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EXHIBIT 99.1
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CREDIT AGREEMENT
Dated as of November 14, 2002
among
XXXXXXX LABORATORIES, INC. and
INVERNESS MEDICAL (UK) HOLDINGS LIMITED,
as Borrowers,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
and
KEYBANK NATIONAL ASSOCIATION,
as Documentation Agent and Lender,
with
GECC CAPITAL MARKETS GROUP, INC.
as Lead Arranger
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TABLE OF CONTENTS
Page
1. AMOUNT AND TERMS OF CREDIT..................................................................................1
1.1 Credit Facilities...................................................................................1
1.2 Letters of Credit...................................................................................7
1.3 Prepayments.........................................................................................7
1.4 Use of Proceeds....................................................................................11
1.5 Interest and Applicable Margins....................................................................11
1.6 Intentionally Omitted..............................................................................14
1.7 Intentionally Omitted..............................................................................14
1.8 Cash Management Systems............................................................................14
1.9 Fees...............................................................................................15
1.10 Receipt of Payments................................................................................15
1.11 Application and Allocation of Payments.............................................................15
1.12 Loan Account and Accounting........................................................................17
1.13 Indemnity..........................................................................................17
1.14 Access.............................................................................................18
1.15 Taxes..............................................................................................19
1.16 Capital Adequacy; Increased Costs; Illegality......................................................19
1.17 Single Loan........................................................................................21
1.18 Limitations on Obligations of European Credit Parties..............................................21
2. CONDITIONS PRECEDENT.......................................................................................21
2.1 Conditions to the Initial Loans....................................................................21
2.2 Further Conditions to Each Loan....................................................................23
3. REPRESENTATIONS AND WARRANTIES.............................................................................24
3.1 Corporate Existence; Compliance with Law...........................................................24
3.2 Executive Offices, Collateral Locations, FEIN......................................................25
3.3 Corporate Power, Authorization, Enforceable Obligations............................................25
3.4 Financial Statements and Projections...............................................................26
3.5 Material Adverse Effect............................................................................27
3.6 Ownership of Property; Liens.......................................................................27
3.7 Labor Matters......................................................................................28
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness..........................28
3.9 Government Regulation..............................................................................28
TABLE OF CONTENTS
Page
3.10 Margin Regulations.................................................................................29
3.11 Taxes..............................................................................................29
3.12 ERISA..............................................................................................30
3.13 No Litigation......................................................................................31
3.14 Brokers............................................................................................31
3.15 Intellectual Property..............................................................................31
3.16 Full Disclosure....................................................................................31
3.17 Environmental Matters..............................................................................32
3.18 Insurance..........................................................................................32
3.19 Deposit Accounts...................................................................................33
3.20 Government Contracts...............................................................................33
3.21 Customer and Trade Relations.......................................................................33
3.22 Agreements and Other Documents.....................................................................33
3.23 Solvency...........................................................................................33
3.24 Acquisition Agreement..............................................................................33
3.25 Intentionally Omitted..............................................................................34
3.26 Subordinated Debt..................................................................................34
3.27 Business Activities of US Credit Parties...........................................................34
4. FINANCIAL STATEMENTS AND INFORMATION.......................................................................34
4.1 Reports and Notices................................................................................34
4.2 Communication with Accountants.....................................................................34
5. AFFIRMATIVE COVENANTS......................................................................................35
5.1 Maintenance of Existence and Conduct of Business...................................................35
5.2 Payment of Charges.................................................................................35
5.3 Books and Records..................................................................................36
5.4 Insurance; Damage to or Destruction of Collateral..................................................36
5.5 Compliance with Laws...............................................................................37
5.6 Supplemental Disclosure............................................................................37
5.7 Intellectual Property..............................................................................38
5.8 Environmental Matters..............................................................................38
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases..............39
5.10 ERISA..............................................................................................39
TABLE OF CONTENTS
Page
5.11 European Credit Parties............................................................................40
5.12 Sales and Distribution Agreements..................................................................40
5.13 Further Assurances.................................................................................41
6. NEGATIVE COVENANTS.........................................................................................41
6.1 Mergers, Subsidiaries, Etc.........................................................................41
6.2 Investments; Loans and Advances....................................................................43
6.3 Indebtedness.......................................................................................44
6.4 Employee Loans and Affiliate Transactions..........................................................45
6.5 Capital Structure and Business.....................................................................46
6.6 Guaranteed Indebtedness............................................................................46
6.7 Liens..............................................................................................46
6.8 Sale of Stock and Assets...........................................................................46
6.9 ERISA..............................................................................................47
6.10 Financial Covenants................................................................................47
6.11 Hazardous Materials................................................................................47
6.12 Sale-Leasebacks....................................................................................48
6.13 Cancellation of Indebtedness.......................................................................48
6.14 Restricted Payments................................................................................48
6.15 Change of Corporate Name or Location; Change of Fiscal Year........................................48
6.16 No Impairment of Intercompany Transfers............................................................48
6.17 No Speculative Transactions........................................................................48
6.18 Leases; Real Estate Purchases......................................................................49
6.19 Changes Relating to Subordinated Debt; Material Contracts..........................................49
6.20 Business Activities................................................................................49
7. TERM.......................................................................................................49
7.1 Termination........................................................................................49
7.2 Survival of Obligations Upon Termination of Financing Arrangements.................................49
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES.....................................................................50
8.1 Events of Default..................................................................................50
8.2 Remedies...........................................................................................52
8.3 Waivers by Credit Parties..........................................................................52
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT........................................................53
9.1 Assignment and Participations......................................................................53
TABLE OF CONTENTS
Page
9.2 Appointment of Agent...............................................................................55
9.3 Agent's Reliance, Etc..............................................................................56
9.4 GE Capital and Affiliates..........................................................................56
9.5 Lender Credit Decision.............................................................................56
9.6 Indemnification....................................................................................57
9.7 Successor Agent....................................................................................57
9.8 Setoff and Sharing of Payments.....................................................................58
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert...........................58
9.10 Agent as Joint Creditor............................................................................60
10. SUCCESSORS AND ASSIGNS.....................................................................................61
10.1 Successors and Assigns.............................................................................61
11. MISCELLANEOUS..............................................................................................61
11.1 Complete Agreement; Modification of Agreement......................................................61
11.2 Amendments and Waivers.............................................................................61
11.3 Fees and Expenses..................................................................................63
11.4 No Waiver..........................................................................................64
11.5 Remedies...........................................................................................65
11.6 Severability.......................................................................................65
11.7 Conflict of Terms..................................................................................65
11.8 Confidentiality....................................................................................65
11.9 GOVERNING LAW......................................................................................65
11.10 Notices............................................................................................66
11.11 Section Titles.....................................................................................67
11.12 Counterparts.......................................................................................67
11.13 WAIVER OF JURY TRIAL...............................................................................67
11.14 Press Releases and Related Matters.................................................................67
11.15 Reinstatement......................................................................................67
11.16 Advice of Counsel..................................................................................68
11.17 Judgment Currency..................................................................................68
11.18 Subordination......................................................................................68
11.19 Negative Pledge....................................................................................69
11.20 No Strict Construction.............................................................................70
INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (SECTION 1.2) - Letters of Credit
Annex C (SECTION 1.8) - Cash Management System
Annex D (SECTION 2.1(a)) - Closing Checklist
Annex E (SECTION 4.1(a)) - Financial Statements and Projections - Reporting
Annex F (SECTION 6.10) - Financial Covenants
Annex G (SECTION 9.9(a)) - Lenders' Wire Transfer Information
Annex H (SECTION 11.10) - Notice Addresses
Annex I (from Annex A -
Commitments definition) Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of European Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of European Revolving Note
Exhibit 1.1(b)(i) - Form of US Term Note
Exhibit 1.1(b)(ii) - Form of European Term Note
Exhibit 1.1(c)(i) - Form of European Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit A-1 - EBITDA Carveout
Exhibit A-2 - Material Contracts
Exhibit B-1 - Application for Standby Letter of Credit
Schedule 1.1 - Agent's Representatives
Schedule 1.2 - Prior Lenders
Schedule 1.3 - Prior Lender Obligations
Schedule 2 - European Security Agreements
Schedule 3 - European Pledge Agreements
Schedule 4 - European Intellectual Property Security Agreements
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(b) - Pro Forma
Disclosure Schedule 3.4(c) - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.2 - Investments
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.4(b) - Loans to Employees
Disclosure Schedule 6.7 - Existing Liens
Disclosure Schedule 6.12 - Sale-Leaseback Transactions
Disclosure Schedule 11.19(a) - Indebtedness of Orgenics and Unipath Scandinavia
Disclosure Schedule 11.19(b) - Existing Liens of Orgenics and Unipath Scandinavia
This
CREDIT AGREEMENT (this "AGREEMENT"), dated as of November 14,
2002 among INVERNESS MEDICAL INNOVATIONS, INC., a Delaware corporation
("INNOVATIONS"), XXXXXXX LABORATORIES, INC., a Delaware corporation ("US
BORROWER"), INVERNESS MEDICAL (UK) HOLDINGS LIMITED, a company organized under
the laws of England and Wales ("EUROPEAN BORROWER"; US Borrower and European
Borrower are sometimes collectively referred to as "BORROWERS" and individually
as a "BORROWER"), the other Credit Parties signatory hereto, the Lenders
signatory hereto from time to time, GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation, as administrative agent for Lenders, KEYBANK NATIONAL
ASSOCIATION, as documentation agent, and GECC Capital Markets Group, Inc., as
lead arranger.
RECITALS
WHEREAS, Borrowers have requested that Lenders extend revolving and
term credit facilities to Borrowers of up to Fifty-Five Million Dollars
($55,000,000) in the aggregate for the purpose of refinancing certain
indebtedness of Swissco (as defined below) and to provide (a) working capital
financing for Borrowers, (b) funds for other general corporate purposes of
Borrowers and (c) funds for other purposes permitted hereunder; and for these
purposes, Lenders are willing to make certain loans and other extensions of
credit to Borrowers of up to such amount upon the terms and conditions set forth
herein; and
WHEREAS, capitalized terms used in this Agreement, including the
Recitals hereto, shall have the meanings ascribed to them in ANNEX A and, for
purposes of this Agreement and the other Loan Documents, the rules of
construction set forth in ANNEX A shall govern. All Annexes, Disclosure
Schedules, Exhibits and other attachments (collectively, "APPENDICES") hereto,
or expressly identified to this Agreement, are incorporated herein by reference,
and taken together with this Agreement, shall constitute but a single agreement.
These Recitals shall be construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) EUROPEAN REVOLVING CREDIT FACILITY.
(i) Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available to European Borrower from time to time
until the Commitment Termination Date its Pro Rata Share of advances in Dollars
(each, a "EUROPEAN REVOLVING CREDIT ADVANCE"). The Pro Rata Share of the
European Revolving Loan of any Revolving Lender shall not at any time exceed its
separate European Revolving Loan Commitment. The obligations of each Revolving
Lender hereunder shall be several and not joint. Until the Commitment
Termination Date, European Borrower may borrow, repay and reborrow under this
SECTION 1.1(a). Each European Revolving Credit Advance shall be made on notice
by European Borrower to one of the representatives of Agent identified in
SCHEDULE 1.1 at the address
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specified therein. Any such notice must be given no later than (A) 11:00 a.m.
(
New York time) on the Business Day of the proposed European Revolving Credit
Advance, in the case of an Index Rate Loan, or (B) 11:00 a.m. (
New York time) on
the date which is 3 Business Days prior to the proposed European Revolving
Credit Advance, in the case of a LIBOR Loan. Each such notice (a "NOTICE OF
EUROPEAN REVOLVING CREDIT ADVANCE") must be given in writing (by telecopy or
overnight courier) substantially in the form of EXHIBIT 1.1(a)(i), and shall
include the information required in such Exhibit and such other information as
may be reasonably required by Agent. If European Borrower desires to have the
European Revolving Credit Advances bear interest by reference to a LIBOR Rate,
European Borrower must comply with SECTION 1.5(e).
(ii) Except as provided in SECTION 1.12, European Borrower
shall execute and deliver to each Revolving Lender a note to evidence the
European Revolving Loan Commitment of that Revolving Lender. Each note shall be
in the principal amount of the European Revolving Loan Commitment of the
applicable Revolving Lender, dated the Closing Date and substantially in the
form of EXHIBIT 1.1(a)(ii) (each a "EUROPEAN REVOLVING NOTE" and, collectively,
the "EUROPEAN REVOLVING NOTES"). Each European Revolving Note shall represent
the obligation of the European Borrower to pay the amount of the applicable
Revolving Lender's European Revolving Loan Commitment or, if less, such
Revolving Lender's Pro Rata Share of the aggregate unpaid principal amount of
all European Revolving Credit Advances to European Borrower together with
interest thereon as prescribed in SECTION 1.5. The entire unpaid balance of the
aggregate European Revolving Loan and all other non-contingent Obligations shall
be immediately due and payable in full in immediately available funds on the
Commitment Termination Date.
(b) TERM LOANS.
(i) US TERM LOAN.
(1) Subject to the terms and conditions hereof,
each Term Lender agrees to make a term loan in Dollars (collectively, the "US
TERM LOAN") on the Closing Date to US Borrower in the amount of the applicable
Term Lender's US Term Loan Commitment. The obligations of each Term Lender
hereunder shall be several and not joint. The US Term Loan shall be evidenced by
a promissory note substantially in the form of EXHIBIT 1.1(b)(i) (each a "US
TERM NOTE" and, collectively, the "US TERM NOTES"), and, except as provided in
SECTION 1.12, US Borrower shall execute and deliver the US Term Note to the
applicable Term Lender. Each US Term Note shall represent the obligation of US
Borrower to pay its share of the applicable Term Lender's US Term Loan
Commitment, together with interest thereon as prescribed in SECTION 1.5.
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(2) The US Borrower shall repay the US Term Loan
in eleven (11) consecutive quarterly installments on the last day of January,
April, July and October of each year, commencing April 30, 2003, as follows:
Payment Installment
Dates Amounts
-------- -----------
April 30, 2003 $ 1,250,000
July 31, 2003 $ 1,250,000
October 31, 2003 $ 1,250,000
January 31, 2004 $ 1,250,000
April 30, 2004 $ 1,250,000
July 31, 2004 $ 1,250,000
October 31, 2004 $ 1,250,000
January 31, 2005 $ 1,250,000
April 30, 2005 $ 1,250,000
July 31, 2005 $ 1,250,000
October 31, 2005 $ 1,250,000
The final installment due on November 14, 2005 shall be in the
amount of $6,250,000 or, if different, the remaining principal balance of the US
Term Loan.
(3) Notwithstanding SECTION 1.1(b)(i)(2), the
aggregate outstanding principal balance of the US Term Loan shall be due and
payable in full in immediately available funds on the Commitment Termination
Date, if not sooner paid in full. No payment with respect to the US Term Loan
may be reborrowed.
(4) Each payment of principal with respect to the
US Term Loan shall be paid to Agent for the ratable benefit of each Term Lender
making a US Term Loan, ratably in proportion to each such Term Lender's
respective US Term Loan Commitment.
(ii) EUROPEAN TERM LOAN.
(1) Subject to the terms and conditions hereof,
each Term Lender agrees to make a term loan in Dollars (collectively, the
"EUROPEAN TERM LOAN") on the Closing Date to European Borrower in the amount of
the applicable Term Lender's European Term Loan Commitment. The obligations of
each Term Lender hereunder shall be several and not joint. Each such European
Term Loan shall be evidenced by a promissory note substantially in the form of
EXHIBIT 1.1(b)(ii) (each a "EUROPEAN TERM NOTE" and, collectively, the "EUROPEAN
3
TERM NOTES"), and, except as provided in SECTION 1.12, the European Borrower
shall execute and deliver the European Term Note to the applicable Term Lender.
Each European Term Note shall represent the obligation of European Borrower to
pay the applicable Term Lender's European Term Loan Commitment, together with
interest thereon as prescribed in SECTION 1.5.
(2) European Borrower shall repay the European
Term Loan in fourteen (14) consecutive quarterly installments on the last day of
January, April, July and October of each year, commencing January 31, 2003, as
follows:
Payment Installment
Dates Amounts
-------- -----------
January 31, 2003 $ 25,000
April 30, 2003 $ 25,000
July 31, 2003 $ 25,000
October 31, 2003 $ 25,000
January 31, 2004 $ 25,000
April 30, 2004 $ 25,000
July 31, 2004 $ 25,000
October 31, 2004 $ 25,000
January 31, 2005 $ 25,000
April 30, 2005 $ 25,000
July 31, 2005 $ 25,000
October 31, 2005 $ 25,000
January 31, 2006 $ 25,000
April 30, 2006 $ 25,000
The final installment due on May 14, 2006 shall be in the
amount of $9,650,000 or, if different, the remaining principal balance of the
European Term Loan.
(3) Notwithstanding SECTION 1.1(b)(ii)(2), the
aggregate outstanding principal balance of the European Term Loan shall be due
and payable in full in immediately available funds on the Commitment Termination
Date, if not sooner paid in full. No payment with respect to the European Term
Loan may be reborrowed.
4
(iii) Each payment of principal with respect to the European
Term Loan shall be paid to Agent for the ratable benefit of each Term Lender
making a European Term Loan, ratably in proportion to each such Term Lender's
respective European Term Loan Commitment.
(c) EUROPEAN SWING LINE FACILITY.
(i) Agent shall notify the Swing Line Lender upon Agent's
receipt of any Notice of European Revolving Credit Advance. Subject to the terms
and conditions hereof, the Swing Line Lender may, in its discretion, make
available from time to time until the Commitment Termination Date advances in
Dollars (each, a "EUROPEAN SWING LINE ADVANCE") in accordance with any such
notice. The provisions of this SECTION 1.1(c)(i) shall not relieve Revolving
Lenders of their obligations to make European Revolving Credit Advances under
SECTION 1.1(a)(i); PROVIDED that if the Swing Line Lender makes a European Swing
Line Advance pursuant to any such notice, such European Swing Line Advance shall
be in lieu of any European Revolving Credit Advance that otherwise may be made
by Revolving Lenders pursuant to such notice. The aggregate amount of European
Swing Line Advances outstanding shall not exceed at any time the lesser of (A)
the European Swing Line Commitment and (B) the European Maximum Amount less the
outstanding balance of the European Revolving Loan at such time ("EUROPEAN SWING
LINE AVAILABILITY"). Until the Commitment Termination Date, European Borrower
may from time to time borrow, repay and reborrow under this SECTION 1.1(c)(ii).
Each European Swing Line Advance shall be made pursuant to a Notice of European
Revolving Credit Advance delivered to Agent by European Borrower in accordance
with SECTION 1.1(a)(i). Any such notice must be given no later than 11:00 a.m.
(
New York time) on the Business Day of the proposed European Swing Line Advance.
Unless the Swing Line Lender has received at least one Business Day's prior
written notice from Requisite Lenders instructing it not to make a European
Swing Line Advance, the Swing Line Lender shall, notwithstanding the failure of
any condition precedent set forth in SECTIONS 2.2, be entitled to fund that
European Swing Line Advance, and to have each Revolving Lender make European
Revolving Credit Advances in accordance with SECTION 1.1(c)(iii) or purchase
participating interests in accordance with SECTION 1.1(c)(ii)(4).
Notwithstanding any other provision of this Agreement or the other Loan
Documents, the European Swing Line Loan shall constitute an Index Rate Loan.
European Borrower shall repay the aggregate outstanding principal amount of the
European Swing Line Loan upon demand therefore by Agent.
(ii) European Borrower shall execute and deliver to the
Swing Line Lender a promissory note to evidence the European Swing Line
Commitment. Each note shall be in the principal amount of the European Swing
Line Commitment of the Swing Line Lender, dated the Closing Date and
substantially in the form of EXHIBIT 1.1(c)(ii) (each a "EUROPEAN SWING LINE
NOTE" and, collectively, the "EUROPEAN SWING LINE NOTES"). The European Swing
Line Note shall represent the obligation of European Borrower to pay the amount
of the European Swing Line Commitment or, if less, the aggregate unpaid
principal amount of all European Swing Line Advances made to European Borrower
together with interest thereon as prescribed in SECTION 1.5. The entire unpaid
balance of the European Swing Line Loan and all other noncontingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date if not sooner paid in full.
5
(iii) The Swing Line Lender, at any time and from time to
time in its sole and absolute discretion may on behalf of European Borrower (and
European Borrower hereby irrevocably authorizes the Swing Line Lender to so act
on its behalf) request each Revolving Lender (including the Swing Line Lender)
to make a European Revolving Credit Advance to European Borrower (which shall be
an Index Rate Loan) in an amount equal to that Revolving Lender's Pro Rata Share
of the principal amount of the European Borrower's European Swing Line Loan (the
"EUROPEAN REFUNDED SWING LINE LOAN") outstanding on the date such notice is
given. Unless any of the events described in SECTIONS 8.1(h) OR 8.1(i) has
occurred (in which event the procedures of SECTION 1.1(c)(iv) shall apply) and
regardless of whether the conditions precedent set forth in this Agreement to
the making of a European Revolving Credit Advance are then satisfied, each
Revolving Lender shall disburse directly to Agent, its Pro Rata Share of a
European Revolving Credit Advance on behalf of the Swing Line Lender prior to
3:00 p.m. (
New York time) in immediately available funds on the Business Day
next succeeding the date that notice is given. The proceeds of those European
Revolving Credit Advances shall be immediately paid to the Swing Line Lender and
applied to repay the European Refunded Swing Line Loan of the European Borrower.
(iv) If, prior to refunding a European Swing Line Loan with
a European Revolving Credit Advance pursuant to SECTION 1.1(c)(iii), one of the
events described in SECTIONS 8.1(h) OR 8.1(i) has occurred, then, subject to the
provisions of SECTION 1.1(c)(v) below, each Revolving Lender shall, on the date
such European Revolving Credit Advance was to have been made for the benefit of
the European Borrower, purchase from the Swing Line Lender an undivided
participation interest in the European Swing Line Loan to European Borrower in
an amount equal to its Pro Rata Share of such European Swing Line Loan. Upon
request, each Revolving Lender shall promptly transfer to the Swing Line Lender,
in immediately available funds, the amount of its participation interest.
(v) Each Revolving Lender's obligation to make European
Revolving Credit Advances in accordance with SECTION 1.1(c)(iii) and to purchase
participation interests in accordance with SECTION 1.1(c)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender may have against the Swing Line Lender, European Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of any
Default or Event of Default; (C) any inability of European Borrower to satisfy
the conditions precedent to borrowing set forth in this Agreement at any time;
or (D) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. If any Revolving Lender does not make available
to Agent or the Swing Line Lender, as applicable, the amount required pursuant
to SECTIONS 1.1(c)(iii) or 1.1(c)(iv), as the case may be, the Swing Line Lender
shall be entitled to recover such amount on demand from such Revolving Lender,
together with interest thereon for each day from the date of non-payment until
such amount is paid in full at the Federal Funds Rate for the first two Business
Days and at the Index Rate thereafter.
(d) RELIANCE ON NOTICES; APPOINTMENT OF BORROWER REPRESENTATIVE.
Agent shall be entitled to rely upon, and shall be fully protected in relying
upon, any Notice of European Revolving Credit Advance, Notice of
Conversion/Continuation or similar notice believed by Agent to be genuine. Agent
may assume that each Person executing and delivering any notice in accordance
herewith was duly authorized, unless the responsible individual acting
6
thereon for Agent has actual knowledge to the contrary. Each of US Borrower and
European Borrower hereby designates Innovations as its representative and agent
on its behalf for the purposes of giving and receiving all other notices and
consents hereunder or under any of the other Loan Documents and taking all other
actions (including in respect of compliance with covenants) on behalf of such
Borrower under the Loan Documents. Borrower Representative hereby accepts such
appointment. Agent and each Lender may regard any notice or other communication
pursuant to any Loan Document from Borrower Representative as a notice or
communication from all Borrowers, and may give any notice or communication
required or permitted to be given to any Borrower or Borrowers hereunder to
Borrower Representative on behalf of such Borrower or Borrowers. Each of US
Borrower and European Borrower agrees that each notice, election, representation
and warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.
1.2 LETTERS OF CREDIT. Subject to and in accordance with the terms
and conditions contained herein and in ANNEX B, European Borrower, shall have
the right to request, and Revolving Lenders agree to incur, or purchase
participations in, Letter of Credit Obligations.
1.3 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS; REDUCTIONS IN REVOLVING LOAN
COMMITMENTS. Borrowers may at any time on at least 5 days' prior written notice
by Borrower Representative to Agent (i) voluntarily prepay all or part of the
Term Loans, and/or (ii) permanently reduce (but not terminate) the European
Revolving Loan Commitment; PROVIDED that (A) any such prepayments or reductions
shall be in a minimum amount of $1,000,000 and equivalent multiples in excess
thereof, (B) the European Revolving Loan Commitment shall not be reduced to an
amount less than $5,000,000 unless the European Revolving Loan Commitment is
terminated in its entirety after payment of the Term Loans in full in cash by
the applicable Borrower, and (C) after giving effect to such reductions,
European Borrower shall comply with SECTION 1.3(b)(i). In addition, European
Borrower may at any time on at least 10 days' prior written notice to Agent
terminate the European Revolving Loan Commitment; PROVIDED that upon such
termination, all Loans and other Obligations shall be immediately due and
payable in full and all Letter of Credit Obligations shall be cash
collateralized or otherwise satisfied in accordance with ANNEX B hereto. Any
voluntary prepayment and any reduction or termination of the European Revolving
Loan Commitment must be accompanied by payment of the Fee required by SECTION
1.9(c), if any, plus the payment of any LIBOR funding breakage costs in
accordance with SECTION 1.13(b). Upon any such reduction or termination of the
European Revolving Loan Commitment, European Borrower's right to request
European Revolving Credit Advances, or request that Letter of Credit Obligations
be incurred on its behalf, or request European Swing Line Advances, shall
simultaneously be permanently reduced or terminated, as the case may be;
PROVIDED that a permanent reduction of the European Revolving Loan Commitment
shall require a corresponding pro rata reduction in the European L/C Sublimit.
Each notice of partial prepayment shall designate the Loans or other Obligations
to which such prepayment is to be applied; and PROVIDED, FURTHER, that any
partial prepayments of any Term Loan made by or on behalf of any Borrower shall
be applied pro rata to prepay the scheduled installments of such Borrower's Term
Loan.
7
(b) MANDATORY PREPAYMENTS.
(i) If at any time the aggregate outstanding balances of
the European Revolving Loan and the European Swing Line Loan exceed the European
Maximum Amount, European Borrower shall immediately repay the aggregate
outstanding European Revolving Credit Advances to the extent required to
eliminate such excess. If any such excess remains after repayment in full of the
aggregate outstanding European Revolving Credit Advances, European Borrower
shall provide cash collateral for the Letter of Credit Obligations in the manner
set forth in ANNEX B to the extent required to eliminate such excess.
(ii) Immediately upon receipt by any US Credit Party of
proceeds of any asset disposition (excluding proceeds of asset dispositions
permitted by SECTION 6.8(a)) or any sale of Stock of any Subsidiary of any US
Credit Party, Borrowers shall prepay the Loans in an amount equal to all such
proceeds, net of (A) commissions and other reasonable and customary transaction
costs, fees and expenses properly attributable to such transaction and payable
by such US Credit Party in connection therewith (in each case, paid to
non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior
Liens (to the extent such Liens constitute Permitted Encumbrances hereunder), if
any, and (D) an appropriate reserve for income taxes in accordance with GAAP in
connection therewith. Any such prepayment shall be applied in accordance with
SECTION 1.3(c)(i).
(iii) Immediately upon receipt by any European Credit Party
of proceeds of any asset disposition (excluding proceeds of asset dispositions
permitted by SECTION 6.8(a)) or any sale of Stock of any Subsidiary of any
European Credit Party, Borrowers shall prepay the Loans in an amount equal to
all such proceeds, net of (A) commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction
and payable by such European Credit Party in connection therewith (in each case,
paid to non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of
senior Liens (to the extent such Liens constitute Permitted Encumbrances
hereunder), if any, and (D) an appropriate reserve for taxes in accordance with
generally accepted accounting principles in effect in the jurisdiction of
organization of the applicable European Credit Party in connection therewith.
Any such prepayment shall be applied in accordance with SECTION 1.3(c)(ii).
(iv) If any Credit Party issues Stock, no later than the
Business Day following the date of receipt of the proceeds thereof, Borrowers
(in the case of an issuance by Innovations) or the issuing Credit Party shall
prepay the Loans in an amount equal to twenty-five percent (25%) of the proceeds
for any such issuance after the first anniversary of the Closing Date and on or
before the third anniversary of the Closing Date, and one hundred percent (100%)
of the proceeds for any such issuance thereafter, in each case, net of
underwriting discounts and commissions and other reasonable costs paid to
non-Affiliates in connection therewith. Any such prepayment shall be applied in
accordance with SECTION 1.3(c)(iii). No repayment shall be required with respect
to any Stock issuances on or before the first anniversary of the Closing.
(v) Until the Termination Date, European Borrower shall
prepay the Obligations on the date that is 10 days after the earlier of (A) the
date on which the Credit Parties' annual audited Financial Statements for the
immediately preceding Fiscal Year are delivered pursuant to ANNEX E or (B) the
date on which such annual audited Financial
8
Statements were required to be delivered pursuant to ANNEX E, in an amount equal
to (1) seventy-five percent (75%) of Excess Cash Flow for the immediately
preceding Fiscal Year if the Total Leverage Ratio for such Fiscal Year is equal
to or greater than 3.25:1.0, and (2) fifty percent (50%) of Excess Cash Flow for
the immediately preceding Fiscal Year if the Total Leverage Ratio for such
Fiscal Year is less than 3.25:1.0; PROVIDED that, for purposes of calculating
Excess Cash Flow for the Fiscal Year ending December 31, 2002 pursuant to this
CLAUSE (v), "Fiscal Year" shall mean the month ending December 31, 2002. Any
prepayments from Excess Cash Flow paid pursuant to this CLAUSE (v) shall be
applied in accordance with SECTION 1.3(c)(iv). Each such prepayment shall be
accompanied by a certificate signed by Borrower Representative's Treasurer and
Vice President, Finance, certifying the manner in which Excess Cash Flow and the
resulting prepayment were calculated, which certificate shall be in form and
substance reasonably satisfactory to Agent.
(vi) Until the Termination Date, US Borrower shall prepay
the Obligations on the date that is 10 days after the earlier of (A) the date on
which the Credit Parties' annual audited Financial Statements for the
immediately preceding Fiscal Year are delivered pursuant to ANNEX E or (B) the
date on which such annual audited Financial Statements were required to be
delivered pursuant to ANNEX E, in an amount equal to (1) seventy-five percent
(75%) of Xxxxxxx Excess Cash Flow for the immediately preceding Fiscal Year if
the Senior Xxxxxxx Leverage Ratio for such Fiscal Year is equal to or greater
than 2.00:1.0, and (2) fifty percent (50%) of Xxxxxxx Excess Cash Flow for the
immediately preceding Fiscal Year if the Senior Xxxxxxx Leverage Ratio for such
Fiscal Year is less than 2.00:1.0; PROVIDED that, for purposes of calculating
Xxxxxxx Excess Cash Flow for the Fiscal Year ending December 31, 2002 pursuant
to this CLAUSE (vi), "Fiscal Year" shall mean the month ending December 31,
2002. Any prepayments from Xxxxxxx Excess Cash Flow paid pursuant to this CLAUSE
(vi) shall be applied in accordance with SECTION 1.3(c)(v). Each such prepayment
shall be accompanied by a certificate signed by US Borrower's Treasurer
certifying the manner in which Xxxxxxx Excess Cash Flow and the resulting
prepayment were calculated, which certificate shall be in form and substance
reasonably satisfactory to Agent.
(c) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS.
(i) Any prepayments pursuant to SECTION 1.3(b)(ii) above
arising from any asset disposition by, and any prepayments pursuant to SECTION
5.4(c) arising from any casualty or condemnation proceeds with respect to
property of, any US Credit Party shall be made and applied as follows: FIRST, by
US Borrower to prepay the scheduled principal installments of the US Term Loan
in inverse order of maturity until prepaid in full; SECOND, by European Borrower
to prepay the scheduled principal installments of the European Term Loan in
inverse order of maturity until prepaid in full; THIRD, by European Borrower to
prepay the principal balance of the European Revolving Credit Advances until
paid in full; and FOURTH, by European Borrower to provide cash collateral in the
manner set forth in ANNEX B for any Letter of Credit Obligations, until all such
Letter of Credit Obligations have been fully cash collateralized. None of the
European Revolving Loan Commitments shall be permanently reduced by the amount
of any such prepayments.
(ii) Any prepayments pursuant to SECTION 1.3(b)(iii) above
arising from any asset disposition by, and any prepayments pursuant to SECTION
5.4(c) arising from any
9
casualty or condemnation proceeds with respect to property of, any European
Credit Party shall be made and applied as follows: FIRST, by European Borrower
to prepay the scheduled principal installments of the European Term Loan in
inverse order of maturity until prepaid in full; SECOND, by European Borrower to
prepay the principal balance of the European Revolving Credit Advances until
paid in full; THIRD, by European Borrower to provide cash collateral in the
manner set forth in ANNEX B for any Letter of Credit Obligations until all such
Letter of Credit Obligations have been fully cash collateralized; and any excess
shall be returned to European Borrower or to any other Person entitled thereto
under applicable law. None of the European Revolving Loan Commitments shall be
permanently reduced by the amount of any such prepayments.
(iii) Any prepayments pursuant to SECTIONS 1.3(b)(iv) above
shall be made and applied as follows: FIRST, by US Borrower to prepay the
scheduled principal installments of the US Term Loan in inverse order of
maturity until prepaid in full; SECOND, by European Borrower to prepay the
scheduled principal installments of the European Term Loan in inverse order of
maturity until prepaid in full; THIRD, by European Borrower to prepay the
principal balance of the European Revolving Credit Advances until paid in full;
FOURTH, by European Borrower to provide cash collateral in the manner set forth
in ANNEX B for any Letter of Credit Obligations until all such Letter of Credit
Obligations have been fully cash collateralized; and any excess shall be
returned to European Borrower or to any other Person entitled thereto under
applicable law. None of the European Revolving Loan Commitments shall be
permanently reduced by the amount of any such prepayments.
