Exhibit 10.7
EXECUTION VERSION
FINANCING AGREEMENT,
DATED AS OF JULY 25, 2005,
BY AND AMONG
XANODYNE PHARMACEUTICALS, INC.,
AS BORROWER,
AND
EACH SUBSIDIARY OF BORROWER LISTED AS A GUARANTOR ON THE
SIGNATURE PAGES HERETO,
AS GUARANTORS,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
AS LENDERS,
AND
SILVER POINT FINANCE, LLC,
AS COLLATERAL AGENT AND AS ADMINISTRATIVE AGENT
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS; CERTAIN TERMS..................................... 2
Section 1.01 Definitions............................................. 2
Section 1.02 Terms Generally......................................... 29
Section 1.03 Accounting and Other Terms.............................. 30
Section 1.04 Time References......................................... 30
ARTICLE II THE LOANS..................................................... 30
Section 2.01 Commitments............................................. 30
Section 2.02 Making the Loans........................................ 31
Section 2.03 Repayment of Loans; Evidence of Debt.................... 34
Section 2.04 Interest................................................ 35
Section 2.05 Reduction of Commitment; Prepayment of Loans............ 36
Section 2.06 Fees.................................................. 40
Section 2.07 Securitization.......................................... 40
Section 2.08 Taxes................................................... 41
Section 2.09 LIBOR Option............................................ 43
ARTICLE III FEES, PAYMENTS AND OTHER COMPENSATION........................ 45
Section 3.01 Audit and Collateral Monitoring Fees.................... 45
Section 3.02 Payments; Computations and Statements................... 46
Section 3.03 Sharing of Payments, Etc................................ 47
Section 3.04 Apportionment of Payments............................... 47
Section 3.05 Increased Costs and Reduced Return...................... 48
ARTICLE IV CONDITIONS TO LOANS........................................... 49
Section 4.01 Conditions Precedent to Effectiveness................... 49
Section 4.02 Conditions Precedent to All Loans....................... 55
ARTICLE V REPRESENTATIONS AND WARRANTIES................................. 56
Section 5.01 Representations and Warranties.......................... 56
ARTICLE VI COVENANTS OF THE LOAN PARTIES................................. 66
Section 6.01 Affirmative Covenants................................... 66
Section 6.02 Negative Covenants...................................... 78
Section 6.03 Financial Covenants..................................... 85
ARTICLE VII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND
OTHER COLLATERAL...................................................... 86
Section 7.01 Collection of Accounts Receivable; Management of
Collateral.............................................. 86
Section 7.02 Accounts Receivable Documentation....................... 89
Section 7.03 Status of Accounts Receivable and Other Collateral...... 89
Section 7.04 Collateral Custodian.................................... 90
ARTICLE VIII EVENTS OF DEFAULT........................................... 90
Section 8.01 Events of Default....................................... 90
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ARTICLE IX AGENTS..................................................... 95
Section 9.01 Appointment............................................. 95
Section 9.02 Nature of Duties........................................ 96
Section 9.03 Rights, Exculpation, Etc................................ 96
Section 9.04 Reliance................................................ 97
Section 9.05 Indemnification......................................... 97
Section 9.06 Agents Individually..................................... 97
Section 9.07 Successor Agent......................................... 98
Section 9.08 Collateral Matters...................................... 98
Section 9.09 Agency for Perfection................................... 100
Section 9.10 Collateral Agent May File Proofs of Claim............... 100
Section 9.11 Agents and their Affiliates and their Designated
Entities................................................ 101
ARTICLE X GUARANTY....................................................... 101
Section 10.01 Guaranty................................................ 101
Section 10.02 Guaranty Absolute....................................... 102
Section 10.03 Waiver.................................................. 102
Section 10.04 Continuing Guaranty; Assignments........................ 103
Section 10.05 Subrogation............................................. 103
ARTICLE XI MISCELLANEOUS................................................. 104
Section 11.01 Notices, Etc............................................ 104
Section 11.02 Amendments, Etc......................................... 105
Section 11.03 No Waiver; Remedies, Etc................................ 105
Section 11.04 Expenses; Taxes; Attorneys' Fees........................ 106
Section 11.05 Right of Set-off........................................ 107
Section 11.06 Severability............................................ 107
Section 11.07 Assignments and Participations.......................... 107
Section 11.08 Counterparts............................................ 111
Section 11.09 GOVERNING LAW........................................... 111
Section 11.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE... 111
Section 11.11 WAIVER OF JURY TRIAL, ETC............................... 112
Section 11.12 Consent by the Agents and Lenders....................... 112
Section 11.13 No Party Deemed Drafter................................. 112
Section 11.14 Reinstatement; Certain Payments......................... 112
Section 11.15 Indemnification......................................... 113
Section 11.16 Records................................................. 114
Section 11.17 Binding Effect.......................................... 114
Section 11.18 Interest................................................ 114
Section 11.19 Confidentiality......................................... 115
Section 11.20 Integration............................................. 116
Section 11.21 USA Patriot Act Notice.................................. 116
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SCHEDULE AND EXHIBITS
Schedule 1.01(A) Lenders and Lenders' Commitments
Schedule 1.01(B) Licensing Agreements
Schedule 1.01(C) Marketed Products
Schedule 5.01(e) Subsidiaries
Schedule 5.01(f) Litigation; Commercial Tort Claims
Schedule 5.01(i) ERISA
Schedule 5.01(o) Real Property
Schedule 5.01(q) Operating Lease Obligations
Schedule 5.01(r) Environmental Matters
Schedule 5.01(s) Insurance
Schedule 5.01(v) Bank Accounts
Schedule 5.01(w) Intellectual Property
Schedule 5.01(x) Material Contracts
Schedule 5.01(aa) Customers and Suppliers
Schedule 5.01(bb) Name; Jurisdiction of Organization; Organizational ID
Number; Chief Place of Business; Chief Executive Office;
FEIN
Schedule 5.01(cc) Tradenames
Schedule 5.01(dd) Locations of Collateral
Schedule 5.01(hh) FDA Compliance; Notices, etc.
Schedule 6.02(a) Existing Liens
Schedule 6.02(b) Existing Indebtedness
Schedule 6.02(e) Existing Investments
Schedule 6.02(j) Transactions With Affiliates
Schedule 6.02(k) Limitations on Dividends and Other Payment Restrictions
Schedule 7.01 Cash Management Banks
Exhibit A Form of Guaranty
Exhibit B Form of Security Agreement
Exhibit C Form of Pledge Agreement
Exhibit D Form of Notice of Borrowing
Exhibit E Form of LIBOR Notice
Exhibit F Form of Opinion of Counsel
Exhibit G Form of Assignment and Acceptance
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FINANCING AGREEMENT
Financing Agreement, dated as of July 25, 2005, by and among Xanodyne
Pharmaceuticals, Inc., a Delaware corporation (the "Borrower"), each subsidiary
of the Borrower listed as a "Guarantor" on the signature pages hereto (together
with each other Person (as hereinafter defined) that guarantees, pursuant to
Section 6.0 l(b) or otherwise, all or any portion of the Obligations (as
hereinafter defined) from time to time, each a "Guarantor" and collectively, the
"Guarantors"), the lenders from time to time party hereto (each a "Lender" and
collectively, the "Lenders"), Silver Point Finance, LLC, a Delaware limited
liability company ("Silver Point"), as collateral agent for the Agents (as
hereinafter defined) and the Lenders (in such capacity, together with its
successors and assigns in such capacity, if any, the "Collateral Agent"), and as
administrative agent for the Agents and the Lenders (in such capacity, together
with its successors and assigns in such capacity, if any, the "Administrative
Agent" and together with the Collateral Agent, each an "Agent" and collectively,
the "Agents").
RECITALS
The Borrower has advised the Agents and the Lenders that it intends to
purchase substantially all of the assets of the aaiPharma Sellers (as
hereinafter defined), who filed voluntary petitions under Chapter 11 of the
Bankruptcy Code (as hereinafter defined) with the United States Bankruptcy Court
for the District of Delaware (the "Bankruptcy Court"), on May 10, 2005, and are
debtors-in-possession under Case No. 05-11341 (PJW), and that such acquisition
is to be consummated in accordance with the terms of that certain aaiPharma
Acquisition Agreement (as hereinafter defined), and shall be subject to the
terms of the aaiPharma Sale Order (as hereinafter defined) issued by such
Bankruptcy Court under Section 363 of the Bankruptcy Code.
The Borrower has asked the Lenders to extend credit to the Borrower
consisting of (a) a term loan in the aggregate principal amount of $55,000,000
and (b) a revolving credit facility in an aggregate principal amount not to
exceed $15,000,000 at any time outstanding. The proceeds of the term loan and
the loans made under the revolving credit facility shall be used, together with
the Unrestricted Cash Proceeds (as hereinafter defined) (i) to finance the
aaiPharma Acquisition (as hereinafter defined), (ii) to pay fees and expenses
related to the aaiPharma Acquisition and this Agreement and the transactions
contemplated hereby and thereby, and (iii) to provide for general working
capital and general corporate purposes of the Borrower. The Lenders are
severally, and not jointly, willing to extend such credit to the Borrower
subject to the terms and conditions hereinafter set forth.
In consideration of the premises and the covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01 Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
"aaiPharma Acquisition" means the acquisition by the Borrower of the
aaiPharma Assets from the aaiPharma Sellers and the assumption by the Borrower
of certain liabilities relating thereto, pursuant to the aaiPharma Acquisition
Agreement and the aaiPharma Sale Order.
"aaiPharma Acquisition Agreement" means the Asset Purchase Agreement,
dated as of May 6, 2005, as amended by the First Amendment to Asset Purchase
Agreement, dated as of June 7, 2005, and Second Amendment to Asset Purchase
Agreement, dated as of July 18, 2005, between the Borrower and the Sellers, and
all related agreements, documents and instruments thereto, as in effect on the
date hereof.
"aaiPharma Acquisition Documents" means the aaiPharma Acquisition
Agreement, the Services Agreement, the Manufacturing Agreement, the Odyssey
Co-Development Agreement, the Trademark Assignment Agreement, the Indemnity
Escrow Agreement, the Domain Name Transfer Agreement (as such terms are defined
in the aaiPharma Acquisition Agreement), each ▇▇▇▇ of sale, each assignment
agreement, each assumption agreement and all other agreements, instruments and
documents entered into or delivered in connection with the aaiPharma
Acquisition.
"aaiPharma Assets" means all of the property and assets (tangible and
intangible) sold, assigned or otherwise transferred to, or assumed or otherwise
acquired by the Borrower pursuant to the aaiPharma Sale Order and the aaiPharma
Acquisition Agreement.
"aaiPharma Sale Order" means the final order of the Bankruptcy Court
authorizing (i) the aaiPharma Sellers to sell the aaiPharma Assets to the
Borrower free and clear of all Liens, and (ii) the Borrower to assume certain
liabilities of the Sellers, which order shall otherwise be in form and substance
reasonably satisfactory to the Agents.
"aaiPharma Sellers" means, collectively, aaiPharma Inc., a Delaware
corporation, and aaiPharma, LLC, a Delaware limited liability company, each as a
debtor-in-possession.
"Account Debtor" means each debtor, customer or obligor in any way
obligated on or in connection with any Account Receivable.
"Account Receivable" means, with respect to any Person, any and all
rights of such Person to payment for goods sold and/or services rendered,
including accounts, general intangibles and any and all such rights evidenced by
chattel paper, instruments or documents, whether due or to become due and
whether or not earned by performance, and whether now or hereafter acquired or
arising in the future, and any supporting obligations in respect of the
foregoing and any proceeds arising from or relating to the foregoing.
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"Acquisition" means the acquisition of (i) all of the Capital Stock of
any Person, (ii) all or substantially all of the assets of any Person or (iii)
all or substantially all of the intellectual property rights to a pharmaceutical
product or product line of any Person, whether or not involving a merger or
consolidation with such Person.
"Action" has the meaning specified therefor in Section 11.12.
"Administrative Agent" has the meaning specified therefor in the
preamble hereto.
"Administrative Agent's Account" means an account at a bank designated
by the Administrative Agent from time to time as the account into which the Loan
Parties shall make all payments to the Administrative Agent for the benefit of
the Agents and the Lenders under this Agreement and the other Loan Documents.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
any Agent or any Lender be considered an "Affiliate" of any Loan Party.
"After Acquired Property" has the meaning specified therefor in
Section 6.01(o).
"Agent" has the meaning specified therefor in the preamble hereto.
"Agent-Related Persons" means the Administrative Agent and the
Collateral Agent, together with their Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Agreement" means this Financing Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to the Agreement as the same may be in effect at the
time such reference becomes operative.
"Annualized Demand Revenues" means, the product of (i) the aggregate
IMS Product Demand Average Value of the Loan Parties times (ii) four (4).
"Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to (a) (x) during the period of time from and
after the date that is the 12-month anniversary of the Effective Date up to and
including the date that is the 18-month anniversary of the Effective Date, and
(y) solely in connection with a Financial Covenant Cure Payment, during the
period of time from and after the Effective Date up to and including the date
that is the 18-month anniversary of the Effective Date, 3.0% times the sum of
(i) the amount of the reduction of the Total Revolving Credit Commitment on such
date plus (ii) the principal amount of the Term Loan prepaid on such date, (b)
during the period of time after the date that is the 18-month anniversary of the
Effective Date up to and including the date that is the 30-month anniversary of
the Effective Date, 2.0% times the sum of (i) the amount of the reduction of the
Total Revolving
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Credit Commitment on such date plus (ii) the principal amount of the Term Loan
prepaid on such date, (c) during the period of time after the date that is the
30-month anniversary of the Effective Date up to and including the date that is
the 42-month anniversary of the Effective Date, 1.0% times the sum of (i) the
amount of the reduction of the Total Revolving Credit Commitment on such date
plus (ii) the principal amount of the Term Loan prepaid on such date, and (d) at
all times thereafter, zero. Notwithstanding the foregoing, if the Total
Revolving Credit Commitment is terminated and all of the Obligations (including,
without limitation, the outstanding principal amount of the Revolving Loans and
the Term Loan) are prepaid in full in immediately available funds in connection
with the acceleration of all the Obligations (other than an acceleration of the
Obligations arising as a result of any Event of Default described in subsection
(f) or (g) of Section 8.01), the Applicable Prepayment Premium shall be zero. If
the Total Revolving Credit Commitment is terminated and all of the Obligations
(including, without limitation, the outstanding principal amount of the
Revolving Loans and the Term Loan) are prepaid in full in immediately available
funds in connection with a new financing facility provided by Silver Point or
any of its Related Funds, then Silver Point and its Related Funds, and any other
Lender that participates in such new financing facility, shall waive its Pro
Rata Share of the Applicable Prepayment Premium, if any.
"Assignment and Acceptance" means an assignment and acceptance entered
into by an assigning Lender and an assignee, and accepted by the Collateral
Agent, in accordance with Section 11.07 hereof and substantially in the form of
Exhibit G hereto or such other form acceptable to the Collateral Agent.
"Authorized Officer" means, with respect to any Person, the chief
executive officer, chief operating officer, chief financial officer, president,
executive vice president, controller or treasurer of such Person.
"Availability" means, at any time, an amount equal to (i) the
difference between (a) the Total Revolving Credit Commitment and (b) the
aggregate outstanding principal amount of all Revolving Loans minus (ii) any
reserves instituted pursuant to any Loan Document.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.
Section 101, et seg.), as amended, and any successor statute.
"Bankruptcy Court" has the meaning specified therefor in the preamble
hereto.
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor Governmental Authority).
"Board of Directors" means, with respect to any Person, the board of
directors (or comparable managers) of such Person or any committee thereof duly
authorized to act on behalf of the board.
"Borrower" has the meaning specified therefor in the preamble hereto.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City or the state where the Payment
Office is located are authorized or required to close, except that, if a
determination of a Business Day shall relate to a
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LIBOR Rate Loan, the term "Business Day" also shall exclude any day on which
banks are closed for dealings in Dollar deposits in the London interbank market.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate of all expenditures by such Person and its Subsidiaries
during such period that in accordance with GAAP are required to be included in
"property, plant and equipment" or in a similar fixed asset account on its
balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period.
"Capital Guideline" means any law, rule, regulation, policy, guideline
or directive (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) of any central bank or
Governmental Authority (i) regarding capital adequacy, capital ratios, capital
requirements, the calculation of a bank's capital or similar matters, or (ii)
affecting the amount of capital required to be obtained or maintained by any
Lender or any Person controlling any Lender or the manner in which any Lender or
any Person controlling any Lender allocates capital to any of its contingent
liabilities (including letters of credit), advances, acceptances, commitments,
assets or liabilities.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person; provided that, the term
"Capital Stock" shall not include any debt securities convertible into equity
securities prior to such conversion.
"Capitalized Lease" means, with respect to any Person, any lease of
real or personal property by such Person as lessee which is required under GAAP
to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"Cash and Cash Equivalents" means all cash and any presently existing
or hereafter arising deposit account balances, certificates of deposit or other
financial instruments properly classified as cash equivalents under GAAP.
"Cash Management Account" has the meaning specified therefor in
Section 7.01(a)
"Cash Management Agreements" means those certain cash management
agreements, in form and substance satisfactory to the Administrative Agent, each
of which is among a Loan Party, the Administrative Agent, and one of the Cash
Management Banks.
"Cash Management Bank" has the meaning specified therefor in Section
7.01(a).
"Change in Law" has the meaning specified therefor in Section 3.05(a).
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"Change of Control" means each occurrence of any of the following:
(a) the acquisition, directly or indirectly, by any person or group
(within the meaning of Section 13(d)(3) of the Exchange Act) other than a
Permitted Holder of beneficial ownership of more than 25% of the aggregate
outstanding voting power of the Capital Stock of the Borrower;
(b) except as otherwise expressly permitted by Section 6.02(c), the
Borrower shall cease to have beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) of 100% of the aggregate voting power of the Capital
Stock of each other Loan Party, free and clear of all Liens (other than any
Liens securing the Obligations); or
(c) except as otherwise expressly permitted by Section 6.02(c) of this
Agreement, (i) any Loan Party consolidates or amalgamates with or merges into
another entity or conveys, transfers or leases all or substantially all of its
property and assets to another Person, or (ii) any entity consolidates or
amalgamates with or merges into any Loan Party in a transaction pursuant to
which the outstanding voting Capital Stock of such Loan Party is reclassified or
changed into or exchanged for cash, securities or other property, other than any
such transaction described in this clause (ii) in which either (A) in the case
of any such transaction involving the Borrower, no person or group (within the
meaning of Section 13(d)(3) of the Exchange Act) other than a Permitted Holder
has, directly or indirectly, acquired beneficial ownership of more than 25% of
the aggregate outstanding voting Capital Stock of the Borrower or (B) in the
case of any such transaction involving a Loan Party other than the Borrower, the
Borrower has direct or indirect beneficial ownership of 100% of the aggregate
voting power of all Capital Stock of the resulting, surviving or transferee
entity.
"Chosen Valuation Firms" has the meaning specified therefor in Section
6.03.
"Collateral" means all of the property and assets and all interests
therein and proceeds thereof now owned or hereafter acquired by any Person upon
which a Lien is granted or purported to be granted by such Person as security
for all or any part of the Obligations.
"Collateral Agent" has the meaning specified therefor in the preamble
hereto.
"Collateral Agent Advances" has the meaning specified therefor in
Section 9.08(a).
"Commitments" means, with respect to each Lender, such Lender's
Revolving Credit Commitment and Term Loan Commitment.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) guaranteeing or
intended to guarantee any Indebtedness ("primary obligations") of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, (i) the direct or indirect guaranty, endorsement
(other than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
obligation of a primary obligor, (ii) the obligation to make "take-or-pay" or
similar payments, if required, regardless of
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nonperformance by any other party or parties to an agreement, (iii) any
obligation of such Person, whether or not contingent, (A) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (B) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (C) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (D) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term
"Contingent Obligation" shall not include any product warranties extended in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation with respect to which such Contingent Obligation is made (or, if
less, the maximum amount of such primary obligation for which such Person may be
liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability with respect thereto (assuming such Person is required to
perform thereunder), as determined by such Person in good faith.
"Contribution Agreement" means a Contribution Agreement, duly executed
by each Loan Party, in form and substance satisfactory to the Collateral Agent.
"Current Value" has the meaning specified therefor in Section 6.0l(o).
"Declined Prepayment Amount" has the meaning specified therefor in
Section 2.05(g).
"Default" means an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default.
"Designated Entity" has the meaning specified therefor in Section
9.11.
"Designation Valuation Firm" has the meaning specified therefor in
Section 6.03.
"Disbursement Letter" means a disbursement of proceeds letter, dated
on or about the Effective Date, among the Agents, the Lenders, the Borrower and
the other parties thereto, in form and substance satisfactory to the Agents.
"Disposition" means any transaction, or series of related
transactions, pursuant to which any Person or any of its Subsidiaries sells,
assigns, transfers or otherwise disposes of any property or assets, whether now
owned or hereafter acquired, to any other Person, in each case, whether or not
the consideration therefor consists of cash, securities or other assets owned by
the acquiring Person, excluding the sales, transfers or other dispositions set
forth in Section 6.02(c)(ii)(A), (B), (D), (E), (G) and (H). Notwithstanding the
foregoing, Extraordinary Receipts, Excluded Equity Issuances and Permitted Liens
shall not constitute "Dispositions" under this Agreement.
"Dollar," "Dollars" and the symbol "$" each means lawful money of the
United States of America.
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"Domestic Subsidiary" means a Subsidiary organized under the laws of
the United States, any of the states thereof or the District of Columbia.
"Effective Date" means the date, on or before July 25, 2005 on which
all of the conditions precedent set forth in Section 4.01 are satisfied and the
initial Loans are made.
"Employee Plan" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Loan Party or any of its ERISA
Affiliates.
"Enterprise Cash Collateral Account" means the cash collateral account
maintained at Silicon Valley Bank in the name of the Borrower, with account
number 3300298519.
"Enterprise Letter of Credit" means one or more letters of credit
issued by Silicon Valley Bank in favor of Enterprise Rent A Car Company of
Cincinnati D/B/A Enterprise Fleet Services (or a successor thereto), as the
stated amount of such letters of credit may be increased from time to time.
"Environmental Actions" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or other communication from any
Person or Governmental Authority involving violations of Environmental Laws or
Releases of Hazardous Materials (i) from any assets, properties or businesses
owned or operated by any Loan Party or any of its Subsidiaries or any
predecessor in interest; (ii) from adjoining properties or businesses; or (iii)
onto any facilities which received Hazardous Materials generated by any Loan
Party or any of its Subsidiaries or any predecessor in interest.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.), the Federal
Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.) and the Occupational Safety and Health Act (29 U.S.C. Section 651 et
seq.), as such laws may be amended or otherwise modified from time to time, and
any other present or future federal, state, local or foreign statute, ordinance,
rule, regulation, order, judgment, decree, permit, license or other binding
determination of any Governmental Authority imposing liability or establishing
standards of conduct for protection of the environment or other government
restrictions relating to the protection of the environment or the Release,
deposit or migration of any Hazardous Materials into the environment.
"Environmental Liabilities and Costs" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any Environmental Action, claim or demand by
any
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Governmental Authority or any third party, and which relate to any environmental
condition or a Release of Hazardous Materials from or onto (i) any property
presently or formerly owned by any Loan Party or any of its Subsidiaries or (ii)
any facility which received Hazardous Materials generated by any Loan Party or
any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equity Issuance" means any issuance by any Loan Party or any of its
Subsidiaries to any Person of (a) any shares of its Capital Stock (whether
pursuant to the exercise of options or warrants or the conversion of any debt
securities to equity or otherwise) or (b) any options or warrants relating to
its Capital Stock.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a "controlled group"
within the meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue
Code.
"Event of Default" means any of the events set forth in Section 8.01.
"Excess Amount" has the meaning specified therefor in Section 6.02(g).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Equity Issuance" means (i) any Equity Issuance by the
Borrower, the Net Cash Proceeds of which are used (or are to be used) within 90
days of receipt thereof to finance a Permitted Acquisition, (ii) any Equity
Issuance by the Borrower pursuant to an initial public offering of the Capital
Stock of the Borrower in accordance with all applicable laws, (iii) any Equity
Issuance the Net Cash Proceeds of which are used by the Borrower used to cure a
violation of the Loan to Value Ratio covenant in accordance with Section 6.03,
and (iv) one or more Equity Issuances after the Effective Date in which the
aggregate proceeds received in connection therewith, together with all other
Equity Issuances (other than Equity Issuances of a type specified in clauses (i)
through (iii) above) do not exceed $60,000,000.
"Exemption Certificate" has the meaning specified therefor in Section
2.08(d).
"Existing Convertible Secured Promissory Notes" means the Convertible
Secured Promissory Notes, each dated May 5, 2005, made by the Borrower in favor
of the Existing Shareholder Lenders, and in the original aggregate principal
amount of $4,250,000.
"Existing Interim Loan Agreement" means the Interim Loan Agreement,
dated as of May 5, 2005, between the Borrower and the Existing Shareholder
Lenders.
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"Existing Shareholder Lenders" means each lender party to the Existing
Interim Loan Agreement.
"Existing Shareholder Lender Agent" means Blue ▇▇▇▇ ▇▇, Limited
Partnership, as Authorized Agent for the Existing Shareholder Lenders.
"Extended Units" means the number of tablets, capsules or milliliters
of liquid, as applicable, of the Marketed Products.
"Extraordinary Receipts" means any cash received by the Borrower or
any of its Subsidiaries not in the ordinary course of business (and not
consisting of proceeds described in Section 2.05(c)(ii) or (iii) hereof),
including, without limitation, (i) foreign, United States, state or local tax
refunds, (ii) pension plan reversions, (iii) proceeds of insurance, (iv)
judgments, proceeds of settlements or other consideration of any kind in
connection with any cause of action, (v) condemnation awards (and payments in
lieu thereof), (vi) indemnity payments and (vii) any purchase price adjustments
or deferred purchase price payments (including, without limitation, (x) in the
form of royalties and licensing fees and (y) pursuant to the aaiPharma
Acquisition Agreement) received in connection with any purchase agreement (it
being understood that royalties and progress payments received by the Borrower
or any of its Subsidiaries in the ordinary course of business shall not
constitute "Extraordinary Receipts").
"Facility" means each parcel of real property identified on Schedule
5.01 (o) that is owned or leased by a Loan Party as of the Effective Date,
including, without limitation, the land on which such facility is located, all
buildings and other improvements thereon, all fixtures located at or used in
connection with such facility, all whether now or hereafter existing.
"FDA" means the United States Food and Drug Administration and any
successor agency.
"FDA Notice" has the meaning set forth in Section 5.01(hh).
"FDA Regulation" means any rule, regulation or administrative order
promulgated or issued by the FDA.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal to, for each day during such period, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
"Fee Letter" means the fee letter, dated as of the Effective Date,
between the Borrower and the Administrative Agent.
"Final Maturity Date" means July 25, 2010, or such earlier date on
which all Loans shall become due and payable in accordance with the terms of
this Agreement and the other Loan Documents.
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"Financial Covenant Cure Payment" has the meaning specified therefor
in Section 6.03.
"Financial Statements" means (i) the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the Fiscal Year ended December
31, 2004, and the related consolidated statement of operations, shareholders'
equity and cash flows for the Fiscal Year then ended and (ii) the unaudited
consolidated balance sheet of the Parent and its Subsidiaries for the five
months ended May 31, 2005, and the related consolidated statement of operations,
shareholder's equity and cash flows for the five months then ended.
"Fiscal Year" means the fiscal year of the Borrower and its
Subsidiaries ending on December 31st of each year.
"Food and Drug Act" means the Federal Food, Drug and Cosmetic Act, 21
USC Section 1 et seq. and any successor act.
"Foreign Subsidiary" means a Subsidiary organized under the laws of a
jurisdiction other than the United States, any of the states thereof or the
District of Columbia.
"Funding Losses" has the meaning set forth in Section 2.09(b)(ii).
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States, applied on a consistent basis.
"Governmental Authority" means any nation or government, any Federal,
state, city, town, municipality, county, local or other political subdivision
thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guaranteed Obligations" has the meaning specified therefor in Section
10.01 (and any applicable Guaranty).
"Guarantor" has the meaning specified therefor in the preamble hereto.
"Guaranty" means (i) the guaranty of each Guarantor party hereto
contained in ARTICLE X, and (ii) each guaranty substantially in the form of
Exhibit A, made by any other Guarantor in favor of the Collateral Agent for the
benefit of the Agents and the Lenders pursuant to Section 6.0l(b) or otherwise.
"Hazardous Material" means (a) any element, compound or chemical that
is defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws or that is likely to cause immediately, or at some future time, harm to or
have an adverse effect on, the environment or risk to human health or safety,
including, without limitation, any pollutant, contaminant, waste, hazardous
waste, toxic substance or dangerous good which is defined or identified in any
Environmental Law and which is present in the environment in such quantity or
state that it violates any Environmental Law;
-11-
(b) petroleum and its refined products; (c) polychlorinated biphenyls; (d) any
substance exhibiting a hazardous waste characteristic, including, without
limitation, corrosivity, ignitability, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) any raw materials, building
components (including, without limitation, asbestos-containing materials) and
manufactured products containing hazardous substances listed or classified as
such under Environmental Laws.
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.
"HHS" means the United States Department of Health and Human Services,
or any successor agency thereof.
"HHS Regulation" means any rule, regulation or administrative order
promulgated or issued by the HHS.
"Highest Lawful Rate" means, with respect to any Agent or any Lender,
the maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.
"IMS" means IMS Health, Inc. and its successors or any other Person
reasonably acceptable to the Collateral Agent that performs a substantially
similar function as IMS Health, Inc.
"IMS National Sales Perspective" means the monthly audit prepared by
IMS and usually available 27 days after the closing of the month; it being
understood that all available channels of distribution shall be included.
"IMS Product Demand Average Value" shall mean at any time, with
respect to all Marketed Products by the Loan Parties at such time, the product
of (i) the three (3) month rolling average of the latest available IMS National
Sales Perspective data at such time in Extended Units (prorated for any partial
months) for such products times (ii) the actual monthly Net Selling Price for
such products.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money; (ii) all obligations of
such Person for the deferred purchase price of property or services (other than
(x) trade payables, other accounts payable, royalty and licensing fee payables
and other similar payment obligations incurred in the ordinary course of such
Person's business and not outstanding for more than 90 days after the date such
payable was created, (y) payment obligations incurred under the Services
Agreement (as defined in the aaiPharma Acquisition Agreement as in effect on the
date hereof) and not
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outstanding for more than 90 days past the original due date thereof and (z)
contingent obligations for the deferred purchase price of property that mature
or become fixed based upon the financial performance of the property acquired
and that have not matured or become fixed); (iii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments or upon which
interest payments are customarily made; (iv) all reimbursement, payment or other
obligations and liabilities of such Person created or arising under any
conditional sales or other title retention agreement with respect to property
used and/or acquired by such Person (other than customary reservations of rights
(other than retentions of title) under agreements with suppliers entered into in
the ordinary course of business); (v) all Capitalized Lease Obligations of such
Person; (vi) all obligations and liabilities, contingent or otherwise, of such
Person, in respect of letters of credit, acceptances and similar facilities;
(vii) the net termination obligations, calculated on any date, on a basis
satisfactory to the Collateral Agent and in accordance with accepted practice as
if the Hedging Agreement was terminated on such date, of such Person under
Hedging Agreements; (viii) all monetary obligations under any receivables
factoring, receivable sales or similar transactions and all monetary obligations
under any synthetic lease, tax ownership/operating lease, off-balance sheet
financing or similar financing; (ix) all Contingent Obligations; and (x) all
obligations referred to in clauses (i) through (ix) of this definition of
another Person secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) a Lien upon property
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness. The Indebtedness of any Person shall
include the Indebtedness of any partnership of or joint venture in which such
Person is a general partner or a joint venturer to the extent such Person is
liable for such Indebtedness.
"Indemnified Matters" has the meaning specified therefor in Section
11.15.
"Indemnitees" has the meaning specified therefor in Section 11.15.
"Indianapolis Facility" has the meaning specified therefor in Section
6.02(c)(ii)(I).
"Indianapolis Facility Disposition" has the meaning specified therefor
in Section 6.02(c)(ii)(I).
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"Intercompany Subordination Agreement" means an Intercompany
Subordination Agreement, in form and substance satisfactory to the Collateral
Agent, made by each Loan Party and certain of their Subsidiaries in favor of the
Collateral Agent for the benefit of the Agents and the Lenders.
"Interest Period" means, with respect to each LIBOR Rate Loan, a
period commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Reference Rate Loan to
a LIBOR Rate Loan) and
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ending 1,2, 3 or 6 months thereafter; provided, however, that (a) if any
Interest Period would end on a day that is not a Business Day, such Interest
Period shall be extended (subject to clauses (c)-(e) below) to the next
succeeding Business Day, (b) interest shall accrue at the applicable rate based
upon the LIBOR Rate from and including the first day of each Interest Period to,
but excluding, the day on which any Interest Period expires, (c) any Interest
Period that would end on a day that is not a Business Day shall be extended to
the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (d) with respect to an Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2, 3 or 6 months after the date on which the Interest Period
began, as applicable, and (e) the Borrower may not elect an Interest Period
which will end after the Final Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto) and the regulations thereunder.
"Inventory" means, with respect to any Person, all goods and
merchandise of such Person, including, without limitation, all raw materials,
work-in-process, packaging, supplies, materials and finished goods of every
nature used or usable in connection with the shipping, storing, advertising or
sale of such goods and merchandise, whether now owned or hereafter acquired, and
all such other property the sale or other disposition of which would give rise
to an Account Receivable or cash.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or otherwise)
of assets (other than equipment, Inventory, supplies or other property in the
ordinary course of business and other than any acquisition of assets
constituting a Capital Expenditure), Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other securities of
such other Person, (b) any deposit with, or advance, loan or other extension of
credit to, such Person (other than security deposits under a lease, deposits
made in connection with the purchase of equipment, inventory and supplies in the
ordinary course of business) or (c) any other capital contribution to or
investment in such Person, including, without limitation, any Contingent
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person and any Disposition to such
Person for consideration less than fair market value of the property disposed in
such transaction. Investments which are capital contributions or purchases of
Capital Stock which have a right to participate in the profits of the issuer
thereof shall be valued at the amount actually contributed or paid to purchase
such Capital Stock as of the date of such contribution or payment. Investments
which are loans, advances, extensions of credit or Contingent Obligations shall
be valued at the principal amount of such loan, advance or extension of credit
outstanding as of the date of determination or, as applicable, the principal
amount of the loan or advance outstanding as of the date of determination
actually guaranteed by such Contingent Obligation.
"Lease" means any lease of real property to which any Loan Party or
any of its Subsidiaries is a party as lessor or lessee.
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"Lender" has the meaning specified therefor in the preamble hereto.
"Liabilities" has the meaning specified therefor in Section 2.07.
"LIBOR" means, with respect to any LIBOR Rate Loan for the Interest
Period applicable thereto, the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on the Dow ▇▇▇▇▇ Markets
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, that if more than one (1)
rate is specified on Telerate Page 3750, the applicable rate shall be the
arithmetic mean of all such rates. If, for any reason, such rate is not
available, the term "LIBOR" shall mean, with respect to any LIBOR Rate Loan for
the Interest Period applicable thereto, the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, that if more than one (1) rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.
"LIBOR Deadline" has the meaning set forth in Section 2.09(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit E.
"LIBOR Option" has the meaning set forth in Section 2.09(a).
"LIBOR Rate" means, for each Interest Period for each LIBOR Rate Loan,
the rate per annum determined by the Administrative Agent (rounded upwards if
necessary, to the next 1/100%) by dividing (i) LIBOR for such Interest Period by
(ii) 100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and
as of the effective day of any change in the Reserve Percentage.
"LIBOR Rate Loan" means each portion of a Loan that bears interest at
a rate determined by reference to the LIBOR Rate.
"Licensing Agreements" means each of the licensing agreements
constituting a Material Contract set forth on Schedule 1.01(B) hereto between
any Loan Party or any of its Subsidiaries and any licensor with respect to the
rights to manufacture, sell and/or distribute Inventory.
"Lien" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any Capitalized Lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
"Loan" means the Term Loan or any Revolving Loan made by an Agent or a
Lender to the Borrower pursuant to ARTICLE II hereof.
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"Loan Account" means an account maintained hereunder by the
Administrative Agent on its books of account at the Payment Office, and with
respect to the Borrower, in which the Borrower will be charged with all Loans
made to, and all other Obligations incurred by, the Borrower.
"Loan Document" means this Agreement, the Fee Letter, any Guaranty,
any Security Agreement, any Pledge Agreement, any Mortgage, any UCC Filing
Authorization Letter, the Intercompany Subordination Agreement, the Contribution
Agreement, the Disbursement Letter and any other agreement, instrument,
certificate, report and other document executed and delivered pursuant hereto or
thereto or otherwise evidencing or securing any Loan or any other Obligation.
"Loan Party" means any Borrower and any Guarantor.
"Loan to Value Ratio" has the meaning specified therefor in Section
6.03.
"Marketed Products" mean, collectively, (i) those products identified
as currently marketed products on Schedule 1.01(C) and (ii) such other marketed
products that have a gross margin of not less than 90% of the average gross
margin for all Marketed Products of the immediately preceding year.
"Material Adverse Effect" means a material adverse effect on any of
(i) the operations, business, assets, properties or condition (financial or
otherwise) of the Borrower or the Loan Parties taken as a whole, (ii) the
ability of any Loan Party to perform any of its obligations under any Loan
Document to which it is a party, (iii) the legality, validity or enforceability
of this Agreement or any other Loan Document, (iv) the rights and remedies of
any Agent or any Lender under any Loan Document, or (v) the validity, perfection
or priority of a Lien in favor of the Collateral Agent for the benefit of the
Agents and the Lenders on any of the Collateral.
"Material Contract" means, with respect to any Person, (i) the
aaiPharma Acquisition Documents, (ii) each other contract or agreement to which
such Person or any of its Subsidiaries is a party involving aggregate
consideration payable to or by such Person or such Subsidiary of $250,000 or
more per year (other than purchase orders in the ordinary course of the business
of such Person or such Subsidiary and other than contracts that by their terms
may be terminated by such Person or Subsidiary in the ordinary course of its
business upon less than 60 days' notice without penalty or premium) and (iii)
all other contracts or agreements material to the operations, business, assets,
properties or condition (financial or otherwise) of such Person or its
Subsidiaries taken as a whole.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto.
"Mortgage" means a mortgage (including, without limitation, a
leasehold mortgage), deed of trust or deed to secure debt, in form and substance
reasonably satisfactory to the Collateral Agent, made by a Loan Party in favor
of the Collateral Agent for the benefit of the Agents and the Lenders, securing
the Obligations and delivered to the Collateral Agent pursuant to Section
6.01(b), Section 6.01(o) or otherwise.
-16-
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA
Affiliates has contributed to, or has been obligated to contribute, at any time
during the preceding six (6) years.
"Net Cash Proceeds" means, (i) with respect to any Disposition by any
Person or any of its Subsidiaries, the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
such Person or such Subsidiary in connection therewith, after deducting
therefrom only (A) the amount of any Indebtedness secured by any Permitted Lien
on any asset (other than Indebtedness assumed by the purchaser of such asset)
which is required to be, and is, repaid in connection with such Disposition
(other than Indebtedness under this Agreement), (B) reasonable costs and
expenses related thereto incurred by such Person or such Subsidiary in
connection therewith (including, without limitation, legal, accounting and
investment banking fees, and underwriting discounts and commissions), (C)
transfer taxes paid to any taxing authorities by such Person or such Subsidiary
in connection therewith, (D) net income taxes to be paid in connection with such
Disposition (after taking into account any tax credits or deductions and any tax
sharing arrangements) and (E) reasonable reserves for indemnification
obligations in connection with such Disposition in an aggregate amount not to
exceed $500,000 during the term of this Agreement, (ii) with respect to the
issuance or incurrence of any Indebtedness by any Person or any of its
Subsidiaries, or the sale or issuance by any Person or any of its Subsidiaries
of any shares of its Capital Stock, the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
such Person or such Subsidiary in connection therewith, after deducting
therefrom only (A) reasonable costs and expenses related thereto incurred by
such Person or such Subsidiary in connection therewith (including, without
limitation, legal, accounting and investment banking fees, and underwriting
discounts and commissions), (B) transfer taxes paid by such Person or such
Subsidiary in connection therewith and (C) net income taxes to be paid in
connection therewith (after taking into account any tax credits or deductions
and any tax sharing arrangements), and (iii) with respect to any Extraordinary
Receipts received by any Person or any of its Subsidiaries, the aggregate amount
of cash received (directly or indirectly) from time to time by or on behalf of
such Person or such Subsidiary in connection therewith, after deducting
therefrom only (A) reasonable costs and expenses related to the collection
thereof incurred by such Person or such Subsidiary, (B) net income taxes to be
paid in connection with such Extraordinary Receipts (after taking into account
any tax credits or deductions and any tax sharing arrangements) and (C) in the
case of a casualty, taking or condemnation, amounts required to repay principal
of, premium, if any, and interest on any Permitted Indebtedness that is required
to be repaid and that is repaid in connection with such casualty, taking or
condemnation; in the case of each of clauses (i), (ii) and (iii), to the extent,
but only to the extent, that the amounts so deducted are (x) actually paid to a
Person that, except in the case of reasonable out-of-pocket expenses, is not an
Affiliate of such Person or any of its Subsidiaries and (y) properly
attributable to such transaction or to the asset that is the subject thereof, as
the case may be.
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"Net Selling Price" means, with respect to a Marketed Product, the
gross amount invoiced by a seller of such Marketed Product or a Subsidiary of a
seller of such Marketed Product, to third Persons, less:
(a) trade, quantity and/or cash discounts actually allowed;
(b) discounts, refunds, rebates, chargebacks, retroactive price
adjustments and any other allowances, credits or payments (other than
commissions) which effectively reduce the net selling price; and
(c) actual returns and allowances of Marketed Product.
"Non-Consenting Lender" has the meaning specified therefor in Section
11.07(j).
"Non-Loan Party Permitted Acquisition Asset Indebtedness" means
Indebtedness of a wholly-owned Subsidiary of a Loan Party (other than a Loan
Party) incurred in connection with a financing arrangement made by a Person to
such Subsidiary, provided that (i) the aggregate amount of such Indebtedness
shall not exceed $10,000,000 at any time outstanding, (ii) such Indebtedness may
be secured only by a Lien on Non-Loan Party Permitted Acquisition Assets and
such Lien shall not extend to or cover any other property of any Loan Party or
any of its Subsidiaries, and (iii) such Indebtedness shall be non-recourse to
each Loan Party and each of its Subsidiaries (other than a Non-Loan Party
Permitted Acquisition Subsidiary).
"Non-Loan Party Permitted Acquisition Assets" has the meaning
specified therefor in paragraph (e) of the definition of the term "Permitted
Acquisition."
"Non-Loan Party Permitted Acquisition Subsidiary" has the meaning
specified therefor in paragraph (e) of the definition of the term "Permitted
Acquisition."
"Notice of Borrowing" has the meaning specified therefor in Section
2.02(a).
"Obligations" means all present and future indebtedness, obligations,
and liabilities of each Loan Party to the Agents and the Lenders arising under
this Agreement or any other Loan Document, whether or not the right of payment
in respect of such claim is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, disputed, undisputed, legal, equitable, secured,
unsecured, and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 8.01. Without limiting the
generality of the foregoing, the Obligations of each Loan Party under the Loan
Documents include (a) the obligation to pay principal, interest, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other amounts
payable by such Person under the Loan Documents (including, without limitation,
any interest, fees and other amounts that, but for the provisions of the
Bankruptcy Code, would have accrued), and (b) the obligation of such Person to
reimburse any amount in respect of any of the foregoing that any Agent or any
Lender (in its sole discretion) may elect to pay or advance on behalf of such
Person in accordance with the terms of the Loan Documents.
-18-
"Odyssey Product" means any pharmaceutical product containing
magnesium S-omeprazole in development as of the date of the aaiPharma
Acquisition Agreement by the aaiPharma Sellers, or its bioequivalents.
"Operating Lease Obligations" means all obligations for the payment of
rent for any real or personal property under leases or agreements to lease,
other than Capitalized Lease Obligations.
"Participant Register" has the meaning specified therefor in Section
11.07(g).
"Payment Office" means the Administrative Agent's office located at
Two ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
office or offices of the Administrative Agent as may be designated in writing
from time to time by the Administrative Agent to the Collateral Agent and the
Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permitted Acquisition" means an Acquisition consummated by a Loan
Party or any wholly-owned Subsidiary of a Loan Party, provided that each of the
following conditions are satisfied:
(a) no Default or Event of Default shall exist immediately prior
to or shall have occurred and be continuing or would result from the
consummation of the proposed Acquisition;
(b) (i) except in the case of Non-Loan Party Permitted
Acquisition Assets, the assets being acquired are useful in the business of the
Loan Parties and are located within the United States, or (ii) except in the
case of a Non-Loan Party Permitted Acquisition Subsidiary, the Person whose
Capital Stock is being acquired is engaged in the same line of business of the
Loan Parties and is organized within the United States, as applicable;
(c) in the case of an asset Acquisition, the assets are being
acquired by a Loan Party or a wholly-owned Subsidiary of a Loan Party, and,
subject to clause (e) below, the applicable Loan Party shall have executed and
delivered or authorized, as applicable, any and all security agreements,
financing statements, fixture filings, and other documentation reasonably
requested by the Collateral Agent in order to include the newly acquired assets
within the collateral hypothecated under the Loan Documents;
(d) in the case of a Capital Stock Acquisition, (i) the Capital
Stock is being acquired in such Acquisition directly by a Loan Party or a
wholly-owned Subsidiary of a Loan Party, (ii) subject to clause (e) below, the
relevant Loan Party shall have executed and delivered a pledge agreement with
respect to the Capital Stock being acquired and shall have delivered to the
Collateral Agent possession of the original Capital Stock certificates
representing all of the issued and outstanding shares of Capital Stock of such
acquired Person, together with stock powers with respect thereto endorsed in
blank, and (iii) subject to clause (e) below, the relevant Loan Party shall have
caused such acquired Person to execute and deliver a joinder to either this
Agreement as a Guarantor and/or a Guaranty (in the sole discretion of
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Collateral Agent) in order to make such Person a party hereto or thereto,
together with any and all security agreements, financing statements, fixture
filings, and other documentation reasonably requested by any Agent in order to
cause such acquired Person to be obligated with respect to the Obligations and
to include the assets of the acquired Person within the collateral hypothecated
under the Loan Documents;
(e) the Collateral Agent shall be satisfied that all actions
necessary to perfect Collateral Agent's Liens in the assets or Capital Stock
being purchased in connection with such Acquisition have been taken; provided
that (i) the assets (other than Capital Stock) being purchased in connection
with an Acquisition that is financed solely with Net Cash Proceeds from (A)
Non-Loan Party Permitted Acquisition Asset Indebtedness, (B) other Permitted
Indebtedness not to exceed $100,000 in the aggregate since the Effective Date
(when taken together with the amount of Net Cash Proceeds used to finance the
purchase of Capital Stock in accordance with clause (ii)(B) below) and/or (C) an
Excluded Equity Issuance shall not be required to be pledged to the Collateral
Agent (such assets not required to be pledged, the "Non-Loan Party Permitted
Acquisition Assets") if such assets are not being purchased by a Loan Party
(such non-Loan Party Person acquiring such assets, a "Non-Loan Party Permitted
Acquisition Subsidiary"), and (ii) the Capital Stock being purchased in
connection with an Acquisition that is financed solely with Net Cash Proceeds
from (A) Non-Loan Party Permitted Acquisition Asset Indebtedness, (B) other
Permitted Indebtedness not to exceed $100,000 in the aggregate since the
Effective Date (when taken together with the amount of Net Cash Proceeds used to
finance the purchase of assets in accordance with clause (i)(B) above) and/or
(C) an Excluded Equity Issuance shall not be required to be pledged to the
Collateral Agent, if the applicable wholly-owned Subsidiary of a Loan Party,
acting in good faith and after using commercially reasonable efforts, is unable
to obtain third party financing to acquire Non-Loan Party Permitted Acquisition
Assets, without a pledge to a third party lender of the Capital Stock being
purchased in connection with such Acquisition, on terms similar to terms the
applicable Subsidiary would have obtained with a pledge of such Capital Stock to
such third party lender (such Capital Stock not required to be pledged,
"Permitted Acquisition Capital Stock");
(f) any Indebtedness or Liens assumed in connection with such
Acquisition constitute Permitted Indebtedness or Permitted Liens, respectively,
and (i) no additional Indebtedness or other liabilities shall be incurred,
assumed or otherwise be reflected on a consolidated balance sheet of the
Borrower and its Subsidiaries after giving effect to such Acquisition, and (ii)
if any property is subject to any Lien that is not a Permitted Lien, then
concurrently with such Acquisition such Lien shall be released;
(g) such Acquisition shall be consensual and shall have been
approved by the board of directors of the Person whose Capital Stock or assets
are proposed to be acquired and shall not have been preceded by an unsolicited
tender offer for such Capital Stock by, or proxy contest initiated by, the
Borrower or any of its Subsidiaries;
(h) the Borrower shall have delivered to each Agent projections
for the Person whose Capital Stock or assets are proposed to be acquired, in
form and content reasonably acceptable to the Agents;
-20-
(i) the Borrower shall have provided each Agent with prior
written notice of such Acquisition (which notice shall not be less than 15 days
prior to the closing date of such Acquisition and which notice shall include,
without limitation, a reasonably detailed description of such Acquisition),
together with copies of all financial information, financial analysis,
documentation and other information and documentation relating to such
acquisition as any Agent shall reasonably request;
(j) on or prior to the date of such Acquisition, each Agent shall
have received copies of the acquisition agreement, related contracts and
instruments and all opinions, certificates, lien search results and other
documents reasonably requested by any Agent, which shall be reasonably
satisfactory to each Agent;
(k) the Purchase Price for all Permitted Acquisitions shall not
exceed $30,000,000 in the aggregate during any Fiscal Year;
(l) if such Acquisition shall require incremental borrowings of
Revolving Loans in excess of (i) $5,000,000 plus (ii) the Net Cash Proceeds
received by the Borrower from an Excluded Equity Issuance of the type described
in clause (i) of such definition raised for such Acquisition, plus (iii) the Net
Cash Proceeds received by the Borrower from any Subordinated Indebtedness that
is permitted to be incurred hereunder raised for such Acquisition, the Agents
shall have provided prior written consent to such Acquisition, which consent
shall not be unreasonably withheld;
(m) if such Acquisition shall require any incremental borrowings
of Revolving Loans that result in the aggregate outstanding principal amount of
Revolving Loans to exceed $5,000,000, the Borrower shall provide a certificate
of the chief financial officer of the Borrower certifying as to and
demonstrating on a pro forma basis compliance with the Loan to Value Ratio
covenant set forth in Section 6.03 after the consummation of such Acquisition;
and
(n) prior to or concurrently with the closing of such
Acquisition, an Authorized Officer of the Borrower shall have delivered to each
Agent a certificate as to each of the items set forth in the foregoing clauses
(a), (b), (k) and if applicable, (m).
"Permitted Acquisition Capital Stock" has the meaning specified
therefor in paragraph (e) of the definition of the term "Permitted Acquisition."
"Permitted Holder" means (i) MPM Bioventures III, LP, MPM BioVentures
III-QP, LP, MPM Bioventures III GmbH & Co. Deteiligung SKG, MPM Bioventures III
Parallel Fund, LP and MPM Asset Management Investors 2005 BVIII LLC, and (ii)
Apax Excelsior VI, Apax Excelsior VI-A, C.V., Apax Excelsior VI-B, C.V.,
Patricoff Private Investment Club III, LP, Apax Europe VI-A LP, and Apax Europe
VI-1 LP and, in the case of clauses (i) and (ii), each fund managed by such
Person or its investment manager.
"Permitted Indebtedness" means:
(a) any Indebtedness owing to any Agent and any Lender under this
Agreement and the other Loan Documents;
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(b) any other Indebtedness listed on Schedule 6.02(b), and the
extension of maturity, refinancing or modification of the terms thereof;
provided, however, that (i) such extension, refinancing or modification is
pursuant to terms (other than immaterial terms) that are not less favorable to
the Loan Parties, the Agents and the Lenders than the terms of the Indebtedness
being extended, refinanced or modified, provided, that any such extension,
refinancing or modification may provide for a market rate of interest and (ii)
after giving effect to such extension, refinancing or modification, the amount
of such Indebtedness is not greater than the amount of Indebtedness outstanding
immediately prior to such extension, refinancing or modification;
(c) Indebtedness evidenced by Capitalized Lease Obligations entered
into in order to finance Capital Expenditures made by the Loan Parties in
accordance with the provisions of Section 6.02(g), which Indebtedness, when
aggregated with the principal amount of all Indebtedness incurred under this
clause (c) and clause (d) of this definition, does not exceed $5,000,000 at any
time outstanding;
(d) Indebtedness permitted by clause (e) of the definition of
"Permitted Lien";
(e) Indebtedness permitted under Section 6.02(e);
(f) obligations of the Borrower in respect of Hedging Agreements
entered into with any Agent-Related Person and with the prior written consent of
each Agent in order to manage existing or anticipated interest rate or exchange
rate risks and not for speculative purposes;
(g) unsecured Subordinated Indebtedness in an aggregate amount not to
exceed $10,000,000;
(h) unsecured Indebtedness in the form of seller notes, seller
earn-outs or similar deferred or contingent purchase price payments to the
extent such Indebtedness is issued, incurred or assumed after the Effective Date
by a Loan Party to Sellers in connection with Permitted Acquisitions in an
aggregate principal amount for this clause (h) not exceeding $5,000,000 in the
aggregate principal amount outstanding at any time;
(i) Non-Loan Party Permitted Acquisition Asset Indebtedness;
(j) Contingent Obligations with respect to (i) any Indebtedness
described in this definition and (ii) any other obligations of a Loan Party or
any of its Subsidiaries to the extent such obligations are not prohibited by the
terms of this Agreement or any other Loan Document;
(k) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business, provided that such Indebtedness is satisfied
within 3 Business Days of incurrence; and
(l) endorsements in the ordinary course of business of negotiable
instruments for deposit or collection.
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"Permitted Investments" means (i) marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case, maturing within six months from the date of acquisition thereof; (ii)
commercial paper, maturing not more than 270 days after the date of issue rated
P-l by ▇▇▇▇▇'▇ or A-l by Standard & Poor's; (iii) certificates of deposit
maturing not more than 270 days after the date of issue, issued by commercial
banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (iv) repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major
money center banks included in the commercial banking institutions described in
clause (iii) above and which are secured by readily marketable direct
obligations of the United States Government or any agency thereof, (v) money
market accounts maintained with mutual funds having assets in excess of
$2,500,000,000; and (vi) tax exempt securities rated A or higher by ▇▇▇▇▇'▇ or
A+ or higher by Standard & Poor's.
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges the payment
of which is not required under Section 6.0 l(c);
(c) Liens imposed by law, such as landlords', carriers',
warehousemen's, mechanics', materialmen's and other similar Liens arising in the
ordinary course of business and securing obligations (other than Indebtedness
for borrowed money) that are not overdue by more than 30 days or are being
contested in good faith and by appropriate proceedings promptly initiated and
diligently conducted, and a reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor (and as to which the
assets or property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
(d) Liens described on Schedule 6.02(a); provided, that (i) no such
Lien shall at any time be extended to cover any additional property not subject
thereto on the Effective Date and (ii) the principal amount of the Indebtedness
secured by such Liens shall not be extended, renewed, refunded or refinanced
other than in accordance with clause (b) of the definition of Permitted
Indebtedness;
(e) (i) purchase money Liens on equipment acquired or held by any Loan
Party or any of its Subsidiaries in the ordinary course of its business to
secure the purchase price of such equipment or Indebtedness incurred solely for
the purpose of financing the acquisition of such equipment or (ii) Liens
existing on such equipment at the time of its acquisition; provided, however,
that (A) no such Lien shall extend to or cover any other property of any Loan
Party or any of its Subsidiaries and (B) the aggregate principal amount of
Indebtedness secured by any or all such Liens shall not exceed at any one time
outstanding $5,000,000;
(f) Liens (other than Liens created or imposed under ERISA), deposits
and pledges of cash securing (i) obligations incurred in respect of workers'
compensation,
-23-
unemployment insurance or other forms of governmental insurance or benefits,
(ii) the performance of bids, tenders, leases, contracts (other than for the
payment of money) and statutory obligations or (iii) obligations on surety or
appeal bonds, but only to the extent such Liens, deposits or pledges are made or
otherwise arise in the ordinary course of business and secure obligations not
past due;
(g) easements, zoning restrictions and similar encumbrances on real
property and minor irregularities in the title thereto that (i) in the case of
any Facility, are exceptions to the Title Insurance Policy with respect to such
Facility, as accepted by the Agents or (ii) in the case of any real property, do
not (A) secure obligations for the payment of money or (B) materially impair the
value of such property or its use by any Loan Party or any of its Subsidiaries
in the normal conduct of such Person's business;
(h) Liens on real property or equipment securing Indebtedness
permitted by subsection (c) of the definition of Permitted Indebtedness;
(i) Liens resulting from any judgment or award so long as such
judgment or award does not constitute an Event of Default under Section 8.01(k);
(j) leases or subleases granted to others not interfering in any
material respect with the business of any Loan Party;
(k) any interest of title of a lessor under, and Liens arising solely
from the filing of Uniform Commercial Code financing statements (or equivalent
filings, registrations or agreements in foreign jurisdictions) relating to,
leases permitted by this Agreement;
(l) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions not securing Indebtedness for
borrowed money;
(m) Liens of a collection bank arising under Section 4-210 of the
Uniform Commercial Code on items in the course of collection; and
(n) Liens securing Non-Loan Party Permitted Acquisition Asset
Indebtedness.
"Person" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"Plan" means any Employee Plan or Multiemployer Plan.
"Pledge Agreement" means a Pledge and Security Agreement made by a
Loan Party in favor of the Collateral Agent for the benefit of the Agents and
the Lenders, substantially in the form of Exhibit C, securing the Obligations
and delivered to the Collateral Agent.
"Post-Default Rate" means a rate of interest per annum equal to the
rate of interest otherwise in effect from time to time pursuant to the terms of
this Agreement plus 2.00%, or, if a rate of interest is not otherwise in effect,
the Reference Rate plus 7.00%.
-24-
"Product Recall Notice" means any written notice from the FDA stating
that any product or product line of any Loan Party or any of its Subsidiaries
has been or will be recalled.
"Pro Forma Senior Indebtedness" shall mean, as at any date, the
average outstanding principal balance of the Loans and all other secured
Indebtedness projected by the Borrower in good faith and based on reasonable
assumptions to be outstanding during the immediately succeeding three (3)
months, which amount shall be set forth in a certificate of the Chief Financial
Officer of the Borrower and delivered to the Agents.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to make Revolving Loans and
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender's Revolving Credit Commitment,
by (ii) the Total Revolving Credit Commitment, provided, that, if the Total
Revolving Credit Commitment has been reduced to zero, the numerator shall be the
aggregate unpaid principal amount of such Lender's Revolving Loans (including
Collateral Agent Advances) and the denominator shall be the aggregate unpaid
principal amount of all Revolving Loans (including Collateral Agent Advances),
(b) with respect to a Lender's obligation to make the Term Loan and
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender's Term Loan Commitment, by (ii)
the Total Term Loan Commitment, provided that if the Total Term Loan Commitment
has been reduced to zero, the numerator shall be the aggregate unpaid principal
amount of such Lender's portion of the Term Loan and the denominator shall be
the aggregate unpaid principal amount of the Term Loan, and
(c) with respect to all other matters (including, without limitation,
the indemnification obligations arising under Section 9.05), the percentage
obtained by dividing (i) the sum of such Lender's Revolving Credit Commitment
and the unpaid principal amount of such Lender's portion of the Term Loan, by
(ii) the sum of the Total Revolving Credit Commitment and the aggregate unpaid
principal amount of the Term Loan, provided, that, if such Lender's Revolving
Credit Commitment shall have been reduced to zero, such Lender's Revolving
Credit Commitment shall be deemed to be the aggregate unpaid principal amount of
such Lender's Revolving Loans (including Collateral Agent Advances) and if the
Total Revolving Credit Commitment shall have been reduced to zero, the Total
Revolving Credit Commitment shall be deemed to be the aggregate unpaid principal
amount of all Revolving Loans (including Collateral Agent Advances).
"Purchase Price" means, with respect to any Permitted Acquisition, an
amount equal to the sum of (i) the aggregate consideration, whether cash,
property or securities (including, without limitation, the fair market value of
any Capital Stock of any Loan Party issued in connection with such Permitted
Acquisition), paid or delivered by a Loan Party in connection with such
Permitted Acquisition, plus (ii) the aggregate amount of all Indebtedness
assumed in connection with such Permitted Acquisition, but excluding
consideration consisting of royalties based upon a percentage of sale or other
similar percentage of sale arrangements.
"Rating Agencies" has the meaning specified therefor in Section 2.07.
-25-
"Reference Bank" means Citibank, N.A., its successors or any other
commercial bank designated by the Administrative Agent to the Borrower from time
to time.
"Reference Rate" means the rate of interest publicly announced by the
Reference Bank in New York, New York from time to time as its reference rate,
base rate or prime rate. The reference rate, base rate or prime rate is
determined from time to time by the Reference Bank as a means of pricing some
loans to its borrowers and neither is tied to any external rate of interest or
index nor necessarily reflects the lowest rate of interest actually charged by
the Reference Bank to any particular class or category of customers. Each change
in the Reference Rate shall be effective from and including the date such change
is publicly announced as being effective.
"Reference Rate Loan" means a Loan bearing interest calculated based
upon the Reference Rate.
"Register" has the meaning specified therefor in Section 11.07(d).
"Registered Loan" has the meaning specified therefor in Section
11.07(d).
"Regulation T", "Regulation U" and "Regulation X" mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.
"Related Fund" means, (a) with respect to any Person, any Affiliate of
such Person or any fund or account managed by such Person or an Affiliate of
such Person or its investment manager, (b) with respect to Silver Point, (i) any
Affiliate of Silver Point or any fund or account managed by Silver Point or any
Affiliate of Silver Point or its investment manager, or (ii) any Designated
Entity, and (c) with respect to any Designated Entity, Silver Point or any other
Designated Entity.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through or in the ambient air,
soil, surface or ground water, or property.
"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (ii) prevent or
minimize a Release or threatened Release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
perform any other actions authorized by 42 U.S.C. Section 9601.
"Reportable Event" means an event described in Section 4043 of ERISA
(other than an event not subject to the provision for 30-day notice to the PBGC
under the regulations promulgated under such Section).
-26-
"Required Lenders" means Lenders whose Pro Rata Shares aggregate at
least 50.1%.
"Reserve Percentage" means, on any day, for any Lender, the maximum
percentage prescribed by the Board for determining the reserve requirements
(including any basic, supplemental, marginal, or emergency reserves) that are in
effect on such date with respect to eurocurrency funding (currently referred to
as "eurocurrency liabilities") of that Lender, but so long as such Lender is not
required or directed under applicable regulations to maintain such reserves, the
Reserve Percentage shall be zero.
"Revolving Credit Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans to the Borrower in the amount
set forth opposite such Lender's name in Schedule 1.01 (A) hereto, as such
amount may be terminated or reduced from time to time in accordance with the
terms of this Agreement.
"Revolving Loan" means a loan made by a Lender to the Borrower
pursuant to Section 2.01 (a)(i).
"Revolving Loan Lender" means a Lender with a Revolving Credit
Commitment.
"SEC" means the Securities and Exchange Commission or any other
similar or successor agency of the Federal government administering the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect from time to time.
"Securitization" has the meaning specified therefor in Section 2.07.
"Securitization Parties" has the meaning specified therefor in Section
2.07.
"Security Agreement" means a Security Agreement made by a Loan Party
in favor of the Collateral Agent for the benefit of the Agents and the Lenders,
substantially in the form of Exhibit B, securing the Obligations and delivered
to the Collateral Agent.
"Seller" means any Person that sells Capital Stock or other property
or assets to a Loan Party in a Permitted Acquisition.
"Settlement Period" has the meaning specified therefor in Section
2.02(d)(i).
"Silver Point" has the meaning specified therefor in the preamble
hereto.
"Solvent" means, with respect to any Person on a particular date, that
on such date (i) the fair value of the property of such Person is not less than
the total amount of the liabilities of such Person, (ii) 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 existing debts
as they become absolute and matured, (iii) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the
-27-
normal course of business, (iv) such Person does not intend to, arid does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (v) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"Subordinated Indebtedness" means Indebtedness of any Loan Party the
terms of which are satisfactory to the Collateral Agent and the Required Lenders
and which has been expressly subordinated in right of payment to all
Indebtedness of such Loan Party under the Loan Documents (i) by the execution
and delivery of a subordination agreement, in form and substance satisfactory to
the Collateral Agent and the Required Lenders, or (ii) otherwise on terms and
conditions (including, without limitation, subordination provisions, payment
terms, interest rates, covenants, remedies, defaults and other material terms)
satisfactory to the Collateral Agent and the Required Lenders.
"Subsidiary" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business entity (i) the accounts of
which would be consolidated with those of such Person in such Person's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding
Capital Stock having (in the absence of contingencies) ordinary voting power to
elect a majority of the board of directors or other managing body of such
Person, (B) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company or (C) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
"Taxes" has the meaning specified therefor in Section 2.08(a).
"Term Loan" means, collectively, the loans made by the Term Loan
Lenders to the Borrower on the Effective Date pursuant to Section 2.01(a)(ii).
"Term Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make the Term Loan to the Borrower in the amount
set forth in Schedule 1.01(A) hereto, as the same may be terminated or reduced
from time to time in accordance with the terms of this Agreement.
"Term Loan Lender" means a Lender with a Term Loan Commitment.
"Term Loan Obligations" means any Obligations with respect to the Term
Loan (including without limitation, the principal thereof, the interest thereon,
and the fees and expenses specifically related thereto).
-28-
"Termination Event" means (i) a Reportable Event with respect to any
Employee Plan, (ii) any event that causes any Loan Party or any of its ERISA
Affiliates to incur liability under Section 409, 502(i), 502(1), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the
Internal Revenue Code, (iii) the filing of a notice of intent to terminate an
Employee Plan or the treatment of an Employee Plan amendment as a termination
under Section 4041 of ERISA, (iv) the institution of proceedings by the PBGC to
terminate an Employee Plan, or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Employee Plan.
"Title Insurance Policy" means a mortgagee's loan policy, in form and
substance satisfactory to the Collateral Agent, together with all endorsements
made from time to time thereto, issued by or on behalf of a title insurance
company reasonably satisfactory to the Collateral Agent, insuring the Lien
created by a Mortgage in an amount and on terms reasonably satisfactory to the
Collateral Agent, delivered to the Collateral Agent.
"Total Commitment" means the sum of the Total Revolving Credit
Commitment and the Total Term Loan Commitment.
"Total Revolving Credit Commitment" means the sum of the amounts of
the Lenders' Revolving Credit Commitments.
"Total Term Loan Commitment" means the sum of the amounts of the
Lenders' Term Loan Commitments.
"Transferee" has the meaning specified therefor in Section 2.08(a).
"UCC Filing Authorization Letter" means a letter duly executed by each
Loan Party authorizing the Collateral Agent to file appropriate financing
statements on Form UCC-1 without the signature of such Loan Party in such office
or offices as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the security interests purported to be created by each
Security Agreement, each Pledge Agreement and each Mortgage.
"Uniform Commercial Code" has the meaning specified therefor in
Section 1.03.
"Unrestricted Cash Proceeds" has the meaning specified therefor in
Section 4.01(h).
"Unused Line Fee" has the meaning specified therefor in Section
2.06(a).
"WARN" has the meaning specified therefor in Section 5.01(z).
"Xanodyne Acquisition Trigger Date" has the meaning specified therefor
in Section 6.01(r)(vii).
Section 1.02 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words
-29-
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise,
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any right or interest in or to
assets and properties of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible. References in this Agreement to
"determination" by any Agent include good faith estimates by such Agent (in the
case of quantitative determinations) and good faith beliefs by such Agent (in
the case of qualitative determinations).
Section 1.03 Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
Financial Statements. All terms used in this Agreement which are defined in
Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to
time in the State of New York (the "Uniform Commercial Code") and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein, provided that terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of New York on the date hereof shall
continue to have the same meaning notwithstanding any replacement or amendment
of such statute except as any Agent may otherwise determine.
Section 1.04 Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding"; provided, however, that with respect to a computation
of fees or interest payable to any Agent or any Lender, such period shall in any
event consist of at least one full day.
ARTICLE II
THE LOANS
Section 2.01 Commitments. (a) Subject to the terms and conditions and
relying upon the representations and warranties herein set forth:
(i) each Revolving Loan Lender severally agrees to make
Revolving Loans to the Borrower at any time and from time to time from the
Effective Date to the Final Maturity Date, or until the earlier reduction of its
Revolving Credit Commitment to zero in accordance with the terms hereof, in an
aggregate principal amount of Revolving Loans
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at any time outstanding not to exceed the amount of such Revolving Loan Lender's
Revolving Credit Commitment; and
(ii) each Term Loan Lender severally agrees to make the Term
Loan to the Borrower on the Effective Date, in an aggregate principal amount not
to exceed the amount of such Term Loan Lender's Term Loan Commitment.
(b) Notwithstanding the foregoing:
(i) The aggregate principal amount of Revolving Loans
outstanding at any time to the Borrower shall not exceed the Total Revolving
Credit Commitment. The Revolving Credit Commitment of each Lender shall
automatically and permanently be reduced to zero on the Final Maturity Date.
Within the foregoing limits, the Borrower may borrow, repay and re-borrow, on or
after the Effective Date and prior to the Final Maturity Date, subject to the
terms, provisions and limitations set forth herein.
(ii) The aggregate principal amount of the Term Loan made on
the Effective Date shall not exceed the Total Term Loan Commitment. Any
principal amount of the Term Loan which is repaid or prepaid may not be
re-borrowed.
Section 2.02 Making the Loans. (a) The Borrower shall give the
Administrative Agent prior written notice (in substantially the form of Exhibit
D hereto (a "Notice of Borrowing")), not later than (x) in the case of a
borrowing consisting of a Reference Rate Loan, 11:00 a.m. (New York City time)
on the borrowing date of the proposed Reference Rate Loan, and (y) in the case
of a borrowing consisting of LIBOR Rate Loans, 11:00 a.m. (New York City time)
on a date that is three (3) Business Days prior to the date of the proposed
borrowing. Such Notice of Borrowing shall be irrevocable and shall specify (i)
the principal amount of the proposed Loan (which, in the case of a LIBOR Rate
Loan, must be in a minimum amount of $500,000 and in integral multiples of
$100,000 in excess thereof), (ii) whether such Loan is requested to be a
Reference Rate Loan or a LIBOR Rate Loan and, in the case of a LIBOR Rate Loan,
the initial Interest Period with respect thereto, (iii) in the case of Loans
requested on the Effective Date, whether such Loan is requested to be a
Revolving Loan or the Term Loan, (iv) the use of the proceeds of such proposed
Loan, and (v) the proposed borrowing date, which must be a Business Day, and,
with respect to the Term Loan, must be the Effective Date. The Administrative
Agent and the Lenders may act without liability upon the basis of written or
telecopied notice believed by the Administrative Agent in good faith to be from
the Borrower (or from any Authorized Officer thereof designated in writing
purportedly from the Borrower to the Administrative Agent). The Administrative
Agent and each Lender shall be entitled to rely conclusively on any Authorized
Officer's authority to request a Loan on behalf of the Borrower until the
Administrative Agent receives written notice to the contrary. The Administrative
Agent and the Lenders shall have no duty to verify the authenticity of the
signature appearing on any written Notice of Borrowing. Notwithstanding anything
to the contrary herein, all Loans made on the Effective Date shall be Reference
Rate Loans. Thereafter all or any portion of the Loans maybe converted into
LIBOR Rate Loans in accordance with the terms of Section 2.09.
(b) Each Notice of Borrowing pursuant to this Section 2.02 shall
be irrevocable and the Borrower shall be bound to make a borrowing in accordance
therewith. Each
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Revolving Loan shall be made in a minimum amount of $500,000 and shall be in an
integral multiple of $50,000.
(c) (i) Except as otherwise provided in this subsection 2.02(c),
all Loans under this Agreement shall be made by the Lenders simultaneously and
proportionately to their Pro Rata Shares of the Total Revolving Credit
Commitment and the Total Term Loan Commitment, as the case may be, it being
understood that no Lender shall be responsible for any default by any other
Lender in that other Lender's obligations to make a Loan requested hereunder,
nor shall the Commitment of any Lender be increased or decreased as a result of
the default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder, and each Lender shall be obligated to make the Loans
required to be made by it by the terms of this Agreement regardless of the
failure by any other Lender.
(ii) Notwithstanding any other provision of this Agreement,
and in order to reduce the number of fund transfers among the Borrower, the
Agents and the Lenders, the Borrower, the Agents and the Lenders agree that the
Administrative Agent may (but shall not be obligated to), and the Borrower and
the Lenders hereby irrevocably authorize the Administrative Agent to, fund, on
behalf of the Revolving Loan Lenders, Revolving Loans pursuant to Section 2.01,
subject to the procedures for settlement set forth in subsection 2.02(d);
provided, however, that (a) the Administrative Agent shall in no event fund any
such Revolving Loans if the Administrative Agent shall have received written
notice from the Collateral Agent or the Required Lenders on the Business Day
prior to the date of the proposed Revolving Loan that one or more of the
conditions precedent contained in Section 4.02 will not be satisfied at the time
of the proposed Revolving Loan, and (b) the Administrative Agent shall not
otherwise be required to determine that, or take notice whether, the conditions
precedent in Section 4.02 have been satisfied. If either (x) the Borrower gives
a Notice of Borrowing requesting a Revolving Loan that is a LIBOR Rate Loan or
(y) the Administrative Agent elects not to fund a requested Revolving Loan that
is a Reference Rate Loan on behalf of the Revolving Loan Lenders, then promptly
after receipt of the Notice of Borrowing requesting such Revolving Loan, the
Administrative Agent shall notify each Revolving Loan Lender of the specifics of
the requested Revolving Loan and that it will not fund the requested Revolving
Loan on behalf of the Revolving Loan Lenders. If the Administrative Agent
notifies the Revolving Loan Lenders that it will not fund a requested Revolving
Loan on behalf of the Revolving Loan Lenders, each Revolving Loan Lender shall
make its Pro Rata Share of the Revolving Loan available to the Administrative
Agent, in immediately available funds, in the Administrative Agent's Account no
later than 3:00 p.m. (New York City time) (provided that the Administrative
Agent requests payment from such Revolving Loan Lender not later than 1:00 p.m.
(New York City time)) on the date of the proposed Revolving Loan. The
Administrative Agent will make the proceeds of such Revolving Loans available to
the Borrower on the day of the proposed Revolving Loan by causing an amount, in
immediately available funds, equal to the proceeds of all such Revolving Loans
received by the Administrative Agent in the Administrative Agent's Account or
the amount funded by the Administrative Agent on behalf of the Revolving Loan
Lenders to be deposited in an account designated by the Borrower.
(iii) If the Administrative Agent has notified the Revolving
Loan Lenders that the Administrative Agent, on behalf of the Revolving Loan
Lenders, will not fund a particular Revolving Loan pursuant to subsection
2.02(c)(ii), the Administrative Agent
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may assume that each such Revolving Loan Lender has made such amount available
to the Administrative Agent on such day and the Administrative Agent, in its
sole discretion, may, but shall not be obligated to, cause a corresponding
amount to be made available to the Borrower on such day. If the Administrative
Agent makes such corresponding amount available to the Borrower and such
corresponding amount is not in fact made available to the Administrative Agent
by any such Revolving Loan Lender, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Revolving Loan Lender
together with interest thereon, for each day from the date such payment was due
until the date such amount is paid to the Administrative Agent, at the Federal
Funds Rate for three Business Days and thereafter at the Reference Rate. During
the period in which such Revolving Loan Lender has not paid such corresponding
amount to the Administrative Agent, notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, the amount so advanced
by the Administrative Agent to the Borrower shall, for all purposes hereof, be a
Revolving Loan made by the Administrative Agent for its own account. Upon any
such failure by a Revolving Loan Lender to pay the Administrative Agent, the
Administrative Agent shall promptly thereafter notify the Borrower of such
failure and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent for its own account.
(iv) Nothing in this subsection 2.02(c) shall be deemed to
relieve any Revolving Loan Lender from its obligations to fulfill its Revolving
Credit Commitment hereunder or to prejudice any rights that the Administrative
Agent or the Borrower may have against any Revolving Loan Lender as a result of
any default by such Revolving Loan Lender hereunder.
(d) (i) With respect to each LIBOR Rate Loan, on the first and
the last date of each Interest Period, and with respect to all periods for which
the Administrative Agent, on behalf of the Revolving Loan Lenders, has funded
Revolving Loans that are Reference Rate Loans pursuant to subsection 2.02(c), on
Friday of each week, or if the applicable Friday is not a Business Day, then on
the following Business Day, or such shorter period as the Administrative Agent
may from time to time select (any such Interest Period, week or shorter period
being herein called a "Settlement Period"), the Administrative Agent shall
notify each Revolving Loan Lender of the unpaid principal amount of the
Revolving Loans outstanding as of the last day of each such Settlement Period.
In the event that such amount is greater than the unpaid principal amount of the
Revolving Loans outstanding on the last day of the Settlement Period immediately
preceding such Settlement Period (or, if there has been no preceding Settlement
Period, the amount of the Revolving Loans made on the date of such Revolving
Loan Lender's initial funding), each Revolving Loan Lender shall promptly (and
in any event not later than 2:00 p.m. (New York City time) if the Administrative
Agent requests payment from such Lender not later than 12:00 noon (New York City
time) on such day) make available to the Administrative Agent its Pro Rata Share
of the difference in immediately available funds. In the event that such amount
is less than such unpaid principal amount, the Administrative Agent shall
promptly pay over to each Revolving Loan Lender its Pro Rata Share of the
difference in immediately available funds. In addition, if the Administrative
Agent shall so request at any time when a Default or an Event of Default shall
have occurred and be continuing, or any other event shall have occurred as a
result of which the Administrative Agent shall determine that it is desirable to
present claims against the Borrower for repayment, each Revolving Loan Lender
shall promptly remit to the Administrative Agent or, as the case may be, the
Administrative
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Agent shall promptly remit to each Revolving Loan Lender, sufficient funds to
adjust the interests of the Revolving Loan Lenders in the then outstanding
Revolving Loans to such an extent that, after giving effect to such adjustment,
each such Revolving Loan Lender's interest in the then outstanding Revolving
Loans will be equal to its Pro Rata Share thereof. The obligations of the
Administrative Agent and each Revolving Loan Lender under this subsection
2.02(d) shall be absolute and unconditional. Each Revolving Loan Lender shall
only be entitled to receive interest on its Pro Rata Share of the Revolving
Loans which have been funded by such Revolving Loan Lender.
(ii) In the event that any Revolving Loan Lender fails to
make any payment required to be made by it pursuant to subsection 2.02(d)(i),
the Administrative Agent shall be entitled to recover such corresponding amount
on demand from such Revolving Loan Lender together with interest thereon, for
each day from the date such payment was due until the date such amount is paid
to the Administrative Agent, at the Federal Funds Rate for three Business Days
and thereafter at the Reference Rate. During the period in which such Revolving
Loan Lender has not paid such corresponding amount to the Administrative Agent,
notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the amount so advanced by the Administrative Agent to the
Borrower shall, for all purposes hereof, be a Revolving Loan made by the
Administrative Agent for its own account. Upon any such failure by a Revolving
Loan Lender to pay the Administrative Agent, the Administrative Agent shall
promptly thereafter notify the Borrower of such failure and, upon the
Administrative Agent's written demand, the Borrower shall immediately pay such
corresponding amount to the Administrative Agent for its own account. Nothing in
this subsection 2.02(d)(ii) shall be deemed to relieve any Revolving Loan Lender
from its obligation to fulfill its Revolving Credit Commitment hereunder or to
prejudice any rights that the Administrative Agent or the Borrower may have
against any Revolving Loan Lender as a result of any default by such Revolving
Loan Lender hereunder.
Section 2.03 Repayment of Loans; Evidence of Debt. (a) The outstanding
principal of all Revolving Loans shall be due and payable on the Final Maturity
Date.
(b) The outstanding principal of the Term Loan shall be due and
payable on the Final Maturity Date.
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender hereunder, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the date and the amount of each Loan made hereunder and whether
such Loan is a Reference Rate Loan or a LIBOR Rate Loan, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
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(e) The entries made in the accounts maintained pursuant to
paragraph (c) or (d) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by
a promissory note. In such event, the Borrower shall execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) in a form furnished
by the Collateral Agent and reasonably acceptable to the Borrower. Thereafter,
the Loans evidenced by such promissory note and interest thereon shall at all
times (including after assignment pursuant to Section 11.07) be represented by
one or more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).
Section 2.04 Interest. (a) Revolving Loans. Each Revolving Loan that
is a Reference Rate Loan shall bear interest on the principal amount thereof
from time to time outstanding at a rate per annum equal to the Reference Rate
plus 5.00%. Each Revolving Loan that is a LIBOR Rate Loan shall bear interest on
the principal amount thereof from time to time outstanding at a rate per annum
equal to the LIBOR Rate plus 6.50%.
(b) Term Loan. Each portion of the Term Loan that is a Reference
Rate Loan shall bear interest on the principal amount thereof from time to time
outstanding at a rate per annum equal to the Reference Rate plus 5.00%. Each
portion of the Term Loan that is a LIBOR Rate Loan shall bear interest on the
principal amount thereof from time to time outstanding at a rate per annum equal
to the LIBOR Rate plus 6.50%.
(c) Default Interest. To the extent permitted by law, upon the
occurrence and during the continuance of an Event of Default, at the election of
the Administrative Agent, the principal of, and all accrued and unpaid interest
on, all Loans, fees, indemnities or any other Obligations of the Loan Parties
under this Agreement and the other Loan Documents, shall bear interest, from the
date such Event of Default occurred until the date such Event of Default is
cured or waived in writing in accordance herewith, at a rate per annum equal at
all times to the Post-Default Rate.
(d) Interest Payment. Interest on each Loan (whether a Reference
Rate Loan or a LIBOR Rate Loan) shall be payable monthly, in arrears, on the
first day of each month, commencing on the first day of the month following the
month in which such Loan is made and at maturity (whether upon demand, by
acceleration or otherwise). Interest at the Post-Default Rate shall be payable
on demand. The Borrower hereby authorizes the Administrative Agent to, and the
Administrative Agent may, from time to time, charge the Loan Account pursuant to
Section 3.02 with the amount of any interest payment due hereunder.
(e) General. All computations of interest shall be made on the
basis of a 360-day year for the actual number of days elapsed.
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Section 2.05 Reduction of Commitment; Prepayment of Loans.
(a) Reduction of Commitments.
(i) Revolving Credit Commitments. The Total Revolving Credit
Commitment shall terminate on the Final Maturity Date. The Borrower shall not be
permitted to voluntarily reduce the Total Revolving Credit Commitment until July
25,2006. On and after such date, the Borrower may reduce the Total Revolving
Credit Commitment to an amount (which may be zero) not less than the sum of (A)
the aggregate unpaid principal amount of all Revolving Loans then outstanding,
and (B) the aggregate principal amount of all Revolving Loans not yet made as to
which a Notice of Borrowing has been given by the Borrower under Section 2.02.
Each such reduction (w) shall be in an amount which is an integral multiple of
$1,000,000 (unless the Total Revolving Credit Commitment in effect immediately
prior to such reduction is less than $1,000,000), (x) shall be made by providing
not less than five (5) Business Days' prior written notice to the Administrative
Agent, (y) shall be irrevocable and (z) shall be accompanied by the payment of
the Applicable Prepayment Premium, if any, payable in connection with such
reduction of the Total Revolving Credit Commitment. Once reduced, the Total
Revolving Credit Commitment may not be increased. Each such reduction of the
Total Revolving Credit Commitment shall reduce the Revolving Credit Commitment
of each Lender proportionately in accordance with its Pro Rata Share thereof.
(ii) Term Loan. The Total Term Loan Commitment shall
terminate at 5:00 p.m. (New York City time) on the Effective Date.
(b) Optional Prepayment.
(i) Revolving Loans. The Borrower may at any time and from
time to time, prepay the principal of any Revolving Loan, in whole or in part,
and subject to the following sentence, without penalty or premium.
Notwithstanding the foregoing, each prepayment made pursuant to this clause
(b)(i) made in connection with a reduction of the Total Revolving Credit
Commitment pursuant to clause (a)(i) above shall be accompanied by the payment
of the Applicable Prepayment Premium, if any, payable in connection with such
reduction of the Total Revolving Credit Commitment.
(ii) Term Loan. Except in connection with a Financial
Covenant Cure Payment, in which case the Borrower shall at any time be permitted
to voluntarily prepay the principal of the Term Loan to the extent of such
Financial Covenant Cure Payment, the Borrower shall not be permitted to
voluntarily prepay the principal of the Term Loan, in whole or in part, until
July 25, 2006. On and after such date, the Borrower may, at any time and from
time to time, upon at least five (5) Business Days' prior written notice to the
Administrative Agent, prepay the principal of the Term Loan, in whole or in
part. Each prepayment made pursuant to this clause (b)(ii) and any prepayment
made as a result of a Financial Covenant Cure Payment shall be accompanied by
the payment of (A) accrued interest to the date of such payment on the amount
prepaid and (B) the Applicable Prepayment Premium, if any, payable in connection
with such prepayment of the Term Loan.
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(iii) Prepayment In Full. On and after July 25,2006, the
Borrower may, upon at least five (5) Business Days' prior written notice to the
Agents, terminate this Agreement by paying to the Administrative Agent, in cash,
the Obligations, in full, together with the Applicable Prepayment Premium, if
any. If the Borrower has sent a notice of termination pursuant to this clause
(iii), then the Lenders' obligations to extend credit hereunder shall terminate
on the date set forth as the date of termination of this Agreement in such
notice and the Borrower shall be obligated to repay the Obligations, in full,
together with the Applicable Prepayment Premium, if any, on the date set forth
as the date of termination of this Agreement in such notice.
(c) Mandatory Prepayment.
(i) [Intentionally Omitted.]
(ii) Within 2 Business Days of any Disposition by any Loan
Party or its Subsidiaries (other than Non-Loan Party Permitted Acquisition
Subsidiaries) pursuant to Section 6.02(c)(ii), the Borrower shall prepay the
outstanding principal amount of the Loans in accordance with Section 2.05(d) in
an amount equal to 100% of the Net Cash Proceeds received by such Person in
connection with such Disposition to the extent that the aggregate amount of Net
Cash Proceeds received by all Loan Parties and their Subsidiaries (other than
Non-Loan Party Permitted Acquisition Subsidiaries) (and not paid to the
Administrative Agent as a prepayment of the Loans) shall exceed for all such
Dispositions $300,000 in any Fiscal Year (provided that the aggregate amount of
Net Cash Proceeds not subject to prepayment pursuant to this clause (ii), when
taken together with the aggregate amount of Extraordinary Receipts not subject
to prepayment pursuant to clause (iv) below shall not exceed $1,500,000 in the
aggregate during the term of this Agreement). Nothing contained in this clause
(ii) shall permit any Loan Party or any of its Subsidiaries to make a
Disposition of any property other than in accordance with Section 6.02(c)(ii).
Notwithstanding the foregoing, so long as no Default or Event of Default has
occurred and is continuing on the date such Person receives Net Cash Proceeds in
connection with a Disposition of equipment or inventory, such Net Cash Proceeds
(in an aggregate amount, when taken together with the aggregate amount of
Extraordinary Receipts reinvested in accordance with clause (iv) below, not to
exceed $1,500,000 in any Fiscal Year, and in any event, iii an aggregate amount
not to exceed $2,500,000 during the term of this Agreement) received by such
Person may, at the option of the Borrower, be applied to acquire replacement
equipment or inventory for the equipment or inventory so disposed of, provided,
that (x) until so applied, such Net Cash Proceeds shall either be (1) deposited
into a cash collateral account with a commercial bank designated by the
Collateral Agent (and when so deposited such Net Cash Proceeds shall constitute
Collateral for the Obligations then outstanding and shall remain in such cash
collateral account until such Net Cash Proceeds are applied in accordance with
either of clauses (y) or (z) of this clause (ii)) or (2) upon notification by
the Borrower to the Agents, applied to the Revolving Loans (and concurrently
with such application to the Revolving Loans, the Administrative Agent shall
establish and maintain a corresponding reserve to Availability in the amount so
applied, which reserve shall be released at such time as the Borrower re-borrows
funds in such amount to be used in accordance with either of clauses (y) or
(z)(2) of this clause (ii)), (y) such Net Cash Proceeds must be applied and such
equipment or inventory must be replaced within 120 days after the date of
receipt thereof, and (z) upon (1) the occurrence and during the continuance of a
Default or an Event of Default or (2) the
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expiration of such 120-day period, such Net Cash Proceeds, if not so applied,
shall be applied to the prepayment of the Loans in accordance with Section
2.05(d). Notwithstanding the foregoing, if any Disposition shall occur on or
prior to July 25,2006 and in connection therewith, the Borrower shall be
required to prepay the Loans from the Net Cash Proceeds received from such
Disposition in accordance with this clause (ii) and the Borrower shall not be
permitted to reinvest the Net Cash Proceeds in accordance with this clause (ii)
or does not reinvest such Net Cash Proceeds within the applicable 120-day period
specified in this clause (ii), then an amount equal to such Net Cash Proceeds
received in connection with such Disposition shall be applied to the Revolving
Loans (but, if the outstanding principal amount of the Revolving Loans at such
time is less than the amount of such Net Cash Proceeds, the amount of such Net
Cash Proceeds remaining after applying such Net Cash Proceeds to the Revolving
Loans shall be deposited into a cash collateral account with a commercial bank
designated by the Collateral Agent (and when so deposited such Net Cash Proceeds
shall constitute Collateral for the Obligations then outstanding)), and
concurrently with such application to the Revolving Loans (or deposit into a
cash collateral account), the Administrative Agent shall establish and maintain
a corresponding reserve to Availability in the amount so applied and/or
deposited, which (x) reserve and cash collateral shall be released and (y) such
amount shall be used to prepay the Loans in accordance with Section 2.05(d), in
each case on July 25, 2006.
(iii) Within 1 Business Day of the issuance or incurrence by
any Loan Party or any of its Subsidiaries (other than Non-Loan Party Permitted
Acquisition Subsidiaries) of any Indebtedness (other than any Permitted
Indebtedness), the Borrower shall prepay the outstanding amount of the Loans in
accordance with Section 2.05(d) in an amount equal to 100% of the Net Cash
Proceeds received by such Person in connection therewith. The provisions of this
subsection (iii) shall not be deemed to be implied consent to any such issuance
or incurrence otherwise prohibited by the terms and conditions of this
Agreement.
(iv) Within 2 Business Days of the receipt by any Loan Party
or any of its Subsidiaries (other than Non-Loan Party Permitted Acquisition
Subsidiaries) of any Extraordinary Receipts in excess of $300,000 in any Fiscal
Year (provided that the aggregate amount of Extraordinary Receipts not subject
to prepayment pursuant to this clause (iv), when taken together with the
aggregate amount of Net Cash Proceeds not subject to prepayment pursuant to
clause (ii) above shall not exceed $1,500,000 in the aggregate during the term
of this Agreement), the Borrower shall prepay the outstanding principal of the
Loans in accordance with Section 2.05(d) in an amount equal to 100% of the Net
Cash Proceeds of such Extraordinary Receipts. Notwithstanding the foregoing, so
long as no Default or Event of Default has occurred and is continuing on the
date such Person receives Extraordinary Receipts consisting of insurance
proceeds from one or more policies covering, or proceeds from any judgment,
settlement, condemnation or other cause of action in respect of, the loss,
damage, taking or theft of any real property, equipment or inventory, such
Extraordinary Receipts (in an aggregate amount, when taken together with the
aggregate amount of Net Cash Proceeds reinvested in accordance with clause (ii)
above, not to exceed $1,500,000 in any Fiscal Year, and, in any event, in an
aggregate amount not to exceed $2,500,000 during the term of this Agreement)
received by such Person may, at the option of the Borrower, be applied to repair
or restore such real property, equipment or inventory or acquire replacement
real property, equipment or inventory for the real property, equipment or
inventory so lost, damaged or stolen or other real property, equipment or
inventory used or useful in the business of such Person for the real
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property, equipment or inventory so lost, damaged or stolen, provided, that (x)
until so applied, such Extraordinary Receipts shall either be (1) deposited into
a cash collateral account with a commercial bank designated by the Collateral
Agent (and when so deposited such Extraordinary Receipts shall constitute
Collateral for the Obligations then outstanding and shall remain in such cash
collateral account until such Extraordinary Receipts are applied in accordance
with either of clauses (y) or (z) of this clause (iv)) or (2) upon notification
by the Borrower to the Agents, applied to the Revolving Loans (and concurrently
with such application to the Revolving Loans, the Administrative Agent shall
establish and maintain a corresponding reserve to Availability in the amount so
applied, which reserve shall be released at such time as the Borrower re-borrows
funds in such amount to be applied in accordance with either of clauses (y) or
(z)(2) of this clause (iv)), (y) such Extraordinary Receipts must be applied and
such real property, equipment or inventory must be repaired, restored or
replaced within 120 days after the date of receipt thereof, and (z) upon (1) the
occurrence and during the continuance of a Default or an Event of Default or (2)
the expiration of such 120-day period, such Extraordinary Receipts, if not so
applied, shall be applied to the prepayment of the Loans in accordance with
Section 2.05(d). Notwithstanding the foregoing, if any Loan Party or any of its
Subsidiaries (other than Non-Loan Party Permitted Acquisition Subsidiaries)
receives any Extraordinary Receipts on or prior to July 25, 2006 and in
connection therewith, the Borrower shall be required to prepay the Loans from
the Net Cash Proceeds received from such Extraordinary Receipts in accordance
with this clause (iv) and the Borrower shall not be permitted to reinvest the
Net Cash Proceeds in accordance with this clause (iv) or does not reinvest such
Net Cash Proceeds within the applicable 120-day period specified in this clause
(iv), then an amount equal to such Net Cash Proceeds received in connection with
such Extraordinary Receipts shall be applied to the Revolving Loans (but, if the
outstanding principal amount of the Revolving Loans at such time is less than
the amount of such Net Cash Proceeds, the amount of such Net Cash Proceeds
remaining after applying such Net Cash Proceeds to the Revolving Loans shall be
deposited into a cash collateral account with a commercial bank designated by
the Collateral Agent (and when so deposited such Net Cash Proceeds shall
constitute Collateral for the Obligations then outstanding)), and concurrently
with such application to the Revolving Loans (or deposit into a cash collateral
account), the Administrative Agent shall establish and maintain a corresponding
reserve to Availability in the amount so applied and/or deposited, which (x)
reserve and cash collateral shall be released and (y) such amount shall be used
to prepay the Loans in accordance with Section 2.05(d), in each case on July 25,
2006.
(d) Application of Payments. So long as no Event of Default shall
have occurred and be continuing, each prepayment pursuant to subsections
(c)(ii), (c)(iii) and (c)(iv) above shall be applied (i) first, to the Term
Loan, and (ii) second, to the Revolving Loans (together with a corresponding
reduction, on a dollar for dollar basis, of the Total Revolving Credit
Commitment). Notwithstanding anything to the contrary contained in this Section
2.05(d), after the occurrence and during the continuance of an Event of Default,
all prepayments of the Loans pursuant to Section 2.05(c) shall be applied in
accordance with Section 3.04(b).
(e) Interest and Fees. Any prepayment made pursuant to this
Section 2.05 shall be accompanied by (i) accrued interest on the principal
amount being prepaid to the date of prepayment, and (ii) if such prepayment
would reduce the amount of the outstanding Loans to zero at a time when the
Total Revolving Credit Commitment has been terminated, the payment of all fees
accrued to such date pursuant to Section 2.06. Any prepayment made
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pursuant to Section 2.05(c)(ii) or (iii) shall be accompanied by the Applicable
Prepayment Premium, if any.
(f) Cumulative Prepayments. Except as otherwise expressly
provided in this Section 2.05, payments with respect to any subsection of this
Section 2.05 are in addition to, but without duplication of, payments made or
required to be made under any other subsection of this Section 2.05.
(g) Waiver of Mandatory Prepayments. Notwithstanding anything to
the contrary in Section 2.05(c) or Section 2.05(d), (i) any Term Loan Lender
shall be permitted to waive its portion of any prepayment of the Term Loan
required to be made under Section 2.05(c) (the aggregate amount of any such
prepayment of the Term Loan that is so waived, the "Declined Prepayment
Amount"), and (ii) the Loan Parties shall be entitled to retain the entire
Declined Prepayment Amount.
Section 2.06 Fees.
(a) Unused Line Fee. From and after the Effective Date and until
the Final Maturity Date, the Borrower shall pay to the Administrative Agent for
the account of the Revolving Loan Lenders, in accordance with their Pro Rata
Shares, an unused line fee (the "Unused Line Fee"), which shall accrue at the
rate equal to (i) during the period of time from and after the Effective Date up
to and including the date that is the 18-month anniversary of the Effective
Date, 0.10% per month times the excess, if any, of the Total Revolving Credit
Commitment over the sum of the average principal amount of all Revolving Loans
outstanding from time to time and (b) at all times thereafter, 0.15% per month
times the excess, if any, of the Total Revolving Credit Commitment over the sum
of the average principal amount of all Revolving Loans outstanding from time to
time. The Unused Line Fee shall be payable monthly in arrears on the first day
of each calendar month commencing on August 1, 2005.
(b) Fee Letter Fees. The Borrower shall pay to the Administrative
Agent, as and when due and payable under the terms of the Fee Letter, the fees
set forth in the Fee Letter.
Section 2.07 Securitization. The Loan Parties hereby acknowledge that
the Lenders and their Affiliates may sell or securitize the Loans (a
"Securitization") through the pledge of the Loans as collateral security for
loans to the Lenders or their Affiliates or through the sale of the Loans or the
issuance of direct or indirect interests in the Loans, which loans to the
Lenders or their Affiliates or direct or indirect interests will be rated by
▇▇▇▇▇'▇, Standard & Poor's or one or more other rating agencies (the "Rating
Agencies"). The Loan Parties shall cooperate with the Lenders and their
Affiliates to effect the Securitization including, without limitation, by (a)
amending this Agreement and the other Loan Documents, and executing such
additional documents, as reasonably requested by the Lenders in connection with
the Securitization, provided that (i) any such amendment or additional
documentation does not impose material additional costs on the Loan Parties and
(ii) any such amendment or additional documentation does not adversely affect
the rights (other than immaterial rights), or increase the obligations (other
than ministerial obligations), of the Loan Parties under the Loan Documents or
change or affect in a manner adverse to the Loan Parties the financial terms of
the Loans,
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(b) providing such information as may be reasonably requested by the Lenders in
connection with the rating of the Loans or the Securitization, and (c) providing
in connection with any rating of the Loans a certificate (i) agreeing to
indemnify the Agents, the Lenders and their Affiliates and their Related Funds,
any of the Rating Agencies, or any party providing credit support or otherwise
participating in the Securitization (collectively, the "Securitization
Parties"') for any losses, claims, damages or liabilities (the "Liabilities") to
which the Agents, the Lenders, their Affiliates, their Related Funds or such
Securitization Parties may become subject insofar as the Liabilities arise out
of or are based upon a violation of the representation set forth in Section 5.01
(p), and such indemnity shall survive any transfer by the Lenders or their
successors or assigns of the Loans and (ii) agreeing to reimburse the Agents,
the Lenders and their Affiliates and their Related Funds for any legal or other
expenses reasonably incurred by such Persons in connection with defending the
Liabilities.
Section 2.08 Taxes. (a) Any and all payments by any Loan Party
hereunder shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding franchise taxes of, and
taxes imposed on the net income of, any Agent or any Lender (or any transferee
or assignee thereof, including a participation holder (any such entity, a
"Transferee")) (i) by the jurisdiction in which such Person is organized or has
its principal lending office or any political subdivision thereof or (ii) by
reason of any present or former connection between such Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision thereof, other than such a connection arising in whole or
in part (and to the extent arising) from such Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced this Agreement or any other Loan Document (all such nonexcluded taxes,
levies, imposts, deductions, charges withholdings and liabilities with respect
to payments by any Loan Party hereunder, collectively or individually, "Taxes").
If any Loan Party shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Agent or any Lender (or any
Transferee), (i) the sum payable shall be increased by the amount (an
"additional amount") necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.08) such Agent or such Lender (or such Transferee) shall receive an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Loan Party shall make such deductions and (iii) such Loan Party shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) In addition, each Loan Party agrees to pay to the relevant
Governmental Authority in accordance with applicable law any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
("Other Taxes"). Each Loan Party shall deliver to each Agent and each Lender
official receipts in respect of any Taxes or Other Taxes payable hereunder
promptly after payment of such Taxes or Other Taxes.
(c) The Loan Parties hereby jointly and severally indemnify and
agree to hold each Agent and each Lender harmless from and against Taxes and
Other Taxes (including, without limitation, Taxes and Other Taxes imposed on any
amounts payable under
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this Section 2.08) paid by such Person, whether or not such Taxes or Other Taxes
were correctly or legally asserted. Such indemnification shall be paid within 10
days from the date on which any such Person makes written demand therefor
specifying in reasonable detail the nature and amount of such Taxes or Other
Taxes.
(d) Each Lender (or Transferee) that is organized under the laws
of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non- U.S. Lender") shall deliver to the Agents and the
Borrower two properly completed and duly executed copies of either U.S. Internal
Revenue Service Form W-8BEN or Form W-8ECI or an applicable successor form, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8BEN, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8,
a certificate representing that such Non-U.S. Lender is not a bank for purposes
of Section 881(c)(3)(A) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Sections 871(h)(3)(B) or 881(c)(3)(B) of the
Internal Revenue Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Sections 864(d)(4)
and 881(c)(3)(B) of the Internal Revenue Code)) (such certificate, an "Exemption
Certificate"), in each case claiming complete exemption from U.S. Federal
withholding tax on payments by the Loan Parties under this Agreement. Such forms
shall be delivered by each Non-U.S. Lender on or before the date it becomes a
party to this Agreement (or, in the case of a Transferee that is a participation
holder, on or before the date such participation holder becomes a Transferee
hereunder) and on or before the date, if any, such Non-U.S. Lender changes its
applicable lending office by designating a different lending office (a "New
Lending Office"). Each Non-U.S. Lender agrees that it shall promptly notify the
Administrative Agent in the event any such Exemption Certificate is no longer
accurate. In addition, each Non-U.S. Lender shall deliver such forms within 20
days after receipt of a written request therefor from the Borrower or any Agent.
Notwithstanding any other provision of this Section 2.08, a Non-U.S. Lender
shall not be required to deliver after the date hereof any form pursuant to this
Section 2.08 that such Non-U.S. Lender is not legally able to deliver.
(e) The Loan Parties shall not be required to indemnify any
Non-U.S. Lender, or pay any additional amounts to any Non-U.S. Lender, in
respect of United States Federal withholding tax pursuant to this Agreement to
the extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan; provided, however,
that this clause (i) shall not apply to the extent the indemnity payment or
additional amounts any Transferee or any Lender (or Transferee) through a New
Lending Office, would be entitled to receive (without regard to this clause (i))
do not exceed the indemnity payment or additional amounts that the Person making
the assignment, participation or transfer to such Transferee or such Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation, (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non- U.S. Lender to comply with the
provisions of clause (d) above, or (iii) any of the representations or
certifications made by a Non-U.S. Lender pursuant to clause (d) above are
incorrect at the
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time a payment hereunder is made, other than by reason of any change in treaty,
law or regulation having effect after the date such representations or
certifications were made.
(f) Any Agent or any Lender (or Transferee) claiming any
indemnity payment or additional payment amounts payable pursuant to this Section
2.08 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document reasonably requested in
writing by the Borrower or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
reduce the amount of any such indemnity payment or additional amount which may
thereafter accrue, would not require such Agent or such Lender (or Transferee)
to disclose any information such Agent or such Lender (or Transferee) deems
confidential and would not, in the reasonable determination of such Agent or
such Lender (or Transferee), be otherwise disadvantageous to such Agent or such
Lender (or Transferee).
(g) If any Agent or any Lender (or any Transferee) receives a
refund of a tax for which a payment has been made by the Loan Parties pursuant
to this Agreement, which refund in the sole judgment of such Agent or such
Lender (or Transferee) is attributable to such payment made by the Loan Parties,
then such Agent or such Lender (or Transferee) shall reimburse the Loan Parties
for such amount. Nothing contained in this clause (g) shall require any Agent or
any Lender (or Transferee) to make available to any Loan Party or any other
Person any of its tax returns (or any other information that it deems to be
confidential in its sole discretion).
(h) The obligations of the Loan Parties under this Section 2.08
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
Section 2.09 LIBOR Option. (a) In lieu of having interest charged at
the rate based upon the Reference Rate, the Borrower shall have the option (the
"LIBOR Option") to have interest on all or a portion of the Loans be charged at
a rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall
be payable in accordance with Section 2.04(d). On the last day of each
applicable Interest Period, unless the Borrower properly has exercised the LIBOR
Option with respect thereto pursuant to Section 2.09(b), the interest rate
applicable to such LIBOR Rate Loan automatically shall convert to the rate of
interest then applicable to Reference Rate Loans of the same type hereunder. At
any time that an Event of Default has occurred and is continuing, the Borrower
no longer shall have the option to request that Loans bear interest at the LIBOR
Rate.
(b) (i) The Borrower may, at any time and from time to time, so
long as no Event of Default has occurred and is continuing, elect to exercise
the LIBOR Option by notifying Administrative Agent prior to 11:00 a.m. (New York
time) at least 3 Business Days prior to the commencement of the proposed
Interest Period (the "LIBOR Deadline"). Notice of the Borrower's election of the
LIBOR Option for a permitted portion of the Loans and an Interest Period
pursuant to this Section shall be made by delivery to the Administrative Agent
of a LIBOR Notice received by the Administrative Agent before the LIBOR
Deadline, or by telephonic notice received by the Administrative Agent before
the LIBOR Deadline (to be confirmed by delivery to the Administrative Agent of a
LIBOR Notice received by
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Administrative Agent prior to 5:00 p.m. (New York time) on the same day).
Promptly upon its receipt of each such LIBOR Notice (but in any event on the
same day as the Administrative Agent receives such LIBOR Notice), the
Administrative Agent shall provide a copy thereof to each of the Lenders having
a Revolving Credit Commitment.
(ii) Each LIBOR Notice shall be irrevocable and binding on
the Borrower. In connection with each LIBOR Rate Loan, the Borrower shall
indemnify, defend, and hold the Agents and the Lenders harmless against any
loss, cost, or expense incurred by any Agent or any Lender as a result of (A)
the payment of any principal of any LIBOR Rate Loan other than on the last day
of an Interest Period applicable thereto (including as a result of an Event of
Default), (B) the conversion of any LIBOR Rate Loan other than on the last day
of the Interest Period applicable thereto, or (C) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date specified in any
LIBOR Notice delivered pursuant hereto (such losses, costs, and expenses,
collectively, "Funding Losses"). Funding Losses shall, with respect to any Agent
or any Lender, be deemed to equal the amount determined by such Agent or such
Lender to be the excess, if any, of (1) the amount of interest that would have
accrued on the principal amount of such LIBOR Rate Loan had such event not
occurred, at the LIBOR Rate that would have been applicable thereto, for the
period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period therefor), minus (2) the
amount of interest that would accrue on such principal amount for such period at
the interest rate which such Agent or such Lender would be offered were it to be
offered, at the commencement of such period, Dollar deposits of a comparable
amount and period in the London interbank market. A certificate of an Agent or a
Lender delivered to the Borrower setting forth any amount or amounts that such
Agent or such Lender is entitled to receive pursuant to this Section 2.09 shall
be conclusive absent manifest error.
(iii) The Borrower shall have not more than five (5) LIBOR
Rate Loans in effect at any given time. The Borrower only may exercise the LIBOR
Option for LIBOR Rate Loans of at least $500,000 and integral multiples of
$100,000 in excess thereof.
(c) The Borrower may prepay LIBOR Rate Loans at any time;
provided, however, that in the event that LIBOR Rate Loans are prepaid on any
date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment through the required
application by the Administrative Agent of proceeds of Collateral in accordance
with Section 3.04 or for any other reason, including early termination of the
term of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, the Borrower shall indemnify, defend, and hold the
Agents and the Lenders and their participants harmless against any and all
Funding Losses in accordance with clause (b) above.
(d) (i) The LIBOR Rate shall be adjusted by the Administrative
Agent with respect to any Lender on a prospective basis to take into account any
additional or increased costs to such Lender of maintaining or obtaining any
eurodollar deposits or increased costs due to changes in applicable law
occurring subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general applicability in
corporate income tax laws) and changes in the reserve requirements imposed by
the Board,
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excluding the Reserve Percentage, which additional or increased costs would
increase the cost of funding loans bearing interest at the LIBOR Rate. In any
such event, the affected Lender shall give the Borrower and the Administrative
Agent notice of such a determination and adjustment and the Administrative Agent
promptly shall transmit the notice to each other Lender and, upon its receipt of
the notice from the affected Lender, the Borrower may, by notice to such
affected Lender (A) require such Lender to furnish to the Borrower a statement
setting forth the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans
with respect to which such adjustment is made (together with any amounts due
under clause (b)(ii) above).
(ii) In the event that any change in market conditions or
any law, regulation, treaty, or directive, or any change therein or in the
interpretation of application thereof, shall at any time after the date hereof,
in the reasonable opinion of any Lender, make it unlawful or impractical for
such Lender to rand or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to the Administrative
Agent and the Borrower and the Administrative Agent promptly shall transmit the
notice to each other Lender and (A) in the case of any LIBOR Rate Loans of such
Lender that are outstanding, the date specified in such Lender's notice shall be
deemed to be the last day of the Interest Period of such LIBOR Rate Loans, and
interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue
interest at the rate then applicable to Loans that are Reference Rate Loans, and
(B) the Borrower shall not be entitled to elect the LIBOR Option until such
Lender determines that it would no longer be unlawful or impractical to do so.
(e) Anything to the contrary contained herein notwithstanding,
neither any Agent, nor any Lender, nor any of their participants, is required
actually to acquire eurodollar deposits to fund or otherwise match fund any
Obligation as to which interest accrues at the LIBOR Rate. The provisions of
this Section shall apply as if each Lender or its participants had match funded
any Obligation as to which interest is accruing at the LIBOR Rate by acquiring
eurodollar deposits for each Interest Period in the amount of the LIBOR Rate
Loans.
ARTICLE III
FEES, PAYMENTS AND OTHER COMPENSATION
Section 3.01 Audit and Collateral Monitoring Fees. The Borrower
acknowledges that pursuant to Section 6.01 (f), representatives of the Agents
may visit any or all of the Loan Parties and/or conduct audits, inspections,
appraisals, valuations and/or field examinations of any or all of the Loan
Parties or the Collateral at any time and from time to time in a manner so as to
not unduly disrupt the business of the Loan Parties. The Borrower agrees to pay
(i) $1,500 per day per examiner plus the examiner's reasonable out-of-pocket
costs and reasonable expenses incurred in connection with all such visits,
audits, inspections, appraisals, valuations and field examinations and (ii) the
actual reasonable out-of-pocket cost of all visits, audits, inspections,
appraisals, valuations and field examinations conducted by a third party on
behalf of any Agent.
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Section 3.02 Payments; Computations and Statements. (a) The Borrower
will make each payment under the Loan Documents not later than 12:00 noon (New
York City time) on the day when due, in lawful money of the United States of
America and in immediately available funds, to the Administrative Agent's
Account. All payments received by the Administrative Agent after 12:00 noon (New
York City time) on any Business Day will be credited to the Loan Account on the
next succeeding Business Day. All payments shall be made by the Borrower without
set-off, counterclaim, deduction or other defense to the Agents and the Lenders.
Except as provided in Section 2.02, after receipt, the Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal ratably to the Lenders in accordance with their Pro Rata Shares and
like funds relating to the payment of any other amount payable to any Agent or
Lender to such Agent or Lender, in each case to be applied in accordance with
the terms of this Agreement, provided that the Administrative Agent will cause
to be distributed all interest and fees received from or for the account of the
Borrower not less than once each month and in any event promptly after receipt
thereof. The Lenders and the Borrower hereby authorize the Administrative Agent
to, and the Administrative Agent may, from time to time, charge the Loan Account
of the Borrower with any amount due and payable by the Loan Parties under any
Loan Document. Each of the Lenders and the Borrower agrees that the
Administrative Agent shall have the right to make such charges whether or not
any Default or Event of Default shall have occurred and be continuing or whether
any of the conditions precedent in Section 4.02 have been satisfied. Any amount
charged to the Loan Account of the Borrower shall be deemed a Revolving Loan
hereunder made by the Revolving Loan Lenders to the Borrower, funded by the
Administrative Agent on behalf of the Revolving Loan Lenders and subject to
Section 2.02 of this Agreement. The Lenders and the Borrower confirm that any
charges which the Administrative Agent may so make to the Loan Account of the
Borrower as herein provided will be made as an accommodation to the Borrower and
solely at the Administrative Agent's discretion. Whenever any payment to be made
under any such Loan Document shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be. All computations of fees under the Loan
Documents shall be made on the basis of a 360-day year for the actual number of
days elapsed. Each determination by the Administrative Agent of any interest
rate or fees hereunder shall be conclusive and binding for all purposes in the
absence of manifest error.
(b) The Administrative Agent shall provide the Borrower, promptly
upon the request of the Borrower after the end of any calendar month, a summary
statement (in the form from time to time used by the Administrative Agent) of
the opening and closing daily balances in the Loan Account of the Borrower
during such month, the amounts and dates of all Loans made to the Borrower
during such month, the amounts and dates of all payments on account of the Loans
to the Borrower during such month and the Loans to which such payments were
applied, the amount of interest accrued on the Loans to the Borrower during such
month (and indicating whether such Loans are Reference Rate Loans or LIBOR Rate
Loans), and the amount and nature of any charges to the Loan Account made during
such month on account of fees, commissions, expenses and other Obligations. All
entries on any such statement shall be presumed to be correct and, thirty (30)
days after the same is sent, shall be final and conclusive absent manifest error
or objection by the Borrower prior to such date.
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Section 3.03 Sharing of Payments, Etc. Except as provided in Section
2.02 hereof, if any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Obligation in excess of its ratable share of payments on account
of similar obligations obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in such similar obligations
held by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender of any interest or other
amount paid by the purchasing Lender in respect of the total amount so
recovered). The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 3.03 may, to the fullest extent
permitted by law, exercise all of its rights (including the Lender's right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
Section 3.04 Apportionment of Payments. Subject to Section 2.02 hereof
and to any written agreements among the Agents and/or the Lenders:
(a) All payments of principal and interest in respect of
outstanding Loans, all payments of fees (other than the fees set forth in
Section 2.06 hereof, and the audit and collateral monitoring fee provided for in
Section 3.01) and all other payments in respect of any other Obligations, shall
be allocated by the Administrative Agent among such of the Lenders as are
entitled thereto, in proportion to their respective Pro Rata Shares or otherwise
as provided herein or, in respect of payments not made on account of Loans, as
designated by the Person making payment when the payment is made.
(b) After the occurrence and during the continuance of an Event
of Default, the Administrative Agent may, and upon the direction of the Required
Lenders shall, apply all payments in respect of any Obligations and all proceeds
of the Collateral, subject to the provisions of this Agreement, (i) first,
ratably to pay the Obligations in respect of any fees, expense reimbursements,
indemnities and other amounts then due to the Agents, until paid in full; (ii)
second, ratably to pay the Obligations in respect of any fees and indemnities
then due to the Lenders, until paid in full; (iii) third, to pay interest due in
respect of Collateral Agent Advances, until paid in full; (iv) fourth, ratably
to pay interest due in respect of the Loans, until paid in full; (v) fifth, to
pay principal of Collateral Agent Advances, until paid in full; (vi) sixth,
ratably to pay principal of the Loans, until paid in full; and (vii) seventh, to
the ratable payment of all other Obligations then due and payable.
(c) In each instance, so long as no Event of Default has occurred
and is continuing, Section 3.04(b) shall not be deemed to apply to any payment
by the Borrower specified by the Borrower to the Administrative Agent to be for
the payment of Term Loan Obligations then due and payable under any provision of
this Agreement or the prepayment of all or part of the principal of the Term
Loan in accordance with the terms and conditions of Section 2.05.
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(d) For purposes of Section 3.04(b), "paid in full" means payment
of all amounts owing under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest (and specifically
including interest accrued after the commencement of any Insolvency Proceeding),
default interest, interest on interest, and expense reimbursements, in each
case, whether or not the same would be or is allowed or disallowed in whole or
in part in any Insolvency Proceeding.
(e) In the event of a direct conflict between the priority
provisions of this Section 3.04 and other provisions contained in any other Loan
Document, it is the intention of the parties hereto that both such priority
provisions in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 3.04 shall control and govern.
Section 3.05 Increased Costs and Reduced Return. (a) If any Lender or
any Agent shall have determined that, after the Effective Date, the adoption or
implementation of, or any change in, any law, rule, treaty or regulation, or any
policy, guideline or directive of, or any change in, the interpretation or
administration thereof by, any court, central bank or other administrative or
Governmental Authority, or compliance by any Lender or any Agent or any Person
controlling any such Lender or any such Agent with any directive of, or
guideline from, any central bank or other Governmental Authority or the
introduction of, or change in, any accounting principles applicable to any
Lender or any Agent or any Person controlling any such Lender or any such Agent
(in each case, whether or not having the force of law) (each, a "Change in
Law"), shall (i) subject such Lender or such Agent, or any Person controlling
such Lender or such Agent to any tax, duty or other charge with respect to any
LIBOR Rate Loan made by such Lender or such Agent, or change the basis of
taxation of payments to such Lender or such Agent or any Person controlling such
Lender or such Agent of any amounts payable hereunder in respect of LIBOR Rate
Loans (except for taxes on the overall net income of such Lender or such Agent
or any Person controlling such Lender or such Agent), (ii) impose, modify or
deem applicable any reserve, special deposit or similar requirement (other than
the Reserve Percentage) against any LIBOR Rate Loan or against assets of or held
by, or deposits with or for the account of, or credit extended by, such Lender
or such Agent or any Person controlling such Lender or such Agent or (iii)
impose on such Lender or such Agent or any Person controlling such Lender or
such Agent any other condition regarding any LIBOR Rate Loan, and the result of
any event referred to in clauses (i), (ii) or (iii) above shall be to increase
the cost to such Lender or such Agent of making any LIBOR Rate Loan, or agreeing
to make any Loan, or to reduce any amount received or receivable by such Lender
or such Agent hereunder in respect of LIBOR Rate Loans, then, within 15 days of
written demand by such Lender or such Agent, the Borrower shall pay to such
Lender or such Agent such additional amounts as will compensate such Lender or
such Agent for such increased costs or reductions in amount.
(b) If any Lender or any Agent shall have determined that any
Change in Law after the Effective Date either (i) affects or would affect the
amount of capital required or expected to be maintained by such Lender or such
Agent or any Person controlling such Lender or such Agent, and such Lender or
such Agent determines that the amount of such capital is increased as a direct
or indirect consequence of any Loans made or maintained, such Lender's or such
Agent's or such other controlling Person's other obligations hereunder, or (ii)
has or would
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have the effect of reducing the rate of return on such Lender's or such Agent's
or such other controlling Person's capital to a level below that which such
Lender or such Agent or such controlling Person could have achieved but for such
circumstances as a consequence of any Loans made or maintained, or any agreement
to make Loans, or such Lender's or such Agent's or such other controlling
Person's other obligations hereunder (in each case, taking into consideration,
such Lender's or such Agent's or such other controlling Person's policies with
respect to capital adequacy), then, within 15 days of written demand by such
Lender or such Agent, the Borrower shall pay to such Lender or such Agent from
time to time such additional amounts as will compensate such Lender or such
Agent for such cost of maintaining such increased capital or such reduction in
the rate of return on such Lender's or such Agent's or such other controlling
Person's capital.
(c) All amounts payable under this Section 3.05 shall bear
interest from the date that is 15 days after the date of written demand by any
Lender or any Agent until payment in full to such Lender or such Agent at the
Reference Rate. A certificate of such Lender or such Agent claiming compensation
under this Section 3.05, specifying the event herein above described and the
nature of such event shall be submitted by such Lender or such Agent to the
Borrower, setting forth the additional amount due and an explanation of the
calculation thereof, and such Lender's or such Agent's reasons for invoking the
provisions of this Section 3.05, and shall be final and conclusive absent
manifest error.
(d) The Borrower shall not be required to compensate any Agent or
any Lender pursuant to this Section 3.05 for any increased costs or reductions
incurred more than 180 days prior to the date that such Agent or such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Agent's or such Lender's intention to claim
compensation therefor; provided, that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then such 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.
ARTICLE IV
CONDITIONS TO LOANS
Section 4.01 Conditions Precedent to Effectiveness. This Agreement
shall become effective as of the Business Day (the "Effective Date") when each
of the following conditions precedent shall have been satisfied in a manner
reasonably satisfactory to the Collateral Agent:
(a) Payment of Fees, Etc. The Borrower shall have paid on or
before the date of this Agreement all fees, costs, expenses and taxes then
payable pursuant to Section 11.04 and the Fee Letter.
(b) Representations and Warranties; No Event of Default. The
following statements shall be true and correct: (i) the representations and
warranties contained in ARTICLE V and in each other Loan Document are true and
correct on and as of the Effective Date as though made on and as of such date,
except to the extent that any such representation or warranty expressly relates
solely to an earlier date (in which case such representation or warranty
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shall be true and correct on and as of such earlier date) and (ii) no Default or
Event of Default shall have occurred and be continuing on the Effective Date or
would result from this Agreement or the other Loan Documents becoming effective
in accordance with its or their respective terms.
(c) Legality. The making of the initial Loans shall not
contravene any law, rule or regulation applicable to any Agent or any Lender.
(d) Delivery of Documents. The Collateral Agent shall have
received on or before the Effective Date the following, each in form and
substance reasonably satisfactory to the Collateral Agent and, unless indicated
otherwise, dated the Effective Date:
(i) the Fee Letter, duly executed by each Loan Party and the
Administrative Agent;
(ii) a Security Agreement, duly executed by each Loan Party;
(iii) a Pledge Agreement, duly executed by each Loan Party,
together with the original stock certificates representing all of the Capital
Stock of such Loan Party's Subsidiaries and all promissory notes of such Loan
Parties, accompanied by undated stock powers executed in blank and other proper
instruments of transfer;
(iv) the Intercompany Subordination Agreement, duly executed
by each Loan Party;
(v) the Contribution Agreement, duly executed by each Loan
Party;
(vi) [INTENTIONALLY OMITTED]
(vii) the Disbursement Letter, duly executed by each party
thereto;
(viii) a UCC Filing Authorization Letter, duly executed by
each Loan Party, together with (A) appropriate financing statements on Form
UCC-1 duly filed in such office or offices as may be necessary or, in the
reasonable business judgment of the Collateral Agent, desirable to perfect the
security interests purported to be created by each Security Agreement and each
Pledge Agreement and (B) evidence satisfactory to the Collateral Agent of the
filing of such UCC-1 financing statements;
(ix) certified copies of request for copies of information
listing all effective financing statements which name as debtor any Loan Party
and which are filed in the offices referred to in paragraph (viii) above,
together with copies of such financing statements, none of which, except as
otherwise agreed in writing by the Collateral Agent in the exercise of its
reasonable discretion, shall cover any of the Collateral and the results of
searches for any tax Lien and judgment Lien filed against such Person or its
property, and the results of any intellectually property filings, which results,
except as otherwise agreed to in writing by the Collateral Agent in its
reasonable discretion, shall not show any such Liens;
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(x) a copy of the resolutions of each Loan Party, certified
as of the Effective Date by an Authorized Officer thereof, authorizing (I) the
borrowings hereunder and the transactions contemplated by the Loan Documents to
which such Loan Party is or will be a party, (II) the execution, delivery and
performance by such Loan Party of each Loan Document to which such Loan Party is
or will be a party and the execution and delivery of the other documents to be
delivered by such Person in connection herewith and therewith and (III) the
execution, delivery and performance by such Loan Party (to the extent
applicable) of each aaiPharma Acquisition Document to which such Loan Party is
or will be a party and the execution and delivery of the other documents to be
delivered by such Loan Party in connection therewith;
(xi) a certificate of an Authorized Officer of each Loan
Party, certifying the names and true signatures of the representatives of such
Loan Party authorized to sign each Loan Document to which such Loan Party is or
will be a party and the other documents to be executed and delivered by such
Loan Party in connection herewith and therewith, together with evidence of the
incumbency of such authorized officers;
(xii) a certificate of the appropriate official(s) of the
state of organization and each state of foreign qualification of each Loan Party
certifying as of a recent date not more than 35 days prior to the Effective Date
as to the subsistence in good standing of such Loan Party in such states;
(xiii) a true and complete copy of the charter, certificate
of formation, certificate of limited partnership or other similar publicly filed
organizational document of each Loan Party, together with all amendments
thereto, certified as of a recent date not more than 35 days prior to the
Effective Date by an appropriate official of the state of organization of such
Loan Party which shall set forth the same complete name of such Loan Party as is
set forth herein and the organizational number of such Loan Party, if an
organizational number is issued in such jurisdiction;
(xiv) a copy of the charter and by-laws, limited liability
company agreement, operating agreement, agreement of limited partnership or
other similar organizational document of each Loan Party, together with all
amendments thereto, certified as of the Effective Date by an Authorized Officer
of such Loan Party (which in the case of Xanodyne Acquisition, LLC and Xanodyne
Development Group, LLC shall contain an amendment to their respective limited
liability company operating agreements providing that the membership interests
or units of such Loan Parties may be pledged and transferred to the Collateral
Agent (or any successor thereto) without any further consent of any Person);
(xv) an opinion of ▇▇▇▇▇▇▇▇ & Shohl, LLP, counsel to the
Loan Parties, substantially in the form of Exhibit F and as to such other
matters as the Collateral Agent may reasonably request (including, without
limitation, as to matters related to Kentucky and Indiana law);
(xvi) a certificate of an Authorized Officer of each Loan
Party, certifying as to the matters set forth in subsection (b) of this Section
4.01;
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(xvii) a copy of (A) the Financial Statements, (B) the
financial projections described in Section 5.01 (g)(ii), certified as of the
Effective Date by an Authorized Officer of the Borrower as complying with the
representations and warranties set forth in Section 5.01(g)(ii), and (C) a
schedule of revenues and average gross margins for the Marketed Products of the
Borrower for the period from January 1, 2005 through May 31, 2005;
(xviii) a certificate of the chief financial officer of the
Borrower, certifying that, after giving effect to the payment of the purchase
price for the aaiPharma Acquisition, the incurrence of the Loans made on the
Effective Date and the payment of all fees, costs and expenses in connection
therewith and this Agreement, (A) the Borrower is, and the Loan Parties on a
consolidated basis are, Solvent and (B) all liabilities of the Loan Parties are
current;
(xix) evidence of the insurance coverage required by Section
6.01 and the terms of each Security Agreement and such other insurance coverage
with respect to the business and operations of the Loan Parties as the
Collateral Agent may reasonably request, in each case, with such endorsements as
to the named insureds or loss payees thereunder as the Collateral Agent may
request and providing that such policy may be terminated or canceled (by the
insurer or the insured thereunder) only upon 30 days' prior written notice to
the Collateral Agent and each such named insured or loss payee, together with
evidence of the payment of all premiums due in respect thereof for such period
as the Collateral Agent may request;
(xx) a certificate of an Authorized Officer of the Borrower,
certifying the names and true signatures of the persons that are authorized to
provide Notices of Borrowing, LIBOR Notices and all other notices under this
Agreement and the other Loan Documents;
(xxi) copies of the aaiPharma Acquisition Documents and each
other Material Contract as in effect on the Effective Date, certified as true
and correct copies thereof by an Authorized Officer of the Borrower, together
with a certificate of an Authorized Officer of the Borrower stating that such
agreements remain in full force and effect and that none of the Loan Parties has
breached or defaulted in any of its obligations under any such agreements;
(xxii) evidence of the payment in full of all Indebtedness
under the Existing Interim Loan Agreement (which may be accomplished through the
conversion of such Indebtedness into shares of Series A-l Convertible Preferred
Stock, par value $.001 per share of the Borrower, on terms and conditions
satisfactory to the Agents), together with a copy of each Existing Convertible
Secured Promissory Note marked cancelled (or words of similar import) certified
by an Authorized Officer of the Borrower as being a true, correct and complete
copy thereof, and a termination and release agreement with respect to the
Existing Interim Loan Agreement and all related promissory notes, other
instruments, security agreements and other agreements and documents related
thereto, duly executed by the Loan Parties and the Existing Shareholder Lenders
(including, without limitation, Blue ▇▇▇▇ ▇▇ Limited Partnership, Essex
Woodlands Health Ventures Fund TV, L.P., Essex Woodlands Health Ventures Fund V,
L.P., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Booth IV L.P. and HealthCare Ventures VI, L.P.)
and the Existing Shareholder Lender Agent, together with a satisfaction of
mortgage for each mortgage filed by
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the Existing Shareholder Lender Agent on each Facility, if any, a termination of
security interest in intellectual property for each assignment for security
recorded by the Existing Shareholder Lender Agent at the United States Patent
and Trademark Office or United States Copyright Office and covering any
intellectual property of the Loan Parties, if any, UCC-3 termination statements
for all UCC-1 financing statements filed by the Existing Shareholder Lender
Agent and covering any portion of the Collateral, and (iv) a receipt, executed
by the Existing Shareholder Lender Agent, acknowledging receipt of all of the
stock certificates necessary to cause the satisfaction of such Indebtedness;
(xxiii) an opening consolidated balance sheet for the
Borrower and its Subsidiaries as at the Effective Date, certified as true and
correct by an Authorized Officer of the Borrower; and
(xxiv) such other agreements, instruments, approvals,
opinions and other documents, each satisfactory to the Collateral Agent in form
and substance, as the Collateral Agent may reasonably request.
(e) Material Adverse Effect. The Collateral Agent and the Lenders
shall have determined, in their sole and reasonable judgment that, after giving
effect to the Acquisition and the transactions contemplated hereby and by the
other Loan Documents, no "Material Adverse Effect" (as defined in the aaiPharma
Acquisition Agreement) with respect to the aaiPharma Assets shall have occurred
since May 20, 2005.
(f) The aaiPharma Sale Order. The aaiPharma Sale Order shall have
been signed and entered by the Bankruptcy Court and the Collateral Agent shall
have received a copy of the same certified as a true copy by the clerk of the
Bankruptcy Court and an Authorized Officer of the Borrower and such order shall
be in full force and effect and shall not have been reversed, stayed, modified
or amended absent the consent of the Collateral Agent and the Required Lenders.
The aaiPharma Sale Order shall provide that good and marketable title to the
aaiPharma Assets has been transferred to the Borrower free and clear of all
Liens, and shall otherwise be in form and substance satisfactory to the
Collateral Agent and the Required Lenders. The aaiPharma Sale Order shall have
been entered by the Bankruptcy Court and no appeals shall have been filed as of
the Effective Date.
(g) The aaiPharma Acquisition. On or prior to the Effective Date,
there shall have been delivered to the Collateral Agent all aaiPharma
Acquisition Documents as in effect on the Effective Date, certified as true,
correct and complete by an Authorized Officer of the Borrower, and all terms and
provisions of each aaiPharma Acquisition Document as in effect on the Effective
Date shall be in form and substance reasonably satisfactory to the Collateral
Agent and the Required Lenders and shall not have been amended, modified or
otherwise changed without the prior written consent of the Collateral Agent and
the Required Lenders. The aaiPharma Acquisition, including all of the terms and
conditions thereof, shall have been duly authorized and all aaiPharma
Acquisition Documents shall have been duly executed and delivered by all parties
thereto and shall be in full force and effect. The aaiPharma Acquisition shall
have been consummated substantially contemporaneously with the funding of the
initial Loans in accordance with all applicable law (including, without
limitation, the Bankruptcy Code), the aaiPharma Acquisition Documents and the
aaiPharma Sale Order and the
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Borrower shall have become the owner of the aaiPharma Assets, free and clear of
all Liens other than Permitted Liens. The proceeds of the initial Loans,
together with the Unrestricted Cash Proceeds, shall have been applied in full to
pay the purchase price payable pursuant to the aaiPharma Acquisition Agreement
for the aaiPharma Assets and the closing and other costs relating thereto and
each of the Borrower and the aaiPharma Sellers shall have fully performed all of
their respective obligations to be performed by aaiPharma under the aaiPharma
Acquisition Documents. At the time of consummation thereof, all consents and
approvals of, and filings and registrations with, and all other actions in
respect of, any Governmental Authorities required in order to consummate the
aaiPharma Acquisition shall have been obtained and shall be in full force and
effect. The Collateral Agent and the Lenders shall be satisfied (i) with the
organizational and legal structure of the Loan Parties, both before and after
giving effect to the aaiPharma Acquisition and the equity and Indebtedness
described in paragraph (h) below, including the terms and conditions of each
Loan Parties' organizational documents, each class of Capital Stock of the Loan
Parties and each agreement or instrument relating to such structure or
capitalization, (ii) the ownership of the aaiPharma Assets after giving effect
to the aaiPharma Acquisition, and (iii) after giving effect to the aaiPharma
Acquisition, the Loan Parties shall have good and marketable title to or valid
licenses to use all of the assets and properties material to the businesses of
the aaiPharma Sellers and their respective Subsidiaries, as in effect
immediately prior to the aaiPharma Acquisition (including, without limitation,
all property leases, if any).
(h) Unrestricted Cash. The Borrower shall have unrestricted cash
in its possession and/or shall have received by wire transfer of immediately
available funds from the equity holders of the Borrower cash proceeds of equity
in an aggregate amount of at least $170,000,000 (such amount, the "Unrestricted
Cash Proceeds"), which equity, if any, shall be on terms and conditions
satisfactory to the Collateral Agent and the Lenders and which cash proceeds of
equity, if any, shall be funded to the Borrower through the Administrative
Agent. On or prior to the Effective Date, there shall have been delivered to the
Collateral Agent true and correct copies of all documents evidencing the equity
described above, if any, as in effect on the Effective Date, and all terms and
provisions of such documents as in effect on the Effective Date shall be in form
and substance satisfactory to the Collateral Agent and the Lenders and shall not
have been amended, modified or otherwise changed without the prior written
consent of the Collateral Agent and the Lenders.
(i) Approvals. All consents, authorizations and approvals of, and
filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the making of
the Loans or the conduct of the Loan Parties' business and in connection with
the transactions contemplated by the aaiPharma Acquisition Agreement and the
aaiPharma Sale Order shall have been obtained and shall be in full force and
effect and all applicable waiting periods shall have expired without any action
being taken by any Governmental Authority or any other Person that restrains,
prevents or imposes materially adverse conditions upon the aaiPharma Acquisition
and the making of the Loans or the conduct of the Loan Parties' business.
(j) Proceedings; Receipt of Documents. All proceedings in
connection with the making of the initial Loans and the other transactions
contemplated by this Agreement and the other Loan Documents, and all documents
incidental hereto and thereto, shall be satisfactory to the Collateral Agent and
its counsel, and the Collateral Agent and such counsel
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shall have received all such information and such counterpart originals or
certified or other copies of such documents as the Collateral Agent or such
counsel may reasonably request.
(k) Liens; Priority. The Collateral Agent shall be satisfied that
the Collateral Agent has been granted, and holds, for the benefit of the Agents
and the Lenders, a perfected, first priority Lien on and security interest in
all of the Collateral.
Section 4.02 Conditions Precedent to All Loans. The obligation of any
Agent or any Lender to make any Loan after the Effective Date is subject to the
fulfillment, in a manner reasonably satisfactory to the Administrative Agent, as
certified to by the Borrower in the applicable Notice of Borrowing, of each of
the following conditions precedent:
(a) Payment of Fees, Etc. The Borrower shall have paid all fees,
costs, expenses and taxes then payable by the Borrower pursuant to this
Agreement and the other Loan Documents, including, without limitation, Section
2.06 and Section 11.04 hereof.