(iv) Any prepayments pursuant to SECTIONS 1.3(b)(v) above
shall be made and applied as follows: FIRST, by European Borrower to prepay the
scheduled principal installments of the European Term Loan until prepaid in
full; SECOND, by European Borrower to prepay the principal balance of the
European Revolving Credit Advances until paid in full; THIRD, by European
Borrower to provide cash collateral in the manner set forth in ANNEX B for any
Letter of Credit Obligations until all such Letter of Credit Obligations have
been fully cash collateralized, and any excess shall be returned to European
Borrower or to any other Person entitled thereto under applicable law. None of
the European Revolving Loan Commitments shall be permanently reduced by the
amount of any such prepayments.
(v) Any prepayments pursuant to SECTIONS 1.3(b)(vi) above
shall be made and applied as follows: FIRST, by US Borrower to prepay the
scheduled principal installments of the US Term Loan in inverse order of
maturity until prepaid in full; SECOND, by European Borrower to prepay the
scheduled principal installments of the European Term Loan in inverse order of
maturity until prepaid in full; THIRD, by European Borrower to prepay the
principal balance of the European Revolving Credit Advances until paid in full;
and FOURTH, by European Borrower to provide cash collateral in the manner set
forth in ANNEX B for any Letter of Credit Obligations until all such Letter of
Credit Obligations have been fully cash collateralized.
(vi) Any prepayments required in this SECTION 1.3(c) shall
be applied first to the repayment of Index Rate Loans of the type of Loan
required to be prepaid and then to LIBOR Rate Loans. In the event any LIBOR Rate
Loans are required to be prepaid pursuant to this SECTION 1.3(c), payments may
be made to a cash collateral account held by Agent and
10
applied to the Loans at the end of the applicable LIBOR Period. Loans repaid
with proceeds held in the cash collateral account shall not be deemed repaid
until such amounts are actually applied to the payment of the Loans.
(d) NO IMPLIED CONSENT. Nothing in this SECTION 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4 USE OF PROCEEDS. Borrowers shall utilize the proceeds of the
Term Loans, the European Revolving Loans and the European Swing Line Advances
solely for the Refinancing (and to pay any related transaction expenses),
acquisitions consented to by Agent pursuant to SECTION 6.1, and for the
financing of Borrowers' ordinary working capital and general corporate needs.
DISCLOSURE SCHEDULE (1.4) contains a description of Borrowers' sources and uses
of funds as of the Closing Date, including Loans and Letter of Credit
Obligations to be made or incurred on that date, and a funds flow memorandum
detailing how funds from each source are to be transferred to particular uses.
1.5 INTEREST AND APPLICABLE MARGINS.
(a) Borrowers shall pay interest to Agent, for the ratable benefit
of Lenders in accordance with the various Loans being made by each Lender, in
arrears on each applicable Interest Payment Date, at the following rates:
(i) with respect to the European Revolving Credit Advances, the Index Rate PLUS
the Applicable European Revolver Index Margin per annum or, at the election of
European Borrower, the applicable LIBOR Rate PLUS the Applicable European
Revolver LIBOR Margin per annum, based on the aggregate European Revolving
Credit Advances outstanding from time to time; (ii) with respect to the US Term
Loan, the Index Rate PLUS the Applicable US Term Loan Index Margin per annum or,
at the election of US Borrower, the applicable LIBOR Rate PLUS the Applicable US
Term Loan LIBOR Margin per annum; (iii) with respect to the European Term Loan,
the Index Rate PLUS the Applicable European Term Loan Index Margin per annum or,
at the election of European Borrower, the applicable LIBOR Rate PLUS the
Applicable European Term Loan LIBOR Margin per annum; and (iv) with respect to
the European Swing Line Loan, the Index Rate PLUS the Applicable European
Revolver Index Margin per annum.
The Applicable Margins will be as follows as of the Closing Date:
Applicable European Revolver Index Margin 2.00%
Applicable European Revolver LIBOR Margin 3.25%
Applicable US Term Loan Index Margin 2.00%
Applicable US Term Loan LIBOR Margin 3.25%
Applicable European Term Loan Index Margin 2.50%
Applicable European Term Loan LIBOR Margin 3.75%
11
Applicable L/C Margin 3.25%
The Applicable Margins shall be adjusted (up or down) prospectively on
a quarterly basis as determined by Borrowers' consolidated financial
performance, commencing with the first day of the first calendar month that
occurs more than 5 days after delivery of Borrowers' quarterly Financial
Statements to Lenders for the Fiscal Quarter ending March 31, 2003. Adjustments
in Applicable Margins shall be determined by reference to the following grids:
LEVEL OF
IF TOTAL LEVERAGE RATIO IS: APPLICABLE MARGINS:
------------------------------------------------- -------------------
LESS THAN 2.50 Level I
LESS THAN 2.75, but GREATER THAN OR EQUAL TO 2.50 Level II
LESS THAN 3.25, but GREATER THAN OR EQUAL TO 2.75 Level III
GREATER THAN 3.25 Level IV
APPLICABLE MARGINS
------------------------------------------------------
XXXXX X XXXXX XX XXXXX XXX XXXXX XX
------- -------- --------- --------
Applicable European Revolver 1.25% 1.50% 1.75% 2.00%
Index Margin
Applicable European Revolver 2.50% 2.75% 3.00% 3.25%
LIBOR Margin
Applicable US Term Loan Index 1.25% 1.50% 1.75% 2.00%
Margin
Applicable US Term Loan LIBOR 2.50% 2.75% 3.00% 3.25%
Margin
Applicable European Term Loan 1.75% 2.00% 2.25% 2.50%
Index Margin
Applicable European Term Loan 3.00% 3.25% 3.50% 3.75%
LIBOR Margin
Applicable L/C Margin 2.50% 2.75% 3.00% 3.25%
If any Event of Default has occurred and is continuing, the Applicable European
Revolver Index Margin and the Applicable European Revolver LIBOR Margin shall be
the highest level set forth in the foregoing grid until the next Business Day
following the earlier to occur of (A) the date on which such Event of Default
has been waived in accordance with SECTION 11.2 or (B) the date on which the
Chief Executive Officer and Treasurer and Vice President, Finance, of
Innovations shall have provided to Agent a certificate, in form and substance
satisfactory to Agent, certifying that such Event of Default has been cured.
All adjustments in the Applicable Margins after March 31, 2003 shall
be implemented quarterly on a prospective basis, for each calendar month
commencing at least 5 days after the date of delivery to Lenders of the
quarterly unaudited or annual audited (as applicable) Financial Statements
evidencing the need for an adjustment. Failure to timely deliver such Financial
Statements shall, in addition to any other remedy provided for in this
Agreement,
12
result in an increase in the Applicable Margins to the highest level set forth
in the foregoing grid, 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, that
reduction shall be deferred until the next Business Day following the earlier to
occur of (A) the date on which such Event of Default has been waived in
accordance with SECTION 11.2 or (B) the date on which the Chief Executive
Officer and Treasurer and Vice President, Finance, of Innovations shall have
provided to Agent a certificate, in form and substance satisfactory to Agent,
certifying that such Event of Default has been cured.
(b) If any payment on any Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a 360-day year, in each case for
the actual number of days occurring in the period for which such interest and
Fees are payable. The Index Rate is a floating rate determined for each day.
Each determination by Agent of an interest rate and Fees hereunder shall be
final, binding and conclusive on Borrowers, absent manifest error.
(d) So long as an Event of Default has occurred and is continuing
under SECTION 8.1(a), (h) OR (i) or so long as any other Event of Default has
occurred and is continuing and at the election of Agent (or upon the written
request of Requisite Lenders) confirmed by written notice from Agent to Borrower
Representative, the interest rates applicable to the Loans and the Letter of
Credit Fees shall be increased by two percentage points (2%) per annum above the
rates of interest or the rate of such Fees otherwise applicable hereunder
("DEFAULT RATE"), and all outstanding Obligations shall bear interest at the
Default Rate applicable to such Obligations. Interest and Letter of Credit Fees
at the Default Rate shall accrue from the initial date of such Event of Default
until that Event of Default is cured or waived and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in SECTION 2.2,
the applicable Borrower shall have the option to (i) request that any Revolving
Credit Advance be made as a LIBOR Loan, (ii) convert at any time all or any part
of outstanding Loans (other than any European Swing Line Loan) from Index Rate
Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan,
subject to payment of LIBOR breakage costs in accordance with SECTION 1.13(b) if
such conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of any Loan (other than any
European Swing Line Loan) as a LIBOR Loan upon the expiration of the applicable
LIBOR Period and the succeeding LIBOR Period of that continued Loan shall
commence on the first day after the last day of the LIBOR Period of the Loan to
be continued. Any Loan or group of Loans having the same proposed LIBOR Period
to be made or continued as, or converted into, a LIBOR Loan must be in a minimum
amount of $1,000,000 and integral multiples of $500,000 in excess of such
amount. Any such election must be made by 11:00 a.m. (
New York time) on the 3rd
Business Day prior to (1) the date of any proposed Revolving Credit Advance
which is to bear interest at the LIBOR Rate, (2) the end of each LIBOR Period
with respect to any LIBOR Loans
13
to be continued as such, or (3) the date on which the applicable Borrower wishes
to convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by
such Borrower in such election. If no election is received with respect to a
LIBOR Loan by 11:00 a.m. (
New York time) on the 3rd Business Day prior to the
end of the LIBOR Period with respect thereto (or if a Default or an Event of
Default has occurred and is continuing or if the additional conditions precedent
set forth in SECTION 2.2 shall not have been satisfied), that LIBOR Loan shall
be converted to an Index Rate Loan at the end of its LIBOR Period. The
applicable Borrower must make such election by notice to Agent in writing, by
telecopy or overnight courier. In the case of any conversion or continuation,
such election must be made pursuant to a written notice (a "NOTICE OF
CONVERSION/CONTINUATION") in the form of EXHIBIT 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this
SECTION 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "MAXIMUM LAWFUL RATE"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; PROVIDED, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in SECTIONS 1.5(a) THROUGH (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this SECTION 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in SECTION 1.11 and thereafter shall refund any excess to Borrowers or as a
court of competent jurisdiction may otherwise order.
1.6 INTENTIONALLY OMITTED.
1.7 INTENTIONALLY OMITTED.
1.8 CASH MANAGEMENT SYSTEMS. On or prior to the Closing Date, the
Credit Parties will establish, and will maintain until the Termination Date, the
cash management systems described in ANNEX C (the "CASH MANAGEMENT SYSTEMS").
1.9 FEES.
(a) Borrowers shall pay to GE Capital the Fees specified in the GE
Capital Fee Letter in the amounts, and at the times, specified for payment
therein.
14
(b) As additional compensation for the Revolving Lenders, European
Borrower shall pay to Agent, for the ratable benefit of such Revolving Lenders,
in arrears, on the first Business Day of each month prior to the Commitment
Termination Date and on the Commitment Termination Date, a Fee calculated on the
average daily Unutilized Amount for such month at the rate per annum set forth
in the table below:
IF UNUTILIZED AMOUNT IS: FEE:
----------------------------------------------------- ------------------------------
GREATER THAN OR EQUAL TO 66% of the European Maximum 0.75% of the Unutilized Amount
Amount
GREATER THAN OR EQUAL TO 33% but LESS THAN 66% of the 0.50% of the Unutilized Amount
European Maximum Amount
LESS THAN 33% of the European Maximum 0.25% of the Unutilized Amount
Amount
(c) European Borrower shall pay to Agent, for the ratable benefit
of Revolving Lenders, the Letter of Credit Fee as provided in ANNEX B.
1.10 RECEIPT OF PAYMENTS. Borrowers shall make each payment of
principal, interest, Fees or other amounts due under this Agreement or any of
the other Loan Documents not later than 2:00 p.m. (
New York time) on the day
when due in immediately available funds in Dollars to the Collection Account.
For purposes of computing interest and Fees as of any date, all payments shall
be deemed received on the Business Day on which immediately available funds
therefor are received in the Collection Account prior to 2:00 p.m.
New York
time. Payments received after 2:00 p.m.
New York time on any Business Day or on
a day that is not a Business Day shall be deemed to have been received on the
following Business Day.
1.11 APPLICATION AND ALLOCATION OF PAYMENTS.
(a) So long as no Default or Event of Default has occurred and is
continuing, (i) payments matching specific scheduled payments then due shall be
applied to those scheduled payments; (ii) voluntary prepayments shall be applied
as determined by the applicable Borrower and directed by Borrower
Representative, subject to the provisions of SECTION 1.3(a); and (iii) mandatory
prepayments shall be applied as set forth in SECTIONS 1.3(b) AND (c). All
payments and prepayments applied to a particular Loan shall be applied ratably
to the portion thereof held by each Lender as determined by its Pro Rata Share.
As to any other payment, and as to all payments made when a Default or Event of
Default has occurred and is continuing or following the Commitment Termination
Date, each Borrower hereby irrevocably waives the right to direct the
application of any and all payments received from or on behalf of such Borrower,
and each Borrower hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the Obligations of
Borrowers as Agent may deem advisable notwithstanding any previous entry by
Agent in the Loan Account or any other books and records. In the absence of a
specific determination by Agent with respect thereto, payments shall be applied
to amounts then due and payable in the following order: (1) to Fees and Agent's
expenses reimbursable hereunder; (2) to interest on the European Swing Line
Loans; (3) to principal payments on the European Swing Line Loans; (4) to
interest on the other Loans, ratably in proportion to the interest accrued as to
each Loan; (5) to principal payments on
15
the other Loans; (6) to provide cash collateral for Letter of Credit Obligations
in the manner described in ANNEX B, and (7) to all other Obligations, including
expenses of Lenders to the extent reimbursable under SECTION 11.3.
(b) Agent is authorized to, and at its sole election may, charge
to the applicable European Revolving Loan balance on behalf of European Borrower
and cause to be paid all Fees, expenses, Charges, costs (including insurance
premiums in accordance with SECTION 5.4(a)) and interest and principal, other
than principal of such European Revolving Loan, owing by European Borrower under
this Agreement or any of the other Loan Documents if and to the extent European
Borrower fails to pay promptly any such amounts as and when due. Agent shall use
reasonable efforts to provide Borrower Representative with notice prior to
charging such amounts but failure to do so shall not effect its rights to so
charge. At Agent's option and to the extent permitted by law, any charges so
made shall constitute part of the applicable European Revolving Loan hereunder.
(c) Upon the exercise of any rights and remedies by Agent under
any of the Loan Documents with respect to Collateral pledged by any US Credit
Party to secure the Obligations of the US Credit Parties after an Event of
Default shall have occurred and be continuing, any and all Proceeds received by
Agent pursuant to any of the Loan Documents with respect to such Collateral
shall be applied and distributed by Agent in the following order: (i) to Fees
and expenses of the Agent reimbursable hereunder that have been allocated to the
US Credit Parties as determined by Agent; (ii) to interest on the US Term Loan;
(iii) to principal of US Term Loan; (iv) to all other Obligations of the US
Credit Parties to the Lenders to the extent reimbursable under SECTION 11.3; (v)
to interest on the European Revolving Loan and the European Term Loan ratably in
proportion to interest accrued thereon; (vi) to principal of the European
Revolving Loan and the European Term Loan ratably in proportion to the
outstanding principal amounts thereof; (vii) to all other Obligations of the
European Credit Parties to the Lenders to the extent reimbursable under SECTION
11.3; and (viii) to the US Borrower or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
(d) Upon the exercise of any rights and remedies by Agent under
any of the Loan Documents with respect to Collateral pledged by any European
Credit Party to secure the Obligations of the European Credit Parties after an
Event of Default shall have occurred and be continuing, any and all Proceeds
received by Agent pursuant to any of the Loan Documents with respect to such
Collateral shall be applied and distributed by Agent in the following order: (i)
to Fees and expenses of the Agent reimbursable hereunder that have been
allocated to the European Credit Parties as determined by Agent; (ii) to
interest on the European Revolving Loan and the European Term Loan, ratably in
proportion to the accrued interest thereon; (iii) to principal payments on the
European Revolving Loan and the European Term Loan, ratably in proportion to the
outstanding amounts thereof; (iv) to all other Obligations of the European
Lenders to the extent reimbursable under SECTION 11.3; (v) subject to SECTION
5.11 to the extent such European Credit Party has guaranteed or secured the
payment of the US Term Loan, (x) to interest on the US Term Loan (y) then to the
principal of the US Term Loan and (z) then to all other obligations of the US
Credit Parties to the Lenders to the extent reimbursed under SECTION 11.3; and
(vi) to the European Borrower or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
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1.12 LOAN ACCOUNT AND ACCOUNTING. Agent shall maintain a loan
account (the "LOAN ACCOUNT") on its books to record: all Advances and the Term
Loans, all payments made by Borrowers, and all other debits and credits as
provided in this Agreement with respect to the Loans or any other Obligations.
All entries in the Loan Account shall be made in accordance with Agent's
customary accounting practices as in effect from time to time. The balance in
the Loan Account, as recorded on Agent's most recent printout or other written
statement, shall, absent manifest error, be presumptive evidence of the amounts
due and owing to Agent and Lenders by each Borrower; PROVIDED that any failure
to so record or any error in so recording shall not limit or otherwise affect
any Borrower's duty to pay the Obligations. Agent shall render to Borrower
Representative a monthly accounting of transactions with respect to the Loans
setting forth the balance of the Loan Account as to each Borrower for the
immediately preceding month. Unless Borrower Representative notifies Agent in
writing of any objection to any such accounting (specifically describing the
basis for such objection), within 30 days after the date thereof, each and every
such accounting shall (absent manifest error) be deemed final, binding and
conclusive on Borrowers in all respects as to all matters reflected therein.
Only those items expressly objected to in such notice shall be deemed to be
disputed by Borrowers. Notwithstanding any provision herein contained to the
contrary, any Lender may elect (which election may be revoked) to dispense with
the issuance of Notes to that Lender and may rely on the Loan Account as
evidence of the amount of Obligations from time to time owing to it.
1.13 INDEMNITY.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers, directors,
employees, attorneys, agents and representatives (each, an "INDEMNIFIED
PERSON"), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "INDEMNIFIED LIABILITIES"); PROVIDED, that no such Credit Party
shall be liable for any indemnification to an Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from that Indemnified Person's gross negligence or willful
misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY
OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE
ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED
UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.
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(b) To induce Lenders to provide the LIBOR Rate option on the
terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that repayment is
made pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii) any
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) any Borrower shall refuse to accept any
borrowing of, or shall request a termination of, any borrowing of, conversion
into or continuation of, LIBOR Loans after such Borrower has given notice
requesting the same in accordance herewith; or (iv) any Borrower shall fail to
make any prepayment of a LIBOR Loan after such Borrower has given a notice
thereof in accordance herewith, the applicable Borrower shall indemnify and hold
harmless each Lender from and against all losses, costs and expenses resulting
from or arising from any of the foregoing. Such indemnification shall include
any loss (including loss of margin) or expense arising from the reemployment of
funds obtained by it or from fees payable to terminate deposits from which such
funds were obtained. For the purpose of calculating amounts payable to a Lender
under this subsection, each Lender shall be deemed to have actually funded its
relevant LIBOR Loan through the purchase of a deposit bearing interest at the
LIBOR Rate in an amount equal to the amount of that LIBOR Loan and having a
maturity comparable to the relevant LIBOR Period; PROVIDED that each Lender may
fund each of its LIBOR Loans in any manner it sees fit, and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this subsection. This covenant shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable hereunder. As
promptly as practicable under the circumstances, each Lender shall provide
Borrower Representative with its written calculation in reasonable detail of all
amounts payable pursuant to this SECTION 1.13(b), and such calculation shall be
binding on the parties hereto unless Borrower Representative shall object in
writing within 10 Business Days of receipt thereof, specifying the basis for
such objection in detail.
1.14 ACCESS. Each Credit Party that is a party hereto shall, during
normal business hours, from time to time upon three Business Days' prior notice
by Agent to Borrower Representative (or, if a Default or an Event of Default
shall have occurred and be continuing, upon same-day notice by Agent to Borrower
Representative), as frequently as Agent determines to be appropriate but in no
event more often than twice in any period of twelve (12) consecutive months
unless a Default or Event of Default shall have occurred and be continuing: (a)
provide Agent and any of its officers, employees and agents access to its
properties, facilities, advisors and employees (including officers) of each
Credit Party and to the Collateral; (b) permit Agent, and any of its officers,
employees and agents, to inspect, audit and make extracts from any Credit
Party's books and records; and (c) permit Agent, and its officers, employees and
agents, to inspect, review, evaluate and make test verifications and counts of
the Accounts, Inventory and other Collateral of any Credit Party. If a Default
or Event of Default has occurred and is continuing or if access is necessary to
preserve or protect the Collateral as determined by Agent, each such Credit
Party shall provide such access to Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Event of Default has
occurred and is continuing, Credit Parties shall provide Agent and each Lender
with access to their suppliers and customers. Each Credit Party shall make
available to Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records that Agent may
reasonably request. Each Credit Party shall deliver any document or instrument
necessary for Agent, as it may from time to time reasonably request, to obtain
records from any service bureau
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or other Person that maintains records for such Credit Party, and shall maintain
duplicate material records or supporting documentation on media, including
computer tapes and discs owned by such Credit Party. Agent will give Lenders at
least 5 days' prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany Agent's representatives on
regularly scheduled audits.
1.15 TAXES.
(a) Except as required by law, any and all payments by each
Borrower hereunder or under the Notes shall be made, in accordance with this
SECTION 1.15, free and clear of and without deduction for any and all present or
future Taxes. If any Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under the Notes, (i) the sum
payable shall be increased as much as shall be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this SECTION 1.15) Agent or Lenders, as applicable, receive an
amount equal to the sum they would have received had no such deductions been
made, (ii) such Borrower shall make such deductions, and (iii) such Borrower
shall pay the full amount deducted to the relevant taxing or other authority in
accordance with applicable law. Within 30 days after the date of any payment of
Taxes, Borrower Representative shall furnish to Agent the original or a
certified copy of a receipt evidencing payment thereof. Agent and Lenders shall
not be obligated to return or refund any amounts received pursuant to this
SECTION 1.15.
(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within 10 days of demand therefor, pay Agent and each
Lender for the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this SECTION 1.15) paid by Agent or such
Lender, as appropriate, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction outside
the United States of America (a "FOREIGN LENDER") as to which payments to be
made under this Agreement or under the Notes are exempt from United States'
withholding tax under an applicable statute or tax treaty shall provide to
Borrower Representative and Agent a properly completed and executed IRS Form
W-8ECI or Form W-8BEN or other applicable form, certificate or document
prescribed by the IRS or the United States of America certifying as to such
Foreign Lender's entitlement to such exemption (a "CERTIFICATE OF EXEMPTION").
Any foreign Person that seeks to become a Lender under this Agreement shall
provide a Certificate of Exemption to Borrower Representative and Agent prior to
becoming a Lender hereunder. No foreign Person may become a Lender hereunder if
such Person fails to deliver a Certificate of Exemption in advance of becoming a
Lender.
1.16 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY.
(a) If any Lender shall have determined in good faith that any
law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements
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(whether or not having the force of law), in each case, adopted after the
Closing Date, from any central bank or other Governmental Authority increases or
would have the effect of increasing the amount of capital, reserves or other
funds required to be maintained by such Lender and thereby reducing the rate of
return on such Lender's capital as a consequence of its obligations hereunder,
then Borrowers shall from time to time upon demand by such Lender (with a copy
of such demand to Agent) pay to Agent, for the account of such Lender,
additional amounts sufficient to compensate such Lender for such reduction. A
certificate as to the amount of that reduction and showing the basis of the
computation thereof in reasonable detail submitted by such Lender to Borrower
Representative and to Agent shall, absent manifest error, be final, conclusive
and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrowers shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost in reasonable detail,
submitted to Borrower Representative and to Agent by such Lender, shall be
conclusive and binding on Borrowers for all purposes, absent manifest error.
Each Lender agrees that, as promptly as practicable after it becomes aware of
any circumstances referred to above which would result in any such increased
cost, the affected Lender shall, to the extent not inconsistent with such
Lender's internal policies of general application, use reasonable commercial
efforts to minimize costs and expenses incurred by it and payable to it by
Borrowers pursuant to this SECTION 1.16(b).
(c) Notwithstanding anything to the contrary contained herein, if
the introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
good faith opinion, adversely affecting it or its Loans or the income obtained
therefrom, on notice thereof and demand therefor by such Lender to Borrower
Representative through Agent, (i) the obligation of such Lender to agree to make
or to make or to continue to fund or maintain LIBOR Loans shall terminate and
(ii) each Borrower shall forthwith prepay in full all outstanding LIBOR Loans
owing by such Borrower to such Lender, together with interest accrued thereon,
unless Borrower Representative on behalf of such Borrower, within 5 Business
Days after the delivery of such notice and demand, converts all LIBOR Loans into
Index Rate Loans.
(d) Within 15 days after receipt by Borrower Representative of
written notice and demand from any Lender (an "AFFECTED LENDER") for payment of
additional amounts or increased costs as provided in SECTIONS 1.15(a), 1.16(a)
OR 1.16(b), Borrower Representative may, at its option, notify Agent and such
Affected Lender of its intention to replace the Affected Lender. So long as no
Default or Event of Default has occurred and is continuing, Borrower
Representative, with the consent of Agent, may obtain, at Borrowers' expense, a
replacement
20
Lender ("REPLACEMENT LENDER") for the Affected Lender, which Replacement Lender
must be reasonably satisfactory to Agent. If Borrowers obtain a Replacement
Lender within 90 days following notice of their intention to do so, the Affected
Lender must sell and assign its Loans and Commitments to such Replacement Lender
for an amount equal to the principal balance of all Loans held by the Affected
Lender and all accrued interest and Fees with respect thereto through the date
of such sale; PROVIDED, that Borrowers shall have reimbursed such Affected
Lender for the additional amounts or increased costs that it is entitled to
receive under this Agreement through the date of such sale and assignment.
Notwithstanding the foregoing, Borrowers shall not have the right to obtain a
Replacement Lender if the Affected Lender rescinds its demand for increased
costs or additional amounts within 15 days following its receipt of Borrowers'
notice of intention to replace such Affected Lender. Furthermore, if Borrowers
give a notice of intention to replace and do not so replace such Affected Lender
within 90 days thereafter, Borrowers' rights under this SECTION 1.16(d) shall
terminate and Borrowers shall promptly pay all increased costs or additional
amounts demanded by such Affected Lender pursuant to SECTIONS 1.15(a), 1.16(a)
AND 1.16(b).
1.17 SINGLE LOAN. The US Term Loan and all of the other Obligations
of US Borrower arising under this Agreement and the other Loan Documents shall
constitute one general obligation of US Borrower secured, until the Termination
Date, by the Collateral pledged by the US Credit Parties to secure such
Obligations pursuant to the Collateral Documents. All Loans to European Borrower
and all of the other Obligations of European Borrower arising under this
Agreement and the other Loan Documents shall constitute one general obligation
of European Borrower secured, until the Termination Date, by all of the
Collateral pursuant to the Collateral Documents.
1.18 LIMITATIONS ON OBLIGATIONS OF EUROPEAN CREDIT PARTIES.
Notwithstanding anything set forth in this Agreement or any other Loan Documents
to the contrary, other than as may be required by SECTION 5.11, no European
Credit Party shall at any time be liable for any portion of the principal of the
US Term Loan or any interest thereon or Fees or in respect of Indemnified
Liabilities payable with respect thereto (and the US Credit Parties are solely
liable for such Obligations), and no assets of any European Credit Party shall
at any time serve, directly or indirectly, as security for any portion of the
principal of the US Term Loan or any interest thereon or any Fees or in respect
of Indemnified Liabilities payable with respect thereto.
2. CONDITIONS PRECEDENT
2.1 CONDITIONS TO THE INITIAL LOANS. No Lender shall be obligated
to make any Loan or incur any Letter of Credit Obligations on the Closing Date,
or to take, fulfill, or perform any other action hereunder, until the following
conditions have been satisfied or provided for in a manner satisfactory to
Agent, or waived in writing by Agent and Lenders:
(a)
CREDIT AGREEMENT; LOAN DOCUMENTS. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrowers, each other Credit Party, Agent and Lenders; and Agent shall have
received such documents, instruments, agreements and legal opinions as Agent
shall reasonably request in connection with the transactions contemplated by
this Agreement and the other Loan Documents, including all those listed in the
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Closing Checklist attached hereto as ANNEX D, each in form and substance
reasonably satisfactory to Agent.
(b) REPAYMENT OF PRIOR LENDER OBLIGATIONS; SATISFACTION OF
OUTSTANDING L/CS. (i) Agent shall have received a fully executed original of a
pay-off letter reasonably satisfactory to Agent confirming that all of the Prior
Lender Obligations will be repaid in full from the proceeds of the Term Loans
and the initial European Revolving Credit Advances and all Liens upon any of the
property of Borrowers or any of their Subsidiaries in favor of Prior Lenders
shall be terminated by Prior Lenders immediately upon such payment; and (ii) all
letters of credit issued or guaranteed by Prior Lenders shall have been cash
collateralized, supported by a guaranty of Agent or supported by a Letter of
Credit issued pursuant to ANNEX B, as mutually agreed upon by Agent, Borrowers
and Prior Lenders.
(c) APPROVALS. Agent shall have received (i) satisfactory evidence
that the Credit Parties have obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Loan Documents and the
consummation of the Related Transactions or (ii) an officer's certificate in
form and substance reasonably satisfactory to Agent affirming that no such
consents or approvals are required.
(d) PAYMENT OF FEES. Borrowers shall have paid the Fees required
to be paid on the Closing Date in the respective amounts specified in SECTION
1.9 (including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent for all fees, costs and expenses (including, without
limitation, reasonable legal fees and expenses) of closing presented as of the
Closing Date.
(e) CAPITAL STRUCTURE: OTHER INDEBTEDNESS. The capital structure
of each Credit Party and the terms and conditions of all Indebtedness of each
Credit Party shall be acceptable to Agent in its sole discretion.
(f) DUE DILIGENCE. Agent shall have completed its business and
legal due diligence with results reasonably satisfactory to Agent.
(g) CONSUMMATION OF RELATED TRANSACTIONS. Agent shall have
received fully executed copies of the Acquisition Agreement and each of the
Related Transactions Documents, each of which shall be in form and substance
reasonably satisfactory to Agent and its counsel. The Acquisition and the other
Related Transactions shall have been consummated in accordance with the terms of
the Acquisition Agreement and the other Related Transactions Documents.
(i) The aggregate purchase price for the Acquisition shall
not have exceeded $70,000,000 plus aggregate fees and closing costs (including
those payable to Agent and Lenders) which shall not exceed $4,000,000 (which
shall include, without limitation, the fees incurred in connection with the
issuance of the Subordinated Notes). In no event shall the proceeds of any
Subordinated Debt applied to the purchase price for the Acquisition exceed
$35,000,000.
(ii) On or prior to the Closing Date, Innovations shall
have received aggregate gross cash proceeds of $35,000,000 from the issuance of
the Subordinated Notes. All
22
terms of the Subordinated Notes and the Subordinated Note Documents and any
other Subordinated Debt and the documentation with respect thereto (including,
without limitation, the maturity thereof, the interest rate applicable thereto,
the required payments with respect thereto, and the covenants, events of default
and subordination provisions with respect thereto) shall be in form and
substance, satisfactory to Agent and Lenders. On or prior to the Closing Date,
Agent shall have received copies of all agreements entered into, or proposed to
be entered into, in respect of all the foregoing, certified on behalf of
Borrowers as true and complete by an authorized officer of Innovations.
(iii) On or prior to the Closing Date, Innovations shall
have used all cash proceeds (net of underwriting commissions, fees or other
expenses) described in the preceding CLAUSE (ii) to make payments owing in
connection with the Acquisition before utilizing any proceeds of Loans pursuant
to this Agreement for such purpose. The cash proceeds received on or prior to
the Closing Date from the Subordinated Notes and other available cash shall be
sufficient to effect the Acquisition and pay all fees and expenses in connection
therewith.
(h) LTM EBITDA; SENIOR CONSOLIDATED LEVERAGE RATIO; TOTAL LEVERAGE
RATIO. The Credit Parties shall have LTM EBITDA, after giving effect to the
Acquisition, calculated on a consolidated basis for the twelve-month period
ended June 30, 2002, as determined by reference to the financial statements
delivered pursuant to SECTION 3.4(a), of not less than $21,900,000. The Credit
Parties shall have a Senior Consolidated Leverage Ratio and Total Leverage
Ratio, after giving effect to the Acquisition, calculated on a consolidated
basis for the twelve-month period ended June 30, 2002, as determined by
reference to the financial statements delivered pursuant to SECTION 3.4(a), of
not more than 2.5:1.00 and 3.8:100, respectively.
(i) SALES AND DISTRIBUTION AGREEMENTS; LETTERS OF INTENT. Agent
shall have received a fully executed copy of (A) each sales and distribution
agreement among Subsidiaries of Innovations in effect on the Closing Date, each
of which shall be in form and substance reasonably satisfactory to Agent, and
(B) letters of intent between Subsidiaries of Innovations acceptable to Agent
pursuant to which such parties covenant and agree to enter into sales and
distribution agreements no less favorable to the distributor (unless consented
to by Agent) than the form of agreement delivered pursuant to clause (A) above.
(j) MINIMUM CASH. Agent shall have received evidence reasonably
satisfactory to it that the Credit Parties, on a consolidated basis, shall have
available cash of at least $10,000,000 on the Closing Date.
2.2 FURTHER CONDITIONS TO EACH LOAN. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Advance, convert or
continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation, if,
as of the date thereof:
(a) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect as of such date,
except to the extent that such representation or warranty expressly relates to
an earlier date and except for changes therein expressly permitted or expressly
contemplated by this Agreement and Agent or Requisite Lenders have determined
not to make such Advance, convert or continue any Loan as LIBOR
23
Loan or incur such Letter of Credit Obligation as a result of the fact that such
warranty or representation is untrue or incorrect;
(b) any event or circumstance having a Material Adverse Effect has
occurred since the date hereof as determined by the Requisite Lenders and Agent
or Requisite Lenders have determined not to make such Advance, convert or
continue any Loan as a LIBOR Loan or incur such Letter of Credit Obligation as a
result of the fact that such event or circumstance has occurred;
(c) any Default or Event of Default has occurred and is continuing
or would result after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligation), and Agent or Requisite Lenders shall have
determined not to make any Advance, convert or continue any Loan as a LIBOR Loan
or incur any Letter of Credit Obligation as a result of that Default or Event of
Default; or
(d) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), the outstanding principal amount of the aggregate
European Revolving Loan would exceed the European Maximum Amount, in each case,
less the then outstanding principal amount of the European Swing Line Loan.
The request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this SECTION 2.2 have been satisfied and (ii) a reaffirmation by the Credit
Parties of the granting and continuance of Agent's Liens, on behalf of itself
and Lenders, pursuant to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties, after giving effect to the
Acquisition, to Agent and each Lender with respect to all Credit Parties, each
and all of which shall survive the execution and delivery of this Agreement.
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
(a) Each Credit Party (i) is a corporation, limited liability
company or limited partnership duly organized, validly existing and in good
standing (or the foreign equivalent thereof, if any) under the laws of its
respective jurisdiction of incorporation or organization set forth in DISCLOSURE
SCHEDULE (3.1); (ii) is duly qualified to conduct business and is in good
standing (or the foreign equivalent thereof, if any) in each other jurisdiction
where its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified could not
reasonably be expected to result in a Material Adverse Effect; (iii) has the
requisite corporate, company or partnership power and corporate, company or
partnership authority and the legal right to own, pledge, mortgage or otherwise
encumber and operate its properties, to lease the property it operates under
lease and to conduct its business as now, heretofore and proposed to be
conducted; (iv) subject to specific representations regarding
24
Environmental Laws, has all material licenses, permits, consents or approvals
from or by, and has made all material filings with, and has given all material
notices to, all Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct; (v) is in compliance with
its charter and bylaws or equivalent constitutive documents or partnership or
operating agreement, as applicable; and (vi) subject to specific representations
set forth herein regarding ERISA or a Foreign Government Scheme or Arrangement,
as applicable, Environmental Laws, tax and other laws, is in compliance with all
applicable provisions of law, except where the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(b) Without limiting the generality of SECTION 3.1 or any other
representation or warranty made herein, each Credit Party and each of the
facilities operated by such Credit Party and, to such Credit Party's knowledge,
each of such Credit Party's licensed employees and contractors (other than
contracted agencies), if any, in the exercise of their respective duties on
behalf of such Credit Party or any such facilities, is in compliance with all
applicable statutes, laws, ordinances, rules and regulations of any federal,
state or local governmental authority with respect to regulatory matters
primarily relating to patient healthcare and/or patient healthcare information,
including without limitation the HIPAA (collectively, "HEALTHCARE LAWS"), except
where the failure to comply could not reasonably be expected to have a Material
Adverse Effect. Each Credit Party has maintained in all material respects all
records required to be maintained by any governmental agency or authority or
otherwise under the Healthcare Laws and, to the knowledge of such Credit Party,
there are no presently existing circumstances which could reasonably be expected
to result in material violations of the Healthcare Laws. Each Credit Party and
its Affiliates and, to the knowledge of such Credit Party, the owners of the
facilities and other businesses managed by such Credit Party or its Affiliates,
if any, have such permits, licenses, franchises, certificates and other
approvals or authorizations of governmental or regulatory authorities as are
necessary under applicable law to own their respective properties and to conduct
their respective business (including without limitation such permits as are
required under such Healthcare Laws), except where the failure to comply could
not reasonably be expected to have a Material Adverse Effect.
(c) None of the Credit Parties is a "covered entity" within the
meaning of HIPAA and none of the Credit Parties and/or its business and
operations are subject to or covered by the so-called "Administrative
Simplification" provisions of HIPAA.
3.2 EXECUTIVE OFFICES, COLLATERAL LOCATIONS, FEIN. As of the
Closing Date, the current location of each Credit Party's chief executive office
and the warehouses and premises at which any Collateral is located are set forth
in DISCLOSURE SCHEDULE (3.2), and none of such locations has changed within the
12 months preceding the Closing Date. In addition, DISCLOSURE SCHEDULE (3.2)
lists the federal employer identification number or other organizational number
set forth on its organizational documents of each Credit Party taxable in the
United States of America.
3.3 CORPORATE POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Person's corporate, company or partnership power; (b) have been
duly authorized by all necessary corporate, limited liability
25
company or limited partnership action; (c) do not contravene any provision of
such Person's charter, bylaws or equivalent constitutive documents or
partnership or operating agreement, as applicable; (d) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority; (e)
do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which such Person is a party or by which such Person or any of its
property is bound; (f) do not result in the creation or imposition of any Lien
upon any of the property of such Person other than those in favor of Agent, on
behalf of itself and Lenders, pursuant to the Loan Documents; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except those referred to in SECTION 2.1(c), all of which will have been
duly obtained, made or complied with prior to the Closing Date. Each of the Loan
Documents shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency
or other laws affecting creditors' rights generally.
3.4 FINANCIAL STATEMENTS AND PROJECTIONS. Except for the
Projections, all Financial Statements concerning the Reporting Credit Parties
that are referred to below have been prepared in accordance with GAAP
consistently applied throughout the periods covered (except as disclosed therein
and except, with respect to unaudited Financial Statements, for the absence of
footnotes and normal year-end audit adjustments) and present fairly in all
material respects the financial position of the Persons covered thereby as at
the dates thereof and the results of their operations and cash flows for the
periods then ended.
(a) FINANCIAL STATEMENTS. The following Financial Statements
attached hereto as DISCLOSURE SCHEDULE (3.4(a)) have been delivered on the date
hereof:
(i) The audited consolidated balance sheets at December
31, 2001 and the related statements of income and cash flows of Innovations for
the Fiscal Year then ended, certified by Xxxxxx Xxxxxxxx LLP.
(ii) The audited balance sheets at March 31, 2001 and March
31, 2002 and the related statements of income and cash flows of the Division for
the Fiscal Years then ended, certified by KPMG Peat Marwick.
(iii) The unaudited balance sheet at June 30, 2002 and the
related statement of income and cash flows of Innovations for the Fiscal Quarter
then ended, each of which shall have been reviewed by Ernst & Young LLP as
provided in Statement on Auditing Standards No. 71.
(b) PRO FORMA. The Pro Forma delivered on the date hereof and
attached hereto as DISCLOSURE SCHEDULE (3.4(b)) was prepared by Innovations
giving pro forma effect to the Related Transactions, was based on the unaudited
consolidated balance sheet of the Reporting Credit Parties, dated June 30, 2002.
26
(c) PROJECTIONS. The Projections delivered on the date hereof and
attached hereto as DISCLOSURE SCHEDULE (3.4(c)) have been prepared by the
Reporting Credit Parties in light of the past operations of their businesses,
but including future payments of known contingent liabilities stated at the
reasonably estimated present values thereof and reflect projections through
December 31, 2006, beginning on June 30, 2002 on a quarter-by-quarter basis for
the first year and on a year-by-year basis thereafter. The Projections are based
upon estimates and assumptions stated therein, all of which the Reporting Credit
Parties believe to be reasonable and fair in light of current conditions and
current facts known to the Reporting Credit Parties and, as of the Closing Date,
reflect the Reporting Credit Parties' good faith and reasonable estimates of the
future financial performance of the Reporting Credit Parties and of the other
information projected therein for the period set forth therein. It is understood
that the Projections are estimates only and not a guarantee of actual results.
3.5 MATERIAL ADVERSE EFFECT. Between December 31, 2001 and the
Closing Date: (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Pro Forma and
that, alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit Party's
assets and no law or regulation applicable to any Credit Party has been adopted
that has had or could reasonably be expected to have a Material Adverse Effect,
and (c) no Credit Party is in default and, to the best of Borrowers' knowledge,
no third party is in default under any material contract, lease or other
agreement or instrument, that alone or in the aggregate could reasonably be
expected to have a Material Adverse Effect. Between December 31, 2001 and the
Closing Date, no event has occurred, that alone or together with other events,
could reasonably be expected to have a Material Adverse Effect.
3.6 OWNERSHIP OF PROPERTY; LIENS. As of the Closing Date, the real
estate ("REAL ESTATE") listed in DISCLOSURE SCHEDULE (3.6) constitutes all of
the real property owned, leased, subleased, or used by any Credit Party. Except
as set forth in CLAUSE (b) of DISCLOSURE SCHEDULE (3.6), the aggregate value of
Collateral located on any property leased or subleased by any Credit Party does
not exceed $100,000. Each Credit Party owns good and marketable fee simple title
to all of its owned Real Estate, and valid leasehold interests in all of its
leased Real Estate, all as described on DISCLOSURE SCHEDULE (3.6), and copies of
all such leases or a summary of terms thereof reasonably satisfactory to Agent
have been delivered to Agent. DISCLOSURE SCHEDULE (3.6) further describes any
Real Estate with respect to which any Credit Party is a lessor, sublessor or
assignor as of the Closing Date. Each Credit Party also has good and marketable
title to, or valid leasehold interests in, all of its personal property and
assets. As of the Closing Date, none of the properties and assets of any Credit
Party are subject to any Liens other than Permitted Encumbrances, and there are
no facts, circumstances or conditions known to any Credit Party that may result
in any Liens (including Liens arising under Environmental Laws) other than
Permitted Encumbrances. Each Credit Party has received all deeds, assignments,
waivers, consents, nondisturbance and attornment or similar agreements, bills of
sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Credit Party's
right, title and interest in and to all such Real Estate and other properties
and assets. DISCLOSURE SCHEDULE (3.6) also describes any purchase options,
rights of first refusal or other similar contractual rights pertaining to any
Real
27
Estate. As of the Closing Date, no portion of any Credit Party's Real Estate has
suffered any material damage by fire or other casualty loss that has not
heretofore been repaired and restored in all material respects to its original
condition or otherwise remedied. As of the Closing Date, all material permits
required to have been issued or appropriate to enable the Real Estate to be
lawfully occupied and used for all of the purposes for which it is currently
occupied and used have been lawfully issued and are in full force and effect.
3.7 LABOR MATTERS. As of the Closing Date, (a) no strikes or other
material labor disputes against any Credit Party are pending or, to any Credit
Party's knowledge, threatened; (b) hours worked by and payment made to employees
of each Credit Party comply with the Fair Labor Standards Act and each other
federal, state, local or foreign law applicable to such matters; (c) all
payments due from any Credit Party for employee health and welfare insurance
have been paid or accrued as a liability on the books of such Credit Party; (d)
except as set forth in DISCLOSURE SCHEDULE (3.7), no Credit Party is a party to
or bound by any collective bargaining agreement, management agreement,
consulting agreement, employment agreement, bonus, restricted stock, stock
option, or stock appreciation plan or agreement or any similar plan, agreement
or arrangement (and true and complete copies of any agreements described on
DISCLOSURE SCHEDULE (3.7) have been delivered to Agent); (e) there is no
organizing activity involving any Credit Party pending or, to any Credit Party's
knowledge, threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Credit Party's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Credit Party has made a pending demand for
recognition; and (g) except as set forth in DISCLOSURE SCHEDULE (3.7), there are
no material complaints or charges against any Credit Party pending or, to the
knowledge of any Credit Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by any Credit
Party of any individual.
3.8 VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND
INDEBTEDNESS. Except as set forth in DISCLOSURE SCHEDULE (3.8), as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. All of the issued and outstanding Stock of each Credit Party is owned by
each of the Stockholders and in the amounts set forth in DISCLOSURE SCHEDULE
(3.8). Except as set forth in DISCLOSURE SCHEDULE (3.8), there are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Indebtedness and
Guaranteed Indebtedness of each Credit Party as of the Closing Date (except for
the Obligations) is described in SECTION 6.3 (including DISCLOSURE SCHEDULE
(6.3)).
3.9 GOVERNMENT REGULATION. No Credit Party is an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940. No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other federal
or state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder. The making of the Loans by Lenders to
Borrowers, the incurrence of the Letter of Credit Obligations on behalf of
European Borrower,
28
and the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
3.10 MARGIN REGULATIONS. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" as such terms are defined in Regulation U of the Federal Reserve Board as
now and from time to time hereafter in effect (such securities being referred to
herein as "MARGIN STOCK"). No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11 TAXES. All tax returns, reports and statements, including
information returns, required by any Governmental Authority ("TAX RETURNS") to
be filed by any Credit Party have been filed with the appropriate Governmental
Authority; all such Tax Returns are true, correct and complete in all material
respects; and all Charges have been paid prior to the date on which any fine,
penalty, interest or late charge may be added thereto for nonpayment thereof (or
any such fine, penalty, interest, late charge or loss has been paid), excluding
Charges or other amounts being contested in accordance with SECTION 5.2(b).
There are no Liens for Charges (other than for current Charges not yet due and
payable) upon the assets of any Credit Party. No adjustment relating to such Tax
Returns has been proposed formally or informally by any Governmental Authority
and, to the knowledge of each Credit Party, no basis exists for any such
adjustment. Proper and accurate amounts have been withheld by each Credit Party
from its respective employees, independent contractors, creditors and other
third parties for all periods in full and complete compliance with all
applicable federal, state, local and foreign laws and such withholdings have
been timely paid to the respective Governmental Authorities. DISCLOSURE SCHEDULE
(3.11) sets forth as of the Closing Date those taxable years for which any
Credit Party's tax returns are currently being audited by the IRS or any other
applicable Governmental Authority, and any assessments or threatened assessments
in connection with such audit, or otherwise currently outstanding. Except as
indicated on DISCLOSURE SCHEDULE (3.11), all Charges that have been claimed,
proposed, asserted or assessed against any Credit Party (or with respect to any
of their assets) have been fully paid or finally settled. Except as described in
DISCLOSURE SCHEDULE (3.11), no Credit Party has executed or filed with the IRS
or any other Governmental Authority any agreement or other document extending,
or having the effect of extending, the period for assessment or collection of
any Charges. None of the Credit Parties and their respective predecessors are
liable for any Charges: (a) under any agreement (including any tax sharing
agreements) or (b) to each Credit Party's knowledge, as a transferee. As of the
Closing Date, no Credit Party has agreed or been requested to make any
adjustment under IRC Section 481(a), by reason of a change in accounting method
or otherwise, which would have a Material Adverse Effect.
29
3.12 ERISA.
(a) DISCLOSURE SCHEDULE (3.12) lists (i) all ERISA Affiliates and
(ii) all Plans and separately identifies all Pension Plans, including Title IV
Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree
Welfare Plans. Copies of all such listed Plans, together with a copy of the
latest IRS/DOL 5500-series form for each such Plan, have been delivered to
Agent. Except with respect to Multiemployer Plans, each Qualified Plan has been
determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would cause
the loss of such qualification or tax-exempt status. Each Plan is in compliance
in all material respects with the applicable provisions of ERISA and the IRC,
including the timely filing of all reports required under the IRC or ERISA,
including the statement required by 29 CFR Section 2520.104-23. Neither any
Credit Party nor ERISA Affiliate has failed to make any contribution or pay any
amount due as required by either Section 412 of the IRC or Section 302 of ERISA
or the terms of any such Plan. Neither any Credit Party nor ERISA Affiliate has
engaged in a "prohibited transaction," as defined in Section 406 of ERISA and
Section 4975 of the IRC, in connection with any Plan, that would subject any
Credit Party to a material tax on prohibited transactions imposed by Section
502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in DISCLOSURE SCHEDULE (3.12): (i) no
Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or to
the knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan of any
Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 4041(b)(1) of ERISA, nor
has any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at
any time within the last five years) with Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such
time); (vi) except in the case of any ESOP, Stock of all Credit Parties and
their ERISA Affiliates makes up, in the aggregate, no more than 10% of fair
market value of the assets of any Plan measured on the basis of fair market
value as of the latest valuation date of any Plan; and (vii) no liability under
any Title IV Plan has been satisfied with the purchase of a contract from an
insurance company that is not rated AAA by the Standard & Poor's Corporation or
an equivalent rating by another nationally recognized rating agency.
(c) Except as set forth in DISCLOSURE SCHEDULE (3.12), with
respect to each scheme or arrangement mandated by a government other than the
United States of America providing for post-employment benefits (a "FOREIGN
GOVERNMENT SCHEME OR ARRANGEMENT") and with respect to each employee benefit
plan maintained or contributed to by any Credit Party or any Subsidiary of any
Credit Party that is not subject to United States law providing for
post-employment benefits (a "FOREIGN PLAN"): (i) all material employer and
employee contributions required by law or by the terms of any Foreign Government
Scheme or Arrangement or any
30
Foreign Plan have been made, or, if applicable, accrued, in accordance with
normal accounting practices; (ii) the fair market value of the assets of each
funded Foreign Plan, the liability of each insurer for any Foreign Plan funded
through insurance or the book reserve established for any Foreign Plan, together
with any accrued contributions, is sufficient to procure or provide for the
accrued benefit obligations, as of the date hereof, with respect to all current
and former participants in such Foreign Plan according to the actuarial
assumptions and valuations most recently used to account for such obligations,
in accordance with applicable generally accepted accounting principles, and the
liability of each Credit Party and each Subsidiary of a Credit Party with
respect to a Foreign Plan is reflected in accordance with normal accounting
practices on the financial statements of such Credit Party or such Subsidiary,
as the case may be; and (iii) each Foreign Plan required to be registered has
been registered and has been maintained in good standing with applicable
regulatory authorities unless, in each case, the failure to do so would not be
reasonably likely to have a Material Adverse Effect.
3.13 NO LITIGATION. No action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of any Credit
Party, threatened against any Credit Party, before any Governmental Authority or
before any arbitrator or panel of arbitrators (collectively, "LITIGATION"), that
(a) challenges any Credit Party's right or power to enter into or perform any of
its obligations under the Loan Documents to which it is a party, or the validity
or enforceability of any Loan Document or any action taken thereunder, or (b)
has a reasonable risk of being determined adversely to any Credit Party and
that, if so determined, could be reasonably be expected to have a Material
Adverse Effect. Except as set forth on DISCLOSURE SCHEDULE (3.13), as of the
Closing Date there is no Litigation pending or, to any Credit Party's knowledge,
threatened, that seeks damages in excess of $100,000 (or the Equivalent Amount
thereof) or injunctive relief against, or alleges criminal misconduct of, any
Credit Party.
3.14 BROKERS. Except for Xxxxxxxxx Associates, the fees of which
have been paid by the Borrowers, no broker or finder brought about the
obtaining, making or closing of the Loans or the Related Transactions, and no
Credit Party or Affiliate thereof has any obligation to any Person in respect of
any finder's or brokerage fees in connection therewith.
3.15 INTELLECTUAL PROPERTY. As of the Closing Date, each Credit
Party owns or has rights to use all Intellectual Property necessary to continue
to conduct its business as now or heretofore conducted by it or proposed to be
conducted by it, and each Patent, Trademark, Copyright and License is listed,
together with application or registration numbers, as applicable, in DISCLOSURE
SCHEDULE (3.15). To the knowledge of the Credit Parties, each of the Credit
Parties conducts its business and affairs without infringement of or
interference with any Intellectual Property of any other Person in any material
respect. Except as set forth in DISCLOSURE SCHEDULE (3.15), no Credit Party is
aware of any infringement claim by any other Person with respect to any
Intellectual Property.
3.16 FULL DISCLOSURE. No information contained in this Agreement,
any of the other Loan Documents or Financial Statements or other written reports
from time to time delivered hereunder or any written statement furnished by or
on behalf of any Credit Party to Agent or any Lender pursuant to the terms of
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which
31
they were made. The Liens granted to Agent, on behalf of itself and Lenders,
pursuant to the Collateral Documents will at all times be fully perfected first
priority Liens in and to the Collateral described therein, subject, as to
priority, only to Permitted Encumbrances.
3.17 ENVIRONMENTAL MATTERS.
(a) Except as set forth in DISCLOSURE SCHEDULE (3.17), as of the
Closing Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that would not adversely impact the value
or marketability of such Real Estate and that would not result in Environmental
Liabilities that could reasonably be expected to exceed $100,000 (or the
Equivalent Amount thereof); (ii) no Credit Party has caused or suffered to occur
any Release of Hazardous Materials on, at, in, under, above, to, from or about
any of its Real Estate; (iii) the Credit Parties are and have been in compliance
with all Environmental Laws, except for such noncompliance that would not result
in Environmental Liabilities which could reasonably be expected to exceed
$100,000 (or the Equivalent Amount thereof); (iv) the Credit Parties have
obtained, and are in compliance with, all Environmental Permits required by
Environmental Laws for the operations of their respective businesses as
presently conducted or as proposed to be conducted, except where the failure to
so obtain or comply with such Environmental Permits would not result in
Environmental Liabilities that could reasonably be expected to exceed $100,000
(or the Equivalent Amount thereof), and all such Environmental Permits are
valid, uncontested and in good standing; (v) no Credit Party is involved in
operations or knows of any facts, circumstances or conditions, including any
Releases of Hazardous Materials, that are likely to result in any Environmental
Liabilities of such Credit Party which could reasonably be expected to exceed
$100,000 (or the Equivalent Amount thereof), and no Credit Party has permitted
any current or former tenant or occupant of the Real Estate to engage in any
such operations; (vi) there is no Litigation arising under or related to any
Environmental Laws, Environmental Permits or Hazardous Material that seeks
damages, penalties, fines, costs or expenses in excess of $100,000 (or the
Equivalent Amount thereof) or injunctive relief against, or that alleges
criminal misconduct by, any Credit Party; (vii) no notice has been received by
any Credit Party identifying it as a "potentially responsible party" or
requesting information under CERCLA or analogous state statutes, and to the
knowledge of the Credit Parties, there are no facts, circumstances or conditions
that may result in any Credit Party being identified as a "potentially
responsible party" under CERCLA or analogous state statutes; and (viii) the
Credit Parties have provided to Agent copies of all existing environmental
reports, reviews and audits and all written information pertaining to actual or
potential Environmental Liabilities, in each case relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agent
(i) is not now, and has not ever been, in control of any of the Real Estate or
any Credit Party's affairs, and (ii) does not have the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's
conduct with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental Permits.
3.18 INSURANCE. DISCLOSURE SCHEDULE (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party.
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3.19 DEPOSIT ACCOUNTS. DISCLOSURE SCHEDULE (3.19) lists all banks
and other financial institutions at which any Credit Party maintains deposit or
other accounts as of the Closing Date, and such Schedule correctly identifies
the name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete
account number therefor.
3.20 GOVERNMENT CONTRACTS. Except as set forth in DISCLOSURE
SCHEDULE (3.20), as of the Closing Date, no Credit Party is a party to any
contract or agreement with any Governmental Authority and no Credit Party's
Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C. Section
3727) or any similar state or local law.
3.21 CUSTOMER AND TRADE RELATIONS. As of the Closing Date, there
exists no actual or, to the knowledge of any Credit Party, threatened
termination or cancellation of, or any material adverse modification or change
in: (i) the business relationship of any Credit Party with any customer or group
of customers whose purchases during the preceding 12 months caused them to be
ranked among the ten largest customers of such Credit Party; or (ii) the
business relationship of any Credit Party with any supplier material to its
operations.
3.22 AGREEMENTS AND OTHER DOCUMENTS. As of the Closing Date, each
Credit Party has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which it is subject and each of which is listed in DISCLOSURE
SCHEDULE (3.22): (a) supply agreements and purchase agreements not terminable by
such Credit Party within 60 days following written notice issued by such Credit
Party and involving transactions in excess of $1,000,000 (or the Equivalent
Amount thereof) per annum; (b) leases of Equipment having a remaining term of
one year or longer and requiring aggregate rental and other payments in excess
of $500,000 (or the Equivalent Amount thereof) per annum; (c) licenses and
permits held by the Credit Parties, the absence of which could be reasonably
likely to have a Material Adverse Effect; (d) instruments and documents
evidencing any Indebtedness or Guaranteed Indebtedness of such Credit Party and
any Lien granted by such Credit Party with respect thereto; and (e) instruments
and agreements evidencing the issuance of any equity securities, warrants,
rights or options to purchase equity securities of such Credit Party.
3.23 SOLVENCY. Both before and after giving effect to (a) the Loans
and Letter of Credit Obligations to be made or incurred on the Closing Date or
such other date as Loans and Letter of Credit Obligations requested hereunder
are made or incurred, (b) the disbursement of the proceeds of such Loans
pursuant to the instructions of the Borrowers; and (c) the consummation of the
Related Transactions; and (d) the payment and accrual of all transaction costs
in connection with the foregoing, each Credit Party is and will be Solvent.
3.24 ACQUISITION AGREEMENT. As of the Closing Date, Borrowers have
delivered to Agent a complete and correct copy of the Acquisition Agreement
(including all schedules, exhibits, amendments, supplements, modifications,
assignments and all other documents delivered pursuant thereto or in connection
therewith). No Credit Party and no other Person party thereto is in default in
the performance or compliance with any provisions thereof. The Acquisition
Agreement complies with, and the Acquisition has been consummated in accordance
with, all applicable laws. The Acquisition Agreement is in full force and effect
as of
33
the Closing Date and has not been terminated, rescinded or withdrawn. All
requisite approvals by Governmental Authorities having jurisdiction over Seller,
any Credit Party and other Persons referenced therein with respect to the
transactions contemplated by the Acquisition Agreement have been obtained, and
no such approvals impose any conditions to the consummation of the transactions
contemplated by the Acquisition Agreement or to the conduct by any Credit Party
of its business thereafter. To the best of each Credit Party's knowledge, none
of the Seller's representations or warranties in the Acquisition Agreement
contain any untrue statement of a material fact or omit any fact necessary to
make the statements therein not misleading. Each of the representations and
warranties given by each applicable Credit Party in the Acquisition Agreement is
true and correct in all material respects. Notwithstanding anything contained in
the Acquisition Agreement to the contrary, such representations and warranties
of the Credit Parties are incorporated into this Agreement by this SECTION 3.24
and shall, solely for purposes of this Agreement and the benefit of Agent and
Lenders, survive the consummation of the Acquisition.
3.25 INTENTIONALLY OMITTED.
3.26 SUBORDINATED DEBT. As of the Closing Date, Borrowers have
delivered to Agent a complete and correct copy of the Subordinated Note
Documents (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto or
in connection therewith). Innovations has the corporate power and authority to
incur the Indebtedness evidenced by the Subordinated Notes. The subordination
provisions of the Subordinated Notes are enforceable against the holders of the
Subordinated Notes by Agent and Lenders, except as enforcement may be limited by
bankruptcy, insolvency or other laws affecting creditors' rights generally. All
Obligations, including the Letter of Credit Obligations, constitute senior
Indebtedness entitled to the benefits of the subordination provisions contained
in the Subordinated Notes. Borrowers acknowledge that Agent and each Lender are
entering into this Agreement and are extending the Commitments in reliance upon
the subordination provisions of the Subordinated Notes and this SECTION 3.26.
3.27 BUSINESS ACTIVITIES OF US CREDIT PARTIES. As of the Closing
Date, the US Credit Parties (other than US Borrower) do not engage in any
business activities other than the distribution and sale of Inventory in the
United States.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 REPORTS AND NOTICES. Each Credit Party executing this
Agreement hereby agrees that from and after the Closing Date and until the
Termination Date, it shall deliver to Agent or to Agent and Lenders, as
required, the Financial Statements, notices, Projections and other information
at the times, to the Persons and in the manner set forth in ANNEX E.
4.2 COMMUNICATION WITH ACCOUNTANTS. Each Credit Party executing
this Agreement authorizes (a) Agent, twice in any twelve (12) month period or
more frequently with the consent of Borrower Representative, which consent shall
not be unreasonably withheld, and (b) so long as an Event of Default has
occurred and is continuing, Agent and each Lender, to communicate directly with
its independent certified public accountants, including Ernst & Young LLP, and
authorizes and, at Agent's request, shall instruct those accountants and
advisors to disclose and make available to Agent and each Lender any and all
Financial Statements and
34
other supporting financial documents, schedules and information relating to any
Credit Party (including copies of any issued management letters) with respect to
the business, financial condition and other affairs of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this
Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Except as
permitted under SECTION 6.1, each Credit Party shall: (a) do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and its rights and franchises; (b) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder; (c) at all
times maintain, preserve and protect all of its assets and properties used or
useful in the conduct of its business, and keep the same in good repair, working
order and condition in all material respects (taking into consideration ordinary
wear and tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices, except where the failure to comply could not reasonably be
expected to have a Material Adverse Effect; and (d) transact business only in
such corporate and trade names as are set forth in DISCLOSURE SCHEDULE (5.1);
PROVIDED that nothing in this SECTION 5.1 shall prevent the dissolution of
Inverness Medical Canada, Inc., Orgenics Holdings or Blitz 2001 GmbH so long as
(i) the assets, if any, of each such entity are transferred simultaneously with
such dissolution to a Credit Party and (ii) such entities are dissolved by not
later than the date which is one hundred eighty (180) days after the Closing
Date.
5.2 PAYMENT OF CHARGES.
(a) Subject to SECTION 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
property (real, personal or mixed) and all Charges with respect to tax, social
security and unemployment withholding with respect to its employees, (ii) lawful
claims for labor, materials, supplies and services or otherwise, and (iii) all
storage or rental charges payable to warehousemen or bailees, in each case,
before any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described in
SECTION 5.2(a); PROVIDED, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP; (ii) no Lien shall be imposed to secure payment of such Charges (other
than payments to warehousemen and/or bailees) that is superior to any of the
Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or
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discontinued adversely to such Credit Party or the conditions set forth in this
SECTION 5.2(b) are no longer met; and (v) Agent has not advised Borrowers in
writing that Agent reasonably believes that nonpayment or nondischarge thereof
could have or result in a Material Adverse Effect.
5.3 BOOKS AND RECORDS. Each Credit Party shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as DISCLOSURE SCHEDULE
(3.4(a)).
5.4 INSURANCE; DAMAGE TO OR DESTRUCTION OF COLLATERAL.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on DISCLOSURE SCHEDULE (3.18) as in
effect on the date hereof or otherwise in form and amounts and with insurers
reasonably acceptable to Agent. Such policies of insurance (or the loss payable
and additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide 30 days prior written notice to
Agent in the event of any non-renewal, cancellation or amendment of any such
insurance policy. If any Credit Party at any time or times hereafter shall fail
to obtain or maintain any of the policies of insurance required above, or to pay
all premiums relating thereto, Agent may at any time or times thereafter obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent deems advisable. Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, Agent shall not be deemed to have waived any Default or
Event of Default arising from any Credit Party's failure to maintain such
insurance or pay any premiums therefor. All sums so disbursed, including
reasonable attorneys' fees, court costs and other charges related thereto, shall
be payable on demand by Borrowers to Agent and shall be additional Obligations
hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any material adverse
change in any Credit Party's risk profile (including any change in the product
mix maintained by any Credit Party or any laws affecting the potential liability
of such Credit Party) to require additional forms and limits of insurance to, in
Agent's good faith opinion, adequately protect both Agent's and Lender's
interests in all or any portion of the Collateral and to ensure that each Credit
Party is protected by insurance in amounts and with coverage customary for its
industry. If reasonably requested by Agent, each Credit Party shall deliver to
Agent from time to time a report of a reputable insurance broker, reasonably
satisfactory to Agent, with respect to its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all "All Risk"
and business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional insured.
Each Credit Party irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent), so long as any Default or
Event of Default has occurred and is continuing or the anticipated insurance
proceeds exceed $2,000,000 (or the Equivalent Amount thereof), as such Credit
Party's true and lawful agent and attorney-in-fact for the purpose of
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making, settling and adjusting claims under such "All Risk" policies of
insurance, endorsing the name of such Credit Party on any check or other item of
payment for the proceeds of such "All Risk" policies of insurance and for making
all determinations and decisions with respect to such "All Risk" policies of
insurance. Agent shall have no duty to exercise any rights or powers granted to
it pursuant to the foregoing power-of-attorney. Borrower Representative shall
promptly notify Agent of any loss, damage, or destruction to the Collateral in
the amount of $2,000,000 (or the Equivalent Amount thereof) or more, whether or
not covered by insurance. After deducting from such proceeds the expenses, if
any, incurred by Agent in the collection or handling thereof, Agent may, at its
option, either apply such proceeds to the reduction of the Obligations in
accordance with SECTION 1.3(c), or permit or require the applicable Credit Party
to use such money, or any part thereof, to replace, repair, restore or rebuild
the Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss, damage
or destruction. Notwithstanding the foregoing, if the casualty giving rise to
such insurance proceeds could not reasonably be expected to have a Material
Adverse Effect and such insurance proceeds do not exceed $2,000,000 (or the
Equivalent Amount thereof) in the aggregate, Agent shall permit the applicable
Credit Party to replace, restore, repair or rebuild the property; PROVIDED that
if such Credit Party shall not have completed or entered into binding agreements
to complete such replacement, restoration, repair or rebuilding within 180 days
of such casualty, Agent may apply such insurance proceeds to the Obligations in
accordance with SECTION 1.3(c). All insurance proceeds that are to be made
available to European Borrower to replace, repair, restore or rebuild the
Collateral shall be applied by Agent to reduce the outstanding principal balance
of the European Revolving Loan of European Borrower (which application shall not
result in a permanent reduction of the European Revolving Loan Commitment). All
insurance proceeds made available to any Credit Party (other than European
Borrower) to replace, repair, restore or rebuild Collateral shall be deposited
in a cash collateral account. Thereafter, such funds shall be made available to
such Credit Party to provide funds to replace, repair, restore or rebuild the
Collateral as follows: (x) European Borrower shall request a European Revolving
Credit Advance or a release from the cash collateral account be made to such
Credit Party in the amount requested to be released and US Borrower shall
request a release from the cash collateral account to be made to such Credit
Party in the amount requested to be so released; and (y) so long as the
conditions set forth in SECTION 2.2 have been met, Revolving Lenders shall make
such European Revolving Credit Advance or Agent shall release funds from the
cash collateral account upon such request. To the extent not used to replace,
repair, restore or rebuild the Collateral in accordance with this SECTION 5.4,
such insurance proceeds shall be applied in accordance with SECTION 1.3(c).
5.5 COMPLIANCE WITH LAWS. Each Credit Party shall comply with all
federal, state, local and foreign laws and regulations applicable to it,
including those relating to HIPAA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.6 SUPPLEMENTAL DISCLOSURE. From time to time as may be
reasonably requested by Agent (which request will not be made more frequently
than once each year absent the occurrence and continuance of a Default or an
Event of Default), the Credit Parties shall supplement each Disclosure Schedule
hereto, or any representation herein or in any other Loan Document, with respect
to any matter hereafter arising that, if existing or occurring at the date of
37
this Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or that is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); PROVIDED that (a) no
such supplement to any such Disclosure Schedule or representation shall amend,
supplement or otherwise modify any Disclosure Schedule or representation, or be
or be deemed a waiver of any Default or Event of Default resulting from the
matters disclosed therein, except as consented to by Agent and Requisite Lenders
in writing, and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to the Closing Date.