(b) Representations and Warranties; No Event of Default. The
following statements shall be true and correct, and the submission by the
Borrower to the Administrative Agent of a Notice of Borrowing with respect to
each such Loan, and the Borrower's acceptance of the proceeds of such Loan,
shall each be deemed to be a representation and warranty by each Loan Party on
the date of such Loan that: (i) the representations and warranties contained in
ARTICLE V and in each other Loan Document are true and correct on and as of such
date as though made on and as of such date, except to the extent that any such
representation or warranty expressly relates solely to an earlier date (in which
case such representation or warranty shall be true and correct on and as of such
earlier date), (ii) at the time of and after giving effect to the making of such
Loan and the application of the proceeds thereof, no Default or Event of Default
has occurred and is continuing or would result from the making of the Loan to be
made on such date and (iii) the conditions set forth in this Section 4.02 have
been satisfied as of the date of such request.
(c) Legality. The making of such Loan shall not contravene any
law, rule or regulation applicable to any Agent or any Lender.
(d) Notices. The Administrative Agent shall have received (i) a
Notice of Borrowing pursuant to Section 2.02 hereof, and (ii) a LIBOR Notice
pursuant to Section 2.09 hereof, if applicable.
(e) Proceedings; Receipt of Documents. All proceedings in
connection with the making of such Loan and the other transactions contemplated
by this Agreement and the other Loan Documents, and all documents incidental
hereto and thereto, shall be reasonably satisfactory to the Collateral Agent and
its counsel, and the Collateral Agent and its counsel shall have received all
such information and such counterpart originals or certified or other copies of
such documents, in form and substance reasonably satisfactory to the Collateral
Agent, as the Collateral Agent or its counsel may reasonably request.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01 Representations and Warranties. Each Loan Party hereby
represents and warrants to the Agents and the Lenders as follows:
(a) Organization, Good Standing, Etc. Each Loan Party (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated (both before
and after giving effect to the aaiPharma Acquisition) and, in the case of the
Borrower, to make the borrowings hereunder, and to execute and deliver each Loan
Document to which it is a party, and to consummate the transactions contemplated
thereby, and (iii) both before and after giving effect to the aaiPharma
Acquisition, is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary
other than in such jurisdictions where the failure to be so qualified and in
good standing could not reasonably be expected to have a Material Adverse
Effect.
(b) Authorization, Etc. The execution, delivery and performance
by each Loan Party of each Loan Document and each aaiPharma Acquisition Document
to which it is or will be a party, (i) have been duly authorized by all
necessary action, (ii) do not and will not contravene its charter or by-laws,
its limited liability company or operating agreement or its certificate of
partnership or partnership agreement, as applicable, or any applicable law, or
any contractual restriction binding on or otherwise affecting it or any of its
properties, (iii) do not and will not result in or require the creation of any
Lien (other than pursuant to any Loan Document) upon or with respect to any of
its properties, and (iv) do not and will not result in any default,
noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of
any material permit, license, authorization or approval applicable to its
operations or any of its properties.
(c) Governmental Approvals. Both before and after giving effect
to the aaiPharma Acquisition, no authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority is required in
connection with the due execution, delivery and performance by any Loan Party of
any Loan Document or any aaiPharma Acquisition Document to which it is or will
be a party.
(d) Enforceability of Loan Documents. This Agreement, each other
Loan Document and each aaiPharma Acquisition Document, when delivered, is (or
will be, in the case of such documents delivered after the Effective Date), a
legal, valid and binding obligation of the Loan Parties which are party hereto
or thereto, enforceable against such Loan Parties in accordance with its terms,
except as enforceability may be limited by equitable principles and by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditor's rights generally.
(e) Subsidiaries. Schedule 5.01(e) is, as of the Effective Date,
a complete and correct description of the name, jurisdiction of incorporation
and ownership of the
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outstanding Capital Stock of such Subsidiaries of the Borrower in existence on
the date hereof after giving effect to the aaiPharma Acquisition. All of the
issued and outstanding shares of Capital Stock of such Subsidiaries have been
validly issued and are fully paid and nonassessable, and the holders thereof are
not entitled to any preemptive, first refusal or other similar rights. Except as
indicated on such Schedule, as of the Effective Date, all such Capital Stock is
owned by the Borrower or one or more of its wholly-owned Subsidiaries, free and
clear of all Liens. Except as set forth on Schedule 5.01(e), as of the Effective
Date, there are no outstanding debt or equity securities of the Borrower or any
of its Subsidiaries and no outstanding obligations of the Borrower or any of its
Subsidiaries convertible into or exchangeable for, or warrants, options or other
rights for the purchase or acquisition from the Borrower or any of its
Subsidiaries, or other obligations of any Subsidiary to issue, directly or
indirectly, any shares of Capital Stock of any Subsidiary of the Borrower.
(f) Litigation; Commercial Tort Claims. Except as set forth in
Schedule 5.01(f), (i) there is no pending or, to the best knowledge of any Loan
Party, threatened action, suit or proceeding affecting any Loan Party or any of
its properties before any court or other Governmental Authority or any
arbitrator that (A) if adversely determined, could reasonably be expected to
have a Material Adverse Effect or (B) relates to this Agreement or any other
Loan Document or any transaction contemplated hereby or thereby or to the
aaiPharma Sale Order, the aaiPharma Acquisition or the aaiPharma Assets and (ii)
as of the Effective Date, none of the Loan Parties holds any commercial tort
claims in respect of which a claim has been filed in a court of law or a written
notice by an attorney has been given to a potential defendant.
(g) Financial Condition.
(i) The Financial Statements, copies of which have been
delivered to each Agent and each Lender, fairly present in all material respects
the consolidated financial condition of the Borrower and its Subsidiaries as at
the respective dates thereof and the consolidated results of operations of the
Borrower and its Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP, and since the Effective Date no event or
development has occurred that has had or could reasonably be expected to have a
Material Adverse Effect. The opening date balance sheet, provided to the
Collateral Agent pursuant to Section 4.01(d)(xxiii), is true and correct in all
material respects.
(ii) The Borrower has heretofore furnished to each Agent (A)
projected monthly balance sheets, income statements and statements of cash flows
of the Borrower and its Subsidiaries for the period from June 30,2005, through
December 31,2006, and (B) projected annual balance sheets, income statements and
statements of cash flows of the Borrower and its Subsidiaries for the Fiscal
Years ending in 2005 through 2009, which projected financial statements shall be
updated from time to time pursuant to Section 6.01(a)(vi). Such projections, as
so updated, shall be believed by the Borrower at the time furnished to be
reasonable, shall have been prepared on a reasonable basis and in good faith by
the Borrower, and shall have been based on assumptions believed by the Borrower
to be reasonable at the time made and upon the best information then reasonably
available to the Borrower, and the Borrower shall not be aware of any facts or
information that would lead it to believe that such projections, as so updated,
are incorrect or misleading in any material respect.
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(h) Compliance with Law, Etc. No Loan Party is in violation of
(i) its organizational documents, (ii) any law, rule, regulation (including,
without limitation, the FDA Regulations and the HHS Regulations), judgment or
order of any Governmental Authority applicable to it or any of its property or
assets (other than immaterial violations for which no penalty or fine in excess
of $100,000 is payable, or which are being contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or Lien resulting
from such violation and with respect to which adequate reserves have been set
aside for the payment of any penalty or fine arising therefrom in accordance
with GAAP), or (iii) any material term of any Material Contract binding on or
otherwise affecting it or any of its properties, and no Default or Event of
Default has occurred and is continuing.
(i) ERISA. Except as set forth on Schedule 5.01(i), (i) each
Employee Plan is in substantial compliance with ERISA and the Internal Revenue
Code, (ii) no Termination Event has occurred nor is reasonably expected to occur
with respect to any Employee Plan, (iii) the most recent annual report (Form
5500 Series) with respect to each Employee Plan, including any required Schedule
B (Actuarial Information) thereto, copies of which have been filed with the
Internal Revenue Service and, if requested by any Agent pursuant to Section
6.01(a)(x), delivered to the Agents, is complete and correct in all material
respects and fairly presents the funding status of such Employee Plan, and since
the date of such report there has been no material adverse change in such
funding status, (iv) copies of each agreement entered into with the PBGC, the
U.S. Department of Labor or the Internal Revenue Service with respect to any
Employee Plan have been delivered to the Agents, (v) no Employee Plan had an
accumulated or waived funding deficiency or permitted decrease which would
create a deficiency in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the
Internal Revenue Code at any time during the previous 60 months, and (vi) no
Lien imposed under the Internal Revenue Code or ERISA exists or is likely to
arise on account of any Employee Plan within the meaning of Section 412 of the
Internal Revenue Code. Except as set forth on Schedule 5.01(i), no Loan Party or
any of its ERISA Affiliates has incurred any withdrawal liability under ERISA
with respect to any Multiemployer Plan, or is aware of any facts indicating that
it or any of its ERISA Affiliates may in the future incur any such withdrawal
liability. No Loan Party or any of its ERISA Affiliates nor any fiduciary of any
Employee Plan has (i) engaged in a nonexempt prohibited transaction described in
Sections 406 of ERISA or 4975 of the Internal Revenue Code, (ii) failed to pay
any required installment or other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such required installment or
payment, (iii) engaged in a transaction within the meaning of Section 4069 of
ERISA or (iv) incurred any liability to the PBGC which remains outstanding other
than the payment of premiums, and there are no premium payments which have
become due which are unpaid. There are no pending or, to the best knowledge of
any Loan Party, threatened claims, actions, proceedings or lawsuits (other than
claims for benefits in the normal course) asserted or instituted against (i) any
Employee Plan or its assets, (ii) any fiduciary with respect to any Employee
Plan, or (iii) any Loan Party or any of its ERISA Affiliates with respect to any
Employee Plan. Except as required by Section 4980B of the Internal Revenue Code,
no Loan Party or any of its ERISA Affiliates maintains an employee welfare
benefit plan (as defined in Section 3(1) of ERISA) which provides health or
welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employee of any Loan Party or any of its ERISA Affiliates or
coverage after a participant's termination of employment.
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(j) Taxes, Etc. All Federal, state and local tax returns and
other reports required by applicable law to be filed by any Loan Party have been
filed, or extensions have been obtained, and all taxes, assessments and other
governmental charges imposed upon any Loan Party or any property of any Loan
Party and which have become due and payable on or prior to the date hereof have
been paid, except (i) as of the Effective Date, for amounts contested in good
faith by proper proceedings which stay the imposition of any penalty, fine or
Lien resulting from the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof on the Financial Statements
in accordance with GAAP and (ii) after the Effective Date, as permitted by
Section 6.01(c).
(k) Regulations T, U and X. Both before and after giving effect
to the aaiPharma Acquisition, no Loan Party is or will be engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation T, U or X), and no proceeds of any Loan
will be used to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock.
(l) Nature of Business. After giving effect to the aaiPharma
Acquisition, no Loan Party is engaged in any business other than the
development, marketing, sale and distribution of pharmaceuticals and activities
reasonably related thereto.
(m) Adverse Agreements, Etc. After giving effect to the aaiPharma
Acquisition, no Loan Party is a party to any agreement or instrument, or subject
to any charter, limited liability company agreement, partnership agreement or
other corporate, partnership or limited liability company restriction or any
judgment, order, regulation, ruling or other requirement of a court or other
Governmental Authority, which has, or in the future could reasonably be expected
to have, a Material Adverse Effect.
(n) Permits, Etc. After giving effect to the aaiPharma
Acquisition, each Loan Party has, and is in compliance with, all permits,
licenses, authorizations, approvals, entitlements and accreditations required
for such Person lawfully to own, lease, manage or operate, or to acquire, each
business currently owned, leased, managed or operated, or to be acquired, by
such Person except for such non-compliance and such permits, licenses,
authorizations, entitlements and accelerations, as to which (individually or in
the aggregate) a Loan Party or its Subsidiary's failure to maintain or so comply
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. Both before and after giving effect to the
aaiPharma Acquisition, no condition exists or event has occurred which, in
itself or with the giving of notice or lapse of time or both, would result in
the suspension, revocation, impairment, forfeiture or non-renewal of any such
permit, license, authorization, approval, entitlement or accreditation, and
there is no claim that any thereof is not in full force and effect.
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(o) Properties. (i) After giving effect to the aaiPharma
Acquisition, each Loan Party has good and marketable title to, valid leasehold
interests in, or valid licenses to use, all property and assets material to its
business, free and clear of all Liens, except Permitted Liens. All such
properties and assets are in good working order and condition, ordinary wear and
tear excepted.
(ii) Schedule 5.01(o) sets forth a complete and accurate
list, as of the Effective Date (after giving effect to the aaiPharma
Acquisition), of the location, by state and street address, of all real property
owned or leased by each Loan Party and identifies the interest (fee or
leasehold) of such Loan Party therein. As of the Effective Date, each Loan Party
has valid leasehold interests in the Leases described on Schedule 5.01(o) to
which it is a party. True, complete and correct copies of each such Lease have
been delivered to the Collateral Agent prior to the Effective Date. Schedule
5.01(o) sets forth with respect to each such Lease, the commencement date,
termination date, renewal options (if any) and annual base rents. Each such
Lease is valid and enforceable in accordance with its terms in all material
respects and is in full force and effect (except to the extent that any such
Lease is terminated by a Loan Party or any of its Subsidiaries upon a
determination by such Person in its reasonable business judgment that such Lease
is no longer material and useful to the conduct of the business of the Borrower
and its Subsidiaries, taken as a whole). No consent or approval of any landlord
or other third party in connection with any such Lease is necessary for any Loan
Party to enter into and execute the Loan Documents or the aaiPharma Acquisition
Documents to which it is a party, except as set forth on Schedule 5.01(o). To
the best knowledge of any Loan Party, no other party to any such Lease is in
default of its obligations thereunder, and no Loan Party (or any other party to
any such Lease) has at any time delivered or received any notice of default
which remains uncured under any such Lease and, as of the Effective Date (after
giving effect to the aaiPharma Acquisition), no event has occurred which, with
the giving of notice or the passage of time or both, would constitute a default
under any such Lease.
(p) Full Disclosure. Each Loan Party has disclosed to the Agents
and the Lenders all agreements, instruments and corporate or other restrictions
to which it is subject, and all other matters known to it, that, individually or
in the aggregate, could result in a Material Adverse Effect. None of the other
reports, financial statements, certificates or other information furnished by or
on behalf of any Loan Party to the Agents or the Lenders in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which it was made,
not misleading; provided that, with respect to projected financial information,
each Loan Party represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time prepared. There is
no contingent liability or fact that may have a Material Adverse Effect which
has not been set forth in a footnote included in the Financial Statements or a
Schedule hereto.
(q) Operating Lease Obligations. On the Effective Date (after
giving effect to the aaiPharma Acquisition), none of the Loan Parties has any
Operating Lease Obligations other than the Operating Lease Obligations set forth
on Schedule 5.01(q).
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(r) Environmental Matters. Except as set forth on Schedule
5.0l(r), (i) the operations of each Loan Party are in material compliance with
all Environmental Laws; (ii) there has been no Release at any of the properties
owned or operated by any Loan Party or, to the best knowledge of the Loan
Parties, a predecessor in interest, or, to the best knowledge of the Loan
Parties, at any disposal or treatment facility which received Hazardous
Materials generated by any Loan Party or any predecessor in interest which could
reasonably be expected to have a Material Adverse Effect; (iii) no Environmental
Action has been asserted against any Loan Party or, to the best knowledge of the
Loan Parties, any predecessor in interest nor does any Loan Party have knowledge
or notice of any threatened or pending Environmental Action against any Loan
Party or any predecessor in interest which could reasonably be expected to have
a Material Adverse Effect; (iv) to the best knowledge of the Loan Parties, no
Environmental Actions have been asserted against any facilities that may have
received Hazardous Materials generated by any Loan Party or any predecessor in
interest which could reasonably be expected to have a Material Adverse Effect;
(v) no property now or formerly owned or operated by a Loan Party has been used
as a treatment or disposal site for any Hazardous Material other than in
compliance with Environmental Laws, except to the extent that such
non-compliance could not reasonably be expected to have a Material Adverse
Effect; (vi) no Loan Party has failed to report to the proper Governmental
Authority any Release which is required to be so reported by any Environmental
Laws which could reasonably be expected to have a Material Adverse Effect; (vii)
each Loan Party holds all licenses, permits and approvals required under any
Environmental Laws in connection with the operation of the business carried on
by it, except for such licenses, permits and approvals as to which a Loan
Party's failure to maintain or comply with could not reasonably be expected to
have a Material Adverse Effect; and (viii) no Loan Party has received any
notification pursuant to any Environmental Laws that (A) any work, repairs,
construction or Capital Expenditures are required to be made in respect as a
condition of continued compliance with any Environmental Laws, or any license,
permit or approval issued pursuant thereto or (B) any license, permit or
approval referred to above is about to be reviewed, made, subject to limitations
or conditions, revoked, withdrawn or terminated, in each case, except as could
not reasonably be expected to have a Material Adverse Effect.
(s) Insurance. Each Loan Party keeps its property adequately
insured and maintains (i) insurance to such extent and against such risks,
including fire, as is customary with companies in the same or similar
businesses, (ii) workmen's compensation insurance in the amount required by
applicable law, (iii) public liability insurance, which shall include product
liability insurance, in the amount customary with companies in the same or
similar business against claims for personal injury or death on properties
owned, occupied or controlled by it, and (iv) such other insurance as may be
required by law or as may be reasonably required by the Collateral Agent
(including, without limitation, against larceny, embezzlement or other criminal
misappropriation). Schedule 5.01(s) sets forth a list of all insurance
maintained by each Loan Party on the Effective Date (after giving effect to the
aaiPharma Acquisition).
(t) Use of Proceeds. The proceeds of the Loans shall be used to,
together with the Unrestricted Cash Proceeds, (i) finance the aaiPharma
Acquisition, (ii) pay fees and expenses in connection with the transactions
contemplated hereby and by the aaiPharma Acquisition Documents and (iii) provide
for general working capital and general corporate purposes of the Borrower.
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(u) Solvency. After giving effect to the transactions
contemplated by this Agreement, the aaiPharma Sale Order, the aaiPharma
Acquisition Documents and both before and after giving effect to each Loan, the
Borrower is, and the Loan Parties on a consolidated basis are, Solvent.
(v) Location of Bank Accounts. Schedule 5.01(v) sets forth a
complete and accurate list as of the Effective Date (after giving effect to the
aaiPharma Acquisition) of all deposit, checking and other bank accounts, all
securities and other accounts maintained with any broker dealer and all other
similar accounts maintained by each Loan Party, together with a description
thereof (i.e., the bank or broker dealer at which such deposit or other account
is maintained and the account number and the purpose thereof).
(w) Intellectual Property. Except as set forth on Schedule
5.01(w). after giving effect to the aaiPharma Acquisition, each Loan Party owns
or licenses or otherwise has the right to use all licenses, permits, patents,
patent applications, trademarks, trademark applications, service marks,
tradenames, copyrights, copyright applications, franchises, authorizations,
non-governmental licenses and permits for intellectual property rights and other
intellectual property rights that are necessary for the operation of its
business, without infringement upon or conflict with the rights of any other
Person with respect thereto, except for such infringements and conflicts which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. Set forth on Schedule 5.01(w) is a complete and
accurate list as of the Effective Date (after giving effect to the aaiPharma
Acquisition) of all such material licenses, permits, patents, patent
applications, registered trademarks, trademark applications, registered service
marks, tradenames, registered copyrights, and copyright applications of each
Loan Party. No slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by any Loan Party infringes upon or conflicts with any rights owned by
any other Person, and no claim or litigation regarding any of the foregoing is
pending or threatened, except for such infringements, conflicts, claims and
litigation which could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. To the best knowledge of each Loan
Party, no patent has been issued or is pending, no invention, device or
application exists, and no statute, law, rule, regulation, standard or code has
been issued or is pending or proposed, which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(x) Material Contracts. Set forth on Schedule 5.01(x) is a
complete and accurate list as of the Effective Date (after giving effect to the
aaiPharma Acquisition) of all Material Contracts of each Loan Party, showing the
parties and subject matter thereof and amendments and modifications thereto.
Each such Material Contract (i) is in full force and effect and is binding upon
and enforceable against each Loan Party that is a party thereto and, to the best
knowledge of such Loan Party, all other parties thereto in accordance with its
terms, (ii) has not been otherwise amended or modified (other than, after the
Effective Date, in accordance with Section 6.02(s)), and (iii) is not in default
in any material respect due to the action of any Loan Party or, to the best
knowledge of any Loan Party, any other party thereto.
(y) Holding Company and Investment Company Acts. None of the Loan
Parties is (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding
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Company Act of 1935, as amended, or (ii) an "investment company" or an
"affiliated person" or "promoter" of, or "principal underwriter" of or for, an
"investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
(z) Employee and Labor Matters. As of the Effective Date, there
is (i) no unfair labor practice complaint pending or, to the best knowledge of
any Loan Party, threatened against any Loan Party before any Governmental
Authority and no grievance or arbitration proceeding pending or, to the best
knowledge of any Loan Party, threatened against any Loan Party which arises out
of or under any collective bargaining agreement, (ii) no strike, labor dispute,
slowdown, stoppage or similar action or grievance pending or, to the best
knowledge of any Loan Party, threatened against any Loan Party or (iii) to the
best knowledge of any Loan Party, no union representation question existing with
respect to the employees of any Loan Party and no union organizing activity
taking place with respect to any of the employees of any Loan Party. After the
Effective Date, there is (i) no unfair labor practice complaint pending or, to
the best knowledge of any Loan Party, threatened against any Loan Party before
any Governmental Authority and no grievance or arbitration proceeding pending
or, to the best knowledge of any Loan Party, threatened against any Loan Party
which arises out of or under any collective bargaining agreement, (ii) no
strike, labor dispute, slowdown, stoppage or similar action or grievance pending
or, to the best knowledge of any Loan Party, threatened against any Loan Party
or (iii) to the best knowledge of any Loan Party, no union representation
question existing with respect to the employees of any Loan Party and no union
organizing activity taking place with respect to any of the employees of any
Loan Party, in each case of clauses (i), (ii) and (iii) to the extent such
matter could reasonably be expected to have a Material Adverse Effect. No Loan
Party or any of its ERISA Affiliates has incurred any liability or obligation
under the Worker Adjustment and Retraining Notification Act ("WARN") or similar
state law, which remains unpaid or unsatisfied. The hours worked and payments
made to employees of any Loan Party have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements other than violations
of immaterial obligations of any Loan Party resulting in immaterial liabilities
incurred by any Loan Party. After giving effect to the aaiPharma Acquisition,
all material payments due from any Loan Party on account of wages and employee
health and welfare insurance and other benefits have been paid or accrued as a
liability on the books of such Loan Party.
(aa) Customers and Suppliers. Except as set forth on Schedule
5.01(aa), as of the Effective Date, there exists no actual or, to the best
knowledge of any Loan Party, threatened termination, cancellation or limitation
of, or adverse modification to or change in, the business relationship between
(i) any Loan Party, on the one hand, and any customer or any group thereof, on
the other hand, whose agreements with any Loan Party are individually or in the
aggregate material to the business or operations of the Loan Parties (taken as a
whole), or (ii) any Loan Party, on the one hand, and any material supplier
thereof, on the other hand whose agreements with any Loan Party are individually
or in the aggregate material to the business or operations ofthe Loan Parties
(taken as a whole); and to the best knowledge of any Loan Party, there exists no
present state of facts or circumstances that could give rise to or result in any
such termination, cancellation, limitation, modification or change that,
individually or in the aggregate, would be material to the business or
operations of the Loan Parties (taken as a whole). After the Effective Date,
there exists no actual or, to the best knowledge of any Loan Party, threatened
termination, cancellation or limitation of, or adverse modification to or change
in, the
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business relationship between (i) any Loan Party, on the one hand, and any
customer or any group thereof, on the other hand, which could reasonably be
expected to have a Material Adverse Effect, or (ii) any Loan Party, on the one
hand, and any material supplier thereof, on the other hand which could
reasonably be expected to have a Material Adverse Effect; and to the best
knowledge of any Loan Party, there exists no present state of facts or
circumstances that could give rise to or result in any such termination,
cancellation, limitation, modification or change that could reasonably be
expected to have a Material Adverse Effect.
(bb) Name; Jurisdiction of Organization; Organizational ID
Number; Chief Place of Business; Chief Executive Office; FEIN. Schedule 5.01(bb)
sets forth a complete and accurate list as of the Effective Date (after giving
effect to the aaiPharma Acquisition) of (i) the exact legal name of each Loan
Party, (ii) the jurisdiction of organization of each Loan Party, (iii) the
organizational identification number of each Loan Party (or indicates that such
Loan Party has no organizational identification number), (iv) each place of
business of each Loan Party, (v) the chief executive office of each Loan Party
and (vi) the federal employer identification number of each Loan Party.
(cc) Tradenames. Schedule 5.01(cc) sets forth a complete and
accurate list as of the Effective Date (after giving effect to the aaiPharma
Acquisition) of all tradenames, business names or similar appellations used by
each Loan Party or any of its divisions or other business units during the past
five years.
(dd) Locations of Collateral. There is no location at which any
Loan Party has any Collateral (except for Inventory in transit) other than (i)
those locations listed on Schedule 5.01(dd), (ii) any other locations in the
United States for which such Loan Party has provided notice to the Agents in
accordance with Section 6.01(1) and, if necessary, a written subordination or
waiver or collateral access agreement in accordance with Section 6.01 (m) and
(iii) any other locations at which any Loan Party has Collateral with a fair
market value of less than $50,000, individually for any location, and $250,000
in the aggregate for all such locations. Schedule 5.01(dd) hereto contains a
true, correct and complete list, as of the Effective Date, of the legal names
and addresses of each warehouse at which Collateral of each Loan Party is
stored. None of the receipts received by any Loan Party from any warehouse
states that the goods covered thereby are to be delivered to bearer or to the
order of a named Person or to a named Person and such named Person's assigns.
(ee) Security Interests. Each Security Agreement creates in favor
of the Collateral Agent, for the benefit of the Agents and the Lenders, a legal,
valid and enforceable security interest in the Collateral secured thereby. Upon
the filing of the UCC-1 financing statements described in Section 4.01(d)(viii)
and the recording of the Collateral Assignments for Security referred to in each
Security Agreement in the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, such security interests in and
Liens on the Collateral granted thereby shall be perfected, first priority
security interests, and no further recordings or filings are or will be required
in connection with the creation, perfection or enforcement of such security
interests and Liens, other than (i) the filing of continuation statements in
accordance with applicable law, (ii) the recording of the Collateral Assignments
for Security pursuant to each Security Agreement in the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, with
respect to after-acquired U.S. patent and
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trademark applications and registrations and U.S. copyrights and (iii) the
recordation of appropriate evidence of the security interest in the appropriate
foreign registry with respect to all foreign intellectual property.
(ff) aaiPharma Acquisition Documents. (i) No party to any
aaiPharma Acquisition Document is in default on any of its obligations under
such aaiPharma Acquisition Document, (ii) all representations and warranties
made by the Borrower in the aaiPharma Acquisition Documents and in the
certificates delivered in connection therewith are true and correct as of the
date hereof and, to the best knowledge of the Borrower, all representations and
warranties made in the aaiPharma Acquisition Documents by or on behalf of the
aaiPharma Sellers, or any other party thereto other than the Borrower, are true
and correct as of the date hereof, (iii) all information with respect to the
Borrower, and the aaiPharma Acquisition and the business and aaiPharma Assets
acquired in connection with the aaiPharma Acquisition, furnished to Agents
and/or the Lenders by the Borrower or on behalf of the Borrower, were, at the
time the same were so furnished, complete and correct in all material respects,
or have been subsequently supplemented by other written information, to the
extent necessary to give Agents and Lenders a true and accurate knowledge of the
subject matter of each of them in relation to the Borrower, the aaiPharma
Acquisition, and the business and aaiPharma Assets acquired in connection with
the aaiPharma Acquisition, in all material respects, (iv) no representation,
warranty or statement made by the Borrower or, to its best knowledge, the
aaiPharma Sellers or any other party thereto other than the Borrower, at the
time they were made in any aaiPharma Acquisition Document, or any agreement,
certificate, statement or document required to be delivered pursuant to any
aaiPharma Acquisition Document contains any untrue statement of material fact or
omits to state a material fact necessary in order to make the statements
contained in such aaiPharma Acquisition Documents not misleading in light of the
circumstances in which they were made, (v) in connection with the aaiPharma
Acquisition, the Borrower is acquiring the aaiPharma Assets, and, on the date
hereof, after giving effect to the transactions contemplated by this Agreement,
by the aaiPharma Acquisition Agreement and by the other aaiPharma Acquisition
Documents, the aaiPharma Sale Order and Loan Documents, will have good title to
such aaiPharma Assets free and clear of all Liens other than Permitted Liens,
and (vi) after giving effect to the aaiPharma Acquisition, the Loan Parties
shall have good and marketable title to or valid licenses to use all of the
assets and properties material to the businesses of the aaiPharma Sellers and
their respective Subsidiaries, as in effect immediately prior to the aaiPharma
Acquisition (including, without limitation, all property leases).
(gg) Consummation of the aaiPharma Acquisition. (i) The Borrower
has delivered to the Collateral Agent true, correct and complete copies of the
aaiPharma Acquisition Documents, including all schedules and exhibits thereto,
(ii) each aaiPharma Acquisition Document sets forth the entire agreement and
understanding of the parties thereto relating to the subject matter thereof, and
there are no other agreements, arrangements or understandings, written or oral,
relating to the matters covered thereby, (iii) no aaiPharma Acquisition Document
has been amended or otherwise modified without the prior written consent of the
Collateral Agent and the Required Lenders, (iv) the execution, delivery and
performance of each of the aaiPharma Acquisition Documents has been duly
authorized by all necessary action on the part of each such Person, (v) the
aaiPharma Acquisition has been effected in accordance with, and all actions
taken by the Loan Parties pursuant to or in furtherance of the aaiPharma
Acquisition have been taken in compliance with, the terms of the
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aaiPharma Sale Order, the aaiPharma Acquisition Documents and all applicable law
(including, without limitation, the Bankruptcy Code), (vi) at the time of
consummation of the aaiPharma Acquisition, there does not exist any judgment,
order or injunction prohibiting or imposing any material adverse condition upon
the consummation of the aaiPharma Acquisition, (vii) at the time of consummation
thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all Government Authorities required in order to
consummate the aaiPharma Acquisition shall have been obtained, given, filed or
taken and shall be in full force and effect, (viii) the Loan Parties did not
incur or assume any liabilities or obligations pursuant to or in connection with
the aaiPharma Acquisition other than the Assumed Liabilities (as defined in the
aaiPharma Acquisition Agreement), (ix) each aaiPharma Acquisition Document is
the legal, valid and binding obligation of the parties thereto, enforceable
against such parties in accordance with its terms, and (x) all conditions
precedent to the aaiPharma Acquisition Agreement and each of the other aaiPharma
Acquisition Documents have been fulfilled or (with the prior written consent of
the Collateral Agent and the Required Lenders) waived.
(hh) FDA Compliance; Notices, etc. Except as set forth in
Schedule 5.01(hh) hereto, each Loan Party and each of its Subsidiaries are, and
the products sold by each Loan Party and each of its Subsidiaries are, in
compliance with all current applicable statutes, rules, regulations, guidelines,
policies, orders or directives administered or issued by the FDA and the Food
and Drug Act, except (i) where failure to so comply could not reasonably be
expected to have a Material Adverse Effect, or (ii) with respect to any FDA Form
483-s or warning letters issued by the FDA or pursuant to the Food and Drug Act
(the foregoing, together with any such notices as any Loan Party or any of its
Subsidiaries may at any time hereafter receive, collectively, the "FDA
Notices"), so long as such Person is diligently pursuing corrective action with
respect to the same.
(ii) Schedules. All of the information which is required to be
scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate and does not omit to state any information material
thereto.
(jj) Representations and Warranties in Documents; No Default. All
representations and warranties set forth in this Agreement and the other Loan
Documents are true and correct in all respects at the time as of which such
representations were made and on the Effective Date. No Event of Default has
occurred and is continuing and no condition exists which constitutes a Default
or an Event of Default.
ARTICLE VI
COVENANTS OF THE LOAN PARTIES
Section 6.01 Affirmative Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party will,
unless the Required Lenders shall otherwise consent in writing:
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(a) Reporting Requirements. Furnish to each Agent and each
Lender:
(i) as soon as available and in any event within 30 days
after the end of each fiscal quarter of the Borrower and its Subsidiaries
commencing with the first fiscal quarter of the Borrower and its Subsidiaries
ending after the Effective Date internally-prepared consolidated and
consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating statements
of cash flows of the Borrower and its Subsidiaries as at the end of such
quarter, and for the period commencing at the end of the immediately preceding
Fiscal Year and ending with the end of such quarter, setting forth in each case
in comparative form the figures for the corresponding date or period of the
immediately preceding Fiscal Year, all in reasonable detail (and to include, in
the case of the consolidated statements of stockholders' equity and cash flows,
revenue and volume data for any products acquired and/or marketed by a Loan
Party or any of its Subsidiaries to the extent that such product accounts for 5%
or more of net revenues of the Borrower and its Subsidiaries on a consolidated
basis) by product line (to the extent available and in any event including
profit and loss information by product line to the gross margin level) and
reasonably acceptable to the Collateral Agent and certified by an Authorized
Officer of the Borrower as fairly presenting, in all material respects, the
financial position of the Borrower and its Subsidiaries as of the end of such
quarter and the results of operations and cash flows of the Borrower and its
Subsidiaries for such quarter, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements of the
Borrower and its Subsidiaries furnished to the Agents and the Lenders, subject
to the absence of footnotes and normal year-end adjustments;
(ii) as soon as available, and in any event within 90 days
after the end of each Fiscal Year of the Borrower and its Subsidiaries,
commencing with Fiscal Year ending December 31, 2005, consolidated and
consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating statements
of cash flows of the Borrower and its Subsidiaries as at the end of such Fiscal
Year, setting forth in each case in comparative form the figures for the
corresponding date or period set forth in the financial statements for the
immediately preceding Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP, and accompanied by a report and an unqualified opinion,
prepared in accordance with generally accepted auditing standards, of
independent certified public accountants of recognized standing selected by the
Borrower and reasonably satisfactory to the Collateral Agent (which opinion
shall be without (A) a "going concern" or like qualification or exception, (B)
any qualification or exception as to the scope of such audit, or (C) any
qualification which relates to the treatment or classification of any item and
which, as a condition to the removal of such qualification, would require an
adjustment to such item, the effect of which would be to cause any noncompliance
with the provisions of Section 6.03), together with a written statement of such
accountants (1) to the effect that, in making the examination necessary for
their certification of such financial statements, they have not obtained any
knowledge of the existence of an Event of Default or a Default relating to
Section 6.03, and (2) if such accountants shall have obtained any knowledge of
the existence of an Event of Default or such Default, describing the nature
thereof;
(iii) as soon as available, and in any event within 30 days
after the end of each fiscal month of the Borrower and its Subsidiaries
commencing with the first
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fiscal month of the Borrower and its Subsidiaries ending after the Effective
Date, internally prepared consolidated and consolidating balance sheets,
consolidated and consolidating statements of operations and retained earnings
and consolidated and consolidating statements of cash flows as at the end of
such fiscal month, and for the period commencing at the end of the immediately
preceding Fiscal Year and ending with the end of such fiscal month, all in
reasonable detail and certified by an Authorized Officer of the Borrower as
fairly presenting, in all material respects, the financial position of the
Borrower and its Subsidiaries as at the end of such fiscal month and the results
of operations, retained earnings and cash flows of the Borrower and its
Subsidiaries for such fiscal month, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements furnished
to the Agents and the Lenders, subject to the absence of footnotes and normal
year-end adjustments;
(iv) simultaneously with the delivery of the financial
statements of the Borrower and its Subsidiaries required by clauses (i) and (ii)
of this Section 6.01(a), a certificate of an Authorized Officer of the Borrower
(A) stating that such Authorized Officer has reviewed the provisions of this
Agreement and the other Loan Documents and has made or caused to be made under
his or her supervision a review of the condition and operations of the Borrower
and its Subsidiaries during the period covered by such financial statements with
a view to determining whether the Borrower and its Subsidiaries were in
compliance with all of the provisions of this Agreement and such Loan Documents
at the times such compliance is required hereby and thereby, and that such
review has not disclosed, and such Authorized Officer has no knowledge of, the
existence during such period of an Event of Default or Default or, if an Event
of Default or Default existed, describing the nature and period of existence
thereof and the action which the Borrower and its Subsidiaries propose to take
or have taken with respect thereto and (B) attaching a schedule showing the
calculations of the Loan to Value Ratio covenant specified in Section 6.03;
(v) (A) as soon as available and in any event within 30 days
after the end of each fiscal month of the Borrower and its Subsidiaries
commencing with the first fiscal month of the Borrower and its Subsidiaries
ending after the Effective Date, reports in form and detail satisfactory to the
Collateral Agent and certified by an Authorized Officer of the Borrower as being
accurate and complete (1) listing all Accounts Receivable of the Loan Parties as
of such day (including an aging thereof) and such other information with respect
to such Accounts Receivable as the Collateral Agent may reasonably request and
(2) listing all accounts payable of the Loan Parties as of each such day
(including an aging thereof) and such other information with respect to such
accounts payable as the Collateral Agent may reasonably request, and
(B) as soon as available and in any event within 30
days after the end of each fiscal quarter of the Borrower and its Subsidiaries
commencing with the first fiscal quarter of the Borrower and its Subsidiaries
ending after the Effective Date, reports in form and detail satisfactory to the
Collateral Agent and certified by an Authorized Officer of the Borrower as being
accurate and complete listing all Inventory of the Loan Parties as of each such
day, and containing a breakdown of such Inventory in a form reasonably
satisfactory to the Collateral Agent and such other information with respect to
such Inventory as the Collateral Agent may reasonably request;
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(vi) (A) as soon as available and in any event not later
than 30 days prior to the end of each Fiscal Year, financial projections,
supplementing and superseding the financial projections referred to in Section
5.01(g)(ii)(A), prepared on a monthly basis and otherwise in form and substance
reasonably satisfactory to the Collateral Agent, for the immediately succeeding
Fiscal Year for the Borrower and its Subsidiaries, and (B) as soon as available
and in any event not later than 30 days prior to the end of each fiscal quarter,
financial projections, supplementing and superseding the financial projections
referred to in Section 5.01(g)(ii)(B), prepared on a monthly basis and otherwise
in form and substance reasonably satisfactory to the Collateral Agent, for each
remaining quarterly period in such Fiscal Year, all such financial projections
to be reasonable, to be prepared on a reasonable basis and in good faith, and to
be based on assumptions believed by the Borrower to be reasonable at the time
made and from the best information then available to the Borrower;
(vii) promptly after submission to any Governmental
Authority (other than the FDA), to the fullest extent permitted by applicable
law, all documents and information furnished to such Governmental Authority
(other than to the extent that provision of such documents or information to the
Agents and the Lenders would invalidate any privileged status granted by such
Governmental Authority with respect to such documents or information, in which
case, the Loan Parties shall furnish a summary of the documents or information
so provided that does not invalidate such privilege) in connection with any
investigation of any Loan Party other than routine inquiries by such
Governmental Authority;
(viii) promptly, and in any event within 3 Business Days
after the occurrence of an Event of Default or Default or the occurrence of any
event or development that could reasonably be expected to have a Material
Adverse Effect, the written statement of an Authorized Officer of the Borrower
setting forth the details of such Event of Default or Default or other such
event or development and the action which the affected Loan Party proposes to
take with respect thereto;
(ix) promptly, and in any event within 5 Business Days after
any Loan Party knows or has reason to know of (A) any material violation, claim,
complaint, charge or receipt of any material violation, claim, complaint or
charge of or under the Food and Drug Act or any material applicable statutes,
rules, regulations, guidelines, policies orders or directives administered or
issued by the FDA, including without limitation receipt by any Loan Party or any
of its Subsidiaries of any Product Recall Notice, or any other FDA Notice or
amendment to a previous Product Recall Notice or FDA Notice or (B) any other
investigation by the FDA of any Loan Party (other than any routine inquiry), in
each case, a statement of an Authorized Officer of the Borrower setting forth
the details of such occurrence and the actions, if any, which such Loan Party
proposes to take with respect thereto, and in the case of a written document
evidencing such event, together with a true, correct and complete copy of such
Product Recall Notice, FDA Notice or amendment or other notice, as the case may
be, and in the case of clause (B), to the fullest extent permitted by applicable
law, all documents and information furnished to the FDA (other than to the
extent that provision of such documents or information to the Agents and the
Lenders would invalidate any privileged status granted by the FDA with respect
to such documents or information, in which case, the Loan Parties shall furnish
a summary of the documents or information so provided that does not invalidate
such privilege) in connection with any such investigation;
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(x) (A) promptly and in any event within 10 Business Days
after any Loan Party or any ERISA Affiliate thereof knows or has reason to know
that (1) any Reportable Event with respect to any Employee Plan has occurred,
(2) any other Termination Event with respect to any Employee Plan has occurred,
or (3) an accumulated funding deficiency has been incurred or an application has
been made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including installment payments) or an extension of any
amortization period under Section 412 of the Internal Revenue Code with respect
to an Employee Plan, a statement of an Authorized Officer of the Borrower
setting forth the details of such occurrence and the action, if any, which such
Loan Party or such ERISA Affiliate proposes to take with respect thereto, (B)
promptly and in any event within 10 Business Days after receipt thereof by any
Loan Party or any ERISA Affiliate thereof from the PBGC, copies of each notice
received by any Loan Party or any ERISA Affiliate thereof of the PBGC's
intention to terminate any Plan or to have a trustee appointed to administer any
Plan, (C) promptly and in any event within 10 Business Days after the filing
thereof with the Internal Revenue Service if requested by any Agent, copies of
each Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Employee Plan and Multiemployer Plan, (D) promptly and in
any event within 10 Business Days after any Loan Party or any ERISA Affiliate
thereof knows or has reason to know that a required installment within the
meaning of Section 412 of the Internal Revenue Code has not been made when due
with respect to an Employee Plan, (E) promptly and in any event within 10
Business Days after receipt thereof by any Loan Party or any ERISA Affiliate
thereof from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each
notice received by any Loan Party or any ERISA Affiliate thereof concerning the
imposition or amount of withdrawal liability under Section 4202 of ERISA or
indicating that such Multiemployer Plan may enter reorganization status under
Section 4241 of ERISA, and (F) promptly and in any event within 10 Business Days
after any Loan Party or any ERISA Affiliate thereof sends notice of a plant
closing or mass layoff (as defined in WARN) to employees, copies of each such
notice sent by such Loan Party or such ERISA Affiliate thereof;
(xi) promptly after the commencement thereof but in any
event not later than 5 Business Days after service of process with respect
thereto on, or the obtaining of knowledge thereof by, any Loan Party, notice of
each action, suit or proceeding before any court or other Governmental Authority
or other regulatory body or any arbitrator which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect;
(xii) promptly, and in any event within (A) 5 Business Days
after execution, receipt or delivery thereof, copies of any material notices
that any Loan Party executes or receives in connection with any Material
Contract (other than any aaiPharma Acquisition Document), (B) except as
specified in clause (C) below, 3 Business Days after execution, receipt or
delivery thereof, copies of any documents, correspondence or notices that any
Loan Party executes or receives in connection with any aaiPharma Acquisition
Document and (C) 5 Business Days after the execution, receipt or delivery by any
Loan Party of any reports or statements to or from the aaiPharma Sellers,
including, without limitation, the Lifecycle Product Statement, New Product
Statement, Closing Date Inventory Statement and the Post-Signing Shipments
Statement (as such terms are defined in the aaiPharma Acquisition Agreement),
and any financial statements or other financial information delivered to the
aaiPharma Sellers under Section 8.18 of the aaiPharma Acquisition Agreement or
otherwise;
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(xiii) promptly, and in any event within 5 Business Days
after execution, receipt or delivery thereof, copies of any material notices
that any Loan Party executes or receives in connection with the sale or other
Disposition of the Capital Stock (other than pursuant to a stock option plan or
stock incentive plan approved by the Board of Directors of the Borrower) of, or
all or substantially all of the assets of, any Loan Party;
(xiv) promptly after the sending or filing thereof, copies
of all statements, reports and other information any Loan Party sends to any
holders of its Indebtedness (other than intercompany Indebtedness, Capitalized
Lease Obligations and purchase money Indebtedness) or its securities or files
with the SEC or any national (domestic or foreign) securities exchange;
(xv) 15 days after the delivery of the financial statements
of the Borrower and its Subsidiaries required by clause (iii) of this Section
6.01(a), a certificate of an Authorized Officer of the Borrower (A) setting
forth the product-by-product revenue results for the month covered by such
financial statements and (B) certifying as to and attaching a schedule showing
the calculation of the Annualized Demand Revenues for such month covered by such
financial statements;
(xvi) promptly upon receipt thereof, copies of all financial
reports (including, without limitation, management letters), if any, submitted
to any Loan Party by its auditors in connection with any annual or interim audit
of the books thereof; and
(xvii) promptly upon request, such other information
concerning the condition or operations, financial or otherwise, of any Loan
Party as any Agent may from time to time may reasonably request.
(b) Additional Guaranties and Collateral Security. Cause:
(i) each Domestic Subsidiary of any Loan Party not in
existence on the Effective Date, to execute and deliver to the Collateral Agent
promptly and in any event within 10 Business Days after the formation,
acquisition or change in status thereof (A) a Guaranty guaranteeing the
Obligations, (B) a Security Agreement, (C) if such Subsidiary has any Domestic
Subsidiaries or any first-tier Foreign Subsidiaries, a Pledge Agreement together
with (x) certificates evidencing all (or, in the case of a first-tier Foreign
Subsidiary of such Subsidiary, 65%) (or such greater percentage that, due to a
change in applicable law after the Effective Date, (1) could not reasonably be
expected to cause the undistributed earnings of such Foreign Subsidiary as
determined for United States federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary's United States Borrower or (2) could
not reasonably be expected to cause any material adverse tax consequences) of
the issued and outstanding Capital Stock entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding
Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) of the Capital Stock of any Person owned by such Subsidiary, (y)
undated stock powers executed in blank with signature guaranteed, and (z) such
opinion of counsel and such approving certificate of such Subsidiary as the
Collateral Agent may reasonably request in respect of complying with any legend
on any such certificate or any other matter relating to such shares, (D) one or
more Mortgages creating on any real property of
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such Subsidiary (which, in the case of a leasehold interest in real property,
shall be on a commercially reasonable efforts basis), a perfected, first
priority Lien on such real property, a Title Insurance Policy covering such real
property, a current ALTA survey thereof and a surveyor's certificate, each in
form and substance satisfactory to the Collateral Agent, together with such
other agreements, instruments and documents as the Collateral Agent may require
whether comparable to the documents required under Section 6.01(o) or otherwise,
and (E) such other agreements, instruments, approvals, legal opinions or other
documents reasonably requested by the Collateral Agent in order to create,
perfect, establish the first priority of or otherwise protect any Lien purported
to be covered by any such Security Agreement, Pledge Agreement or Mortgage or
otherwise to effect the intent that such Subsidiary shall become bound by all of
the terms, covenants and agreements contained in the Loan Documents and that
substantially all property and assets of such Subsidiary shall become Collateral
for the Obligations; and
(ii) each owner of the Capital Stock of any Domestic
Subsidiary or any first-tier Foreign Subsidiary not in existence on the
Effective Date to execute and deliver promptly and in any event within 10
Business Days after the formation or acquisition of such Subsidiary a Pledge
Agreement, together with (A) certificates evidencing all (or, in the case of a
first-tier Foreign Subsidiary of such Subsidiary, 65%) (or such greater
percentage that, due to a change in applicable law after the Effective Date, (1)
could not reasonably be expected to cause the undistributed earnings of such
Foreign Subsidiary as determined for United States federal income tax purposes
to be treated as a deemed dividend to such Foreign Subsidiary's United States
Borrower or (2) could not reasonably be expected to cause any material adverse
tax consequences) of the issued and outstanding Capital Stock entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
and outstanding Capital Stock not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) of the Capital Stock of such Subsidiary, (B) undated
stock powers or other appropriate instruments of assignment executed in blank
with signature guaranteed, (C) such opinion of counsel and such approving
certificate of such Subsidiary as the Collateral Agent may reasonably request in
respect of complying with any legend on any such certificate or any other matter
relating to such shares and (D) such other agreements, instruments, approvals,
legal opinions or other documents reasonably requested by the Collateral Agent
relating to such Capital Stock.
(iii) Notwithstanding anything in this Section 6.01(b) to
the contrary, (A) no Non-Loan Party Permitted Acquisition Subsidiary shall be
required to pledge to the Collateral Agent any Non-Loan Party Permitted
Acquisition Assets in accordance with clause (e) of the definition of the term
"Permitted Acquisition", (B) no Loan Party or Non-Loan Party Permitted
Acquisition Subsidiary shall be required to pledge to the Collateral Agent any
Permitted Acquisition Capital Stock in accordance with clause (e) of the
definition of the term "Permitted Acquisition", and (C) no Subsidiary of a Loan
Party that is formed solely to acquire Non-Loan Party Permitted Acquisition
Assets in connection with a contemplated Permitted Acquisition and that is
designated in a writing to the Collateral Agent as a "Non-Loan Party Permitted
Acquisition Subsidiary" shall be required to deliver copies of the agreements,
instruments, appraisals, legal opinions or other documents specified in Section
6.01(b)(i).
(c) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations
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(including, without limitation, the FDA Regulations and the HHS Regulations),
orders, judgments and awards (including any settlement of any claim that, if
breached, could give rise to any of the foregoing), other than any
non-compliance for which no penalty or fine in excess of $100,000 is payable, or
which is being contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from such non-compliance and
with respect to which adequate reserves have been set aside for the payment of
any penalty or fine arising therefrom in accordance with GAAP.
(d) Preservation of Existence, Etc. Maintain and preserve, and
cause each of its Subsidiaries to (i) maintain and preserve, (A) its existence
and (B) its other rights and privileges other than such rights and privileges
the failure to so maintain and preserve could not reasonably be expect to have a
Material Adverse Effect, and (ii) become or remain, and cause each of its
Subsidiaries to become or remain, duly qualified and in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary
other than in such jurisdictions where the failure to be so qualified and in
good standing could not reasonably be expected to have a Material Adverse
Effect.
(e) Keeping of Records and Books of Account. Keep, and cause each
of its Subsidiaries to keep, adequate records and books of account, with
complete entries made to permit the preparation of financial statements in
accordance with GAAP.
(f) Inspection Rights. Permit, and cause each of its Subsidiaries
to permit, the agents and representatives of any Agent at any time and from time
to time during normal business hours, and, so long as no Default or Event of
Default shall have occurred and be continuing, upon reasonable prior notice and
in a manner that does not materially interfere with the business or operations
of the Loan Parties, to examine and make copies of and abstracts from its
records and books of account, to visit and inspect its properties, to verify
materials, leases, notes, accounts receivable, deposit accounts and its other
assets, to conduct audits, physical counts, valuations, appraisals, Phase I
Environmental Site Assessments (and, if reasonably requested by the Collateral
Agent based upon the results of any such Phase I Environmental Site Assessment,
a Phase II Environmental Site Assessment) or examinations and to discuss its
affairs, finances and accounts with any of its directors, officers, managerial
employees, independent accountants or any of its other representatives. In
furtherance of the foregoing, each Loan Party hereby authorizes its independent
accountants, and the independent accountants of each of its Subsidiaries, to
discuss the affairs, finances and accounts of such Person (independently or
together with representatives of such Person) with the agents and
representatives of any Agent in accordance with this Section 6.01(f).
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
which are material to its business in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to
comply, at all times with the provisions of all leases material to its business
to which it is a party as lessee or under which it occupies property, so as to
prevent any loss or forfeiture thereof or thereunder.
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(h) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks as is required by any Governmental
Authority having jurisdiction with respect thereto or as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and in any event in amount, adequacy and scope reasonably
satisfactory to the Collateral Agent. All policies covering the Collateral are
to be made payable to the Collateral Agent for the benefit of the Agents and the
Lenders, as its interests may appear, in case of loss, under a standard
non-contributory "lender" or "secured party" clause and are to contain such
other provisions as the Collateral Agent may reasonably require to fully protect
the Lenders' interest in the Collateral and to any payments to be made under
such policies. All certificates of insurance are to be delivered to the
Collateral Agent within 10 Business Days after receipt thereof and the policies
are to be premium prepaid, with the loss payable and additional insured
endorsement in favor of the Collateral Agent and such other Persons as the
Collateral Agent may designate from time to time, and shall provide for not less
than 30 days' prior written notice to the Collateral Agent of the exercise of
any right of cancellation. If any Loan Party or any of its Subsidiaries fails to
maintain such insurance, the Collateral Agent may arrange for such insurance,
but at the Borrower's expense and without any responsibility on the Collateral
Agent's part for obtaining the insurance, the solvency of the insurance
companies, the adequacy of the coverage, or the collection of claims. Upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent shall have the sole right, in the name of the Lenders, any Loan Party and
its Subsidiaries, to file claims under any insurance policies, to receive,
receipt and give acquittance for any payments that may be payable thereunder,
and to execute any and all endorsements, receipts, releases, assignments,
reassignments or other documents that may be necessary to effect the collection,
compromise or settlement of any claims under any such insurance policies.
(i) Obtaining of Permits, Etc. Obtain, maintain and preserve, and
cause each of its Subsidiaries to obtain, maintain and preserve, and take all
necessary action to timely renew, all permits, licenses, authorizations,
approvals, entitlements and accreditations which are necessary in the proper
conduct of its business.
(j) Environmental. (i) Keep any property either owned or operated
by it or any of its Subsidiaries free of any Environmental Liens; (ii) comply,
and cause each of its Subsidiaries to comply, in all material respects with
Environmental Laws; (iii) provide the Agents written notice within 5 Business
Days of any notice of or, knowledge of a Release of a Hazardous Material in
excess of any reportable quantity from or onto property at any time owned or
operated by it or any of its Subsidiaries and take any Remedial Actions required
to ▇▇▇▇▇ said Release; and (iv) provide the Agents with written notice promptly
and in any event within 10 Business Days of the receipt of any of the following:
(A) notice that an Environmental Lien has been filed against any property of any
Loan Party or any of its Subsidiaries; (B) commencement of any Environmental
Action or notice that an Environmental Action will be filed against any Loan
Party or any of its Subsidiaries; and (C) notice of a violation, citation or
other administrative order which could have a Material Adverse Effect.
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(k) Further Assurances. Take such action and execute, acknowledge
and deliver, and cause each of its Subsidiaries to take such action and execute,
acknowledge and deliver, at its sole cost and expense, such agreements,
instruments or other documents as any Agent may reasonably require from time to
time in order (i) to carry out more effectively the purposes of this Agreement
and the other Loan Documents, (ii) to subject to valid and perfected first
priority Liens any of the Collateral or any other property of any Loan Party and
its Subsidiaries (to the extent consistent with the terms of this Agreement and
the other Loan Documents), (iii) to establish and maintain the validity and
effectiveness of any of the Loan Documents and the validity, perfection and
priority of the Liens intended to be created thereby, and (iv) to better assure,
convey, grant, assign, transfer and confirm unto each Agent and each Lender the
rights now or hereafter intended to be granted to it under this Agreement or any
other Loan Document. In furtherance of the foregoing, to the maximum extent
permitted by applicable law, each Loan Party (i) authorizes each Agent to
execute any such agreements, instruments or other documents in such Loan Party's
name and to file such agreements, instruments or other documents in any
appropriate filing office, (ii) authorizes each Agent to file any financing
statement required hereunder or under any other Loan Document, and any
continuation statement or amendment with respect thereto, in any appropriate
filing office without the signature of such Loan Party, and (iii) ratifies the
filing of any financing statement, and any continuation statement or amendment
with respect thereto, filed without the signature of such Loan Party prior to
the date hereof.
(l) Change in Collateral; Collateral Records. (i) Give the
Collateral Agent not less than 10 days' prior written notice of any change in
the location of any Collateral (other than Collateral in transit), other than
with respect to (A) locations set forth on Schedule 5.01(dd) and (B) locations
of any Collateral with an aggregate fair market value of less than $50,000,
individually for any location, and $250,000, for all such locations, (ii) advise
the Collateral Agent promptly, in sufficient detail, of any material adverse
change relating to the type, quantity or quality of the Collateral or the Lien
granted thereon and (iii) execute and deliver, and cause each of its
Subsidiaries to execute and deliver, to the Collateral Agent for the benefit of
the Agents and the Lenders from time to time, solely for the Collateral Agent's
convenience in maintaining a record of Collateral, such written statements and
schedules as the Collateral Agent may reasonably require, designating,
identifying or describing the Collateral.
(m) Landlord Waivers; Collateral Access Agreements. (i) At any
time any Collateral with a book value in excess of $250,000 (when aggregated
with all other Collateral at the same location) is located on any real property
of a Loan Party (whether such real property is now owned or is acquired after
the Effective Date) which is not owned by a Loan Party, use commercially
reasonable efforts to obtain written subordinations or waivers, in form and
substance reasonably satisfactory to the Collateral Agent, of all present and
future Liens to which the owner or lessor of such premises may be entitled to
assert against the Collateral (it being understood that in the event the Loan
Parties are unable to obtain any such written subordination or waiver the
Administrative Agent shall, at the direction of the Collateral Agent using its
reasonable discretion, establish such reserves against Availability as the
Collateral Agent deems necessary with respect to any such Collateral); provided,
however, that the Loan Parties shall be permitted to maintain Collateral with a
book value in excess of $250,000 but not in excess of $1,500,000 (when
aggregated with all other Collateral at the same location) at any one location
in the United States which is not owned by a Loan Party (other than the location
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specified in Section 6.01(r)(ii)) without using commercially reasonable efforts
to obtain such written subordinations or waivers; and
(ii) At any time any Collateral with a book value in excess
of $250,000 (when aggregated with all other Collateral at the same location) is
located on any premises not owned by a Loan Party, use commercially reasonable
efforts to, obtain written access agreements, in form and substance reasonably
satisfactory to the Collateral Agent, providing access to Collateral located on
such premises in order to remove such Collateral from such premises during an
Event of Default (it being understood that in the event the Loan Parties are
unable to obtain any such written access agreements, the Administrative Agent
shall, at the direction of the Collateral Agent using its reasonable discretion,
establish such reserves against Availability as the Collateral Agent deems
necessary with respect to any such Collateral); provided, however, that the Loan
Parties shall be permitted to maintain Collateral with a book value in excess of
$250,000 but not in excess of $1,500,000 (when aggregated with all other
Collateral at the same location) at any one location in the United States which
is not owned by a Loan Party (other than the locations specified in Section
6.01(r)(iii)) without using commercially reasonable efforts to obtain such
written access agreements.
(n) Subordination. Cause all Indebtedness and other obligations
now or hereafter owed by it to any of its Affiliates, to be subordinated in
right of payment and security to the Indebtedness and other Obligations owing to
the Agents and the Lenders in accordance with a subordination agreement in form
and substance satisfactory to the Agents.
(o) After Acquired Real Property. Subject to Section
6.01(b)(iii), upon the acquisition by it after the date hereof of any interest
(whether fee or leasehold) in any real property (wherever located) (each such
interest being an "After Acquired Property") (x) with a Current Value (as
defined below) in excess of $300,000 in the case of a fee interest, or (y)
requiring the payment of annual rent exceeding in the aggregate $250,000 in the
case of leasehold interest, promptly so notify the Collateral Agent, setting
forth with specificity a description of the interest acquired, the location of
the real property, any structures or improvements thereon and, in the case of a
fee interest in After Acquired Property, either an appraisal or such Loan
Party's good-faith estimate of the current value of such After Acquired Property
(for purposes of this Section, the "Current Value"). The Collateral Agent shall
notify such Loan Party whether it intends to require a Mortgage and the other
documents referred to below or in the case of leasehold, a leasehold Mortgage or
landlord's waiver (pursuant to Section 6.01(m)). Promptly, but in any event,
within 30 days of receipt of such notice requesting a Mortgage, the Loan Party
which has acquired such After Acquired Property shall furnish to the Collateral
Agent the following, each in form and substance satisfactory to the Collateral
Agent: (i) a Mortgage with respect to such After Acquired Property and related
assets located at the After Acquired Property (which, in the case of a leasehold
interest in After Acquired Property, shall be on a commercially reasonable
efforts basis), each duly executed by such Person and in recordable form; (ii)
evidence of the recording of the Mortgage referred to in clause (i) above in
such office or offices as may be necessary or, in the opinion of the Collateral
Agent, desirable to create and perfect a valid and enforceable first priority
lien on the property purported to be covered thereby or to otherwise protect the
rights of the Agents and the Lenders thereunder, (iii) a Title Insurance Policy,
(iv) a survey of such After Acquired Property, certified to the Collateral Agent
and to the issuer of the Title Insurance Policy by a licensed professional
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surveyor reasonably satisfactory to the Collateral Agent, (v) Phase I
Environmental Site Assessments with respect to such After Acquired Property,
certified to the Collateral Agent by a company reasonably satisfactory to the
Collateral Agent, (vi) in the case of a leasehold interest, a certified copy of
the lease between the landlord and such Person with respect to such real
property in which such Person has a leasehold interest, and (vii) such other
documents or instruments (including opinions of counsel) as the Collateral Agent
may reasonably require. The Borrower shall pay all fees and expenses, including
reasonable attorneys' fees and expenses, and all title insurance charges and
premiums, in connection with each Loan Party's obligations under this Section
6.01 (o).
(p) Fiscal Year. Cause the Fiscal Year of the Borrower and its
Subsidiaries to end on December 31st of each calendar year unless the Agents
consent to a change in such Fiscal Year (and appropriate related changes to this
Agreement).
(q) Payments Current. Make (i) all royalty and other payments due
and payable under each Licensing Agreement prior to the time when the other
party thereto may terminate any such Licensing Agreement and (ii) all deferred
payments when due in connection with any Acquisition, in each case, except for
payments contested in good faith and with respect to which adequate reserves
have been set aside for the payment thereof in accordance with GAAP.
(r) Post-Closing Deliveries.
(i) Within 90 days following the Effective Date, deliver to
the Collateral Agent and each Lender an opening consolidated balance sheet for
the Borrower and its Subsidiaries as at the closing date of the aaiPharma
Acquisition, accompanied by a report and an unqualified opinion, prepared in
accordance with generally accepted auditing standards, of independent certified
public accountants of recognized standing selected by the Borrower and
satisfactory to the Collateral Agent;
(ii) within 30 days following the Effective Date, deliver to
the Collateral Agent a landlord waiver, in form and substance satisfactory to
the Collateral Agent executed by each landlord and the applicable Loan Party
with respect to the Facility located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇;
(iii) within 30 days following the Effective Date, deliver
to the Collateral Agent, a collateral access agreement, in form and substance
satisfactory to the Collateral Agent, executed by the following third parties
and the applicable Loan Parties with respect to the Inventory: (A) maintained by
Special Pharmaceutical Services, Inc., located at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, (B) maintained by JB Laboratories, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (C) maintained by Accucaps Industries Limited,
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, (D)
maintained by Quantofill Inc., located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ #▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, (E) maintained by Banner Pharmacaps, located at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (F) maintained by American
Health Packaging, ▇▇▇▇-▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and (G)
maintained by Mikart, located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇;
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(iv) if the Indianapolis Facility Disposition does not occur
within 180 days following the Effective Date, on the 180th day following the
Effective Date, deliver to the Collateral Agent, the following agreements and
documents: (A) a Mortgage duly executed by the applicable Loan Party, with
respect to the Indianapolis Facility, (B) if requested by the Collateral Agent,
a Title Insurance Policy with respect to such Mortgage, dated as of recent date
of such Mortgage, (C) if requested by the Collateral Agent, a survey of the
Indianapolis Facility, in form and substance satisfactory to the Collateral
Agent, certified to the Collateral Agent and to the issuer of such Title
Insurance Policy, and (D) such other documents, agreements and instruments as
the Collateral Agent may reasonably request in order to receive a valid and
perfected lien on the Indianapolis Facility;
(v) within 30 days following the Effective Date, deliver to
the Collateral Agent such depository account, blocked account, lockbox account
and similar agreements and other documents, each in form and substance
satisfactory to the Agents, as are required pursuant to Section 7.01;
(vi) within 30 days following the Effective Date, deliver to
the Collateral Agent a securities account control agreement, with respect to
Account Number 886-03298 maintained at Silicon Valley Bank in the name of the
Borrower, in form and substance satisfactory to the Agents; and
(vii) within 30 days following the Effective Date, deliver
to the Collateral Agent, a Pledge Amendment (as defined in the Pledge
Agreement), executed by the Borrower, in favor of the Collateral Agent, for the
benefit of the Agents and the Lenders, providing for a pledge of all of the
Capital Stock of Xanodyne Acquisition, LLC, to the extent such Capital Stock was
not pledged to the Collateral Agent on the Effective Date (the date on which
such condition is satisfied, the "Xanodyne Acquisition Trigger Date").
Section 6.02 Negative Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall
not, unless the Required Lenders shall otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien upon or with respect to any of its properties, whether now owned or
hereafter acquired; file or suffer to exist under the Uniform Commercial Code or
any similar law or statute of any jurisdiction, a financing statement (or the
equivalent thereof) that names it or any of its Subsidiaries as debtor; sign or
suffer to exist any security agreement authorizing any secured party thereunder
to file such financing statement (or the equivalent thereof); sell any of its
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable) with recourse to it or any of its Subsidiaries or assign or
otherwise transfer, or permit any of its Subsidiaries to assign or otherwise
transfer, any account or other right to receive income; other than, as to all of
the above, Permitted Liens.
(b) Indebtedness. Create, incur, assume, guarantee or suffer to
exist, or otherwise become or remain liable with respect to, or permit any of
its Subsidiaries to create,
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incur, assume, guarantee or suffer to exist or otherwise become or remain liable
with respect to, any Indebtedness other than Permitted Indebtedness.
(c) Fundamental Changes; Dispositions. Wind-up, liquidate or
dissolve, or merge, consolidate or amalgamate with any Person, or convey, sell,
lease or sublease, transfer or otherwise dispose of, whether in one transaction
or a series of related transactions, all or any part of its business, property
or assets, whether now owned or hereafter acquired (or agree to do any of the
foregoing), or purchase or otherwise acquire, whether in one transaction or a
series of related transactions, all or substantially all of the assets of any
Person (or any division thereof) (or agree to do any of the foregoing), or
permit any of its Subsidiaries to do any of the foregoing; provided, however,
that
(i) any direct or indirect wholly-owned Subsidiary of any
Loan Party (other than a Non-Loan Party Permitted Acquisition Subsidiary) may be
merged into, or may convey, sell or transfer all of its business, property or
assets to, such Loan Party or another direct or indirect wholly-owned Subsidiary
of such Loan Party (other than a Non-Loan Party Permitted Acquisition
Subsidiary), or may consolidate with, or may convey, sell or transfer all of its
business, property or assets to, another direct or indirect wholly-owned
Subsidiary of such Loan Party (other than a Non-Loan Party Permitted Acquisition
Subsidiary), or may be liquidated with its assets contributed to such Loan Party
or another direct or indirect wholly-owned Subsidiary of such Loan Party (other
than a Non-Loan Party Permitted Acquisition Subsidiary), so long as (A) no other
provision of this Agreement would be violated thereby, (B) such Loan Party gives
the Agents at least 30 days' prior written notice of such merger or
consolidation, (C) no Default or Event of Default shall have occurred and be
continuing either before or after giving effect to such transaction, (D) the
Agents' and the Lenders' rights in any Collateral, including, without
limitation, the existence, perfection and priority of any Lien thereon, are not
adversely affected by such merger or consolidation and (E) if the surviving
Subsidiary, if any, is not a Loan Party, such surviving Subsidiary is joined as
a Loan Party hereunder and is a party to a Security Agreement and the Capital
Stock of which Subsidiary is the subject of a Pledge Agreement, in each case,
which is in full force and effect on the date of and immediately after giving
effect to such merger or consolidation;
(ii) any Loan Party and its Subsidiaries may (A) sell
Inventory in the ordinary course of business, (B) sell or license intellectual
property, know-how, developed pharmaceutical products, drug delivery
technologies and pharmaceutical product development, research and testing
results in the ordinary course of business, (C) dispose of equipment in the
ordinary course of business, (D) sell, lease, license or otherwise transfer
property or assets to any Loan Party, provided that the Loan Parties shall cause
to be executed and delivered such documents, instruments and certificates in
connection therewith as the Collateral Agent may reasonably request, (E) sell
all or any portion of the Borrower's right, title and interest in and to the
Odyssey Product, provided that, the Borrower delivers to the Agents a
certificate of the chief financial officer of the Borrower certifying that after
giving effect to such sale the Loan Parties are in pro forma compliance with the
Loan to Value Ratio covenant set forth in Section 6.03 and attaching a schedule
demonstrating the calculation of the same, (F) sell or otherwise dispose of
other property or assets for cash in an aggregate amount not less than the fair
market value of such property or assets, (G) in the case of any direct or
indirect Foreign Subsidiary of any Loan Party, sell, lease, license or otherwise
transfer property or assets to any other direct or indirect
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wholly-owned Foreign Subsidiary of any Loan Party, (H) make Investments
permitted by Section 6.02(e) and (I) sell the Facility located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "Indianapolis Facility"), provided
that (1) such sale shall occur within 180 days following the Effective Date, (2)
such Facility shall be sold for not less than the fair market value of such
Facility (and for consideration comprised of at least 75% cash), and (3) such
sale shall be approved by the Borrower's Board of Directors (such sale, the
"Indianapolis Facility Disposition"); provided that the Net Cash Proceeds of
such Dispositions (x) in the case of clauses (C) and (F) above, do not exceed
$500,000 in any Fiscal Year and (y) in the case of clauses (C), (F) and (I), are
paid to the Administrative Agent for the benefit of the Agents and the Lenders
pursuant to the terms of Section 2.05(c)(ii); and
(iii) and any Loan Party or any Non-Loan Party Permitted
Acquisition Subsidiary may purchase or otherwise acquire, whether in one
transaction or a series of related transactions, all or substantially all of the
assets or Capital Stock of any Person (or any division thereof) in connection
with a Permitted Acquisition.
(d) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any change in the principal nature of its business as
described in Section 5.01(1).
(e) Loans, Advances, Investments, Etc. Make or commit or agree to
make any loan, advance, guarantee of obligations, other extension of credit or
capital contributions to, or hold or invest in or commit or agree to hold or
invest in, or purchase or otherwise acquire or commit or agree to purchase or
otherwise acquire any shares of the Capital Stock, bonds, notes, debentures or
other securities of, or make or commit or agree to make any other Investment in,
any other Person, or purchase or own any futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or permit any of its Subsidiaries to
do any of the foregoing, except for: (i) Investments existing on the date
hereof, as set forth on Schedule 6.02(e). but not any increase in the amount
thereof as set forth in such Schedule or any other modification of the terms
thereof, (ii) loans, advances or other Investments by (A) a Loan Party or a
Foreign Subsidiary to or in a Loan Party, in each case, made in the ordinary
course of business, provided that such loan, advance or other Investment shall
be subject to an Intercompany Subordination Agreement and (B) a Loan Party to or
in a Foreign Subsidiary made in the ordinary course of business and not
exceeding in the aggregate for all Loan Parties and Foreign Subsidiaries at any
one time outstanding $500,000, (iii) loans and advances by a Loan Party or any
of its Subsidiaries to its officers, directors, employees, agents, customers or
suppliers for moving, entertainment, travel and other expenses in the ordinary
course of business and not exceeding in the aggregate for all Loan Parties and
their Subsidiaries at any one time outstanding $250,000, (iv) Permitted
Investments, (v) Investments consisting of Capital Stock, obligations,
securities or other property received by any Loan Party in settlement of
accounts receivable or other Indebtedness (created in the ordinary course of
business) from bankrupt obligors, (vi) Investments consisting of Permitted
Indebtedness, (vii) Permitted Acquisitions and (viii) other Investments by a
Loan Party or any of its Subsidiaries in an aggregate amount for all Loan
Parties and their Subsidiaries not to exceed $1,000,000 at any time; provided
that, notwithstanding the foregoing, until the Xanodyne Acquisition Trigger
Date, no Loan Party or
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Subsidiary of a Loan Party shall be permitted to make any Investment in Xanodyne
Acquisition, LLC.
(f) Lease Obligations. Create, incur or suffer to exist, or
permit any of its Subsidiaries to create, incur or suffer to exist, any
obligations as lessee (i) for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
payment of rent for any real or personal property under leases or agreements to
lease other than (A) Capitalized Lease Obligations which would not cause the
aggregate amount of all obligations under Capitalized Leases entered into after
the Effective Date owing by all Loan Parties and their Subsidiaries in any
Fiscal Year to exceed the amounts set forth in subsection (g) of this Section
6.02, and (B) Operating Lease Obligations which would not cause the aggregate
amount of all Operating Lease Obligations owing by all Loan Parties and their
Subsidiaries in any Fiscal Year to exceed $ 1,000,000.
(g) Capital Expenditures. Make or commit or agree to make, or
permit any of its Subsidiaries to make or commit or agree to make, any Capital
Expenditure (by purchase or Capitalized Lease) that would cause the aggregate
amount of all Capital Expenditures made by the Loan Parties and their
Subsidiaries to exceed $2,000,000 in any Fiscal Year; provided, that (i) if at
the end of any Fiscal Year, the amount specified above for Capital Expenditures
during such Fiscal Year exceeds the aggregate amount of Capital Expenditures
actually made or incurred by the Borrower or any of its Subsidiaries on a
consolidated basis during such Fiscal Year (the amount of such excess being
referred to herein as the "Excess Amount"), the Loan Parties shall be entitled
to make additional Capital Expenditures in the immediately succeeding Fiscal
Year (but not in any subsequent Fiscal Years) in an aggregate amount equal to
the Excess Amount and (ii) Capital Expenditures made pursuant to this Section
6.02(g) during any Fiscal Year shall be deemed made first, in respect of amounts
permitted for such Fiscal Year as provided above (without giving effect to
amounts carried over from the immediately prior Fiscal Year pursuant to clause
(i) above) and second, in respect of the Excess Amount carried over from the
immediately prior Fiscal Year pursuant to clause (i) above.
(h) Restricted Payments. (i) Declare or pay any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any Loan
Party or any of its Subsidiaries, now or hereafter outstanding, (ii) make any
repurchase, redemption, retirement, defeasance, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Capital
Stock of any Loan Party or any direct or indirect parent of any Loan Party, now
or hereafter outstanding, (iii) make any payment to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights for the purchase
or acquisition of shares of any class of Capital Stock of any Loan Party, now or
hereafter outstanding, (iv) return any Capital Stock to any shareholders or
other equity holders of any Loan Party or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Capital Stock, warrants,
rights, options, obligations or securities thereto as such or (v) pay any
management fees or any other fees or expenses (including the reimbursement
thereof by any Loan Party or any of its Subsidiaries) pursuant to any
management, consulting or other services agreement to any of the shareholders or
other equityholders of any Loan Party or any of its Subsidiaries or other
Affiliates, or to any other Subsidiaries or Affiliates of any Loan Party;
provided, however, (A) any Subsidiary of the Borrower may pay dividends to the
Borrower, (B) the Borrower may pay dividends in the form of Capital Stock, and
(C) so long as no Event of Default shall have
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occurred and be continuing, both immediately before and immediately after giving
effect thereto, the Borrower may repurchase or redeem Capital Stock held by
management and other employees of the Borrower upon the resignation, termination
or retirement of such manager or employee in an aggregate amount not to exceed
$200,000 in any Fiscal Year and $500,000 since the Effective Date.
(i) Federal Reserve Regulations. Permit any Loan or the proceeds
of any Loan under this Agreement to be used for any purpose that would cause
such Loan to be a margin loan under the provisions of Regulation T, U or X of
the Board.
(j) Transactions with Affiliates. Enter into, renew, extend or be
a party to, or permit any of its Subsidiaries to enter into, renew, extend or be
a party to, any transaction or series of related transactions (including,
without limitation, the purchase, sale, lease, transfer or exchange of property
or assets of any kind or the rendering of services of any kind) with any
Affiliate, except (i) in the ordinary course of business in a manner and to an
extent consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable
to it or its Subsidiaries than would be obtainable in a comparable arm's length
transaction with a Person that is not an Affiliate thereof, (ii) transactions
with another Loan Party, (iii) intercompany transactions among the Loan Parties
and their Subsidiaries expressly permitted by this Agreement, and (iv) the
transactions set forth on Schedule 6.02(i).
(k) Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. Create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any Subsidiary of any Loan Party (i) to pay dividends
or to make any other distribution on any shares of Capital Stock of such
Subsidiary owned by any Loan Party or any of its Subsidiaries, (ii) to pay or
prepay or to subordinate any Indebtedness owed to any Loan Party or any of its
Subsidiaries, (iii) to make loans or advances to any Loan Party or any of its
Subsidiaries or (iv) to transfer any of its property or assets to any Loan Party
or any of its Subsidiaries, or permit any of its Subsidiaries to do any of the
foregoing; provided, however, that nothing in any of clauses (i) through (iv) of
this Section 6.02(k) shall prohibit or restrict compliance with:
(A) this Agreement and the other Loan Documents;
(B) any agreements in effect on the date of this
Agreement and described on Schedule 6.02(k);
(C) any applicable law, rule or regulation (including,
without limitation, applicable currency control laws and applicable state
corporate statutes restricting the payment of dividends in certain
circumstances);
(D) in the case of clause (iv) any agreement setting
forth customary restrictions on the subletting, assignment or transfer of any
property or asset that is a lease, license, conveyance or contract of similar
property or assets; or
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(E) in the case of clause (iv) any agreement,
instrument or other document evidencing a Permitted Lien (or the Indebtedness
secured thereby) from restricting on customary terms the transfer of any
property or assets subject thereto.
(l) Limitation on Issuance of Capital Stock. Permit any
Subsidiary of the Borrower to issue or sell or enter into any agreement or
arrangement for the issuance and sale of any shares of its Capital Stock, any
securities convertible into or exchangeable for its Capital Stock or any
warrants.
(m) Modifications of Indebtedness, Organizational Documents and
Certain Other Agreements; Etc.
(i) Amend, modify or otherwise change (or permit the
amendment, modification or other change in any manner of) any of the provisions
of any of its or its Subsidiaries' Indebtedness or of any instrument or
agreement (including, without limitation, any purchase agreement, indenture,
loan agreement or security agreement) relating to any such Indebtedness if such
amendment, modification or change would shorten the final maturity or average
life to maturity of, or require any payment to be made earlier than the date
originally scheduled on, such Indebtedness, would increase the interest rate
applicable to such Indebtedness, would change the subordination provisions, if
any, of such Indebtedness in a manner adverse to the Agents or the Lenders, or
would otherwise be adverse to the Agents or the Lenders or the issuer of such
Indebtedness in any respect;
(ii) except for the Obligations, make any voluntary or
optional payment, prepayment, redemption, defeasance, sinking fund payment or
other acquisition for value of any of its or its Subsidiaries' Indebtedness
(including, without limitation, by way of depositing money or securities with
the trustee therefor before the date required for the purpose of paying any
portion of such Indebtedness when due), or refund, refinance, replace or
exchange any other Indebtedness for any such Indebtedness (except, in the case
of any refund, refinance, replacement or exchange, to the extent such
Indebtedness is otherwise expressly permitted by the definition of "Permitted
Indebtedness"), make any payment, prepayment, redemption, defeasance, sinking
fund payment or repurchase of any Subordinated Indebtedness in violation of the
subordination provisions thereof or any subordination agreement with respect
thereto, or make any payment, prepayment, redemption, defeasance, sinking fund
payment or repurchase of any Indebtedness as a result of any asset sale, change
of control, issuance and sale of debt or equity securities or similar event, or
give any notice with respect to any of the foregoing;
(iii) amend, modify or otherwise change its name,
jurisdiction of organization, organizational identification number or FEIN,
except that a Loan Party may (A) change its name, jurisdiction of organization,
organizational identification number or FEIN in connection with a transaction
permitted by Section 6.02(c) and (B) change its name upon at least 30 days prior
written notice by the Borrower to the Agents of such change and so long as, at
the time of such written notification, such Person provides any financing
statements or fixture filings necessary to perfect and continue perfected the
Collateral Agent's Liens; or
(iv) amend, modify or otherwise change its certificate of
incorporation or bylaws (or other similar organizational documents), including,
without
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limitation, by the filing or modification of any certificate of designation, or
any agreement or arrangement entered into by it, with respect to any of its
Capital Stock (including any shareholders' agreement), or enter into any new
agreement with respect to any of its Capital Stock, except any such amendments,
modifications or changes or any such new agreements or arrangements pursuant to
this clause (iv) that either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect (it being understood
that if any Loan Party that is a partnership or a limited liability company, or
any Loan Party with any Subsidiary that is a partnership or a limited liability
company, amends or modifies its organizational documents to cause such
partnership interests or membership interests to (A) be dealt in or traded on
securities exchanges or in securities markets, (B) become a security for
purposes of Article 8 of any relevant Uniform Commercial Code, (C) become an
investment company security within the meaning of Section 8-103 of any relevant
Uniform Commercial Code or (D) be evidenced by a certificate, such amendment or
modification shall be deemed to reasonably be expected to have a Material
Adverse Effect).
(n) Investment Company Act of 1940. Engage in any business, enter
into any transaction, use any securities or take any other action or permit any
of its Subsidiaries to do any of the foregoing, that would cause it or any of
its Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of being an "investment
company" or a company "controlled" by an "investment company" not entitled to an
exemption within the meaning of such Act.
(o) Compromise of Accounts Receivable. Compromise or adjust any
Account Receivable (or extend the time of payment thereof) or grant any
discounts, allowances or credits or permit any of its Subsidiaries to do so
other than, provided no Event of Default has occurred and is continuing, in the
ordinary course of its business and consistent with industry practice.
(p) Properties. Permit any property (other than property with an
aggregate fair market value of less than $100,000) to become a fixture with
respect to real property or to become an accession with respect to other
personal property with respect to which real or personal property the Collateral
Agent does not have a valid and perfected first priority Lien or has not
received a written subordination or waiver in accordance with Section 6.01
(m)(i).
(q) ERISA. (i) Engage, or permit any ERISA Affiliate to engage,
in any transaction described in Section 4069 of ERISA; (ii) engage, or permit
any ERISA Affiliate to engage, in any prohibited transaction described in
Section 406 of ERISA or 4975 of the Internal Revenue Code for which a statutory
or class exemption is not available or a private exemption has not previously
been obtained from the U.S. Department of Labor; (iii) adopt or permit any ERISA
Affiliate to adopt any employee welfare benefit plan within the meaning of
Section 3(1) of ERISA which provides benefits to employees after termination of
employment other than as required by Section 601 of ERISA or applicable law;
(iv) fail to make any contribution or payment to any Multiemployer Plan which it
or any ERISA Affiliate may be required to make under any agreement relating to
such Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit
any ERISA Affiliate to fail, to pay any required installment or any other
payment required under Section 412 of the Internal Revenue Code on or before the
due date for such installment or other payment.
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(r) Environmental. Permit the use, handling, generation, storage,
treatment, Release or disposal of Hazardous Materials at any property owned or
leased by it or any of its Subsidiaries, except in compliance with Environmental
Laws and so long as such use, handling, generation, storage, treatment, Release
or disposal of Hazardous Materials does not result in a Material Adverse Effect.
(s) Certain Agreements. Amend, change or agree to any material
amendment or other material change to or material waiver of any of its rights
under any Material Contract (other than any aaiPharma Acquisition Document).
(t) Amendment to aaiPharma Acquisition Documents. Amend, change
or agree to any amendment or other change to (or make any payment consistent
with any amendment or other change to) or waive any of its rights under any
aaiPharma Acquisition Document, in each case if such amendment, change or waiver
would be adverse to any Agent, any Lender or any Loan Party.
(u) Location of Assets. Maintain or permit any of their
Subsidiaries (other than Non-Loan Permitted Acquisition Subsidiaries) to
maintain assets outside of the United States, provided that up to $500,000 in
the aggregate of the Borrower's and its Subsidiaries' assets may be maintained
in Canada.
(v) Xanodyne Acquisition, LLC. Until the occurrence of the
Xanodyne Acquisition Trigger Date, permit Xanodyne Acquisition, LLC to (i)
engage in any business activities, (ii) own at any time assets, other than the
Capital Stock of Xanodyne Development Group, LLC, or (iii) incur any liabilities
or obligations other than the liabilities and obligations incurred in respect of
its guaranty of the Obligations.
(w) Enterprise Cash Collateral Account. Maintain Cash and Cash
Equivalents in the Enterprise Cash Collateral Account in excess of 105% of the
stated amount of the Enterprise Letter of Credit.
Section 6.03 Financial Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall
not, unless the Required Lenders shall otherwise consent in writing, permit the
ratio (the "Loan to Value Ratio") of (a) Pro Forma Senior Indebtedness to (b)
the product of (i) 2.75 times (ii) the Annualized Demand Revenues to exceed 40%
at the end of any fiscal quarter, provided that (x) in the event that either the
Borrower or the Collateral Agent determines, in the exercise of its good faith
(and upon written notice to the Collateral Agent, in the case of the Borrower,
and to the Borrower, in the case of the Collateral Agent), that the value
calculated pursuant to clause (b) above does not accurately represent the
enterprise value of the Loan Parties, then the calculation set forth in clause
(b) above shall be deemed to be the appraised enterprise value of the Loan
Parties, as set forth in the most recent enterprise valuation received by the
Collateral Agent, which enterprise valuation shall be performed by a third party
valuation firm mutually acceptable to the Borrower and the Collateral Agent,
provided that if the Borrower and the Collateral Agent are unable to select a
third-party valuation firm mutually acceptable to the Borrower and the
Collateral Agent within two Business Days after the receipt by either the
Borrower or the Collateral Agent from the other
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Person of written notice indicating such Person's desire to commence the process
set forth herein of selecting the Chosen Valuation Firms, then the Borrower and
the Collateral Agent shall each select a valuation firm and the two selected
initial valuation firms shall mutually choose a third valuation firm (the
"Designated Valuation Firm"; and together with the two initial valuation firms,
the "Chosen Valuation Firms"), which Designated Valuation Firm shall determine
such enterprise value of the Loan Parties (it being agreed that (w) no Person
who has a conflict of interest with respect to any Loan Party, any Lender or any
Agent or the subject matter of the issue in dispute between the Collateral Agent
and the Borrower shall be one of the Chosen Valuation Firms, (x) the
determination of the Designated Valuation Firm of such enterprise value of the
Loan Parties shall be in writing and shall be final and binding on the
Collateral Agent and the Borrower, (y) each of the Borrower and the Collateral
Agent hereby waive any right to appeal such determination by resorting to legal
proceedings or otherwise and (z) the Borrower shall pay the fees and expenses of
each of the Chosen Valuation Firms), and (y) such covenant shall only be tested
at the end of any fiscal quarter if the Annualized Demand Revenues for such
fiscal quarter are less than 95% of the quarterly revenue projections delivered
to the Collateral Agent on or prior to the Effective Date for such fiscal
quarter multiplied by four (4). Notwithstanding the foregoing, in the event that
the Loan to Value Ratio is greater than 40% at the end of any fiscal quarter
(and the Annualized Demand Revenues for such fiscal quarter are less than 95% of
the quarterly revenue projections delivered to the Collateral Agent on or prior
to the Effective Date for such fiscal quarter multiplied by four (4), then if
the Borrower shall, within 10 days of the date on which the Borrower delivered
the certificate of an Authorized Officer thereof to the Collateral Agent and
each Lender pursuant to Section 6.01(a)(iv) for such fiscal quarter (or within
10 days of the date on which the Borrower was required to deliver such
certificate, whichever is earlier), provide the Collateral Agent with evidence
reasonably satisfactory to the Collateral Agent (which may include a non-binding
letter of intent) indicating that one or more third-party funding sources are
actively and in good faith pursuing an Investment in the Borrower in an amount
sufficient to cure such covenant violation with equity proceeds, Subordinated
Indebtedness and/or a prepayment of the outstanding principal amount of the Term
Loans or the Revolving Loans, in each case to the extent permitted by this
Agreement and in accordance with the terms of this Agreement (collectively, a
"Financial Covenant Cure Payment"), then the Borrower shall have 30 days from
the end of such fiscal quarter to cure such covenant violation by making a
Financial Covenant Cure Paymnent.
ARTICLE VII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
Section 7.01 Collection of Accounts Receivable; Management of
Collateral. (a) Within 30 days after the Effective Date, each Loan Party shall
assist the Administrative Agent in (i) establishing, and, during the term of
this Agreement, maintaining cash management services of a type and on terms
satisfactory to the Administrative Agent at one or more of the banks set forth
on Schedule 7.01 or such other banks selected by the Loan Parties and acceptable
to the Administrative Agent in its sole discretion exercised reasonably (each a
"Cash Management Bank"), and shall irrevocably instruct their Account Debtors,
with respect to Accounts Receivable of the Loan Parties, to forward payment of
the amounts owed by them
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directly to such Cash Management Bank, and (ii) establishing and maintaining a
bank account in the Administrative Agent's name, of if the Administrative Agent
otherwise agrees, in such Loan Party's name (a "Cash Management Account") at one
of the Cash Management Banks. Each Cash Management Bank shall establish and
maintain Cash Management Agreements with the Collateral Agent and the applicable
Loan Parties, in form and substance acceptable to the Collateral Agent and each
Cash Management Account shall be a cash collateral account subject to a control
agreement, in form and substance satisfactory to the Administrative Agent,
executed and delivered by the applicable Loan Party, the Administrative Agent,
and the applicable Cash Management Bank. Until the Administrative Agent has
advised the Loan Parties to the contrary after the occurrence and during the
continuance of an Event of Default, the Loan Parties may and will enforce,
collect and receive all amounts owing on the Accounts Receivable of the Loan
Parties for the Administrative Agent's benefit and on the Administrative Agent's
behalf, but at the Loan Parties' expense; such privilege shall terminate, at the
election of any Agent, upon the occurrence and during the continuance of an
Event of Default. All checks, drafts, notes, money orders, acceptances, cash and
other evidences of Indebtedness received directly by the Loan Parties from any
of their Account Debtors, as proceeds from Accounts Receivable of the Loan
Parties, or as proceeds of any other Collateral, shall be held by the Loan
Parties in trust for the Agents and the Lenders and upon receipt be deposited by
the Loan Parties in original form and no later than the next Business Day after
receipt thereof into a Cash Management Account. The Loan Parties shall not
commingle such collections with the Loan Parties' own funds or the funds of any
of their Subsidiaries or Affiliates or with the proceeds of any assets not
included in the Collateral. Prior to the occurrence of an Event of Default, all
funds received in the Cash Management Accounts shall be processed by the
respective Cash Management Banks in accordance with the instructions of officers
or agents of the Borrower in accordance with prior practice. After the
occurrence and during the continuance of an Event of Default, the Collateral
Agent may give notice to the respective Cash Management Banks that all funds
received in the Cash Management Account shall be sent by wire transfer or
Automated Clearing House, Inc. payment to the Administrative Agent's Account for
application at the end of each Business Day to reduce the then outstanding
Obligations, conditional upon final payment to the Administrative Agent. No
checks, drafts or other instruments received by the Administrative Agent shall
constitute final payment to the Administrative Agent unless and until such
checks, drafts or instruments have actually been collected.
(b) After the occurrence and during the continuance of an Event
of Default, the Collateral Agent or its designee may, and at the request of the
Required Lenders, the Collateral Agent shall, send a notice of assignment and/or
notice of the Collateral Agent's security interest to any and all Account
Debtors or third parties holding or otherwise concerned with any of the
Collateral, and thereafter the Collateral Agent or its designee shall have the
sole right to collect the Accounts Receivable and/or take possession of the
Collateral and the books and records relating thereto. The Loan Parties shall
not, without prior written consent of the Collateral Agent, grant any extension
of time of payment of any Account Receivable, compromise or settle any Account
Receivable for less than the full amount thereof, release, in whole or in part,
any Person or property liable for the payment thereof, or allow any credit or
discount whatsoever thereon, except, in the absence of a continuing Event of
Default, as permitted by Section 6.02(o).
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(c) Each Loan Party hereby appoints the Collateral Agent or its
designee on behalf of the Collateral Agent as the Loan Parties' attorney-in-fact
with power exercisable during the continuance of an Event of Default to endorse
any Loan Party's name upon any notes, acceptances, checks, drafts, money orders
or other evidences of payment relating to the Accounts Receivable, to sign any
Loan Party's name on any invoice or ▇▇▇▇ of lading relating to any of the
Accounts Receivable, drafts against Account Debtors with respect to Accounts
Receivable, assignments and verifications of Accounts Receivable and notices to
Account Debtors with respect to Accounts Receivable, to send verification of
Accounts Receivable, and to notify the Postal Service authorities to change the
address for delivery of mail addressed to any Loan Party to such address as the
Collateral Agent or such designee may designate and to do all other acts and
things necessary to carry out this Agreement. All acts of said attorney or
designee are hereby ratified and approved, and said attorney or designee shall
not be liable for any acts of omission or commission (other than acts of
omission or commission constituting gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction), or for any
error of judgment or mistake of fact or law not constituting gross negligence or
willful misconduct as determined by a final judgment of a court of competent
jurisdiction; this power being coupled with an interest is irrevocable until all
of the Loans and other Obligations under the Loan Documents are paid in full and
all of the Loan Documents are terminated.
(d) Nothing herein contained shall be construed to constitute any
Agent as agent of any Loan Party for any purpose whatsoever, and the Agents
shall not be responsible or liable for any shortage, discrepancy, damage, loss
or destruction of any part of the Collateral wherever the same may be located
and regardless of the cause thereof (other than from acts of omission or
commission constituting gross negligence or willful misconduct as determined by
a final judgment of a court of competent jurisdiction). The Agents shall not,
under any circumstance or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement, collection
or payment of any of the Accounts Receivable or any instrument received in
payment thereof or for any damage resulting therefrom (other than acts of
omission or commission constituting gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction). The
Agents, by anything herein or in any assignment or otherwise, do not assume any
of the obligations under any contract or agreement assigned to any Agent and
shall not be responsible in any way for the performance by any Loan Party of any
of the terms and conditions thereof.
(e) If any Account Receivable includes a charge for any tax
payable to any Governmental Authority, each Agent is hereby authorized (but in
no event obligated) in its discretion to pay the amount thereof to the proper
taxing authority for the Loan Parties' account and to charge the Loan Parties
therefor. The Loan Parties shall notify the Agents if any Account Receivable
includes any taxes due to any such Governmental Authority and, in the absence of
such notice, the Agents shall have the right to apply the full proceeds of such
Account Receivable and shall not be liable for any taxes that may be due by
reason of the sale and delivery creating such Account Receivable.
(f) Notwithstanding any other terms set forth in the Loan
Documents, the rights and remedies of the Agents and the Lenders herein
provided, and the obligations of the Loan Parties set forth herein, are
cumulative of, may be exercised singly or concurrently with,
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and are not exclusive of, any other rights, remedies or obligations set forth in
any other Loan Document or as provided by law.
Section 7.02 Accounts Receivable Documentation. The Loan Parties will
at such intervals as the Collateral Agent may reasonably require, furnish such
schedules and/or information as the Collateral Agent may reasonably require
relating to the Accounts Receivable. In addition, the Loan Parties shall notify
the Agents of any non-compliance in respect of the representations, warranties
and covenants contained in Section 7.03. The items to be provided under this
Section 7.02 are to be in form reasonably satisfactory to the Collateral Agent
and are to be executed and delivered to the Agents from time to time solely for
their convenience in maintaining records of the Collateral. The Loan Parties'
failure to give any of such items to the Agents shall not affect, terminate,
modify or otherwise limit the Collateral Agent's Lien on the Collateral. The
Loan Parties shall not re-date any invoice or sale or make sales on extended
dating beyond that customary in the Loan Parties' industry, and shall not
re-▇▇▇▇ any Accounts Receivable, except in the ordinary course of business,
without promptly disclosing the same to the Agents and providing the Agents with
a copy of such re-billing, identifying the same as such. If the Loan Parties
become aware of anything materially detrimental to any of the Loan Parties'
material customers' credit, the Loan Parties will promptly advise the Agents
thereof.
Section 7.03 Status of Accounts Receivable and Other Collateral. With
respect to Collateral of any Loan Party at the time the Collateral becomes
subject to the Collateral Agent's Lien, each Loan Party covenants, represents
and warrants: (a) such Loan Party shall be the sole owner, free and clear of all
Liens (except for Permitted Liens), and shall be fully authorized to sell,
transfer, pledge and/or grant a security interest in each and every item of said
Collateral; (b) each Account Receivable with an invoice amount in excess of
$100,000 shall be a good and valid account representing a bona fide indebtedness
incurred or an amount owed by the Account Debtor therein named; (c) no Account
Receivable shall be subject to any discount or allowance except as may be stated
in the invoice relating thereto, discounts and allowances as may be customary in
such Loan Party's business and as otherwise disclosed to the Agents; (d) none of
the transactions underlying or giving rise to any Account Receivable shall
violate any applicable state or federal laws or regulations, and all documents
relating thereto shall be legally sufficient under such laws or regulations and
shall be legally enforceable in accordance with their terms; (e) no agreement
under which any deduction or offset of any kind, other than normal trade
discounts, may be granted or shall have been made by such Loan Party at or
before the time such Account Receivable is created; (f) all agreements,
instruments and other documents relating to any Account Receivable shall be true
and correct and in all material respects what they purport to be; (g) such Loan
Party shall maintain books and records pertaining to said Collateral in such
detail, form and scope as the Agents shall reasonably require; (h) such Loan
Party shall promptly notify the Collateral Agent if any Account Receivable with
an invoice amount in excess of $100,000 arises out of contracts with any
Governmental Authority, and will execute any instruments and take any steps
required by the Collateral Agent in order that all monies due or to become due
under any such contract shall be assigned to the Collateral Agent and notice
thereof given to such Governmental Authority under the Federal Assignment of
Claims Act or any similar state or local law; (i) such Loan Party will,
immediately upon learning thereof, report to the Agents any material loss or
destruction of, or substantial damage to, any of the Collateral, and any other
matters affecting the value, enforceability or collectibility of any of the
Collateral with a value in excess of $100,000; (j) if any amount payable under
or in connection with any
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Account Receivable with an invoice amount in excess of $100,000 is evidenced by
a promissory note or other instrument, such promissory note or instrument shall
be immediately pledged, endorsed, assigned and delivered to the Collateral Agent
for the benefit of the Agents and the Lenders as additional Collateral; (k) such
Loan Party shall conduct a physical count of its Inventory at such intervals as
any Agent reasonably may request (but, absent an Event of Default, not more than
2 times in any 12 month period during the term of this Agreement) and such Loan
Party shall promptly supply the Agents with a copy of such count accompanied by
a report of the value (based on the lower of cost (on a first in first out
basis) and market value) of such Inventory; and (1) such Loan Party is not and
shall not be entitled to pledge any Agent's or any Lender's credit on any
purchases or for any purpose whatsoever.
Section 7.04 Collateral Custodian. Upon the occurrence and during the
continuance of any Default or Event of Default, the Collateral Agent or its
designee may at any time and from time to time employ and maintain on the
premises of any Loan Party a custodian selected by the Collateral Agent or its
designee who shall have full authority to do all acts as are reasonably
necessary to protect the Agents' and the Lenders' interests. Each Loan Party
hereby agrees to, and to cause its Subsidiaries to, cooperate with any such
custodian and to comply with any reasonable request of the Collateral Agent or
its designee in order to preserve the Collateral. All costs and expenses
incurred by the Collateral Agent or its designee by reason of the employment of
the custodian shall be the responsibility of the Borrower and charged to the
Loan Account.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01 Events of Default. If any of the following Events of
Default shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of or interest
on any Loan, any Collateral Agent Advance, or any fee, indemnity or other amount
payable under this Agreement or any other Loan Document when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise);
(b) any representation or warranty made or deemed made by or on
behalf of any Loan Party or by any officer of the foregoing under or in
connection with any Loan Document shall have been incorrect in any material
respect when made or deemed made;
(c) any Loan Party shall:
(i) fail to perform or comply with any covenant or agreement
contained in Sections 6.01(a)(viii), 6.01 (a)(x), 6.01(a)(xi), 6.01(b), 6.01(c),
6.01(d), 6.01(f), 6.01 (h), 6.01(1), 6.01 (n) or 6.01 (p), Section 6.02, Section
6.03 (other than expressly set forth in Section 6.03) or ARTICLE VII, or any
Loan Party shall fail to perform or comply with any covenant or agreement
contained in any Security Agreement to which it is a party, any Pledge Agreement
to which it is a party, or any Mortgage to which it is a party;
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(ii) fail to perform or comply with any covenant or
agreement contained in Sections 6.01 (a) (other than clauses (a)(viii), (a)(x)or
(a)(xi)), 6.01(m), 6.01(o), 6.01(q) or 6.01(r), and such failure shall remain
unremedied for 5 Business Days; or
(iii) fail to perform or comply with any covenant or
agreement contained in Sections 6.01(e), 6.01(g), 6.01(i), 6.01(j) or 6.01(k),
and such failure, if capable of being remedied, shall remain unremedied for 10
days, after the earlier of the date a senior officer of any Loan Party shall
become aware of such failure and the date written notice of such default shall
have been given by any Agent to such Loan Party;
(d) any Loan Party shall fail to perform or comply with any other
erm, covenant or agreement contained in any Loan Document to be performed or
observed by it and, except as set forth in subsections (a), (b) and (c) of this
Section 8.01, such failure, if capable of being remedied, shall remain
unremedied for 20 days, after the earlier of the date a senior officer of any
Loan Party shall become aware of such failure and the date written notice of
such default shall have been given by any Agent to such Loan Party;
(e) any Loan Party or any of its Subsidiaries shall fail to pay
any of its Indebtedness (excluding Indebtedness evidenced by this Agreement) in
excess of $250,000, or any payment of principal, interest or premium thereon,
when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness, or any other default under any agreement or instrument relating to
any such Indebtedness, or any other event, shall occur and shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed, purchased or defeased
or an offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case, prior to the stated maturity thereof;
(f) any Loan Party or any of its Subsidiaries (i) shall institute
any proceeding or voluntary case seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for any such Person or
for any substantial part of its property, (ii) shall be generally not paying its
debts as such debts become due or shall admit in writing its inability to pay
its debts generally, (iii) shall make a general assignment for the benefit of
creditors, or (iv) shall take any action to authorize or effect any of the
actions set forth above in this subsection (f);
(g) any proceeding shall be instituted against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for any such Person or for any substantial part of its property, and
either
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such proceeding shall remain undismissed or unstayed for a period of 45 days or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against any such Person or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property) shall occur;
(h) any provision of any Loan Document shall at any time for any
reason (other than pursuant to the express terms thereof) cease to be valid and
binding on or enforceable against any Loan Party intended to be a party thereto,
or the validity or enforceability thereof shall be contested by any party
thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or any Loan Party shall
deny in writing that it has any liability or obligation purported to be created
under any Loan Document;
(i) any Security Agreement, any Pledge Agreement, any Mortgage or
any other security document, after delivery thereof pursuant hereto, shall for
any reason fail or cease to create a valid, perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien in favor of the
Collateral Agent for the benefit of the Agents and the Lenders on Collateral in
excess of $250,000 individually or in the aggregate purported to be covered
thereby, except to the extent permitted by the terms of any Loan Document;
(j) except to the extent permitted by the terms of any Loan
Document, (i) any bank (other than any Agent) at which any deposit account,
blocked account, or lockbox account of any Loan Party containing deposits in
excess of $100,000 is maintained shall fail to comply with any of the terms of
any deposit account, blocked account, lockbox account or similar agreement to
which such bank is a party unless the applicable Loan Party closes such account
and opens a new replacement deposit account, blocked account or lockbox account
subject to a deposit account, blocked account, lockbox account or similar
agreement in form and substance reasonably satisfactory to the Collateral Agent
at a bank reasonably satisfactory to the Collateral Agent within 10 Business
Days after the occurrence of any such non-compliance or (ii) any securities
intermediary, commodity intermediary or other financial institution at any time
in custody, control or possession of any investment property of any Loan Party
shall fail to comply with any of the terms of any investment property control
agreement to which such Person is a party unless the applicable Loan Party
replaces such securities intermediary, commodity intermediary or other financial
institution, as the case may be, with another securities intermediary, commodity
intermediary or other financial institution reasonably acceptable to the
Collateral Agent and enters into an investment property control agreement with
such Person, in form and substance reasonably satisfactory to the Collateral
Agent within 10 Business Days after the occurrence of such non-compliance;
(k) one or more judgments, orders or awards (or any settlement of
any claim that, if breached, could result in a judgment, order or award) for the
payment of money exceeding $50,000 individually, or $250,000 in the aggregate,
shall be rendered against any Loan Party or any of its Subsidiaries and remain
unsatisfied and either (i) enforcement proceedings shall have been commenced by
any creditor upon any such judgment, order, award or settlement, or (ii) there
shall be a period of 20 consecutive days after entry thereof during which a stay
of enforcement of any such judgment, order, award or settlement, by reason of a
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pending appeal or otherwise, shall not be in effect; provided, however, that any
such judgment, order, award or settlement shall not give rise to an Event of
Default under this subsection (k) if and for so long as (A) the amount of such
judgment, order, award or settlement is covered by a valid and binding policy of
insurance between the defendant and the insurer covering full payment thereof
and (B) such insurer has been notified, and has not disputed the claim made for
payment, of the amount of such judgment, order, award or settlement;
(l) the Loan Parties and their Subsidiaries are enjoined,
restrained or in any way prevented by the order of any court or any Governmental
Authority from conducting all or any material part of their business, taken as a
whole, for more than fifteen (15) days;
(m) any (i) material damage to, or loss, theft or destruction of,
any Collateral, whether or not insured, (ii) any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or (iii) other casualty, in
each case which causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing activities at any
facility of any Loan Party, if any such event or circumstance could reasonably
be expected to have a Material Adverse Effect;
(n) any cessation of a substantial part of the business of (i)
the Borrower or (ii) the Loan Parties and their Subsidiaries, taken as a whole,
in each case for a period which materially and adversely affects the ability of
such Person to continue its or their business on a profitable basis;
(o) the loss, suspension or revocation of, or failure to renew,
any license or permit now held or hereafter acquired by any Loan Party or any of
its Subsidiaries, if such loss, suspension, revocation or failure to renew could
reasonably be expected to have a Material Adverse Effect;
(p) the indictment of any Loan Party or any of its Subsidiaries
under any criminal statute, or commencement of criminal or civil proceedings
against any Loan Party, pursuant to which statute or proceedings the penalties
or remedies sought or available include forfeiture to any Governmental Authority
of any material portion of the property of the Borrower or the Loan Parties and
their Subsidiaries, taken as a whole;
(q) any Loan Party or any of its ERISA Affiliates shall have made
a complete or partial withdrawal from a Multiemployer Plan, and, as a result of
such complete or partial withdrawal, any Loan Party or any of its ERISA
Affiliates incurs a withdrawal liability in an annual amount exceeding $100,000;
or a Multiemployer Plan enters reorganization status under Section 4241 of
ERISA, and, as a result thereof any Loan Party's or any of its ERISA Affiliates'
annual contribution requirements with respect to such Multiemployer Plan
increases in an annual amount exceeding $100,000;
(r) any Termination Event with respect to any Employee Plan shall
have occurred, and, 30 days after notice thereof shall have been given to any
Loan Party by any Agent, (i) such Termination Event (if correctable) shall not
have been corrected, and (ii) the then current value of such Employee Plan's
vested benefits exceeds the then current value of assets allocable to such
benefits in such Employee Plan by more than $100,000 (or, in the case of a
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Termination Event involving liability under Section 409, 502(i), 502(1), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of
the Internal Revenue Code, the liability is in excess of such amount);
(s) any Loan Party or any of its Subsidiaries shall be liable for
any Environmental Liabilities and Costs the payment of which could reasonably be
expected to have a Material Adverse Effect;
(t) any Loan Party or any of its Subsidiaries shall (i) receive a
Product Recall Notice or (ii) fail to be in substantial compliance with the Food
and Drug Act and all current applicable statutes, rules, regulations,
guidelines, policies, orders or directives administered or issued by the FDA, in
each case, to the extent that such failure could reasonably be expected to (a)
have a Material Adverse Effect or (b) result in or account for a 10% or greater
decrease in the Borrower's and its Subsidiaries' total sales from the preceding
Fiscal Year;
(u) (i) there shall occur and be continuing any "Event of
Default" (or any comparable term) under, and as defined in the documents
evidencing or governing any Subordinated Indebtedness, (ii) any holder of
Subordinated Indebtedness shall violate any of the subordination provisions of
the documents evidencing or governing such Subordinated Indebtedness, or (iii)
the subordination provisions of the documents evidencing or governing any
Subordinated Indebtedness shall, in whole or in part, terminate, cease to be
effective or cease to be legally valid, binding and enforceable against any
holder of the applicable Subordinated Indebtedness; or
(v) a Change of Control shall have occurred;
then, and in any such event, the Collateral Agent may, and shall at
the request of the Required Lenders, by notice to the Borrower, (i) terminate or
reduce all Commitments, whereupon all Commitments shall immediately be so
terminated or reduced, (ii) declare all or any portion of the Loans then
outstanding to be due and payable, whereupon all or such portion of the
aggregate principal of all Loans, all accrued and unpaid interest thereon, all
fees and premiums, if any, and all other amounts payable under this Agreement
and the other Loan Documents shall become due and payable immediately, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by each Loan Party and (iii) exercise any and all of its
other rights and remedies under applicable law, hereunder and under the other
Loan Documents; provided, however, that upon the occurrence of any Event of
Default described in subsection (f) or (g) of this Section 8.01 with respect to
any Loan Party, without any notice to any Loan Party or any other Person or any
act by any Agent or any Lender, all Commitments shall automatically terminate
and all Loans then outstanding, together with all accrued and unpaid interest
thereon, all fees and all other amounts due under this Agreement and the other
Loan Documents shall become due and payable automatically and immediately,
without presentment, demand, protest or notice of any kind, all of which are
expressly waived by each Loan Party.
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ARTICLE IX
AGENTS
Section 9.01 Appointment. (a) Each Lender (and each subsequent maker
of any Loan by its making thereof) hereby irrevocably appoints and authorizes
the Administrative Agent and the Collateral Agent, (b) the Collateral Agent
hereby irrevocably appoints and authorizes the Administrative Agent and (c) the
Administrative Agent hereby irrevocably appoints and authorizes the Collateral
Agent to perform the duties of each such Agent as set forth in this Agreement
including: (i) to receive on behalf of each Lender any payment of principal of
or interest on the Loans outstanding hereunder and all other amounts accrued
hereunder for the account of the Lenders and paid to such Agent, and, subject to
Section 2.02 of this Agreement, to distribute promptly to each Lender its Pro
Rata Share of all payments so received; (ii) to distribute to each Lender copies
of all material notices and agreements received by such Agent and not required
to be delivered to each Lender pursuant to the terms of this Agreement, provided
that the Agents shall not have any liability to the Lenders for any Agent's
inadvertent failure to distribute any such notices or agreements to the Lenders;
(iii) to maintain, in accordance with its customary business practices, ledgers
and records reflecting the status of the Obligations, the Loans, and related
matters and to maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Collateral and related matters;
(iv) in the case of the Collateral Agent, to execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to this Agreement or any other Loan Document; (v) to make the Loans
and, in the case of the Collateral Agent, Collateral Agent Advances, for such
Agent or on behalf of the applicable Lenders as provided in this Agreement or
any other Loan Document; (vi) to perform, exercise, and enforce any and all
other rights and remedies of the Lenders with respect to the Loan Parties, the
Obligations, or otherwise related to any of same to the extent reasonably
incidental to the exercise by such Agent of the rights and remedies specifically
authorized to be exercised by such Agent by the terms of this Agreement or any
other Loan Document; (vii) to incur and pay such fees necessary or appropriate
for the performance and fulfillment of its functions and powers pursuant to this
Agreement or any other Loan Document; and (viii) subject to Section 9.03 of this
Agreement, to take such action as such Agent deems appropriate on its behalf to
administer the Loans and the Loan Documents and to exercise such other powers
delegated to such Agent by the terms hereof or the other Loan Documents
(including, without limitation, the power to give or to refuse to give notices,
waivers, consents, approvals and instructions and the power to make or to refuse
to make determinations and calculations) together with such powers as are
reasonably incidental thereto to carry out the purposes hereof and thereof. As
to any matters not expressly provided for by this Agreement and the other Loan
Documents (including, without limitation, enforcement or collection of the
Loans), the Agents shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions of the Required Lenders shall be
binding upon all Lenders and all makers of Loans; provided, however, that the
Agents shall not be required to take any action which, in the reasonable opinion
of any Agent, exposes such Agent to liability or which is contrary to this
Agreement or any other Loan Document or applicable law.
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Section 9.02 Nature of Duties. The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. The Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agents any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the value
of the Collateral, and the Agents shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into their possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If any Agent
seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, such Agent shall send notice
thereof to each Lender. Each Agent shall promptly notify each Lender any time
that the Required Lenders have instructed such Agent to act or refrain from
acting pursuant hereto.
Section 9.03 Rights, Exculpation, Etc. No Agent-Related Person shall
be liable for any action taken or omitted to be taken by them under or in
connection with this Agreement or the other Loan Documents, except for their own
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction. Without limiting the generality of the
foregoing, the Agent-Related Persons (i) may treat the payee of any Loan as the
owner thereof until the Collateral Agent receives written notice of the
assignment or transfer thereof, pursuant to Section 11.07 hereof, signed by such
payee and in form satisfactory to the Collateral Agent; (ii) may consult with
legal counsel (including, without limitation, counsel to any Agent or counsel to
the Loan Parties), independent public accountants, and other experts selected by
any of them and shall not be liable for any action taken or omitted to be taken
in good faith by any of them in accordance with the advice of such counsel or
experts; (iii) make no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, certificates, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (iv) 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 Person, the existence
or possible existence of any Default or Event of Default, or to inspect the
Collateral or other property (including, without limitation, the books and
records) of any Person; (v) 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 (vi) shall not be deemed to
have made any representation or warranty regarding the existence, value or
collectibility of the Collateral, the existence, priority or perfection of the
Collateral Agent's Lien thereon, or any certificate prepared by any Loan Party
in connection therewith, nor shall the Agents be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the Collateral.
The Agent-Related Persons shall not be liable for any apportionment or
distribution of payments made in good faith
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pursuant to Section 3.04, and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due but not made, shall be to recover from other
Lenders any payment in excess of the amount which they are determined to be
entitled. The Agent-Related Persons may at any time request instructions from
the Lenders with respect to any actions or approvals which by the terms of this
Agreement or of any of the other Loan Documents the Agent-Related Persons are
permitted or required to take or to grant, and if such instructions are promptly
requested, the Agent-Related Persons shall be absolutely entitled to refrain
from taking any action or to withhold any approval under any of the Loan
Documents until they shall have received such instructions from the Required
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against any Agent-Related Person as a result of such
Agent-Related Person acting or refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of the
Required Lenders.
Section 9.04 Reliance. Each Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the other Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
Section 9.05 Indemnification. To the extent that any Agent-Related
Person is not reimbursed and indemnified by any Loan Party, the Lenders will
reimburse and indemnify such Agent-Related Person from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, advances or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against such Agent-Related
Person in any way relating to or arising out of this Agreement or any of the
other Loan Documents or any action taken or omitted by such Agent-Related Person
under this Agreement or any of the other Loan Documents, in proportion to each
Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Section 9.08; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements for which there has been a final judicial determination that such
liability resulted from such Agent-Related Person's gross negligence or willful
misconduct. The obligations of the Lenders under this Section 9.05 shall survive
the payment in full of the Loans and the termination of this Agreement.
Section 9.06 Agents Individually. With respect to its Pro Rata Share
of the Total Commitment hereunder and the Loans made by it, each Agent shall
have and may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for any
other Lender or maker of a Loan. The terms "Lenders" or "Required Lenders" or
any similar terms shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity as a Lender or one of the Required
Lenders. Each Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Borrower as if it were not acting as an Agent pursuant hereto without any duty
to account to the other Lenders.
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Section 9.07 Successor Agent. (a) Each Agent may resign from the
performance of all its functions and duties hereunder and under the other Loan
Documents at any time by giving at least thirty (30) Business Days' prior
written notice to the Borrower and each Lender. Such resignation shall take
effect upon the acceptance by a successor Agent of appointment pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Agent; provided, that, so long as no Event of Default
shall have occurred and be continuing, if such successor Agent is not the other
Agent hereunder (or any of its Affiliates or Related Funds), such appointment
shall be made with the consent of the Borrower (which consent shall not be
unreasonably withheld, delayed or conditioned). Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any Agent's resignation hereunder as an Agent, the provisions
of this ARTICLE IX shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was an Agent under this Agreement and the other Loan
Documents.
(c) If a successor Agent shall not have been so appointed within
said thirty (30) Business Day period, the retiring Agent, with the consent of
the other Agent shall then appoint a successor Agent who shall serve as an Agent
until such time, if any, as the Required Lenders, with the consent of the other
Agent, appoint a successor Agent as provided above; provided, that, so long as
no Event of Default shall have occurred and be continuing, if such successor
Agent is not the other Agent hereunder (or any of its Affiliates or Related
Funds), such appointment shall be made with the consent of the Borrower (which
consent shall not be unreasonably withheld, delayed or conditioned).
(d) In the case of the resignation of the Administrative Agent
from the performance of all its functions and duties hereunder and under the
other Loan Documents, if no successor Administrative Agent accepts appointment
as Administrative Agent within said thirty (30) Business Day period, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Collateral Agent shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as a successor
Administrative Agent is appointed in accordance with this Section 9.07.
Section 9.08 Collateral Matters.
(a) The Collateral Agent may from time to time make such
disbursements and advances ("Collateral Agent Advances") which the Collateral
Agent, in its reasonable business judgment, deems necessary or desirable to
preserve, protect, prepare for sale or lease or dispose of the Collateral or any
portion thereof, to enhance the likelihood or maximize the amount of repayment
by the Borrower of the Loans and other Obligations or to pay any other amount
chargeable to the Borrower pursuant to the terms of this Agreement, including,
without limitation, costs, fees and expenses as described in Section 11.04. The
Collateral Agent Advances shall bear interest at the maximum rate set forth in
this Agreement and shall be repayable on demand and be secured by the
Collateral. The Collateral Agent Advances shall
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constitute Obligations hereunder which may be charged to the Loan Account in
accordance with Section 3.02. The Collateral Agent shall notify the
Administrative Agent, each Lender and the Borrower in writing of each such
Collateral Agent Advance, which notice shall include a description of the
purpose of such Collateral Agent Advance. Without limitation to its obligations
pursuant to Section 9.05, each Lender agrees that it shall make available to the
Collateral Agent, upon the Collateral Agent's demand, in Dollars in immediately
available funds, the amount equal to such Lender's Pro Rata Share of each such
Collateral Agent Advance. If such funds are not made available to the Collateral
Agent by such Lender, the Collateral Agent shall be entitled to recover such
funds on demand from such Lender, together with interest thereon for each day
from the date such payment was due until the date such amount is paid to the
Collateral Agent, at the Federal Funds Rate for three Business Days and
thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the Collateral
Agent, at its option and in its discretion, to release any Lien granted to or
held by the Collateral Agent upon any Collateral upon termination of the Total
Commitment and payment and satisfaction of all Loans and all other Obligations
which have matured; or constituting property being sold or disposed of in
compliance with the terms of this Agreement and the other Loan Documents; or
constituting property in which the Loan Parties owned no interest at the time
the Lien was granted or at any time thereafter; or (subject to Section 11.02) if
approved, authorized or ratified in writing by the Required Lenders; or to
subordinate any Lien on any property granted to the Collateral Agent to the
holder of any Lien on such property permitted by clauses (e) or (h) of the
definition of Permitted Liens. Upon request by the Collateral Agent at any time,
the Lenders will confirm in writing the Collateral Agent's authority to release
particular types or items of Collateral pursuant to this Section 9.08(b).
(c) Without in any manner limiting the Collateral Agent's
authority to act without any specific or further authorization or consent by the
Lenders (as set forth in Section 9.08(b)), each Lender agrees to confirm in
writing, upon request by the Collateral Agent, the authority to release
Collateral conferred upon the Collateral Agent under Section 9.08(b). Upon
receipt by the Collateral Agent of confirmation from the Lenders of its
authority to release any particular item or types of Collateral, and upon prior
written request by any Loan Party, the Collateral Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Collateral Agent
for the benefit of the Agents and the Lenders upon such Collateral; provided,
however, that (i) the Collateral Agent shall not be required to execute any such
document on terms which, in the Collateral Agent's reasonable business judgment,
would expose the Collateral Agent to liability or create any obligations or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Lien upon (or obligations of any Loan Party in
respect of) all interests in the Collateral retained by any Loan Party.
(d) The Collateral Agent shall have no obligation whatsoever to
the Administrative Agent or to any Lender to assure that the Collateral exists
or is owned by the Loan Parties or is cared for, protected or insured or has
been encumbered or that the Lien granted to the Collateral Agent pursuant to
this Agreement or any other Loan Document has been properly or sufficiently or
lawfully created, perfected, protected or enforced or is entitled to any
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particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Collateral Agent in
this Section 9.08 or in any other Loan Document, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, the Collateral Agent may act in any manner it may deem appropriate, in
its sole discretion, given the Collateral Agent's own interest in the Collateral
as one of the Lenders and that the Collateral Agent shall have no duty or
liability whatsoever to any other Lender, except as otherwise provided herein.
Section 9.09 Agency for Perfection. Each Agent and each Lender hereby
appoints each other Agent and each other Lender as agent and bailee for the
purpose of perfecting the security interests in and liens upon the Collateral in
assets which, in accordance with Article 9 of the Uniform Commercial Code, can
be perfected only by possession or control (or where the security interest of a
secured party with possession or control has priority over the security interest
of another secured party) and each Agent and each Lender hereby acknowledges
that it holds possession of or otherwise controls any such Collateral for the
benefit of the Agents and the Lenders as secured party. Should the
Administrative Agent or any Lender obtain possession or control of any such
Collateral, the Administrative Agent or such Lender shall notify the Collateral
Agent thereof, and, promptly upon the Collateral Agent's request therefor shall
deliver possession or control of such Collateral to the Collateral Agent or in
accordance with the Collateral Agent's instructions. In addition, the Collateral
Agent shall also have the power and authority hereunder to appoint such other
sub-agents as may be necessary or required under applicable state law or
otherwise to perform its duties and enforce its rights with respect to the
Collateral and under the Loan Documents. Each Loan Party by its execution and
delivery of this Agreement hereby consents to the foregoing.
Section 9.10 Collateral Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower, the Collateral Agent (irrespective of
whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Collateral Agent shall have made any demand on the Borrower) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Agents and the Lenders
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Agents and the Lenders and their respective agents and
counsel and all other amounts due the Agents and the Lenders under Section 2.06
and Section 11.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by the Administrative Agent
and each Lender
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to make such payments to the Collateral Agent and, in the event that the
Collateral Agent shall consent to the making of such payments directly to the
Administrative Agent and the Lenders, to pay to the Collateral Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of the
Collateral Agent and its agents and counsel, and any other amounts due the
Collateral Agent under Section 2.06 and Section 11.04.
Nothing contained herein shall be deemed to authorize the Collateral Agent to
authorize or consent to or accept or adopt on behalf of the Administrative Agent
or any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of the Administrative Agent or any
Lender or to authorize the Collateral Agent to vote in respect of the claim of
the Administrative Agent or any Lender in any such proceeding.
Section 9.11 Agents and their Affiliates and their Designated
Entities. With respect to the Loans of SPCP Group IIII LLC, SPF CDO I, LLC,
Field Point I, LTD, Broad Point I, LLC, and SPCP Group, L.L.C. (each a
"Designated Entity" and collectively, the "Designated Entities") hereunder,
Silver Point, 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 an Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include each Designated Entity in its individual capacity.
Silver Point, the Designated Entities and their Affiliates may lend money to,
invest in, and generally engage in any kind of business with, any Loan Party,
any of their Affiliates and any Person who may do business with or own
securities of any Loan Party or any such Affiliate, all as if Silver Point was
not an Agent and without any duty to account therefor to Lenders. Silver Point,
the Designated Entities and their Affiliates may accept fees and other
consideration from any Loan Party for services in connection with this Agreement
or otherwise without having to account for the same to Lenders.
ARTICLE X
GUARANTY
Section 10.01 Guaranty. Each Guarantor hereby jointly and severally
and unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
the Borrower now or hereafter existing under any Loan Document, whether for
principal, interest, fees, commissions, expense reimbursements, indemnifications
or otherwise (including, without limitation, all interest, fees, expense
reimbursements and other amounts that accrue after the commencement of an
Insolvency Proceeding of the Borrower, whether or not a claim for post-filing
interest, fees, expense reimbursements or such other amounts are allowed in such
Insolvency Proceeding) (such obligations, to the extent not paid by the
Borrower, being the "Guaranteed Obligations"), and agrees to pay any and all
expenses (including reasonable counsel fees and expenses) incurred by the Agents
and the Lenders in enforcing any rights under the guaranty set forth in this
ARTICLE X. Without limiting the generality of the foregoing, each Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Borrower to the Agents and the Lenders
under any Loan Document but for the fact that they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving the
Borrower.
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Section 10.02 Guaranty Absolute. Each Guarantor jointly and severally
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Agents or the Lenders with respect thereto. Each Guarantor
agrees that this ARTICLE X constitutes a guaranty of payment when due and not of
collection and waives any right to require that any resort be made by any Agent
or any Lender to any Collateral. The obligations of each Guarantor under this
ARTICLE X are independent of the Guaranteed Obligations, and a separate action
or actions may be brought and prosecuted against each Guarantor to enforce such
obligations, irrespective of whether any action is brought against any Loan
Party or whether any Loan Party is joined in any such action or actions. The
liability of each Guarantor under this ARTICLE X shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now or hereafter have in any way relating to, any or all of
the following:
(a) any lack of validity or enforceability of any Loan Document
or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or
otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d) the existence of any claim, set-off, defense or other right
that any Guarantor may have at any time against any Person, including, without
limitation, any Agent, or any Lender;
(e) any change, restructuring or termination of the corporate,
limited liability company or partnership structure or existence of any Loan
Party; or
(f) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
the Agents or the Lenders that might otherwise constitute a defense available
to, or a discharge of, any Loan Party or any other guarantor or surety, other
than, subject to Section 11.14, the indefeasible payment in full in cash of all
of the Obligations and the Guaranteed Obligations after the termination of the
Total Commitment.
This ARTICLE X shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agents, the Lenders or any other Person,
all as though such payment had not been made.
Section 10.03 Waiver. Each Guarantor hereby waives (i) promptness and
diligence, (ii) notice of acceptance and any other notice with respect to any of
the Guaranteed
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Obligations and this ARTICLE X and any requirement that the Agents or the
Lenders exhaust any right or take any action against any Loan Party, any other
Person or any Collateral, (iii) any right to compel or direct any Agent or any
Lender to seek payment or recovery of any amounts owed under this ARTICLE X from
any one particular fund or source or to exhaust any right or take any action
against any other Loan Party, any other Person or any Collateral, (iv) any
requirement that any Agent or any Lender protect, secure, perfect or insure any
security interest or Lien on any property subject thereto or exhaust any right
to take any action against any Loan Party, any other Person or any Collateral,
and (v) any other defense available to any Guarantor, other than, subject to
Section 11.14, the indefeasible payment in full in cash of all of the
Obligations and the Guaranteed Obligations after the termination of the Total
Commitment. Each Guarantor agrees that the Agents and the Lenders shall have no
obligation to marshal any assets in favor of any Guarantor or against, or in
payment of, any or all of the Obligations. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated herein and that the waiver set forth in this Section 10.03 is
knowingly made in contemplation of such benefits. Each Guarantor hereby waives
any right to revoke this ARTICLE X, and acknowledges that this ARTICLE X is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
Section 10.04 Continuing Guaranty; Assignments. This ARTICLE X is a
continuing guaranty and shall (a) remain in full force and effect until the
later of the cash payment in full of the Guaranteed Obligations (other than
indemnification obligations as to which no claim has been made) and all other
amounts payable under this ARTICLE X and the termination of the Total
Commitment, (b) be binding upon each Guarantor, its successors and assigns and
(c) inure to the benefit of and be enforceable by the Agents and the Lenders and
their successors, pledgees, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may pledge, assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or any portion of its Commitments
or its Loans) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted such Lender herein or
otherwise, in each case as provided in Section 11.07.
Section 10.05 Subrogation. No Guarantor will exercise any rights that
it may now or hereafter acquire against any Loan Party or any other guarantor
that arise from the existence, payment, performance or enforcement of such
Guarantor's obligations under this ARTICLE X, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Agents and the Lenders against any Loan Party or any other guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from any Loan Party or any other guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless and
until all of the Guaranteed Obligations and all other amounts payable under this
ARTICLE X shall have been paid in full in cash and the Total Commitment shall
have been terminated. If any amount shall be paid to any Guarantor in violation
of the immediately preceding sentence at any time prior to the later of the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this ARTICLE X and the termination of the Total Commitment, such
amount shall be held in trust for the benefit of the Agents and the Lenders and
shall forthwith be paid to the
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Agents and the Lenders to be credited and applied to the Guaranteed Obligations
and all other amounts payable under this ARTICLE X, whether matured or
unmatured, in accordance with the terms of this Agreement, or to be held as
Collateral for any Guaranteed Obligations or other amounts payable under this
ARTICLE X thereafter arising. If (i) any Guarantor shall make payment to the
Agents and the Lenders of all or any part of the Guaranteed Obligations, (ii)
all of the Guaranteed Obligations and all other amounts payable under this
ARTICLE X shall be paid in full in cash and (iii) the termination of the Total
Commitment shall have occurred, the Agents and the Lenders will, at such
Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment by such
Guarantor.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, if to any Loan Party, at the following address:
Xanodyne Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & Shohl, LLP
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
if to the Administrative Agent or the Collateral Agent, to it at the
following address:
Silver Point Finance, LLC
Two ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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with copies to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 11.01. All such notices and other communications shall be
effective, (i) if mailed (by certified or registered mail, postage prepaid and
return receipt requested), when received or three Business Days after deposited
in the mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, provided same is on a Business Day, and, if not, on the
next Business Day or (iii) if delivered, upon delivery, provided same is on a
Business Day, and, if not, on the next Business Day, except that notices to any
Agent pursuant to ARTICLE II shall not be effective until received by such
Agent.
Section 11.02 Amendments, Etc. No amendment or waiver of any provision
of this Agreement, and no consent to any departure by any Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Borrower, on the one hand, and the Required Lenders or by the Collateral
Agent with the consent of the Required Lenders, on the other hand, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given, provided, however, that no amendment, waiver
or consent shall (i) increase the Commitment of any Lender, reduce the principal
of, or interest on, the Loans payable to any Lender (provided that only the
consent of the Required Lenders shall be required to waive the applicability of
any post-default increase in interest rates), reduce the amount of any fee
payable for the account of any Lender, or postpone or extend any date fixed for
any payment of principal of, or interest or fees on, the Loans payable to any
Lender, in each case without the written consent of such Lender, (ii) increase
the Total Commitment without the written consent of each Lender, (iii) change
the percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans that is required for the Lenders or any of them to take any action
hereunder, (iv) amend the definition of "Required Lenders" or "Pro Rata Share",
(v) release all or a substantial portion of the Collateral or subordinate any
Lien granted in favor of the Collateral Agent for the benefit of the Lenders
(except as otherwise provided in this Agreement and the other Loan Documents as
in effect on the Effective Date), or release the Borrower or any Guarantor, or
(vi) amend, modify or waive Section 3.04 or this Section 11.02 of this Agreement
without the written consent of each Lender. Notwithstanding the foregoing no
amendment, waiver or consent shall, unless in writing and signed by an Agent,
affect the rights or duties of such Agent (but not in its capacity as a Lender)
under this Agreement or the other Loan Documents.
Section 11.03 No Waiver; Remedies, Etc. No failure on the part of any
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any other Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of
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any other right. The rights and remedies of Ihe Agents and the Lenders provided
herein and in the other Loan Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law. The rights of the
Agents and the Lenders under any Loan Document against any party thereto are not
conditional or contingent on any attempt by the Agents and the Lenders to
exercise any of their rights under any other Loan Document against such party or
against any other Person.
Section 11.04 Expenses; Taxes; Attorneys' Fees. The Borrower will pay
on demand, all costs and expenses incurred by or on behalf of each Agent (and,
in the case of clauses (c) through (m) below, each Lender), regardless of
whether the transactions contemplated hereby are consummated, including, without
limitation, reasonable fees, costs, client charges and expenses of counsel for
each Agent (and, in the case of clauses (c) through (m) below, each Lender),
accounting, due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of
Collateral, title searches and reviewing environmental assessments,
miscellaneous disbursements, examination, travel, lodging and meals, arising
from or relating to: (a) the negotiation, preparation, execution, delivery,
performance and administration of this Agreement and the other Loan Documents
(including, without limitation, the preparation of any additional Loan Documents
pursuant to Section 6.01(b) or the review of any of the agreements, instruments
and documents referred to in Section 6.01 (f) and the use of Intralinks or other
similar information transmission systems in connection with the Loan Documents),
(b) any requested amendments, waivers or consents to this Agreement or the other
Loan Documents whether or not such documents become effective or are given, (c)
the preservation and protection of any of the Lenders' rights under this
Agreement or the other Loan Documents, (d) the defense of any claim or action
asserted or brought against any Agent or any Lender by any Person that arises
from or relates to this Agreement, any other Loan Document, the Agents' or the
Lenders' claims against any Loan Party, or any and all matters in connection
therewith, (e) the commencement or defense of, or intervention in, any court
proceeding arising from or related to this Agreement or any other Loan Document,
(f) the filing of any petition, complaint, answer, motion or other pleading by
any Agent or any Lender, or the taking of any action in respect of the
Collateral or other security, in connection with this Agreement or any other
Loan Document, (g) the protection, collection, lease, sale, taking possession of
or liquidation of, any Collateral or other security in connection with this
Agreement or any other Loan Document, (h) any attempt to enforce any Lien or
security interest in any Collateral or other security in connection with this
Agreement or any other Loan Document, (i) any attempt to collect from any Loan
Party, (j) all liabilities and costs arising from or in connection with the
past, present or future operations of any Loan Party involving any damage to
real or personal property or natural resources or harm or injury alleged to have
resulted from any Release of Hazardous Materials on, upon or into such property,
(k) any Environmental Liabilities and Costs incurred in connection with the
investigation, removal, cleanup and/or remediation of any Hazardous Materials
present or arising out of the operations of any facility owned or operated by
any Loan Party, (1) any Environmental Liabilities and Costs incurred in
connection with any Environmental Lien, or (m) the receipt by any Agent or any
Lender of any advice from professionals with respect to any of the foregoing.
Without limitation of the foregoing or any other provision of any Loan Document:
(x) the Borrower agrees to pay all stamp, document, transfer, recording or
filing taxes or fees and similar impositions now or hereafter determined by any
Agent or any Lender to be payable in connection with this Agreement or any other
Loan Document, and the Borrower agrees to save each Agent and each
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Lender harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions, (y) the Borrower agrees to
pay all broker fees that may become due in connection with the transactions
contemplated by this Agreement and the other Loan Documents, and (z) if the
Borrower fails to perform any covenant or agreement contained herein or in any
other Loan Document, any Agent may itself perform or cause performance of such
covenant or agreement, and the expenses of such Agent incurred in connection
therewith shall be reimbursed on demand by the Borrower.
Section 11.05 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, any Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to any Loan
Party (any such notice being expressly waived by the Loan Parties) and to the
fullest extent permitted by law, set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by such Agent or such Lender to or for the credit
or the account of any Loan Party against any and all of the Obligations,
irrespective of whether or not such Agent or such Lender shall have made any
demand. Each Agent and each Lender agrees to notify such Loan Party promptly
after any such set-off and application made by such Agent or such Lender
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Agents and the Lenders under
this Section 11.05 are in addition to the other rights and remedies (including
other rights of set-off) which the Agents and the Lenders may have under this
Agreement or any other Loan Documents of law or otherwise.
Section 11.06 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.07 Assignments and Participations.
(a) This Agreement and the other Loan Documents shall be binding
upon and inure to the benefit of each Loan Party and each Agent and each Lender
and their respective successors and assigns; provided, however, that none of the
Loan Parties may assign or transfer any of its rights hereunder without the
prior written consent of each Lender and any such assignment without the
Lenders' prior written consent shall be null and void.