5.7 INTELLECTUAL PROPERTY. Each Credit Party will conduct its
business and affairs (a) without intentional infringement of or intentional
interference with any Patents or trade secrets of any other Person in any
material respect and (b) without infringement of or interference with any
Intellectual Property (other than Patents and trade secrets) of any other Person
in any material respect, PROVIDED that no Credit Party shall be deemed to have
violated the covenant set forth in clause (b) if, prior to taking action which
is later judged by a court of competent jurisdiction to have infringed or
interfered with any such Intellectual Property, such Credit Party shall have (i)
obtained an opinion of reputable intellectual property counsel which (A)
provides that such action will not infringe or interfere with such Intellectual
Property and (B) is in such form which would reasonably entitle such Credit
Party to rely on such opinion, (ii) notified Agent of its intent to take such
action and (iii) within ten (10) days of Agent's request, delivered a copy of
such opinion to Agent.
5.8 ENVIRONMENTAL MATTERS. Each Credit Party shall and shall cause
each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are appropriate or
necessary to maintain the value and marketability of the Real Estate or to
otherwise comply in all material respects with Environmental Laws and
Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate; (c) notify Agent
promptly after such Credit Party becomes aware of any violation of Environmental
Laws or Environmental Permits or any Release on, at, in, under, above, to, from
or about any Real Estate that is reasonably likely to result in Environmental
Liabilities in excess of $100,000 (or the Equivalent Amount thereof); and (d)
promptly forward to Agent a copy of any order, notice, request for information
or any communication or report received by such Credit Party in connection with
any such violation or Release or any other matter relating to any Environmental
Laws or Environmental Permits that could reasonably be expected to result in
Environmental Liabilities in excess of $100,000 (or the Equivalent Amount
thereof), in each case whether or not the Environmental Protection Agency or any
Governmental Authority has taken or threatened any action in connection with any
such violation, Release or other matter. If Agent at any time has a reasonable
basis to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, that, in each case, could reasonably be
expected to have a Material Adverse Effect, then
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each Credit Party shall, upon Agent's written request (i) cause the performance
of such environmental audits including subsurface sampling of soil and
groundwater, and preparation of such environmental reports, at Borrowers'
expense, as Agent may from time to time reasonably request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to
Agent and shall be in form and substance reasonably acceptable to Agent, and
(ii) permit Agent or its representatives to have access to all Real Estate for
the purpose of conducting such environmental audits and testing as Agent deems
appropriate, including subsurface sampling of soil and groundwater. Borrowers
shall reimburse Agent for the costs of such audits and tests and the same will
constitute a part of the Obligations secured hereunder.
5.9 LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS, BAILEE LETTERS
AND REAL ESTATE PURCHASES. Except as otherwise agreed to by Agent in its sole
discretion, each Credit Party shall obtain a landlord's agreement, mortgagee
agreement or bailee letter, as applicable, from the lessor of each leased
property, mortgagee of owned property or bailee with respect to any warehouse,
processor or converter facility or other location where Collateral is stored or
located, which agreement or letter shall contain a waiver or subordination of
all Liens or claims that the landlord, mortgagee or bailee may assert against
the Collateral at that location, and shall otherwise be reasonably satisfactory
in form and substance to Agent. After the Closing Date, no real property or
warehouse space shall be leased by any Credit Party and no Inventory shall be
shipped to a processor or converter under arrangements established after the
Closing Date without the prior written consent of Agent or, unless and until a
reasonably satisfactory landlord agreement or bailee letter, as appropriate,
shall first have been obtained with respect to such location. Each Credit Party
shall timely and fully pay and perform its obligations under all leases and
other agreements with respect to each leased location or public warehouse where
any Collateral is or may be located except as otherwise consented to by Agent.
To the extent otherwise permitted hereunder, if any Credit Party proposes to
acquire a fee ownership interest in Real Estate after the Closing Date, it shall
first provide to Agent a mortgage or deed of trust granting Agent a first
priority Lien on such Real Estate, together with environmental audits, mortgage
title insurance commitment, real property survey, local counsel opinion(s), and,
if required by Agent, supplemental casualty insurance and flood insurance, and
such other documents, instruments or agreements reasonably requested by Agent,
in each case, in form and substance reasonably satisfactory to Agent.
5.10 ERISA. Each Credit Party shall comply in all material respects
with the applicable provisions of ERISA and the Code and any foreign laws and
regulations relating to any Foreign Plan or Foreign Government Scheme or
Arrangement, except to the extent such failure(s) to comply, individually and in
the aggregate, could not reasonably be expected to have a Material Adverse
Affect. Each Credit Party shall furnish to the Agent (a) written notice as soon
as possible, and in any event within 10 Business Days after any Credit Party
knows or has reason to know, of: (i) a material increase in the benefits of any
existing Plan, the establishment of any new Pension Plan, or the commencement of
contributions to any Multiemployer Plan; (ii) an ERISA Event, together with a
statement of an officer setting forth the details of such ERISA Event and the
action(s) which the Credit Parties propose to take with respect thereto;
(iii) the imposition of a Lien under Section 412 of the IRC or Section 302 or
4058 of ERISA; (iv) the imposition of a Lien with respect to any Foreign Plan;
and (b) written notice on an annual basis on each anniversary of the Closing
Date until the Termination Date, of the circumstances where the fair market
value of the assets of a funded Foreign Plan, the liability of each insurer for
such
39
Foreign Plan funded through insurance or the book reserve established for such
Foreign Plan, together with any accrued contributions, are insufficient to
satisfy all the accrued benefit obligations with respect to all current and
former participants in such Foreign Plan according to the actuarial assumptions
and valuations most recently used to account for such obligations in accordance
with generally accepted accounting principles. The Credit Parties shall furnish
to the Agent, within 30 Business Days after the filing thereof with the DOL, IRS
or PBGC, copies of each annual report (From 5500 series) filed for each Plan.
The Credit Parties shall furnish to the Agent, within 30 days after receipt by
any Credit Party or ERISA Affiliate, copies of each actuarial report for each
Title IV Plan or Multiemployer Plan and each annual report for any Multiemployer
Plan.
5.11 EUROPEAN CREDIT PARTIES. If Innovations shall at any time
consolidate its and all of its Subsidiaries' financial statements for United
States tax-reporting purposes on a world-wide basis, then at the request of the
Agent or the Required Lenders, Innovations shall cause each European Credit
Party to execute and deliver to the Agent (a) a Guaranty in form and substance
reasonably satisfactory to the Agent, guarantying the Obligations of US Borrower
hereunder and under the other Loan Documents, and (b) Collateral Documents in
form and substance reasonably satisfactory to Agent, granting to Agent a Lien
over such European Credit Party's properties and assets, in each case, to the
extent such European Credit Party has, or is required to have, entered into a
Guaranty or a Collateral Document with respect to the Obligations of the
European Credit Parties, and to the extent such Guaranty or Collateral Document
is not prohibited by the law of the jurisdiction of formation of such European
Credit Party, and shall cause the pledge of all Stock of such European Credit
Party to Agent to secure all of the Obligations to the extent only a portion of
such Stock was previously pledged to Agent to secure the Obligations of US
Credit Parties. The security interests required to be granted pursuant to this
SECTION 5.11 shall be valid and enforceable perfected security interests prior
to the rights of all third Persons and subject to no other Liens except
Permitted Encumbrances, except as enforcement may be limited by bankruptcy,
insolvency and other laws affecting creditors' rights generally. The Collateral
Documents and other instruments related thereto shall be duly recorded or filed
in such manner and in such places and at such times, and such other actions
shall be taken, as are required by law to establish, perfect, preserve and
protect the Liens, in favor of Agent, required to be granted pursuant to such
documents and all taxes, fees and other charges payable in connection therewith
shall be paid in full by European Credit Parties. At the time of the execution
and delivery of the additional documents, European Credit Parties shall cause to
be delivered to Agent such opinions of counsel, mortgage policies, title
surveys, real estate appraisals, certificates of title, stock certificates and
other related documents as may be reasonably requested by Agent to assure
themselves that this SECTION 5.11 has been complied with.
5.12 SALES AND DISTRIBUTION AGREEMENTS. The Credit Parties shall
promptly deliver to Agent copies of all sales and distribution agreements, in
form and substance reasonably satisfactory to Agent, between (a) the European
Credit Parties and (b) Innovations and/or its Domestic Subsidiaries (other than
the Excluded US Subsidiaries), pursuant to which, among other things, the
applicable European Credit Party (i) provides to Innovations and/or its Domestic
Subsidiaries (other than the Excluded US Subsidiaries) the right to manufacture
and distribute products in North America, (ii) agrees to provide appropriate key
personnel to assist, any of Innovations and/or its Domestic Subsidiaries (other
than the Excluded US Subsidiaries) in
40
its manufacturing operations, if applicable, and (iii) represents and warrants
as to its ownership and indemnifies such Persons for any breach of such
representations and warranties.
5.13 FURTHER ASSURANCES. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon request of Agent, duly execute and deliver, or cause to
be duly executed and delivered, to Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectively the provisions and
purposes of this Agreement or any other Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof until the
Termination Date:
6.1 MERGERS, SUBSIDIARIES, ETC. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) merge with, consolidate with,
acquire all or substantially all of the assets or Stock of, or otherwise combine
with or acquire, any Person, except that (i) any wholly-owned Subsidiary of US
Borrower may merge with US Borrower so long as US Borrower is the survivor
thereof, (ii) any wholly-owned Subsidiary of European Borrower may merge with
European Borrower so long as European Borrower is the survivor thereof, (iii)
any US Credit Party (other than US Borrower) may merge with any other US Credit
Party (other than US Borrower), and (iv) any European Credit Party (other than
European Borrower) may merge with any other European Credit Party (other than
European Borrower),or (b) form any Subsidiary or acquire all or substantially
all of the assets or Stock of any Person without the prior written consent of
Agent. Notwithstanding the foregoing, any Borrower may acquire all or
substantially all of the assets or Stock of any Person (the "TARGET") (in each
case, a "PERMITTED ACQUISITION"), subject to the satisfaction of each of the
following conditions:
(i) Agent shall receive at least 30 Business Days' prior
written notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such proposed Permitted
Acquisition;
(ii) such Permitted Acquisition shall only involve assets
comprising a business, or those assets of a business, of the type engaged in by
Borrowers as of the Closing Date, and which business would not subject Agent or
any Lender to regulatory or third party approvals in connection with the
exercise of its rights and remedies under this Agreement or any other Loan
Documents other than approvals applicable to the exercise of such rights and
remedies with respect to Borrowers prior to such Permitted Acquisition;
(iii) such Permitted Acquisition shall be consensual and
shall have been approved by the Target's board of directors or otherwise duly
authorized by the Target;
(iv) no additional Indebtedness, Guaranteed Indebtedness,
contingent obligations or other liabilities shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of Borrowers and Target
after giving effect to such Permitted Acquisition, except ordinary course trade
payables, accrued expenses and unsecured
41
Indebtedness of the Target to the extent no Default or Event of Default has
occurred and is continuing or would result after giving effect to such Permitted
Acquisition;
(v) the consideration payable in connection with all
Permitted Acquisitions (including all transaction costs and all Indebtedness,
liabilities and contingent obligations incurred or assumed in connection
therewith or otherwise reflected in a consolidated balance sheet of Borrowers
and Target) shall consist solely of (A) Stock of Innovations and/or (B) cash not
to exceed $1,000,000 in the aggregate for the period from the Closing Date until
the Termination Date;
(vi) the Target shall have positive EBITDA for the trailing
twelve-month period preceding the date of the Permitted Acquisition, as
determined based upon the Target's financial statements for its most recently
completed fiscal year and its most recent interim financial period completed
within 60 days prior to the date of consummation of such Permitted Acquisition;
(vii) the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);
(viii) at or prior to the closing of any Permitted
Acquisition, Agent will be granted a first priority perfected Lien (subject to
Permitted Encumbrances) in all assets acquired pursuant thereto or in the assets
and Stock of the Target, and each Credit Party and the Target shall have
executed such documents and taken such actions as may be required by Agent in
connection therewith;
(ix) Concurrently with delivery of the notice referred to
in CLAUSE (i) above, Borrowers shall have delivered to Agent, in form and
substance reasonably satisfactory to Agent:
(1) a pro forma consolidated balance sheet, income
statement and cash flow statement of the Reporting Credit Parties (the
"ACQUISITION PRO FORMA"), based on recent financial statements, which shall be
complete and shall fairly present in all material respects the assets,
liabilities, financial condition and results of operations of Innovations and
its Subsidiaries in accordance with GAAP consistently applied, but taking into
account such Permitted Acquisition and the funding of all Loans in connection
therewith, and such Acquisition Pro Forma shall reflect that on a pro forma
basis, no Event of Default has occurred and is continuing or would result after
giving effect to such Permitted Acquisition and the Reporting Credit Parties
would have been in compliance with the financial covenants set forth in ANNEX G
for the four quarter period reflected in the Compliance Certificate most
recently delivered to Agent pursuant to ANNEX E prior to the consummation of
such Permitted Acquisition (after giving effect to such Permitted Acquisition
and all Loans funded in connection therewith as if made on the first day of such
period);
(2) updated versions of the most recently
delivered Projections covering the 1-year period commencing on the date of such
Permitted Acquisition and otherwise prepared in accordance with the Projections
(the "ACQUISITION PROJECTIONS") and based upon
42
historical financial data of a recent date reasonably satisfactory to Agent,
taking into account such Permitted Acquisition; and
(3) a certificate of the Treasurer and Vice
President, Finance, of Innovations to the effect that: (w) each Credit Party
(after taking into consideration all rights of contribution and indemnity such
Credit Party has against Innovations and each other Subsidiary of Innovations)
will be Solvent upon the consummation of the Permitted Acquisition; (x) the
Acquisition Pro Forma fairly presents the financial condition of the Reporting
Credit Parties (on a consolidated basis) as of the date thereof after giving
effect to the Permitted Acquisition; (y) the Acquisition Projections are
reasonable estimates of the future financial performance of the Reporting Credit
Parties subsequent to the date thereof based upon the historical performance of
the Reporting Credit Parties and the Target and show that the Reporting Credit
Parties shall continue to be in compliance with the financial covenants set
forth in ANNEX G for the 3-year period thereafter; and (z) the Reporting Credit
Parties have completed their due diligence investigation with respect to the
Target and such Permitted Acquisition, which investigation was conducted in a
manner similar to that which would have been conducted by a prudent purchaser of
a comparable business and the results of which investigation were delivered to
Agent and Lenders;
(x) on or prior to the date of such Permitted Acquisition,
Agent shall have received, in form and substance reasonably satisfactory to
Agent, copies of the acquisition agreement and related agreements and
instruments, and all opinions, certificates, lien search results and other
documents reasonably requested by Agent including those specified in the last
sentence of SECTION 5.9 and
(xi) at the time of such Permitted Acquisition and after
giving effect thereto, no Default or Event of Default has occurred and is
continuing.
6.2 INVESTMENTS; LOANS AND ADVANCES. Except as otherwise
expressly permitted by this SECTION 6.2, no Credit Party shall make or permit to
exist any investment in, or make, accrue or permit to exist loans or advances of
money to, any Person, through the direct or indirect lending of money, holding
of securities or otherwise, except that: (a) Borrowers may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to any Borrower pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of business,
so long as the aggregate amount of such Accounts so settled by Borrowers does
not exceed $500,000 (or the Equivalent Amount thereof); (b) each Credit Party
may maintain its existing investments and loans as of the Closing Date as set
forth on DISCLOSURE SCHEDULE (6.2) hereof; (c) European Borrower may make
investments and loans to Unipath Scandinavia AB, an entity organized under the
laws of Sweden and a wholly-owned Subsidiary of European Borrower, PROVIDED that
the aggregate amount of such investments and loans permitted by this clause (c)
shall not exceed $250,000 (or the Equivalent Amount thereof) at any time; (d) US
Borrower may make loans to Ostex International, Inc. ("OSTEX") pursuant to the
terms of that certain Agreement and Plan of Merger, dated as of September 6,
2002, by and among Innovations, Geras and Ostex; PROVIDED that the aggregate
amount of such loans permitted by this clause (d) shall not exceed $2,000,000 at
any time; (e) so long as Agent has not delivered an Activation Notice and there
is no outstanding European Revolving Loan balance, Borrowers may make
investments, subject to Control Letters
43
in favor of Agent for the benefit of Lenders or otherwise subject to a perfected
security interest in favor of Agent for the benefit of Lenders, in (i)
marketable direct obligations issued or unconditionally guaranteed by the United
States of America or any agency thereof maturing within one year from the date
of acquisition thereof, (ii) commercial paper maturing no more than one year
from the date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor's Ratings Group or Xxxxx'x Investors
Service, Inc., (iii) certificates of deposit maturing no more than one year from
the date of creation thereof issued by commercial banks incorporated under the
laws of the United States of America, each having combined capital, surplus and
undivided profits of not less than $300,000,000 and having a senior unsecured
rating of "A" or better by a nationally recognized rating agency (an "A RATED
BANK"), (iv) time deposits maturing no more than 30 days from the date of
creation thereof with A Rated Banks and (v) mutual funds that invest solely in
one or more of the investments described in clauses (i) through (iv) above; and
(f) the Credit Parties may make additional investments and loans not otherwise
permitted by this SECTION 6.2 (other than loans or other investments in Ostex),
PROVIDED that the aggregate amount of such investments and loans permitted by
this clause (f) shall not exceed $1,000,000 (or the Equivalent Amount thereof)
at any time.
6.3 INDEBTEDNESS.
(a) No Credit Party shall create, incur, assume or permit to exist
any Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in SECTION
6.7(c), (ii) the Loans and the other Obligations, (iii) unfunded pension fund
and other employee benefit plan obligations and liabilities to the extent they
are permitted to remain unfunded under applicable law, (iv) existing
Indebtedness described in DISCLOSURE SCHEDULE (6.3) and refinancings thereof or
amendments or modifications thereto that do not have the effect of increasing
the principal amount thereof or changing the amortization thereof (other than to
extend the same) and that are otherwise on terms and conditions no less
favorable to any Credit Party, Agent or any Lender, as determined by Agent in
good faith, than the terms of the Indebtedness being refinanced, amended or
modified, (v) Indebtedness specifically permitted under SECTION 6.17; (vi) the
Subordinated Debt evidenced by the Subordinated Notes and refinancings thereof
or amendments thereto to the extent permitted by the Intercreditor Agreement;
(vii) Indebtedness consisting of intercompany loans and advances made by US
Borrower to any other US Credit Party which is a Subsidiary of US Borrower
(other than the Excluded US Subsidiaries); PROVIDED that: (A) US Borrower shall
record all intercompany transactions on its books and records in a manner
reasonably satisfactory to Agent; (B) the obligations of US Borrower with
respect to such intercompany loans and advances shall be subordinated to the
Obligations pursuant to SECTION 11.18; and (C) no Default or Event of Default
would occur and be continuing after giving effect to any such proposed
intercompany loan; (viii) Indebtedness consisting of intercompany loans and
advances made by European Borrower to any other European Credit Party which is a
Subsidiary of European Borrower (other than the Excluded European Subsidiaries);
PROVIDED that: (A) European Borrower shall record all intercompany transactions
on its books and records in a manner reasonably satisfactory to Agent; (B) the
obligations of European Borrower with respect to such intercompany loans and
advances shall be subordinated to the Obligations pursuant to SECTION 11.18; and
(C) no Default or Event of Default would occur and be continuing after giving
effect to any such proposed intercompany loan; (ix) Indebtedness consisting of
44
intercompany loans and advances, made by US Borrower to European Borrower;
PROVIDED that: (A) US Borrower shall record all intercompany transactions on its
books and records in a manner reasonably satisfactory to Agent; (B) the
obligations of European Borrower with respect to such intercompany loans and
advances shall be subordinated to the Obligations pursuant to SECTION 11.18; (C)
no Default or Event of Default would occur and be continuing after giving effect
to any such proposed intercompany loan; (x) Indebtedness consisting of
intercompany loans and advances made by European Borrower to US Borrower;
PROVIDED that: (A) European Borrower shall record all intercompany transactions
on its books and records in a manner reasonably satisfactory to Agent; (B) the
obligations of US Borrower with respect to such intercompany loans and advances
shall be subordinated to the Obligations pursuant to SECTION 11.18; and (C) no
Default or Event of Default would occur and be continuing after giving effect to
any such proposed intercompany loan; (ix) Indebtedness under Interest Hedge
Agreements and Foreign Exchange Agreements entered into in the ordinary course
of business; PROVIDED that such agreements (A) are designed solely to protect
Credit Parties against fluctuations in foreign currency exchange rates or
interest rates and (B) do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder; and (x) unsecured Indebtedness incurred by any
Credit Party, not to exceed at any time $500,000 in the aggregate.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations; (ii) Indebtedness secured by a Permitted Encumbrance if the asset
securing such Indebtedness has been sold or otherwise disposed of in accordance
with SECTIONS 6.8(b) OR (c); (iii) Indebtedness permitted by SECTION 6.3(a)(i)
so long as any Liens securing such Indebtedness are terminated simultaneously
therewith; (iv) Indebtedness permitted by SECTION 6.3(a)(iv) upon any
refinancing thereof in accordance with SECTION 6.3(a)(iv); (v) Indebtedness
permitted by SECTION 6.3(a)(ix), (vi) payments of interest by Innovations on the
Subordinated Notes to the extent permitted by the Intercreditor Agreement, and
(vii) as otherwise permitted in SECTION 6.14.
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS.
(a) Except as otherwise expressly permitted in this SECTION 6 with
respect to Affiliates, no Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit
Party's business and upon fair and reasonable terms that are no less favorable
to such Credit Party than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Credit Party. In addition, if
any such transaction or series of related transactions with any other Credit
Party or any Affiliate thereof involves payments in excess of $100,000 (or the
Equivalent Amount thereof) in the aggregate, the terms of these transactions
must be disclosed in advance to Agent and Lenders. All such transactions
existing as of the date hereof are described in DISCLOSURE SCHEDULE (6.4(a)).
(b) Except as set forth on DISCLOSURE SCHEDULE (6.4(b)), no Credit
Party shall enter into any lending or borrowing transaction with any employees
of any Credit Party, except loans to its respective employees in the ordinary
course of business consistent with past practices
45
for travel and entertainment expenses, relocation costs and similar purposes up
to a maximum of $75,000 (or the Equivalent Amount thereof) to any employee and
up to a maximum of $250,000 (or the Equivalent Amount thereof) in the aggregate
at any one time outstanding.
6.5 CAPITAL STRUCTURE AND BUSINESS. No Credit Party shall (a) make
any changes in any of its business objectives, purposes or operations that could
reasonably be expected to have or result in a Material Adverse Effect, (b) make
any change in its capital structure as described in DISCLOSURE SCHEDULE (3.8),
including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock; PROVIDED that Innovations may issue or sell shares of its
Stock for cash so long as (i) the proceeds thereof are applied in prepayment of
the Obligations as required by SECTION 1.3(b)(iii), and (ii) no Change of
Control occurs after giving effect thereto, or (c) amend its charter or bylaws
in a manner that would adversely affect Agent or Lenders or such Credit Party's
duty or ability to repay the Obligations. No Credit Party shall engage in any
business other than the businesses currently engaged in by it or businesses
reasonably related thereto.
6.6 GUARANTEED INDEBTEDNESS. No Credit Party shall create, incur,
assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement
of instruments or items of payment for deposit to the general account of any
Credit Party, and (b) for Guaranteed Indebtedness incurred for the benefit of
any other Credit Party if the primary obligation is expressly permitted by this
Agreement.
6.7 LIENS. No Credit Party shall create, incur, assume or permit
to exist any Lien on or with respect to its Accounts or any of its other
properties or assets (whether now owned or hereafter acquired) except for (a)
Permitted Encumbrances; (b) Liens in existence on the date hereof and summarized
on DISCLOSURE SCHEDULE (6.7) securing the Indebtedness described on DISCLOSURE
SCHEDULE (6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; PROVIDED that the principal
amount of the Indebtedness so secured is not increased and the Lien does not
attach to any other property; (c) Liens created after the date hereof by
conditional sale or other title retention agreements (including Capital Leases)
or in connection with purchase money Indebtedness with respect to Equipment and
Fixtures acquired by any Credit Party in the ordinary course of business,
involving the incurrence of an aggregate amount of purchase money Indebtedness
and Capital Lease Obligations of not more than $500,000 (or the Equivalent
Amount thereof) outstanding at any one time for all such Liens (PROVIDED that
such Liens attach only to the assets subject to such purchase money debt and
such Indebtedness is incurred within 20 days following such purchase and does
not exceed 100% of the purchase price of the subject assets); and (d) other
Liens securing Indebtedness not exceeding $500,000 (or the Equivalent Amount
thereof). In addition, no Credit Party shall become a party to any agreement,
note, indenture or instrument, or take any other action, that would prohibit the
creation of a Lien on any of its properties or other assets in favor of Agent,
on behalf of itself and Lenders, as additional collateral for the Obligations,
except operating leases, Capital Leases or Licenses which prohibit Liens upon
the assets that are subject thereto.
6.8 SALE OF STOCK AND ASSETS. No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or other
assets, except as permitted under SECTION 6.5, including the Stock of any of its
Subsidiaries (whether in a public or a private
46
offering or otherwise) or any of its Accounts, other than (a) the sale of
Inventory in the ordinary course of business, (b) the sale, transfer, conveyance
or other disposition by a Credit Party of Equipment, Fixtures or Real Estate
that are obsolete or no longer used or useful in such Credit Party's business
and having a net book value not exceeding $1,000,000 (or the Equivalent Amount
thereof) in the aggregate in any Fiscal Year; (c) other Equipment and Fixtures
having a value not exceeding $200,000 (or the Equivalent Amount thereof) in any
single transaction or $400,000 (or the Equivalent Amount thereof) in the
aggregate in any Fiscal Year; (d) the transfer by a US Credit Party of Stock or
assets of a Subsidiary of such US Credit Party to another US Credit Party; and
(e) the transfer by a European Credit Party of Stock or assets of a Subsidiary
of such European Credit Party to another European Credit Party, PROVIDED that
Borrower Representative shall have provided Agent prior written notice of such
transfer and, upon Agent's request, the Borrowers shall have delivered to Agent
an opinion of counsel acceptable to Agent which shall provide (i) that Agent's
Lien on the Stock or assets so transferred shall, after giving effect to such
transfer, continue in full force and effect and shall continue to have the
priority contemplated by this
Credit Agreement and the other Loan Documents,
(ii) that such transfer does not violate applicable law and (iii) such other
opinions as Agent may reasonably request, all in form and substance satisfactory
to Agent. With respect to any disposition of assets or other properties
permitted pursuant to CLAUSES (b) and (c) above, subject to SECTION 1.3(b),
Agent agrees on reasonable prior written notice to release its Lien on such
assets or other properties in order to permit the applicable Credit Party to
effect such disposition and shall execute and deliver to Borrowers, at
Borrowers' expense, appropriate UCC-3 termination statements and other releases
as reasonably requested by Borrowers.
6.9 ERISA. No Credit Party shall, or shall cause or permit any
ERISA Affiliate to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect. No Credit Party
shall cause of permit an event that could result in the imposition of a Lien
with respect to any Foreign Plan. No Credit Party shall cause or permit the fair
market value of the assets of any funded Foreign Plan, the liability of each
insurer for such Foreign Plan funded through insurance or the book reserve
established for such Foreign Plan, together with any accrued contributions, to
become insufficient to satisfy all the accrued benefit obligations with respect
to all current and former participants in such Foreign Plan according to the
actuarial assumptions and valuations most recently used to account for such
obligations in accordance with generally accepted accounting principles to the
extent such underfunding could reasonably be expected to have a Material Adverse
Effect.
6.10 FINANCIAL COVENANTS. No Credit Party shall breach or fail to
comply with any of the Financial Covenants.
6.11 HAZARDOUS MATERIALS. No Credit Party shall cause or permit a
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.
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6.12 SALE-LEASEBACKS. Except as set forth on DISCLOSURE SCHEDULE
(6.12), no Credit Party shall engage in any sale-leaseback, synthetic lease or
similar transaction involving any of its assets.
6.13 CANCELLATION OF INDEBTEDNESS. No Credit Party shall cancel any
claim or debt owing to it, except for reasonable consideration negotiated on an
arm's length basis and in the ordinary course of its business consistent with
past practices.
6.14 RESTRICTED PAYMENTS. No Credit Party shall make any Restricted
Payment, except (a) intercompany loans and advances between Credit Parties to
the extent permitted by SECTION 6.3, (b) dividends and distributions by
Subsidiaries of any Borrower paid to such Borrower, (c) payments of principal
and interest of intercompany loans issued in accordance with SECTION 6.3, (d)
employee loans permitted under SECTION 6.4(b), and (e) the US Borrower may make
cash distributions to Innovations to enable Innovations to pay debt service on
the Subordinated Notes to the extent permitted by the Intercreditor Agreement;
PROVIDED that (i) no Default or Event of Default has occurred and is continuing
or would result after giving effect to any Restricted Payment pursuant to CLAUSE
(e) above, and (ii) the timing of the Restricted Payments referred to in CLAUSE
(e) above shall be set at dates that permit the delivery of Financial Statements
necessary to determine current compliance with the Financial Covenants prior to
each such payment.
6.15 CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL YEAR.
No Credit Party shall (a) change its name as it appears in official filings in
the jurisdiction of its incorporation or other organization (b) change its chief
executive office, principal place of business, corporate offices or warehouses
or locations at which Collateral is held or stored, or the location of its
records concerning the Collateral, (c) change the type of entity that it is, (d)
change its organization identification number, if any, issued by its
jurisdiction of incorporation or other organization, or (e) change its
jurisdiction of incorporation or organization, in each case without at least 30
days prior written notice to Agent and after Agent's written acknowledgment that
any reasonable action requested by Agent in connection therewith, including to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral, has been completed or taken, and provided that any such new
location for any Credit Party shall be in the same country in which such
Collateral is held or stored as of the Closing Date. No Credit Party shall
change its Fiscal Year.
6.16 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement, the other Loan
Documents and the Subordinated Notes and any agreement or indenture in
connection therewith) that could directly or indirectly restrict, prohibit or
require the consent of any Person with respect to the payment of dividends or
distributions or the making or repayment of intercompany loans by a Subsidiary
of Innovations to Innovations or to any Borrower or between Borrowers.
6.17 NO SPECULATIVE TRANSACTIONS. No Credit Party shall engage in
any transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
48
6.18 LEASES; REAL ESTATE PURCHASES. No Credit Party shall enter
into any operating lease for Equipment or Real Estate, if the aggregate of all
such operating lease payments payable in any year for all Credit Parties on a
consolidated basis would exceed $1,000,000 (or the Equivalent Amount thereof).
No Credit Party shall purchase a fee simple ownership interest in Real Estate.
6.19 CHANGES RELATING TO SUBORDINATED DEBT; MATERIAL CONTRACTS.
(a) No Credit Party shall change or amend the terms of any
Subordinated Note Documents unless otherwise expressly permitted under the
Intercreditor Agreement.
(b) No Credit Party shall change or amend the terms of any
Material Contract.
6.20 BUSINESS ACTIVITIES. From and after the consummation of the
Related Transactions on the Closing Date, (a) Innovations shall not engage in
any business or have any assets or incur any Indebtedness or Guaranteed
Indebtedness (other than the Obligations) other than (i) owning the Stock of its
Subsidiaries owned by it as of the Closing Date, (ii) the entering into, and the
performance of obligations under, this Agreement, the other Loan Documents to
which it is a party and the Related Transaction Documents to which it is a
party, (iii) the receipt of cash dividend or cash distribution from US Borrower
in accordance with the terms hereof, (iv) activities associated with expenses
and other amounts paid with any distributions paid to Innovations which are
permitted under SECTION 6.14 and (v) Subordinated Debt as evidenced by the
Subordinated Note Documents; PROVIDED, HOWEVER, Innovations may engage in
activities incidental to (A) the maintenance of its corporate existence in
compliance with applicable law, (B) legal, tax and accounting matters in
connection with any of the foregoing activities and (C) the licensing of
intellectual property rights by Innovations from Swissco; and (b) Geras shall
not engage in any business or have any assets or incur any Indebtedness unless
(i) Agent shall have given its prior written consent and (ii) Agent shall have
received a legal opinion in form and substance, and from counsel, reasonably
satisfactory to Agent.
7. TERM
7.1 TERMINATION. The financing arrangements contemplated hereby
shall be in effect until the Commitment Termination Date, and the Loans and all
other Obligations shall be automatically due and payable in full on such date.
7.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENTS. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any
49
such termination or cancellation and shall continue in full force and effect
until the Termination Date; PROVIDED, that the provisions of SECTION 11, the
payment obligations under SECTIONS 1.15 and 1.16, and the indemnities contained
in the Loan Documents shall survive the Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "EVENT
OF DEFAULT" hereunder:
(a) Any Borrower (i) fails to make any payment of principal of, or
interest on, the Loans or any of the other Obligations when due and payable,
(ii) fails to make any payment of Fees owing in respect of the Loans or any of
the other Obligations when due and payable and such failure continues for a
period of 3 Business Days or more, or (iii) fails to pay or reimburse Agent or
Lenders for any expense reimbursable hereunder or under any other Loan Document
within 10 days following Agent's demand for such reimbursement or payment of
expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe
any of the provisions of SECTIONS 1.4, 1.8, 5.1, 5.4(a), 5.9, 5.10 OR 6, or any
of the provisions set forth in ANNEXES C OR G, respectively.
(c) Any Borrower fails or neglects to perform, keep or observe any
of the provisions of SECTION 4 or any provisions set forth in ANNEXES E OR F,
respectively, and the same shall remain unremedied for 3 Business Days or more.
(d) Any Credit Party fails or neglects to perform, keep or observe
any other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
SECTION 8.1) and the same shall remain unremedied for 30 days or more.
(e) A default or breach occurs under any other agreement, document
or instrument to which any Credit Party is a party that is not cured within any
applicable grace period therefor, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness or
Guaranteed Indebtedness (other than the Obligations) of any Credit Party (other
than any Immaterial Subsidiary) in excess of $350,000 (or the Equivalent Amount
thereof) in the aggregate (including (x) undrawn committed or available amounts
and (y) amounts owing to all creditors under any combined or syndicated credit
arrangements), or (ii) causes, or permits any holder of such Indebtedness or
Guaranteed Indebtedness or a trustee to cause, Indebtedness or Guaranteed
Indebtedness or a portion thereof in excess of $350,000 (or the Equivalent
Amount thereof) in the aggregate to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment, or cash collateral in respect
thereof to be demanded, in each case, regardless of whether such default is
waived, or such right is exercised, by such holder or trustee.
(f) Any representation or warranty herein or in any Loan Document
or in any written statement, report, financial statement or certificate made or
delivered to Agent or any Lender by (i) any Credit Party (other than an
Immaterial Subsidiary) is untrue or incorrect in any material respect as of the
date when made or deemed made or (ii) any Immaterial Subsidiary is
50
untrue or incorrect in any material respect as of the date when made or deemed
made and such breach could reasonably be expected to have a Material Adverse
Effect.