(b) Each Lender may assign to one or more other lenders or other
entities all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments and the
Loans made by it); provided, however, that (i) such assignment is in an amount
which is at least $3,000,000 or a multiple of $1,000,000 in excess thereof (or
the remainder of such Lender's Commitment) (except such minimum amount shall not
apply to an assignment by a Lender to (x) an Affiliate of such Lender or a
Related Fund of such Lender or (y) a group of new Lenders, each of whom is an
Affiliate or Related Fund of each other to the extent the aggregate amount to be
assigned to all such new Lenders is at least $3,000,000 or a multiple of
$1,000,000 in excess thereof), (ii) the parties to each such assignment shall
execute and deliver to the Collateral Agent, for its acceptance, an
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Assignment and Acceptance, together with any promissory note subject to such
assignment and such parties shall deliver to the Collateral Agent a processing
and recordation fee of $3,000 (except the payment of such fee shall not be
required in connection with an assignment by a Lender to an Affiliate of such
Lender or Related Fund of such Lender), (iii) except as provided in Section
11.07(b), (iv), any such assignment shall be made with the written consent of,
and prior notice to, (x) the Collateral Agent, and (y) so long as no Default or
Event of Default shall have occurred and be continuing, the Borrower, which
consent of the Collateral Agent and the Borrower shall not be unreasonably
withheld, and (v) no written consent of or prior notice to the Collateral Agent
or the Borrower shall be required in connection with any assignment by a Lender
to an Affiliate of such Lender or a Related Fund of such Lender. Upon such
execution, delivery and acceptance, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least three
Business Days after the delivery thereof to the Collateral Agent (or such
shorter period as shall be agreed to by the Collateral Agent and the parties to
such assignment), (A) the assignee thereunder shall become a "Lender" hereunder
and, in addition to the rights and obligations hereunder held by it immediately
prior to such effective date, have the rights and obligations hereunder that
have been assigned to it pursuant to such Assignment and Acceptance and (B) the
assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto). Notwithstanding anything
contained to the contrary in this Section 11.07(b), a Lender may assign any or
all of its rights under the Loan Documents to an Affiliate of such Lender or a
Related Fund of such Lender without delivering an Assignment and Acceptance to
the Collateral Agent; provided, that (x) the Borrower and the Agents may
continue to deal solely and directly with such assigning Lender in connection
with the interest so assigned until such Lender and its assignee shall have
executed and delivered an Assignment and Acceptance to the Collateral Agent for
recordation and (y) the failure of such assigning Lender to deliver an
Assignment and Acceptance to the Collateral Agent or any other Person shall not
affect the legality, validity or binding effect of such assignment. Unless the
Borrower shall otherwise consent in writing, Silver Point and/or its Related
Funds' Pro Rata Share (as defined in clause (c) of the definition of such term)
shall equal or exceed 51% at all times.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto; (ii) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or any of its Subsidiaries or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently
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and without reliance upon the assigning Lender, any Agent or any 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 and the other Loan Documents; (v) such assignee appoints
and authorizes the Agents to take such action as agents on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agents by the terms hereof and thereof, together with such
powers as are reasonably incidental hereto and thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender.
(d) The Collateral Agent shall, on behalf of the Borrower,
maintain, or cause to be maintained at the Payment Office, a copy of each
Assignment and Acceptance delivered to and accepted by it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amount of the Loans (the "Registered Loans")
owing to each Lender from time to time. Other than in connection with an
assignment by a Lender to an Affiliate of such Lender or a Related Fund of such
Lender, the entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agents and the Lenders
shall treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower and any Lender at any reasonable time and from
time to time upon reasonable prior notice. In the case of any assignment by a
Lender to an Affiliate of such Lender or a Related Fund of such Lender, and
which assignment is not recorded in the Register, the assigning Lender shall
maintain a comparable register.
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, together with any promissory notes subject
to such assignment, the Collateral Agent shall, if the Collateral Agent (and the
Borrower, if applicable) consents to such assignment and if such Assignment and
Acceptance has been completed (i) accept such Assignment and Acceptance and (ii)
record the information contained therein in the Register.
(f) A Registered Loan (and the registered note, if any,
evidencing the same) may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register (and each registered
note shall expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by registration of such assignment or sale on the Register,
together with the surrender of the registered note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such registered note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new registered notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the registration of assignment or sale of
any Registered Loan (and the registered note, if any, evidencing the same), the
Agents shall treat the Person in whose name such Registered Loan (and the
registered note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.
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(g) In the event that any Lender sells participations in a
Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered Loans held by it (the "Participant
Register"). A Registered Loan (and the registered note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each registered note shall
expressly so provide). Any participation of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.
(h) Any foreign Person who purchases or is assigned or
participates in any portion of such Registered Loan shall comply with Section
2.08(d).
(i) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of its Commitments and the Loans made by it); provided, that (i)
such Lender's obligations under this Agreement (including without limitation,
its Commitments hereunder) and the other Loan Documents shall remain unchanged;
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, and the Borrower, the Agents and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents; and (iii) a participant shall not be entitled to
require such Lender to take or omit to take any action hereunder except (A)
action directly effecting an extension of the maturity dates or decrease in the
principal amount of the Loans, (B) action directly effecting an extension of the
due dates or a decrease in the rate of interest payable on the Loans or the fees
payable under this Agreement, or (C) actions directly effecting a release of all
or a substantial portion of the Collateral or any Loan Party (except as set
forth in Section 9.08 of this Agreement or any other Loan Document). The Loan
Parties agree that each participant shall be entitled to the benefits of Section
2.08 and Section 3.05 of this Agreement with respect to its participation in any
portion of the Commitments and the Loans as if it was a Lender.
(j) In the event (i) any Lender delivers to the Borrower any
notice in accordance with Section 2.08(c), 2.09(d), or 3.05(b), (ii) any Lender
defaults in its obligations to fund a Revolving Loan pursuant to this Agreement,
or (iii) any Lender (a "Non-Consenting Lender") refuses to consent to an
amendment, modification or waiver of this Agreement that, pursuant to Section
11.02, requires the consent of all of the Lenders or all of the Lenders directly
affected thereby, and which amendment, modification or waiver has been consented
to by the Required Lenders, then, provided that no Default or Event of Default
has occurred and is continuing at such time, the Borrower may, at its own
expense (such expense to include any transfer fee payable to the Collateral
Agent under Section 11.07(b)), require such Lender to transfer and assign in
whole or in part, without recourse (in accordance with and subject to the terms
and conditions of Section 11.07), all or part of its interests, rights and
obligations under this Agreement to any assignee which shall assume such
assigned obligations, provided that (A) such assignee shall be acceptable to the
Collateral Agent, (B) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority, (C) the
Borrower or such assignee shall have paid to the assigning Lender in immediately
available funds the principal of and interest accrued to the date of such
payment on the Loans made by it hereunder and all other
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amounts owed to it hereunder (including, without limitation, any amounts owing
pursuant to Section 2.08(c), 2.09(d), or 3.05(b)) and (D) in the event such
Lender is a Non-Consenting Lender, each assignee shall consent, at the time of
such assignment, to each matter in respect of which such Lender was a
Non-Consenting Lender and the Borrower also requires each other Lender that is a
Non-Consenting Lender to assign its interests, rights and obligations under this
Section 11.07(j).
Section 11.08 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of this Agreement by telecopier or electronic transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telecopier or
electronic transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this Agreement.
The foregoing shall apply to each other Loan Document mutatis mutandis.
Section 11.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 11.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH AGENT, EACH LENDER
AND EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH
LOAN PARTY HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF
NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 11.01 AND TO THE
SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME EFFECTIVE
TEN (10) DAYS AFTER SUCH MAILING. EACH AGENT, EACH LENDER AND EACH LOAN PARTY
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
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OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION. EACH LOAN
PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 11.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH AGENT
AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT,
DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN
CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO
THIS AGREEMENT.
Section 11.12 Consent by the Agents and Lenders. Except as otherwise
expressly set forth herein or in any other Loan Document to the contrary, if the
consent, approval, satisfaction, determination, judgment, acceptance or similar
action (an "Action") of any Agent or any Lender shall be permitted or required
pursuant to any provision hereof or any provision of any other agreement to
which any Loan Party is a party and to which any Agent or any Lender has
succeeded thereto, such Action shall be required to be in writing and may be
withheld or denied by such Agent or such Lender, in its sole discretion, with or
without any reason, and without being subject to question or challenge on the
grounds that such Action was not taken in good faith.
Section 11.13 No Party Deemed Drafter. Each of the parties hereto
agrees that no party hereto shall be deemed to be the drafter of this Agreement.
Section 11.14 Reinstatement; Certain Payments. If any claim is ever
made upon any Agent or any Lender for repayment or recovery of any amount or
amounts received by
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such Agent or such Lender in payment or on account of any of the Obligations,
such Agent or such Lender shall give prompt notice of such claim to each other
Agent and Lender and the Borrower, and if such Agent or such Lender repays all
or part of such amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such Agent or such Lender
or any of its property, or (ii) any good faith settlement or compromise of any
such claim effected by such Agent or such Lender with any such claimant, then
and in such event each Loan Party agrees that (A) any such judgment, decree,
order, settlement or compromise shall be binding upon it notwithstanding the
cancellation of any Indebtedness hereunder or under the other Loan Documents or
the termination of this Agreement or the other Loan Documents, and (B) it shall
be and remain liable to such Agent or such Lender hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by such Agent or such Lender.
Section 11.15 Indemnification.
(a) General Indemnity. In addition to each Loan Party's other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless each Agent and each
Lender and all of their respective officers, directors, employees, attorneys,
consultants and agents (collectively called the "Indenmitees") from and against
any and all losses, damages, liabilities, obligations, penalties, fees,
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Indenmitees, whether prior
to or from and after the Effective Date, whether direct, indirect or
consequential, as a result of or arising from or relating to or in connection
with any of the following: (i) the negotiation, preparation, execution or
performance or enforcement of this Agreement, any other Loan Document or of any
other document executed in connection with the transactions contemplated by this
Agreement, (ii) any Agent's or any Lender's furnishing of funds to the Borrower
under this Agreement or the other Loan Documents, including, without limitation,
the management of any such Loans, (iii) any matter relating to the financing
transactions contemplated by this Agreement or the other Loan Documents or by
any document executed in connection with the transactions contemplated by this
Agreement or the other Loan Documents, or (iv) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto (collectively, the "Indemnified Matters");
provided, however, that the Loan Parties shall not have any obligation to any
Indemnitee under this subsection (a) for any Indemnified Matter caused by the
gross negligence or willful misconduct of such Indemnitee, as determined by a
final judgment of a court of competent jurisdiction.
(b) Environmental Indemnity. Without limiting Section 11.15(a)
hereof, each Loan Party agrees to, jointly and severally, defend, indemnify, and
hold harmless the Indenmitees against any and all Environmental Liabilities and
Costs, arising out of (i) any Releases or threatened Releases (x) at any
property presently or formerly owned or operated by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest, or (y) of any
Hazardous Materials generated and disposed of by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest; (ii) any request
for information, investigation, lawsuit brought or threatened, settlement
reached or order by a Governmental Authority relating to the presence or Release
of such Hazardous Materials; (iii) any violations of Environmental Laws; (iv)
any Environmental Action relating to any Loan Party or any Subsidiary of any
Loan Party,
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or any predecessor in interest or filed against any Agent or any Lender; (v) any
personal injury (including wrongful death) or property damage (real or personal)
arising out of exposure to Hazardous Materials used, handled, generated,
transported or disposed by any Loan Party or any Subsidiary of any Loan Party,
or any predecessor in interest; and (vi) any breach of any warranty or
representation regarding environmental matters made by the Loan Parties in
Section 5.01(r) or the breach of any covenant made by the Loan Parties in
Section 6.01(j). Notwithstanding the foregoing, the Loan Parties shall not have
any obligation to any Indemnitee under this subsection (b) regarding any
potential environmental matter covered hereunder which is caused by the gross
negligence or willful misconduct of such Indemnitee, as determined by a final
judgment of a court of competent jurisdiction.
(c) The indemnification for all of the foregoing losses, damages,
fees, costs and expenses of the Indemnitees are chargeable against the Loan
Account. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section 11.15 may be unenforceable because it is violative of
any law or public policy, each Loan Party shall, jointly and severally,
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees. The indemnities set forth in this Section 11.15
shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.
Section 11.16 Records. The unpaid principal of and interest on the
Loans, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Commitments, and the accrued
and unpaid fees payable pursuant to this Agreement, including, without
limitation, the Applicable Prepayment Premium and the Unused Line Fee and the
fees set forth in the Fee Letter, shall at all times be ascertained from the
records of the Agents, which shall be conclusive and binding absent manifest
error.
Section 11.17 Binding Effect. This Agreement shall become effective
when it shall have been executed by each Loan Party, each Agent and each Lender
and when the conditions precedent set forth in Section 4.01 hereof have been
satisfied or waived in writing by the Agents, and thereafter shall be binding
upon and inure to the benefit of each Loan Party, each Agent and each Lender,
and their respective successors and assigns, except that the Loan Parties shall
not have the right to assign their rights hereunder or any interest herein
without the prior written consent of the Agents and each Lender, and any
assignment by any Lender shall be governed by Section 11.07 hereof.
Section 11.18 Interest. It is the intention of the parties hereto that
each Agent and each Lender shall conform strictly to usury laws applicable to
it. Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to any Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to such
Agent or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to any Agent
or any Lender that is contracted for, taken, reserved, charged or received by
such Agent or such Lender under this Agreement or any other Loan
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Document or agreements or otherwise in connection with the Obligations shall
under no circumstances exceed the maximum amount allowed by such applicable law,
any excess shall be canceled automatically and if theretofore paid shall be
credited by such Agent or such Lender on the principal amount of the Obligations
(or, to the extent that the principal amount of the Obligations shall have been
or would thereby be paid in full, refunded by such Agent or such Lender, as
applicable, to the Borrower); and (ii) in the event that the maturity of the
Obligations is accelerated by reason of any Event of Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest under law applicable to any
Agent or any Lender may never include more than the maximum amount allowed by
such applicable law, and excess interest, if any, provided for in this Agreement
or otherwise shall be canceled automatically by such Agent or such Lender, as
applicable, as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Agent or such Lender, as applicable,
on the principal amount of the Obligations (or, to the extent that the principal
amount of the Obligations shall have been or would thereby be paid in full,
refunded by such Agent or such Lender to the Borrower). All sums paid or agreed
to be paid to any Agent or any Lender for the use, forbearance or detention of
sums due hereunder shall, to the extent permitted by law applicable to such
Agent or such Lender, be amortized, prorated, allocated and spread throughout
the full term of the Loans until payment in full so that the rate or amount of
interest on account of any Loans hereunder does not exceed the maximum amount
allowed by such applicable law. If at any time and from time to time (x) the
amount of interest payable to any Agent or any Lender on any date shall be
computed at the Highest Lawful Rate applicable to such Agent or such Lender
pursuant to this Section 11.18 and (y) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Agent or
such Lender would be less than the amount of interest payable to such Agent or
such Lender computed at the Highest Lawful Rate applicable to such Agent or such
Lender, then the amount of interest payable to such Agent or such Lender in
respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate applicable to such Agent or such Lender
until the total amount of interest payable to such Agent or such Lender shall
equal the total amount of interest which would have been payable to such Agent
or such Lender if the total amount of interest had been computed without giving
effect to this Section 11.18.
For purposes of this Section 11.18, the term "applicable law" shall
mean that law in effect from time to time and applicable to the loan transaction
between the Borrower, on the one hand, and the Agents and the Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.
The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest that has not accrued as of the date
of acceleration.
Section 11.19 Confidentiality. Each Agent and each Lender agrees (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature and in accordance with safe and sound practices of comparable
commercial finance companies, any non-public information supplied to it by the
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Loan Parties pursuant to this Agreement or the other Loan Documents which is
identified in writing by the Loan Parties as being confidential at the time the
same is delivered to such Person (and which at the time is not, and does not
thereafter become, publicly available or available to such Person from another
source not known to be subject to a confidentiality obligation to such Person
not to disclose such information), provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any Agent or any Lender (it
being understood that such Person will be informed of the confidential nature of
such information and instructed to keep it confidential), (iii) to examiners,
auditors, accountants or Securitization Parties (it being understood that such
Person will be informed of the confidential nature of such information and
instructed to keep it confidential), (iv) in connection with any litigation to
which any Agent or any Lender is a party or (v) to any assignee or participant
(or prospective assignee or participant) so long as such assignee or participant
(or prospective assignee or participant) first agrees, in writing, to be bound
by confidentiality provisions similar in substance to this Section 11.19. Each
Agent and each Lender agrees that, upon receipt of a request or identification
of the requirement for disclosure pursuant to clause (iv) hereof, it will make
reasonable efforts to keep the Loan Parties informed of such request or
identification; provided that each Loan Party acknowledges that each Agent and
each Lender may make disclosure as required or requested by any Governmental
Authority having or asserting jurisdiction over such Agent or Lender or
representative thereof and that each Agent and each Lender may be subject to
review by Securitization Parties or other regulatory agencies and may be
required to provide to, or otherwise make available for review by, the
representatives of such parties or agencies any such non-public information (it
being understood that such Person will be informed of the confidential nature of
such information and instructed to keep it confidential).
Section 11.20 Integration. This Agreement, together with the other
Loan Documents, reflects the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or qualified
by any other agreement, oral or written, before the date hereof.
Section 11.21 USA Patriot Act Notice.
Each Lender, the Collateral Agent (for itself and not on behalf of any
Lender) and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,2001)),
it may be required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender, the Collateral Agent or the
Administrative Agent, as applicable, to identify the Borrower in accordance
therewith.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
XANODYNE PHARMACEUTICALS, INC.
By: /s/ S.A. Stamp
------------------------------------
Name: S.A. Stamp
Title: Chief Financial Officer
GUARANTORS:
XANODYNE ACQUISITION, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary and Treasurer
XANODYNE DEVELOPMENT GROUP, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary and Treasurer
RUTI ACQUISITIONS, INC.
By: /s/ S.A. Stamp
------------------------------------
Name: S.A. Stamp
Title: Treasurer
[FINANCING AGREEMENT]
AGENTS:
SILVER POINT FINANCE, LLC,
as Collateral Agent and as
Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
[FINANCING AGREEMENT]
LENDERS:
BLUE RIDGE INVESTMENTS, L.L.C.,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. Carp
------------------------------------
Name: ▇▇▇▇▇▇ ▇. Carp
Title: Senior Vice President
[FINANCING AGREEMENT]
LENDERS:
SPCP GROUP III LLC
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
SPF CDO I, LLC
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
FIELD POINT I, LTD
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
BROAD POINT I LLC
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
SPCP GROUP LLC
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
[FINANCING AGREEMENT]
EXHIBIT A
FORM OF GUARANTY
GUARANTY, dated as of _________, 200_, made by ______________, (the
"Additional Guarantor"), in favor of each of the Lenders (as hereinafter
defined), Silver Point Finance, LLC, a Delaware limited liability company, as
collateral agent for the Agents (as hereinafter defined) and the Lenders (in
such capacity, together with its successors and assigns in such capacity, if
any, the "Collateral Agent"), and as administrative agent for the Agents and the
Lenders (in such capacity, together with its successors and assigns in such
capacity, if any, the "Administrative Agent" and together with the Collateral
Agent, each an "Agent" and collectively, the "Agents") pursuant to the Financing
Agreement referred to below.
WITNESSETH:
WHEREAS, Xanodyne Pharmaceuticals, Inc., a Delaware corporation (the
"Borrower"), each subsidiary of the Borrower listed as a "Guarantor" on the
signature pages thereto (together with each other Person (as defined in the
Financing Agreement) that guarantees all or any portion of the Obligations (as
defined in the Financing Agreement) from time to time, each a "Guarantor" and
collectively, the "Guarantors"), the lenders from time to time party thereto
(each a "Lender" and collectively, the "Lenders") and the Agents are parties to
a Financing Agreement, dated as of July 25, 2005 (such agreement, as amended,
restated, supplemented or otherwise modified from time to time, including any
replacement agreement therefor, being hereinafter referred to as the "Financing
Agreement");
WHEREAS, the Borrower directly or indirectly owns all of the issued
and outstanding shares of Capital Stock or other interests of the Additional
Guarantor;
WHEREAS, pursuant to Section 6.01(b) of the Financing Agreement, the
Additional Guarantor is required to execute and deliver to the Collateral Agent
a guaranty guaranteeing all Loans and all other Obligations of the Borrower
under the Financing Agreement; and
WHEREAS, the Additional Guarantor has determined that its execution,
delivery and performance of this Guaranty directly benefit, and are within the
corporate, limited partnership or limited liability company purposes, as the
case may be, and in the best interests of, the Additional Guarantor;
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Lenders to make and maintain the Loans and to
provide other financial accommodations pursuant to the Financing Agreement, the
Additional Guarantor hereby agrees with the Lenders and the Agents as follows:
SECTION 1. Definitions. Reference is hereby made to the Financing
Agreement for a statement of the terms thereof. All terms used in this Guaranty
which are defined in the Financing Agreement and not otherwise defined herein
shall have the same meanings herein as set forth therein.
SECTION 2. Guaranty. The Additional Guarantor (together with the other
Guarantors) hereby jointly and severally (i) unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity, by
acceleration or otherwise, of all Obligations of the Borrower now or hereafter
existing under any Loan Document, whether for principal, interest, fees,
commissions, expense reimbursements, indemnifications or otherwise (including,
without limitation, all interest, fees and expense reimbursements and other
amounts that accrue after the commencement of an Insolvency Proceeding of the
Borrower, whether or not a claim for post-filing interest, fees, expense
reimbursements or such other amounts are allowed in such Insolvency Proceeding)
(such obligations to the extent not paid by the Borrower, being the "Guaranteed
Obligations"), and (ii) agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by the Agents and the Lenders in enforcing
any rights under this Guaranty. Without limiting the generality of the
foregoing, the Additional Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by the Borrower
to the Agents and the Lenders under any Loan Document but for the fact that they
are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any Borrower.
SECTION 3. Guaranty Absolute; Continuing Guaranty; Assignments.
(a) The Additional Guarantor (together with the other Guarantors)
jointly and severally hereby guarantees that the Guaranteed Obligations will be
paid strictly in accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agents or the Lenders with
respect thereto. The Additional Guarantor agrees that this Guaranty constitutes
a guaranty of payment when due and not of collection and waives any right to
require that any resort be made by any Agent or any Lender to any Collateral.
The obligations of the Additional Guarantor under this Guaranty are independent
of the Guaranteed Obligations, and a separate action or actions may be brought
and prosecuted against the Additional Guarantor to enforce such obligations,
irrespective of whether any action is brought against any other Loan Party or
whether any other Loan Party is joined in any such action or actions. The
liability of the Additional Guarantor under this Guaranty shall be irrevocable,
absolute and unconditional irrespective of, and the Additional Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way relating
to, any or all of the following:
(i) any lack of validity or enforceability of any Loan Document
or any agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or
otherwise;
(iii) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
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(iv) the existence of any claim, set-off, defense or other right
that the Additional Guarantor may have at any time against any Person,
including, without limitation, any Agent or any Lender;
(v) any change, restructuring or termination of the corporate,
limited liability company or partnership structure or existence of any Loan
Party; or
(vi) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
the Agents or the Lenders that might otherwise constitute a defense available
to, or a discharge of, any Loan Party or any other guarantor or surety, other
than, subject to Section 11.14 of the Financing Agreement, the indefeasible
payment in full in cash of all of the Obligations and the Guaranteed Obligations
after the termination of the Total Commitment.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agents, the Lenders or any other Person all
as though such payment had not been made.
(b) This Guaranty is a continuing guaranty and shall (i) remain in
full force and effect until the later of (A) the cash payment in full of all of
the Guaranteed Obligations (other than indemnification obligations as to which
no claim has been made) and all other amounts payable under this Guaranty and
(B) the termination of the Total Commitment, (ii) be binding upon the Additional
Guarantor, its successors and assigns and (iii) inure to the benefit of and be
enforceable by the Agents and the Lenders and their successors, pledgees,
transferees and assigns. Without limiting the generality of the foregoing clause
(iii), any Lender may pledge, assign or otherwise transfer all or any portion of
its rights and obligations under any Loan Document (including, without
limitation, all or any portion of its Commitments or its Loans) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as provided in the Financing Agreement.
SECTION 4. Waivers. The Additional Guarantor hereby waives (i)
promptness, diligence, (ii) notice of acceptance and any other notice with
respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that the Agents or the Lenders exhaust any right or take any action
against any Loan Party or any other Person or any Collateral, (iii) any right to
compel or direct any Agent or any Lender to seek payment or recovery of any
amounts owed under this Guaranty from any one particular fund or source or to
exhaust any right or take any action against any other Loan Party or any other
Person or any Collateral, (iv) any requirement that any Agent or any Lender
protect, secure, perfect or insure any security interest or Lien or any property
subject thereto, or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral and (v) any other defense available to the
Additional Guarantor, other than, subject to Section 11.14 of the Financing
Agreement, the indefeasible payment in full in cash of all of the Obligations
and the Guaranteed Obligations after the termination of the Total Commitment.
The Additional Guarantor agrees that the Agents and the Lenders shall have no
obligation to marshal any assets in favor of the Additional Guarantor or
against, or in payment of, any or all of the Obligations. The Additional
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated
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herein and in the Financing Agreement and that the waiver set forth in this
Section 4 is knowingly made in contemplation of such benefits. The Additional
Guarantor hereby waives any right to revoke this Guaranty, and acknowledges that
this Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.
SECTION 5. Subrogation. The Additional Guarantor will not exercise any
rights that it may now or hereafter acquire against any Loan Party or any other
guarantor that arise from the existence, payment, performance or enforcement of
the Additional Guarantor's obligations under this Guaranty, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of the
Agents, and the Lenders against any Loan Party or any other guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from any Loan Party or any other guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless and
until all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash and the Total Commitment shall
have been terminated. If any amount shall be paid to the Additional Guarantor in
violation of the immediately preceding sentence at any time prior to the later
of the payment in full in cash of the Guaranteed Obligations and the termination
of the Total Commitment, such amount shall be held in trust for the benefit of
the Agents and the Lenders and shall forthwith be paid to the Agents and the
Lenders, to be credited and applied to the Guaranteed Obligations and all other
amounts payable under this Guaranty, whether matured or unmatured, in accordance
with the terms of this Guaranty and the Financing Agreement, or to be held as
Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (i) the Additional Guarantor shall make payment
to the Agents and the Lenders, of all or any part of the Guaranteed Obligations,
(ii) all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall be paid in full in cash and (iii) the termination of the Total
Commitment shall have occurred, the Agents and the Lenders will, at the
Additional Guarantor's request and expense, execute and deliver to the
Additional Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
the Additional Guarantor of an interest in the Guaranteed Obligations resulting
from the payment by the Additional Guarantor.
SECTION 6. Representations, Warranties and Covenants. The Additional
Guarantor hereby represents and warrants to the Agents and the Lenders as
follows:
(a) The Additional Guarantor (i) is a [corporation] [limited
partnership] [limited liability company], duly organized, validly existing and
in good standing under the laws of the state or jurisdiction of its organization
as set forth on the first page hereof, (ii) has all requisite power and
authority to conduct its business as now conducted and as presently contemplated
and to execute and deliver this Guaranty and each other Loan Document to which
the Additional Guarantor is a party, and to consummate the transactions
contemplated hereby and thereby and (iii) is duly qualified to do business and
is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary other than in such jurisdictions where the
failure to
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be so qualified and in good standing could not reasonably be expected to have a
Material Adverse Effect.
(b) The execution, delivery and performance by the Additional
Guarantor of this Guaranty and each other Loan Document to which the Additional
Guarantor is or will be a party (i) have been duly authorized by all necessary
action, (ii) do not and will not contravene its charter or by-laws, its limited
liability company or operating agreement or its certificate of partnership or
partnership agreement, as applicable, or any applicable law, or any contractual
restriction binding on or otherwise affecting the Additional Guarantor or any of
its properties, (iii) do not and will not result in or require the creation of
any Lien (other than pursuant to any Loan Document) upon or with respect to any
of its properties, and (iv) do not and will not result in any default,
noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of
any material permit, license, authorization or approval applicable to its
operations or any of its properties.
(c) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority is required in connection with the
due execution, delivery and performance by the Additional Guarantor of this
Guaranty or any other Loan Document to which the Additional Guarantor is or will
be a party.
(d) Each of this Guaranty and each other Loan Document, when
delivered, is (or will be, in the case of such documents delivered after the
date hereof) a legal, valid and binding obligation of the Additional Guarantor,
enforceable against the Additional Guarantor in accordance with its terms,
except as enforceability may be limited by equitable principles and by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally.
(e) (i) There is no pending or, to the best knowledge of the
Additional Guarantor, threatened action, suit or proceeding affecting the
Additional Guarantor or its properties before any court or other Governmental
Authority or any arbitrator that (A) if adversely determined, could reasonably
be expected to have a Material Adverse Effect or (B) relates to this Guaranty or
any other Loan Document to which the Additional Guarantor is a party or any
transaction contemplated hereby or thereby and (ii) as of the date hereof, the
Additional Guarantor does not hold any commercial tort claims in respect of
which a claim has been filed in a court of law or a written notice by an
attorney has been given to a potential defendant.
(f) The Additional Guarantor (i) has read and understands the terms
and conditions of the Financing Agreement and the other Loan Documents, and (ii)
now has and will continue to have independent means of obtaining information
concerning the affairs, financial condition and business of the Borrower and the
other Loan Parties, and has no need of, or right to obtain from any Agent or any
Lender, any credit or other information concerning the affairs, financial
condition or business of the Borrower or the other Loan Parties that may come
under the control of any Agent or any Lender.
(g) The Additional Guarantor acknowledges and agrees that by its
execution and delivery of this Guaranty (i) it shall be bound, as a Guarantor,
by all the provisions of the
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Financing Agreement and the other Loan Documents and shall comply with and be
subject to all of the terms, conditions, covenants, agreements and obligations
set forth therein and applicable to the Guarantors (including, without
limitation, each of the covenants that are set forth in Section 6.01 and Section
6.02 of the Financing Agreement) and (ii) from and after the date hereof, each
reference to a "Guarantor", the "Guarantors", a "Loan Party" or the "Loan
Parties" in the Financing Agreement and each other Loan Document shall include
the Additional Guarantor. The Additional Guarantor further acknowledges and
agrees that it has received a copy of the Financing Agreement and each other
Loan Document and that it has read and understands the terms thereof.
SECTION 7. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, any Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to the
Additional Guarantor (any such notice being expressly waived by the Additional
Guarantor) and to the fullest extent permitted by law, set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other Indebtedness at any time owing by such Agent or such Lender
to or for the credit or the account of the Additional Guarantor against any and
all of the Obligations irrespective of whether or not such Agent or such Lender
shall have made any demand. By its acceptance of the benefits hereof, each Agent
and each Lender agrees to notify the Additional Guarantor promptly after any
such set-off and application made by such Agent or such Lender, provided that
the failure to give such notice shall not affect the validity of such set-off
and application. The rights of the Agents and the Lenders under this Section 7
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which the Agents and the Lenders may have under this
Guaranty or any other Loan Document, in law or otherwise.
SECTION 8. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing and shall be mailed, telecopied or delivered,
if to the Additional Guarantor, to it in the care of the Borrower at the
Borrower's address set forth in the Financing Agreement, or if to any Agent, to
it at its address set forth in the Financing Agreement; or as to such Person at
such other address as shall be designated by such Person in a written notice to
such other Persons complying as to delivery with the terms of this Section 8.
All such notices and other communications shall be effective (a) if mailed (by
certified or registered mail, postage prepaid and return receipt requested),
when received or three (3) Business Days after deposited in the mails, whichever
occurs first; (b) if telecopied, when transmitted and confirmation is received,
provided same is on a Business Day and, if not, on the next Business Day; or (c)
if delivered, upon delivery, provided same is on a Business Day and, if not, on
the next Business Day.
SECTION 9. CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, (A) BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY, EACH AGENT
AND EACH LENDER, AND (B) BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
ADDITIONAL GUARANTOR, HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE
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JURISDICTION OF THE AFORESAID COURTS. THE ADDITIONAL GUARANTOR HEREBY
IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS
AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT IN CARE
OF THE BORROWER AT THE BORROWER'S ADDRESS FOR NOTICES AS SET FORTH IN THE
FINANCING AGREEMENT AND TO THE SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH
SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. THE ADDITIONAL
GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY, EACH AGENT
AND EACH LENDER, AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE ADDITIONAL GUARANTOR IN ANY OTHER JURISDICTION. THE ADDITIONAL GUARANTOR
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO
THE EXTENT THAT THE ADDITIONAL GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE ADDITIONAL
GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS GUARANTY AND THE OTHER LOAN DOCUMENTS.
SECTION 10. WAIVER OF JURY TRIAL, ETC. THE ADDITIONAL GUARANTOR HEREBY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
CONCERNING ANY RIGHTS UNDER THIS GUARANTY OR THE OTHER LOAN DOCUMENTS, OR UNDER
ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT
DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS GUARANTY OR THE OTHER LOAN DOCUMENTS, AND AGREES THAT ANY SUCH ACTION,
PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
THE ADDITIONAL GUARANTOR CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT ANY AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING
OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. THE ADDITIONAL GUARANTOR
HEREBY
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ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE
LENDERS ENTERING INTO THIS AGREEMENT.
SECTION 11. Taxes.
(a) Any and all payments by the Additional Guarantor hereunder or
under any other Loan Document shall be made free and clear of and without
deduction for any and all present or future Taxes. If the Additional Guarantor
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Agent or any Lender (or any Transferee), (i) the sum
payable shall be increased by the amount (an "additional amount") necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 11) such Agent or such Lender (or
such Transferee) shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) the Additional Guarantor shall make such
deductions and (iii) the Additional Guarantor shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Additional Guarantor agrees to pay to the
relevant Governmental Authority in accordance with applicable law any present or
future Other Taxes. The Additional Guarantor shall deliver to each Agent and
each Lender official receipts in respect of any Taxes or Other Taxes payable
hereunder promptly after payment of such Taxes or Other Taxes.
(c) The Additional Guarantor (together with the other Guarantors)
hereby jointly and severally indemnifies and agrees to hold each Agent and each
Lender harmless from and against Taxes and Other Taxes (including, without
limitation, Taxes and Other Taxes imposed on any amounts payable under this
Section 11) paid by such Agent or such Lender (or such Transferee), whether or
not such Taxes or Other Taxes were correctly or legally asserted. Such
indemnification shall be paid within 10 days from the date on which any such
Agent or such Lender makes written demand therefor specifying in reasonable
detail the nature and amount of such Taxes or Other Taxes.
(d) The Additional Guarantor shall not be required to indemnify any
Non-U.S. Lender, or pay any additional amounts to any Non-U.S. Lender, in
respect of United States Federal withholding tax pursuant to this Guaranty to
the extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S. Lender became a
party to the Financing Agreement (or, in the case of a Transferee that is a
participation holder, on the date such participation holder became a Transferee
thereunder) or, with respect to payments to a New Lending Office, the date such
Non-U.S. Lender designated such New Lending Office with respect to a Loan;
provided, however, that this clause (i) shall not apply to the extent the
indemnity payment or additional amounts any Transferee, or any Lender (or
Transferee) through a New Lending Office, would be entitled to receive (without
regard to this clause (i)) do not exceed the indemnity payment or additional
amounts that the Person making the assignment, participation or transfer to such
Transferee, or such Lender (or Transferee) making the designation of such New
Lending Office, would have been entitled to receive in the absence of such
assignment, participation, transfer or designation, (ii) the obligation to pay
such additional amounts would not have arisen but for a failure by such Non-
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U.S. Lender to comply with the provisions of Section 2.08(d) of the Financing
Agreement or (iii) any of the representations or certifications made by a
Non-U.S. Lender pursuant to Section 2.08(d) of the Financing Agreement are
incorrect at the time a payment hereunder is made, other than by reason of any
change in treaty, law or regulation having effect after the date such
representations or certifications were made.
(e) Any Agent or any Lender (or Transferee) claiming any indemnity
payment or additional payment amounts payable pursuant to this Section 11 shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
file any certificate or document reasonably requested in writing by the Borrower
or change the jurisdiction of its applicable lending office if the making of
such a filing or change would avoid the need for or reduce the amount of any
such indemnity payment or additional amount which may thereafter accrue, would
not require such Agent or such Lender (or Transferee) to disclose any
information such Agent or such Lender (or Transferee) deems confidential and
would not, in the reasonable determination of such Agent or such Lender (or
Transferee), be otherwise disadvantageous to such Agent or such Lender (or
Transferee).
(f) If any Agent or any Lender (or any Transferee) receives a refund
of a tax for which a payment has been made by the Additional Guarantor pursuant
to this Section 11, which refund in the sole judgment of such Agent or such
Lender (or Transferee) is attributable to such payment made by the Additional
Guarantor, then such Agent or such Lender (or Transferee) shall reimburse
Additional Guarantor for such amount. Nothing contained herein shall require any
Agent or any Lender (or Transferee) to make available to the Additional
Guarantor or any other Person any of its tax returns (or any other information
that it deems to be confidential in its sole discretion).
(g) The obligations of the Additional Guarantor under this Section 11
shall survive the termination of this Guaranty and the payment of the Loans and
all other amounts payable hereunder and under the Financing Agreement.
SECTION 12. Miscellaneous.
(a) The Additional Guarantor will make each payment hereunder in
lawful money of the United States of America and in immediately available funds
to the Administrative Agent, for the benefit of the Agents and the Lenders, at
such address specified by the Administrative Agent from time to time by notice
to the Additional Guarantor under the Financing Agreement.
(b) No amendment or waiver of any provision of this Guaranty and no
consent to any departure by the Additional Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by the
Additional Guarantor and the Collateral Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
(c) No failure on the part of any Agent or any Lender to exercise, and
no delay in exercising, any right hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right hereunder or under any other
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Loan Document preclude any other or further exercise thereof or the exercise of
any other right. The rights and remedies of the Agents and the Lenders provided
herein and in the other Loan Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law. The rights of the
Agents and the Lenders under any Loan Document against any party thereto are not
conditional or contingent on any attempt by the Agents and the Lenders to
exercise any of their rights under any other Loan Document against such party or
against any other Person.
(d) Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(e) This Guaranty shall (i) be binding on the Additional Guarantor and
its successors and assigns, and (ii) inure, together with all rights and
remedies of the Agents and the Lenders hereunder, to the benefit of the Agents
and the Lenders and their respective successors, transferees and assigns.
Without limiting the generality of clause (ii) of the immediately preceding
sentence, to the extent permitted by Section 11.07 of the Financing Agreement,
any Lender may assign or otherwise transfer its rights and obligations under the
Financing Agreement or any other Loan Document to any other Person, and such
other Person shall thereupon become vested with all of the benefits in respect
thereof granted to the Lenders herein or otherwise. The Additional Guarantor
agrees that each participant shall be entitled to the benefits of this Section
12 with respect to its participation in any portion of the Loans as if it was a
Lender. None of the rights or obligations of the Additional Guarantor hereunder
may be assigned or otherwise transferred without the prior written consent of
the Collateral Agent and any such assignment without the Collateral Agent's
prior written consent shall be null and void.
(f) This Guaranty and the other Loan Documents reflect the entire
understanding of the parties with respect to the transactions contemplated
hereby and thereby and shall not be contradicted or qualified by any other
agreement, oral or written, before the date hereof.
(g) Section headings herein are included for convenience of reference
only and shall not constitute a part of this Guaranty for any other purpose.
(h) THIS GUARANTY AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY
PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN
DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE
OF NEW YORK.
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IN WITNESS WHEREOF, the Additional Guarantor has caused this Guaranty
to be executed by an officer thereunto duly authorized, as of the date first
above written.
[NAME OF ADDITIONAL GUARANTOR]
By:
------------------------------------
Name:
Title:
EXHIBIT B
FORM OF SECURITY AGREEMENT
SECURITY AGREEMENT, dated July 25, 2005, made by each of the Grantors
referred to below, in favor of Silver Point Finance, LLC, a Delaware limited
liability company ("Silver Point"), in its capacity as collateral agent for the
Agents and the Lenders (as such terms are defined below) party to the Financing
Agreement referred to below (in such capacity, together with its successors and
assigns in such capacity, if any, the "Collateral Agent").
WITNESSETH:
WHEREAS, Xanodyne Pharmaceuticals, Inc., a Delaware corporation (the
"Borrower"), each subsidiary of the Borrower listed as a "Guarantor" on the
signature pages thereto (together with each other Person (as defined in the
Financing Agreement) that guarantees all or any portion of the Obligations (as
defined in the Financing Agreement) from time to time, each a "Guarantor" and
collectively, the "Guarantors", and together with the Borrower, each a "Grantor"
and collectively, the "Grantors"), the lenders from time to time party thereto
(each a "Lender" and collectively, the "Lenders"), the Collateral Agent, and
Silver Point, as administrative agent for the Lenders (in such capacity,
together with its successors and assigns in such capacity; if any, the
"Administrative Agent", and together with the Collateral Agent, each an "Agent"
and collectively, the "Agents"), are parties to a Financing Agreement, dated as
of July 25, 2005 (such agreement, as amended, restated, supplemented or
otherwise modified from time to time, including any replacement agreement
therefor, being hereinafter referred to as the "Financing Agreement");
WHEREAS, pursuant to the Financing Agreement, the Lenders have agreed
to make certain term loans and certain revolving loans (each a "Loan" and
collectively, the "Loans"), to the Borrower;
WHEREAS, it is a condition precedent to the Lenders making any Loan or
making any other financial accommodation to the Borrower pursuant to the
Financing Agreement that each Grantor shall have executed and delivered to the
Collateral Agent a security agreement providing for the grant to the Collateral
Agent for the benefit of the Agents and the Lenders of a security interest in
all personal property of such Grantor;
WHEREAS, the Grantors are mutually dependent on each other in the
conduct of their respective businesses as an integrated operation, with the
credit needed from time to time by each Grantor often being provided through
financing obtained by the other Grantors and the ability to obtain such
financing being dependent on the successful operations of all of the Grantors as
a whole; and
WHEREAS, each Grantor has determined that the execution, delivery and
performance of this Agreement directly benefit, and are in the best interest of,
such Grantor;
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Lenders to make and maintain the Loans and to
provide other financial accommodations to the Borrower pursuant to the Financing
Agreement, the Grantors hereby
jointly and severally agree with the Collateral Agent, for the benefit of the
Agents and the Lenders, as follows:
SECTION 1. Definitions.
(a) Reference is hereby made to the Financing Agreement for a
statement of the terms thereof. All terms used in this Agreement and the
recitals hereto which are defined in the Financing Agreement or in Article 9 of
the Uniform Commercial Code as in effect from time to time in the State of New
York (the "Code") and which are not otherwise defined herein shall have the same
meanings herein as set forth therein; provided that terms used herein which are
defined in the Code as in effect in the State of New York on the date hereof
shall continue to have the same meaning notwithstanding any replacement or
amendment of such statute except as the Collateral Agent may otherwise
determine.
(b) The following terms shall have the respective meanings provided
for in the Code: "Accounts", "Account Debtor", "Cash Proceeds", "Chattel Paper",
"Commercial Tort Claim", "Commodity Account", "Commodity Contracts", "Deposit
Account", "Documents", "Electronic Chattel Paper", "Equipment", "Fixtures",
"General Intangibles", "Goods", "Instruments", "Inventory", "Investment
Property", "Letter-of-Credit Rights", "Noncash Proceeds", "Payment Intangibles",
"Proceeds", "Promissory Notes", "Record", "Security Account", "Software", and
"Supporting Obligations".
(c) As used in this Agreement, the following terms shall have the
respective meanings indicated below, such meanings to be applicable equally to
both the singular and plural forms of such terms:
"Copyright Licenses" means all licenses, contracts or other
agreements, whether written or oral, naming any Grantor as licensee or licensor
and providing for the grant of any right to use or sell any works covered by any
copyright (including, without limitation, all Copyright Licenses set forth in
Schedule II hereto).
"Copyrights" means all domestic and foreign copyrights, whether
registered or unregistered, including, without limitation, all copyright rights
throughout the universe (whether now or hereafter arising) in any and all media
(whether now or hereafter developed), in and to all original works of authorship
fixed in any tangible medium of expression, acquired or used by any Grantor
(including, without limitation, all copyrights described in Schedule II hereto),
all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States or any
other country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or renewals
thereof.
"Intellectual Property" means the Copyrights, Trademarks and Patents.
"Licenses" means the Copyright Licenses, the Trademark Licenses and
the Patent Licenses.
"Patent Licenses" means all licenses, contracts or other agreements,
whether written or oral, naming any Grantor as licensee or licensor and
providing for the grant of any
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right to manufacture, use or sell any invention covered by any Patent
(including, without limitation, all Patent Licenses set forth in Schedule II
hereto).
"Patents" means all domestic and foreign letters patent, design
patents, utility patents, industrial designs, inventions, trade secrets, ideas,
concepts, methods, techniques, processes, proprietary information, technology,
know-how, formulae, rights of publicity and other general intangibles of like
nature, now existing or hereafter acquired (including, without limitation, all
domestic and foreign letters patent, design patents, utility patents, industrial
designs, inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how and formulae described
in Schedule II hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office, or in any similar office or
agency of the United States or any other country or any political subdivision
thereof), and all reissues, divisions, continuations, continuations in part and
extensions or renewals thereof.
"Trademark Licenses" means all licenses, contracts or other
agreements, whether written or oral, naming any Grantor as licensor or licensee
and providing for the grant of any right concerning any Trademark, together with
any goodwill connected with and symbolized by any such trademark licenses,
contracts or agreements and the right to prepare for sale or lease and sell or
lease any and all Inventory now or hereafter owned by any Grantor and now or
hereafter covered by such licenses (including, without limitation, all Trademark
Licenses described in Schedule II hereto).
"Trademarks" means all domestic and foreign trademarks, service marks,
collective marks, certification marks, trade names, business names, d/b/a's,
Internet domain names, trade styles, designs, logos and other source or business
identifiers and all general intangibles of like nature, now or hereafter owned,
adopted, acquired or used by any Grantor (including, without limitation, all
domestic and foreign trademarks, service marks, collective marks, certification
marks, trade names, business names, d/b/a's, Internet domain names, trade
styles, designs, logos and other source or business identifiers described in
Schedule II hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state thereof or any other country or any political
subdivision thereof), and all reissues, extensions or renewals thereof, together
with all goodwill of the business symbolized by such marks and all customer
lists, formulae and other Records of any Grantor relating to the distribution of
products and services in connection with which any of such marks are used.
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SECTION 2. Grant of Security Interest. As collateral security for all
of the Obligations (as defined in Section 3 hereof), each Grantor hereby pledges
and assigns to the Collateral Agent, and grants to the Collateral Agent, for the
benefit of the Agents and the Lenders, a continuing security interest in, all
personal property of such Grantor, wherever located and whether now or hereafter
existing and whether now owned or hereafter acquired, of every kind and
description, tangible or intangible (the "Collateral"), including, without
limitation, the following:
(a) all Accounts;
(b) all Chattel Paper (whether tangible or electronic);
(c) the Commercial Tort Claims specified on Schedule VI hereto;
(d) all Deposit Accounts, all cash, and all other property from time
to time deposited therein and the monies and property in the possession or under
the control of any Agent or any Lender or any affiliate, representative, agent
or correspondent of any Agent or any Lender;
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all General Intangibles (including, without limitation, all
Payment Intangibles);
(i) all Goods;
(j) all Instruments (including, without limitation, Promissory Notes);
(k) all Inventory;
(l) all Investment Property;
(m) all Intellectual Property, and all Licenses;
(n) all Letter-of-Credit Rights;
(o) all Supporting Obligations;
(p) all other tangible and intangible personal property of such
Grantor (whether or not subject to the Code), including, without limitation, all
bank and other accounts and all cash and all investments therein, all proceeds,
products, offspring, accessions, rents, profits, income, benefits, substitutions
and replacements of and to any of the property of such Grantor described in the
preceding clauses of this Section 2 (including, without limitation, any proceeds
of insurance thereon and all causes of action, claims and warranties now or
hereafter held by such Grantor in respect of any of the items listed above), and
all books, correspondence.
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files and other Records, including, without limitation, all tapes, disks, cards,
Software, data and computer programs in the possession of or under the control
of such Grantor or any other Person from time to time acting for such Grantor
that at any time evidence or contain information relating to any of the property
described in the preceding clauses of this Section 2 or are otherwise necessary
or helpful in the collection or realization thereof; and
(q) all Proceeds, including all Cash Proceeds and Noncash Proceeds,
and products of any and all of the foregoing Collateral;
in each case howsoever such Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise). Notwithstanding
anything to the contrary set forth above, the types or items of Collateral
described above shall not include any rights or interests in (x) Permitted
Acquisition Capital Stock; or (y) any contract, permit, license, or license
agreement covering real or personal property, if under the terms of such
contract, permit, license, or license agreement, or applicable law with respect
thereto, the valid grant of a security interest or Lien therein to the
Collateral Agent is prohibited and such prohibition has not been or is not
waived or the consent of the other party to such contract, permit, license, or
license agreement has not been or is not otherwise obtained or under applicable
law such prohibition cannot be waived; provided, that, the foregoing exclusion
in this clause (y) shall in no way be construed (i) to apply if any such
prohibition is unenforceable under Sections 9-406, 9-407 or 9-408 of the Code or
other applicable law (including, without limitation, the Bankruptcy Code) or
principles of equity or (ii) so as to limit, impair or otherwise affect the
Collateral Agent's unconditional continuing security interests in and Liens upon
any rights or interests of a Grantor in or to the proceeds of, or any monies due
or to become due under, any such contract, permit, license, or license
agreement; provided further that immediately upon the ineffectiveness, lapse or
termination of any such prohibition on the grant of such security interest or
Lien, the Collateral shall include, and such Grantor shall be deemed to have
granted a security interest in, all such right, title and interests as if such
prohibition had never been in effect.
SECTION 3. Security for Obligations. The security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, whether now existing or hereafter incurred (the
"Obligations"'):
(a) the prompt payment by each Grantor, as and when due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), of all amounts from time to time owing by it in respect of the
Financing Agreement and the other Loan Documents, including, without limitation,
(i) all Obligations (as defined in the Financing Agreement) (including, without
limitation, all interest that accrues after the commencement of any Insolvency
Proceeding of any Loan Party, whether or not the payment of such interest is
unenforceable or is not allowable, in whole or in part, due to the existence of
such Insolvency Proceeding), (ii) in the case of a Guarantor, all amounts from
time to time owing by such Grantor in respect of its guaranty made pursuant to
Article X of the Financing Agreement or under any other Guaranty to which it is
a party, including all obligations guaranteed by such Grantor and (iii) all
fees, commissions, charges, expense reimbursements, indemnifications and all
other amounts due or to become due under any Loan Document (including, without
limitation, all fees, commissions, charges, expense, reimbursements,
indemnifications and other amounts that accrue after the commencement of any
Insolvency Proceeding of any Loan Party, whether or not the
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payment of such fees, commissions, charges, expenses, reimbursements,
indemnifications and other amounts are unenforceable or are not allowable, in
whole or in part, due to the existence of such Insolvency Proceeding); and
(b) the due performance and observance by each Grantor of all of its
other obligations from time to time existing in respect of the Loan Documents.
SECTION 4. Representations and Warranties. Each Grantor jointly and
severally represents and warrants as follows:
(a) Schedule I hereto sets forth (i) the exact legal name of each
Grantor and (ii) the organizational identification number of each Grantor or
states that no such organizational identification number exists.
(b) Each Grantor (i) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of the state or other applicable jurisdiction of its organization as
set forth on Schedule I hereto, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and to
execute, deliver and perform this Agreement and each other Loan Document to be
executed and delivered by it pursuant hereto and to consummate the transactions
contemplated hereby and thereby, and (iii) is duly qualified to do business and
is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, other than in such jurisdictions where the
failure to be so qualified and in good standing could not reasonably be expected
to have a Material Adverse Effect.
(c) The execution, delivery and performance by each Grantor of this
Agreement and each other Loan Document to which such Grantor is or will be a
party (i) have been duly authorized by all necessary action, (ii) do not and
will not contravene its charter or by-laws, its limited liability company or
operating agreement or its certificate of partnership or partnership agreement,
as applicable, or any applicable law or any contractual restriction binding on
or otherwise affecting such Grantor or any of its properties, (iii) do not and
will not result in or require the creation of any Lien (other than pursuant to
any Loan Document) upon or with respect to any of its properties and (iv) do not
and will not result in any default, noncompliance, suspension, revocation,
impairment, forfeiture or nonrenewal of any material permit, license,
authorization or approval applicable to it or its operations or any of its
properties.
(d) This Agreement and each other Loan Document when delivered, is (or
will be, in the case of such documents delivered after the date hereof) a legal,
valid and binding obligation of the Grantor which is party hereto or thereto,
enforceable against such Grantor in accordance with its terms, except as
enforceability may be limited by equitable principles and by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally.
(e) There is no pending or, to the best knowledge of any Grantor,
threatened action, suit, proceeding or claim affecting any Grantor or any of its
properties, before any court or other Governmental Authority or any arbitrator,
or any order, judgment or award by any
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Governmental Authority or arbitrator, that may adversely affect the grant by any
Grantor, or the perfection, of the security interest purported to be created
hereby in the Collateral, or the exercise by the Collateral Agent of any of its
rights or remedies hereunder.
(f) All Federal and foreign and all state and local tax returns and
other reports required by applicable law to be filed by any Grantor have been
filed, or extensions have been obtained, and all taxes, assessments and other
governmental charges imposed upon any Grantor or any property of any Grantor
(including, without limitation, all federal income and social security taxes on
employees' wages and all sales taxes) and which have become due and payable on
or prior to the date hereof have been paid, except (i) as of the date hereof, to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof in accordance with GAAP, and (ii) after the date hereof, as expressly
permitted by Section 6.01 (c) of the Financing Agreement.
(g) All Equipment, Fixtures, Goods and Inventory (except for
Equipment, Goods and Inventory in transit) now existing are, and all Equipment,
Fixtures, Goods and Inventory hereafter existing will be, located and/or based
at (i) the addresses specified therefor in Schedule III hereto (as amended,
supplemented or otherwise modified from time to time in accordance with Section
5(b) hereof), (ii) any other locations in the United States for which any
Grantor has provided notice to the Agents in accordance with Section 6.01(1) of
the Financing Agreement and, if necessary, a written subordination or waiver or
collateral access agreement in accordance with Section 6.01(m) of the Financing
Agreement and (iii) any other locations at which any Grantor has Collateral with
a fair market value of less than $50,000, individually for any location, and
$250,000 in the aggregate for all such locations. Each Grantor's chief place of
business and chief executive office, the place where such Grantor keeps its
Records concerning Accounts and all originals of all Chattel Paper are located
at the addresses specified therefor in Schedule III hereto (as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof). None of the Accounts is evidenced by Promissory Notes or other
Instruments except for promissory notes evidencing aggregate indebtedness of not
more than $100,000. Set forth in Schedule IV hereto is a complete and accurate
list, as of the date of this Agreement, of each Deposit Account, Securities
Account and Commodities Account of each Grantor, together with the name and
address of each institution at which each such Account is maintained, the
account number for each such Account and a description of the purpose of each
such Account. Set forth in Schedule II hereto is a complete and correct list of
each trade name used by each Grantor.
(h) Each Grantor has delivered to the Collateral Agent complete and
correct copies of each written License described in Schedule II hereto,
including all schedules and exhibits thereto, which represents all of the
written Licenses existing on the date of this Agreement. Each such written
License sets forth the entire agreement and understanding of the parties thereto
relating to the subject matter thereof, and there are no other agreements,
arrangements or understandings, written or oral, relating to the matters covered
thereby or the rights of any Grantor or any of its Affiliates in respect
thereof. Each License now existing is, and each other License will be, the
legal, valid and binding obligation of the parties thereto, enforceable against
such parties in accordance with its terms. No default under any License by
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any such party has occurred, nor does any defense, offset, deduction or
counterclaim exist thereunder in favor of any such party.
(i) The Grantors own and control, or otherwise possess adequate rights
to use, all Trademarks, Patents and Copyrights, which are the only trademarks,
patents, copyrights, inventions, trade secrets, proprietary information and
technology, know-how, formulae and rights of publicity necessary to conduct
their business in substantially the same manner as conducted as of the date
hereof. Schedule II hereto sets forth a true and complete list of all
Intellectual Property and Licenses owned or used by each Grantor as of the date
hereof. Except as set forth on Schedule II hereto, all such Intellectual
Property is subsisting and in full force and effect, has not been adjudged
invalid or unenforceable, is valid and enforceable and has not been abandoned in
whole or in part. Except as set forth on Schedule II hereto, no such
Intellectual Property is the subject of any licensing or franchising agreement.
No Grantor has any knowledge of any conflict with the rights of others to any
Intellectual Property and, to the best knowledge of each Grantor, no Grantor is
now infringing or in conflict with any such rights of others in any material
respect, and to the best knowledge of each Grantor, no other Person is now
infringing or in conflict in any material respect with any such properties,
assets and rights owned or used by any Grantor. No Grantor has received any
written notice that it is violating or has violated the trademarks, patents,
copyrights, inventions, trade secrets, proprietary information and technology,
know-how, formulae, rights of publicity or other intellectual property rights of
any third party.
(j) The Grantors are and will be at all times the sole and exclusive
owners of, or otherwise have and will have adequate rights in, the Collateral
free and clear of any Lien except for the Permitted Liens. No effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any recording or filing office except such
as may have been filed to perfect or protect any Permitted Lien.
(k) The exercise by the Collateral Agent of any of its rights and
remedies hereunder will not contravene any applicable law or any contractual
restriction binding on or otherwise affecting any Grantor or any of its
properties and will not result in, or require the creation of, any Lien upon or
with respect to any of its properties.
(l) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or other regulatory body, or any
other Person, is required for (i) the grant by any Grantor, or the perfection,
of the security interest purported to be created hereby in the Collateral or
(ii) the exercise by the Collateral Agent of any of its rights and remedies
hereunder, except (A) for the filing under the Uniform Commercial Code as in
effect in the applicable jurisdiction of the financing statements as described
in Schedule V hereto, all of which financing statements have been duly filed and
are in full force and effect, (B) with respect to the perfection of the security
interest created hereby in the United States Intellectual Property, for the
recording of the appropriate Assignment for Security, substantially in the form
of Exhibit A hereto in the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, (C) with respect to the
perfection of the security interest created hereby in foreign Intellectual
Property and Licenses, for registrations and filings in jurisdictions located
outside of the United States and covering rights in such jurisdictions relating
to such foreign Intellectual Property and Licenses, (D) with respect to the
perfection of the security interest created hereby in
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motor vehicles (including, without limitation, all trucks, trailers, tractors,
service vehicles, automobiles and other mobile equipment) for which the title to
such motor vehicles is governed by a certificate of title or ownership
(collectively, the "Motor Vehicles"), for the submission of an appropriate
application requesting that the Lien of the Collateral Agent be noted on the
certificate of title or ownership, completed and authenticated by the applicable
Grantor, together with the certificate of title, with respect to each Motor
Vehicle, to the appropriate state agency, (E) with respect to any action that
may be necessary to obtain control of Collateral described in Sections 5(i) and
5(k) hereof, the taking of such actions and (F) the taking possession of all
Documents, Chattel Paper, Instruments and cash constituting Collateral.
(m) This Agreement creates in favor of the Collateral Agent for the
benefit of the Agents and the Lenders a legal, valid and enforceable security
interest in the Collateral, as security for the Obligations. The Collateral
Agent's having possession of all Instruments, Documents, Chattel Paper and cash
constituting Collateral and obtaining control of all Collateral described in
Sections 5(i) and 5(k) hereof from time to time, the recording of the
appropriate Assignment for Security executed pursuant hereto in the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable, the submission of an appropriate application requesting that the
Lien of the Collateral Agent be noted on the certificate of title or ownership,
completed and authenticated by the applicable Grantor, together with the
certificate of title or ownership, with respect to such Motor Vehicles, to the
applicable state agency, and the filing of the financing statements described in
Schedule V hereto and, with respect to the Intellectual Property hereafter
existing and not covered by an applicable Assignment for Security, the recording
in the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, of appropriate instruments of assignment, result in the
perfection of such security interests. Such security interests are, or in the
case of Collateral in which any Grantor obtains rights after the date hereof,
will be, perfected, first priority security interests, subject in priority only
to the Permitted Liens that, pursuant to the definition of the term "Permitted
Liens", are not prohibited from being prior to the Liens in favor of the
Collateral Agent, for the benefit of the Agents and the Lenders, and the
recording or filing of such instruments of assignment described above. Such
recordings and filings and all other action necessary or desirable to perfect
and protect such security interest have been duly taken, except for (i) the
Collateral Agent's having possession of all Instruments, Documents and Chattel
Paper and cash constituting Collateral after the date hereof, (ii) the
Collateral Agent's having control of any Collateral described in Sections 5(i)
and 5(k) of this Agreement after the date hereof and (iii) the other filings,
recordations and actions described in Section 4(1) hereof.
(n) As of the date hereof, no Grantor holds any Commercial Tort Claims
or is aware of any such pending claims, except for such claims described in
Schedule VI.
(o) The partnership interests or membership interests of each Grantor
in each of its Subsidiaries that is a partnership or a limited liability company
are not (i) dealt in or traded on securities exchanges or in securities markets,
(ii) securities for purposes of Article 8 of any relevant Uniform Commercial
Code, (iii) investment company securities within the meaning of Section 8-103 of
any relevant Uniform Commercial Code and (iv) evidenced by a certificate. Such
partnership interests or membership interests constitute General Intangibles.
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SECTION 5. Covenants as to the Collateral. So long as any of the
Obligations shall remain outstanding or prior to the termination of the Total
Commitment and the Loan Documents, unless the Collateral Agent shall otherwise
consent in writing:
(a) Further Assurances. Each Grantor will at its expense, at any time
and from time to time, promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or that the
Collateral Agent may reasonably request in order to (i) enable the Collateral
Agent to perfect and protect the security interest purported to be created
hereby; (ii) enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder in respect of the Collateral; or (iii) otherwise effect the
purposes of this Agreement, including, without limitation: (A) marking
conspicuously all Chattel Paper, Licenses and Records pertaining to the
Collateral with a legend, in form and substance satisfactory to the Collateral
Agent, indicating that such Chattel Paper, License or Collateral is subject to
the security interest created hereby, (B) if any Account with an invoice amount
in excess of $100,000 shall be evidenced by Promissory Notes or other
Instruments or Chattel Paper, delivering and pledging to the Collateral Agent
hereunder such Promissory Notes, Instruments or Chattel Paper, duly endorsed and
accompanied by executed instruments of transfer or assignment, all in form and
substance satisfactory to the Collateral Agent, (C) executing and filing (to the
extent, if any, that such Grantor's signature is required thereon) or
authenticating the filing of, such financing or continuation statements, or
amendments thereto, as may be necessary or desirable or that the Collateral
Agent may reasonably request in order to perfect and preserve the security
interest purported to be created hereby, (D) furnishing to the Collateral Agent
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the
Collateral Agent may reasonably request, all in reasonable detail, (E) except as
otherwise provided in the Financing Agreement, if any Collateral with a book
value in excess of $250,000 (when aggregated with all other Collateral at the
same location) shall be in the possession of a third party, notifying such
Person of the Collateral Agent's security interest created hereby and using
commercially reasonable efforts to obtain a written acknowledgment from such
Person that such Person holds possession of the Collateral for the benefit of
the Collateral Agent, which such written acknowledgement shall be in form and
substance reasonably satisfactory to the Collateral Agent, (F) if at any time
after the date hereof, any Grantor acquires or holds any Commercial Tort Claim,
immediately notifying the Collateral Agent in a writing signed by such Grantor
setting forth a brief description of such Commercial Tort Claim and granting to
the Collateral Agent a security interest therein and in the proceeds thereof,
which writing shall incorporate the provisions hereof and shall be in form and
substance satisfactory to the Collateral Agent, (G) if requested by the
Collateral Agent after the occurrence and during the continuance of an Event of
Default, cause the Collateral Agent to be listed as the lienholder, for the
benefit of the Agents and the Lenders, on each certificate of title or ownership
with respect to each Motor Vehicle or other item of Equipment subject to a
certificate of title or ownership (other than a Motor Vehicle or item of
Equipment that is subject to a purchase money security interest permitted by
Section 6.02(a) of the Financing Agreement) and within ten (10) Business Days of
such request deliver evidence of the same to the Collateral Agent and (H) taking
all actions required by law in any relevant Uniform Commercial Code
jurisdiction, or by other law as applicable in any foreign jurisdiction.
(b) Location of Equipment and Inventory. Each Grantor will keep the
Equipment and Inventory (other than (x) Equipment and Inventory sold in the
ordinary course of
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business in accordance with Section 5(g) hereof and (y) Equipment and Inventory
in transit) at (i) one or more of the locations specified on Schedule III
hereto, (ii) upon not less than ten (10) days' prior written notice to the
Collateral Agent accompanied by a new Schedule III hereto indicating each new
location of the Equipment and Inventory, at such other locations in the
continental United States, as the Grantors may elect or (iii) at any other
location at which any Grantor has Collateral with a fair market value of less
than $50,000, individually for any location, and $250,000 for all such
locations, provided that (x) all action has been taken to grant to the
Collateral Agent a perfected, first priority security interest in such Equipment
and Inventory (subject in priority only to Permitted Liens that, pursuant to the
definition of the term "Permitted Liens," are not prohibited from being prior to
the Liens in favor of the Collateral Agent, for the benefit of the Agents and
the Lenders), and (y) the Collateral Agent's rights in such Equipment and
Inventory, including, without limitation, the existence, perfection and priority
of the security interest created hereby in such Equipment and Inventory, are not
adversely affected thereby.
(c) Condition of Equipment. Each Grantor will maintain or cause the
Equipment which is necessary or used in the proper conduct of its business to be
maintained and preserved in good condition, repair and working order, ordinary
wear and tear excepted, and will forthwith, or in the case of any loss or damage
to any Equipment promptly after the occurrence thereof, make or cause to be made
all repairs, replacements and other improvements in connection therewith which
are necessary or desirable, consistent with past practice, or after the
occurrence and during the continuance of an Event of Default, which the
Collateral Agent may reasonably request to such end. Each Grantor will promptly
furnish to the Collateral Agent a statement describing in reasonable detail any
loss or damage in excess of $25,000 to any Equipment.
(d) Taxes, Etc. Each Grantor jointly and severally agrees to pay
promptly when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Equipment and Inventory, except to the
extent otherwise provided in the Financing Agreement.
(e) Insurance.
(i) Each Grantor will, at its own expense, maintain insurance
(including, without limitation, comprehensive general liability, hazard, rent,
property and business interruption insurance) with respect to all of its
properties, including, without limitation, its Equipment and Inventory and all
real properties leased or owned by it in such amounts, against such risks, in
such form and with responsible and reputable insurance companies or associations
as is required by any Governmental Authority having jurisdiction with respect
thereto or as is carried generally in accordance with sound business practice by
companies in similar businesses similarly situated and in any event, in amount,
adequacy and scope reasonably satisfactory to the Collateral Agent. Each policy
for liability insurance shall provide for all losses to be paid to the
Collateral Agent as its interests may appear, and each policy for property
damage insurance shall provide for all losses to be adjusted with, and paid
directly to, the Collateral Agent for the benefit of the Agents and the Lenders.
In addition, each such policy shall (A) name each Grantor and the Collateral
Agent (and such other Persons as the Collateral Agent may designate from time to
time) as insured parties thereunder (without any
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representation or warranty by or obligation upon the Collateral Agent or such
other Person) as their interests may appear, (B) contain an agreement by the
insurer that any loss thereunder shall be payable to the Collateral Agent on its
own account notwithstanding any action, inaction or breach of representation or
warranty by any Grantor, (C) provide that there shall be no recourse against the
Collateral Agent for payment of premiums or other amounts with respect thereto
and (D) provide that at least thirty (30) days' prior written notice of
cancellation, lapse, expiration or other adverse change shall be given to the
Collateral Agent by the insurer. Each Grantor will, if so requested by the
Collateral Agent, deliver to the Collateral Agent original or duplicate policies
of such insurance and, as often as the Collateral Agent may reasonably request,
a report of a reputable insurance broker with respect to such insurance. Each
Grantor will also, at the reasonable request of the Collateral Agent, execute
and deliver instruments of assignment of such insurance policies assigning such
policies to the Collateral Agent as security for the Obligations and will use
commercially reasonable efforts to cause the respective insurers to acknowledge
notice of such assignment.
(ii) Reimbursement under any liability insurance maintained by
any rantor pursuant to this Section 5(e) may be paid directly to the Person who
shall have incurred liability covered by such insurance. In the case of any loss
involving damage to Equipment or Inventory, any proceeds of insurance maintained
by a Grantor pursuant to this Section 5(e) shall be paid to the Collateral Agent
for the benefit of the Agents and the Lenders in accordance with the Financing
Agreement.
(iii) Upon the occurrence and during the continuance of a Default
or Event of Default or except as otherwise expressly provided in the Financing
Agreement, upon any insurance payment in respect of any Equipment or Inventory,
all insurance payments in respect of such Equipment or Inventory shall be paid
to the Collateral Agent for the benefit of the Agents and the Lenders and
applied as specified in Section 7(b) hereof.
(f) Provisions Concerning the Accounts and the Licenses.
(i) Except as otherwise expressly permitted by Section 6.02(m) of
the Financing Agreement, no Grantor shall, without the prior written consent of
the Collateral Agent, change (A) its name, identity or organizational structure,
(B) its jurisdiction of incorporation or organization as set forth in Section
4(b) hereof or (C) its chief executive office as set forth on Schedule III
hereto. Each Grantor shall (x) promptly notify the Collateral Agent upon
obtaining an organizational identification number, if on the date hereof such
Grantor did not have such identification number, and (y) keep adequate records
concerning the Accounts and Chattel Paper and permit representatives of the
Collateral Agent pursuant to the terms of the Financing Agreement to inspect and
make abstracts from such Records and Chattel Paper.
(ii) Each Grantor will, except as otherwise provided in this
subsection (f), continue to collect, at its own expense, all amounts due or to
become due under the Accounts. In connection with such collections, each Grantor
may (and, upon the occurrence and during the continuance of an Event of Default,
at the Collateral Agent's direction, will) take such action as such Grantor (or,
if applicable, the Collateral Agent) may deem necessary or advisable to enforce
collection or performance of the Accounts; provided, however, that the
Collateral Agent shall have the right at any time, upon the occurrence and
during the continuance
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of an Event of Default, to notify the Account Debtors or obligors under any
Accounts of the assignment of such Accounts to the Collateral Agent and to
direct such Account Debtors or obligors to make payment of all amounts due or to
become due to such Grantor thereunder directly to the Collateral Agent or its
designated agent and, upon such notification and at the expense of such Grantor
and to the extent permitted by law, to enforce collection of any such Accounts
and to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done. After receipt by
any Grantor of a notice from the Collateral Agent that the Collateral Agent has
notified, intends to notify, or has enforced or intends to enforce a Grantor's
rights against the Account Debtors or obligors under any Accounts as referred to
in the proviso to the immediately preceding sentence, (A) all amounts and
proceeds (including Instruments) received by such Grantor in respect of the
Accounts shall be received in trust for the benefit of the Collateral Agent
hereunder, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Collateral Agent or its designated agent in the same
form as so received (with any necessary endorsement) to be held as cash
collateral and either (i) credited to the Loan Account so long as no Event of
Default shall have occurred and be continuing or (ii) if an Event of Default
shall have occurred and be continuing, applied as specified in Section 7(b)
hereof, and (B) such Grantor will not adjust, settle or compromise the amount or
payment of any Account or release wholly or partly any Account Debtor or obligor
thereof or allow any credit or discount thereon. In addition, upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent may (in its sole and absolute discretion) direct any or all of the banks
and financial institutions with which any Grantor either maintains a Deposit
Account or a lockbox or deposits the proceeds of any Accounts to send
immediately to the Collateral Agent or its designated agent by wire transfer (to
such account as the Collateral Agent shall specify, or in such other manner as
the Collateral Agent shall direct) all or a portion of such securities, cash,
investments and other items held by such institution. Any such securities, cash,
investments and other items so received by the Collateral Agent or its
designated agent shall be distributed in accordance with Section 7 hereof.
(iii) Upon the occurrence and during the continuance of any
breach or default under any material term of any License referred to in Schedule
II hereto by any party thereto other than a Grantor, (A) the relevant Grantor
will, promptly after obtaining knowledge thereof, give the Collateral Agent
written notice of the nature and duration thereof, specifying what action, if
any, it has taken and proposes to take with respect thereto, (B) no Grantor
will, without the prior written consent of the Collateral Agent, declare or
waive any such breach or default or affirmatively consent to the cure thereof or
exercise any of its remedies in respect thereof, and (C) after the occurrence
and during the continuance of an Event of Default, each Grantor will, upon
written instructions from the Collateral Agent and at such Grantor's expense,
take such action as the Collateral Agent may deem necessary or advisable in
respect thereof.
(iv) Each Grantor will, at its expense, promptly deliver to the
Collateral Agent a copy of each notice or other communication received by it by
which any other party to any License referred to in Schedule II hereto (A)
declares a breach or default by a Grantor of any material term thereunder, (B)
terminates such License or (C) purports to exercise any of its rights or affect
any of its obligations thereunder, together with a copy of any reply by such
Grantor thereto.
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(v) Each Grantor will exercise promptly and diligently each and
every right which it may have under each License referred to in Schedule II
hereto (other than any right of termination) and will duly perform and observe
in all material respects all of its obligations under each License and will take
all action necessary to maintain the Licenses in full force and effect, in each
case to the extent such Grantor deems (in the exercise of its reasonable
business judgment) such exercise or action to be in its best interests. No
Grantor will, without the prior written consent of the Collateral Agent (which
consent shall not be unreasonably withheld), cancel, terminate, amend or
otherwise modify in any respect, or waive any provision of, any License except
for the termination of Licenses that the Grantors reasonably determine in good
faith to no longer be material and useful to the business of the Grantors, taken
as a whole.
(g) Transfers and Other Liens.
(i) Except to the extent expressly permitted by Section 6.02(c)
of the Financing Agreement, no Grantor will sell, assign (by operation of law or
otherwise), lease, license, exchange or otherwise transfer or dispose of any of
the Collateral.
(ii) Except to the extent expressly permitted by Section 6.02(a)
of the Financing Agreement, no Grantor will create, suffer to exist or grant any
Lien upon or with respect to any Collateral.
(h) Intellectual Property.
(i) If applicable, each Grantor has duly executed and delivered
the applicable Assignment for Security in the form attached hereto as Exhibit A.
Each Grantor (either itself or through licensees) will, and will cause each
licensee thereof to, take all action necessary to maintain all of the
Intellectual Property in full force and effect, including, without limitation,
using the proper statutory notices and markings and using the Trademarks on each
applicable trademark class of goods in order to so maintain the Trademarks in
full force, free from any claim of abandonment for non-use, and no Grantor will
(nor permit any licensee thereof to) do any act or knowingly omit to do any act
whereby any Intellectual Property may become invalidated; provided, however,
that so long as no Event of Default has occurred and is continuing, no Grantor
shall have an obligation to use or to maintain any Intellectual Property (A)
that relates solely to any product or work, that has been, or is in the process
of being, discontinued, abandoned or terminated, (B) that is being replaced with
Intellectual Property substantially similar to the Intellectual Property that
may be abandoned or otherwise become invalid, so long as the failure to use or
maintain such Intellectual Property does not materially adversely affect the
validity of such replacement Intellectual Property and so long as such
replacement Intellectual Property is subject to the Lien created by this
Agreement or (C) that is substantially the same as another Intellectual Property
that is in full force, so long the failure to use or maintain such Intellectual
Property does not materially adversely affect the validity of such replacement
Intellectual Property and so long as such other Intellectual Property is subject
to the Lien and security interest created by this Agreement. Each Grantor will
cause to be taken all necessary steps in any proceeding before the United States
Patent and Trademark Office and the United States Copyright Office or any
similar office or agency in any other country or political subdivision thereof
to maintain each registration of the Intellectual Property (other than the
Intellectual Property described in the proviso to the immediately preceding
sentence), including, without limitation, filing of renewals, affidavits of
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use, affidavits of incontestability and opposition, interference and
cancellation proceedings and payment of maintenance fees, filing fees, taxes or
other governmental fees. If any Intellectual Property is infringed,
misappropriated, diluted or otherwise violated in any material respect by a
third party, the Grantors shall (x) upon obtaining knowledge of such
infringement, misappropriation, dilution or other violation, promptly notify the
Collateral Agent and (y) to the extent the Grantors shall deem appropriate under
the circumstances, promptly ▇▇▇ for infringement, misappropriation, dilution or
other violation, seek injunctive relief where appropriate and recover any and
all damages for such infringement, misappropriation, dilution or other
violation, or take such other actions as the Grantors shall deem appropriate
under the circumstances to protect such Intellectual Property. Each Grantor
shall furnish to the Collateral Agent, from time to time upon the Collateral
Agent's request, statements and schedules further identifying and describing the
Intellectual Property and Licenses, and such other reports in connection with
the Intellectual Property and Licenses as the Collateral Agent may reasonably
request, all in reasonable detail. Following receipt by the Collateral Agent of
any such statements, schedules or reports, the Grantors shall modify this
Agreement by amending Schedule II hereto to include any Intellectual Property
and Licenses, as the case may be, which become part of the Collateral under this
Agreement, and shall execute and authenticate such documents and do such acts as
shall be necessary or, as the Collateral Agent may reasonably request, to
subject such Intellectual Property and Licenses to the Lien and security
interest created by this Agreement. Notwithstanding anything herein to the
contrary, upon the occurrence and during the continuance of an Event of Default,
no Grantor may abandon or otherwise permit any Intellectual Property to become
invalid without the prior written consent of the Collateral Agent, and if any
Intellectual Property is infringed, misappropriated, diluted or otherwise
violated in any material respect by a third party, the Grantors will take such
action as the Collateral Agent shall deem appropriate under the circumstances to
protect such Intellectual Property.
(ii) If any Grantor shall, either itself or through any agent,
employee, licensee or designee, file an application for the registration of any
Trademark or Copyright or the issuance of any Patent with the United States
Patent and Trademark Office or the United States Copyright Office, as
applicable, or in any similar office or agency of the United States or any
country or any political subdivision thereof, such Grantor shall give the
Collateral Agent written notice of such filing within five (5) Business Days
thereof. Upon request of the Collateral Agent, each Grantor shall execute,
authenticate and deliver any and all assignments, agreements, instruments,
documents and papers as the Collateral Agent may reasonably request to evidence
the Collateral Agent's security interest hereunder in such Intellectual Property
and the General Intangibles of such Grantor relating thereto or represented
thereby, and each Grantor hereby appoints the Collateral Agent its
attorney-in-fact to execute and/or authenticate and file all such writings for
the foregoing purposes, all acts of such attorney being hereby ratified and
confirmed, and such power (being coupled with an interest) shall be irrevocable
until the date on which all of the Obligations have been indefeasibly paid in
full in cash after the termination of the Total Commitment.
(i) Deposit, Commodities and Securities Accounts. Prior to the date
hereof, each Grantor shall cause each bank and other financial institution with
an account referred to in Schedule IV hereto to execute and deliver to the
Collateral Agent (or its designee) a control agreement, in form and substance
reasonably satisfactory to the Collateral Agent, duly executed by such Grantor
and such bank or financial institution, or enter into other arrangements in form
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and substance satisfactory to the Collateral Agent, pursuant to which such
institution shall agree, among other things, that (i) it will comply at any time
with the instructions originated by the Collateral Agent (or its designee) to
such bank or financial institution directing the disposition of cash, Commodity
Contracts, securities, Investment Property and other items from time to time
credited to such account, without further consent of such Grantor, which
instructions the Collateral Agent (or its designee) will not give to such bank
or other financial institution in the absence of a continuing Event of Default,
(ii) all cash, Commodity Contracts, securities, Investment Property and other
items of such Grantor deposited with such institution shall be subject to a
perfected, first priority security interest in favor of the Collateral Agent (or
its designee), (iii) any right of set off, banker's Lien or other similar Lien,
security interest or encumbrance shall be fully waived as against the Collateral
Agent (or its designee), and (iv) upon receipt of written notice from the
Collateral Agent during the continuance of an Event of Default, such bank or
financial institution shall immediately send to the Collateral Agent (or its
designee) by wire transfer (to such account as the Collateral Agent (or its
designee) shall specify, or in such other manner as the Collateral Agent (or its
designee) shall direct) all such cash, the value of any Commodity Contracts,
securities, Investment Property and other items held by it. Without the prior
written consent of the Collateral Agent, no Grantor shall make or maintain any
Deposit Account, Commodity Account or Securities Account except for the accounts
set forth in Schedule IV hereto. The provisions of this paragraph 5(i) shall not
apply to (i) Deposit Accounts for which the Collateral Agent is the depositary
and (ii) Deposit Accounts specially and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for the benefit of a
Grantor's salaried employees.
(j) Motor Vehicles.
(i) If requested by the Collateral Agent after the occurrence and
during the continuance of an Event of Default, each Grantor shall deliver to the
Collateral Agent originals of the certificates of title or ownership for all
Motor Vehicles owned by it with the Collateral Agent listed as a lienholder, for
the benefit of the Agents and the Lenders; provided that the Collateral Agent
shall not be required to be listed as a lienholder if a Motor Vehicle is subject
to a purchase money security interest permitted by Section 6.02(a) of the
Financing Agreement.
(ii) Each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact, effective the date hereof and exercisable upon the occurrence
and during the continuance of an Event of Default, for the purpose of (A)
executing on behalf of such Grantor title or ownership applications for filing
with appropriate state agencies to enable Motor Vehicles now owned or hereafter
acquired by such Grantor to be retitled and the Collateral Agent listed as
lienholder thereof, (B) filing such applications with such state agencies, and
(C) executing such other documents and instruments on behalf of, and taking such
other action in the name of, such Grantor as the Collateral Agent may deem
necessary or advisable to accomplish the purposes hereof (including, without
limitation, for the purpose of creating in favor of the Collateral Agent a
perfected Lien on such Motor Vehicles and exercising the rights and remedies of
the Collateral Agent hereunder). This appointment as attorney-in-fact is coupled
with an interest and is irrevocable until the date on which all of the
Obligations have been indefeasibly paid in full in cash after the termination
the Total Commitment.
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(iii) Any certificates of title or ownership delivered pursuant
to the terms hereof shall be accompanied by odometer statements for each Motor
Vehicle covered thereby.
(iv) So long as no Event of Default shall have occurred and be
continuing, upon the request of any Grantor, the Collateral Agent shall execute
and deliver to such Grantor such instruments as such Grantor shall reasonably
request to remove the notation of the Collateral Agent as lienholder on any
certificate of title for any Motor Vehicle; provided that any such instruments
shall be delivered, and the release effective, only upon receipt by the
Collateral Agent of a certificate from such Grantor, stating that the Motor
Vehicle, the Lien on which is to be released, is to be sold or has suffered a
casualty loss (with title thereto passing to the casualty insurance company
therefor in settlement of the claim for such loss), the amount that such Grantor
will receive as sale proceeds or insurance proceeds and whether or not such sale
proceeds or insurance proceeds are required by the Financing Agreement to be
paid to the Collateral Agent to be applied to the Obligations and, to the extent
required by the Financing Agreement, any proceeds of such sale or casualty loss
shall be paid to the Collateral Agent hereunder to be applied to the Obligations
then outstanding, in accordance with the terms of the Financing Agreement.
(k) Control. Each Grantor hereby agrees to take any or all action that
may be necessary or advisable or that the Collateral Agent may reasonably
request in order for the Collateral Agent to obtain control in accordance with
Sections 9-104, 9-105, 9-106, and 9-107 of the Code with respect to the
following Collateral: (i) Deposit Accounts, (ii) Electronic Chattel Paper, (iii)
Investment Property and (iv) Letter-of-Credit Rights. Each Grantor hereby
acknowledges and agrees that any agent or designee of the Collateral Agent shall
be deemed to be a "secured party" with respect to the collateral under the
control of such agent or designee for all purposes.
(l) Inspection and Reporting. Each Grantor shall permit the Agents, or
any agents or representatives thereof or such professionals or other Persons as
the Agents may designate (i) to examine and make copies of and abstracts from
such Grantor's records and books of account, (ii) to visit and inspect its
properties, (iii) to verify materials, leases, notes, Accounts, Inventory and
other assets of such Grantor from time to time, (iv) to conduct audits, physical
counts, appraisals and/or valuations, Phase I and Phase II Environmental Site
Assessments or examinations at the locations of such Grantor and (v) to discuss
such Grantor's affairs, finances and accounts with any of its directors,
officers, managerial employees, independent accountants or any of its other
representatives, in each case as provided in the Financing Agreement.
(m) Partnership and Limited Liability Company Interest. No Grantor
that is a partnership or a limited liability company shall, nor shall any
Grantor with any Subsidiary that is a partnership or a limited liability
company, permit such partnership interests or membership interests to (i) be
dealt in or traded on securities exchanges or in securities markets, (ii) become
a security for purposes of Article 8 of any relevant Uniform Commercial Code,
(iii) become an investment company security within the meaning of Section 8-103
of any relevant Uniform Commercial Code or (iv) be evidenced by a certificate.
Each Grantor agrees that such partnership interests or membership interests
shall constitute General Intangibles.
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SECTION 6. Additional Provisions Concerning the Collateral.
(a) Each Grantor hereby (i) authorizes the Collateral Agent at any
time and from time to time to file, one or more financing or continuation
statements and amendments thereto, relating to the Collateral (including,
without limitation, any such financing statements that (A) describe the
Collateral as "all assets" or "all personal property" (or words of similar
effect) or that describe or identify the Collateral by type or in any other
manner as the Collateral Agent may determine, regardless of whether any
particular asset of such Grantor falls within the scope of Article 9 of the
Uniform Commercial Code or whether any particular asset of such Grantor
constitutes part of the Collateral, and (B) contain any other information
required by Part 5 of Article 9 of the Code for the sufficiency or filing office
acceptance of any financing statement, continuation statement or amendment,
including, without limitation, whether such Grantor is an organization, the type
of organization and any organizational number issued to such Grantor) and (ii)
ratifies such authorization to the extent that the Collateral Agent has filed
any such financing statements, continuation statements, or amendments thereto,
prior to the date hereof. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(b) Each Grantor hereby irrevocably appoints the Collateral Agent as
its attorney-in-fact and proxy, with full authority in the place and stead of
such Grantor and in the name of such Grantor or otherwise, from time to time in
the Collateral Agent's discretion, upon the occurrence and during the
continuance of an Event of Default, to take any action and to execute any
instrument which the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement (subject to the rights of a Grantor
under Section 5 hereof), including, without limitation, (i) to obtain and adjust
insurance required to be paid to the Collateral Agent pursuant to Section 5(e)
hereof, (ii) to ask, demand, collect, ▇▇▇ for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any Collateral, (iii) to receive, endorse, and collect any drafts or
other instruments, documents and chattel paper in connection with clause (i) or
(ii) above, (iv) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable for the
collection of any Collateral or otherwise to enforce the rights of the Agents
and the Lenders with respect to any Collateral, and (v) to execute assignments,
licenses and other documents to enforce the rights of the Agents and the Lenders
with respect to any Collateral. This power is coupled with an interest and is
irrevocable until the date on which all of the Obligations have been
indefeasibly paid in full in cash after the termination of the Total Commitment.
(c) For the purpose of enabling the Collateral Agent to exercise
rights and remedies hereunder, at such time as the Collateral Agent shall be
lawfully entitled to exercise such rights and remedies, and for no other
purpose, each Grantor hereby grants to the Collateral Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable without payment
of royalty or other compensation to any Grantor) to use, assign, license or
sublicense any Intellectual Property now owned or hereafter acquired by any
Grantor, wherever the same may be located, including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer programs used for the compilation or printout thereof.
Notwithstanding anything contained herein to the contrary, but subject to the
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provisions of the Financing Agreement that limit the right of a Grantor to
dispose of its property and Section 5(h) hereof, so long as no Event of Default
shall have occurred and be continuing, each Grantor may exploit, use, enjoy,
protect, license, sublicense, assign, sell, dispose of or take other actions
with respect to the Intellectual Property in the ordinary course of its
business. In furtherance of the foregoing, unless an Event of Default shall have
occurred and be continuing, the Collateral Agent shall from time to time, upon
the request of a Grantor, execute and deliver any instruments, certificates or
other documents, in the form so requested, which such Grantor shall have
certified are appropriate (in such Grantor's judgment) to allow it to take any
action permitted above (including relinquishment of the license provided
pursuant to this clause (c) as to any Intellectual Property). Further, upon the
indefeasible payment in full in cash of all of the Obligations and the
termination of the Total Commitment, the Collateral Agent (subject to Section
11(e) hereof) shall release and reassign to the Grantors all of the Collateral
Agent's right, title and interest in and to the Intellectual Property, and the
Licenses, all without recourse, representation or warranty whatsoever and at the
Grantors' sole expense. The exercise of rights and remedies hereunder by the
Collateral Agent shall not terminate the rights of the holders of any licenses
or sublicenses theretofore granted by any Grantor in accordance with the second
sentence of this clause (c). Each Grantor hereby releases the Collateral Agent
from any claims, causes of action and demands at any time arising out of or with
respect to any actions taken or omitted to be taken by the Collateral Agent
under the powers of attorney granted herein other than actions taken or omitted
to be taken through the Collateral Agent's gross negligence or willful
misconduct, as determined by a final determination of a court of competent
jurisdiction.
(d) If any Grantor fails to perform any agreement contained herein as
and when required, the Collateral Agent may itself perform, or cause performance
of, such agreement or obligation, in the name of such Grantor or the Collateral
Agent, and the expenses of the Collateral Agent incurred in connection therewith
shall be jointly and severally payable by the Grantors pursuant to Section 8
hereof and shall be secured by the Collateral.
(e) The powers conferred on the Collateral Agent hereunder are solely
to protect its interest in the Collateral and shall not impose any duty upon it
to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Collateral Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral.
(f) Anything herein to the contrary notwithstanding (i) each Grantor
shall remain liable under the Licenses and otherwise with respect to any of the
Collateral to the extent set forth therein to perform all of its obligations
thereunder to the same extent as if this Agreement had not been executed, (ii)
the exercise by the Collateral Agent of any of its rights hereunder shall not
release any Grantor from any of its obligations under the Licenses or otherwise
in respect of the Collateral, and (iii) the Collateral Agent shall not have any
obligation or liability by reason of this Agreement under the Licenses or with
respect to any of the other Collateral, nor shall the Collateral Agent be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
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SECTION 7. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the Collateral, in
addition to any other rights and remedies provided for herein or otherwise
available to it, all of the rights and remedies of a secured party upon default
under the Code (whether or not the Code applies to the affected Collateral), and
also may (i) take absolute control of the Collateral, including, without
limitation, transfer into the Collateral Agent's name or into the name of its
nominee or nominees (to the extent the Collateral Agent has not theretofore done
so) and thereafter receive, for the benefit of the Agents and the Lenders, all
payments made thereon, give all consents, waivers and ratifications in respect
thereof and otherwise act with respect thereto as though it were the outright
owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that
it will at its expense and upon request of the Collateral Agent forthwith,
assemble all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place or places to be designated
by the Collateral Agent that is reasonably convenient to both parties, and the
Collateral Agent may enter into and occupy any premises owned or leased by any
Grantor where the Collateral or any part thereof is located or assembled for a
reasonable period in order to effectuate the Collateral Agent's rights and
remedies hereunder or under law, without obligation to any Grantor in respect of
such occupation, and (iii) without notice except as specified below and without
any obligation to prepare or process the Collateral for sale, (A) sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Collateral Agent's offices or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon such other terms as
the Collateral Agent may deem commercially reasonable and/or (B) lease, license
or dispose of the Collateral or any part thereof upon such terms as the
Collateral Agent may deem commercially reasonable. Each Grantor agrees that, to
the extent notice of sale or any other disposition of the Collateral shall be
required by law, at least ten (10) days' prior notice to a Grantor of the time
and place of any public sale or the time after which any private sale or other
disposition of the Collateral is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale or
other disposition of Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each
Grantor hereby waives any claims against the Agents and the Lenders arising by
reason of the fact that the price at which the Collateral may have been sold at
a private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Obligations, even if
the Collateral Agent accepts the first offer received and does not offer the
Collateral to more than one offeree, and waives all rights that such Grantor may
have to require that all or any part of the Collateral be marshaled upon any
sale (public or private) thereof. Each Grantor hereby acknowledges that (i) any
such sale of the Collateral by the Collateral Agent shall be made without
warranty, (ii) the Collateral Agent may specifically disclaim any warranties of
title, possession, quiet enjoyment or the like, and (iii) such actions set forth
in clauses (i) and (ii) above shall not adversely effect the commercial
reasonableness of any such sale of the Collateral. In addition to the foregoing,
(i) upon written notice to any Grantor from the Collateral Agent, each Grantor
shall cease any use of the Intellectual Property or any trademark, patent or
copyright similar thereto for any purpose described in such notice; (ii) the
Collateral Agent may, at any time and from time to time, upon five (5) days'
prior notice to any Grantor, license, whether general, special or otherwise, and
whether on an exclusive or non-
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exclusive basis, any of the Intellectual Property, throughout the universe for
such term or terms, on such conditions, and in such manner, as the Collateral
Agent shall in its sole discretion determine; and (iii) the Collateral Agent
may, at any time, pursuant to the authority granted in Section 6 hereof (such
authority being effective upon the occurrence and during the continuance of an
Event of Default), execute and deliver on behalf of a Grantor, one or more
instruments of assignment of the Intellectual Property (or any application or
registration thereof), in form suitable for filing, recording or registration in
any country.
(b) Any cash held by the Collateral Agent (or its agents or designee)
as Collateral and all Cash Proceeds received by the Collateral Agent in respect
of any sale of or collection from, or other realization upon, all or any part of
the Collateral shall be applied (after payment of any amounts payable to the
Collateral Agent pursuant to Section 8 hereof) in whole or in part by the
Collateral Agent against, all or any part of the Obligations in such order as
the Collateral Agent shall elect, consistent with the provisions of the
Financing Agreement. Any surplus of such cash or Cash Proceeds held by the
Collateral Agent and remaining the indefeasible payment in full in cash of all
of the Obligations and the termination of the Total Commitment, shall be paid
over to whomsoever shall be lawfully entitled to receive the same or as a court
of competent jurisdiction shall direct.
(c) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Agents and the
Lenders are legally entitled, the Grantors shall be jointly and severally liable
for the deficiency, together with interest thereon at the highest rate specified
in any applicable Loan Document for interest on overdue principal thereof or
such other rate as shall be fixed by applicable law, together with the costs of
collection and the reasonable fees, costs, expenses and other client charges of
any attorneys employed by the Collateral Agent to collect such deficiency.
(d) Each Grantor hereby acknowledges that if the Collateral Agent
complies with any applicable state or federal law requirements in connection
with a disposition of the Collateral, such compliance will not adversely affect
the commercial reasonableness of any sale or other disposition of the
Collateral.
(e) The Collateral Agent shall not be required to marshal any present
or future collateral security (including, but not limited to, this Agreement and
the Collateral) for, or other assurances of payment of, the Obligations or any
of them or to resort to such collateral security or other assurances of payment
in any particular order, and all of the Collateral Agent's rights hereunder and
in respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights, however existing or arising. To
the extent that any Grantor lawfully may, such Grantor hereby agrees that it
will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Collateral Agent's rights under
this Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, each Grantor hereby irrevocably waives the
benefits of all such laws.
-21-
SECTION 8. Indemnity and Expenses.
(a) Each Grantor jointly and severally agrees to defend, protect,
indemnify and hold harmless each Indemnitee from and against any and all losses,
damages, liabilities, obligations, penalties, fees, reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees, costs and
expenses incurred by such Indemnitee to the extent that they arise out of or
otherwise result from this Agreement (including, without limitation, enforcement
of this Agreement), provided, however, that the Grantors shall not have any
obligation to any Indemnitee under this Section 8(a) for any Indemnified Matter
caused by the gross negligence or willful misconduct of such Indemnitee, as
determined by a final judgment of a court of competent jurisdiction.
(b) Each Grantor jointly and severally agrees to pay to the Collateral
Agent upon demand the amount of any and all costs and expenses, including the
reasonable fees, costs, expenses and disbursements of counsel for the Collateral
Agent and of any experts and agents (including, without limitation, any
collateral trustee which may act as agent of the Collateral Agent), which the
Collateral Agent may incur in connection with (i) the preparation, negotiation,
execution, delivery, recordation, administration, amendment, waiver or other
modification or termination of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from, or other realization upon,
any Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or
observe any of the provisions hereof.
SECTION 9. Notices. Etc. All notices and other communications provided
for hereunder shall be in writing and shall be mailed, telecopied or delivered,
if to a Grantor, to it in the care of the Borrower at the Borrower's address
specified in the Financing Agreement and if to the Collateral Agent, to it at
its address specified in the Financing Agreement; or as to any such Person, at
such other address as shall be designated by such Person in a written notice to
such other Person complying as to delivery with the terms of this Section 9. All
such notices and other communications shall be effective (a) if mailed (by
certified or registered mail, postage prepaid and return receipt requested),
when received or three (3) Business Days after deposited in the mails, whichever
occurs first, (b) if telecopied, when transmitted and confirmation received,
provided same is on a Business Day and, if not, on the next Business Day; or (c)
if delivered, upon delivery, provided same is on a Business Day and, if not, on
the next Business Day.
SECTION 10. Security Interest Absolute. All rights of the Agents and
the Lenders, all Liens and all obligations of each of the Grantors hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Financing Agreement or any other Loan Document, (b) any
change in the time, manner or place of payment of, or in any other term in
respect of, all or any of the Obligations, or any other amendment or waiver of
or consent to any departure from the Financing Agreement or any other Loan
Document, (c) any exchange or release of, or non-perfection of any Lien on any
Collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Obligations, or (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any of the Grantors in respect of the Obligations. All
authorizations and agencies contained herein with respect to any of the
Collateral are irrevocable
-22-
and powers coupled with an interest.
SECTION 11. Miscellaneous.
(a) No amendment of any provision of this Agreement (including any
Schedule attached hereto) shall be effective unless it is in writing and signed
by each Grantor and the Collateral Agent, and no waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall be
effective unless it is in writing and signed by the Collateral Agent, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
(b) No failure on the part of the Agents or the Lenders to exercise,
and no delay in exercising, any right hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The rights and remedies of the Agents and the Lenders provided
herein and in the other Loan Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law. The rights of the
Agents and the Lenders under any Loan Document against any party thereto are not
conditional or contingent on any attempt by such Person to exercise any of its
rights under any other Loan Document against such party or against any other
Person, including but not limited to, any Grantor.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest in and
Lien on the Collateral and shall (i) remain in full force and effect until the
satisfaction in full in cash of the Obligations after the termination of the
Total Commitment and (ii) be binding on each Grantor and its respective
successors and assigns, and shall inure, together with all rights and remedies
of the Agents and the Lenders hereunder, to the benefit of the Agents and the
Lenders and their respective successors, transferees and assigns. Without
limiting the generality of clause (ii) of the immediately preceding sentence,
the Agents and the Lenders may assign or otherwise transfer their respective
rights and obligations under this Agreement and any other Loan Document to any
other Person pursuant to the terms of the Financing Agreement, and such other
Person shall thereupon become vested with all of the benefits in respect thereof
granted to the Agents and the Lenders herein or otherwise. Upon any such
assignment or transfer, all references in this Agreement to any Agent or any
Lender shall mean the assignee of such Agent or such Lender. None of the rights
or obligations of any of the Grantors hereunder may be assigned or otherwise
transferred without the prior written consent of the Collateral Agent, and any
such assignment or transfer shall be null and void.
(e) Upon the satisfaction in full in cash of the Obligations after the
termination of the Total Commitment, (i) this Agreement and the security
interests and licenses created hereby shall terminate and all rights to the
Collateral shall revert to the Grantors and (ii) the Collateral Agent promptly
will, upon the Grantors' request and at the Grantors' expense,
-23-
without any representation, warranty or recourse whatsoever, (A) return to the
Grantors such of the Collateral as shall not have been sold or otherwise
disposed of or applied pursuant to the terms hereof and (B) execute and deliver
to the Grantors such documents as the Grantors shall reasonably request to
evidence such termination.
(F) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND
PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF
THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
(G) ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY DOCUMENT RELATED THERETO MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF, AND, (A) BY ITS
ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT, THE COLLATERAL AGENT, AND (B) BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR, HEREBY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH GRANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS. WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS
AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY THE COURT.
(H) EACH OF THE GRANTORS (AND BY ITS ACCEPTANCE OF THE BENEFITS OF
THIS AGREEMENT, THE COLLATERAL AGENT) WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE
PARTIES HERETO.
(i) Each Grantor irrevocably consents to the service of process of any
of the aforesaid courts in any such action, suit or proceeding by the mailing of
copies thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to such Grantor in the care of the Borrower at
the Borrower's address as set forth in the Financing Agreement, such service to
become effective ten (10) days after such mailing. The Collateral Agent and each
Grantor agrees that a final judgment in any such action, suit or proceeding
shall
-24-
be conclusive and maybe enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
(j) Nothing contained herein shall affect the right of the Collateral
Agent to serve process in any other manner permitted by law or commence legal
proceedings or otherwise proceed against any Grantor or any property of any
Grantor in any other jurisdiction.
(k) Each Grantor irrevocably and unconditionally waives any right it
may have to claim or recover in any legal action, suit or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
(l) Section headings herein are included for convenience of reference
only and shall not constitute a part of this Agreement for any other purpose.
(m) This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together constitute one in the
same Agreement. Delivery of an executed counterpart of this Agreement by
facsimile or electronic mail shall be equally effective as delivery of an
original executed counterpart.
(n) All of the obligations of the Grantors hereunder are joint and
several. The Collateral Agent may, in its sole and absolute discretion, enforce
the provisions hereof against any of the Grantors and shall not be required to
proceed against all Grantors jointly or seek payment from the Grantors ratably.
In addition, the Collateral Agent may, in its sole and absolute discretion,
select the Collateral of any one or more of the Grantors for sale or application
to the Obligations, without regard to the ownership of such Collateral, and
shall not be required to make such selection ratably from the Collateral owned
by all of the Grantors. The release or discharge of any Grantor by the
Collateral Agent shall not release or discharge any other Grantor from the
obligations of such Person hereunder.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-25-
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
executed and delivered by its officer thereunto duly authorized, as of the date
first above written.
GRANTORS:
XANODYNE PHARMACEUTICALS, INC.
By:
------------------------------------
Name:
Title:
XANODYNE ACQUISITION, LLC
By:
------------------------------------
Name:
Title:
XANODYNE DEVELOPMENT GROUP, LLC
By:
------------------------------------
Name:
Title:
RUTI ACQUISITION, INC.
By:
------------------------------------
Name:
Title:
SCHEDULE I
LEGAL NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; STATES OR
JURISDICTIONS OF ORGANIZATION
Sched. I-1
SCHEDULE II
INTELLECTUAL PROPERTY AND LICENSES; TRADE NAMES
Sched. II-1
SCHEDULE III
LOCATIONS OF GRANTORS
LOCATION Description of Location (State if Location
(i) contains Equipment, Fixtures, Goods or Inventory,
(ii) is chief place of business and chief executive office, or
(iii) contains Records concerning Accounts and originals of Chattel
Paper)
Sched. III-1
SCHEDULE IV
DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITIES ACCOUNTS
Name and Address
of Institution
Maintaining Account Account Number Type of Account
------------------- -------------- ---------------
Sched. IV-1
SCHEDULE V
UCC FINANCING STATEMENTS
UCC Financing Statements have been filed in the jurisdictions below against the
Grantors:
NAME OF DEBTOR SECRETARY OF STATE
-------------- ------------------
Sched. V-1
SCHEDULE VI
COMMERCIAL TORT CLAIMS
Sched. VI-1
EXHIBIT A
ASSIGNMENT FOR SECURITY
[TRADEMARKS] [PATENTS] [COPYRIGHTS]
WHEREAS, _____________________ (the "Assignor") [has adopted, used and
is using, and holds all right, title and interest in and to, the trademarks and
service marks listed on the annexed Schedule 1 A, which trademarks and service
marks are registered or applied for in the United States Patent and Trademark
Office (the "Trademarks")] [holds all right, title and interest in the letter
patents, design patents and utility patents listed on the annexed Schedule 1A,
which patents are issued or applied for in the United States Patent and
Trademark Office (the "Patents")] [holds all right, title and interest in the
copyrights listed on the annexed Schedule 1A, which copyrights are registered in
the United States Copyright Office (the "Copyrights")];
WHEREAS, the Assignor has entered into a Security Agreement, dated
July 25, 2005 (as amended, restated, supplemented or otherwise modified from
time to time, the "Security Agreement"), in favor of Silver Point Finance, LLC,
as collateral agent for certain agents and lenders (in such capacity, together
with any successors and assigns, the "Assignee"); and
WHEREAS, pursuant to the Security Agreement, the Assignor has assigned
to the Assignee and granted to the Assignee for the benefit of the Agents and
the Lenders (as such terms are defined in the Security Agreement) a continuing
security interest in all right, title and interest of the Assignor in, to and
under the [Trademarks, together with, among other things, the good-will of the
business symbolized by the Trademarks] [Patents] [Copyrights] and the
applications and registrations thereof, and all proceeds thereof, including,
without limitation, any and all causes of action which may exist by reason of
infringement thereof and any and all damages arising from past, present and
future violations thereof (the "Collateral"), to secure the payment, performance
and observance of the Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor does hereby pledge,
convey, sell, assign, transfer and set over unto the Assignee and grants to the
Assignee for the benefit of the Agents and the Lenders a continuing security
interest in the Collateral to secure the prompt payment, performance and
observance of the Obligations.
The Assignor does hereby further acknowledge and affirm that the
rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are
hereby incorporated herein by reference as if fully set forth herein.
Exh. A-1
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be duly
executed by its officer thereunto duly authorized as of ______________ __, 20__.
[GRANTOR]
By:
------------------------------------
Name:
Title:
Security Agreement
STATE OF _____________________
ss.:
COUNTY OF ____________________
On this _____ day of___________, 20__, before me personally came
_______________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that s/he is the
_______________ of ____________________________________, a
________________________, and that s/he executed the foregoing instrument in the
firm name of _________________________________________, and that s/he had
authority to sign the same, and s/he acknowledged to me that he executed the
same as the act and deed of said firm for the uses and purposes therein
mentioned.
----------------------------------------
Exh. A-3
SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
[Trademarks and Trademark Applications]
[Patent and Patent Applications]
[Copyright and Copyright Applications]
Owned by _______________________________
EXHIBIT C
FORM OF PLEDGE AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated July 25, 2005, made by each of
the Pledgors referred to below, in favor of Silver Point Finance, LLC, a
Delaware limited liability company ("Silver Point"), in its capacity as
collateral agent for the Agents and the Lenders (as such terms are defined
below) party to the Financing Agreement referred to below (in such capacity,
together with its successors and assigns in such capacity, if any, the
"Collateral Agent").
WITNESSETH:
WHEREAS, Xanodyne Pharmaceuticals, Inc., a Delaware corporation (the
"Borrower"), each subsidiary of the Borrower listed as a "Guarantor" on the
signature pages thereto (together with each other Person (as defined in the
Financing Agreement) that guarantees all or any portion of the Obligations (as
defined in the Financing Agreement) from time to time, each a "Guarantor" and
collectively, the "Guarantors", and together with the Borrower, each a "Pledgor"
and collectively, the "Pledgors"), the lenders from time to time party thereto
(each a "Lender" and collectively, the "Lenders"), the Collateral Agent, and
Silver Point, as administrative agent for the Agents and the Lenders (in such
capacity, together with its successors and assigns in such capacity, if any, the
"Administrative Agent" and together with the Collateral Agent, each an "Agent"
and collectively, the "Agents"), are parties to a Financing Agreement, dated as
of July 25, 2005 (such agreement, as amended, restated, supplemented or
otherwise modified from time to time, including any replacement agreement
therefor, being hereinafter referred to as the "Financing Agreement");
WHEREAS, pursuant to the Financing Agreement, the Lenders have agreed
to make certain term loans and certain revolving loans (each a "Loan" and
collectively, the "Loans"), to the Borrower;
WHEREAS, it is a condition precedent to the Lenders making any Loan or
making any other financial accommodation to the Borrower pursuant to the
Financing Agreement that each Pledgor shall have executed and delivered to the
Collateral Agent a pledge and security agreement providing for the pledge to the
Collateral Agent, for the benefit of the Agents and the Lenders, and the grant
to the Collateral Agent, for the benefit of the Agents and the Lenders, of a
security interest in and Lien on the outstanding shares of Capital Stock (as
defined in the Financing Agreement) and indebtedness from time to time owned by
such Pledgor of each Person now or hereafter existing and in which such Pledgor
has any interest at any time;
WHEREAS, the Pledgors are mutually dependent on each other in the
conduct of their respective businesses as an integrated operation, with the
credit needed from time to time by each Pledgor often being provided through
financing obtained by the other Pledgors and the ability to obtain such
financing being dependent on the successful operations of all of the Pledgors as
a whole; and
WHEREAS, each Pledgor has determined that the execution, delivery and
performance of this Agreement directly benefit, and are in the best interest of,
such Pledgor;
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Lenders to make and maintain the Loans and to
provide other financial accommodations to the Borrower pursuant to the Financing
Agreement, the Pledgors hereby jointly and severally agree with the Collateral
Agent, for the benefit of the Agents and the Lenders, as follows:
SECTION 1. Definitions. Reference is hereby made to the Financing
Agreement for a statement of the terms thereof. All terms used in this Agreement
which are defined in the Financing Agreement or in Article 8 or Article 9 of the
Uniform Commercial Code (the "Code") as in effect from time to time in the State
of New York and which are not otherwise defined herein shall have the same
meanings herein as set forth therein; provided, that terms used herein which are
defined in the Code as in effect in the State of New York on the date hereof
shall continue to have the same meaning notwithstanding any replacement or
amendment of such statute except as the Collateral Agent may otherwise
determine.
SECTION 2. Pledge and Grant of Security Interest. As collateral
security for all of the Obligations (as defined in Section 3 hereof), each
Pledgor hereby pledges and assigns to the Collateral Agent, and grants to the
Collateral Agent, for the benefit of the Agents and the Lenders, a continuing
security interest in, and Lien on such Pledgor's right, title and interest in
and to the following (collectively, the "Pledged Collateral"):
(a) the indebtedness described in Schedule I hereto and all
indebtedness from time to time required to be pledged to the Collateral Agent
pursuant to the terms of the Financing Agreement (the "Pledged Debt"), the
promissory notes and other instruments evidencing the Pledged Debt, and all
interest, cash, instruments, investment property and other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Debt;
(b) the shares of Capital Stock described in Schedule II hereto
(the "Pledged Shares"), whether or not evidenced or represented by any stock
certificate, certificated security or other instrument, issued by the Persons
described in such Schedule II (the "Existing Issuers"), the certificates
representing the Pledged Shares, all options and other rights, contractual or
otherwise, in respect thereof and all dividends, distributions, cash,
instruments, investment property and other property (including, but not limited
to, any stock dividend and any distribution in connection with a stock split)
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Shares;
(c) the shares of Capital Stock at any time and from time to time
acquired by such Pledgor of any and all Persons now or hereafter existing (such
Persons, together with the Existing Issuers, being hereinafter referred to
collectively as the "Pledged Issuers" and each individually as a "Pledged
Issuer"), the certificates representing such shares of Capital Stock, all
options and other rights, contractual or otherwise, in respect thereof and all
dividends, distributions, cash, instruments, investment property and other
property (including, but not limited to, any stock dividend and any distribution
in connection with a stock split) from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
foregoing;
2
(d) all investment property, financial assets, securities, shares
of Capital Stock, other equity interests, stock options and commodity contracts
of such Pledgor, all notes, debentures, bonds, promissory notes or other
evidences of indebtedness of such Pledgor, and all other assets now or hereafter
received or receivable with respect to the foregoing;
(e) all security entitlements of such Pledgor in any and all of
the foregoing; and
(f) all proceeds (including proceeds of proceeds) of any and all
of the foregoing;
in each case, whether now owned or hereafter acquired by such Pledgor and
howsoever its interest therein may arise or appear (whether by ownership,
security interest, Lien, claim or otherwise).
Notwithstanding the foregoing, the Pledged Collateral shall not include (x)
Permitted Acquisition Capital Stock or (y) in the case of a Foreign Subsidiary
of such Pledgor, more than 65% (or such greater percentage that, due to a change
in applicable law after the date hereof, (i) would not reasonably be expected to
cause the undistributed earnings of such Foreign Subsidiary as determined for
United States federal income tax purposes to be treated as a deemed dividend to
such Foreign Subsidiary's United States parent and (ii) would not reasonably be
expected to cause any material adverse tax consequences) of the issued and
outstanding shares of Capital Stock entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) (it being understood and agreed that the
Pledged Collateral shall include 100% of the issued and outstanding shares of
Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) or other equity interest of such Foreign Subsidiary).
The Pledgors agree that the pledge of the shares of Capital Stock of any Pledged
Issuer who is a Foreign Subsidiary may be supplemented by one or more separate
pledge agreements, deeds of pledge, share charges, or other similar agreements
or instruments, executed and delivered by the relevant Pledgors in favor of the
Collateral Agent, which pledge agreements will provide for the pledge of such
shares of Capital Stock in accordance with the laws of the applicable foreign
jurisdiction. With respect to such shares of Capital Stock, the Collateral Agent
may, at any time and from time to time, in its sole discretion, take actions in
such foreign jurisdictions that will result in the perfection of the Lien
created in such shares of Capital Stock.
SECTION 3. Security for Obligations. The security interest created
hereby in the Pledged Collateral constitutes continuing collateral security for
all of the following obligations, whether now existing or hereafter incurred
(the "Obligations"):
(a) the prompt payment by each Pledgor, as and when due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), of all amounts from time to time owing by it in respect of
the Financing Agreement and the other Loan Documents, including, without
limitation, (i) all Obligations (as defined in the Financing Agreement)
(including, without limitation, all interest that accrues after the commencement
of any Insolvency Proceeding of any Loan Party whether or not the payment of
such interest is unenforceable or is not allowable, in whole or in part, due to
the existence of such Insolvency
3
Proceeding), (ii) in the case of a Guarantor, all amounts from time to time
owing by such Pledgor in respect of its guaranty made pursuant to Article X of
the Financing Agreement or under any other Guaranty to which it is a party,
including all obligations guaranteed by such Pledgor and (iii) all fees,
commissions, charges, expense reimbursements, indemnifications and all other
amounts due or to become due under any Loan Document (including, without
limitation, all fees, commissions, charges, expense, reimbursements,
indemnifications and other amounts that accrue after the commencement of any
Insolvency Proceeding of any Loan Party, whether or not the payment of such
fees, commissions, charges, expenses, reimbursements, indemnifications and other
amounts are unenforceable or are not allowable, in whole or in part, due to the
existence of such Insolvency Proceeding); and
(b) the due performance and observance by each Pledgor of all of
its other obligations from time to time existing in respect of the Loan
Documents.
SECTION 4. Delivery of the Pledged Collateral.
(a) (i) All promissory notes currently evidencing the Pledged
Debt and all certificates currently representing the Pledged Shares shall be
delivered to the Collateral Agent on or prior to the execution and delivery of
this Agreement. All other promissory notes, certificates and instruments
constituting Pledged Collateral from time to time required to be pledged to the
Collateral Agent pursuant to the terms of this Agreement or the Financing
Agreement (the "Additional Collateral") shall be delivered to the Collateral
Agent promptly upon, but in any event within ten (10) Business Days of, receipt
thereof by or on behalf of any of the Pledgors. All such promissory notes,
certificates and instruments shall be held by or on behalf of the Collateral
Agent pursuant hereto and shall be delivered in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer or
assignment or undated stock powers executed in blank, all in form and substance
reasonably satisfactory to the Collateral Agent. If any Pledged Collateral
consists of uncertificated securities, unless the immediately following sentence
is applicable thereto, such Pledgor shall cause the Collateral Agent (or its
designated custodian or nominee) to become the registered holder thereof, or
cause each issuer of such securities to agree that it will comply with
instructions originated by the Collateral Agent with respect to such securities
without further consent by such Pledgor. If any Pledged Collateral consists of
security entitlements, such Pledgor shall transfer such security entitlements to
the Collateral Agent (or its custodian, nominee or other designee), or cause the
applicable securities intermediary to agree that it will comply with entitlement
orders by the Collateral Agent without further consent by such Pledgor.
(ii) Within ten (10) Business Days of the receipt by a
Pledgor of any Additional Collateral, a Pledge Amendment, duly executed by such
Pledgor, in substantially the form of Annex I hereto (a "Pledge Amendment"),
shall be delivered to the Collateral Agent, in respect of the Additional
Collateral which must be pledged pursuant to this Agreement and the Financing
Agreement. The Pledge Amendment shall from and after delivery thereof constitute
part of Schedules I and II hereto. Each Pledgor hereby authorizes the Collateral
Agent to attach each Pledge Amendment to this Agreement and agrees that all
promissory notes, certificates or instruments listed on any Pledge Amendment
delivered to the Collateral Agent shall for all purposes hereunder constitute
Pledged Collateral and such Pledgor
4
shall be deemed upon delivery thereof to have made the representations and
warranties set forth in Section 5 hereof with respect to such Additional
Collateral.
(b) If any Pledgor shall receive, by virtue of such Pledgor's
being or having been an owner of any Pledged Collateral, any (i) stock
certificate (including, without limitation, any certificate representing a stock
dividend or distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets, combination of
shares, stock split, spin-off or split-off), promissory note or other
instrument, (ii) option or right, whether as an addition to, substitution for,
or in exchange for, any Pledged Collateral, or otherwise, (iii) dividends
payable in cash (except such dividends permitted to be retained by any such
Pledgor pursuant to Section 7 hereof) or in securities or other property or (iv)
dividends, distributions, cash, instruments, investment property and other
property in connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in surplus, such
Pledgor shall receive such stock certificate, promissory note, instrument,
option, right, payment or distribution in trust for the benefit of the
Collateral Agent, shall segregate it from such Pledgor's other property and
shall deliver it forthwith to the Collateral Agent, in the exact form received,
with any necessary indorsement and/or appropriate stock powers duly executed in
blank, to be held by the Collateral Agent as Pledged Collateral and as further
collateral security for the Obligations.
SECTION 5. Representations and Warranties. Each Pledgor jointly and
severally represents and warrants as follows:
(a) Each Pledgor (i) is a corporation, limited liability company
or limited partnership duly organized, validly existing and in good standing
under the laws of the state or jurisdiction of its organization, (ii) has all
requisite power and authority to conduct its business as now conducted and as
presently contemplated and to execute, deliver and perform this Agreement and
each other Loan Document to be executed and delivered by it pursuant hereto and
to consummate the transactions contemplated hereby and thereby, and (iii) is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, other than in
such jurisdictions where the failure to be so qualified and in good standing
could not reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by each Pledgor of
this Agreement and each other Loan Document to which such Pledgor is or will be
party (i) have been duly authorized by all necessary action, (ii) do not and
will not contravene its charter or by-laws, its limited liability company or
operating agreement or its certificate of partnership or partnership agreement,
as applicable, or any applicable law or any contractual restriction binding on
or otherwise affecting it or any of its properties, (iii) do not and will not
result in or require the creation of any Lien (other than pursuant to any Loan
Document) upon or with respect to any of its properties and (iv) do not and will
not result in any default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal of any material permit, license, authorization or
approval applicable to it or its operations or any of its properties.
(c) The Existing Issuers set forth in Schedule II hereto are the
Pledgors' only Subsidiaries existing on the date hereof. The Pledged Shares have
been duly
5
authorized and validly issued and are fully paid and nonassessable and the
holders thereof are not entitled to any preemptive, first refusal or other
similar rights. Except as noted in Schedule II hereto, the Pledged Shares
constitute 100% of the issued shares of Capital Stock of the Pledged Issuers as
of the date hereof. All other shares of stock constituting Pledged Collateral
will be duly authorized and validly issued, fully paid and nonassessable.
(d) The promissory notes currently evidencing the Pledged Debt
have been, and all other promissory notes from time to time evidencing Pledged
Debt, when executed and delivered, will have been, duly authorized, executed and
delivered by the respective makers thereof, and all such promissory notes are or
will be, as the case may be, legal, valid and binding obligations of such
makers, enforceable against such makers in accordance with their respective
terms, except as may be limited by equitable principles and by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally.
(e) Each Pledgor is and will be at all times the legal and
beneficial owner of its Pledged Collateral free and clear of all Liens, except
for the Lien created by this Agreement or the other Loan Documents.
(f) The exercise by the Collateral Agent of any of its rights and
remedies hereunder will not contravene any applicable law or any contractual
restriction binding on or affecting any Pledgor or any of the properties of any
Pledgor and will not result in or require the creation of any Lien upon or with
respect to any of the properties of such Pledgor other than pursuant to this
Agreement or the other Loan Documents.
(g) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required to be obtained
or made by any Pledgor for (i) the due execution, delivery and performance by
any Pledgor of this Agreement, (ii) the grant by any Pledgor, or the perfection,
of the Lien created hereby in the Pledged Collateral or (iii) the exercise by
the Collateral Agent of any of its rights and remedies hereunder, except as may
be required in connection with any sale of any Pledged Collateral by laws
affecting the offering and sale of securities generally.
(h) This Agreement creates a valid Lien in favor of the
Collateral Agent, for the benefit of the Agents and the Lenders, in the Pledged
Collateral as security for the Obligations. The Collateral Agent's having
possession of the promissory notes evidencing the Pledged Debt, the certificates
representing the Pledged Shares and all other certificates, instruments and cash
constituting Pledged Collateral from time to time results in the perfection of
such Lien. Such Lien is, or in the case of Pledged Collateral in which any of
the Pledgors obtains rights after the date hereof, will be, a perfected, first
priority Lien. All action necessary or desirable to perfect and protect such
Lien has been duly taken, except for the Collateral Agent's having possession of
certificates, instruments and cash constituting Pledged Collateral after the
date hereof.
(i) This Agreement and each other Loan Document when delivered,
is (or will be, in the case of such documents delivered after the date hereof) a
legal valid and binding obligation of the Pledgor which is a party hereto or
thereto, enforceable against such Pledgor in accordance with its terms, except
as enforceability may be limited by equitable
6
principles and by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally.
SECTION 6. Covenants as to the Pledged Collateral. So long as any of
the Obligations shall remain outstanding or prior to the termination of the
Total Commitment, each Pledgor will, unless the Collateral Agent shall otherwise
consent in writing:
(a) keep adequate records concerning the Pledged Collateral and
permit the Collateral Agent or any agents, designees or representatives thereof
at any time or from time to time to examine and make copies of and abstracts
from such records consistent with the terms of the Financing Agreement;
(b) at the Pledgors' joint and several expense, promptly deliver
to the Collateral Agent a copy of each notice or other communication received by
it in respect of the Pledged Collateral;
(c) at the Pledgors' joint and several expense, defend the
Collateral Agent's right, title and security interest in and to the Pledged
Collateral against the claims of any Person;
(d) at the Pledgors' joint and several expense, at any time and
from time to time, promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or advisable or that
the Collateral Agent may reasonably request in order to (i) perfect and protect,
or maintain the perfection of, the security interest and Lien created hereby,
(ii) enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder in respect of the Pledged Collateral or (iii) otherwise effect the
purposes of this Agreement, including, without limitation, delivering to the
Collateral Agent irrevocable proxies in respect of the Pledged Collateral;
(e) not sell, assign (by operation of law or otherwise), exchange
or otherwise dispose of any Pledged Collateral or any interest therein except as
expressly permitted by Section 6.02 of the Financing Agreement;
(f) not create or suffer to exist any Lien upon or with respect
to any Pledged Collateral, except for the Lien created hereby;
(g) not make or consent to any amendment or other modification or
waiver with respect to any Pledged Collateral or enter into any agreement or
permit to exist any restriction with respect to any Pledged Collateral other
than pursuant to the Loan Documents;
(h) except as expressly permitted by the Financing Agreement, not
permit the issuance of (i) any additional shares of any class of Capital Stock
of any Pledged Issuer, (ii) any securities convertible voluntarily by the holder
thereof or automatically upon the occurrence or non-occurrence of any event or
condition into, or exchangeable for, any such shares of Capital Stock or (iii)
any warrants, options, contracts or other commitments entitling any Person to
purchase or otherwise acquire any such shares of Capital Stock; and
7
(i) not take or fail to take any action which would in any manner
impair the validity or enforceability of the Collateral Agent's security
interest in and Lien on any Pledged Collateral.
SECTION 7. Voting Rights, Dividends, Etc. in Respect of the Pledged
Collateral.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) each Pledgor may exercise any and all voting and other
consensual rights pertaining to any Pledged Collateral for any purpose not
inconsistent with the terms of this Agreement, the Financing Agreement or the
other Loan Documents; provided, however, that (A) none of the Pledgors will
exercise or refrain from exercising any such right, as the case may be, if the
Collateral Agent gives a Pledgor notice that, in the Collateral Agent's
reasonable judgment, such action (or inaction) is reasonably likely to have a
Material Adverse Effect and (B) each Pledgor will give the Collateral Agent at
least five (5) Business Days' notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right which is
reasonably likely to have a Material Adverse Effect;
(ii) each of the Pledgors may receive and retain any and all
dividends, interest or other distributions paid in respect of the Pledged
Collateral to the extent permitted by the Financing Agreement; provided,
however, that any and all (A) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of or in exchange for, any Pledged.
Collateral, (B) dividends and other distributions paid or payable in cash in
respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, and (C) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Pledged Collateral, together with any
dividend, interest or other distribution or payment which at the time of such
payment was not permitted by the Financing Agreement, shall be, and shall
forthwith be delivered to the Collateral Agent, to hold as, Pledged Collateral
and shall, if received by any of the Pledgors, be received in trust for the
benefit of the Collateral Agent, shall be segregated from the other property or
funds of the Pledgors, and shall be forthwith delivered to the Collateral Agent
in the exact form received with any necessary indorsement and/or appropriate
stock powers duly executed in blank, to be held by the Collateral Agent as
Pledged Collateral and as further collateral security for the Obligations; and
(iii) the Collateral Agent will execute and deliver (or
cause to be executed and delivered) to a Pledgor all such proxies and other
instruments as such Pledgor may reasonably request for the purpose of enabling
such Pledgor to exercise the voting and other rights which it is entitled to
exercise pursuant to Section 7(a)(i) hereof and to receive the dividends,
interest and/or other distributions which it is authorized to receive and retain
pursuant to Section 7(a)(ii) hereof.
(b) Upon the occurrence and during the continuance of an Event of
Default:
8
(i) all rights of each Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to Section 7(a)(i) hereof, and to receive the dividends, distributions,
interest and other payments that it would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) hereof, shall cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall thereupon
have the sole right to exercise such voting and other consensual rights and to
receive and hold as Pledged Collateral such dividends, distributions and
interest payments;
(ii) the Collateral Agent is authorized to notify each
debtor with respect to the Pledged Debt to make payment directly to the
Collateral Agent (or its designee) and may collect any and all moneys due or to
become due to any Pledgor in respect of the Pledged Debt, and each of the
Pledgors hereby authorizes each such debtor to make such payment directly to the
Collateral Agent (or its designee) without any duty of inquiry;
(iii) without limiting the generality of the foregoing, the
Collateral Agent may at its option exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
any of the Pledged Collateral as if it were the absolute owner thereof,
including, without limitation, the right to exchange, in its discretion, any and
all of the Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other adjustment of any Pledged Issuer, or upon the exercise
by any Pledged Issuer of any right, privilege or option pertaining to any
Pledged Collateral, and, in connection therewith, to deposit and deliver any and
all of the Pledged Collateral with any committee, depository, transfer agent,
registrar or other designated agent upon such terms and conditions as it may
determine; and
(iv) all dividends, distributions, interest and other
payments that are received by any of the Pledgors contrary to the provisions of
Section 7(b)(i) hereof shall be received in trust for the benefit of the
Collateral Agent, shall be segregated from other funds of the Pledgors, and
shall be forthwith paid over to the Collateral Agent as Pledged Collateral in
the exact form received with any necessary indorsement and/or appropriate stock
powers duly executed in blank, to be held by the Collateral Agent as Pledged
Collateral and as further collateral security for the Obligations.
SECTION 8. Additional Provisions Concerning the Pledged Collateral.
(a) To the maximum extent permitted by applicable law, and for
the purpose of taking any action that the Collateral Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, each Pledgor (i)
authorizes the Collateral Agent to execute any such agreements, instruments or
other documents in such Pledgor's name and to file such agreements, instruments
or other documents in such Pledgor's name in any appropriate filing office, (ii)
authorizes the Collateral Agent to file any financing statements required
hereunder or under any other Loan Document, and any continuation statements or
amendments with respect thereto, in any appropriate filing office without the
signature of such Pledgor and (iii) ratifies the filing of any financing
statement, and any continuation statement or amendment with respect thereto,
filed without the signature of such Pledgor prior to the date hereof. A
photocopy or other reproduction of this Agreement or any financing statement
covering the
9
Pledged Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.
(b) Each Pledgor hereby irrevocably appoints the Collateral Agent
as such Pledgor's attorney-in-fact and proxy, with full authority in the place
and stead of such Pledgor and in the name of such Pledgor or otherwise, from
time to time in the Collateral Agent's reasonable discretion, upon the
occurrence and during the continuance of an Event of Default, to take any action
and to execute any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of
such Pledgor under Section 7(a) hereof), including, without limitation, to
receive, indorse and collect all instruments made payable to such Pledgor
representing any dividend, interest payment or other distribution in respect of
any Pledged Collateral and to give full discharge for the same. This power is
coupled with an interest and is irrevocable until the date on which all of the
Obligations have been indefeasibly paid in full in cash after the termination of
the Total Commitment.
(c) If any Pledgor fails to perform any agreement or obligation
contained herein, the Collateral Agent itself may perform, or cause performance
of, such agreement or obligation, and the expenses of the Collateral Agent
incurred in connection therewith shall be jointly and severally payable by the
Pledgors pursuant to Section 10 hereof and shall be secured by the Pledged
Collateral.
(d) Other than the exercise of reasonable care to assure the safe
custody of the Pledged Collateral while held hereunder, the Collateral Agent
shall have no duty or liability to preserve rights pertaining thereto and shall
be relieved of all responsibility for the Pledged Collateral upon surrendering
it or tendering surrender of it to any of the Pledgors. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, it being understood that the
Collateral Agent shall not have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Pledged Collateral, whether or not the Collateral
Agent has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against any parties with respect to any
Pledged Collateral.
(e) The powers conferred on the Collateral Agent hereunder are
solely to protect its interest in the Pledged Collateral and shall not impose
any duty upon the Collateral Agent to exercise any such powers. Except for the
safe custody of any Pledged Collateral in its possession and the accounting for
monies actually received by it hereunder, the Collateral Agent shall have no
duty as to any Pledged Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Pledged Collateral.
(f) Upon the occurrence and during the continuance of an Event of
Default, the Collateral Agent may at any time in its discretion (i) without
notice to any Pledgor, transfer or register in the name of the Collateral Agent
or any of its nominees any or all of the Pledged Collateral, subject only to the
revocable rights of such Pledgor under Section 7(a) hereof, and (ii) exchange
certificates or instruments constituting Pledged Collateral for certificates or
instruments of smaller or larger denominations.
10
SECTION 9. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the Pledged
Collateral, in addition to any other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party
upon default under the Code then in effect in the State of New York; and without
limiting the generality of the foregoing and without notice except as specified
below, sell the Pledged Collateral or any part thereof in one or more parcels at
public or private sale, at any exchange or broker's board or elsewhere, at such
price or prices and on such other terms as the Collateral Agent may deem
commercially reasonable. Each Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten (10) days' notice to such Pledgor of the
time and place of any public sale of Pledged Collateral owned by such Pledgor or
the time after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of
Pledged Collateral regardless of whether or not notice of sale has been given.
The Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) Each Pledgor recognizes that the Collateral Agent may deem it
impracticable to effect a public sale of all or any part of the Pledged Shares
or any other securities constituting Pledged Collateral and that the Collateral
Agent may, therefore, determine to make one or more private sales of any such
securities to a restricted group of purchasers who will be obligated to agree,
among other things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sale may be at prices and on terms
less favorable to the seller than the prices and other terms which might have
been obtained at a public sale and, notwithstanding the foregoing, agrees that
such private sales shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
delay the sale of any such securities for the period of time necessary to permit
the issuer of such securities to register such securities for public sale under
the Securities Act. Each Pledgor further acknowledges and agrees that any offer
to sell such securities which has been (i) publicly advertised on a bona fide
basis in a newspaper or other publication of general circulation in the
financial community of New York, New York (to the extent that such an offer may
be so advertised without prior registration under the Securities Act) or (ii)
made privately in the manner described above to not less than fifteen bona fide
offerees shall be deemed to involve a "public disposition" for the purposes of
Section 9-610(c) of the Code (or any successor or similar, applicable statutory
provision) as then in effect in the State of New York, notwithstanding that such
sale may not constitute a "public offering" under the Securities Act, and that
the Collateral Agent may, in such event, bid for the purchase of such
securities.
(c) Any cash held by the Collateral Agent as Pledged Collateral
and all cash proceeds received by the Collateral Agent in respect of any sale
of, collection from, or other realization upon, all or any part of the Pledged
Collateral shall be applied (after payment of any amounts payable to the
Collateral Agent pursuant to Section 10 hereof) in whole or in part by the
Collateral Agent against, all or any part of the Obligations in such order as
the Collateral Agent shall elect consistent with the provisions of the Financing
Agreement. Any surplus of
11
such cash or cash proceeds held by the Collateral Agent and remaining after the
indefeasible payment in full in cash of all of the Obligations after the
termination of the Total Commitment shall be paid over to the Pledgors or to
such Person as may be lawfully entitled to receive such surplus.
(d) In the event that the proceeds of any such sale, collection
or realization are insufficient to pay all amounts to which the Agents and the
Lenders are legally entitled, the Pledgors shall be jointly and severally liable
for the deficiency, together with interest thereon at the highest rate specified
in any applicable Loan Document for interest on overdue principal thereof or
such other rate as shall be fixed by applicable law, together with the costs of
collection and the reasonable fees, costs and expenses and other client charges
of any attorneys employed by the Collateral Agent to collect such deficiency.
SECTION 10. Indemnity and Expenses.
(a) Each Pledgor jointly and severally agrees to defend, protect,
indemnify and hold harmless each Indemnitee from and against any and all losses,
damages, liabilities, obligations, penalties, fees, reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees, costs and
expenses incurred by such Indemnitee) to the extent that they arise out of or
otherwise result from this Agreement (including, without limitation, enforcement
of this Agreement), provided, however, that the Pledgors shall not have any
obligation to any Indemnitee under this Section 10(a) for any Indemnified Matter
caused by the gross negligence or willful misconduct of such Indemnitee, as
determined by a final judgment of a court of competent jurisdiction.
(b) Each Pledgor jointly and severally agrees to pay to the
Collateral Agent upon demand the amount of any and all costs and expenses,
including the reasonable fees, costs, expenses and disbursements of the
Collateral Agent's counsel and of any experts and agents (including, without
limitation, any collateral trustee which may act as agent of the Collateral
Agent) which the Collateral Agent may incur in connection with (i) the
preparation, negotiation, execution, delivery, recordation, administration,
amendment, waiver or other modification or termination of this Agreement, (ii)
the custody, preservation, use or operation of, or the sale of, collection from,
or other realization upon, any Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent hereunder, or (iv) the
failure by any Pledgor to perform or observe any of the provisions hereof.
SECTION 11. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, if to any Pledgor, to it in care of the Borrower at the Borrower's
address specified in the Financing Agreement; if to the Collateral Agent, to it
at its address specified in the Financing Agreement; or as to any such Person,
at such other address as shall be designated by such Person in a written notice
to such other Person complying as to delivery with the terms of this Section 11.
All such notices and other communications shall be effective (a) if mailed (by
certified or registered mail, postage prepaid and return receipt requested),
when received or three (3) Business Days after deposited in the mails, whichever
occurs first, (b) if telecopied, when transmitted and confirmation received,
provided same is on a Business Day and, if not, on the next Business Day or (c)
if
12
delivered, upon delivery, provided same is on a Business Day and, if not, on the
next Business Day.