(g) Assets of any Credit Party with a fair market value of
$350,000 (or the Equivalent Amount thereof) or more are attached, seized, levied
upon or subjected to a writ or distress warrant, or come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors of
any Credit Party and such condition continues for 30 days or more.
(h) A case or proceeding is commenced against any Credit Party
(other than any Immaterial Subsidiary) seeking a decree or order in respect of
such Credit Party (i) under the Bankruptcy Code, or any other applicable
federal, state or foreign bankruptcy or other similar law, (ii) appointing a
custodian, receiver, liquidator, examiner, assignee, trustee or sequestrator (or
similar official) for such Credit Party or for any substantial part of any such
Credit Party's assets, or (iii) ordering the winding-up or liquidation or
examinership of the affairs of such Credit Party, and such case or proceeding
shall remain undismissed or unstayed for 60 days or more or a decree or order
granting the relief sought in such case or proceeding shall be entered by a
court of competent jurisdiction.
(i) Any Credit Party (other than any Immaterial Subsidiary) (i)
files a petition seeking relief under the Bankruptcy Code, or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii)
consents to or fails to contest in a timely and appropriate manner the
institution of proceedings thereunder or the filing of any such petition or the
appointment of or taking possession by a custodian, receiver, liquidator,
examiner, assignee, trustee or sequestrator (or similar official) for such
Credit Party or for any substantial part of any such Credit Party's assets,
(iii) makes an assignment for the benefit of creditors, (iv) takes any action in
furtherance of any of the foregoing; or (v) admits in writing its inability to,
or is generally unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in
excess of $350,000 (or the Equivalent Amount thereof) in the aggregate at any
time are outstanding against one or more of the Credit Parties (other than any
Immaterial Subsidiary) and the same are not, within 30 days after the entry
thereof, discharged or execution thereof stayed or bonded pending appeal, or
such judgments are not discharged prior to the expiration of any such stay.
(k) Any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or shall
assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any Lien created under any Loan Document ceases to be a valid and perfected
first priority Lien (except as otherwise permitted herein or therein) in any of
the Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any event occurs, whether or not insured or insurable, as a
result of which revenue-producing activities cease or are substantially
curtailed at any facility of Credit Parties
51
generating more than 10% of Credit Parties' consolidated revenues for the Fiscal
Year preceding such event, and such cessation or curtailment continues for more
than 20 days.
(n) Any default or breach by any Credit Party occurs and is
continuing under any Material Contract that could reasonably be expected to have
a Material Adverse Effect, or any of the Material Contracts shall be terminated
for any reason.
(o) Any "DEFAULT" or "EVENT OF DEFAULT" under and as defined in
the Subordinated Note Documents occurs.
(p) Orgenics or Unipath Scandinavia fails or neglects to perform,
keep or observe any of the provisions set forth in SECTION 11.19.
8.2 REMEDIES.
(a) If any Default or Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice, suspend the European Revolving Loan facility with
respect to additional Advances and/or the incurrence of additional Letter of
Credit Obligations, whereupon any additional Advances and additional Letter of
Credit Obligations shall be made or incurred in Agent's sole discretion (or in
the sole discretion of the Requisite Lenders, if such suspension occurred at
their direction) so long as such Default or Event of Default is continuing. If
any Default or Event of Default has occurred and is continuing, Agent may (and
at the written request of Requisite Lenders shall), without notice except as
otherwise expressly provided herein, increase the rate of interest applicable to
the Loans and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default has occurred and is continuing, Agent
may (and at the written request of the Requisite Lenders shall), without notice:
(i) terminate the European Revolving Loan facility with respect to further
Advances or the incurrence of further Letter of Credit Obligations; (ii) declare
all or any portion of the Obligations, including all or any portion of any Loan
to be forthwith due and payable, and require that the Letter of Credit
Obligations be cash collateralized as provided in ANNEX B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrowers and each other Credit Party; or (iii) exercise any
rights and remedies provided to Agent under the Loan Documents or at law or
equity, including all remedies provided under the Code (or the foreign
equivalent) and under the Irish Conveyancing and Law of Property Xxx 0000 as
amended by the Irish Conveyancing Acts 1882 and 1911; PROVIDED, that upon the
occurrence of an Event of Default specified in SECTIONS 8.1(h) OR (i), the
European Revolving Loan facility shall be immediately terminated and all of the
Obligations, including the aggregate European Revolving Loan, shall become
immediately due and payable without declaration, notice or demand by any Person.
8.3 WAIVERS BY CREDIT PARTIES. Except as otherwise provided for in
this Agreement or by applicable law, each Credit Party waives (including for
purposes of SECTION 12): (a) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which
52
any Credit Party may in any way be liable, and hereby ratifies and confirms
whatever Agent may do in this regard, (b) all rights to notice and a hearing
prior to Agent's taking possession or control of, or to Agent's replevy,
attachment or levy upon, the Collateral or any bond or security that might be
required by any court prior to allowing Agent to exercise any of its remedies,
and (c) the benefit of all valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 ASSIGNMENT AND PARTICIPATIONS.
(a) Subject to the terms of this SECTION 9.1, any Lender may make
an assignment of, or sell participations in, at any time or times, the Loan
Documents, Loans, Letter of Credit Obligations and any Commitment or any portion
thereof or interest therein, including any Lender's rights, title, interests,
remedies, powers or duties thereunder. Any assignment by a Lender shall: (i)
require the consent of Agent and the execution of an assignment agreement (an
"ASSIGNMENT AGREEMENT") substantially in the form attached hereto as EXHIBIT
9.1(a) and otherwise in form and substance reasonably satisfactory to, and
acknowledged by, Agent; PROVIDED that such consent shall not be required with
respect to an assignment to a Lender or an Affiliate of a Lender; (ii) be an
assignment of an equal percentage of each of such Lender's European Revolving
Credit Commitment, US Term Loan Commitment and European Term Loan Commitment;
(iii) be conditioned on such assignee Lender representing to the assigning
Lender and Agent that it is purchasing the applicable Loans to be assigned to it
for its own account, for investment purposes and not with a view to the
distribution thereof; (iv) after giving effect to any such partial assignment,
the assignee Lender shall have Commitments in an amount at least equal to
$5,000,000 and the assigning Lender shall have retained Commitments in an amount
at least equal to $5,000,000; PROVIDED that such amounts shall not be applicable
to any assignment to a Lender or an Affiliate of a Lender; (v) include a payment
to Agent of an assignment fee of $3,500; and (vi) so long as no Event of Default
has occurred and is continuing, require the consent of Borrower Representative,
which shall not be unreasonably withheld or delayed; PROVIDED that such consent
shall not be required for an assignment to any Lender or an Affiliate of a
Lender. In the case of an assignment by a Lender under this SECTION 9.1, the
assignee shall have, to the extent of such assignment, the same rights, benefits
and obligations as all other Lenders hereunder. In addition, any assignment by a
European Lender of its Loans and Commitments shall only be made as an integrated
part of (and any such assignment shall be deemed to be and constitute evidence
of) an assignment on a proportionate basis of such Lender's rights and interest
under the Collateral Documents to which it is a party and in the Collateral
created or granted thereunder. The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment. Each Borrower hereby
acknowledges and agrees that any assignment shall give rise to a direct
obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender". In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event Agent or any
Lender assigns or otherwise transfers all or any part of the Obligations, Agent
or any such Lender shall so notify Borrowers and Borrowers shall, upon the
request of Agent or such Lender, execute new Notes in exchange for the Notes, if
any, being assigned. Notwithstanding the foregoing provisions of this SECTION
9.1(a), any Lender may at any time pledge the Obligations held by it and such
Lender's
53
rights under this Agreement and the other Loan Documents to a Federal Reserve
Bank, and any Lender that is an investment fund may assign the Obligations held
by it and such Lender's rights under this Agreement and the other Loan Documents
to another investment fund managed by the same investment advisor; PROVIDED,
that no such pledge to a Federal Reserve Bank shall release such Lender from
such Lender's obligations hereunder or under any other Loan Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of SECTIONS 1.13,
1.15, 1.16 AND 9.8, each Borrower acknowledges and agrees that a participation
shall give rise to a direct obligation of Borrowers to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence no Borrower or Credit Party shall have any obligation or duty
to any participant. Neither Agent nor any Lender (other than the Lender selling
a participation) shall have any duty to any participant and may continue to deal
solely with the Lender selling a participation as if no such sale had occurred.
(c) Except as expressly provided in this SECTION 9.1, no Lender
shall, as between Borrowers and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any
Lender permitted to sell assignments or participations under this SECTION 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be reasonably
requested and, if so requested by Agent, the preparation of informational
materials for, and the participation of management in meetings with, potential
assignees or participants. Each Credit Party executing this Agreement shall
certify the correctness, completeness and accuracy of all descriptions of the
Credit Parties and their respective affairs contained in any selling materials
provided by them and all other information provided by them and included in such
materials, except that any Projections delivered by Borrowers shall only be
certified by Borrowers as having been prepared by Borrowers in compliance with
the representations contained in SECTION 3.4(c).
(e) Any Lender may furnish any information concerning Credit
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); PROVIDED that
such Lender shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in SECTION 11.8.
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(f) So long as no Event of Default has occurred and is continuing,
no Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under SECTION 1.16(a), increased
costs under SECTION 1.16(b), an inability to fund LIBOR Loans under SECTION
1.16(c), or withholding taxes in accordance with SECTION 1.15(a).
9.2 APPOINTMENT OF AGENT. GE Capital is hereby appointed to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this SECTION 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party or any other Person (other than Lenders). Agent
shall have no duties or responsibilities except for those expressly set forth in
this Agreement and the other Loan Documents. The duties of Agent shall be
mechanical and administrative in nature and Agent shall not have, or be deemed
to have, by reason of this Agreement, any other Loan Document or otherwise a
fiduciary relationship or other relationship in respect of any Lender except as
expressly set forth herein. Except as expressly set forth in this Agreement and
the other Loan Documents, Agent shall not have any duty to disclose, and shall
not be liable for failure to disclose, any information relating to any Credit
Party or any of their respective Subsidiaries or any Account Debtor that is
communicated to or obtained by GE Capital or any of its Affiliates in any
capacity. Neither Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or representatives shall be liable to any
Lender for any action taken or omitted to be taken by it hereunder or under any
other Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.
Each Lender hereby authorizes and empowers Agent with the right of
delegation and substitution and under relief from any restrictions (including
but not limited to restrictions of Section 181 German Civil Code) to execute on
its sole signature on behalf of such Lender any and all agreements,
sub-powers-of-attorney to third persons or other instruments and take such
actions, make all statements and accept all declarations deemed necessary or
useful in order to effect any Collateral on behalf of such Lender.
If Agent shall request instructions from Requisite Lenders or all
affected Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders or all affected Lenders,
as the case may be, and Agent shall not incur liability to any Person by reason
of so refraining. Agent shall be fully justified in failing or refusing to take
any action hereunder or under any other Loan Document (a) if such action would,
in the opinion of Agent, be contrary to law or the terms of this Agreement or
any other Loan Document, (b) if such action would, in the opinion of Agent,
expose Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or
55
refraining from acting hereunder or under any other Loan Document in accordance
with the instructions of Requisite Lenders or all affected Lenders, as
applicable.
9.3 AGENT'S RELIANCE, ETC. Neither Agent nor any of its Affiliates
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent: (a) may treat the payee of any
Note as the holder thereof until Agent receives written notice of the assignment
or transfer thereof signed by such payee and in form reasonably satisfactory to
Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4 GE CAPITAL AND AFFILIATES. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or any
such Affiliate, all as if GE Capital were not Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans and GE Capital as Agent.
9.5 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in SECTION 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests
56
in the Loans, and expressly consents to, and waives any claim based upon, such
conflict of interest.
9.6 INDEMNIFICATION. Lenders agree to indemnify Agent (to the
extent not reimbursed by Credit Parties and without limiting the obligations of
Credit Parties hereunder), ratably according to their respective Pro Rata
Shares, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted to be taken by Agent in
connection therewith; PROVIDED, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
agrees to reimburse Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including reasonable counsel fees) incurred by 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 and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Credit Parties.
9.7 SUCCESSOR AGENT. Agent may resign at any time by giving not
less than 30 days' prior written notice thereof to Lenders and Borrower
Representative. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the resigning Agent's giving notice of resignation, then
the resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary of
a commercial bank or financial institution if such commercial bank or financial
institution is organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
$300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, within 30 days after the date such notice of resignation was given by
the resigning Agent, such resignation shall become effective and the Requisite
Lenders shall thereafter perform all the duties of Agent hereunder until such
time, if any, as the Requisite Lenders appoint a successor Agent as provided
above. Any successor Agent appointed by Requisite Lenders hereunder shall be
subject to the approval of Borrower Representative, such approval not to be
unreasonably withheld or delayed; PROVIDED that such approval shall not be
required if a Default or an Event of Default has occurred and is continuing.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the resigning Agent. Upon the earlier of the
acceptance of any appointment as Agent hereunder by a successor Agent or the
effective date of the resigning Agent's resignation, the resigning Agent shall
be discharged from its duties and obligations under this Agreement and the other
Loan Documents, except that any indemnity rights or other rights in favor of
such resigning Agent shall continue. After any resigning Agent's resignation
hereunder, the provisions of this SECTION 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was acting as Agent under
this Agreement and the other Loan Documents.
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9.8 SETOFF AND SHARING OF PAYMENTS. In addition to any rights now
or hereafter granted under applicable law and not by way of limitation of any
such rights, upon the occurrence and during the continuance of any Event of
Default and subject to SECTION 9.9(f), each Lender is hereby authorized at any
time or from time to time, without notice to any Credit Party or to any other
Person, any such notice being hereby expressly waived, to offset and to
appropriate and to apply any and all balances held by it at any of its offices
for the account of any Borrower or Guarantor (regardless of whether such
balances are then due to such Borrower or Guarantor) and any other properties or
assets at any time held or owing by that Lender or that holder to or for the
credit or for the account of any Borrower or Guarantor against and on account of
any of the Obligations that are not paid when due. Any Lender exercising a right
of setoff or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares (other than
offset rights exercised by any Lender with respect to SECTIONS 1.13, 1.15 OR
1.16). Each Lender's obligation under this SECTION 9.8 shall be in addition to
and not in limitation of its obligations to purchase a participation in an
amount equal to its Pro Rata Share of the European Swing Line Loans under
SECTION 1.1. Each Credit Party executing this Agreement agrees, to the fullest
extent permitted by law, that (a) any Lender may exercise its right to offset
with respect to amounts in excess of its Pro Rata Share of the Obligations and
may sell participations in such amounts so offset to other Lenders and holders
and (b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the offset amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
offset, the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
9.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION; ACTIONS
IN CONCERT.
(a) ADVANCES; PAYMENTS.
(i) Revolving Lenders shall refund or participate in the
European Swing Line Loan in accordance with CLAUSES (iii) and (iv) of SECTION
1.1(c). If the Swing Line Lender declines to make a European Swing Line Loan or
if European Swing Line Availability is zero, Agent shall notify Revolving
Lenders, promptly after receipt of a Notice of European Revolving Credit Advance
and in any event prior to 1:00 p.m. (
New York time) on the date such Notice of
Revolving Advance is received, by telecopy, telephone or other similar form of
transmission. Each Revolving Lender shall make the amount of such Lender's Pro
Rata Share of such Revolving Credit Advance available to Agent in same day funds
by wire transfer to Agent's account as set forth in ANNEX G not later than 3:00
p.m. (New York time) on the requested funding date, in the case of an Index Rate
Loan, and not later than 11:00 a.m. (New York time) on the requested funding
date, in the case of a LIBOR Loan. After receipt of such wire transfers (or, in
the Agent's sole discretion, before receipt of such wire transfers), subject to
the terms
58
hereof, Agent shall make the requested Revolving Credit Advance to the Borrower
designated by Borrower Representative in the Notice of European Revolving Credit
Advance. All payments by each Revolving Lender shall be made without setoff,
counterclaim or deduction of any kind.
(ii) On the 2nd Business Day of each calendar week or more
frequently at Agent's election (each, a "SETTLEMENT DATE"), Agent shall advise
each Lender by telephone, or telecopy of the amount of such Lender's Pro Rata
Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each Lender has funded all
payments or Advances required to be made by it and has purchased all
participations required to be purchased by it under this Agreement and the other
Loan Documents as of such Settlement Date, Agent shall pay to each Lender such
Lender's Pro Rata Share of principal, interest and Fees paid by Borrowers since
the previous Settlement Date for the benefit of such Lender on the Loans held by
it. To the extent that any Lender (a "NON-FUNDING LENDER") has failed to fund
all such payments and Advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender's Pro Rata Share of all payments received from
Borrowers. Such payments shall be made by wire transfer to such Lender's account
(as specified by such Lender in ANNEX G or the applicable Assignment Agreement)
not later than 1:00 p.m. (Chicago time) 2:00 p.m. (New York time) on the next
Business Day following each Settlement Date.
(b) AVAILABILITY OF LENDER'S PRO RATA SHARE. Agent may assume that
each Revolving Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without setoff,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower Representative and Borrowers shall immediately repay such amount
to Agent. Nothing in this SECTION 9.9(b) or elsewhere in this Agreement or the
other Loan Documents shall be deemed to require Agent to advance funds on behalf
of any Revolving Lender or to relieve any Revolving Lender from its obligation
to fulfill its Commitments hereunder or to prejudice any rights that Borrowers
may have against any Revolving Lender as a result of any default by such
Revolving Lender hereunder. To the extent that Agent advances funds to any
Borrower on behalf of any Revolving Lender and is not reimbursed therefor on the
same Business Day as such Advance is made, Agent shall be entitled to retain for
its account all interest accrued on such Advance until reimbursed by the
applicable Revolving Lender.
(c) RETURN OF PAYMENTS.
(i) If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrowers and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to any Borrower or paid
to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this
59
Agreement or any other Loan Document, Agent will not be required to distribute
any portion thereof to any Lender. In addition, each Lender will repay to Agent
on demand any portion of such amount that Agent has distributed to such Lender,
together with interest at such rate, if any, as Agent is required to pay to any
Borrower or such other Person, without setoff, counterclaim or deduction of any
kind.
(d) NON-FUNDING LENDERS. The failure of any Non-Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder or to
purchase any participation in any European Swing Line Loan to be made or
purchased by it on the date specified therefor shall not relieve any other
Lender (each such other Revolving Lender, an "OTHER LENDER") of its obligations
to make such Advance or purchase such participation on such date, but neither
any Other Lender nor Agent shall be responsible for the failure of any
Non-Funding Lender to make an Advance, purchase a participation or make any
other payment required hereunder. Notwithstanding anything set forth herein to
the contrary, a Non-Funding Lender shall not have any voting or consent rights
under or with respect to any Loan Document or constitute a "Lender" or a
"Revolving Lender" (or be included in the calculation of "Requisite Lenders"
hereunder) for any voting or consent rights under or with respect to any Loan
Document. At Borrower Representative's request, Agent or a Person reasonably
acceptable to Agent shall have the right with Agent's consent and in Agent's
sole discretion (but shall have no obligation) to purchase from any Non-Funding
Lender, and each Non-Funding Lender agrees that it shall, at Agent's request,
sell and assign to Agent or such Person, all of the Commitments of that
Non-Funding Lender for an amount equal to the principal balance of all Loans
held by such Non-Funding Lender and all accrued interest and fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed Assignment Agreement.
(e) DISSEMINATION OF INFORMATION. Agent shall use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by Agent from, or delivered by Agent to, any Credit Party, with notice
of any Event of Default of which Agent has actually become aware and with notice
of any action taken by Agent following any Event of Default; PROVIDED, that
Agent shall not be liable to any Lender for any failure to do so, except to the
extent that such failure is attributable to Agent's gross negligence or willful
misconduct. Lenders acknowledge that Borrowers are required to provide Financial
Statements to Lenders in accordance with ANNEX E hereto and agree that Agent
shall have no duty to provide the same to Lenders.
(f) ACTIONS IN CONCERT. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.
9.10 AGENT AS JOINT CREDITOR.
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(a) (a) Each of the Credit Parties and each of the Lenders agree
that Agent shall be the joint creditor (together with the relevant Lender) of
each and every Obligation of any Credit Party towards each and any of the
Lenders under the Loan Documents, and that accordingly Agent shall have its own
independent right to demand performance by such Credit Party of those
Obligations when due. Any discharge of any Obligation to Agent shall, to the
same extent, discharge the corresponding obligation owing to the Lenders.
(b) Without limiting or affecting Agent's rights against any
Credit Party (whether under this paragraph or under any other provision of the
Loan Documents), Agent agrees with each Lender, severally but not jointly, that
it shall exercise its rights as a joint creditor with respect to the security
interest granted under the Loan Documents in accordance with the
Credit
Agreement and such Loan Documents. However, nothing in the previous sentence
shall limit to any extent Agent's rights in whatever capacity to take any action
to protect or preserve any rights under any Loan Document or to enforce any
security interest created thereby as contemplated by the
Credit Agreement and
the Loan Documents (or to do any act reasonably incidental to the foregoing).
(c) This SECTION 9.10 applies unless Agent specifies that it shall
not apply in relation to a specific Credit Party or all Credit Parties
incorporated in a particular jurisdiction.
10. SUCCESSORS AND ASSIGNS
10.1 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agent, Lenders and their respective successors and assigns (including, in
the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Agent and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party
without the prior express written consent of Agent and Lenders shall be void.
The terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Credit Party, Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of
the other Loan Documents.
11. MISCELLANEOUS
11.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except as
set forth in SECTION 11.2. Any letter of interest, commitment letter or
confidentiality agreement, if any, between any Credit Party and Agent or any
Lender or any of their respective Affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect shall
be superseded by this Agreement.
11.2 AMENDMENTS AND WAIVERS.
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(a) Except for actions expressly permitted to be taken by Agent,
no amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Agent and Borrowers, and by Requisite Lenders or all
affected Lenders, as applicable. Except as set forth in CLAUSES (b) and (c)
below, all such amendments, modifications, terminations or waivers requiring the
consent of any Lenders shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement that waives compliance
with the conditions precedent set forth in SECTION 2.2 to the making of any Loan
or the incurrence of any Letter of Credit Obligations shall be effective unless
the same shall be in writing and signed by Agent, Requisite Lenders and
Borrowers. Notwithstanding anything contained in this Agreement to the contrary,
no waiver or consent with respect to any Default or any Event of Default shall
be effective for purposes of the conditions precedent to the making of Loans or
the incurrence of Letter of Credit Obligations set forth in SECTION 2.2 unless
the same shall be in writing and signed by Agent, Requisite Lenders and
Borrowers.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected thereby:
(i) increase the principal amount of any Lender's Commitment (which action shall
be deemed only to affect those Lenders whose Commitments are increased and may
be approved by Requisite Lenders, including those Lenders whose Commitments are
increased); (ii) reduce the principal of, rate of interest on or Fees payable
with respect to any Loan or Letter of Credit Obligations of any affected Lender;
(iii) extend any scheduled payment date (other than payment dates of mandatory
prepayments under SECTION 1.3(b)(ii)-(iv)) or final maturity date of the
principal amount of any Loan of any affected Lender; (iv) waive, forgive, defer,
extend or postpone any payment of interest or Fees as to any affected Lender;
(v) release any Guaranty or, except as otherwise permitted herein or in the
other Loan Documents, release, or permit any Credit Party to sell or otherwise
dispose of, any Collateral with a value exceeding $5,000,000 (or the Equivalent
Amount thereof) in the aggregate (which action shall be deemed to directly
affect all Lenders); (vi) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this SECTION 11.2 or the definitions of the term "Requisite Lenders" insofar as
such definitions affect the substance of this SECTION 11.2. Furthermore, no
amendment, modification, termination or waiver affecting the rights or duties of
Agent or L/C Issuer under this Agreement or any other Loan Document shall be
effective unless in writing and signed by Agent or L/C Issuer, as the case may
be, in addition to Lenders required hereinabove to take such action. Each
amendment, modification, termination or waiver shall be effective only in the
specific instance and for the specific purpose for which it was given. No
amendment, modification, termination or waiver shall be required for Agent to
take additional Collateral pursuant to any Loan Document. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No notice
to or demand on any Credit Party in any case shall entitle such Credit Party or
any other Credit Party to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this SECTION 11.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.
62
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "PROPOSED CHANGE"):
(i) requiring the consent of all affected Lenders, the
consent of Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described in this CLAUSE (i) and in CLAUSE (ii) below being referred
to as a "NON-CONSENTING LENDER"),
(ii) requiring the consent of Requisite Lenders, the
consent of Lenders holding 66 2/3% or more of the aggregate Commitments is
obtained, but the consent of Requisite Lenders is not obtained,
then, at Borrower Representative's request, Agent or a Person reasonably
acceptable to Agent shall have the right with Agent's consent and in Agent's
sole discretion (but shall have no obligation) to purchase from such
Non-Consenting Lenders, and such Non-Consenting Lenders agree that they shall,
upon Agent's request, sell and assign to Agent or such Person, all of the
Commitments of such Non-Consenting Lenders for an amount equal to the principal
balance of all Loans held by the Non-Consenting Lenders and all accrued interest
and Fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment Agreement; PROVIDED that if
Agent is a Non-Consenting Lender, Requisite Lenders shall appoint a new Agent
simultaneously with such assignment.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions, proceedings or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent shall deliver to Borrowers termination
statements, mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations.
11.3 FEES AND EXPENSES. Borrowers shall reimburse (i) Agent for all
fees, costs and expenses (including the reasonable fees and expenses of all of
its counsel, advisors, consultants and auditors) and (ii) Agent for all fees,
costs and expenses, including the reasonable fees, costs and expenses of counsel
or other advisors (including environmental and management consultants and
appraisers), incurred in connection with the negotiation and preparation of the
Loan Documents and incurred in connection with:
(a) the forwarding to Borrowers or any other Person on behalf of
Borrowers by Agent of the proceeds of any Loan (including a wire transfer fee);
(b) any amendment, modification or waiver of, consent with respect
to, or termination of, any of the Loan Documents or Related Transactions
Documents or advice in connection with the syndication and administration of the
Loans made pursuant hereto or its rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Borrower or any other Person and
whether as a party, witness or otherwise) in any way relating to the Collateral,
any of the Loan Documents or any
63
other agreement to be executed or delivered in connection herewith or therewith,
including any litigation, contest, dispute, suit, case, proceeding or action,
and any appeal or review thereof, in connection with a case commenced by or
against any or all of the Borrowers or any other Person that may be obligated to
Agent by virtue of the Loan Documents; including any such litigation, contest,
dispute, suit, proceeding or action arising in connection with any work-out or
restructuring of the Loans during the pendency of one or more Events of Default;
PROVIDED that in the case of reimbursement of counsel for Lenders other than
Agent, such reimbursement shall be limited to one counsel for all such Lenders;
PROVIDED, further, that no Person shall be entitled to reimbursement under this
clause (c) in respect of any litigation, contest, dispute, suit, proceeding or
action to the extent any of the foregoing results from such Person's gross
negligence or willful misconduct;
(d) any attempt to enforce any remedies of Agent against any or
all of the Credit Parties or any other Person that may be obligated to Agent or
any Lender by virtue of any of the Loan Documents, including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
Loans during the pendency of one or more Events of Default; PROVIDED, that in
the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(e) any workout or restructuring of the Loans during the pendency
of one or more Events of Default; and
(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, as to each of CLAUSES (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this SECTION 11.3, all of
which shall be payable, on demand, by Borrowers to Agent. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
reasonable fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication expenses; court reporter
fees, costs and expenses; long distance telephone charges; air express charges;
telegram or telecopy charges; reasonable secretarial overtime charges; and
reasonable expenses for travel, lodging and food paid or incurred in connection
with the performance of such legal or other advisory services.
11.4 NO WAIVER. Agent's or any Lender's failure, at any time or
times, to require strict performance by the Credit Parties of any provision of
this Agreement or any other Loan Document shall not waive, affect or diminish
any right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the
64
provisions of SECTION 11.2, none of the undertakings, agreements, warranties,
covenants and representations of any Credit Party contained in this Agreement or
any of the other Loan Documents and no Default or Event of Default by any Credit
Party shall be deemed to have been suspended or waived by Agent or any Lender,
unless such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Agent and the applicable required
Lenders, and directed to Borrowers specifying such suspension or waiver.
11.5 REMEDIES. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
11.6 SEVERABILITY. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement or such other Loan Document.
11.7 CONFLICT OF TERMS. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement conflicts with any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
11.8 CONFIDENTIALITY. Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of its own confidential information)
to maintain as confidential all confidential information provided to them by the
Credit Parties until the date which is the later to occur of (a) the date which
is 3 years following receipt thereof or (b) the date which is 2 years following
the Termination Date, except that Agent and any Lender may disclose such
information (a) to Persons employed or engaged by Agent or such Lender with
respect to this credit; (b) to any bona fide assignee or participant or
potential assignee or participant that has agreed to comply with the covenant
contained in this SECTION 11.8 (and any such bona fide assignee or participant
or potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in CLAUSE (a) above); (c) as required
or requested by any Governmental Authority or reasonably believed by Agent or
such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Agent's or such
Lender's counsel, is required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any Litigation to
which Agent or such Lender is a party; or (f) that ceases to be confidential
through no fault of Agent or any Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY
OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
65
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY
HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX
XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY X XXXXX XXXXXXX XXXXXXX XX XXX
XXXX XXXXXX; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN
ANNEX H OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER
DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
11.10 NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered: (a) upon the earlier of actual receipt and 3
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this SECTION
11.10); (c) 1 Business Day after deposit with a reputable overnight courier with
all charges prepaid or (d) when delivered, if hand-delivered by messenger, all
of which shall be addressed to the party to be notified and sent to the address
or facsimile number indicated in ANNEX H or to such other address (or facsimile
number) as may be substituted by notice given as herein provided. The giving of
any notice required hereunder may
66
be waived in writing by the party entitled to receive such notice. Failure or
delay in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than Borrower
Representative or Agent) designated in ANNEX H to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
11.11 SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 PRESS RELEASES AND RELATED MATTERS. Each Credit Party
executing this Agreement agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure (a) using the name of
GE Capital or its affiliates or (b) referring to this Agreement, the other Loan
Documents or the Related Transactions Documents, in each case without at least 2
Business Days' prior notice to GE Capital and without the prior written consent
of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event, such Credit
Party or Affiliate will consult with GE Capital before issuing such press
release or other public disclosure; PROVIDED, HOWEVER, that with respect to
clause (b) only, the applicable Credit Party also shall be permitted to issue
such release or disclosure if GE Capital has not objected to such release or
disclosure within five (5) days after receipt of notice thereof. Each Credit
Party consents to the publication by Agent or any Lender of a tombstone or
similar advertising material relating to the financing transactions contemplated
by this Agreement reasonably acceptable to Borrower Representative. Agent may,
on notice to the Borrower Representative, provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements at Agent's expense.
11.15 REINSTATEMENT. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Borrower for liquidation or reorganization, should any Borrower become
insolvent or make an assignment for the benefit of
67
any creditor or creditors or should a receiver or trustee be appointed for all
or any significant part of any Borrower's assets, and shall continue to be
effective or to be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
11.16 ADVICE OF COUNSEL. Each of the parties represents to each
other party hereto that it has discussed this Agreement and, specifically, the
provisions of SECTIONS 11.9 and 11.13, with its counsel.
11.17 JUDGMENT CURRENCY.
(a) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder or under the Notes in any currency (the
"ORIGINAL CURRENCY") into another currency (the "OTHER CURRENCY") the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures Agent could purchase the Original Currency with the Other Currency at
11:00 A.M., local time, on the second Business Day preceding that on which final
judgment is given.
(b) The obligation of a Borrower in respect of any sum due in the
Original Currency from it to any Lender or Agent hereunder or under the Notes
held by such Lender shall, notwithstanding any judgment in any Other Currency,
be discharged only to the extent that on the Business Day following receipt by
such Lender or Agent (as the case may be) of any sum adjudged to be so due in
such Other Currency such Lender or Agent (as the case may be) may in accordance
with normal banking procedures purchase the Original Currency with such Other
Currency; if the amount of the Original Currency so purchased is less than the
sum originally due to such Lender or Agent (as the case may be) in the Original
Currency, such Borrower agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such Lender or Agent (as the case may be) against
such loss, and if the amount of the Original Currency so purchased exceeds the
sum originally due to any Lender or Agent (as the case may be) in the Original
Currency, such Lender or Agent (as the case may be) agrees to remit to such
Borrower such excess.
11.18 SUBORDINATION.
(a) Each Credit Party executing this Agreement covenants and
agrees that the payment of all indebtedness, principal, interest (including
interest which accrues after the commencement of any case or proceeding in
bankruptcy, or for the reorganization of any Credit Party), fees, charges,
expenses, attorneys' fees and any other sum, obligation or liability owing by
any other Credit Party to such Credit Party, including any intercompany trade
payables or royalty or licensing fees (collectively, the "SUBORDINATED
OBLIGATIONS"), is subordinated, to the extent and in the manner provided in this
SECTION 11.18, to the prior payment in full of all
68
Obligations (herein, the "SENIOR OBLIGATIONS") and that the subordination is for
the benefit of the Agent and Lenders, and Agent may enforce such provisions
directly.
(b) Each Credit Party executing this Agreement hereby (i)
authorizes Agent to demand specific performance of the terms of this SECTION
11.18, whether or not any other Credit Party shall have complied with any of the
provisions hereof applicable to it, at any time when such Credit Party shall
have failed to comply with any provisions of this SECTION 11.18 which are
applicable to it and (ii) irrevocably waives any defense based on the adequacy
of a remedy at law, which might be asserted as a bar to such remedy of specific
performance.
(c) Upon any distribution of assets of any Credit Party in any
dissolution, winding up, liquidation, examinership or reorganization (whether in
bankruptcy, insolvency, examinership or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise):
(i) The Agent and Lenders shall first be entitled to
receive payment in full in cash of the Senior Obligations before any Credit
Party is entitled to receive any payment on account of the Subordinated
Obligations;
(ii) Any payment or distribution of assets of any Credit
Party of any kind or character, whether in cash, property or securities, to
which any other Credit Party would be entitled except for the provisions of this
SECTION 11.18(c), shall be paid by the liquidating trustee or agent or other
Person making such payment or distribution directly to the Agent, to the extent
necessary to make payment in full of all Senior Obligations remaining unpaid
after giving effect to any concurrent payment or distribution or provisions
therefor to the Agents and Lenders; and
(iii) In the event that notwithstanding the foregoing
provisions of this SECTION 11.18(c), any payment or distribution of assets of
any Credit Party of any kind or character, whether in cash, property or
securities, shall be received by any other Credit Party on account of the
Subordinated Obligations before all Senior Obligations are paid in full, such
payment or distribution shall be received and held in trust for and shall be
paid over to the Agent for application to the payment of the Senior Obligations
until all of the Senior Obligations shall have been paid in full, after giving
effect to any concurrent payment or distribution or provision therefor to the
Agents and Lenders.