SECTION 12. Security Interest Absolute. All rights of the Agents and
the Lenders, all Liens and all obligations of each of the Pledgors hereunder
shall be absolute and unconditional irrespective of: (a) any lack of validity or
enforceability of the Financing Agreement or any other Loan Document, (b) any
change in the time, manner or place of payment of, or in any other term in
respect of, all or any of the Obligations, or any other amendment or waiver of
or consent to any departure from the Financing Agreement or any other Loan
Document, (c) any exchange or release of, or non-perfection of any Lien on any
Collateral, or any release or amendment or waiver of, or consent to or departure
from any guaranty, for all or any of the Obligations, or (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any of the Pledgors in respect of the Obligations. All
authorizations and agencies contained herein with respect to any of the Pledged
Collateral are irrevocable and powers coupled with an interest.
SECTION 13. Miscellaneous.
(a) No amendment of any provision of this Agreement (including
any Schedule attached hereto) shall be effective unless it is in writing and
signed by each Pledgor and the Collateral Agent, and no waiver of any provision
of this Agreement, and no consent to any departure by any of the Pledgors
therefrom, shall be effective unless it is in writing and signed by the
Collateral Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
(b) No failure on the part of the Agents or the Lenders to
exercise, and no delay in exercising, any right hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The rights and remedies of the Agents and the
Lenders provided herein and in the other Loan Documents are cumulative and are
in addition to, and not exclusive of, any rights or remedies provided by law.
The rights of the Agents and the Lenders under any Loan Document against any
party thereto are not conditional or contingent on any attempt by the Agents or
the Lenders to exercise any of their rights under any other document against
such party or against any other Person.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest in
and Lien on the Pledged Collateral and shall (i) remain in full force and effect
until the satisfaction in full in cash of the Obligations after the termination
of the Total Commitment and (ii) be binding on each Pledgor and its respective
successors and assigns, and shall inure, together with all rights and remedies
of the Agents and the Lenders hereunder, to the benefit of the Agents and the
Lenders and their respective successors, transferees and assigns. Without
limiting the generality of clause (ii) of the immediately preceding sentence,
the Agents and the Lenders may assign or
13
otherwise transfer their respective rights and obligations under this Agreement
and any other Loan Document to any other Person pursuant to the terms of the
Financing Agreement, and such other Person shall thereupon become vested with
all of the benefits in respect thereof granted to the Agents and the Lenders
herein or otherwise. Upon any such assignment or transfer, all references in
this Agreement to any Agent or any Lender shall mean the assignee of such Agent
or such Lender. None of the rights or obligations of any of the Pledgors
hereunder may be assigned or otherwise transferred without the prior written
consent of the Collateral Agent, and any such assignment or transfer shall be
null and void.
(e) Upon the satisfaction in full in cash of the Obligations
after the termination of the Total Commitment, (i) this Agreement and the
security interest and Lien created hereby shall terminate and all rights to the
Pledged Collateral shall revert to the Pledgors, and (ii) the Collateral Agent
promptly will, upon the Pledgors' request and at the Pledgors' expense, without
any representation, warranty or recourse whatsoever, (A) return to the Pledgors
such of the Pledged Collateral as shall not have been sold or otherwise disposed
of or applied pursuant to the terms hereof and (B) execute and deliver to the
Pledgors such documents as the Pledgors shall reasonably request to evidence
such termination.
(f) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS 'REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND
PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF
THE SECURITY INTEREST AND LIEN CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
(g) Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
(h) This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
shall be deemed an original, but all such counterparts shall constitute one and
the same agreement. Delivery of an executed counterpart of this Agreement by
facsimile or electronic mail shall be equally effective as delivery of an
original executed counterpart.
(i) All of the obligations of the Pledgors hereunder are joint
and several. The Collateral Agent may, in its sole and absolute discretion,
enforce the provisions hereof against any of the Pledgors and shall not be
required to proceed against all Pledgors jointly or seek payment from the
Pledgors ratably. In addition, the Collateral Agent may, in its sole and
absolute discretion, select the Pledged Collateral of any one or more of the
Pledgors for sale or application to the Obligations, without regard to the
ownership of such Pledged Collateral, and shall not be required to make such
selection ratably from the Pledged Collateral owned by all of the Pledgors. The
release or discharge of any Pledgor by the Collateral Agent shall not release or
discharge any other Pledgor from the obligations of such Person hereunder.
14
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be
executed and delivered by its officer thereunto duly authorized, as of the date
first above written.
PLEDGORS:
XANODYNE PHARMACEUTICALS, INC.
By:
------------------------------------
Name:
Title:
XANODYNE ACQUISITION, LLC
By:
------------------------------------
Name:
Title:
XANODYNE DEVELOPMENT GROUP, LLC
By:
------------------------------------
Name:
Title:
RUTI ACQUISITION, INC.
By:
------------------------------------
Name:
Title:
SCHEDULE I
TO
PLEDGE AND SECURITY AGREEMENT
Pledged Debt
Principal Amount
Pledgor Name of Maker Description Outstanding as of
------- ------------- ----------- -----------------
SCHEDULE II
TO
PLEDGE AND SECURITY AGREEMENT
Pledged Shares
Percentage of
Number of Outstanding Certificate
Pledgor Name of Pledged Issuer Shares Shares Class Number
------- ---------------------- --------- ------------- ----- -----------
ANNEX I
TO
PLEDGE AGREEMENT
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________ __, ____, is delivered
pursuant to Section 4 of the Pledge Agreement referred to below. The undersigned
hereby agrees that this Pledge Amendment may be attached to the Pledge and
Security Agreement, dated July 25, 2005, as it may heretofore have been or
hereafter may be amended, restated or otherwise modified or supplemented from
time to time (the "Pledge Agreement"), and that the promissory notes or shares
listed on this Pledge Amendment shall be hereby pledged and assigned to the
Collateral Agent and become part of the Pledged Collateral referred to in such
Pledge Agreement and shall secure all of the Obligations referred to in such
Pledge Agreement.
Pledged Debt
Principal Amount
Pledgor Name of Maker Description Outstanding as of
------- ------------- ----------- -----------------
Pledged Shares
Percentage of
Name of Number of Outstanding Certificate
Pledgor Pledged Issuer Shares Shares Class Number
------- -------------- --------- ------------- ----- -----------
[PLEDGOR]
By:
------------------------------------
Name:
Title:
Silver Point Finance, LLC,
as Collateral Agent
By:
---------------------------------
Name:
Title:
EXHIBIT D
FORM OF NOTICE OF BORROWING
XANODYNE PHARMACEUTICALS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date:
----------------------------------
Silver Point Finance, LLC, as Administrative Agent
under the below-referenced Financing Agreement
Two ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Xanodyne Pharmaceuticals, Inc., a Delaware
corporation (the "Borrower"), refers to the Financing Agreement, dated as of
July 25, 2005 (such Agreement, as amended, restated, supplemented or otherwise
modified from time to time, including any replacement agreement therefor, being
hereinafter referred to as the "Financing Agreement"), by and among the
Borrower, each subsidiary of the Borrower listed as a "Guarantor" on the
signature pages thereto (together with each other Person (as defined in the
Financing Agreement) that guarantees all or any portion of the Obligations (as
defined in the Financing Agreement) from time to time, each a "Guarantor" and
collectively, the "Guarantors"), the lenders from time to time party thereto
(each a "Lender" and collectively, the "Lenders"). Silver Point Finance, LLC, a
Delaware limited liability company, as collateral agent for the Agents (as
hereinafter defined) and the Lenders (in such capacity, together with its
successors and assigns in such capacity, if any, the "Collateral Agent"), and as
administrative agent for the Agents and the Lenders (in such capacity, together
with its successors and assigns in such capacity, if any, the "Administrative
Agent" and together with the Collateral Agent, each an "Agent" and collectively,
the "Agents"), and hereby gives you notice pursuant to Section 2.02 of the
Financing Agreement that the undersigned hereby requests a Loan under the
Financing Agreement (the "Proposed Loan"), and in that connection sets forth
below the information relating to such Proposed Loan as required by Section 2.02
of the Financing Agreement. All capitalized terms used but not defined herein
have the same meanings herein as set forth in the Financing Agreement.
(i) The aggregate principal amount of the Proposed Loan is
$___________.(1)
(ii) The Proposed Loan is a [Revolving Loan] [Term Loan].(2)
(iii) The Proposed Loan is a [Reference Rate Loan] [LIBOR Rate Loan, with
an initial Interest Period of month[s](3)].
(iv) The proceeds of the Proposed Loan will be used for the following
purposes: [general corporate and working capital purposes] [specify
other purposes].
(v) The borrowing date of the Proposed Loan is _____, 200_.(4)
(vi) The proceeds of the Proposed Loan should be made available to the
undersigned by wire transferring such proceeds in accordance with the
payment instructions set forth on Annex I hereto.
----------
(1) In the case of a LIBOR Rate Loan, such amount shall be in a minimum amount
of $500,000 and in integral multiples of $100,000 in excess thereof. In the
case of a Revolving Loan, such amount shall be in a minimum amount of
$500,000 and shall be in an integral multiple of $50,000.
(2) This information is only required for Loans requested on the Effective
Date.
(3) The Interest Period of the Proposed Loan must be one, two, three or six
months.
(4) This date must be a Business Day, and with respect to the Term Loan, must
be the Effective Date and with respect to a LIBOR Rate Loan, must be three
Business Days prior to the proposed borrowing.
The undersigned hereby certifies that (i) the representations and
warranties contained in Article V of the Financing Agreement and in each other
Loan Document are true and correct on and as of the date hereof as though made
on and as of the date hereof and will be true and correct on and as of the date
of the Proposed Loan (except that any representation and warranty made as of a
specific date shall be true and correct as of such specific date), (ii) no
Default or Event of Default has occurred and is continuing as of the date hereof
or will result from the making of the Proposed Loan or will occur or will be
continuing on the date of the Proposed Loan, and (iii) the conditions set forth
in Section[s] [4.01 and] 4.02 of the Financing Agreement have been satisfied as
of the date hereof and will be satisfied as of the date of the Proposed Loan.
Very truly yours,
XANODYNE PHARMACEUTICALS, INC.
By:
------------------------------------
Name:
Title:
ANNEX I
PAYMENT INSTRUCTIONS
EXHIBIT E
FORM OF LIBOR NOTICE
XANODYNE PHARMACEUTICALS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Silver Point Finance, LLC,
as Administrative Agent under the below-referenced
Financing Agreement
Two ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Financing Agreement, dated as of July 25,
2005 (as the same may be further amended, supplemented or otherwise modified
from time to time, the "Financing Agreement"), by and among Xanodyne
Pharmaceuticals, Inc., a Delaware corporation (the "Borrower"), each subsidiary
of the Borrower listed as a "Guarantor" on the signature pages thereto (together
with each other Person (as defined in the Financing Agreement) that guarantees
all or any portion of the Obligations (as defined in the Financing Agreement)
from time to time, each a "Guarantor" and collectively, the "Guarantors"), the
lenders from time to time party thereto (each a "Lender" and collectively, the
"Lenders"), Silver Point Finance, LLC, a Delaware limited liability company, as
collateral agent for the Agents (as hereinafter defined) and the Lenders (in
such capacity, together with its successors and assigns in such capacity, if
any, the "Collateral Agent"), and as administrative agent for the Agents and the
Lenders (in such capacity, together with its successors and assigns in such
capacity, if any, the "Administrative Agent" and together with the Collateral
Agent, each an "Agent" and collectively, the "Agents"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to them
in the Financing Agreement.
This LIBOR Notice represents the Borrower's request to [elect the
LIBOR Option with respect to a Revolving Loan being requested on the date hereof
in the principal amount of $__________] [[convert into] [continue as] [LIBOR
Rate Loans] [Reference Rate Loans] $_________ of the outstanding principal
amount of the [Revolving Loans] [Term Loan] (the "Requested Loan")[, and is a
written confirmation of the telephonic notice of such election previously given
to the Administrative Agent].
[Such Requested LIBOR Rate Loan will have an Interest Period of [one]
[two] [three] [six] month(s), commencing on ___________.]
[This LIBOR Notice further confirms the Borrower's acceptance, for
purposes of determining the rate of interest based on the LIBOR Rate under the
Financing Agreement, of the LIBOR Rate as determined pursuant to the Financing
Agreement.]
The undersigned certifies that (i) the representations and warranties
contained in Article V of the Financing Agreement and in each other Loan
Document are true and correct on and as of the date hereof as though made on and
as of the date hereof and will be true and correct on as of the date of the
[making] [conversion] [continuation] of the Requested Loan (except that any
representation and warranty made as of a specific date shall be true and correct
as of such specific date), (ii) no Default or Event of Default has occurred and
is continuing or will result from the [making] [conversion] [continuation] of
the Requested Loan or will occur or be continuing on the date of the Requested
Loan and (iii) all applicable conditions set forth in Article IV of the
Financing Agreement have been satisfied as of the date hereof and will remain
satisfied as of the date of the [making] [conversion] [continuation] of the
Requested Loan.
Dated:
-------------------
XANODYNE PHARMACEUTICALS, INC.
By:
------------------------------------
Name:
Title:
EXHIBIT F
FORM OF OPINION OF COUNSEL
EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________ __, 200_
Reference is made to the Financing Agreement, dated as of July 25,
2005 (such Agreement, as amended, restated, supplemented or otherwise modified
from time to time, including any replacement agreement therefor, being
hereinafter referred to as the "Financing Agreement"), by and among Xanodyne
Pharmaceuticals, Inc., a Delaware corporation (the "Borrower"), each subsidiary
of the Borrower listed as a "Guarantor" on the signature pages thereto (together
with each other Person (as defined in the Financing Agreement) that guarantees
all or any portion of the Obligations (as defined in the Financing Agreement)
from time to time, each a "Guarantor" and collectively, the "Guarantors"), the
lenders from time to time party thereto (each a "Lender" and collectively, the
"Lenders"). Silver Point Finance, LLC, a Delaware limited liability company, as
collateral agent for the Agents (as hereinafter defined) and the Lenders (in
such capacity, together with its successors and assigns in such capacity, if
any, the "Collateral Agent"), and as administrative agent for the Agents and the
Lenders (in such capacity, together with its successors and assigns in such
capacity, if any, the "Administrative Agent" and together with the Collateral
Agent, each an "Agent" and collectively, the "Agents"). Capitalized terms used
herein which are defined in the Financing Agreement and not otherwise defined
herein shall have the same meaning herein as set forth therein.
____________ (solely in its capacity as a Lender under the Financing
Agreement) (the "Assignor") and ____________ (the "Assignee"') agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse, representation or warranty (except as set forth in Section 2 hereof),
and the Assignee hereby purchases and assumes from the Assignor, all of the
Assignor's interests, rights and obligations, as set forth in Exhibit A hereto
(the "Assigned Interest"), solely as a Lender, of the Assignor's [Revolving
Credit Commitment] [Revolving Loans] [Term Loan] under the Financing Agreement
and the other Loan Documents as of the Effective Date (as defined below)
(including, without limitation, the Assigned Interest related to [(i)] the
outstanding principal amount of the [Revolving Loans] [Term Loan] made by the
Assignor [, and (ii) the promissory note[s] evidencing the Assignor's [Revolving
Loans] [Term Loan]).
2. (a) The Assignor (i) represents and warrants as of the date hereof
that its [Revolving Credit Commitment] [the outstanding principal amount of its
[Revolving Loans] [Term Loan] is equal to or in excess of the Assigned Interest
(without giving effect to assignments thereof which have not yet become
effective); (ii) represents and warrants that it is the legal and beneficial
owner of the interest it is assigning hereunder; (iii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made by or in connection with the Financing
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Financing Agreement or
any other Loan Document, or any other instrument or document furnished pursuant
thereto; [and] (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under the
Financing Agreement, any other Loan Document or any other instrument or document
furnished pursuant thereto [; and (v) attaches the promissory note[s] referred
to in paragraph 1 above, and requests that the Collateral Agent exchange the
promissory note[s] for [a] new promissory note[s] (appropriately dated so that
no loss of interest accrued prior to the Effective Date shall result with
respect to the portion of the applicable Loans assigned [or the portion of the
applicable Loans retained] by the Assignor), consisting of a promissory note in
the aggregate principal amount of $___________, with respect to the [Revolving
Loans] [Term Loan], payable to the order of the Assignee [and a promissory note
in the aggregate principal amount of $____________, with respect to the
[Revolving Loans] [Term Loan], payable to the order of the Assignor]].
(b) The Assignee represents and warrants that it has become a party
hereto solely in reliance upon its own independent investigation of the
financial and other circumstances surrounding the Loan Parties, the Collateral,
the Loans and all aspects of the transactions evidenced by or referred to in the
Loan Documents, or has otherwise satisfied itself thereto, and that it is not
relying upon any representation, warranty or statement (except any such
representation, warranty or statement expressly set forth in this Agreement) of
the Assignor in connection with the assignment made under this Agreement. The
Assignee further acknowledges that the Assignee will, independently and without
reliance upon the Assignor, the Agents or any other Lender and based upon the
Assignee's review of such documents and information as the Assignee deems
appropriate at the time, make and continue to make its own credit decisions in
entering into this Agreement and taking or not taking action under the Loan
Documents. The Assignor shall have no duty or responsibility either initially or
on a continuing basis to make any such investigation or any such appraisal on
behalf of the Assignee or to provide the Assignee with any credit or other
information with respect thereto, whether coming into its possession before the
making of the initial extension of credit under the Financing Agreement or at
any time or times thereafter.
(c) The Assignee represents and warrants to the Assignor that it has
experience and expertise in the making of loans such as the Loans or with
respect to the other types of credit which may be extended under the Financing
Agreement; that it has acquired its Assigned Interest for its own account and
not with any intention of selling all or any portion of such interest; and that
it has received, reviewed and approved copies of all Loan Documents.
(d) The Assignor shall not be responsible to the Assignee for the
execution, effectiveness, accuracy, completeness, legal effect, genuineness,
validity, enforceability, collectibility or sufficiency of any of the Loan
Documents or for any representations, warranties, recitals or statements made
therein or in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents made or
furnished or made available by the Assignor to the Assignee or by or on behalf
of the Loan Parties to the Assignor or the Assignee in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of the Loan Parties or any other Person liable for
the payment of any Loan or payment of amounts owed in connection with other
extensions of credit under the Financing Agreement or the value of the
Collateral or any other matter. The Assignor shall not be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any
-2-
of the Loan Documents or as to the use of the proceeds of the Loans or other
extensions of credit under the Financing Agreement or as to the existence or
possible existence of any Event of Default or Default.
(e) Each party to this Agreement represents and warrants to the other
party to this Agreement that it has full power and authority to enter into this
Agreement and to perform its obligations under this Agreement in accordance with
the provisions of this Agreement, that this Agreement has been duly authorized,
executed and delivered by such party and that this Agreement constitutes a
legal, valid and binding obligation of such party, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, moratorium or other similar laws affecting creditors' rights
generally and by general equitable principles.
(f) Each party to this Agreement represents and warrants that the
making and performance by it of this Agreement do not and will not violate any
law or regulation of the jurisdiction of its organization or any other law or
regulation applicable to it.
(g) Each party to this Agreement represents and warrants that all
consents, licenses, approvals, authorizations, exemptions, registrations,
filings, opinions and declarations from or with any agency, department,
administrative authority, statutory corporation or judicial entity necessary for
the validity or enforceability of its obligations under this Agreement have been
obtained, and no governmental authorizations other than any already obtained are
required in connection with its execution, delivery and performance of this
Agreement.
(h) The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned and that such interest is free
and clear of any Lien.
(i) The Assignor makes no representation or warranty and assumes no
responsibility with respect to the operations, condition (financial or
otherwise), business or assets of the Loan Parties or the performance or
observance by the Loan Parties of any of their obligations under the Financing
Agreement or any other Loan Document.
(j) The Assignee appoints and authorizes the Agents to take such
action as an agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agents by the terms thereof, together with
such powers as are reasonably incidental thereto.
(k) The Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Financing Agreement and
the other Loan Documents are required to be performed by it as a Lender.
(l) The Assignee confirms that it has received all documents and
information it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement.
(m) The Assignee specifies as its address for notices the office set
forth beneath its name on the signature pages hereof.
-3-
3. The effective date for this Agreement (the "Effective Date") shall
be the date that is at least three (3) Business Days (or such shorter period as
the Collateral Agent may agree) after the latest of (a) the execution of this
Agreement, (b) the delivery of this Agreement to the Collateral Agent for
acceptance, (c) the date on which the Assignor has received the payment, in
immediately available funds, by the Assignee of $____________, which amount
represents the purchase price for the Assigned Interest (the "Purchase Price"),
and (d) except in the case of an assignment by a Lender to an Affiliate of such
Lender or a Related Fund of such Lender, the payment of the processing and
recordation fee of $5,000 to the Collateral Agent.
4. Upon such acceptance, as of the Effective Date (a) the Assignee
shall, in addition to the rights and obligations under the Financing Agreement
and the other Loan Documents, if any, held by it immediately prior to the
Effective Date, have the rights and obligations under the Financing Agreement
and the other Loan Documents that have been assigned to it pursuant to this
Agreement, and (b) the Assignor shall, to the extent provided in this Agreement,
relinquish its rights and be released from its obligations under the Financing
Agreement and the other Loan Documents that have been assigned by the Assignor
to the Assignee pursuant to this Agreement.
5. Upon such acceptance, from and after the Effective Date, the
Administrative Agent shall make all payments under the Financing Agreement in
respect of the rights assigned hereby (including, without limitation, all
payments of principal, interest and fees with respect thereto) to the Assignee.
If the Assignor receives or collects any payment of interest or fees
attributable to the interests assigned to Assignee by this Agreement which has
accrued after the Effective Date, the Assignor shall distribute to the Assignee
such payment. If the Assignee receives or collects any payment of interest or
fees which is not attributable to the interests assigned to the Assignee by this
Agreement or which has accrued on or prior to the Effective Date, the Assignee
shall distribute to the Assignor such payment.
6. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY THEREIN WITHOUT CONSIDERATION AS TO CHOICE OF
LAW.
7. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BASED UPON OR ARISING OUT OF THIS AGREEMENT
OR ANY OF THE TRANSACTIONS RELATED HERETO, AND AGREES THAT ANY SUCH ACTION,
PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
8. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement by facsimile,
or other electronic transmission, shall be equally effective as delivery of an
original executed counterpart.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective officers thereunto duly
authorized, as of the date first above written.
[NAME OF ASSIGNOR]
By:
------------------------------------
Name:
Title:
Date:
NOTICE ADDRESS AND PAYMENT INSTRUCTIONS
FOR ASSIGNOR
----------------------------------------
----------------------------------------
----------------------------------------
Telephone No.:
-------------------------
Telecopy No.:
--------------------------
[NAME OF ASSIGNEE]
By:
------------------------------------
Name:
Title:
Date:
NOTICE ADDRESS AND PAYMENT INSTRUCTIONS
FOR ASSIGNEE
----------------------------------------
----------------------------------------
----------------------------------------
Telephone No.:
-------------------------
Telecopy No.:
--------------------------
ACCEPTED AND CONSENTED TO
this ____ day of _______, 200_
SILVER POINT FINANCE, LLC,
as Collateral Agent
By:
---------------------------------
Name:
Title:
[XANODYNE PHARMACEUTICALS, INC.,
as Borrower](5)
[By:
--------------------------------
Name:
Title:]
----------
(5) The Borrower's consent rights are conditioned upon the absence of a
continuing Default or Event of Default, and must not be unreasonably
withheld. Borrower does not have consent rights in connection with an
assignment by a Lender to an Affiliate of a Lender or to a Related Fund of
such Lender.
EXHIBIT A
AGGREGATE AMOUNT OF PERCENTAGE INTEREST
AMOUNT OF REVOLVING OF TOTAL REVOLVING
REVOLVING CREDIT CREDIT COMMITMENT/ CREDIT COMMITMENT
COMMITMENT/ APPLICABLE LOANS OR
REVOLVING CREDIT COMMITMENT/ APPLICABLE LOANS ASSIGNED TO APPLICABLE LOANS
APPLICABLE LOANS ASSIGNED FOR ALL LENDERS ASSIGNEE ASSIGNED TO ASSIGNEE*
--------------------------- ---------------- ------------------ ---------------------
[Revolving Credit Commitment] $__________ $__________ __. ___%
[Revolving Loans] $__________ $__________ __. ___%
[Term Loan] $__________ $__________ __. ___%
----------
* Specify percentage to no more than 4 decimal points.
EXECUTION VERSION
FIRST AMENDMENT, WAIVER AND CONSENT
TO FINANCING AGREEMENT
FIRST AMENDMENT, WAIVER AND CONSENT, dated as of September 29, 2005
(this "Amendment"), to the Financing Agreement, dated as of July 25, 2005 (the
"Financing Agreement"), by and among Xanodyne Pharmaceuticals, Inc., a Delaware
corporation (the "Borrower"), each subsidiary of the Borrower listed as a
"Guarantor" on the signature pages thereto (together with each other Person (as
defined in the Financing Agreement) that guarantees all or any portion of the
Obligations (as defined in the Financing Agreement) from time to time, each a
"Guarantor" and collectively, the "Guarantors"), the lenders from time to time
party thereto (each a "Lender" and collectively, the "Lenders"), Silver Point
Finance, LLC, a Delaware limited liability company ("Silver Point"), as
collateral agent for the Agents (as hereinafter defined) and the Lenders (in
such capacity, together with its successors and assigns in such capacity, if
any, the "Collateral Agent"), and as administrative agent for the Agents and the
Lenders (in such capacity, together with its successors and assigns in such
capacity, if any, the "Administrative Agent" and together with the Collateral
Agent, each an "Agent" and collectively, the "Agents").
WHEREAS, the Borrower desires to relocate its headquarters from ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the "Exiting Leased Premises") to
the 7th, 8th and 9th floors of One Riverfront Plaza, One ▇▇▇▇▇ ▇▇▇▇▇▇ Drive,
Newport, Kentucky (the "Subleased Premises");
WHEREAS, in order to accomplish such relocation, the Borrower desires
to terminate its existing lease agreement with PHL-OPCO, LP (the "Existing
Lease") for the Existing Leased Premises and to enter into a sublease agreement
(the "Sublease") with Shire U.S. Inc. (the "Sublessor") for the Subleased
Premises;
WHEREAS, (a) the Borrower's failing to make the rent payments due
under the Existing Lease, (b) the Borrower's vacating the Existing Leased
Premises prior to the Existing Lease expiration date and (c) the Borrower's
terminating the Existing Lease prior to the Existing Lease expiration date, in
each case after Borrower enters into the Sublease, constitutes a material
default under the Existing Lease (collectively, the "Potential Existing Lease
Defaults");
WHEREAS, if the Potential Existing Lease Defaults occur, certain
Events of Default (as defined in the Financing Agreement) under Section 8.01(b)
of the Financing Agreement may arise as a result of the Borrower's failure to
comply with Sections 5.01(h)(iii) and 5.01(x) of the Financing Agreement as a
result of the Potential Existing Lease Defaults, and the Borrower has requested
that the Required Lenders and the Agents waive such Events of Default and
consent to the Borrower entering into the Sublease, and the Required Lenders and
the Agents are willing to do so on the terms and conditions hereafter set forth;
and
WHEREAS, certain Events of Default have occurred and the Loan Parties
have requested that the Required Lenders and the Agents waive such Events of
Default and amend
certain terms and conditions of the Financing Agreement and the Required Lenders
and the Agents are willing to do so on the terms and conditions hereafter set
forth.
NOW, THEREFORE, the Loan Parties, the Agents and the Required Lenders
hereby agree as follows:
1. Capitalized Terms. All terms which are defined in the Financing
Agreement and not otherwise defined herein are used herein as defined therein.
2. Amendment.
(a) Section 6.01(m)(i) of the Financing Agreement is hereby
amended by deleting the parenthetical "(other than the locations specified in
Section 6.01(r)(ii))".
(b) Section 6.01(m)(ii) of the Financing Agreement is hereby
amended by deleting the parenthetical "(other than the locations specified in
Section 6.01(r)(iii))".
(c) Section 6.02(f)(ii)(B) of the Financing Agreement is hereby
mended and restated in its entirety to read as follows:
"(B) Operating Lease Obligations which would not cause the
aggregate amount of all Operating Lease Obligations owing by all Loan
Parties and their Subsidiaries during Fiscal Years 2005, 2006 and 2007
to exceed $1,800,000 in the aggregate in any such Fiscal Year and
during Fiscal Year 2008 and each Fiscal Year thereafter to exceed
$2,850,000 in the aggregate in any such Fiscal Year."
3. Post-Closing Covenant Waivers.
(a) The Loan Parties have failed (i) to deliver to the Collateral
Agent (A) the collateral access agreements, in form and substance satisfactory
to the Collateral Agent (the "Required Collateral Access Agreements"), executed
by the following third parties and the applicable Loan Parties with respect to
the Inventory: (I) maintained by Cardinal Health 105, Inc. (a/k/a/ Special
Pharmaceutical Services, Inc.), located at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
(II) maintained by JB Laboratories, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (III) maintained by Accucaps Industries Limited, located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, (IV) maintained by
Quantofill Inc., located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ #▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇, (V) maintained by Banner Pharmacaps, located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (VI) maintained by American Health Packaging,
▇▇▇▇-▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and (VII) maintained by Mikart,
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, in each case of
this subclause (A) required to be delivered pursuant to Section 6.01(r)(iii) of
the Financing Agreement (each such location, a "Required Collateral Access
Agreement Location"), (B) such depository account, blocked account, lockbox
account and similar agreements and other documents required to be delivered
pursuant to Section 6.01(r)(v) of the Financing Agreement, in form and substance
satisfactory to the Agents, (C) a securities account control agreement, with
respect to Account Number 886-03298 maintained at Silicon Valley Bank in the
name of the Borrower required to be delivered pursuant to Section 6.01(r)(vi) of
the Financing Agreement in
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form and substance satisfactory to the Agents and (D) a Pledge Amendment (as
defined in the Pledge Agreement), executed by the Borrower, in favor of the
Collateral Agent, for the benefit of the Agents and the Lenders, providing for a
pledge of all of the Capital Stock of Xanodyne Acquisition, LLC to the extent
such Capital Stock was not pledged to the Collateral Agent on the Effective Date
pursuant to Section 6.01(r)(vii) of the Financing Agreement (the "Required
Pledge Amendment"), and (ii) to establish and maintain (A) cash management
services of a type and on terms satisfactory to the Administrative Agent at one
or more Cash Management Banks pursuant to Section 7.01(a)(i) of the Financing
Agreement and (B) a Cash Management Account at the Cash Management Banks
pursuant to Section 7.01(a)(ii) of the Financing Agreement, in each case of
clauses (i) and (ii) hereof within thirty (30) days following the Effective Date
(collectively, the "Existing Defaults"). Pursuant to the request of the Loan
Parties and in accordance with Section 11.02 of the Financing Agreement, and
subject to the satisfaction of the conditions to effectiveness set forth in
Section 5 of this Amendment, the Agents and the Required Lenders hereby waive
the Existing Defaults, provided that the Loan Parties shall:
(X) comply with Section 6.01(m)(ii) of the Financing Agreement,
as amended hereby, with respect to the Required Collateral Access Agreement
Locations (for the avoidance of doubt, it being understood that in the event the
Loan Parties are unable to obtain the Required Collateral Access Agreements
after using commercially reasonable efforts with respect to any such Required
Collateral Access Agreement Location in which Collateral with a book value in
excess of $250,000 (when aggregated with all other Collateral at the same
location) is maintained at any time, the Administrative Agent shall, at the
direction of the Collateral Agent using its reasonable discretion, establish
such reserves against Availability as the Collateral Agent deems necessary with
respect to any such Collateral)), it being hereby acknowledged that as of the
date hereof, the Loan Parties have delivered to the Collateral Agent, Required
Collateral Access Agreements with respect to Inventory maintained by Cardinal
Health 105, Inc. (a/k/a Special Pharmaceutical Services, Inc.), JB Laboratories,
Accucaps Industries Limited and Quantofill Inc.; and
(Y) (1) on or prior to October 15, 2005, establish and maintain
cash management services of a type and on terms satisfactory to the
Administrative Agent and open Cash Management Accounts with a Cash Management
Bank acceptable to the Administrative Agent in its sole discretion exercised
reasonably (it being understood that Bank of America shall be an acceptable Cash
Management Bank) in order to replace PNC Bank and Silicon Valley Bank as Cash
Management Banks, provided further that such new Cash Management Accounts shall
each be subject to a Cash Management Agreement (unless otherwise agreed to in
writing by the Administrative Agent), (2) on or prior to November 14, 2005,
close any Cash Management Accounts or any other deposit accounts, securities
accounts, commodities accounts or lockbox accounts maintained at or with PNC
Bank, (3) on or prior to November 14, 2005, close any Cash Management Accounts,
or any other deposit accounts, securities accounts, commodities accounts or
lockbox accounts maintained at or with Silicon Valley Bank (except for the
Enterprise Cash Collateral Account), and (4) continue to otherwise comply with
the provisions of Section 7.01.
(b) The waivers in this Section 3 shall be effective only in this
specific instance and for the specific purpose set forth herein and do not allow
for any other or further departure from the terms and conditions of the
Financing Agreement or any other Loan Document, which terms and conditions shall
continue in full force and effect. The Agents' and
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the Required Lenders' granting of such waivers shall not be construed as an
indication that any future waiver of Sections 6.01(r)(iii), (v), (vi) or (vii)
of the Financing Agreement or any other provision of the Loan Documents will be
consented to, it being understood that the granting or denying of any waiver
which may hereafter be requested by the Loan Parties remains in the sole and
absolute discretion of the Required Lenders or the Lenders, as the case may be.
The failure by the Loan Parties to deliver, on time, the documents described in
clauses (X) and (Y) of Section 3(a) above, or to otherwise comply with the terms
thereof will constitute an immediate Event of Default under the Financing
Agreement.
4. Sublease Consents and Waivers.
(a) Pursuant to the request of the Loan Parties and in accordance
with Section 11.02 of the Financing Agreement, and subject to the satisfaction
of the conditions to effectiveness set forth in Section 5 of this Amendment, the
Agents and the Required Lenders hereby consent to the Borrower entering into the
Sublease, failing to make the rent payments due under the Existing Lease after
Borrower enters into the Sublease, vacating the Existing Leased Premises prior
to the Existing Lease expiration date after Borrower enters into the Sublease
and terminating the Existing Lease prior to the Existing Lease expiration date
after Borrower enters into the Sublease, provided that, Borrower shall deliver
to the Collateral Agent as soon as possible, but in any event within three (3)
Business Days after Borrower's entering into the Sublease:
(i) the fully executed copy of the Sublease, in form and
substance reasonably satisfactory to the Collateral Agent, certified by an
Authorized Officer of the Borrower as being a true, correct and complete
copy thereof,
(ii) a landlord waiver agreement executed by the Sublessor
and the Borrower, in form and substance reasonably satisfactory to the
Collateral Agent,
(iii) evidence reasonably satisfactory to the Collateral
Agent that the landlord of the Subleased Premises has consented to the
Sublessor subleasing the Subleased Premises to the Borrower, and
(iv) all of such other agreements, documents and
instruments, if any, executed in connection therewith, in each case of this
Section 4, in form and substance reasonably satisfactory to the Collateral
Agent.
(b) Subject to the satisfaction of the conditions above in this
Section 4, and subject to the effectiveness thereof, the Required Lenders and
the Agents hereby waive (i) any Default or Event of Default under the Financing
Agreement that shall result solely from the Borrower's entering into the
Sublease, and (ii) any Default or Event of Default under Section 8.01(b) of the
Financing Agreement that shall result from the Borrower's failure to comply with
Sections 5.01(h)(iii) and 5.01(x) of the Financing Agreement solely as a result
of the occurrence of the Potential Existing Lease Defaults after the Borrower
enters into the Sublease.
(c) The consents and waivers in this Section 4 shall be effective
only in this specific instance and for the specific purpose set forth herein and
do not allow for any other or further departure from the terms and conditions of
the Financing Agreement or any other
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Loan Document, which terms and conditions shall continue in full force and
effect. The Agents' and the Required Lenders' granting of such consents and
waivers shall not be construed as an indication that any future consent or
waiver of the Financing Agreement or any other provision of the Loan Documents
will be consented to, it being understood that the granting or denying of any
consent or waiver which may hereafter be requested by the Loan Parties remains
in the sole and absolute discretion of the Required Lenders or the Lenders, as
the case may be. If the Borrower enters into the Sublease, the failure by the
Loan Parties to deliver, on time, the documents described in clauses (i) through
(iv) of Section 4(a) above, or to otherwise comply with the terms thereof will
constitute an immediate Event of Default under the Financing Agreement.
5. Conditions to Effectiveness. This Amendment shall become effective
(the "First Amendment Effective Date") only upon satisfaction in full of the
following conditions precedent:
(a) The Collateral Agent shall have received counterparts of this
Amendment that bear the signatures of each Loan Party, each Agent and the
Required Lenders.
(b) The representations and warranties contained herein, in
Article V of the Financing Agreement and in each other Loan Document are true
and correct on and as of the First Amendment Effective Date as though made on
and as of such date, except to the extent that any such representation or
warranty expressly relates solely to an earlier date (in which case such
representation or warranty shall be true and correct on and as of such earlier
date).
(c) No Default or Event of Default shall have occurred and be
continuing on the First Amendment Effective Date or would result from this
Amendment becoming effective in accordance with its terms.
(d) All legal matters incident to this Amendment shall be
satisfactory to the Agents and their respective counsel.
6. Representations and Warranties. Each Loan Party represents and
warrants as follows:
(a) Organization, Good Standing Etc. Each Loan Party (i) is a
corporation, limited liability company or limited partnership, duly organized,
validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
execute and deliver this Amendment, consummate the transactions contemplated
hereby and perform the Financing Agreement, as amended and modified hereby and
(iii) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary
other than in such jurisdictions where the failure to be so qualified and in
good standing could not reasonably be expected to have a Material Adverse
Effect.
(b) Authorization, Etc. The execution, delivery and performance
by each Loan Party of this Amendment and the performance by each Loan Party of
the Financing Agreement, as amended and modified hereby (i) have been duly
authorized by all necessary
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action, (ii) do not and will not contravene its charter or by-laws, its limited
liability company or operating agreement or its certificate of partnership or
partnership agreement, as applicable, or any applicable law, or any contractual
restriction binding on or otherwise affecting it or any of its properties, (iii)
do not and will not result in or require the creation of any Lien (other than
pursuant to any Loan Document) upon or with respect to any of its properties,
and (iv) do not and will not result in any default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal of any material permit,
license, authorization or approval applicable to its operations or any of its
properties,
(c) Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required in connection with the due execution, delivery and performance by any
Loan Party of this Amendment or the performance by any Loan Party of the
Financing Agreement, as amended and modified hereby.
(d) Enforceability of Loan Documents. Each of this Amendment and
the Financing Agreement, as amended and modified hereby, is a legal, valid and
binding obligation of the Loan Parties which are party hereto or thereto,
enforceable against such Loan Parties in accordance with its terms, except as
enforceability may be limited by equitable principles and by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally.
(e) Representations and Warranties; No Default. The
representations and warranties contained herein, in Article V of the Financing
Agreement and in each other Loan Document are true and correct on and as of the
First Amendment Effective Date as though made on and as of such date, except to
the extent that any such representation or warranty expressly relates solely to
an earlier date (in which case such representation or warranty shall be true and
correct on and as of such earlier date); and no Default or Event of Default
shall have occurred and be continuing on the First Amendment Effective Date or
would result from this Amendment becoming effective in accordance with its
terms.
7. Continued Effectiveness of the Financing Agreement.
(a) Ratifications. Except as otherwise expressly provided herein,
(i) the Financing Agreement and the other Loan Documents are, and shall continue
to be, in full force and effect and are hereby ratified and confirmed in all
respects, except that on and after the First Amendment Effective Date (A) all
references in the Financing Agreement to "this Agreement", "hereto", "hereof",
"hereunder" or words of like import referring to the Financing Agreement shall
mean the Financing Agreement as amended and modified by this Amendment, and (B)
all references in the other Loan Documents to the "Financing Agreement",
"thereto", "thereof", "thereunder" or words of like import referring to the
Financing Agreement shall mean the Financing Agreement as amended and modified
by this Amendment, (ii) to the extent that the Financing Agreement or any other
Loan Document purports to pledge to the Collateral Agent, or to grant to the
Collateral Agent a security interest in or lien on, any collateral as security
for the Obligations or the Guaranteed Obligations, such pledge or grant of a
security interest or lien is hereby ratified and confirmed in all respects, and
(iii) the execution, delivery and effectiveness of this Amendment shall not
operate as an amendment of any right, power or remedy of the Agents
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or the Lenders under the Financing Agreement or any other Loan Document, nor
constitute an amendment of any provision of the Financing Agreement or any other
Loan Document.
(b) No Waivers. Except as otherwise expressly provided herein,
this Amendment is not a waiver of, or consent to, any Default or Event of
Default now existing or hereafter arising under the Financing Agreement or any
other Loan Document and the Agents and the Lenders expressly reserve all of
their rights and remedies under the Financing Agreement and the other Loan
Documents, under applicable law or otherwise.
(c) Amendment as Loan Document. Each Loan Party confirms and
agrees that this Amendment shall constitute a Loan Document under the Financing
Agreement. Accordingly, it shall be an Event of Default under the Financing
Agreement if any representation or warranty made or deemed made by any Loan
Party under or in connection with this Amendment shall have been incorrect in
any material respect when made or deemed made or if any Loan Party fails to
perform or comply with any covenant or agreement contained herein.
8. Release. Each Loan Party hereby acknowledges and agrees that: (a)
neither it nor any of its Affiliates has any claim or cause of action against
any Agent or any Lender (or any of their respective Affiliates, officers,
directors, employees, attorneys, consultants or agents) and (b) each Agent and
each Lender has heretofore properly performed and satisfied in a timely manner
all of its obligations to the Loan Parties and their Affiliates under the
Financing Agreement and the other Loan Documents. Notwithstanding the foregoing,
the Agents and the Lenders wish (and the Loan Parties agree) to eliminate any
possibility that any past conditions, acts, omissions, events or circumstances
would impair or otherwise adversely affect any of the Agents' and the Lenders'
rights, interests, security and/or remedies under the Financing Agreement and
the other Loan Documents. Accordingly, for and in consideration of the
agreements contained in this Amendment and other good and valuable
consideration, each Loan Party (for itself and its Affiliates and the
successors, assigns, heirs and representatives of each of the foregoing)
(collectively, the "Releasors") does hereby fully, finally, unconditionally and
irrevocably release and forever discharge each Agent, each Lender and each of
their respective Affiliates, officers, directors, employees, attorneys,
consultants and agents (collectively, the "Released Parties") from any and all
debts, claims, obligations, damages, costs, attorneys' fees, suits, demands,
liabilities, actions, proceedings and causes of action, in each case, whether
known or unknown, contingent or fixed, direct or indirect, and of whatever
nature or description, and whether in law or in equity, under contract, tort,
statute or otherwise, which any Releasor has heretofore had or now or hereafter
can, shall or may have against any Released Party by reason of any act, omission
or thing whatsoever done or omitted to be done on or prior to the First
Amendment Effective Date arising out of, connected with or related in any way to
this Amendment, the Financing Agreement or any other Loan Document, or any act,
event or transaction related or attendant thereto, or the agreements of any
Agent or any Lender contained therein, or the possession, use, operation or
control of any of the assets of any Loan Party, or the making of any Loans or
other advances, or the management of such Loans or advances or the Collateral.
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9. Miscellaneous.
(a) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Amendment by telefacsimile or electronic mail shall be equally effective as
delivery of an original executed counterpart of this Amendment.
(b) Headings. Section and paragraph headings herein are included
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
(c) Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
(d) Expenses. The Borrower will pay on demand all reasonable
fees, costs and expenses of the Agents in connection with the preparation,
execution and delivery of this Amendment and all documents incidental hereto,
including, without limitation, the reasonable fees, disbursements and other
charges of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, counsel to the Agents.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
XANODYNE PHARMACEUTICALS, INC.
By: /s/ ▇▇▇ ▇. ▇'▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇. ▇'▇▇▇▇
Title: Vice President and General
Counsel
GUARANTORS:
XANODYNE ACQUISITION, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary/Treasurer
XANODYNE DEVELOPMENT GROUP, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary/Treasurer
RUTI ACQUISITION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
AGENTS:
SILVER POINT FINANCE, LLC,
As Collateral Agent and as
Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
REQUIRED LENDERS:
SPCP GROUP III LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
SPF CDO I, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
FIELD POINT I, LTD
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
BROAD POINT I, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
SPCP GROUP, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
EXECUTION COPY
SECOND AMENDMENT, WAIVER AND CONSENT
TO FINANCING AGREEMENT
SECOND AMENDMENT, WAIVER AND CONSENT, dated as of June 20, 2007 (this
"Amendment"), to the Financing Agreement, dated as of July 25, 2005, (as amended
by the First Amendment, Waiver and Consent, dated September 29, 2005, and as
further amended, restated or otherwise modified from time to time, the
"Financing Agreement"), by and among Xanodyne Pharmaceuticals, Inc., a Delaware
corporation (the "Borrower"), each subsidiary of the Borrower listed as a
"Guarantor" on the signature pages thereto (together with each other Person (as
defined in the Financing Agreement) that guarantees all or any portion of the
Obligations (as defined in the Financing Agreement) from time to time, each a
"Guarantor" and collectively, the "Guarantors"), the lenders from time to time
party thereto (each a "Lender" and collectively, the "Lenders"), Silver Point
Finance, LLC, a Delaware limited liability company ("Silver Point"), as
collateral agent for the Agents (as hereinafter defined) and the Lenders (in
such capacity, together with its successors and assigns in such capacity, if
any, the "Collateral Agent"), and as administrative agent for the Agents and the
Lenders (in such capacity, together with its successors and assigns in such
capacity, if any, the "Administrative Agent" and together with the Collateral
Agent, each an "Agent" and collectively, the "Agents").
WHEREAS, the Loan Parties have requested that the Agents and the
Lenders amend the Financing Agreement to, among other things: (i) increase the
aggregate principal amount of the term loan facility to $65,000,000, (ii)
increase the aggregate principal amount of the revolving credit facility to an
amount not to exceed $30,000,000 at any time outstanding, (iii) reduce the
interest rate margin applicable to the Loans in the event of a Qualified IPO (as
defined below) of the Borrower, (iv) provide for the payment of certain early
termination and other fees, (v) provide for the issuance of warrants by the
Borrower to the Lenders, and (vi) amend certain other terms and conditions of
the Financing Agreement, in each case, subject to the terms and conditions set
forth in this Amendment.
WHEREAS, the Agent and the Lenders are willing to agree to this
requested Amendment, but only upon the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Loan Parties, the
Agents and the Lenders hereby agree as follows:
1. Definitions. All capitalized terms used herein and not otherwise
defined herein are used herein as defined in the Financing Agreement.
2. Recitals. The second paragraph of the recitals of the Financing
Agreement is hereby amended and restated in its entirety to read as follows:
"The Borrower has asked the Lenders to extend credit to the
Borrower consisting of (a) a term loan in the aggregate principal amount of
$65,000,000 and (b) a revolving credit facility in an aggregate principal amount
not to exceed $30,000,000 at any time
outstanding. On the Effective Date (as defined herein) the proceeds of the term
loan and the loans made under the revolving credit facility prior to the Second
Amendment Effective Date (as defined herein) were used, together with the
Unrestricted Cash Proceeds (as hereinafter defined) (i) to finance the aaiPharma
Acquisition (as hereinafter defined), (ii) to pay fees and expenses related to
the aaiPharma Acquisition and this Agreement and the transactions contemplated
hereby and thereby, and (iii) to provide for general working capital and general
corporate purposes of the Borrower. On the Second Amendment Effective Date the
proceeds of an additional term loan and the loans made under the revolving
credit facility on and after the Second Amendment Effective Date shall be used
(i) to pay fees and expenses related to the Second Amendment and the
transactions contemplated hereby, and (ii) to provide for general working
capital and general corporate purposes of the Borrower. The Lenders are
severally, and not jointly, willing to extend such credit to the Borrower
subject to the terms and conditions hereinafter set forth."
3. Defined Terms in the Financing Agreement. Section 1.01 of the
Financing Agreement is hereby amended, as follows:
(a) Additional Definitions. (i) The following definitions are hereby
inserted in Section 1.01 of the Financing Agreement in appropriate alphabetical
order, to read in their entirety as follows:
"'Applicable LIBOR Rate Margin' means (i) at any time prior to a
Qualified IPO, 6.50% and (ii) at any time following a Qualified IPO, 5.50%."
"'Applicable Make Whole Amount' means (a) for any prepayment
(whether optional or mandatory) of a Term Loan or reduction or termination of
all or any part of the Revolving Credit Commitment at any time during the period
from and after the Second Amendment Effective Date up to and including the date
that is the 12-month anniversary of the Second Amendment Effective Date, an
amount equal to the sum of (1) in the case of a prepayment of the Term Loans,
the aggregate amount of interest which would have otherwise been payable on the
amount of the principal prepayment from the date of prepayment until June 19,
2008 (assuming that interest would have been payable with respect to the amount
of principal prepaid at a rate equal to the one-month LIBOR Rate on the date of
such prepayment plus the Applicable LIBOR Rate Margin from the date of such
principal prepayment through June 19, 2008), and (2) in the case of a reduction
or termination of all or any part of the Revolving Credit Commitment, the
aggregate amount of the Unused Line Fee that would otherwise been payable in
respect of the amount of the commitment reduction as if the amount of the
commitment reduction were the unused portion of the Total Revolving Credit
Commitment from the date of such commitment reduction until June 19, 2008
(assuming that the Unused Line Fee would have been payable with respect to the
unused portion of the Total Revolving Credit Commitment at a rate equal to 0.15%
per month times the amount of the commitment reduction from the date of such
commitment reduction through June 19, 2008), and (b) for any prepayment (whether
optional or mandatory) of the Term Loans that reduces the aggregate outstanding
principal amount of the Term Loan to less than $30,000,000 at any time during
the period from and after the date that is the 12-month anniversary of the
Second Amendment Effective Date up to and including the date that is the
18-month anniversary of the Second Amendment Effective Date, an amount equal to
the aggregate amount of interest which would have otherwise been payable on
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an amount equal to the difference between $30,000,000 and the outstanding
principal amount of the Term Loans immediately after giving effect to such
principal prepayment (such amount, the "Specified Amount") from the date of such
prepayment until December 19, 2008 (assuming that interest would have been
payable with respect to the Specified Amount at a rate equal to the one-month
LIB OR Rate on the date of such prepayment plus the Applicable LIB OR Rate
Margin from the date of such principal prepayment through December 19, 2008)."
"'Applicable Reference Rate Margin' means (i) at any time prior
to a Qualified IPO, 5.00% and (ii) at any time following a Qualified IPO,
4.00%."
"'Appraised Enterprise Value' means the appraised enterprise
value of the Loan Parties, as set forth in the most recent enterprise valuation
received by the Collateral Agent, which enterprise valuation shall be performed
by a mutually agreeable team of individuals employed by L.E.K Consulting;
provided, that if L.E.K. Consulting is unable to perform the enterprise
valuation for whatever reason, the Borrower and the Collateral Agent shall
attempt in good faith to agree upon another third-party valuation firm mutually
acceptable to the Borrower and the Collateral Agent within five Business Days.
In the event the parties are unable to agree within the foregoing five Business
Day period, then within two Business Days the Borrower and the Collateral Agent
shall each select a valuation firm and the two selected initial valuation firms
shall mutually choose a third valuation firm (the "Designated Valuation Firm":
and together with the two initial valuation firms, the "Chosen Valuation
Firms"), which Designated Valuation Firm shall determine such enterprise value
of the Loan Parties. Notwithstanding the foregoing, the Borrower, the Agents and
the Lenders agree that (w) no Person who has a conflict of interest with respect
to any Loan Party, any Lender or any Agent or the subject matter of the issue in
dispute between the Collateral Agent and the Borrower shall be one of the Chosen
Valuation Firms, (x) the determination by L.E.K Consulting or any other
Designated Valuation Firm of the enterprise value of the Loan Parties shall be
in writing and shall be final and binding on the Agents, the Lenders and the
Borrower, (y) each of the Borrower and the Collateral Agent hereby waive any
right to appeal such determination by resorting to legal proceedings or
otherwise, and (z) the Borrower shall pay the fees and expenses of each Chosen
Valuation Firm."
"'Common Stock' means the Common Stock of the Borrower, $0.001
par value."
"'Existing Term Loan' has the meaning specified therefor in
Section 2.01(a)(ii)."
"'IPO' means a bona fide underwritten initial public offering of
voting common Capital Stock of the Borrower in accordance with all applicable
laws."
"'Juno Product' means any tablet, capsule, solution, suspension
or other formulation containing tranexamic acid for the purpose of the treatment
of menorrhagia (including, without limitation, all product compounds listed by
the Borrower in any new drug application or any amended new drug approval filed
with the FDA for the treatment of menorrhagia) or its bioequivalents, in
development by the Borrower as of the Second Amendment Effective Date."
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"'Liquidity Event' means any date on which the amount of
Availability together with unencumbered Cash and Cash Equivalents of the
Borrower and its Subsidiaries is less than $20,000,000."
"'Liquidity Plan' has the meaning specified therefor in Section
6.01(a)(xvii)."
"'Loan to Value Ratio' means, as of any date of determination,
the ratio (expressed as a percentage) of (a) the Appraised Enterprise Value of
the Loan Parties as of such date to (b) the outstanding principal balance of the
Loans and all other Indebtedness of the Loan Parties as of such date."
"'Lynxorb Product' means any tablet, capsule, solution,
suspension or other formulation containing potassium diclofenac acid for the
purpose of the management of mild to moderate pain (including, without
limitation, all product compounds listed by the Borrower in any new drug
application or any amended new drug approval filed with the FDA for the
treatment of menorrhagia) or its bioequivalents, in development by the Borrower
as of the Second Amendment Effective Date.
"'Options' means any option issued pursuant to the Stock
Incentive Plan."
"'Product Milestone Miss' means the occurrence of any one of the
following events at any time: (i) the abandonment, rejection or withdrawal of
the registration development process (including, without limitation, clinical
trials) relating to the Juno Product for any reason; (ii) the failure of the
Loan Parties to demonstrate on or before March 31, 2009, in connection with the
Juno Product that: (x) the difference in the changes from baseline for the
active group compared to the placebo group is statistically different; (y) the
point estimate for the change in menstrual blood loss from baseline in the
active group is at least 50 milliliters per menstrual cycle greater than the
placebo group; and (z) the difference between the point estimates is at least as
great as the decrease found to be clinically meaningful to subjects, in each
case, as more fully described in the minutes of the meeting of the FDA, dated
October 14, 2005, with respect to the Juno Product; and (iii) failure of the
Loan Parties to receive a new drug approvable letter from the FDA for the
purposes of marketing the Lynxorb Product by December 31, 2008."
"'Qualified IPO' means a bona fide underwritten initial public
offering of voting common Capital Stock of the Borrower in accordance with all
applicable laws; provided, that such initial public offering (i) attributes a
pre-IPO enterprise value of the Borrower and its Subsidiaries of not less than
$380,000,000 (based on the outstanding principal amount of the Indebtedness of
the Borrower and its Subsidiaries, plus the fair market value of the Capital
Stock of the Borrower, less the amount of any Cash and Cash Equivalents of the
Borrower and its Subsidiaries), and (ii) results in aggregate Net Cash Proceeds
of at least $100,000,000 to be used for the general working capital and general
corporate purposes of the Borrower and its Subsidiaries."
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"'Registration Rights Agreement' means the Investor Rights
Agreement, dated as of June 20, 2007, by and between the Borrower, each of the
signatories thereto and the Lenders."
"'Second Amendment' means the Second Amendment to the Financing
Agreement, dated as of June 20, 2007, by and among the Loan Parties, the Lenders
and the Agents."
"'Second Amendment Effective Date' means June 20, 2007."
"'Second Term Loan' has the meaning specified therefor in Section
2.01(a)(ii)."
"'Series A-l Purchase Agreement' means the Series A-l Convertible
Preferred Stock Purchase Agreement, dated as of June 20, 2007, by and among the
Company and the entities listed on Exhibit A thereto as purchasers of the
Company's Series A-l Convertible Preferred Stock."
"'Silicon Warrants' means the warrants initially held by Silicon
Valley Bank which may be exercised for up to 35,437 shares of Series A-l
Preferred Stock."
"'Stock Incentive Plan' means the Company's Second Amended and
Restated 2001 Stock Incentive Plan, dated as of June 20, 2007."
"'Stockholders Agreement' means the Amended and Restated
Stockholders Agreement, dated as of June 20, 2007 (as amended as of the date
hereof in connection with the issuance of the Warrants), by and among the
Borrower, the shareholders of the Borrower and the Lenders."
"'Warrants' has the meaning assigned to such term in Section
12.01."
(b) Existing Definitions. (i) The following definitions in Section
1.01 of the Financing Agreement are hereby amended and restated in their
entirety to read as follows:
"Applicable Prepayment Premium' means, as of any date of
determination, an amount equal to (a) during the period of time from and after
the Second Amendment Effective Date up to and including the date that is the
24-month anniversary of the Second Amendment Effective Date, 2.0% times the sum
of (i) the amount of the reduction of the Total Revolving Credit Commitment on
such date plus (ii) the principal amount of the Term Loan prepaid on such date,
(b) during the period of time after the date that is the 24-month anniversary of
the Second Amendment Effective Date up to and including the date that is the
36-month anniversary of the Second Amendment Effective Date, 1.0% times the sum
of (i) the amount of the reduction of the Total Revolving Credit Commitment on
such date plus (ii) the principal amount of the Term Loan prepaid on such date,
and (c) at all times thereafter, zero."
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"'Change of Control' means each occurrence of any of the
following:
(a) the acquisition, directly or indirectly, by any Person or
"group" (within the meaning of Section 13(d)(3) of the Exchange Act) other than
a Permitted Holder of beneficial ownership of more than 35% of the aggregate
outstanding voting power of the Capital Stock of the Borrower;
(b) any Person or "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) other than a Permitted Holder shall have obtained the power
(whether or not exercised) to elect a majority of the members of the board of
managers (or similar governing body) of the Borrower;
(c) except as otherwise expressly permitted by Section 6.02(c),
the Borrower shall cease to have beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) of 100% of the aggregate voting power of the Capital
Stock of each other Loan Party, free and clear of all Liens (other than any
Liens securing the Obligations); or
(d) except as otherwise expressly permitted by Section 6.02(c),
(i) any Loan Party consolidates or amalgamates with or merges into another
entity or conveys, transfers or leases all or substantially all of its property
and assets to another Person, or (ii) any entity consolidates or amalgamates
with or merges into any Loan Party in a transaction pursuant to which the
outstanding voting Capital Stock of such Loan Party is reclassified or changed
into or exchanged for cash, securities or other property, other than any such
transaction described in this clause (ii) in which either (A) in the case of any
such transaction involving the Borrower, no person or group (within the meaning
of Section 13(d)(3) of the Exchange Act) other than a Permitted Holder has,
directly or indirectly, acquired beneficial ownership of more than 35% of the
aggregate outstanding voting Capital Stock of the Borrower or (B) in the case of
any such transaction involving a Loan Party other than the Borrower, the
Borrower has direct or indirect beneficial ownership of 100% of the aggregate
voting power of all Capital Stock of the resulting, surviving or transferee
entity."
"'Excluded Equity Issuance' means (i) any Equity Issuance by the
Borrower, the Net Cash Proceeds of which are used (or are to be used) within 90
days of receipt thereof to finance a Permitted Acquisition; (ii) any Equity
Issuance by the Borrower pursuant to (A) an IPO, (B) upon the conversion of the
shares of the Company's Series A-l Convertible Preferred Stock, (C) upon the
exercise of the Warrants or the exercise of the Silicon Warrants or the exercise
of the Options, or (D) upon the issuance of $25,000,000 of preferred Capital
Stock as further described in Section 20(f) of the Second Amendment; and (iii)
one or more Equity Issuances (excluding any issuance described in (ii)) after
the Second Amendment Effective Date in which the aggregate proceeds received in
connection therewith, together with all other Equity Issuances (other than
Equity Issuances of a type specified in clauses (i) and (ii) above) do not
exceed $60,000,000."
"'Extraordinary Receipts' means any cash received by the Borrower
or any of its Subsidiaries not in the ordinary course of business (and not
consisting of proceeds described in Section 2.05(c)(ii) or (iii) hereof),
including, without limitation, (i) foreign, United States, state or local tax
refunds, (ii) pension plan reversions, (iii) proceeds of insurance, (iv)
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judgments, proceeds of settlements or other consideration of any kind in
connection with any cause of action, (v) condemnation awards (and payments in
lieu thereof), (vi) indemnity payments and (vii) any purchase price adjustments
or deferred purchase price payments (including, without limitation, in the form
of royalties and licensing fees) received in connection with any purchase
agreement (it being understood that royalties and progress payments received by
the Borrower or any of its Subsidiaries in the ordinary course of business shall
not constitute Extraordinary Receipts). Notwithstanding the foregoing,
Dispositions, Excluded Equity Issuances and Permitted Liens shall not constitute
Extraordinary Receipts under this Agreement."
"'Fee Letter' means (i) the fee letter, dated as of the Effective
Date, between the Borrower and the Administrative Agent and (ii) the second
amendment fee letter, dated the Second Amendment Effective Date, between the
Borrower, the Administrative Agent and the Lenders."
"'IMS Product Demand Average Value' shall mean at any time, with
respect to all Marketed Products by the Loan Parties at such time, the product
of (i) the three (3) month average of the latest available IMS National Sales
Perspective data at such time in Extended Units (prorated for any partial
months) for such products times (ii) the actual monthly Net Selling Price for
such products."
"'Revolving Credit Commitment' means, with respect to each
Lender, the commitment of such Lender to make Revolving Loans to the Borrower
(i) at any time on or after the Effective Date, in the initial amount set forth
opposite such Lender's name in Part A of Schedule 1.01(A) hereto, and (ii) at
any time on or after the Second Amendment Effective Date, in an additional
amount set forth opposite such Lender's name in Part B of Schedule 1.01(A)
hereto, in each case, as such amount may be terminated or reduced from time to
time in accordance with the terms of this Agreement."
"Term Loan Commitment' means, with respect to each Lender, the
commitment of such Lender to make (i) the Existing Term Loan to the Borrower on
the Effective Date, in the amount set forth opposite such Lender's name in Part
A of Schedule 1.01(A) hereto, and (ii) the Second Term Loan to the Borrower on
the Second Amendment Effective Date, in the amount set forth opposite such
Lender's name in Part B of Schedule 1.01(A) hereto, in each case, as the same
may be terminated or reduced from time to time in accordance with the terms of
this Agreement."
"Total Revolving Credit Commitment' means the sum of the amounts
of the Lenders' Revolving Credit Commitments in the amount set forth in Part C
of Schedule 1.0(A) hereto."
"Total Term Loan Commitment' means the sum of the amounts of the
Lenders' Term Loan Commitments in the amount set forth in Part C of Schedule
1.01(A) hereto."
(ii) Clause (m) of the definition of "Permitted Acquisition" is
hereby amended and restated in its entirety to read as follows:
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"(m) if such Acquisition shall require any incremental borrowings
of Revolving Loans that result in the aggregate outstanding principal amount of
Revolving Loans to exceed $5,000,000, the Borrower shall provide a certificate
of the chief financial officer of the Borrower certifying (i) that no Product
Milestone Miss has occurred and (ii) as to, and demonstrating on a pro forma
basis, compliance with the covenants set forth in Section 6.03 after giving
effect to the consummation of such Acquisition; and".
(iii) The definitions of "Chosen Valuation Firms", "Financial
Covenant Cure Payment" and "Pro Forma Senior Indebtedness" in Section 1.01 of
the Financing Agreement are hereby deleted in their entirety.
4. Commitments. Section 2.01 of the Financing Agreement is hereby
amended and restated in its entirety to read as follows:
"Section 2.01 Commitments. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set forth:
(i) The Revolving Loan Lenders agreed to make Revolving
Loans to the Borrower after the Effective Date and prior to the Second Amendment
Effective Date in an aggregate principal amount not to exceed $15,000,000 at any
time outstanding. The Borrower hereby acknowledges, confirms and agrees that,
immediately prior to the Second Amendment Effective Date, the outstanding
principal amount of the Revolving Loans is equal to $0.00. Each Revolving Loan
Lender severally agrees to make Revolving Loans to the Borrower at any time and
from time to time from the Second Amendment Effective Date to the Final Maturity
Date, or until the earlier reduction of its Revolving Credit Commitment to zero
in accordance with the terms hereof, in an aggregate principal amount of
Revolving Loans at any time outstanding not to exceed the amount of such
Revolving Loan Lender's Revolving Credit Commitment; and
(ii) The Term Loan Lenders made a Term Loan to the Borrower
on the Effective Date in an aggregate principal amount equal to $55,000,000 (the
"Existing Term Loan"). The Borrower hereby acknowledges, confirms and agrees
that, immediately prior to the Second Amendment Effective Date the outstanding
principal amount of the Existing Term Loan is equal to $55,000,000. The Term
Loan Lenders agree to make an additional term loan to the Borrower on the Second
Amendment Effective Date, in an aggregate principal amount not to exceed
$10,000,000 (the "Second Term Loan", and, together with the Existing Term Loan,
the "Term Loan"). After giving effect to the Second Amendment on the Second
Amendment Effective Date, the aggregate principal amount of the Term Loan shall
not exceed $65,000,000 at any time. Each Term Loan Lender's obligation to fund a
Term Loan shall be limited to the amount of such Lender's Term Loan Commitment,
and no Lender shall have any obligation to fund any portion of the Term Loans
required to be funded by any other Term Loan Lender, but not so funded. Each of
the Existing Term Loan and the Second Term Loan shall be considered part of the
Term Loan for all purposes of this Agreement and all Loan Documents and any
reference to the "Term Loan" in this Agreement and in any other Loan Document
shall be deemed to include both the Existing Term Loan and the Second Term Loan
made by the Term Loan Lenders to the Borrower.
-8-
(b) Notwithstanding the foregoing:
(i) The aggregate principal amount of Revolving Loans
outstanding at any time to the Borrower shall not exceed the Total Revolving
Credit Commitment. The Revolving Credit Commitment of each Lender shall
automatically and permanently be reduced to zero on the Final Maturity Date.
Within the foregoing limits, the Borrower may borrow, repay and re-borrow, on or
after the Effective Date and prior to the Final Maturity Date, subject to the
terms, provisions and limitations set forth herein.
(ii) The aggregate principal amount of the Term Loan made on
the Second Amendment Effective Date shall not exceed the Total Term Loan
Commitment. Any principal amount of the Term Loan which is repaid or prepaid may
not be reborrowed."
5. Making the Loans. Section 2.02 of the Financing Agreement is hereby
amended as follows:
(a) Section 2.02(a)(i) of the Financing Agreement is hereby amended
and restated in its entirety to read as follows:
"(i) the principal amount of the proposed Loan (which, in the
case of (x) a LIB OR Rate Loan, must be in a minimum amount of $10,000,000 and
in integral multiples of $10,000,000 in excess thereof, and (y) a Revolving
Loan, must be in a minimum amount of $10,000,000 and in integral multiples of $
10,000,000 in excess thereof)".
(b) The second sentence of Section 2.02(b) of the Financing Agreement
is hereby amended and restated in its entirety to read as follows:
"Each Revolving Loan shall be made in a minimum amount of
$10,000,000 and shall be in an integral multiple of $10,000,000."
6. Interest. Section 2.04 of the Financing Agreement is hereby amended
as follows:
(a) Revolving Loans. Section 2.04(a) of the Financing Agreement is
hereby amended and restated in its entirety to read as follows:
"(a) Revolving Loans. Each Revolving Loan that is a Reference
Rate Loan shall bear interest on the principal amount thereof from time to time
outstanding at a rate per annum equal to the Reference Rate plus the Applicable
Reference Rate Margin. Each Revolving Loan that is a LIB OR Rate Loan shall bear
interest on the principal amount thereof from time to time outstanding at a rate
per annum equal to the LIB OR Rate plus the Applicable LIBOR Rate Margin."
(b) Term Loan. Section 2.04(b) of the Financing Agreement is hereby
amended and restated in its entirety to read as follows:
"(b) Term Loan. Each portion of the Term Loan that is a Reference
Rate Loan shall bear interest on the principal amount thereof from time to time
outstanding at a
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rate per annum equal to the Reference Rate plus the Applicable Reference Rate
Margin. Each portion of the Term Loan that is a LIBOR Rate Loan shall bear
interest on the principal amount thereof from time to time outstanding at a rate
per annum equal to the LIBOR Rate plus the Applicable LIBOR Rate Margin."