No right of the Agent and Lenders or any other present or future
holders of any Senior Obligations to enforce the subordination provisions herein
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of any Credit Party or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by any Credit Party with the
terms hereof, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with.
11.19 NEGATIVE PLEDGE. Each of Orgenics and Unipath Scandinavia AB
hereby covenant and agree with Agent and Lenders that such Person shall not (a)
create, incur, assume or permit to exist any Indebtedness other than (i) such
Indebtedness existing on the Closing Date listed on DISCLOSURE SCHEDULE
(11.19(a)), (ii) additional Indebtedness of Orgenics under the
69
facilities listed on DISCLOSURE SCHEDULE (11.19(a)), PROVIDED that the aggregate
amount of Indebtedness of Orgenics does not exceed $1,000,000 (or the Equivalent
Amount thereof) at any time, and (iii) refinancings thereof or amendments or
modifications thereto that do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to extend the
same) and that are otherwise on terms and conditions no less favorable to such
Person, as determined by Agent in good faith, than the terms of the Indebtedness
being refinanced, amended or modified, or (b) create, incur, assume or permit to
exist any Lien on or with respect to any of its other properties or assets
(whether now owned or hereafter acquired) except for (i) Permitted Encumbrances;
(ii) Liens in existence on the date hereof and summarized on DISCLOSURE SCHEDULE
(11.19(b)) securing the Indebtedness described on DISCLOSURE SCHEDULE (11.19(a))
and (iii) permitted refinancings, extensions and renewals thereof, including
extensions or renewals of any such Liens; PROVIDED that the principal amount of
the Indebtedness so secured is not increased and the Lien does not attach to any
other property.
11.20 NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
INVERNESS MEDICAL INNOVATIONS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXX LABORATORIES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
INVERNESS MEDICAL (UK) HOLDINGS LIMITED
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender
By:
------------------------------------
Duly Authorized Signatory
KEYBANK NATIONAL ASSOCIATION, as
Documentation Agent and Lender
By:
------------------------------------
Duly Authorized Signatory
71
THE ROYAL BANK OF SCOTLAND PLC,
as Lender
By:
------------------------------------
Duly Authorized Signatory
72
The following Persons are signatories to this Agreement in their
capacity as Credit Parties and not as Borrowers.
SELFCARE TECHNOLOGY, INC.
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
INVERNESS MEDICAL, INC.
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
UNIPATH DIAGNOSTICS, INC.
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
UNIPATH ONLINE, INC.
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
GERAS ACQUISITION CORP.
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
73
INVERNESS MEDICAL INTERNATIONAL
HOLDING CORP.
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
INVERNESS MEDICAL INTERNATIONAL
HOLDING CORP. II
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
ORGENICS INTERNATIONAL HOLDINGS BV
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
INVERNESS MEDICAL SWITZERLAND GMBH
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
UNIPATH DIAGNOSTICS GMBH
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
74
UNIPATH LIMITED
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
CAMBRIDGE DIAGNOSTICS IRELAND LIMITED
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
75
The following Persons are signatories to this Agreement for purposes
of SECTION 11.19 only.
ORGENICS LTD.
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
UNIPATH SCANDINAVIA AB
By:
------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
76
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings, and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"ACCOUNT DEBTOR" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"ACCOUNTING CHANGES" has the meaning ascribed thereto in ANNEX F.
"ACCOUNTS" means all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper, or Instruments),
(including any such obligations that may be characterized as an account or
contract right under the Code), (b) all of each Credit Party's rights in, to and
under all purchase orders or receipts for goods or services, (c) all of each
Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all health care insurance receivables and (f) all
collateral security of any kind, given by any Account Debtor or any other Person
with respect to any of the foregoing.
"ACQUISITION" means the acquisition of all or substantially all of the
assets of the Division by US Borrower pursuant to the Acquisition Agreement.
"ACQUISITION AGREEMENT" means that certain Asset Purchase Agreement,
dated as of August 7, 2002, by and among Medpointe, Inc., The CPI Development
Corporation, Medpointe Healthcare Inc., Innovations and US Borrower.
"ACTIVATION EVENT" AND "ACTIVATION NOTICE" have the meanings ascribed
thereto in ANNEX C.
"ADVANCE" means any European Revolving Credit Advance or European
Swing Line Advance, as the context may require.
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"AFFILIATE" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 5% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrowers, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of any Borrower. For the purposes
of this definition, "CONTROL" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; PROVIDED, HOWEVER, that the term "AFFILIATE" shall specifically
exclude Agent and each Lender.
"AGENT" means GE Capital in its capacity as administrative agent for
Lenders or its successor appointed pursuant to SECTION 9.7.
"AGREEMENT" means this
Credit Agreement by and among Innovations,
Borrowers, the other Credit Parties party thereto, GE Capital, as Agent and
Lender, and the other Lenders from time to time party thereto, as the same may
be amended, supplemented, restated or otherwise modified from time to time.
"ALTERNATIVE CURRENCY" means Swedish kronor, British pounds, German
deutschemarks, Belgian francs, Netherland guilders, Swiss francs, and European
Union euros, Israeli New Shekels, or such other currency as Agent approves,
PROVIDED that no currency shall be an Alternative Currency if it is not freely
transferable and freely convertible into Dollars in the London foreign exchange
market as determined by Agent.
"APPENDICES" has the meaning ascribed to it in the recitals to the
Agreement.
"APPLICABLE L/C MARGIN" means the per annum fee, from time to time in
effect, payable with respect to outstanding Letter of Credit Obligations as
determined by reference to SECTION 1.5(a).
"APPLICABLE MARGINS" means collectively the Applicable L/C Margin, the
Applicable European Revolver Index Margin, the Applicable European Revolver
LIBOR Margin, the Applicable European Term Loan Index Margin, the Applicable
European Term Loan LIBOR Margin, the Applicable US Term Loan Index Margin and
the Applicable US Term Loan LIBOR Margin.
"APPLICABLE EUROPEAN REVOLVER INDEX MARGIN" means the per annum
interest rate from time to time in effect and payable in addition to the Index
Rate applicable to the European Revolving Loan, as determined by reference to
SECTION 1.5(a).
"APPLICABLE EUROPEAN REVOLVER LIBOR MARGIN" means the per annum
interest rate from time to time in effect and payable in addition to the LIBOR
Rate applicable to the European Revolving Loan, as determined by reference to
SECTION 1.5(a).
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"APPLICABLE EUROPEAN TERM LOAN INDEX MARGIN" means the per annum
interest rate from time to time in effect and payable in addition to the Index
Rate applicable to the European Term Loan, as determined by reference to SECTION
1.5(a).
"APPLICABLE EUROPEAN TERM LOAN LIBOR MARGIN" means the per annum
interest rate from time to time in effect and payable in addition to the LIBOR
Rate applicable to the European Term Loan, as determined by reference to SECTION
1.5(a).
"APPLICABLE US TERM LOAN INDEX MARGIN" means the per annum interest
rate from time to time in effect and payable in addition to the Index Rate
applicable to the US Term Loan, as determined by reference to SECTION 1.5(a).
"APPLICABLE US TERM LOAN LIBOR MARGIN" means the per annum interest
rate from time to time in effect and payable in addition to the LIBOR Rate
applicable to the US Term Loan, as determined by reference to SECTION 1.5(a).
"ASSIGNMENT AGREEMENT" has the meaning ascribed to it in SECTION
9.1(a).
"ASSIGNMENT OF REPRESENTATIONS AND WARRANTIES" means that certain
Assignment of Representations, Warranties, Covenants, Indemnities and Rights,
dated as of September 20, 2002, by and among WL Acquisition Corp. (n/k/a Xxxxxxx
Laboratories, Inc.), Innovations and Agent.
"BANKRUPTCY CODE" means the provisions of Title 11 of the United
States Code, 11 U.S.C. Sections 101 et seq.
"BLOCKED ACCOUNTS" has the meaning ascribed to it in ANNEX C.
"BORROWER REPRESENTATIVE" means Innovations, in its capacity as
Borrower Representative pursuant to the provisions of SECTION 1.1(d).
"BORROWERS" and "BORROWER" have the respective meanings ascribed
thereto in the preamble to the Agreement.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the State of New York
and in reference to LIBOR Loans shall mean any such day that is also a LIBOR
Business Day.
"CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto that have a useful life of
more than one year and that are required to be capitalized under GAAP.
"CAPITAL LEASE" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP,
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would be required to be classified and accounted for as a capital lease on a
balance sheet of such Person.
"CAPITAL LEASE OBLIGATION" means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"CASH COLLATERAL ACCOUNT" has the meaning ascribed to it ANNEX B.
"CASH EQUIVALENTS" has the meaning ascribed to it in ANNEX B.
"CASH MANAGEMENT SYSTEMS" has the meaning ascribed to it in
SECTION 1.8.
"CHANGE OF CONTROL" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934,) of 30% or more of the issued and outstanding shares of
capital Stock of Innovations having the right to vote for the election of
directors of Innovations under ordinary circumstances; (b) during any period of
twelve consecutive calendar months, individuals who at the beginning of such
period constituted the board of directors of Innovations (together with any new
directors whose election by the board of directors of Innovations or whose
nomination for election by the Stockholders of Innovations was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason other than death
or disability to constitute a majority of the directors then in office; (c)
Innovations ceases to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of either Borrower; or (d)
the Credit Parties ceases to own, directly or indirectly and control all of the
economic and voting rights associated with all of the outstanding capital stock
of their Subsidiaries.
"CHARGES" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including any interest, penalties, or other
additions to tax that may become payable in respect thereof and taxes owed to
the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of any Credit
Party, (d) any Credit Party's ownership or use of any properties or other
assets, or (e) any other aspect of any Credit Party's business.
"CHATTEL PAPER" means any "chattel paper," as such term is defined in
the Code, including electronic chattel paper, now owned or hereafter acquired by
any Credit Party.
"CLOSING DATE" means November 14, 2002.
"CLOSING CHECKLIST" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with
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the Agreement, the other Loan Documents and the transactions contemplated
thereunder, substantially in the form attached hereto as ANNEX D.
"CODE" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of New York; PROVIDED, that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall
govern; PROVIDED FURTHER, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "CODE" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"COLLATERAL" means the property covered by the Collateral Documents
and any other property, real or personal, tangible or intangible, now existing
or hereafter acquired, that may at any time be or become subject to a security
interest or Lien in favor of Agent, on behalf of itself and Lenders, to secure
the Obligations.
"COLLATERAL DOCUMENTS" means the Guaranties, the US Security
Agreement, the US Pledge Agreement, the US Intellectual Property Security
Agreement, the European Pledge Agreements, the European Security Agreements, the
European Intellectual Property Security Agreements, the Assignment of
Representations and Warranties and all similar agreements entered into
guaranteeing payment of, or granting a Lien upon property as security for
payment of, the Obligations.
"COLLECTION ACCOUNT" means that certain account of Agent, account
number 000-000-00 in the name of Agent at Bankers Trust Company in New York, New
York ABA No. 021 001 033, or such other account as may be specified in writing
by Agent as the "Collection Account.".
"COMMITMENT TERMINATION DATE" means the earliest of (a) November 14,
2005 or with respect to the Xxxxxxxx Xxxx Xxxx, Xxx 00, 0000, (x) the date of
termination of Lenders' obligations to make Advances and to incur Letter of
Credit Obligations or permit existing Loans to remain outstanding pursuant to
SECTION 8.2(b), and (c) the date of indefeasible prepayment in full by Borrowers
of the Loans and the cancellation and return (or stand-by guarantee) of all
Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to ANNEX B and the permanent reduction of all Commitments
to zero dollars ($0).
"COMMITMENTS" means (a) as to any Lender, the aggregate of such
Lender's European Revolving Loan Commitment (including without duplication the
Swing Line Lender's European Swing Line Commitment as a subset of its European
Revolving Loan Commitment), the US Term Loan Commitment and the European Term
Loan Commitment as set forth on ANNEX I to this Agreement or in the most recent
Assignment Agreement executed by such Lender, and (b) as to all Lenders, the
aggregate of all Lenders' European Revolving Loan
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Commitments (including without duplication the Swing Line Lender's European
Swing Line Commitment as a subset of its European Revolving Loan Commitment) and
US Term Loan Commitments and European Term Loan Commitments, which aggregate
commitment shall be FIFTY-FIVE MILLION DOLLARS ($55,000,000) on the Closing
Date, as to each of CLAUSES (a) and (b), as such Commitments may be reduced,
amortized or adjusted from time to time in accordance with the Agreement.
"COMPLIANCE CERTIFICATE" has the meaning ascribed to it in ANNEX E.
"CONCENTRATION ACCOUNTS" has the meaning ascribed to it in ANNEX C.
"CONTRACTS" means all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"CONTROL LETTER" means a letter agreement between Agent and (i) the
issuer of uncertificated securities with respect to uncertificated securities in
the name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant disclaims any security interest in the applicable
financial assets, acknowledges the Lien of Agent, on behalf of itself and
Lenders, on such financial assets, and agrees to follow the instructions or
entitlement orders of Agent without further consent by the affected Credit
Party.
"COPYRIGHT LICENSE" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"COPYRIGHTS" means all of the following now owned or hereafter adopted
or acquired by any Credit Party: (a) all copyrights and General Intangibles of
like nature (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States of America, any state or
territory thereof, or any other country or any political subdivision thereof,
and (b) all reissues, extensions or renewals thereof.
"CREDIT PARTIES" means Innovations, each Borrower and each of their
respective Subsidiaries (other than the Excluded Subsidiaries).
"CURRENT ASSETS" shall mean, with respect to any Person, all current
assets of such Person as of any date of determination calculated in accordance
with GAAP, but excluding cash, cash equivalents and debts due from Affiliates.
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"CURRENT LIABILITIES" shall mean, with respect to any Person, all
liabilities which should, in accordance with GAAP, be classified as current
liabilities, and in any event shall include all Indebtedness payable on demand
or within one year from any date of determination without any option on the part
of the obligor to extend or renew beyond such year, and all accruals for federal
or other taxes based on or measured by income and payable within such year, but
excluding, in the case of European Borrower, the aggregate outstanding principal
balance of the European Revolving Loan.
"DEFAULT" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"DEFAULT RATE" has the meaning ascribed to it in SECTION 1.5(d).
"DEPOSIT ACCOUNTS" means all "deposit accounts" as such term is
defined in the Code, now or hereafter held in the name of any Credit Party.
"DISCLOSURE SCHEDULES" means the Schedules prepared by Borrowers and
denominated as DISCLOSURE SCHEDULES (1.4) through (11.19(b)) in the Index to the
Agreement.
"DIVISION" has the meaning ascribed to it in the Acquisition
Agreement.
"DOCUMENTS" means all "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"DOLLARS" or "$" means lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARIES" means all Subsidiaries of Innovations
incorporated or organized under the laws of the United States of America, any
state thereof or the District of Columbia.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income of such
Person for such period determined in accordance with GAAP, MINUS (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gain from extraordinary
items for such period, (iv) any aggregate net gain (but not any aggregate net
loss) during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), and (v) any other non-cash gains that have been
added in determining consolidated net income, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, PLUS (c) the sum of (i)
any provision for income taxes, (ii) Interest Expense, (iii) loss from
extraordinary items for such period, (iv) the amount of non-cash charges
(including depreciation and amortization) for such period, (v) amortized debt
discount for such period, and (vi) the amount of any deduction to consolidated
net income as the result of any grant to any members of the management of such
Person of any Stock, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication, MINUS (d) the amounts described on EXHIBIT A-1 hereto.
For purposes of this definition, the following items
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shall be excluded in determining consolidated net income of a Person: (1) the
income (or deficit) of any other Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, such Person or any of such
Person's Subsidiaries; (2) the income (or deficit) of any other Person (other
than a Subsidiary) in which such Person has an ownership interest, except to the
extent any such income has actually been received by such Person in the form of
cash dividends or distributions; (3) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made in the
ordinary course of business in accordance with GAAP within such Financial
Covenant testing period; (5) any write-up of any asset; (6) any net gain from
the collection of the proceeds of life insurance policies; (7) any net gain or
loss arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets, and (9) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.
"ENVIRONMENTAL LAWS" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C.
Sections 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), and any and all regulations promulgated thereunder, and all
analogous state, local and foreign counterparts or equivalents and any transfer
of ownership notification or approval statutes.
"ENVIRONMENTAL LIABILITIES" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in
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connection with any Release or threatened Release or presence of a Hazardous
Material whether on, at, in, under, from or about or in the vicinity of any real
or personal property.
"ENVIRONMENTAL PERMITS" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"EQUIPMENT" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefore, all parts therefore,
all substitutes for any of the foregoing, fuel therefore, and all manuals,
drawings, instructions, warranties and rights with respect thereto, and all
products and proceeds thereof and condemnation awards and insurance proceeds
with respect thereto.
"EQUIVALENT AMOUNT" means the equivalent amount in Dollars of such
amount expressed in an Alternative Currency as determined by Agent on such date
on the basis of the Spot Rate for the purchase of Dollars with such Alternative
Currency on such date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA AFFILIATE" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA EVENT" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV 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; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit Party
or ERISA Affiliate to make when due required contributions to a Multiemployer
Plan or Title IV Plan unless such failure is cured within 30 days; (g) any other
event or condition that 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 Title IV Plan or Multiemployer Plan or for the imposition of
liability under Section 4069 or 4212(c) of ERISA; (h) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or
insolvency of a Multiemployer Plan under
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Section 4241 or 4245 of ERISA; (i) the revocation or threatened revocation of a
Qualified Plan's qualification or tax exempt status; or (j) the termination of a
Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"EUROPEAN BLOCKED ACCOUNTS" has the meaning ascribed to it in ANNEX C.
"EUROPEAN BORROWER" has the meaning ascribed to it in the preamble to
this Agreement.
"EUROPEAN CREDIT PARTY" means each of European Borrower, Swissco and
Orgenics Holdings and each of their respective Subsidiaries (other than the
Excluded European Subsidiaries).
"EUROPEAN INTELLECTUAL PROPERTY SECURITY AGREEMENTS" means each of the
intellectual property security agreements made in favor of Agent by each
applicable European Credit Party of even date herewith, as listed on SCHEDULE 4
attached hereto.
"EUROPEAN LOCK BOXES" has the meaning ascribed to it in ANNEX C.
"EUROPEAN MAXIMUM AMOUNT" means, as of any date of determination, an
amount equal to the European Revolving Loan Commitment of all Lenders as of that
date.
"EUROPEAN PLEDGE AGREEMENTS" means each of the pledge agreements made
in favor of Agent by each applicable European Credit Party of even date
herewith, as listed on SCHEDULE 3 attached hereto.
"EUROPEAN RELATIONSHIP BANK" has the meaning ascribed to it in
ANNEX C.
"EUROPEAN REVOLVING CREDIT ADVANCE" has the meaning ascribed to it in
SECTION 1.1(a)(i).
"EUROPEAN REVOLVING LOAN" means, at any time, the sum of (i) the
aggregate amount of European Revolving Credit Advances outstanding to European
Borrower PLUS (ii) the aggregate Letter of Credit Obligations incurred on behalf
of European Borrower. Unless the context otherwise requires, references to the
outstanding principal balance of the European Revolving Loan shall include the
outstanding balance of Letter of Credit Obligations.
"EUROPEAN REVOLVING LOAN COMMITMENT" means (a) as to any Lender, the
aggregate commitment of such Lender to make European Revolving Credit Advances
or incur Letter of Credit Obligations as set forth on ANNEX I to this Agreement
or in the most recent Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate commitment of all Lenders to make European Revolving
Credit Advances or incur Letter of Credit Obligations, which aggregate
commitment shall be TWENTY FIVE MILLION
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DOLLARS ($25,000,000) on the Closing Date, as such amount may be adjusted, if at
all, from time to time in accordance with this Agreement.
"EUROPEAN REVOLVING NOTE" has the meaning ascribed to it in SECTION
1.1(a)(ii).
"EUROPEAN SECURITY AGREEMENTS" means each of the security agreements,
fixed charges, floating charges or similar agreements made in favor of Agent, by
each applicable European Credit Party, as listed on SCHEDULE 2 attached hereto,
and any other agreement delivered on or after the Closing Date (including by way
of supplement to the foregoing) by any Person granting a Lien on the assets of
such Person (including without limitation, any Lien on bank accounts of such
Person) to secure all or any part of the Obligations, in each case as amended,
supplemented or modified from time to time in accordance with its terms.
"EUROPEAN SWING LINE ADVANCE" has the meaning ascribed to it in
SECTION 1.1(c)(i).
"EUROPEAN SWING LINE AVAILABILITY" has the meaning ascribed to it in
SECTION 1.1(c)(i).
"EUROPEAN SWING LINE COMMITMENT" means, as to the Swing Line Lender,
the commitment of the Swing Line Lender to make European Swing Line Advances as
set forth on ANNEX I to the Agreement, which commitment constitutes a
subfacility of the European Revolving Loan Commitment of the Swing Line Lender.
"EUROPEAN SWING LINE LOAN" means, as the context may require, at any
time, the aggregate amount of European Swing Line Advances outstanding to
European Borrower.
"EUROPEAN SWING LINE NOTE" has the meaning ascribed to it in SECTION
1.1(c)(ii).
"EUROPEAN TERM LOAN" has the meaning ascribed to it in SECTION
1.1(b)(i).
"EUROPEAN TERM LOAN COMMITMENT" means (a) as to any Lender with a
European Term Loan Commitment, the commitment of such Lender to make its Pro
Rata Share of the European Term Loan as set forth on ANNEX I to the Agreement or
in the most recent Assignment Agreement executed by such Lender, and (b) as to
all Lenders with a European Term Loan Commitment, the aggregate commitment of
all Lenders to make the European Term Loan, which aggregate commitment shall be
TEN MILLION DOLLARS ($10,000,000) on the Closing Date. After advancing the
European Term Loan, each reference to a Lender's European Term Loan Commitment
shall refer to that Lender's Pro Rata Share of the outstanding European Term
Loan.
"EUROPEAN TERM NOTE" has the meaning ascribed to it in SECTION
1.1(b)(i).
"EVENT OF DEFAULT" has the meaning ascribed to it in SECTION 8.1.
"EXCESS CASH FLOW" means, without duplication, with respect to the
Credit Parties (other than US Borrower) and any Fiscal Year, consolidated net
income PLUS (a) depreciation, amortization and Interest Expense to the extent
deducted in determining consolidated net
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income, MINUS (b) Capital Expenditures during such Fiscal Year (excluding the
financed portion thereof and excluding any Capital Expenditures in such Fiscal
Year to the extent in excess of the amount permitted to be made in such Fiscal
Year pursuant to CLAUSE (a) of ANNEX F), MINUS (c) Interest Expense paid or
accrued (excluding any original issue discount, interest paid in kind or
amortized debt discount, to the extent included in determining Interest Expense)
and scheduled principal payments paid or payable in respect of Funded Debt, PLUS
or MINUS (as the case may be), (d) extraordinary gains or losses which are cash
items not included in the calculation of net income, MINUS (e) mandatory
prepayments paid in cash pursuant to SECTION 1.3 other than mandatory
prepayments made pursuant to SECTIONS 1.3(b)(i), 1.3(b)(ii), 1.3(b)(iv) or
5.4(c), PLUS (f) taxes deducted in determining consolidated net income to the
extent not paid for in cash, PLUS decreases or MINUS increases (as the case may
be) (g) in Working Capital.
"EXCLUDED EUROPEAN SUBSIDIARIES" means, collectively, (a) Unipath BV,
an entity organized under the laws of The Netherlands; (b) Blitz 2001 GmbH, an
entity organized under the laws of Germany; (c) Unipath Management Limited, a
company organized under the laws of England and Wales; (d) Unipath Scandinavia
AB, an entity organized under the laws of Sweden; and (e) Inverness Medical
Benelux Bvba, an entity organized under the laws of Belgium.
"EXCLUDED SUBSIDIARIES" means, collectively, the Excluded US
Subsidiaries and the Excluded European Subsidiaries.
"EXCLUDED US SUBSIDIARIES" means, collectively, (a) IVC Industries,
Inc., a Delaware corporation; (b) Hall Laboratories Ltd., an entity organized
under the laws of Yukon, Canada; (c) SelfCare-PBM, LLC, a Delaware limited
liability company; (d) Inverness Medical Canada, Inc., an entity organized under
the laws of Canada; and (e) Orgenics and each of the Subsidiaries of Orgenics.
"FAIR LABOR STANDARDS ACT" means the Fair Labor Standards Act, 29
U.S.C. Section 201 et seq.
"FEDERAL FUNDS RATE" means, for any day, a floating rate equal to the
weighted average of the rates on overnight Federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System.
"FEES" means any and all fees payable to Agent or any Lender pursuant
to the Agreement or any of the other Loan Documents.
"FINANCIAL COVENANTS" means the financial covenants set forth in
ANNEX F.
"FINANCIAL STATEMENTS" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of the Reporting Credit
Parties delivered in accordance with SECTION 3.4 and ANNEX E.
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"FISCAL MONTH" means any of the monthly accounting periods of the
Credit Parties.
"FISCAL QUARTER" means any of the quarterly accounting periods of the
Credit Parties, ending on March 31, June 30, September 30 and December 31 of
each year.
"FISCAL YEAR" means any of the annual accounting periods of the Credit
Parties ending on December 31 of each year.
"FIXED CHARGES" means, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or accrued during such
period, PLUS (b) scheduled payments of principal with respect to Indebtedness
during such period, PLUS (c) Capital Expenditures during such period, PLUS (d)
cash payments of income taxes of the Credit Parties.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for
any fiscal period, the ratio of EBITDA to Fixed Charges.
"FIXTURES" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
"FOREIGN EXCHANGE AGREEMENT" means a foreign currency exchange hedging
product providing foreign currency exchange protection.
"FOREIGN GOVERNMENT SCHEME OR ARRANGEMENT" has the meaning ascribed to
it in SECTION 3.12(c).
"FOREIGN PLAN" has the meaning ascribed to it in SECTION 3.12(c).
"FUNDED DEBT" means, with respect to any Person, without duplication,
all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness that by its terms matures more than one year
from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrowers, the Obligations and, without duplication, Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United
States of America consistently applied, as such term is further defined in ANNEX
F to the Agreement.
"GE CAPITAL" means General Electric Capital Corporation, a Delaware
corporation.
"GE CAPITAL FEE LETTER" means that certain letter, dated as of October
25, 2002, between GE Capital and Innovations with respect to certain Fees to be
paid from time to time by Borrowers to GE Capital.
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"GENERAL INTANGIBLES" means all "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefore
and reissues, extensions or renewals thereof, rights in Intellectual Property
(including, without limitation, "intent to use" trademark applications),
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"GERAS" means Geras Acquisition Corp., a Washington corporation and a
wholly-owned Subsidiary of Innovations.
"GOODS" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent included in "goods" as defined in the Code, 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, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEED INDEBTEDNESS" means as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("PRIMARY OBLIGATION") of any
other Person (the "PRIMARY OBLIGOR") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed
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Indebtedness at any time shall be deemed to be an amount equal to the lesser at
such time of (x) the stated or determinable amount of the primary obligation in
respect of which such Guaranteed Indebtedness is incurred and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.
"GUARANTIES" means, collectively, the US Guaranty and any other
guaranty executed by any Guarantor in respect of the Obligations.
"GUARANTORS" means Innovations, each Subsidiary of Innovations (other
than the Borrowers and the Excluded Subsidiaries) and each other Person, if any,
that executes a guaranty or other similar agreement in favor of Agent, for
itself and the ratable benefit of Lenders, in connection with the transactions
contemplated by the Agreement and the other Loan Documents.
"HAZARDOUS MATERIAL" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"HEALTHCARE LAWS" has the meaning ascribed to it in SECTION 3.1.
"HIPAA" means the Health Insurance Portability and Accountability Act
of 1996, as the same may be amended, modified or supplemented from time to time,
and any successor statute thereto, and any and all rules or regulations
promulgated from time to time thereunder.
"HIPAA COMPLIANCE DATE" has the meaning ascribed to it in SECTION 3.1.
"HIPAA COMPLIANCE PLAN" has the meaning ascribed to it in SECTION 3.1.
"IMMATERIAL SUBSIDIARY" means any Credit Party which (a) generated
less than 5% of the Credit Parties' consolidated revenues for the fiscal period
most recently ended AND (b) owned less than 5% of the assets of the Credit
Parties on a consolidated basis for such fiscal period, in each case as
acceptable to Agent; PROVIDED that no Credit Party which otherwise satisfies the
criteria set forth in clauses (a) and (b) above shall be treated as an
Immaterial Subsidiary in this Agreement if (x) the aggregate revenues generated
by all Immaterial Subsidiaries would exceed 10% of the Credit Parties'
consolidated revenues for the fiscal period most recently ended OR (y) all
Immaterial Subsidiaries own more than 10% of the assets of the Credit Parties on
a consolidated basis, in each after including such Credit Party as an Immaterial
Subsidiary for purposes of calculating compliance with clauses (x) and (y)
above.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred 6 months or more, but
excluding obligations to trade creditors
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incurred in the ordinary course of business that are unsecured and not overdue
by more than 6 months unless being contested in good faith, (b) all
reimbursement and other obligations with respect to letters of credit, bankers'
acceptances and surety bonds, whether or not matured, (c) all obligations
evidenced by notes, bonds, debentures or similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations and the present value (discounted at the Index
Rate as in effect on the Closing Date) of future rental payments under all
synthetic leases, (f) all obligations of such Person under commodity purchase or
option agreements or other commodity price hedging arrangements, in each case
whether contingent or matured, (g) all obligations of such Person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter the
risks of that Person arising from fluctuations in currency values or interest
rates, in each case whether contingent or matured, (h) all Indebtedness referred
to above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property or other assets (including accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness, and (i) the Obligations.
"INDEMNIFIED LIABILITIES" has the meaning ascribed to it in
SECTION 1.13.
"INDEMNIFIED PERSON" has the meaning ascribed to in SECTION 1.13.
"INDEX RATE" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by THE WALL STREET JOURNAL as
the "base rate on corporate loans posted by at least 75% of the nation's 30
largest banks" (or, if THE WALL STREET JOURNAL ceases quoting a base rate of the
type described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.
"INDEX RATE LOAN" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"INNOVATIONS" has the meaning ascribed to it in the recitals to this
Agreement.
"INSTRUMENTS" means all "instruments," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all promissory notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"INTELLECTUAL PROPERTY" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
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"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement, dated as
of the Closing Date, by and among Agent, Innovations, US Borrower and the senior
noteholders party thereto, as the same may be amended, restated, supplemented or
otherwise modified and in effect from time to time.
"INTEREST EXPENSE" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
"INTEREST HEDGE AGREEMENTS" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"INTEREST PAYMENT DATE" means (a) as to any Index Rate Loan, the first
Business Day of each Fiscal Quarter to occur while such Loan is outstanding, and
(b) as to any LIBOR Loan, the last day of the applicable LIBOR Period; and
PROVIDED that, in addition to the foregoing, each of (x) the date upon which all
of the Commitments have been terminated and the Loans have been paid in full and
(y) the Commitment Termination Date shall be deemed to be an "Interest Payment
Date" with respect to any interest that has then accrued under the Agreement.
"INVENTORY" means all "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"INVESTMENT PROPERTY" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
A-17
"IRC" means the Internal Revenue Code of 1986 and all regulations
promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C ISSUER" has the meaning ascribed to it in ANNEX B.
"L/C SUBLIMIT" has the meaning ascribed to it in ANNEX B.
"LENDERS" means GE Capital, the other Lenders named on the signature
pages of the Agreement, and, if any such Lender shall decide to assign all or
any portion of the Obligations, such term shall include any assignee of such
Lender.
"LETTER OF CREDIT FEE" has the meaning ascribed to it in ANNEX B.
"LETTER OF CREDIT OBLIGATIONS" means all outstanding obligations
incurred by Agent and Lenders at the request of European Borrower, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of Letters of Credit by Agent or another L/C Issuer or the purchase
of a participation as set forth in ANNEX B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
"LETTERS OF CREDIT" means standby letters of credit issued for the
account of European Borrower by any L/C Issuer, and bankers' acceptances issued
by European Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.
"LETTER-OF-CREDIT RIGHTS" means "letter-of-credit rights" as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including rights to payment or performance under a letter of credit, whether or
not such Credit Party, as beneficiary, has demanded or is entitled to demand
payment or performance.
"LIBOR BUSINESS DAY" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR LOAN" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR PERIOD" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by European Borrower or US Borrower,
as applicable pursuant to the Agreement and ending one, two or three months
thereafter, as selected by European Borrower's or US Borrower's irrevocable
notice to Agent as set forth in SECTION 1.5(e); PROVIDED, that the foregoing
provision relating to LIBOR Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR
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Business Day unless the result of such extension would be to carry such
LIBOR Period into another calendar month in which event such LIBOR Period
shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end 2 LIBOR Business Days prior to such
date;
(c) any LIBOR Period that begins on the last LIBOR 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 LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) Borrowers shall select LIBOR Periods so as not to require a
payment or prepayment of any LIBOR Loan during a LIBOR Period for such
Loan; and
(e) Borrowers shall select LIBOR Periods so that there shall be no
more than 8 separate LIBOR Loans in existence at any one time.
"LIBOR RATE" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the first
day of such LIBOR Period (unless such date is not a Business Day, in which event
the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 MINUS the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 LIBOR Business Days prior to the
beginning of such LIBOR Period (including basic, supplemental, marginal and
emergency reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board that are
required to be maintained by a member bank of the Federal Reserve System).
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Agent and
Borrower Representative.
"LICENSE" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
"LIEN" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
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give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"LITIGATION" has the meaning ascribed to it in SECTION 3.13.
"LOAN ACCOUNT" has the meaning ascribed to it in SECTION 1.12.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Collateral
Documents, the Master Standby Agreement, the Intercreditor Agreement and all
other agreements, instruments, documents and certificates identified in the
Closing Checklist executed and delivered to, or in favor of, Agent or any
Lenders and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Agent or any Lender in
connection with the Agreement or the transactions contemplated thereby. Any
reference in the Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to the
Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.
"LOANS" means, collectively, the European Revolving Loan, the European
Swing Line Loan and the Term Loans.
"LOCK BOXES" has the meaning ascribed to it in ANNEX C.
"LTM EBITDA" means, at any date of determination, EBITDA of the Credit
Parties for the twelve (12) Fiscal Month period most recently ended for which
Financial Statements have been delivered to Agent and Lenders in accordance with
the terms hereof.
"MARGIN STOCK" has the meaning ascribed to in SECTION 3.10.
"MASTER STANDBY AGREEMENT" means the Master Agreement for Standby
Letters of Credit dated as of the Closing Date between European Borrower, as
Applicant, and GE Capital, as issuer.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of any
Credit Party or the Credit Parties considered as a whole, (b) any Borrower's
ability to pay any of the Loans or any of the other Obligations in accordance
with the terms of the Agreement or any Guarantor's ability to honor its guaranty
obligation pursuant to the Guaranties, (c) the Collateral or Agent's Liens, on
behalf of itself and Lenders, on the Collateral or the priority of such Liens,
or (d) Agent's or any Lender's rights and remedies under the Agreement and the
other Loan Documents.
"MATERIAL CONTRACTS" means, collectively, the Acquisition Documents,
the Subordinated Note Documents and each of the agreements set forth on EXHIBIT
A-2 to this Agreement.
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"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"NON-FUNDING LENDER" has the meaning ascribed to it in SECTION
9.9(a)(ii).
"NOTES" means, collectively, the European Revolving Notes, the
European Swing Line Notes and the Term Notes.
"NOTICE OF CONVERSION/CONTINUATION" has the meaning ascribed to it in
SECTION 1.5(e).
"NOTICE OF EUROPEAN REVOLVING CREDIT ADVANCE" has the meaning ascribed
to it in SECTION 1.1(a).
"OBLIGATIONS" means all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to any Credit Party under the Agreement or any of the other Loan
Documents.
"ORGENICS" means Orgenics Ltd., an entity organized under the laws of
Israel.
"ORGENICS HOLDINGS" means Orgenics International Holdings BV, an
entity organized under the laws of The Netherlands.
"PATENT LICENSE" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"PATENTS" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States of America or of any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States of America
or of any other country, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
of the United States of America, any State, or any other country, and (b) all
reissues, continuations, continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
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"PENSION PLAN" means a Plan described in Section 3(2) of ERISA.
"PERMITTED ENCUMBRANCES" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with SECTION 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate
amount not in excess of $100,000 (or the Equivalent Amount thereof) at any time,
so long as such Liens attach only to Inventory; (f) deposits securing, or in
lieu of, surety, appeal or customs bonds in proceedings to which any Credit
Party is a party; (g) any attachment or judgment lien not constituting an Event
of Default under SECTION 8.1(j); (h) zoning restrictions, easements, licenses,
or other restrictions on the use of any Real Estate or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use, value, or marketability of such Real Estate;
(i) presently existing or hereafter created Liens in favor of Agent, on behalf
of Lenders; (j) a first priority charge in favor of the Irish Industrial
Development Authority on the real property owned by Cambridge Diagnostics
Ireland Ltd. located at Xxxxxx Xxxxxxxx Xxxx - Xxxx 0X, Xxxxxx, Xxxxxxx, and (k)
Liens expressly permitted under CLAUSES (b) and (c) of SECTION 6.7 of the
Agreement.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"PLAN" means, at any time, an "employee benefit plan", as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to, on behalf of participants
who are or were employed by any Credit Party or ERISA Affiliate.
"PLEDGE AGREEMENTS" means the US Pledge Agreement, any pledge or
similar agreement delivered on the Closing Date listed on SCHEDULE 3 hereto,
granting a Lien on the Stock described on SCHEDULE 3 hereto in favor of Agent,
and any other agreement delivered after the Closing Date (including by way of
supplement to any pledge agreement) by any Person granting a Lien on any Stock
owned by such Person, in each case as amended, supplemented or modified from
time to time in accordance with its terms; PROVIDED that, subject to SECTION
5.11, any such pledge agreement granting a Lien on the Stock of a European
Credit Party shall provide that (i) only 65% of the voting Stock of such
European Credit Party shall secure the Obligations of the US Credit Parties and
(ii) 100% of the voting and non-voting Stock of such European Credit Party shall
secure the Obligations of the European Credit Parties.
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"PRIOR LENDERS" means the financial institutions listed on SCHEDULE
1.2 hereto.
"PRIOR LENDER OBLIGATIONS" means all Indebtedness and other
liabilities and obligations owing by any Credit Party to the Prior Lenders under
the financing documents described on SCHEDULE 1.3 hereto.
"PROCEEDS" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
"PRO FORMA" means the unaudited consolidated and consolidating balance
sheet of the Reporting Credit Parties as of June 30, 2002 after giving PRO FORMA
effect to the Related Transactions.
"PROJECTIONS" means the Reporting Credit Parties' forecasted
consolidated: (a) balance sheets; (b) profit and loss statements; and (c) cash
flow statements, all consistent with the historical Financial Statements of the
Reporting Credit Parties.
"PRO RATA SHARE" means with respect to all matters relating to any
Lender, (a) with respect to the European Revolving Loan, the percentage obtained
by dividing (i) the European Revolving Loan Commitment of such Lender by (ii)
the aggregate European Revolving Loan Commitments of all Revolving Lenders, (b)
with respect to the US Term Loan, the percentage obtained by dividing (i) the US
Term Loan Commitment of such Lender by (ii) the aggregate US Term Loan
Commitments of all Lenders, (c) with respect to the European Term Loan, the
percentage obtained by dividing (i) the European Term Loan Commitment of such
Lender by (ii) the aggregate European Term Loan Commitments of all Lenders, and
(d) with respect to all Loans, the percentage obtained by dividing (i) the
aggregate Commitments of that Lender by (ii) the aggregate Commitments of all
Lenders as any such percentages may be adjusted by assignments permitted
pursuant to SECTION 9.1; PROVIDED that, with respect to the European Revolving
Loan, the US Term Loan, the European Term Loan or all Loans, on and after the
Commitment Termination Date, the percentage referenced above shall be obtained
by dividing (i) the aggregate outstanding principal balance of the applicable
Loan or all Loans held
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by that Lender, by (ii) the outstanding principal balance of the applicable Loan
or all Loans held by all Lenders.
"QUALIFIED PLAN" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"RATABLE SHARE" has the meaning ascribed to it in SECTION 1.1(b).
"REAL ESTATE" has the meaning ascribed to it in SECTION 3.6.
"REFINANCING" means the repayment in full by Borrowers of the Prior
Lender Obligations on the Closing Date.
"REFUNDED EUROPEAN SWING LINE LOAN" has the meaning ascribed to it in
SECTION 1.1(c)(iii).
"RELATED TRANSACTIONS" means the initial borrowing under the European
Revolving Loan and the Term Loans on the Closing Date, the Acquisition, the
Refinancing, the issuance of the Subordinated Notes, the payment of all fees,
costs and expenses associated with all of the foregoing and the execution and
delivery of all of the Related Transactions Documents.
"RELATED TRANSACTIONS DOCUMENTS" means the Loan Documents, the
Acquisition Agreement, the Subordinated Note Documents and all other agreements
or instruments executed and/or delivered in connection with the Related
Transactions.
"RELEASE" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"REPORTING CREDIT PARTIES" means, collectively, Innovations and its
Subsidiaries (other than IVC Industries, Inc. and its Subsidiaries); PROVIDED
that if Reporting Credit Parties which are Excluded Subsidiaries generate more
than 5% of the Reporting Credit Parties' EBITDA on a consolidated basis for the
fiscal period most recently ended as determined by Agent by reference to the
Financial Statements for such fiscal period, the Reporting Credit Parties shall
not include more than 5% of the aggregate EBITDA of such Excluded Subsidiaries
for purposes of calculating EBITDA hereunder.
"REQUISITE LENDERS" means Lenders having (a) at least 66 2/3% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 66 2/3% of the aggregate outstanding amount of all Loans.
"RESTRICTED PAYMENT" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's
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Stock or any other payment or distribution made in respect thereof, either
directly or indirectly; (c) any payment or prepayment of principal of, premium,
if any, or interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or similar payment
and any claim for rescission with respect to, any Subordinated Debt; (d) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire Stock
of such Credit Party now or hereafter outstanding; (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of, any shares of such Credit Party's Stock or of a
claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (f) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder of
such Credit Party other than payment of compensation in the ordinary course of
business to Stockholders who are employees of such Person; and (g) any payment
of management fees (or other fees of a similar nature) by such Credit Party to
any Stockholder of such Credit Party or its Affiliates.
"RETIREE WELFARE PLAN" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"REVOLVING LENDERS" means, as of any date of determination, Lenders
having a European Revolving Loan Commitment.
"SENIOR CONSOLIDATED LEVERAGE RATIO" means, with respect to the
Reporting Credit Parties on a consolidated basis, the ratio of (a) the sum of
Funded Debt as of any date of determination LESS Subordinated Debt as of such
date LESS $10,000,000, to (b) EBITDA for the twelve months ending on that date
of determination; PROVIDED that, for purposes of calculating compliance with the
Senior Consolidated Leverage Ratio set forth in ANNEX F, (i) for the first full
Fiscal Quarter following the Closing Date, EBITDA shall equal EBITDA for such
Fiscal Quarter MULTIPLIED BY 4, (ii) for the first two full Fiscal Quarters
following the Closing Date, EBITDA shall equal EBITDA for such Fiscal Quarters
MULTIPLIED BY 2, and (iii) for the first three full Fiscal Quarters following
the Closing Date, EBITDA shall equal EBITDA for such Fiscal Quarter MULTIPLIED
BY one and one-third.
"SENIOR OBLIGATIONS" has the meaning ascribed to it in SECTION 11.18.
"SENIOR XXXXXXX LEVERAGE RATIO" means with respect to US Borrower, the
ratio of (a) the outstanding principal amount of the US Term Loan on any date of
determination to (b) EBITDA attributable to US Borrower for the twelve months
ending on that date of determination; PROVIDED that for purposes of calculating
compliance with the Senior Xxxxxxx Leverage Ratio set forth in ANNEX F, (a)
(i)for the first full Fiscal Quarter following the Closing Date, EBITDA
attributable to US Borrower shall equal EBITDA attributable to US Borrower for
such Fiscal Quarter MULTIPLIED BY 4, (ii) for the first two full Fiscal Quarters
following the Closing Date, EBITDA attributable to US Borrower shall equal
EBITDA attributable to US Borrower for such Fiscal Quarters MULTIPLIED BY 2, and
(iii) for the first three full Fiscal Quarters
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following the Closing Date, EBITDA attributable to US Borrower shall equal
EBITDA attributable to US Borrower for such Fiscal Quarter MULTIPLIED BY one and
one-third; and (b) in calculating EBITDA for such period, US Borrower may
include revenues generated by licenses of US Borrower's Intellectual Property
which have been assigned to Swissco in an amount not to exceed $800,000 in the
aggregate for such period.
"SOFTWARE" means all "software" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, 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, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; (d)
such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital and; (e) it is not insolvent and would
not be deemed to be insolvent under any laws applicable to it. The amount of
contingent liabilities (such as litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that can
be reasonably be expected to become an actual or matured liability.
"SPOT RATE" for a currency means the rate quoted by the Agent as the
spot rate for the purchase by Agent of such currency with another currency
through its foreign exchange office at approximately 11:00 a.m. (London time) on
the date two Business Days prior to the date as of which the foreign exchange
computation is made.
"STOCK" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity 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 Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"STOCKHOLDER" means, with respect to any Person, each holder of Stock
of such Person.
"SUBORDINATED DEBT" means the Indebtedness of Innovations evidenced by
the Subordinated Notes and any other Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Lenders in their sole discretion, as to right and time of payment and as to any
other rights and remedies thereunder.
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"SUBORDINATED NOTE DOCUMENTS" means, collectively, the Subordinated
Notes, the Subordinated Note and Warrant Purchase Agreement, the Subordinated
Note Purchase Agreement and the Warrants.
"SUBORDINATED NOTE AND WARRANT PURCHASE AGREEMENT" means that certain
Subordinated Note and Warrant Purchase Agreement, dated as of September 20,
2002, by and among Innovations, each of the investors party thereto and Pear
Tree Partners, L.P.
"SUBORDINATED NOTE PURCHASE AGREEMENT" means that certain Subordinated
Note Purchase Agreement, dated as of September 20, 2002, by and among
Innovations and each of the investors party thereto.
"SUBORDINATED NOTES" means, collectively, (a) those certain
Subordinated Notes due September 20, 2008 dated September 20, 2002 in the
original aggregate principal amount of $9,000,000 issued by Innovations to
certain subordinated noteholders, (b) those certain Subordinated Notes due
September 20, 2008 dated September 20, 2002 in the original aggregate principal
amount of $20,000,000 issued by Innovations to certain subordinated noteholders,
and (c) those certain Convertible Subordinated Promissory Notes due September
20, 2008 dated September 20, 2002 in the original aggregate principal amount of
$6,000,000 issued by Innovations to certain subordinated noteholders.
"SUBORDINATED OBLIGATIONS" has the meaning ascribed to it in SECTION
11.18.
"SUBSIDIARY" means, with respect to any Person, (a) any corporation of
which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower.
"SUPPORTING OBLIGATIONS" means all "supporting obligations" as such
term is defined in the Code, including letters of credit and guaranties issued
in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"SWING LINE LENDER" means GE Capital.
"SWISSCO" means Inverness Medical Switzerland GmbH, an entity
organized under the laws of Switzerland.
"TARGET" has the meaning ascribed to it in SECTION 6.1.
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"TAXES" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
"TERMINATION DATE" means the date on which (a) the Loans have been
indefeasibly repaid in full in cash, (b) all other Obligations under this
Agreement and the other Loan Documents have been completely discharged (c) all
Letter of Credit Obligations have been cash collateralized, canceled or backed
by standby letters of credit in accordance with ANNEX B, and (d) none of
Borrowers shall have any further right to borrow any monies under this
Agreement.
"TERM LENDERS" means those Lenders having Term Loan Commitments.
"TERM LOANS" means, collectively, the US Term Loan and the European
Term Loan.
"TITLE IV PLAN" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"TOTAL LEVERAGE RATIO" means, with respect to the Reporting Credit
Parties, on a consolidated basis, the ratio of (a) Funded Debt as of any date of
determination LESS $10,000,000, to (b) EBITDA for the twelve months ending on
that date of determination; PROVIDED that, for purposes of calculating
compliance with the Total Leverage Ratio in this Agreement, (i) for the first
full Fiscal Quarter following the Closing Date, EBITDA shall equal EBITDA for
such Fiscal Quarter MULTIPLIED BY 4, (ii) for the first two full Fiscal Quarters
following the Closing Date, EBITDA shall equal EBITDA for such Fiscal Quarters
MULTIPLIED BY 2, and (iii) for the first three full Fiscal Quarters following
the Closing Date, EBITDA shall equal EBITDA for such Fiscal Quarter MULTIPLIED
BY one and one-third.
"TRADEMARK LICENSE" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"TRADEMARKS" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith (other than "intent to
use" trademark applications), including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States of America, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
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"UNFUNDED PENSION LIABILITY" means, at any time, the aggregate amount,
if any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of 5 years following a transaction
which might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Credit Party
or any ERISA Affiliate as a result of such transaction.
"UNUTILIZED AMOUNT" means, as of any date of determination, the
difference between (a) the European Maximum Amount as of such date and (b) the
average for the period of the daily closing balances of the aggregate European
Revolving Loan and the European Swing Line Loan outstanding during the period
for which the Fee referenced in SECTION 1.9(b) is due.
"US BORROWER" has the meaning ascribed to it in the preamble to this
Agreement.
"US CREDIT PARTY" means Innovations, US Borrower and each of their
respective Domestic Subsidiaries (other than Excluded US Subsidiaries).
"US GUARANTY" means the guaranty of even date herewith executed by
each US Credit Party in favor of Agent and Lenders.
"US INTELLECTUAL PROPERTY SECURITY AGREEMENT" means the US
Intellectual Property Security Agreement of even date herewith made in favor of
Agent by the Credit Parties which are signatories thereto.
"US PLEDGE AGREEMENT" means the Pledge Agreement of even date herewith
executed by the US Credit Parties in favor of Agent pledging all Stock of its
Domestic Subsidiaries, if any, and all intercompany notes owing to or held by
such US Credit Party.
"US SECURITY AGREEMENT" means the Security Agreement of even date
herewith entered into by and among Agent and each of the US Credit Parties.
"US TERM LOAN" has the meaning ascribed to it in SECTION 1.1(b)(i).
"US TERM LOAN COMMITMENT" means (a) as to any Lender with a US Term
Loan Commitment, the commitment of such Lender to make its Pro Rata Share of the
US Term Loan as set forth on ANNEX I to the Agreement or in the most recent
Assignment Agreement executed by such Lender, and (b) as to all Lenders with a
US Term Loan Commitment, the aggregate commitment of all Lenders to make the US
Term Loan, which aggregate commitment shall be TWENTY MILLION DOLLARS
($20,000,000) on the Closing Date. After advancing the US Term Loan, each
reference to a Lender's US Term Loan Commitment shall refer to that Lender's Pro
Rata Share of the outstanding US Term Loan.
"US TERM NOTE" has the meaning ascribed to it in SECTION 1.1(b)(i).
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"XXXXXXX EXCESS CASH FLOW" means, without duplication, with respect to
US Borrower and any Fiscal Year, net income of US Borrower PLUS (a)
depreciation, amortization and Interest Expense to the extent deducted in
determining net income, MINUS (b) Capital Expenditures made during such Fiscal
Year (excluding the financed portion thereof and excluding any Capital
Expenditures in such Fiscal Year to the extent in excess of the amount permitted
to be made in such Fiscal Year pursuant to CLAUSE (a) of ANNEX F), MINUS (c)
Interest Expense paid or accrued (excluding any original issue discount,
interest paid in kind or amortized debt discount, to the extent included in
determining Interest Expense) and scheduled principal payments paid or payable
in respect of Funded Debt, PLUS or MINUS (as the case may be), (d) extraordinary
gains or losses which are cash items not included in the calculation of net
income, MINUS (e) mandatory prepayments paid in cash by US Borrower pursuant to
SECTION 1.3 other than mandatory prepayments made pursuant to SECTIONS
1.3(b)(i), 1.3(b)(ii), 1.3(b)(v) or 5.4(c), PLUS (f) taxes deducted in
determining net income to the extent not paid for in cash, PLUS decreases or
MINUS increases (as the case may be) (g) in Working Capital.
"WARRANTS" means, collectively, those certain Warrants for the
Purchase of Shares of Common Stock of Inverness Medical Innovations, Inc. issued
by Innovations for the account of the investors party to the Subordinated Note
and Warrant Purchase Agreement.
"WELFARE PLAN" means a Plan described in Section 3(i) of ERISA.
"WORKING CAPITAL" means, with respect to the Credit Parties (other
than US Borrower) or US Borrower, as the context may require, Current Assets
MINUS Current Liabilities.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in ANNEX F. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan
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Document refers to the knowledge (or an analogous phrase) of any Credit Party,
such words are intended to signify that an officer of such Credit Party has
actual knowledge or awareness of a particular fact or circumstance, or in the
exercise of its duties with reasonable diligence, should have known or been
aware of a particular fact or circumstance. Each of the Credit Parties
represents and warrants to Agent and Lenders that the officers of such Credit
Party are the individuals in such entities who are primarily responsible for
addressing or managing all such particular matters.
A-31
ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) ISSUANCE. Subject to the terms and conditions of the
Agreement, Agent and Revolving Lenders agree to incur, from time to time prior
to the Commitment Termination Date, upon the request of European Borrower and
for European Borrower's account, Letter of Credit Obligations by causing Letters
of Credit to be issued by GE Capital or a Subsidiary thereof or a bank or other
legally authorized Person selected by or acceptable to Agent in its sole
discretion (each, an "L/C ISSUER") for European Borrower's account and
guaranteed by Agent; PROVIDED, that if the L/C Issuer is a Revolving Lender,
then such Letters of Credit shall not be guaranteed by Agent but rather each
Revolving Lender shall, subject to the terms and conditions hereinafter set
forth, purchase (or be deemed to have purchased) risk participations in all such
Letters of Credit issued with the written consent of Agent, as more fully
described in paragraph (b)(ii) below. The aggregate amount of all such Letter of
Credit Obligations shall not at any time exceed the lesser of (i) TEN MILLION
DOLLARS ($10,000,000) (the "L/C SUBLIMIT") and (ii) the European Maximum Amount
less the aggregate outstanding principal balance of the European Revolving
Credit Advances and the European Swing Line Loan. Furthermore, the aggregate
amount of any Letter of Credit Obligations incurred on behalf of any Borrower
shall not at any time exceed the aggregate principal balance of the European
Revolving Credit Advances and the European Swing Line Loan to European Borrower.
No such Letter of Credit shall have an expiry date that is more than the earlier
of one year following the date of issuance thereof, unless otherwise determined
by the Agent, in its sole discretion, and neither Agent nor Revolving Lenders
shall be under any obligation to incur Letter of Credit Obligations in respect
of, or purchase risk participations in, any Letter of Credit having an expiry
date that is later than the date which is five (5) Business Days prior to the
Commitment Termination Date.
(b) (i) ADVANCES AUTOMATIC; PARTICIPATIONS. In the event that
Agent or any Revolving Lender shall make any payment on or pursuant to any
Letter of Credit Obligation, such payment shall then be deemed automatically to
constitute a European Revolving Credit Advance to the European Borrower under
SECTION 1.1(a) of the Agreement regardless of whether a Default or Event of
Default has occurred and is continuing and notwithstanding any Borrower's
failure to satisfy the conditions precedent set forth in SECTION 2, and each
Revolving Lender shall be obligated to pay its Pro Rata Share thereof in
accordance with the Agreement. The failure of any Revolving Lender to make
available to Agent for Agent's own account its Pro Rata Share of any such
European Revolving Credit Advance or payment by Agent under or in respect of a
Letter of Credit shall not relieve any other Revolving Lender of its obligation
hereunder to make available to Agent its Pro Rata Share thereof, but no
Revolving Lender shall be responsible for the failure of any other Revolving
Lender to make available such other Revolving Lender's Pro Rata Share of any
such payment.
(ii) If it shall be illegal or unlawful for European
Borrower to incur European Revolving Credit Advances as contemplated by
paragraph (b)(i) above because of an Event of Default described in SECTIONS
8.1(h) or (i) or otherwise or if it shall be illegal or
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unlawful for any Revolving Lender to be deemed to have assumed a ratable share
of the reimbursement obligations owed to an L/C Issuer, or if the L/C Issuer is
a Revolving Lender, then (A) immediately and without further action whatsoever,
each Revolving Lender shall be deemed to have irrevocably and unconditionally
purchased from Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation equal to such Revolving Lender's Pro Rata Share
(based on the European Revolving Loan Commitments) of the Letter of Credit
Obligations in respect of all Letters of Credit then outstanding and (B)
thereafter, immediately upon issuance of any Letter of Credit, each Revolving
Lender shall be deemed to have irrevocably and unconditionally purchased from
Agent (or such L/C Issuer, as the case may be) an undivided interest and
participation in such Revolving Lender's Pro Rata Share (based on the European
Revolving Loan Commitments) of the Letter of Credit Obligations with respect to
such Letter of Credit on the date of such issuance. Each Revolving Lender shall
fund its participation in all payments or disbursements made under the Letters
of Credit in the same manner as provided in the Agreement with respect to
European Revolving Credit Advances.
(c) CASH COLLATERAL.
(i) If European Borrower is required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement prior
to the Commitment Termination Date, European Borrower will pay to Agent for the
ratable benefit of itself and Revolving Lenders cash or cash equivalents
acceptable to Agent ("CASH EQUIVALENTS") in an amount equal to 105% of the
maximum amount then available to be drawn under each applicable Letter of Credit
outstanding for the benefit of European Borrower. Such funds or Cash Equivalents
shall be held by Agent in a cash collateral account (the "CASH COLLATERAL
ACCOUNT") maintained at a bank or financial institution acceptable to Agent. The
Cash Collateral Account shall be in the name of the European Borrower and shall
be pledged to, and subject to the control of, Agent, for the benefit of Agent
and Lenders, in a manner satisfactory to Agent. European Borrower hereby pledges
and grants to Agent, on behalf of itself and Lenders, a security interest in all
such funds and Cash Equivalents held in the Cash Collateral Account from time to
time and all proceeds thereof, as security for the payment of all amounts due in
respect of the Letter of Credit Obligations and other Obligations, whether or
not then due. The Agreement, including this ANNEX B, shall constitute a security
agreement under applicable law.
(ii) If any Letter of Credit Obligations, whether or not
then due and payable, shall for any reason be outstanding on the Commitment
Termination Date, European Borrower shall either (A) provide cash collateral
therefore in the manner described above, or (B) cause all such Letters of Credit
and guaranties thereof, if any, to be canceled and returned, or (C) deliver a
stand-by letter (or letters) of credit in guaranty of such Letter of Credit
Obligations, which stand-by letter (or letters) of credit shall be of like tenor
and duration (plus 30 additional days) as, and in an amount equal to 105% of the
aggregate maximum amount then available to be drawn under, the Letters of Credit
to which such outstanding Letter of Credit Obligations relate and shall be
issued by a Person, and shall be subject to such terms and conditions, as are be
satisfactory to Agent in its sole discretion.
(iii) From time to time after funds are deposited in the
Cash Collateral Account by European Borrower, whether before or after the
Commitment Termination Date,
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Agent may apply such funds or Cash Equivalents then held in the Cash Collateral
Account to the payment of any amounts, and in such order as Agent may elect, as
shall be or shall become due and payable by European Borrower to Agent and
Lenders with respect to such Letter of Credit Obligations of European Borrower
and, upon the satisfaction in full of all Letter of Credit Obligations of
European Borrower, to any other Obligations of European Borrower then due and
payable.
(iv) Neither European Borrower nor any Person claiming on
behalf of or through European Borrower shall have any right to withdraw any of
the funds or Cash Equivalents held in the Cash Collateral Account, except that
upon the termination of all Letter of Credit Obligations and the payment of all
amounts payable by European Borrower to Agent and Lenders in respect thereof,
any funds remaining in the Cash Collateral Account shall be applied to other
Obligations then due and owing and upon payment in full of such Obligations, any
remaining amount shall be paid to European Borrower or as otherwise required by
law. Interest earned on deposits in the Cash Collateral Account shall be for the
account of Agent.
(d) FEES AND EXPENSES. European Borrower agrees to pay to Agent
for the benefit of Revolving Lenders, as compensation to such Lenders for Letter
of Credit Obligations incurred hereunder, (i) all costs and expenses incurred by
Agent or any Lender on account of such Letter of Credit Obligations, and (ii)
for each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the "LETTER OF CREDIT FEE") in an amount equal to the
Applicable L/C Margin from time to time in effect multiplied by the maximum
amount available from time to time to be drawn under the applicable Letter of
Credit. Such fee shall be paid to Agent for the benefit of the Revolving Lenders
in arrears, on the first day of each month and on the Commitment Termination
Date. In addition, European Borrower shall pay to any L/C Issuer, on demand,
such fees (including all per annum fees), charges and expenses of such L/C
Issuer in respect of the issuance, negotiation, acceptance, amendment, transfer
and payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
(e) REQUEST FOR INCURRENCE OF LETTER OF CREDIT OBLIGATIONS.
European Borrower shall give Agent at least 2 Business Days' prior written
notice requesting the incurrence of any Letter of Credit Obligation. The notice
shall be accompanied by the form of the Letter of Credit (which shall be
acceptable to the L/C Issuer) and a completed Application for Standby Letter of
Credit or Application in the form of EXHIBIT B-1 attached hereto.
Notwithstanding anything contained herein to the contrary, Letter of Credit
applications by European Borrower and approvals by Agent and the L/C Issuer may
be made and transmitted pursuant to electronic codes and security measures
mutually agreed upon and established by and among European Borrower, Agent and
the L/C Issuer.
(f) OBLIGATION ABSOLUTE. The obligation of European Borrower to
reimburse Agent and Revolving Lenders for payments made with respect to any
Letter of Credit Obligation shall be absolute, unconditional and irrevocable,
without necessity of presentment, demand, protest or other formalities, and the
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations
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of European Borrower and Revolving Lenders shall be paid strictly in accordance
with the terms hereof under all circumstances including the following:
(i) any lack of validity or enforceability of any Letter
of Credit or the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, setoff, defense or other
right that European Borrower or any of their respective Affiliates or
any Lender may at any time have against a beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for
whom any such transferee may be acting), Agent, any Lender, or any
other Person, whether in connection with the Agreement, the Letter of
Credit, the transactions contemplated herein or therein or any
unrelated transaction (including any underlying transaction between
European Borrower or any of their respective Affiliates and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly
provided in paragraph (g)(ii)(C) below) or any L/C Issuer under any
Letter of Credit or guaranty thereof against presentation of a demand,
draft or certificate or other document that does not comply with the
terms of such Letter of Credit or such guaranty;
(v) any other circumstance or event whatsoever, that is
similar to any of the foregoing; or
(vi) the fact that a Default or an Event of Default has
occurred and is continuing.
(g) INDEMNIFICATION; NATURE OF LENDERS' DUTIES.
(i) In addition to amounts payable as elsewhere provided
in the Agreement, European Borrower hereby agrees to pay and to protect,
indemnify, and save harmless Agent and each Lender from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and allocated costs of internal counsel)
that Agent or any Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or guaranty thereof, or
(B) the failure of Agent or any Lender seeking indemnification or of any L/C
Issuer to honor a demand for payment under any Letter of Credit or guaranty
thereof as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority, in
each case other than to the extent solely as a result of the gross negligence or
willful misconduct of Agent or such Lender (as finally determined by a court of
competent jurisdiction).
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(ii) As between Agent and any Lender and European Borrower,
European Borrower assume all risks of the acts and omissions of, or misuse of
any Letter of Credit by beneficiaries, of any Letter of Credit. In furtherance
and not in limitation of the foregoing, to the fullest extent permitted by law,
neither Agent nor any Lender shall be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of
Credit, even if it should in fact 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, that may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to demand payment under such Letter of Credit;
PROVIDED, that in the case of any payment by Agent under any Letter of Credit or
guaranty thereof, Agent shall be liable to the extent such payment was made
solely as a result of its gross negligence or willful misconduct (as finally
determined by a court of competent jurisdiction) in determining that the demand
for payment under such Letter of Credit or guaranty thereof complies on its face
with any applicable requirements for a demand for payment under such Letter of
Credit or guaranty thereof; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they may 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 payment under any Letter of Credit or
guaranty thereof or of the proceeds thereof; (G) the credit of the proceeds of
any drawing under any Letter of Credit or guaranty thereof; and (H) any
consequences arising from causes beyond the control of Agent or any Lender. None
of the above shall affect, impair, or prevent the vesting of any of Agent's or
any Lender's rights or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or
to expand any waivers, covenants or indemnities made by European Borrower in
favor of any L/C Issuer in any letter of credit application, reimbursement
agreement or similar document, instrument or agreement between European
Borrowers and such L/C Issuer, including a Master Standby Agreement entered into
with Agent.
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ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
I. US CASH MANAGEMENT. Innovations and US Borrower shall, and
Innovations shall cause each of its Domestic Subsidiaries (other than the
Excluded US Subsidiaries) to, establish and maintain the Cash Management Systems
described below:
(a) On or before the Closing Date and until the Termination Date,
(i) US Borrower shall establish lock boxes ("LOCK BOXES") or at Agent's
discretion, blocked accounts ("BLOCKED ACCOUNTS") at one or more of the banks
set forth in DISCLOSURE SCHEDULE (3.19), and shall request in writing and
otherwise take such reasonable steps to ensure that all Account Debtors forward
payment directly to such Lock Boxes, and (ii) Innovations and US Borrower shall,
and Innovations shall cause each of its Domestic Subsidiaries (other than the
Excluded US Subsidiaries) to, deposit promptly, and in any event no later than
the first Business Day after the date of receipt thereof, all cash, checks,
drafts or other similar items of payment relating to or constituting payments
made in respect of any and all Collateral (whether or not otherwise delivered to
a Lock Box) into one or more Blocked Accounts in US Borrower's name or any such
Subsidiary's name and at a bank identified in DISCLOSURE SCHEDULE (3.19) (each,
a "RELATIONSHIP BANK"). On or before the Closing Date, US Borrower shall have
established a concentration account in its name (each a "CONCENTRATION ACCOUNT"
and collectively, the "CONCENTRATION ACCOUNTS") at the bank or banks that shall
be designated as the Concentration Account bank for US Borrower in DISCLOSURE
SCHEDULE (3.19) (each a "CONCENTRATION ACCOUNT BANK" and collectively, the
"CONCENTRATION ACCOUNT BANKS"), which banks shall be reasonably satisfactory to
Agent.
(b) Intentionally omitted.
(c) On or before the Closing Date (or such later date as Agent
shall consent to in writing), each Concentration Account Bank and all other
Relationship Banks shall have entered into tri-party blocked account agreements
with Agent, for the benefit of itself and Lenders, and the applicable US Credit
Party, in form and substance reasonably acceptable to Agent, which shall become
operative on or prior to the Closing Date. Each such blocked account agreement
shall provide, among other things, that (i) all items of payment deposited in
such account and proceeds thereof deposited in the applicable Concentration
Account are held by such bank as agent or bailee-in-possession for Agent, on
behalf of itself and Lenders, (ii) the bank executing such agreement has no
rights of setoff or recoupment or any other claim against such account, as the
case may be, other than for payment of its service fees and other charges
directly related to the administration of such account and for returned checks
or other items of payment, and (iii) from and after the Closing Date (A) with
respect to banks at which a Blocked Account is maintained, such bank agrees,
from and after the receipt of a notice (an "ACTIVATION NOTICE") from Agent
(which Activation Notice may be given by Agent at any time at which (1) a
Default or Event of Default has occurred and is continuing, (2) Agent reasonably
believes based upon information available to it that a Default or an Event of
Default is likely to occur; (3) Agent
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reasonably believes that an event or circumstance that is likely to have a
Material Adverse Effect has occurred, or (4) Agent reasonably has grounds to
question the integrity of US Borrower's Cash Management Systems or any US Credit
Party's compliance with the provisions of this ANNEX C or any other provisions
of the Loan Documents to the extent related to such Cash Management Systems (any
of the foregoing being referred to herein as an "ACTIVATION EVENT")), to forward
immediately all amounts in each Blocked Account to such Borrower's Concentration
Account Bank and to commence the process of daily sweeps from such Blocked
Account into the applicable Concentration Account and (B) with respect to each
Concentration Account Bank, such bank agrees from and after the receipt of an
Activation Notice from Agent upon the occurrence of an Activation Event, to
immediately forward all amounts received in the applicable Concentration Account
to the Collection Account through daily sweeps from such Concentration Account
into the Collection Account.
(d) So long as no Default or Event of Default has occurred and is
continuing, US Borrower may amend DISCLOSURE SCHEDULE (3.19) to add or replace a
Relationship Bank, Lock Box or Blocked Account or to replace any Concentration
Account; PROVIDED, that (i) Agent shall have consented in writing in advance to
the opening of such account or Lock Box with the relevant bank and (ii) prior to
the time of the opening of such account or Lock Box, the applicable US Credit
Party and such bank shall have executed and delivered to Agent a tri-party
blocked account agreement, in form and substance reasonably satisfactory to
Agent. Such US Credit Party shall close any of its accounts (and establish
replacement accounts in accordance with the foregoing sentence) promptly and in
any event within 30 days following notice from Agent that the creditworthiness
of any bank holding an account is no longer acceptable in Agent's reasonable
judgment, or as promptly as practicable and in any event within 60 days
following notice from Agent that the operating performance, funds transfer or
availability procedures or performance with respect to accounts or Lock Boxes of
the bank holding such accounts or Agent's liability under any tri-party blocked
account agreement with such bank is no longer acceptable in Agent's reasonable
judgment.
(e) The Lock Boxes, Blocked Accounts and the Concentration
Accounts shall be cash collateral accounts, with all cash, checks and other
similar items of payment in such accounts securing payment of the Loans and all
other Obligations, and in which each US Credit Party shall have granted a Lien
to Agent, on behalf of itself and Lenders, pursuant to the US Security
Agreement.
(f) All amounts deposited in the Collection Account shall be
deemed received by Agent in accordance with SECTION 1.10 and shall be applied
(and allocated) by Agent in accordance with SECTION 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Each US Credit Party shall, and Innovations shall cause its
domestic Affiliates, officers, employees, agents, directors or other Persons
acting for or in concert with such Person (each a "RELATED PERSON") to, (i) hold
in trust for Agent, for the benefit of itself and Lenders, all checks, cash and
other items of payment received by such US Credit Party or any such Related
Person, and (ii) within 1 Business Day after receipt by such US Credit Party or
any such Related Person of any checks, cash or other items of payment, deposit
the same into a
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Blocked Account of such Person. Each US Credit Party and each Related Person
thereof acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral. All proceeds of
the sale or other disposition of any Collateral, shall be deposited directly
into the applicable Blocked Accounts.
II. EUROPEAN CASH MANAGEMENT. European Borrower shall, and
Innovations shall cause each other European Credit Party to, establish and
maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date,
European Credit Parties shall request in writing and otherwise take such
reasonable steps to ensure that all Account Debtors forward payment directly to
their operating accounts (each, a "EUROPEAN OPERATING ACCOUNT" and collectively,
"EUROPEAN OPERATING ACCOUNTS") with each of their relationship banks identified
in DISCLOSURE SCHEDULE (3.19) (each, a "EUROPEAN RELATIONSHIP BANK"), and (ii)
deposit and cause its Subsidiaries to deposit or cause to be deposited promptly,
and in any event no later than the first Business Day after the date of receipt
thereof, all cash, checks, drafts or other similar items of payment relating to
or constituting payments made in respect of any and all Collateral into one or
more European Operating Accounts.
(b) On or before the Closing Date (or such later date as Agent
shall consent to in writing, or as provided in SECTION 5.13(c) and (d)),
European Credit Parties shall have caused each European Relationship Bank, to
have entered into a blocked account agreement with Agent, for the benefit of
itself and Lenders, in form and substance reasonably acceptable to Agent, which
shall become operative on or prior to the Closing Date. Each such blocked
account agreement shall provide, among other things, that (i) all items of
payment deposited in such account and proceeds thereof deposited in the
applicable European Operating Account are held by such bank as agent or
bailee-in-possession for Agent, on behalf of itself and Lenders, and (ii) the
bank executing such agreement has no rights of setoff or recoupment or any other
claim against such account, as the case may be, other than for payment of its
service fees and other charges directly related to the administration of such
account and for returned checks or other items of payment (it being understood
that it shall be sufficient for each European Credit Party to comply with this
subclause (b) to notify its European Relationship Banks of the security in favor
of Agent over the respective European Operating Accounts and to receive in
response an acknowledgment of such notice from the European Relationship Banks
and deliver a copy of such acknowledgment to Agent).
(c) So long as no Default or Event of Default has occurred and is
continuing, European Credit Parties may amend DISCLOSURE SCHEDULE (3.19) to add
or replace a European Relationship Bank or European Operating Account; PROVIDED,
that (i) Agent shall have consented in writing in advance to the opening of such
account with the relevant bank and (ii) prior to the time of the opening of such
account, such bank shall have executed and delivered to Agent a blocked account
agreement, in form and substance reasonably satisfactory to Agent. European
Credit Parties shall close any of their accounts (and establish replacement
accounts in accordance with the foregoing sentence) promptly and in any event
within 30 days following notice from Agent that the creditworthiness of any bank
holding an account is no longer acceptable in Agent's reasonable judgment, or as
promptly as practicable and in any event within 60 days
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following notice from Agent that the operating performance, funds transfer or
availability procedures or performance with respect to accounts or European Lock
Boxes of the bank holding such accounts or Agent's liability under any blocked
account agreement with such bank is no longer acceptable in Agent's reasonable
judgment.
(d) The European Operating Accounts shall be cash collateral
accounts, with all cash, checks and other similar items of payment in such
accounts securing payment of the European Term Loan and all other Obligations of
the European Borrower, and in which each applicable European Credit Party shall
have granted a Lien to Agent, on behalf of itself and Lenders, pursuant to a
pledge or security agreement.
(e) Each European Credit Party shall and shall cause its
Affiliates, officers, employees, agents, directors or other Persons acting for
or in concert with such European Credit Party to (i) hold in trust for Agent,
for the benefit of itself and Lenders, all checks, cash and other items of
payment received by such European Credit Party, and (ii) within 1 Business Day
after receipt by such European Credit Party of any checks, cash or other items
of payment, deposit the same into a European Operating Account of such European
Credit Party. Each European Credit Party thereof acknowledges and agrees that
all cash, checks or other items of payment constituting proceeds of Collateral
are part of the Collateral. All proceeds of the sale or other disposition of any
Collateral, shall be deposited directly into the applicable European Operating
Account.
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ANNEX D (SECTION 2.1(A))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in SECTION
2.1 of the Agreement, pursuant to SECTION 2.1(a), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
Closing Date (each capitalized term used but not otherwise defined herein shall
have the meaning ascribed thereto in ANNEX A to the Agreement):
A. APPENDICES. All Appendices to the Agreement, in form and
substance satisfactory to Agent.
B. EUROPEAN REVOLVING NOTES, EUROPEAN SWING LINE NOTES AND TERM
NOTES. Duly executed originals of the European Revolving Notes, European Swing
Line Notes, US Term Notes and European Term Notes for each applicable Lender,
dated the Closing Date.
C. SECURITY AGREEMENTS. Duly executed originals of the US
Security Agreement and the European Security Agreements, each dated the Closing
Date, and all instruments, documents and agreements executed pursuant thereto.
D. INSURANCE. Satisfactory evidence that the insurance policies
required by SECTION 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as requested by Agent, in favor of Agent, on behalf of Lenders.
E. SECURITY INTERESTS AND CODE FILINGS.
(a) Evidence satisfactory to Agent that Agent (for the
benefit of itself and Lenders) has a valid and perfected first priority security
interest in (i) the Collateral of the US Credit Parties to secure all of the
Obligations and (ii) the Collateral of the European Credit Parties to secure the
obligations of the European Credit Parties, including (i) such documents duly
executed by each Credit Party (including financing statements under the Code (or
foreign equivalent) and other applicable documents under the laws of any
jurisdiction with respect to the perfection of Liens) as Agent may request in
order to perfect its security interests in the Collateral and (ii) copies of
Code (or foreign equivalent) search reports (or, where not available, such other
equivalent information available and reasonably satisfactory to Agent) listing
all effective financing statements (or equivalent information) that name any
Credit Party as debtor, together with copies of such financing statements (or
equivalent information), none of which shall cover the Collateral, except for
those relating to the Prior Lender Obligations (all of which shall be terminated
on the Closing Date). With regard to such security interest granted or perfected
under the laws of the Federal Republic of Germany, the parties hereto agree that
for the purposes of this clause (a), evidence is satisfactory if Agent is
provided with a copy of the executed copy of (i) the Security Assignment of
Receivables between Unipath Diagnostics GmbH ("DIAGNOSTICS") and Agent, (ii) the
Guaranty Agreement between Diagnostics and Agent,
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(iii) the Account Pledge Agreement among Diagnostics, Agent and other parties
thereto, and (iv) the Share Pledge Agreement between among, Agent and the other
parties thereto.
(b) Evidence satisfactory to Agent, including copies, of
all UCC-1 and other financing statements (or, where not available, such other
equivalent documentation available and reasonably satisfactory to Agent) filed
in favor of any Credit Party with respect to each location, if any, at which
Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated
securities and financial assets held by each US Credit Party, (ii) all
securities intermediaries with respect to all securities accounts and securities
entitlements of each US Credit Party, and (iii) all futures commission agents
and clearing houses with respect to all commodities contracts and commodities
accounts held by any US Credit Party.
F. PAYOFF LETTER; TERMINATION STATEMENTS. Copies of a duly
executed payoff letter, in form and substance reasonably satisfactory to Agent,
by and between all parties to the Prior Lender loan documents evidencing
repayment in full of all Prior Lender Obligations, together with (a) UCC-3 or
other appropriate termination statements, in form and substance satisfactory to
Agent, manually signed by the Prior Lender releasing all liens of Prior Lender
upon any of the personal property of each Credit Party, and (b) termination of
all blocked account agreements, bank agency agreements or other similar
agreements or arrangements or arrangements in favor of Prior Lender or relating
to the Prior Lender Obligations.
G. INTELLECTUAL PROPERTY SECURITY AGREEMENTS. Duly executed
originals of the US Intellectual Property Security Agreement and the European
Intellectual Property Security Agreements, each dated the Closing Date and
signed by each applicable Credit Party which owns Trademarks, Copyrights and/or
Patents, as applicable, all in form and substance reasonably satisfactory to
Agent, together with all instruments, documents and agreements executed pursuant
thereto.
H. GUARANTIES. Duly executed originals of the Guaranties, dated
the Closing Date, and all documents, instruments and agreements executed
pursuant thereto.
I. PLEDGE AGREEMENTS. Duly executed originals of each of the
Pledge Agreements accompanied by (as applicable) (a) share certificates
representing all of the outstanding Stock being pledged pursuant to each such
Pledge Agreement and stock powers for such share certificates executed in blank,
(b) the original intercompany notes and other instruments evidencing
Indebtedness being pledged pursuant to each such Pledge Agreement, duly endorsed
in blank, and (c) such other instruments, documents, certifications and filings
as are required thereunder.
J. INTENTIONALLY OMITTED.
K. INITIAL NOTICE OF EUROPEAN REVOLVING CREDIT ADVANCE. Duly
executed originals of a Notice of European Revolving Credit Advance, dated the
Closing Date, with respect to the initial European Revolving Credit Advance to
be requested by European Borrower on the Closing Date.
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L. LETTER OF DIRECTION. Duly executed originals of a letter of
direction from Borrower Representative addressed to Agent, on behalf of itself
and Lenders, with respect to the disbursement on the Closing Date of the
proceeds of the US Term Loan, the European Term Loan and the initial European
Revolving Credit Advance.
M. CASH MANAGEMENT SYSTEM; BLOCKED ACCOUNT AGREEMENTS. Evidence
satisfactory to Agent that, as of the Closing Date, Cash Management Systems
complying with ANNEX C to the Agreement have been established and are currently
being maintained in the manner set forth in such ANNEX C, together with copies
of duly executed tri-party blocked account and lock box agreements, reasonably
satisfactory to Agent, with the banks as required by ANNEX C.
N. CHARTER AND GOOD STANDING. For each Credit Party, such
Person's (a) charter or other organizational documents and all amendments
thereto, (b) good standing certificates or the foreign equivalent (including
verification of tax status) in its jurisdiction of incorporation and (c) good
standing certificates or the foreign equivalent (including verification of tax
status) and certificates of qualification to conduct business in each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, each dated a recent date prior to the
Closing Date and certified by the applicable Secretary of State or other
authorized Governmental Authority.
O. BYLAWS AND RESOLUTIONS. For each Credit Party, (a) such
Person's bylaws or the foreign equivalent, together with all amendments thereto
and (b) resolutions of such Person's Board of Directors and, to the extent
required under applicable law, stockholders, approving and authorizing the
execution, delivery and performance of the Loan Documents to which such Person
is a party and the transactions to be consummated in connection therewith, each
certified as of the Closing Date by such Person's corporate secretary or an
assistant secretary as being in full force and effect without any modification
or amendment.
P. INCUMBENCY CERTIFICATES. For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
Q. OPINIONS OF COUNSEL. Duly executed originals of opinions of
each of: (a) Xxxxxxx Procter LLP, US counsel for the Credit Parties, (b) Xxxx X.
Xxxxxx, Esq., general counsel to the Credit Parties, (c) Xxxxx & Xxxxx, local
counsel for the European Borrower and Unipath Limited in England, (d) Xxxxx
Xxxxx & Xxxxxx, local counsel for Cambridge Diagnostics Ireland Ltd. in Ireland,
(e) Lanter, Trachsler, Xxxx & Partners, local counsel for Swissco in
Switzerland, (f) Xxxxx & Xxxxx, local counsel for Orgenics Holdings in The
Netherlands, (g) Xxxxx & Overy, local counsel for Inverness Medical Benelux Bvba
in Belgium, (h) Xxxxx & Xxxxx, local counsel for Unipath Diagnostics GmbH in
Germany, and (i) Advokatfirman Xxxxx KB, counsel to Unipath Scandinavia AB in
Sweden, together with any other local or foreign counsel opinions reasonably
requested by Agent, each in form and substance reasonably satisfactory to Agent
and its counsel, dated the Closing Date, and each accompanied by a letter
addressed to such counsel from the Credit Parties, authorizing and
D-3
directing such counsel to address its opinion to Agent, on behalf of Lenders,
and to include in such opinion an express statement to the effect that Agent and
Lenders are authorized to rely on such opinion.
R. INTENTIONALLY OMITTED.
S. ACCOUNTANTS' LETTERS. A letter from the Credit Parties to
their independent auditors authorizing the independent certified public
accountants of the Credit Parties to communicate with Agent and Lenders in
accordance with SECTION 4.2, and a letter from such auditors acknowledging
Lenders' reliance on the auditor's certification of past and future Financial
Statements.
T. APPOINTMENT OF AGENT FOR SERVICE. An appointment of CT
Corporation as each European Credit Party's agent for service of process.
U. SOLVENCY CERTIFICATE. The Credit Parties shall deliver to
Agent for the benefit of Lenders a solvency certificate of the Chief Operating
Officer and Treasurer and Vice President, Finance, of Innovations reasonably
satisfactory in form and substance to Agent.
V. FEE LETTER. Duly executed originals of the GE Capital Fee
Letter.
W. OFFICER'S CERTIFICATE. Agent shall have received duly executed
originals of a certificate of the Chief Operating Officer and Treasurer and Vice
President, Finance, of Innovations, dated the Closing Date, stating that, since
(a) with respect to the Credit Parties, December 31, 2001, and (b) with respect
to the Division, March 31, 2002, (i) no event or condition has occurred or is
existing which could reasonably be expected to have a Material Adverse Effect;
(ii) there has been no material adverse change in the industry in which any
Borrower or the Division operates; (iii) no Litigation has been commenced which,
if successful, would have a Material Adverse Effect or could challenge any of
the transactions contemplated by this Agreement and the other Loan Documents or
the Acquisition Agreement; (iv) there have been no Restricted Payments made by
any Credit Party; and (e) there has been no material increase in liabilities,
liquidated or contingent, and no material decrease in assets of any Borrower or
any of its Subsidiaries or the Division.
X. WAIVERS. Agent, on behalf of Lenders, shall have received
landlord waivers and consents, bailee letters and mortgagee agreements in form
and substance reasonably satisfactory to Agent, in each case as required
pursuant to SECTION 5.9.
Y. SUBORDINATION AND INTERCREDITOR AGREEMENTS. Agent and Lenders
shall have received any and all subordination and/or intercreditor agreements
(including the Intercreditor Agreement), all in form and substance reasonably
satisfactory to Agent, in its sole discretion, as Agent shall have deemed
necessary or appropriate with respect to any Indebtedness of any Credit Party.
AA. AUDITED FINANCIALS; FINANCIAL CONDITION. Agent shall have
received the Financial Statements, Projections and other materials set forth in
SECTION 3.4, certified by Innovations' Treasurer and Vice President, Finance, in
each case in form and substance
D-4
reasonably satisfactory to Agent, and Agent shall be satisfied, in its sole
discretion, with all of the foregoing. Agent shall have further received a
certificate of the Chief Operating Officer and/or the Treasurer and Vice
President, Finance, of Innovations, based on such Pro Forma and Projections, to
the effect that (a) each Credit Party will be Solvent upon the consummation of
the transactions contemplated herein; (b) the Pro Forma fairly presents the
financial condition of the Reporting Credit Parties as of the date thereof after
giving effect to the transactions contemplated by the Loan Documents; (c) the
Projections are based upon estimates and assumptions stated therein, all of
which Innovations believes to be reasonable and fair in light of current
conditions and current facts known to Innovations and, as of the Closing Date,
reflect Innovations' good faith and reasonable estimates of its future financial
performance and of the other information projected therein for the period set
forth therein; and (d) containing such other statements with respect to the
solvency of each Credit Party and matters related thereto as Agent shall
request.
BB. ASSIGNMENT OF REPRESENTATIONS, WARRANTIES, COVENANTS,
INDEMNITIES AND RIGHTS. Agent shall have received a duly executed copy of an
Assignment of Representations, Warranties, Covenants, Indemnities and Rights in
respect of the Credit Parties' rights under the Acquisition Agreement, which
assignment shall be expressly permitted under the Acquisition Agreement or shall
have been consented to by the Seller in writing.
CC. MASTER STANDBY AGREEMENT. A duly executed copy of the Master
Agreement for Standby Letters of Credit between European Borrower and GE
Capital.
DD. OTHER. Such other certificates, documents and agreements
respecting any Credit Party as Agent may, in its sole discretion, request.
D-5
ANNEX E (SECTION 4.1(A))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS - REPORTING
Innovations shall deliver or cause to be delivered to Agent or to
Agent and Lenders, as indicated, the following:
(a) INTENTIONALLY OMITTED.
(b) QUARTERLY FINANCIALS. To Agent and Lenders, within 45 days
after the end of each Fiscal Quarter, consolidated and consolidating financial
information regarding the Credit Parties, certified by the Treasurer and Vice
President, Finance, of Innovations, including (i) unaudited balance sheets as of
the close of such Fiscal Quarter and the related statements of income and cash
flow for that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter and (ii) unaudited statements of income and cash flows for such Fiscal
Quarter, in each case setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections for such Fiscal Year, all prepared in accordance with GAAP (subject
to normal year-end adjustments). Such financial information shall be accompanied
by (A) a Compliance Certificate in respect of each of the Financial Covenants
that is tested on a quarterly basis and (B) the certification of the Treasurer
and Vice President, Finance, of Innovations that (i) such financial information
presents fairly in accordance with GAAP (subject to normal year-end adjustments)
the financial position, results of operations and statements of cash flows of
the Credit Parties, on both a consolidated and consolidating basis, as at the
end of such Fiscal Quarter and for that portion of the Fiscal Year then ended,
(ii) any other information presented is true, correct and complete in all
material respects and that there was no Default or Event of Default in existence
as of such time or, if a Default or Event of Default has occurred and is
continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default. In addition, Innovations shall deliver to
Agent and Lenders, within 45 days after the end of each Fiscal Quarter, a
management discussion and analysis that includes a comparison to budget for that
Fiscal Quarter and a comparison of performance for that Fiscal Quarter to the
corresponding period in the prior year.
(c) OPERATING PLAN. To Agent and Lenders, as soon as available,
but not later than 60 days after the end of each Fiscal Year, an annual
operating plan for the Credit Parties, on a consolidated and consolidating
basis, approved by the Board of Directors of Innovations, for the following
Fiscal Year, which (i) includes a statement of all of the material assumptions
on which such plan is based, (ii) includes quarterly balance sheets, income
statements and statements of cash flows for the following year and (iii)
integrates sales, gross profits, operating expenses, operating profit and cash
flow projections, all prepared on the same basis and in similar detail as that
on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future financial
performance based on historical performance), and including plans for personnel,
Capital Expenditures and facilities.
E-1
(d) ANNUAL AUDITED FINANCIALS. To Agent and Lenders, within 90
days after the end of each Fiscal Year, audited Financial Statements for the
Credit Parties on a consolidated and (unaudited) consolidating basis, consisting
of balance sheets and statements of income and retained earnings and cash flows,
setting forth in comparative form in each case the figures for the previous
Fiscal Year, which Financial Statements shall be prepared in accordance with
GAAP and certified without qualification, by an independent certified public
accounting firm of national standing or otherwise acceptable to Agent. Such
Financial Statements shall be accompanied by (i) a statement prepared in
reasonable detail showing the calculations used in determining compliance with
each of the Financial Covenants, (ii) a report from such accounting firm to the
effect that, in connection with their audit examination, nothing has come to
their attention to cause them to believe that a Default or Event of Default has
occurred as a result of the Reporting Credit Parties' failure to comply with the
Financial Covenants (or specifying those Defaults and Events of Default that
they became aware of), it being understood that such audit examination extended
only to accounting matters and that no special investigation was made with
respect to the existence of Defaults or Events of Default, (iii) a letter
addressed to Agent, on behalf of itself and Lenders, in form and substance
reasonably satisfactory to Agent and subject to standard qualifications required
by nationally recognized accounting firms, signed by such accounting firm
acknowledging that Agent and Lenders are entitled to rely upon such accounting
firm's certification of such audited Financial Statements, (iv) the annual
letters to such accountants in connection with their audit examination detailing
contingent liabilities and material litigation matters, and (v) the
certification of the Chief Operating Officer or Treasurer and Vice President,
Finance, of Innovations that all such Financial Statements present fairly in
accordance with GAAP the financial position, results of operations and
statements of cash flows of the Credit Parties on a consolidated and
consolidating basis, as at the end of such Fiscal Year and for the period then
ended, and that there was no Default or Event of Default in existence as of such
time or, if a Default or Event of Default has occurred and is continuing,
describing the nature thereof and all efforts undertaken to cure such Default or
Event of Default.
(e) MANAGEMENT LETTERS. To Agent and Lenders, within 5 Business
Days after receipt thereof by any Credit Party, copies of all management
letters, exception reports or similar letters or reports received by such Credit
Party from its independent certified public accountants.
(f) DEFAULT NOTICES. To Agent and Lenders, as soon as practicable,
and in any event within 5 Business Days after an executive officer of any Credit
Party has actual knowledge of the existence of any Default, Event of Default or
other event that has had a Material Adverse Effect, telephonic or telecopied
notice specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
(g) SEC FILINGS AND PRESS RELEASES. To Agent and Lenders, promptly
upon their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements
E-2
made available by any Credit Party to the public concerning material changes or
developments in the business of any such Person.
(h) SUBORDINATED DEBT AND EQUITY NOTICES. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt or Stock of such Person, and,
within 2 Business Days after any Credit Party obtains knowledge of any matured
or unmatured event of default with respect to any Subordinated Debt, notice of
such event of default.
(i) SUPPLEMENTAL SCHEDULES. To Agent, supplemental disclosures, if
any, required by SECTION 5.6.
(j) LITIGATION. To Agent in writing, promptly upon learning
thereof, notice of any Litigation commenced or threatened against any Credit
Party that (i) seeks damages in excess of $100,000 (or the Equivalent Amount
thereof), (ii) seeks injunctive relief that could reasonably be expected to have
a Material Adverse Effect, (iii) is asserted or instituted against any Plan, its
fiduciaries or its assets or against any Credit Party or ERISA Affiliate in
connection with any Plan, (iv) alleges criminal misconduct by any Credit Party,
(v) alleges the violation of any law regarding, or seeks remedies in connection
with, any Environmental Liabilities or (vi) involves any product recall.
(k) INSURANCE NOTICES. To Agent, disclosure of losses or
casualties required by SECTION 5.4.
(l) LEASE DEFAULT NOTICES. To Agent, within 2 Business Days after
receipt thereof, copies of (i) any and all default notices received under or
with respect to any leased location or public warehouse where Collateral is
located, and (ii) such other notices or documents as Agent may reasonably
request.
(m) LEASE AMENDMENTS. To Agent, within 2 Business Days after
receipt thereof, copies of all material amendments to the real estate leases
pertaining to the properties located at (i) Xxxxxx Xxxxxxxx Xxxx, Xxxxxx,
Xxxxxxx, and (ii) Xxxxxxxx Xxx, Xxxxxx Xxxxxxxx Xxxx, Xxxxxxx XX00 0XX, Xxxxxxx.
(n) OTHER DOCUMENTS. To Agent and Lenders, such other financial
and other information respecting any Credit Party's business or financial
condition as Agent or any Lender shall from time to time reasonably request.
E-3
ANNEX F (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
The Reporting Credit Parties shall not breach or fail to comply with
any of the following financial covenants, each of which shall be calculated in
accordance with GAAP consistently applied:
(a) MAXIMUM CAPITAL EXPENDITURES. The Reporting Credit Parties on
a consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate the amounts set forth opposite each of such
periods:
Period Maximum Capital Expenditures per Period
------ ---------------------------------------
November 1, 2002 through December 31, 2003 $ 7,000,000
January 1, 2004 through December 31, 2004 $ 6,000,000
January 1, 2005 through December 31, 2005 $ 6,000,000
January 1, 2006 through May 14, 2006 $ 3,000,000
(b) MINIMUM FIXED CHARGE COVERAGE RATIO. The Reporting Credit
Parties shall have on a consolidated basis at the end of each Fiscal Quarter set
forth below, a Fixed Charge Coverage Ratio for the 12-month period then ended
(or with respect to the Fiscal Quarters ending on or before June 30, 2003, the
period commencing on September 30, 2002 and ending on the last day of such
Fiscal Quarter) of not less than 1.20:1.00.
(c) MINIMUM EBITDA. The Reporting Credit Parties on a consolidated
basis shall have, at the end of each Fiscal Quarter set forth below, EBITDA for
the 12-month period then ended (or with respect to the Fiscal Quarters ending on
or before June 30, 2003, the period commencing on September 30, 2002 and ending
on the last day of such Fiscal Quarter) of not less than the following:
Fiscal Quarter Ending: EBITDA
---------------------- ------
December 31, 2002 $ 4,900,000
March 31, 2003 $ 9,800,000
June 30, 2003 $ 15,525,000
September 30, 2003 $ 21,300,000
December 31, 2003 $ 22,100,000
March 31, 2004 $ 23,300,000
June 30, 2004 $ 23,500,000
September 30, 2004 $ 23,800,000
December 31, 2004 $ 24,000,000
March 31, 2005 $ 24,300,000
F-1
June 30, 2005 $ 24,500,000
September 30, 2005 $ 24,800,000
December 31, 2005 $ 25,000,000
(d) MAXIMUM SENIOR CONSOLIDATED LEVERAGE RATIO. The Reporting
Credit Parties, on a consolidated basis, shall have, at the end of each Fiscal
Quarter set forth below, a Senior Consolidated Leverage Ratio as of the last day
of such Fiscal Quarter and for the 12-month period then ended (or with respect
to the Fiscal Quarters ending on or before June 30, 2003, the period commencing
on September 30, 2002 and ending on the last day of such Fiscal Quarter) of not
more than the following:
2.30:1.00 for the Fiscal Quarter ending December 31, 2002
2.20:1.00 for the Fiscal Quarter ending March 31, 2003
2.00:1.00 for the Fiscal Quarter ending June 30, 2003
1.90:1.00 for the Fiscal Quarter ending September 30, 2003
1.80:1.00 for the Fiscal Quarter ending December 31, 2003
1.70:1.00 for the Fiscal Quarter ending March 31, 2004
1.60:1.00 for the Fiscal Quarter ending June 30, 2004
1.50:1.00 for the Fiscal Quarter ending September 30 2004
1.40:1.00 for the Fiscal Quarter ending December 31, 2004
1.40:1.00 for the Fiscal Quarter ending March 31, 2005
1.30:1.00 for the Fiscal Quarter ending June 30, 2005
1.00:1.00 for the Fiscal Quarter ending September 30, 2005
1.00:1.00 for the Fiscal Quarter ending December 31, 2005
(e) MAXIMUM TOTAL LEVERAGE RATIO. The Reporting Credit Parties, on
a consolidated basis, shall have, at the end of each Fiscal Quarter set forth
below, a Total Leverage Ratio as of the last day of such Fiscal Quarter and for
the 12-month period then ended (or with respect to the Fiscal Quarters ending on
or before June 30, 2003, the period commencing on September 30, 2002 and ending
on the last day of such Fiscal Quarter) of not more than the following:
4.10:1.00 for the Fiscal Quarter ending December 31, 2002
4.00:1.00 for the Fiscal Quarter ending March 31, 2003
3.70:1.00 for the Fiscal Quarter ending June 30, 2003
3.60:1.00 for the Fiscal Quarter ending September 30, 2003
3.40:1.00 for the Fiscal Quarter ending December 31, 2003
3.20:1.00 for the Fiscal Quarter ending March 31, 2004
3.10:1.00 for the Fiscal Quarter ending June 30, 2004
3.00:1.00 for the Fiscal Quarter ending September 30 2004
2.90:1.00 for the Fiscal Quarter ending December 31, 2004
2.80:1.00 for the Fiscal Quarter ending March 31, 2005
2.70:1.00 for the Fiscal Quarter ending June 30, 2005
1.40:1.00 for the Fiscal Quarter ending September 30, 2005
F-2
1.40:1.00 for the Fiscal Quarter ending December 31, 2005
(f) MINIMUM CASH. The Credit Parties, on a consolidated basis,
shall have at all times available cash equal to at least $10,000,000 (or the
Equivalent Amount thereof).
(g) MAXIMUM SENIOR XXXXXXX LEVERAGE RATIO. US Borrower shall have,
at the end of each Fiscal Quarter set forth below, a Senior Xxxxxxx Leverage
Ratio as of the last day of such Fiscal Quarter and for the 12-month period then
ended (or with respect to the Fiscal Quarters ending on or before June 30, 2003,
the period commencing on September 30, 2002 and ending on the last day of such
Fiscal Quarter) of not more than the following:
2.75.00:1.00 for the Fiscal Quarter ending December 31, 2002
2.75:1.00 for the Fiscal Quarter ending March 31, 2003
2.50:1.00 for the Fiscal Quarter ending June 30, 2003
2.25:1.00 for the Fiscal Quarter ending September 30, 2003
2.25:1.00 for the Fiscal Quarter ending December 31, 2003
2.00:1.00 for the Fiscal Quarter ending March 31, 2004
2.00:1.00 for the Fiscal Quarter ending June 30, 2004
2.00:1.00 for the Fiscal Quarter ending September 30 2004
2.00:1.00 for the Fiscal Quarter ending December 31, 2004
1.75:1.00 for the Fiscal Quarter ending March 31, 2005
1.75:1.00 for the Fiscal Quarter ending June 30, 2005
1.75:1.00 for the Fiscal Quarter ending September 30, 2005
1.75:1.00 for the Fiscal Quarter ending December 31, 2005
Unless otherwise specifically provided herein, any accounting term
used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then the Credit Parties, Agent and Lenders agree to enter into
negotiations in order to amend such provisions of the Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Credit Parties' financial condition shall be the
same after such Accounting Changes as if such Accounting Changes had not been
made; PROVIDED, HOWEVER, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"ACCOUNTING CHANGES" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by Innovations' certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments
F-3
resulting from expenditures made subsequent to the Closing Date (including
capitalization of costs and expenses or payment of pre-Closing Date liabilities)
shall be treated as expenses in the period the expenditures are made and
deducted as part of the calculation of EBITDA in such period. If Agent, Credit
Parties and Requisite Lenders agree upon the required amendments, then after
appropriate amendments have been executed and the underlying Accounting Change
with respect thereto has been implemented, any reference to GAAP contained in
the Agreement or in any other Loan Document shall, only to the extent of such
Accounting Change, refer to GAAP, consistently applied after giving effect to
the implementation of such Accounting Change. If Agent, Credit Parties and
Requisite Lenders cannot agree upon the required amendments within 30 days
following the date of implementation of any Accounting Change, then all
Financial Statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan
Documents shall be prepared, delivered and made without regard to the underlying
Accounting Change. For purposes of SECTION 8.1, a breach of a Financial Covenant
contained in this ANNEX F shall be deemed to have occurred as of any date of
determination by Agent or as of the last day of any specified measurement
period, regardless of when the Financial Statements reflecting such breach are
delivered to Agent.
F-4
ANNEX G (SECTION 9.9(A))
TO
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: Bankers Trust Company
New York, New York
ABA #: 000000000
Account #: 00000000
Account Name: GECC/CAF Depository
Reference: CFN 4940 Inverness Med.
G-1
ANNEX H (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
AND
GE Capital Healthcare Financial Services, Inc.
0 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq., Vice President and
Senior Counsel
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(B) If to any Borrower, to Borrower Representative, at
Inverness Medical Innovations, Inc.
00 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx Xxxxxxxxx, Chief Executive Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Inverness Medical Innovations, Inc.
H-1
00 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
Xxxxxxx Procter LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Xxxxxx X. Xxxxx, P.C.
Xxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
H-2
ANNEX I (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
LENDER(S)
European Revolving Loan Commitment
(including a European Swing Line Commitment
of $10,000,000)
$13,636,363.63 GENERAL ELECTRIC CAPITAL
CORPORATION
US Term Loan Commitment:
$10,909,090.91
European Term Loan Commitment:
$5,454,545.45
European Revolving Loan Commitment
$6,818,181.82 KEYBANK NATIONAL ASSOCIATION
US Term Loan Commitment:
$5,454,545.45
European Term Loan Commitment:
$2,727,272.73
European Revolving Loan Commitment
$4,545,454.55 THE ROYAL BANK OF SCOTLAND
PLC
US Term Loan Commitment:
$3,636,363.64
European Term Loan Commitment:
$1,818,181.82
-1-