7. Reduction of Commitment; Prepayment of Loans. Section 2.05 of the
Financing Agreement is hereby amended as follows:
(a) Applicable Make Whole Amount. Section 2.05 of the Financing
Agreement is hereby amended by inserting reference to the phrase "the Applicable
Make Whole Amount and" immediately prior to the words "the Applicable Prepayment
Premium" wherever they appear in such Section (except to the extent such
amendment has already been effected by the terms of this Second Amendment), with
the effect that in the event that the Borrower reduces or terminates the
Revolving Credit Commitment or makes voluntary or mandatory prepayments, at any
time after the Second Amendment Effective Date up to and including the date that
is the 18-month anniversary of the Second Amendment Effective Date, then an
Applicable Make Whole Amount will be payable with respect to the amount of such
commitment reduction or prepayment in addition to any required payment of the
Applicable Prepayment Premium.
(b) Reduction of Commitments. Section 2.05(a)(ii) of the
Financing Agreement is hereby amended and restated in its entirety to read as
follows:
"(ii) Term Loan. The commitment to make the Existing Term
Loan terminated at 5:00 p.m. (New York City time) on the Effective Date. The
commitment to make the Second Term Loan shall terminate at 5:00 p.m. (New York
City time) on the Second Amendment Effective Date."
(c) Optional Prepayments. Section 2.05(b)(ii) of the Financing
Agreement is hereby amended and restated in its entirety to read as follows:
"The Borrower may, at any time and from time to time, upon at
least five (5) Business Days' prior written notice to the Administrative Agent,
prepay the principal of the Term Loan, in whole or in part. Each prepayment made
pursuant to this clause (b)(ii) shall be accompanied by the payment of (A)
accrued interest to the date of such payment on the amount prepaid and (B) the
Applicable Make Whole Amount and Applicable Prepayment Premium, if any, payable
in connection with such prepayment of the Term Loan."
(d) Mandatory Prepayments. Section 2.05(c)(i) of the Financing
Agreement is hereby amended and restated in its entirety to read as follows:
"(i) Within 30 days of the receipt by the Borrower and the Agents
of the determination of the Appraised Enterprise Value of the Loan Parties
following a Product Milestone Miss and to the extent that the Loan to Value
Ratio of the Loan Parties is in excess of 25%, the Borrower shall prepay the
outstanding amount of the Loans in accordance with Section 2.05(d) in an amount
which will result in the aggregate outstanding principal amount of the Loans to
be equal to or less than 20% of the Appraised Enterprise Value of the Loan
Parties."
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(e) Application of Payments. Section 2.05(d) of the Financing
Agreement is hereby amended by inserting reference to subsection "(c)(i),"
immediately after the word "subsections" and immediately prior to the reference
to subsection "(c)(ii)" set forth therein.
8. Representations and Warranties; No Event of Default; No Product
Milestone Miss. Section 4.02(b) of the Financing Agreement is hereby amended and
restated in its entirety to read as follows:
"(b) Representations and Warranties; No Event of Default; No
Product Milestone Miss. The following statements shall be true and correct, and
the submission by the Borrower to the Administrative Agent of a Notice of
Borrowing with respect to each such Loan, and the Borrower's acceptance of the
proceeds of such Loan, shall each be deemed to be a representation and warranty
by each Loan Party on the date of such Loan that: (i) the representations and
warranties contained in ARTICLE V and in each other Loan Document are true and
correct on and as of such date as though made on and as of such date, except to
the extent that any such representation or warranty expressly relates solely to
an earlier date (in which case such representation or warranty shall be true and
correct on and as of such earlier date), (ii) at the time of and after giving
effect to the making of such Loan and the application of the proceeds thereof,
no Default or Event of Default has occurred and is continuing or would result
from the making of the Loan to be made on such date (iii) at the time of and
after giving effect to the making of such Loan and the application of the
proceeds thereof, no Product Milestone Miss has occurred and (iv) the conditions
set forth in this Section 4.02 have been satisfied as of the date of such
request."
9. Capitalization; Subsidiaries. Section 5.01(e) of the Financing
Agreement is hereby amended and restated in its entirety to read as follows:
"(e) Capitalization; Subsidiaries.
(i) On the Second Amendment Effective Date, after giving
effect to the transactions contemplated hereby and the Second Amendment to occur
on the Second Amendment Effective Date, the authorized Capital Stock of the
Borrower and the issued and outstanding Capital Stock of the Borrower are as set
forth on Schedule 5.01(e). All of the issued and outstanding shares of Capital
Stock of the Borrower have been validly issued and are fully paid and
nonassessable, and except as provided in the Stockholders Agreement and
Registration Rights Agreement, the holders thereof are not entitled to any
preemptive, first refusal or other similar rights. As of the Second Amendment
Effective Date, 5,119,139 shares of Common Stock of the Borrower have been
reserved for issuance in connection with the exercise of the Warrants and
15,191,677 shares of Common Stock of the Borrower are issuable under the terms
of the Stock Incentive Plan and the Integrity Pharmaceutical Corporation 1999
Stock Incentive Plan, copies of which plan have been delivered to the Agents in
the form and on the terms in effect on the Second Amendment Effective Date, and
35,437 shares of Common Stock are designated for issuance upon conversion of the
Series A-l Preferred Stock issued upon exercise of the Silicon Warrants, and
218,957,468 shares of Common Stock are reserved for issuance in connection with
the conversion of the Company's Series A-l Convertible Preferred Stock, $0,001
per value per share. Except as described on Schedule 5.01(e) as of the Second
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Amendment Effective Date, the Stock Incentive Plan is the only plan or
arrangement in existence relating to the issuance of shares of Capital Stock of
the Borrower.
(ii) Schedule 5.01(e) is, as of the Effective Date and as of
the Second Amendment Effective Date, a complete and correct description of the
name, jurisdiction of incorporation and ownership of the outstanding Capital
Stock of such Subsidiaries of the Borrower in existence on the date hereof after
giving effect to the aaiPharma Acquisition. All of the issued and outstanding
shares of Capital Stock of such Subsidiaries have been validly issued and are
fully paid and nonassessable, and the holders thereof are not entitled to any
preemptive, first refusal or other similar rights. Except as indicated on such
Schedule, as of the Effective Date and as of the Second Amendment Effective
Date, all such Capital Stock is owned by the Borrower or one or more of its
wholly-owned Subsidiaries, free and clear of all Liens. Except as set forth on
Schedule 5.01(e), as of the Effective Date and as of the Second Amendment
Effective Date, there are no outstanding debt or equity securities of the
Borrower or any of its Subsidiaries and no outstanding obligations of the
Borrower or any of its Subsidiaries convertible into or exchangeable for, or
warrants, options or other rights for the purchase or acquisition from the
Borrower or any of its Subsidiaries, or other obligations of any Subsidiary to
issue, directly or indirectly, any shares of Capital Stock of any Subsidiary of
the Borrower."
10. Use of Proceeds. Section 5.01(t) of the Financing Agreement is
hereby amended and restated in its entirety to read as follows:
"(t) Use of Proceeds. The proceeds of the Loans shall be used to,
together with the Unrestricted Cash Proceeds, (i) on the Effective Date, finance
the aaiPharma Acquisition, (ii) on the Effective Date, pay fees and expenses in
connection with the transactions contemplated hereby and by the aaiPharma
Acquisition Documents, (iii) on the Second Amendment Effective Date, pay fees
and expenses related to the Second Amendment and the transactions contemplated
thereby, and (iv) provide for general working capital and general corporate
purposes of the Borrower."
11. Reporting Requirements. Section 6.01(a) of the Financing Agreement
is hereby amended, as follows:
(a) Compliance Certificate. Section 6.01(a)(iv)(B) is hereby amended
and restated in its entirety to read as follows:
"(B) attaching a schedule showing the calculations of the
financial covenants specified in Section 6.03."
(b) Additional Reporting Requirements. (i) Section 6.01(a)(xvi) is
hereby amended by deleting the word "and" at the end thereof, (ii) Section
6.01(a)(xvii) is hereby deleted in its entirety and (iii) the following
reporting requirements are herby inserted in Section 6.01(a) at the end thereof
to read as follows:
"(xvii) promptly, and in any event within 5 Business Days after a
Liquidity Event, a 13-week cash requirement forecast setting forth cash receipts
and disbursements of the Borrower and its Subsidiaries and the Loans projected
to be outstanding, and on Friday of each week thereafter, an updated forecast
prepared on a weekly basis,
-12-
supplementing and superseding the most recently delivered forecast, each in form
and substance satisfactory to the Collateral Agent and in sufficient detail to
evidence that (A) the Borrower and the Loan Parties have sufficient Availability
and unencumbered Cash and Cash Equivalents to support their ordinary course of
business operating expenses until such time as the Borrower and the Loan Parties
become cash flow positive and (B) the Borrower will be able to obtain sufficient
funding during the immediately succeeding 60 day period to bridge its ordinary
course of business operating expenses until it becomes cash flow positive (the
"Liquidity Plan"); such Liquidity Plan, when delivered and as so updated, shall
be (x) believed by the Borrower at the time furnished to be reasonable, (y)
prepared on a reasonable basis and in good faith, and (z) based on assumptions
believed by the Borrower to be reasonable at the time made and from the best
information then reasonably available to the Borrower, and shall be accompanied
by a certificate of an Authorized Officer certifying as to the matters set forth
in subclauses (x), (y) and (z) above;
(xviii) promptly, and in any event within 5 Business Days after
the end of each fiscal month of the Borrower and its Subsidiaries commencing
with the first fiscal month of the Borrower and its Subsidiaries ending after
the Second Amendment Effective Date, a certificate of an Authorized Officer
attaching a calculation of the amount of the Availability and unencumbered Cash
and Cash Equivalents of the Borrower and its Subsidiaries as of the last day of
the immediately preceding fiscal month;
(xix) promptly and in any event within 3 Business Days after any
Loan Party knows or has reason to know of the occurrence of a Product Milestone
Miss, notice of any such Product Milestone Miss setting forth the details of
such Product Milestone Miss;
(xx) promptly and in any event within 15 Business Days after a
Product Milestone Miss, the Borrower shall cause L.E.K. Consulting or the
Designated Valuation Firm to perform and deliver an enterprise valuation and
calculation of the Appraised Enterprise Value of the Loan Parties; and
(xxi) promptly upon request, using commercially reasonable
efforts, such other information concerning the condition or operations,
financial or otherwise, of any Loan Party as any Agent may from time to time
reasonably request."
12. Liquidity Event. Section 6.01 of the Financing Agreement is hereby
amended by inserting a new subsection (s) at the end thereof to read as follows:
"(s) Liquidity Event. Execute and implement the Liquidity Plan
within 60 days of delivery of the same to the Collateral Agent pursuant to
Section 6.01(a)(xvii)."
13. Financial Covenants. Section 6.03 of the Financing Agreement is
hereby amended and restated in its entirety to read as follows:
"Section 6.03 Financial Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall
not, unless the Required Lenders shall otherwise consent in writing, permit the
Annualized Demand Revenues of the Loan Parties
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for the trailing three consecutive fiscal months period ended as of the last day
each fiscal quarter set forth below to be less than the amount set forth
opposite such date:
Fiscal Period Ending: Annualized Demand Revenues:
--------------------- ---------------------------
June 30, 2007 $48,607,000
September 30, 2007 $49,514,000
December 31, 2007 $51,114,000
March 31, 2008 $52,093,000
June 30, 2008 $53,184,000
September 30, 2008 $54,275,000
December 31, 2008, and as of the last day of
each fiscal quarter ending thereafter
until and including the Final Maturity
Date $55,366,000
;provided that, Annualized Demand Revenues for purposes of this Section 6.03
shall only be calculated based upon the currently marketed products as of the
Second Amendment Effective Date.
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14. Records. Section 11.16 of the Financing Agreement is hereby
amended by inserting reference to "the Applicable Make Whole Amount,"
immediately after the words "including, without limitation," and immediately
prior to the words "the Applicable Prepayment Premium" where they appear
therein.
15. Warrants. The Financing Agreement is hereby amended by inserting a
new Article XII to read as set forth on Exhibit A hereto.
16. Schedule 1.01(A). Schedule 1.01(A) of the Financing Agreement is
hereby amended and restated in its entirety to read as set forth on Exhibit B
hereto.
17. Schedules. Schedules 1.01(B), 1.01(C), 5.01(e), 5.01(f), 5.01(o),
5.01(q), 5.01(s), 5.01(v), 5.01(w), 5.01(x), 5.01(bb), 5.01(dd), 6.02(a),
6.02(e), and 7.01 of the Financing Agreement are hereby amended and supplemented
to the extent set forth on Exhibit C hereto.
18. Exhibit D. Exhibit D of the Financing Agreement is hereby amended
and restated in its entirety to read as set forth on Exhibit D hereto.
19. Waiver.
(a) Pursuant to the request of the Borrower and in accordance with
Section 11.02 of the Financing Agreement, the Agent and Required Lenders hereby
consent to waive the Event of Default that has arisen under Section 8.01(c) of
the Financing Agreement by reason of the failure of the Loan Parties to deliver
copies of those certain audited financial statements and reports together with
the required unqualified opinion of the Borrower's independent accountants for
the Fiscal Year Ending December 31, 2006 pursuant to Section 6.01(a)(ii) of the
Financing Agreement; provided that such financial statements, reports and
unqualified opinion shall be delivered to the Agents, as soon as available, but
in any event no later than 30 days after the Second Amendment Effective Date.
(b) The waiver in this Section 19 shall be effective only in this
specific instance and for the specific purpose set forth herein and does not
allow for any other or further departure from the terms and conditions of the
Financing Agreement or any other Loan Document, which terms and conditions shall
continue in full force and effect.
20. Conditions to Effectiveness. This Amendment shall become effective
(the "Second Amendment Effective Date") only upon satisfaction in full of the
following conditions precedent:
(a) The Collateral Agent shall have received counterparts of this
Amendment that bear the signatures of each Loan Party, each Agent and the
Lenders.
(b) The Collateral Agent shall have received amendments to the
Registration Rights Agreement and the Stockholders Agreement, each duly executed
by the Borrower and each other Person thereto and in form and substance
satisfactory to the Lenders.
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(c) The Collateral Agent shall have received the Warrants required to
be delivered on or prior to the Effective Date pursuant to Section 12.01, duly
executed by the Borrower.
(d) The Administrative Agent shall have received a Notice of
Borrowing, duly executed by the Borrower.
(e) The Administrative Agent shall have received payment, in
immediately available funds the fees set forth in the Fee Letter.
(f) The Collateral Agent shall have received evidence that the
Borrower shall have received proceeds of not less than $25,000,000 from the
issuance by the Borrower of its preferred Capital Stock on terms and conditions
and pursuant to documents in each case satisfactory to the Agents, together with
a certificate of an Authorized Officer of the Borrower attaching true and
correct copies of the Series A-l Purchase Agreement and all other material
documents evidencing such equity issuance, as in effect on the Second Amendment
Effective Date and stating that: (x) such documents are true and correct copies
and (y) such documents remain in full force and effect.
(g) The Collateral Agent shall have received a copy of the resolutions
of each Loan Party, certified as of the Second Amendment Effective Date by an
Authorized Officer thereof, authorizing (i) in the case of the Borrower, the
borrowings contemplated by this Amendment, and in the case of the other Loan
Parties, the increase in the amount of the Obligations, (ii) in the case of the
Borrower, the issuance of the Warrants contemplated by Article XII of the
Financing Agreement, (iii) the execution, delivery and performance of this
Amendment, the Financing Agreement as amended hereby, and the other documents to
be executed and delivered by such Person in connection herewith and (iv) the
transactions contemplated hereby and certified by an Authorized Officer of each
Loan Party.
(h) The Collateral Agent shall have received a certificate of an
Authorized Officer of each Loan Party, certifying (i) that the charter and
by-laws, limited liability company agreement, operating agreement, agreement of
limited partnership or other organizational documents of each such Person remain
in full force and effect and have not been amended or modified since the
Effective Date and that the copy thereof previously delivered to the Collateral
Agent is true, correct and complete; provided, however, if any of the foregoing
organizational documents have been amended or modified, true and correct
certified copies of the amendments and/or modifications shall be attached to
such certificate; and (ii) the names and true signatures of the representatives
of such Loan Party authorized to sign this Amendment and the other documents to
be executed and delivered by such Person in connection herewith, together with
evidence of the incumbency of such Authorized Officers.
(i) The Collateral Agent shall have received a certificate of an
Authorized Officer of the Borrower, certifying that after giving effect to the
transactions contemplated by this Amendment (including, with out limitation, the
equity investment contemplated by Section 20(f), the fees, costs and expenses
payable on the Second Amendment Effective Date pursuant to the terms of this
Amendment and the Financing Agreement) and before and after giving effect to the
Loans made on the Second Amendment Effective Date, (i) Availability together
with
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unencumbered Cash and Cash Equivalents shall be equal to or greater than
$50,000,000 and (ii) the Borrower individually is, and the Borrower and its
Subsidiaries on a consolidated basis are, Solvent.
(j) The Agents shall have received an opinion of counsel for the Loan
Parties, as to such matters as the Agent may reasonably request, including,
without limitation, an opinion with respect to the Warrants and opinion that
after giving effect to the transactions contemplated by this Amendment the Agent
shall continue to hold a valid and perfected security interest in the
Collateral.
(k) The Collateral Agent shall have received a certificate of the
appropriate official(s) of the state of organization of each Loan Party and in
the case of the Borrower, each State of foreign qualification requested by the
Collateral Agent, certifying as to the subsistence and good standing of, and the
payment of taxes by, each Loan Party in such state.
(l) The Collateral Agent shall have received certified copies of
request for copies of information on Form UCC-11, listing all effective
financing statements which name as debtor any Loan Party and which are filed in
the such offices as may be necessary or, in the opinion of the Agent, desirable
to perfect the security interests purported to be created by the Security
Agreement and the Pledge Agreement, together with copies of such financing
statements, none of which, except as otherwise agreed in writing by the Agent,
shall cover any of the Collateral and the results of searches for any tax Lien
and judgment Lien filed against such Person or its property, which results,
except as otherwise agreed in writing by the Agent, shall not show any such
Liens.
(m) The representations and warranties contained herein, in Article V
of the Financing Agreement and in each other Loan Document are true and correct
on and as of the Second Amendment Effective Date as though made on and as of
such date, except to the extent that any such representation or warranty
expressly relates solely to an earlier date (in which case such representation
or warranty shall be true and correct on and as of such earlier date).
(n) After giving effect to the waiver contained in Section 19 hereof,
no Default or Event of Default shall have occurred and be continuing on the
Second Amendment Effective Date or would result from this Amendment becoming
effective in accordance with its terms.
(o) All legal matters incident to this Amendment shall be satisfactory
to the Agents and their respective counsel.
21. Representations and Warranties. Each Loan Party represents and
warrants as follows:
(a) Organization, Good Standing, Etc. Each Loan Party (i) is a
corporation, limited liability company or limited partnership, duly organized,
validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
execute and deliver this Amendment, consummate the transactions contemplated
hereby and perform the Financing Agreement, as amended and modified hereby and
(iii) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the
-17-
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary other than in such jurisdictions where the
failure to be so qualified and in good standing could not reasonably be expected
to have a Material Adverse Effect.
(b) Authorization, Etc. The execution, delivery and performance by
each Loan Party of this Amendment and the performance by each Loan Party of the
Financing Agreement, as amended and modified hereby (i) have been duly
authorized by all necessary action, (ii) do not and will not contravene its
charter or by-laws, its limited liability company or operating agreement or its
certificate of partnership or partnership agreement, as applicable, or any
applicable law, or any contractual restriction binding on or otherwise affecting
it or any of its properties, (iii) do not and will not result in or require the
creation of any Lien (other than pursuant to any Loan Document) upon or with
respect to any of its properties, and (iv) do not and will not result in any
default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any material permit, license, authorization or approval applicable
to its operations or any of its properties.
(c) Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required in connection with the due execution, delivery and performance by any
Loan Party of this Amendment or the performance by any Loan Party of the
Financing Agreement, as amended and modified hereby.
(d) Enforceability of Loan Documents. Each of this Amendment and the
Financing Agreement, as amended and modified hereby, is a legal, valid and
binding obligation of the Loan Parties which are party hereto or thereto,
enforceable against such Loan Parties in accordance with its terms, except as
enforceability may be limited by equitable principles and by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally.
(e) Representations and Warranties; No Default. The representations
and warranties contained herein, in Article V of the Financing Agreement and in
each other Loan Document are true and correct on and as of the Second Amendment
Effective Date as though made on and as of such date, except to the extent that
any such representation or warranty expressly relates solely to an earlier date
(in which case such representation or warranty shall be true and correct on and
as of such earlier date); and after giving effect to the waiver set forth in
Section 19 hereof, no Default or Event of Default shall have occurred and be
continuing on the Second Amendment Effective Date or would result from this
Amendment becoming effective in accordance with its terms.
(f) Continuing Validity of Liens. The provisions of the Financing
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of the Lenders, and such Liens constitute perfected and
continuing Liens on the Collateral, securing the Obligations.
-18-
22. Effect of Amendment; Continued Effectiveness of the Financing
Agreement.
(a) Ratifications. Except as otherwise expressly provided herein, (i)
the Financing Agreement and the other Loan Documents are, and shall continue to
be, in full force and effect and are hereby ratified and confirmed in all
respects, except that on and after the Second Amendment Effective Date (A) all
references in the Financing Agreement to "this Agreement", "hereto", "hereof",
"hereunder" or words of like import referring to the Financing Agreement shall
mean the Financing Agreement as amended and modified by this Amendment, and (B)
all references in the other Loan Documents to the "Financing Agreement",
"thereto", "thereof", "thereunder" or words of like import referring to the
Financing Agreement shall mean the Financing Agreement as amended and modified
by this Amendment, (ii) to the extent that the Financing Agreement or any other
Loan Document purports to pledge to the Collateral Agent, or to grant to the
Collateral Agent a security interest in or lien on, any collateral as security
for the Obligations or the Guaranteed Obligations, such pledge or grant of a
security interest or lien is hereby ratified and confirmed in all respects, and
(iii) the execution, delivery and effectiveness of this Amendment shall not
operate as an amendment of any right, power or remedy of the Agents or the
Lenders under the Financing Agreement or any other Loan Document, nor constitute
an amendment of any provision of the Financing Agreement or any other Loan
Document. This Amendment shall be effective only in the specific instances and
for the specific purposes set forth herein and does not allow for any other or
further departure from the terms and conditions of the Financing Agreement or
any other Loan Document, which terms and conditions shall remain in full force
and effect.
(b) No Waivers. Except as otherwise expressly provided herein, this
Amendment is not a waiver of, or consent to, any other Default or Event of
Default now existing or hereafter arising under the Financing Agreement or any
other Loan Document and the Agents and the Lenders expressly reserve all of
their rights and remedies under the Financing Agreement and the other Loan
Documents, under applicable law or otherwise.
(c) Amendment as Loan Document. Each Loan Party confirms and agrees
that this Amendment shall constitute a Loan Document under the Financing
Agreement. Accordingly, it shall be an Event of Default under the Financing
Agreement if any representation or warranty made or deemed made by any Loan
Party under or in connection with this Amendment shall have been incorrect in
any material respect when made or deemed made or if any Loan Party fails to
perform or comply with any covenant or agreement contained herein.
23. Release. Each Loan Party hereby acknowledges and agrees that: (a)
neither it nor any of its Affiliates has any claim or cause of action against
any Agent or any Lender (or any of their respective Affiliates, officers,
directors, employees, attorneys, consultants or agents) and (b) each Agent and
each Lender has heretofore properly performed and satisfied in a timely manner
all of its obligations to the Loan Parties and their Affiliates under the
Financing Agreement and the other Loan Documents. Notwithstanding the foregoing,
the Agents and the Lenders wish (and the Loan Parties agree) to eliminate any
possibility that any past conditions, acts, omissions, events or circumstances
would impair or otherwise adversely affect any of the Agents' and the Lenders'
rights, interests, security and/or remedies under the Financing Agreement and
the other Loan Documents. Accordingly, for and in consideration of
-19-
the agreements contained in this Amendment and other good and valuable
consideration, each Loan Party (for itself and its Affiliates and the
successors, assigns, heirs and representatives of each of the foregoing)
(collectively, the "Releasors") does hereby fully, finally, unconditionally and
irrevocably release and forever discharge each Agent, each Lender and each of
their respective Affiliates, officers, directors, employees, attorneys,
consultants and agents (collectively, the "Released Parties") from any and all
debts, claims, obligations, damages, costs, attorneys' fees, suits, demands,
liabilities, actions, proceedings and causes of action, in each case, whether
known or unknown, contingent or fixed, direct or indirect, and of whatever
nature or description, and whether in law or in equity, under contract, tort,
statute or otherwise, which any Releasor has heretofore had or now or hereafter
can, shall or may have against any Released Party by reason of any act, omission
or thing whatsoever done or omitted to be done on or prior to the Second
Amendment Effective Date arising out of, connected with or related in any way to
this Amendment, the Financing Agreement or any other Loan Document, or any act,
event or transaction related or attendant thereto, or the agreements of any
Agent or any Lender contained therein, or the possession, use, operation or
control of any of the assets of any Loan Party, or the making of any Loans or
other advances, or the management of such Loans or advances or the Collateral.
24. Miscellaneous.
(a) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Amendment by telefacsimile or electronic mail shall be equally effective as
delivery of an original executed counterpart of this Amendment.
(b) Headings. Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
(c) Governing Law. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
(d) Expenses. The Borrower will pay on demand all reasonable fees,
costs and expenses of the Lenders in connection with the preparation, execution
and delivery of this Amendment and all documents incidental hereto, including,
without limitation, the reasonable fees, disbursements and other charges of
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, counsel to the Agents.
[Remainder of this page intentionally left blank]
-20-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
XANDODYNE PHARMACEUTICALS, INC.
By: /s/ S.A. Stamp
------------------------------------
Name: S.A. Stamp
Title: Treasurer
GUARANTOR:
RUTI ACQUISITION, INC.
By: /s/ S.A. Stamp
------------------------------------
Name: S.A. Stamp
Title: Treasurer
-22-
AGENTS:
SILVER POINT FINANCE, LLC,
As Collateral Agent and as
Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
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LENDER:
BLUE RIDGE INVESTMENTS, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
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LENDERS:
SPCP GROUP III LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
SPF CDO I, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
FIELD POINT I, LTD
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
FIELD POINT II, LTD
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
SPCP GROUP, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇ III, LTD
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
FIELD POINT IV, LTD
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
-26-
EXHIBIT A TO SECOND AMENDMENT
"ARTICLE XII
ISSUANCE OF EQUITY INTERESTS TO THE LENDERS
Section 12.01 Authorization and Issuance of Warrants. On the Second
Amendment Effective Date, the Borrower shall issue to the Lenders in accordance
with their Pro Rata Shares one or more warrant certificates covering the
purchase of 3,053,119 shares of Common Stock of the Borrower substantially in
the form of Annex I to the Second Amendment (such certificates, together with
the rights to purchase Common Stock of the Borrower provided thereby and all
warrant certificates covering such stock issued upon transfer, division or
combination of, or in substitution for, any thereof, being herein called the
"Warrants"). On each borrowing date following the Second Amendment Effective
Date that the Borrower draws a Revolving Loan in an aggregate principal amount
of $10,000,000 or more, the Borrower shall issue to the Lenders one or more
Warrants in an amount equal to the Lenders' Pro Rata Share of 459,116 (subject
to appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares), 688,673
(subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such shares) and
918,231 (subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization affecting such
shares) shares of Common Stock of the Borrower, respectively as of each such
subsequent borrowing date. It is understood and agreed that the Warrants contain
provisions affecting the number of shares of Common Stock of the Borrower that
may be acquired, which provisions are set forth in the Warrants. All such
Warrants will have an exercise price equal to an amount not greater than $0.001
per share and will cease to be exercisable on a date that is the fifth
anniversary of the Second Amendment Effective Date or as otherwise provided in
the Warrants.
Section 12.02 Securities Act Matters. (a) Each Lender represents and
warrants (severally on behalf of itself and not the other Lenders) to the
Borrower that:
(i) each such Lender is acquiring the Warrants hereunder for its own
account, without a view to the distribution thereof, all without prejudice,
however, to the right of the Lenders at any time, in accordance with this
Agreement, lawfully to sell or otherwise to dispose of all or any part of the
Warrants or Common Stock held by any of them under an effective registration
statement under the Securities Act or under an exemption from said registration
under the Securities Act;
(ii) each such Lender is an "accredited investor" within the meaning
of Regulation D under the Securities Act; and
(iii) each such Lender acknowledges and understands that the Warrants
have not been, and the Common Stock issuable upon exercise of the Warrants shall
not be, registered under the Securities Act or any state securities laws, by
reason of their issuance by the Borrower in a transaction exempt from the
registration requirements thereof.
(b) The Borrower represents and warrants to the Lenders that:
(i) Assuming the truth and accuracy of each Lender's
representations and warranties contained in the immediately preceding
paragraphs, the issuance of the Warrants to the Lenders hereunder and the
issuance of shares of Common Stock to the Lenders pursuant to the Warrants are
exempt from the registration and prospectus delivery requirements of the
Securities Act.
(ii) All stock and securities of the Borrower heretofore issued
and sold by the Borrower were, and all securities of the Borrower issued and
sold by the Borrower on and after the date hereof are or will be issued and sold
in accordance with, or are or will be exempt from, the registration and
prospectus delivery requirements of the Securities Act.
(c) The Borrower agrees that neither it nor any Person acting on its
behalf has offered or will offer the Warrants or Common Stock or any part
thereof or any similar securities for issue or sale to, or has solicited or will
solicit any offer to acquire any of the same from, any Person so as to bring the
issuance and sale of the Warrants or Common Stock hereunder within the
provisions of the registration and prospectus delivery requirements of the
Securities Act.
Section 12.03 Certain Taxes. The Borrower shall pay all taxes (other than
Federal, state or local income taxes) which may be payable and arise from the
execution and delivery of this Agreement or the issuance of the Warrants or
Common Stock hereunder or in connection with any modification of this Agreement
or the Warrants and shall hold the Lenders harmless without limitation as to
time against any and all liabilities with respect to all such taxes. The
obligations of the Borrower under this Section 12.03 shall survive any
redemption, repurchase or acquisition of Warrants or Common Stock by the
Borrower, any termination of this Agreement, and any cancellation or termination
of the Warrants. The parties hereto agree that, within 5 Business Days of the
Second Amendment Effective Date, the parties hereto will agree for income tax
purposes, the purchase price to be attributed to the Warrants issued to the
Lenders hereunder as of the Second Amendment Effective Date.
Section 12.04 Cancellation and Issuance. If any Lender assigns or otherwise
transfers all or any of its Loans (including by selling participations therein)
to any Person, such Lender may request (upon 10 days' prior notice to the
Borrower) that (a) a number of Warrants held by such Lender be canceled on the
date of such assignment and transfer and (b) a like number of Warrants be issued
by the Borrower to the Person to whom such Loans are being assigned or otherwise
transferred. Upon the date specified in such request:
(i) the Borrower shall issue, and such Lender shall surrender (or
cause to be surrendered) for cancellation, such number of Warrants as aforesaid,
provided that such issuance shall not violate the Securities Act or any
applicable state securities laws;
(ii) each Person that receives Warrants will deliver a
certificate to the Borrower affirming the representations and warranties
contained in Section 12.02(a) hereof as of such date;
(iii) the Borrower will deliver a certificate to each Person that
receives Warrants affirming the representations and warranties contained in
Section 12.02(b) hereof as of such date; and
(iv) the transferring Lender shall cause the transferee to become
a party to the Stockholders Agreement.
EXHIBIT B TO SECOND AMENDMENT
"SCHEDULE 1.01(A)
LENDERS AND LENDERS' COMMITMENTS
PART A:
Initial Total
Revolving Existing Commitment
Credit Term Loan as of the
Lender Commitment Commitment Effective Date
------------------------------ -------------- -------------- --------------
Blue Ridge Investments, L.L.C. $ 5,357,142.86 $19,642,857.14 $ 25,000,000
SPCP Group III LLC $ 2,410,714.29 $ -0- $ 2,410,714.29
SPF CDO I, LTD. $ -0- $ 8,839,285.71 $ 8,839,285.71
Field Point I, LTD. $ -0- $ 9,978,670.15 $ 9,978,670.15
Field Point II LTD. $ -0- $10,539,187.00 $10,539,187.00
Field Point IV, LTD. $ -0- $ 6,000,000.00 $ 6,000,000.00
SPCP Group, L.L.C. $ 7,232,142.85 -0- $ 7,232,142.85
-------------- -------------- --------------
TOTAL $15,000,000.00 $55,000,000.00 $70,000,000.00
============== ============== ==============
PART B:
Total
Commitment
Additional as of the
Revolving Second Second
Credit Term Loan Amendment
Lender Commitment Commitment Effective Date
------------------------------ -------------- -------------- --------------
Blue Ridge Investments, L.L.C. $ 5,357,142.86 $ 3,571,428.57 $ 8,928,571.43
SPCP Group ffl LLC $ 2,410,714.29 $ -0- $ 2,410,714.29
SPF CDO I LTD. $ -0- $ 1,607,142.86 $ 1,607,142.86
Field Point I, LTD. $ -0- $ 2,410,714.29 $ 2,410,714.29
Field Point III, LTD. $ -0- $ 2,410,714.28 $ 2,410,714.28
SPCP Group, L.L.C. $ 7,232,142.85 $ -0- $ 7,232,142.85
-------------- -------------- --------------
TOTAL $15,000,000.00 $10,000,000.00 $25,000,000.00
============== ============== ==============
PART C:
Revolving
Credit Term Loan Total
Lender Commitment Commitment Commitment
------------------------------ -------------- -------------- --------------
Blue Ridge Investments, L.L.C. $10,714,285.72 $23,214,285.71 $33,928,571.43
SPCP Group III LLC $ 4,821,428.58 $ -0- $ 4,821,428.58
SPF CDO I LTD. $ -0- $10,446,428.57 $10,446,428.57
Field Point I, LTD. $ -0- $12,389,384.44 $12,389,384.44
Field Point II, LTD. $ -0- $10,539,187.00 $10,539,187.00
Field Point III, LTD. $ -0- $ 2,410,714.28 $ 2,410,714.28
Field Point IV, LTD. $ -0- $ 6,000,000.00 $ 6,000,000.00
SPCP Group, L.L.C. $14,464,285.70 $ -0- $14,464,285.70
-------------- -------------- --------------
TOTAL $30,000,000.00 $65,000,000.00 $95,000,000.00"
============== ============== ==============
EXHIBIT C TO SECOND AMENDMENT
"SUPPLEMENTAL SCHEDULE
[Borrower to attach Supplemental Schedules per Section 17 hereof]
EXHIBIT D TO SECOND AMENDMENT
"EXHIBIT D
FORM OF NOTICE OF BORROWING
XANODYNE PHARMACEUTICALS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date: ______________
Silver Point Finance, LLC, as Administrative Agent
under the below-referenced Financing Agreement
Two ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Xanodyne Pharmaceuticals, Inc., a Delaware
corporation (the "Borrower"), refers to the Financing Agreement, dated as of
July 25, 2005 (such Agreement, as amended by the First Amendment, Waiver and
Consent dated September 29, 2005 and as further amended by the Second Amendment,
Waiver and Consent, dated as of June __, 2007, and as further amended, restated,
supplemented or otherwise modified from time to time, including any replacement
agreement therefor, being hereinafter referred to as the "Financing Agreement"),
by and among the Borrower, each subsidiary of the Borrower listed as a
"Guarantor" on the signature pages thereto (together with each other Person (as
defined in the Financing Agreement) that guarantees all or any portion of the
Obligations (as defined in the Financing Agreement) from time to time, each a
"Guarantor" and collectively, the "Guarantors"), the lenders from time to time
party thereto (each a "Lender" and collectively, the "Lenders"), Silver Point
Finance, LLC, a Delaware limited liability company, as collateral agent for the
Agents (as hereinafter defined) and the Lenders (in such capacity, together with
its successors and assigns in such capacity, if any, the "Collateral Agent"),
and as administrative agent for the Agents and the Lenders (in such capacity,
together with its successors and assigns in such capacity, if any, the
"Administrative Agent" and together with the Collateral Agent, each an "Agent"
and collectively, the "Agents"), and hereby gives you notice pursuant to Section
2.02 of the Financing Agreement that the undersigned hereby requests a Loan
under the Financing Agreement (the "Proposed Loan"), and in that connection sets
forth below the information relating to such Proposed Loan as required by
Section 2.02 of the Financing Agreement. All capitalized terms used but not
defined herein have the same meanings herein as set forth in the Financing
Agreement.
25. The aggregate principal amount of the Proposed Loan is
$____________.(1)
26. The Proposed Loan is a [Revolving Loan] [Term Loan].(2)
27. The Proposed Loan is a [Reference Rate Loan] [LIBOR Rate Loan, with an
initial Interest Period of _______ month[s](3)].
28. The proceeds of the Proposed Loan will be used for the following
purposes: [general corporate and working capital purposes] [specify
other purposes].
29. The borrowing date of the Proposed Loan is ________________, 200__.(4)
30. The proceeds of the Proposed Loan should be made available to the
undersigned by wire transferring such proceeds in accordance with the
payment instructions set forth on Annex I hereto.
----------
(1) In the case of a LIBOR Rate Loan, such amount shall be in a minimum amount
of $500,000 and in integral multiples of $100,000 in excess thereof. In the
case of a Revolving Loan, such amount shall be in a minimum amount of
$500,000 and shall be in an integral multiple of $50,000.
(2) This information is only required for Loans requested on the Effective
Date.
(3) The Interest Period of the Proposed Loan must be one, two, three or six
months.
(4) This date must be a Business Day, and with respect to the Term Loan, must
be the Effective Date and with respect to a LIBOR Rate Loan, must be three
Business Days prior to the proposed borrowing.
The undersigned hereby certifies that (i) the representations and
warranties contained in Article V of the Financing Agreement and in each other
Loan Document are true and correct on and as of the date hereof as though made
on and as of the date hereof and will be true and correct on and as of the date
of the Proposed Loan (except that any representation and warranty made as of a
specific date shall be true and correct as of such specific date), (ii) no
Default or Event of Default has occurred and is continuing as of the date hereof
or will result from the making of the Proposed Loan or will occur or will be
continuing on the date of the Proposed Loan, (iii) no Product Milestone Miss has
occurred as of the date hereof, and (iv) the conditions set forth in Section[s]
[4.01 and] 4.02 of the Financing Agreement have been satisfied as of the date
hereof and will be satisfied as of the date of the Proposed Loan.
Very truly yours,
XANODYNE PHARMACEUTICALS, INC.
By:
------------------------------------
Name:
Title:
ANNEX I TO SECOND AMENDMENT
FORM OF WARRANT
FINAL FORM
FORM OF WARRANT
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
XANODYNE PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE WARRANT
No. [__] Dated: As of June __, ▇▇▇▇
▇▇▇▇▇▇▇ to Purchase [_____]
Shares of Common Stock
XANODYNE PHARMACEUTICALS, INC., a Delaware corporation (the
"Company"), for value received, hereby certifies that [Silver Point Finance,
LLC, a Delaware limited liability company] [INSERT HOLDER ADDRESS] or its
registered assigns (the "Holder"), is entitled to purchase from the Company
[________] (the "Initial Warrant Quantity") duly authorized, validly issued,
fully paid and nonassessable shares of common stock, par value $0.01 per share,
of the Company (the "Common Stock"), at a purchase price of $0.001 per share
(the "Warrant"), at any time or from time to time after the date hereof but
prior to the Expiration Date (as defined below), all subject to the terms,
conditions and adjustments set forth below in this Warrant. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
such terms in the Financing Agreement, dated as July 25, 2005, as amended by the
First Amendment, Consent and Waiver, dated September 25, 2005, and as further
amended by the Second Amendment thereto, dated as of June [ ], 2007 (as further
amended, restated or otherwise modified from time to time, the "Financing
Agreement") among the Company, its subsidiaries, certain lenders named therein,
including the Holder and Silver Point Finance, LLC ("Silver Point") as
collateral agent and administrative agent.
1. DEFINITIONS. As used herein, the following terms shall have the
meanings indicated:
"Additional Shares of Common Stock" shall mean all shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to Section 3.3 or
3.4, deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than:
(a) (i) shares of Common Stock issued upon the exercise of the
Warrant and (ii) such number of additional shares of Common Stock as may
become
issuable upon the exercise of the Warrant by reason of adjustments required
pursuant to the anti-dilution provisions applicable to the Warrant as in
effect on the date hereof; and
(b) (i) up to 15,191,677 shares of Common Stock or Options issued
to employees or directors of, or consultants or advisors to, the Company
pursuant to a plan, agreement or arrangement approved by a majority vote of
the Board of Directors, and (ii) such additional number of shares of Common
Stock as may become issuable pursuant to the terms of any such plan by
reason of adjustments required pursuant to anti-dilution provisions
applicable to such securities in order to reflect any subdivision or
combination of Common Stock, by reclassification or otherwise.
(c) The warrants initially held by Silicon Valley Bank which may
be exercised for up to 35,437 shares of Series A-l Preferred Stock
("Silicon Warrant Shares") and the Silicon Warrant Shares.
(d) Shares of Common Stock which may be issued in connection with
the conversion of the Series A-l Preferred Stock.
(e) Dividends paid to the holders of Series A-l Preferred Stock,
in accordance with Article Fourth Section C(1) of the Company's Certificate
of Incorporation, that are paid in shares of Common Stock.
(f) Up to 6,600,000 shares of Series A-l Preferred Stock issued
in connection with the acquisition of any product or products, directly or
indirectly, that are complementary to the Juno Product.
(g) Stock dividends and stock splits for which the Warrant
Quantity is adjusted pursuant to Section 3.3 below.
"Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly through one or more intermediaries, controls, is
controlled by. or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.
"Business Day" shall mean any day other than a Saturday or a Sunday or
a day on which commercial banking institutions in the City of New York are
authorized by law to be closed. Any reference to "days" (unless Business Days
are specified) shall mean calendar days.
"Commission" shall mean the Securities and Exchange Commission or any
successor agency having jurisdiction to enforce the Securities Act.
"Common Stock" shall have the meaning assigned to it in the
introduction to this Warrant, such term to include any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or
classes (however designated) of the Company the holders of which have the right,
without limitation as to amount, either to all or to a share of the balance of
current
2
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to a preference as to dividends or
distributions upon liquidation.
"Company" shall have the meaning assigned to it in the introduction to
this Warrant, such term to include any corporation or other entity which shall
succeed to or assume the obligations of the Company hereunder in compliance with
Section 4.
"Convertible Securities" shall mean any evidences of indebtedness,
shares of capital stock (other than Common Stock) or other securities directly
or indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
"Current Market Price" shall mean, on any date specified herein, the
average of the daily Market Price during the 20 consecutive trading days
commencing 30 trading days before such date, except that, if on any such date
the shares of Common Stock are not listed or admitted for trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date.
"Designated Entity" shall mean, individually and collectively, SPCP
Group III LLC, SPF CDO I, LLC, Field Point I, LTD, Broad Point I, LLC, and SPCP
Group, L.L.C.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Expiration Date" shall have the meaning assigned to it in Section 21.
"Fair Value" shall mean, on any date specified herein (i) in the case
of cash, the dollar amount thereof, (ii) in the case of a security, the Current
Market Price, and (iii) in all other cases, the fair value thereof (as of a date
which is within 20 days of the date as of which the determination is to be made)
determined in good faith by the Board of Directors of the Company and set forth
in a certificate of an Authorized Officer of Company.
"Financing Agreement" shall have the meaning assigned to it in the
introduction to this Warrant.
"Holder" shall have the meaning assigned to it in the introduction to
this Warrant.
"Initial Warrant Quantity" shall have the meaning assigned to it in
the introduction to this Warrant.
"Investor Rights Agreement" shall mean that certain Investor Rights
Agreement dated as of July 25, 2005, amended as of the date hereof, among the
Company, the existing stockholders named therein and the lenders party to the
Second Amendment to the Financing Agreement.
"Market Price" shall mean, on any date specified herein, the amount
per share of the Common Stock, equal to (i) the average weighted sale price of
such Common Stock, regular way, on such date or, in case no such sale takes
place on such date, the average of the closing bid and asked prices thereof
regular way on such date, in either case as officially reported on the
3
principal national securities exchange on which such Common Stock is then listed
or admitted for trading, (ii) if such Common Stock is not then listed or
admitted for trading on any national securities exchange but is designated as a
national market system security by the NASD, the average weighted trading price
of the Common Stock on such date, (iii) if there shall have been no trading on
such date or if the Common Stock is not so designated, the average of the
closing bid and asked prices of the Common Stock on such date as shown by the
NASD automated quotation system, or (iv) if such Common Stock is not then listed
or admitted for trading on any national exchange or quoted in the
over-the-counter market, the Fair Value (as set forth in subsection (iii) of the
definition of Fair Value).
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Options" shall mean any rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
"Other Securities" shall mean any capital stock (other than Common
Stock) and other securities of the Company or any other Person (corporate or
otherwise) which the holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
"Person" shall mean any individual, firm, partnership, corporation,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
"Purchase Price" shall mean $0.001 per share.
"Related Fund" means, (a) with respect to any Person, any Affiliate of
such Person or any fund or account managed by such Person or an Affiliate of
such Person or its investment manager, (b) with respect to Silver Point, (i) any
Affiliate of Silver Point or any fund or account managed by Silver Point or any
Affiliate of Silver Point or its investment manager, or (ii) any Designated
Entity, and (c) with respect to any Designated Entity, Silver Point or any other
Designated Entity.
"Restricted Securities" shall mean (i) any Warrants bearing the
applicable legend set forth in ▇▇▇▇▇▇▇ ▇▇.▇, (▇▇)▇▇▇ shares of Common Stock (or
Other Securities) issued or issuable upon the exercise of Warrants which are
(or, upon issuance, will be) evidenced by a certificate or certificates bearing
the applicable legend set forth in such Section, and (iii) any shares of Common
Stock (or Other Securities) issued subsequent to the exercise of any of the
Warrants as a dividend or other distribution with respect to, or resulting from
a subdivision of the outstanding shares of Common Stock (or other Securities)
into a greater number of shares by reclassification, stock splits or otherwise,
or in exchange for or in replacement of the Common Stock (or Other Securities)
issued upon such exercise, which are evidenced by a certificate or certificates
bearing the applicable legend set forth in such Section.
4
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder, or any successor
statute.
"Series A-l Preferred Stock" shall mean the Company's Series A-l
Convertible Preferred Stock, $.001 par value per share.
"Stockholders' Agreement" means that certain Amended and Restated
Stockholder's Agreement dated as of July 25, 2005, as amended as of the date
hereof, by and among the Company and certain of the holders of the Company's
Common Stock and Preferred Stock that are listed on the signature pages thereto.
"Warrant Quantity" shall mean initially the Initial Warrant Quantity
(as defined in the first paragraph of this Warrant), which amount shall be
subject to adjustment and readjustment from time to time as provided in Section
3, and, as so adjusted or readjusted, shall remain in effect until a further
adjustment or readjustment is required by Section 3.
"Warrant" shall have the meaning assigned to it in the introduction to
this Warrant.
2. EXERCISE OF WARRANT.
2.1. Manner of Exercise; Payment of the Purchase Price. (a) This
Warrant may be exercised by the Holder hereof, in whole or in part, at any
time or from time to time prior to the Expiration Date, by surrendering to
the Company at its principal office this Warrant, with the form of Election
to Purchase Shares attached hereto as Exhibit A (or a reasonable facsimile
thereof) duly executed by the Holder and accompanied by payment of the
Purchase Price for the number of shares of Common Stock specified in such
form.
(b) Payment of the Purchase Price may be made as follows (or
by any combination of the following): (i) in United States currency by
cash or delivery of a certified check or bank draft payable to the
order of the Company or by wire transfer to the Company, (ii) by
cancellation of such number of the shares of Common Stock otherwise
issuable to the Holder upon such exercise as shall be specified in
such Election to Purchase Shares, such that the excess of the
aggregate Current Market Price of such specified number of shares on
the date of exercise over the portion of the Purchase Price
attributable to such shares shall equal the Purchase Price
attributable to the shares of Common Stock to be issued upon such
exercise, in which case such amount shall be deemed to have been paid
to the Company and the number of shares issuable upon such exercise
shall be reduced by such specified number, or (iii) by surrender to
the Company for cancellation certificates representing shares of
Common Stock of the Company owned by the Holder (properly endorsed for
transfer in blank) having a Current Market Price on the date of
Warrant exercise equal to the Purchase Price.
2.2. When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to, and the
Purchase Price shall have been received by,
5
the Company as provided in Section 2.1, and at such time the Person or Persons
in whose name or names any certificate or certificates for shares of Common
Stock (or Other Securities) shall be issuable upon such exercise as provided in
Section 2.3 shall be deemed to have become the holder or holders of record
thereof for all purposes.
2.3. Delivery of Stock Certificates, Etc.; Charges, Taxes and
Expenses. (a) As soon as practicable after each exercise of this Warrant, in
whole or in part, and in any event within five Business Days thereafter, the
Company shall cause to be issued in the name of and delivered to the Holder
hereof or as the Holder may direct,
(i) a certificate or certificates for the number of
shares of Common Stock (or Other Securities) to which the Holder
shall be entitled upon such exercise plus, in lieu of issuance of
any fractional share to which the Holder would otherwise be
entitled, if any, a check for the amount of cash equal to the
same fraction multiplied by the Current Market Price per share on
the date of exercise, and
(ii) in case such exercise is for less than all of the
shares of Common Stock purchasable under this Warrant, a new
Warrant or Warrants of like tenor, for the balance of the shares
of Common Stock purchasable hereunder.
(b) Issuance of certificates for shares of Common Stock upon
the exercise of this Warrant shall be made without charge to the
Holder hereof for any transfer tax or other incidental expense in
respect of the issuance of such certificates, all of which such taxes
and expenses shall be paid by the Company.
(c) In the case of any dispute in respect of the number of
shares of Common Stock to be issued upon exercise of this Warrant, the
Company shall promptly issue to the Holder such number of shares of
Common Stock that is not disputed and shall submit the disputed
determinations or arithmetic calculations to the Holder via facsimile
within five (5) Business Days after each exercise of this Warrant. If
the Holder and the Company are unable to agree as to the determination
of the number of shares of Common Stock to be issued within three (3)
Business Days of such disputed determination or arithmetic calculation
being submitted to the Holder, then the dispute in respect of the
number of shares of Common Stock to be issued upon exercise of this
Warrant shall be determined in good faith by any firm of independent
public accountants of national standing, selected jointly by the
Company and the Holder or, if that selection cannot be made within ten
(10) days, by any firm of independent public accountants of national
standing selected by the American Arbitration Association in
accordance with its rules, and provided further, that all of the fees
and expenses of any third parties incurred in connection with
resolving such dispute will be paid by the party that is determined by
such accountant to be least correct and if neither party is more
correct than the other, one- half by the Company and one-half by the
Holder. The Company shall then, on the next Business Day. issue the
appropriate
6
number of shares of Common Stock upon exercise of the Warrant in
accordance with such accounting firm's determination under this
Section 2.3(c).
3. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE.
3.1. General; Warrant Quantity. This Warrant evidences the right to
purchase a number of shares of Common Stock equal to the Warrant Quantity,
subject to adjustment and readjustment as provided in this Section 3.
3.2. Adjustment of Warrant Quantity.
3.2.1. Issuance of Additional Shares of Common Stock. In case the
Company at any time or from time to time after the date hereof shall issue or
sell Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 3.3 or 3.4), without consideration
or for consideration per share less than the Fair Value of the Common Stock in
effect immediately prior to such issue or sale, then, in each such case, subject
to Section 3.8, the Warrant Quantity shall be increased, concurrently with such
issue or sale, to an amount determined by multiplying such Warrant Quantity by a
fraction:
(a) the numerator of which shall be the number of shares of
Common Stock outstanding on a fully diluted basis (including shares of
Common Stock issuable upon exercise of this Warrant, shares of Common
Stock issuable upon conversion of the issued and outstanding Series
A-l Preferred Stock and the conversion of the Silicon Warrant Shares,
and the 9,947,191 shares of Common Stock issuable upon the exercise of
Options granted as of the Second Amendment Effective Date) immediately
after such issue or sale; provided, that for the purposes of this
Section 3.2.1(a), (i) immediately after any Additional Shares of
Common Stock are deemed to have been issued pursuant to Section 3.3 or
3.4, such Additional Shares shall be deemed to be outstanding, and
(ii) treasury shares shall not be deemed to be outstanding; and
(b) the denominator of which shall be the sum of (i) the
number of shares of Common Stock outstanding on a fully diluted basis
(including shares of Common Stock issuable upon exercise of this
Warrant, shares of Common Stock issuable upon conversion of the issued
and outstanding Series A-l Preferred Stock and the conversion of the
Silicon Warrant Shares, and the 9,947,191 shares of Common Stock
issuable upon the exercise of Options granted as of the Second
Amendment Effective Date) immediately prior to such issue or sale;
(provided that for purposes of this Section 3.2.1(b) treasury shares
shall not be deemed outstanding) and (ii) the number of shares of
Common Stock which the aggregate consideration received by the Company
for the total number of such Additional Shares of Common Stock so
issued or sold would purchase at an amount equal to Fair Value.
3.2.2. Treatment of Options and Convertible Securities. Except as
set forth herein, in case the Company at any time or from time to time after the
date hereof shall issue., sell, grant or assume, or shall fix a record date for
the determination of holders of any
7
class of securities of the Company entitled to receive, any Options or
Convertible Securities (whether or not the rights thereunder are immediately
excrcisable), then, and in each such case, the maximum number of Additional
Shares of Common Stock (as set forth in the instrument relating thereto, without
regard to any provisions contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue, sale, grant or assumption or, in case such
a record date shall have been fixed, as of the close of business on such record
date; provided, that such Additional Shares of Common Stock shall not be deemed
to have been issued unless the consideration per share (determined pursuant to
Section 3.5) of such shares would be less than the Fair Value in effect on the
date of and immediately prior to such issue, sale, grant or assumption or
immediately prior to the close of business on such record date, as the case may
be; and provided, further, that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(a) whether or not the Additional Shares of Common Stock
underlying such Options or Convertible Securities are deemed to be
issued, no further adjustment of the Warrant Quantity shall be made
upon the subsequent issue or sale of Convertible Securities or shares
of Common Stock upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, except in the case of any
such Options or Convertible Securities which contain provisions
requiring an adjustment, subsequent to the date of the issue or sale
thereof, of the number of Additional Shares of Common Stock issuable
upon the exercise of such Options or the conversion or exchange of
such Convertible Securities by reason of (i) a Change of Control (as
defined in the Financing Agreement) of the Company, (ii) the
acquisition by any Person or group of Persons of any specified number
or percentage of the voting securities of the Company or (iii) any
other event or occurrence, such as a reset of pricing with respect to
the conversion of convertible Securities, each such case to be deemed
hereunder to involve a separate issuance of Additional Shares of
Common Stock. Options or Convertible Securities, as the case may be;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (by change of rate or otherwise), the
Warrant Quantity computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date with
respect thereto), and any subsequent adjustments based thereon, shall,
upon any such increase or decrease becoming effective, be recomputed
to reflect such increase or decrease insofar as it affects such
Options, or the rights of conversion or exchange under such
Convertible Securities, which are outstanding at such time;
(c) no readjustment pursuant to subdivision (b) above shall
have the effect of decreasing the Warrant Quantity by an amount in
excess of the
8
amount of the adjustment thereof originally made in respect of the
issue, sale, grant or assumption of such Options or Convertible
Securities.
3.3. Treatment of Stock Dividends, Stock Splits, etc. Except to the
extent paid to the holders of Series A-l Preferred Stock in satisfaction of the
Company's dividend obligation set forth in Article Fourth Section C(l) of the
Company's Certificate of Incorporation, in case the Company at any time or from
time to time after the date hereof shall declare or pay any dividend on the
Common Stock payable in Common Stock, or shall effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in Common
Stock), then, and in each such case, if the Company declares or pays a dividend
on its Common Stock, payable in Common Stock, or other securities, subdivides
the outstanding Common Stock into a greater amount of Common Stock, then upon
exercise or conversion of this Warrant, for each share of Common Stock acquired,
Holder shall receive, without cost to Holder, the total number and kind of
securities to which Holder would have been entitled had Holder owned the shares
of Common Stock recorded as of the date the dividend or subdivision occurred. If
the outstanding shares of Common Stock are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Purchase
Price shall be proportionately increased.
3.4. Computation of Consideration. For the purposes of this Section 3,
(a) the consideration for the issue or sale of any
Additional Shares of Common Stock shall, irrespective of the
accounting treatment of such consideration,
(i) insofar as it consists of cash, be computed at the
net amount of cash received by the Company, without deducting any
expenses paid or incurred by the Company or any commissions or
compensations paid or concessions or discounts allowed to
underwriters, dealers or others performing similar services in
connection with such issue or sale,
(ii) insofar as it consists of property (including
securities) or services other than cash, be computed at the Fair
Value thereof at the time of such issue or sale, and
(iii) in case Additional Shares of Common Stock are
issued or sold together with other stock or securities or other
assets of the Company for a consideration which covers both, be
the portion of such consideration so received, computed as
provided in clauses (i) and (ii) above, allocable to such
Additional Shares of Common Stock, such allocation to be
determined in the same manner that the Fair Value of property not
consisting of cash or securities is to be determined as provided
in the definition of "Fair Value" herein;
(b) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 3.3, relating to Options and Convertible
Securities,
9
shall be deemed to have been issued for a consideration per share
determined by dividing:
(i) the total amount, if any, received and receivable
by the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in question,
plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of
such consideration to protect against dilution) payable to the
Company upon the exercise in full of such Options or the
conversion or exchange of such Convertible Securities or, in the
case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange
of such Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a).
by
(ii) the maximum number of Additional Shares of Common
Stock (as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent
adjustment of such number to protect against dilution) issuable
upon the exercise of such Options or the conversion or exchange
of such Convertible Securities.
3.5. Adjustments for Combinations, etc. In case the outstanding shares
of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Quantity
in effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately decreased.
3.6. Dilution in Case of Other Securities. In case any Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other Securities or any other Person referred to in Section 4) or
to subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Company (or any such other issuer or Person) for a consideration
such as to dilute, on a basis consistent with the standards established in the
other provisions of this Section 3, the purchase rights granted by this Warrant,
then, and in each such case, the computations, adjustments and readjustments
provided for in this Section 3 with respect to the Warrant Quantity shall be
made as nearly as possible in the manner so provided and applied to determine
the amount of Other Securities from time to time receivable upon the exercise of
this Warrant, so as to protect the Holder of this Warrant against the effect of
such dilution.
3.7. De Minimis Adjustments. If the amount of any adjustment of the
Warrant Quantity required pursuant to this Section 3 would be less than one
tenth (1/10) of one percent (1%) of the Warrant Quantity in effect at the time
such adjustment is otherwise so required to be made, such amount shall be
carried forward and adjustment with respect thereto made at the time of and
together with any subsequent adjustment which, together with such amount and any
other
10
amount or amounts so carried forward, shall aggregate a change in the Warrant
Quantity of at least one tenth (1/10) of one percent (1%) of such Warrant
Quantity. All calculations under this Warrant shall be made to the nearest
one-tenth of a share.
3.8. Abandoned Dividend or Distribution. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution (which results in an adjustment to the
Warrant Quantity under the terms of this Warrant) and shall, thereafter, and
before such dividend or distribution is paid or delivered to shareholders
entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Warrant Quantity by reason of the
taking of such record shall be reversed, and any subsequent adjustments, based
thereon, shall be recomputed.
4. CONSOLIDATION, MERGER, ETC.
4.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof shall effect a
capital reorganization or reclassification of the Common Stock or Other
Securities (other than a capital reorganization or reclassification resulting in
the issue of Additional Shares of Common Stock for which adjustment in the
Warrant Quantity is provided in Section 3.2.1 or 3.2.2), then, and in the case
of each such transaction, proper provision shall be made so that, upon the basis
and the terms and in the manner provided in this Warrant, the Holder of this
Warrant, upon the exercise hereof at any time after the consummation of such
transaction, shall be entitled to receive (at the aggregate Purchase Price in
effect at the time of such consummation for all Common Stock or Other Securities
issuable upon such exercise immediately prior to such consummation), in lieu of
the Common Stock or Other Securities issuable upon such exercise prior to such
consummation, the highest amount of securities, cash or other property to which
such Holder would actually have been entitled as a shareholder upon such
consummation if such Holder had exercised this Warrant immediately prior
thereto, subject to adjustments (subsequent to such consummation) as nearly
equivalent as possible to the adjustments provided for in Sections 3 through 5.
4.2. Assumption of Obligations. Notwithstanding anything contained in
the Warrants or in the Financing Agreement to the contrary, the Company shall
not effect any of the transactions described in Section 4.1 unless, prior to the
consummation thereof, each Person (other than the Company) which may be required
to deliver any stock, securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the Holder of this Warrant, (a) the obligations of
the Company under this Warrant (and if the Company shall survive the
consummation of such transaction, such assumption shall be in addition to, and
shall not release the Company from, any continuing obligations of the Company
under this Warrant), (b) the obligations of the Company under the Investor
Rights Agreement and (c) the obligation to deliver to the Holder such shares of
stock, securities, cash or property as, in accordance with the foregoing
provisions of this Section 4. the Holder may be entitled to receive. Nothing in
this Section 4 shall be deemed to authorize the Company to enter into any
transaction not otherwise permitted by the Financing Agreement.
5. OTHER DILUTIVE EVENTS. In case any event shall occur as to which,
in the good faith opinion of both the Board of Directors of the Company and the
Holder, the
11
provisions of Section 3 or Section 4 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles of such Sections,
then, in each such case, the Board of Directors of Company shall make an
adjustment, which adjustment, if any, will be final, in the application of such
provisions, in accordance with the essential intent and principles, as
determined jointly and in good faith by the Board of Directors and the Holder,
so as to preserve, without dilution, the purchase rights represented by this
Warrant.
6. NO IMPAIRMENT. The Company shall not, by amendment of its
certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Holder of
this Warrant against impairment. Without limiting the generality of the
foregoing, the Company (a) shall not permit the par value of any shares of stock
receivable upon the exercise of this Warrant to exceed the amount payable
therefor upon such exercise, (b) shall take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of stock, free from all taxes, liens, security
interests, encumbrances, preemptive rights and charges on the exercise of the
Warrants from time to time outstanding, and (c) shall not take any action which
results in any adjustment of the Warrant Quantity if the total number of shares
of Common Stock (or Other Securities) issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's certificate
of incorporation and available for the purpose of issue upon such exercise.
7. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable upon
the exercise of this Warrant, the Company at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms of this Warrant and
prepare a certificate signed by the Chief Financial Officer or Treasurer of the
Company setting forth such adjustment or readjustment and showing in reasonable
detail the method of calculation thereof and the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or to be received by the Company for any Additional
Shares of Common Stock issued or sold or deemed to have been issued, (b) the
number of shares of Common Stock outstanding or deemed to be outstanding, and
(c)the Warrant Quantity in effect immediately prior to such issue or sale and as
adjusted and readjusted (if required by Section 3) on account thereof. The
Company shall forthwith mail a copy of each such certificate to each holder of a
Warrant and shall, upon the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate. The Company shall also keep
copies of all such certificate at its principal office and shall cause the same
to be available for inspection at such office during normal business hours by
any holder of a Warrant or any prospective purchaser of a Warrant designated by
the holder thereof.
12
8. NOTICES OF CORPORATE ACTION. In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a
regularly scheduled cash dividend payable out of consolidated earnings
or earned surplus, determined in accordance with generally accepted
accounting principles, in an amount not exceeding the amount in excess
of 110% of the immediately preceding cash dividend for such period) or
other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company, any consolidation or merger involving the Company and any
other Person, any transaction or series of transactions in which more
than 50% of the voting securities of the Company are transferred to
another Person, or any transfer, sale or other disposition of all or
substantially all the assets of the Company to any other Person,
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any other transaction of the Company that would result
in any adjustment to the Common Stock as provided in this Section 8,
the Company shall mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, sale, disposition, dissolution, liquidation or winding-up is to take
place and the time, if any such time is to be fixed, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least 20 days prior to the date
therein specified. Notwithstanding the foregoing, the Company will be deemed to
provide notice of any corporate action if the Company provides notice to the
Administrative Agent under the Financing Agreement.
9. REGISTRATION OF COMMON STOCK. If any shares of Common Stock
required to be reserved for purposes of exercise of this Warrant require
registration with or approval of any governmental authority under any federal or
state law (other than the Securities Act) before such shares may be issued upon
exercise, the Company shall, at its expense and as expeditiously as possible,
use commercially reasonable best efforts to cause such shares to be duly
registered or approved, as the case may be. At any such time as Common Stock is
listed on any national securities exchange, the Company shall, at its expense,
obtain promptly and
13
maintain the approval for listing on each such exchange, upon official notice of
issuance, the shares of Common Stock issuable upon exercise of the then
outstanding Warrants and maintain the listing of such shares after their
issuance; and the Company shall also list on such national securities exchange,
shall register under the Exchange Act and shall maintain such listing of, any
Other Securities that at any time are issuable upon exercise of the Warrants, if
and at the time that any securities of the same class shall be listed on such
national securities exchange by the Company.
10. RESTRICTIONS ON TRANSFER.
10.1. Restrictive Legends. Except as otherwise permitted by this
Section 10, each Warrant (including each Warrant issued upon the transfer of any
Warrant) shall be stamped or otherwise imprinted with a legend in substantially
the following form and as otherwise required by the Stockholders Agreement:
"THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS."
Except as otherwise permitted by this Section 10, each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant, and each
certificate issued upon the transfer of any such Common Stock (or Other
Securities), shall be stamped or otherwise imprinted with a legend in
substantially the following form and as otherwise required by the Stockholders
Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO
THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS."
10.2. Transfer to Comply With the Securities Act. Restricted
Securities may not be sold, assigned, pledged, hypothecated, encumbered or in
any manner transferred or disposed of, in whole or in part, except in compliance
with the provisions of the Securities Act and state securities or Blue Sky laws
and the terms and conditions hereof.
10.3. Termination of Restrictions. Subject to the Stockholders
Agreement,, the restrictions imposed by this Section 10 on the transferability
of Restricted Securities shall cease
14
and terminate as to any particular Restricted Securities (a) when a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (b) when such securities are
sold pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (c) when, in the opinion of both counsel for the Holder and
counsel for the Company, such restrictions are no longer required or necessary
in order to protect the Company against a violation of the Securities Act upon
any sale or other disposition of such securities without registration
thereunder; provided no such opinion shall be required for any disposition by
the Holder to an Affiliate or Related Fund. Whenever such restrictions shall
cease and terminate as to any Restricted Securities, the Holder shall be
entitled to receive from the Company, without expense, new securities of like
tenor not bearing the applicable legends required by Section 10.1.
11. RESERVATION OF STOCK, ETC. The Company shall at all times reserve
and keep available, solely for issuance and delivery upon exercise of the
Warrants, the number of shares of Common Stock (or Other Securities) from time
to time issuable upon exercise of all Warrants at the time outstanding. All
shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable with no
liability on the part of the holders thereof, and, in the case of all
securities, shall be free from all taxes, liens, security interests,
encumbrances, preemptive rights and charges. The transfer agent for the Common
Stock, which may be the Company ("Transfer Agent"), and every subsequent
Transfer Agent for any shares of the Company's capital stock issuable upon the
exercise of any of the purchase rights represented by this Warrant, are hereby
irrevocably authorized and directed at all times until the Expiration Date to
reserve such number of authorized and unissued shares as shall be requisite for
such purpose. The Company shall keep copies of this Warrant on file with the
Transfer Agent for the Common Stock and with every subsequent Transfer Agent for
any shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by this Warrant. The Company shall supply such
Transfer Agent with duly executed stock certificates for such purpose. All
Warrant Certificates surrendered upon the exercise of the rights thereby
evidenced shall be canceled, and such canceled Warrants shall constitute
sufficient evidence of the number of shares of stock which have been issued upon
the exercise of such Warrants. Subsequent to the Expiration Date, no shares of
stock need be reserved in respect of any unexercised Warrant.
12. REGISTRATION AND TRANSFER OF WARRANTS. ETC.
12.1. Warrant Register; Ownership of Warrants. Each Warrant issued by
the Company shall be numbered and shall be registered in a warrant register (the
"Warrant Register") as it is issued and transferred, which Warrant Register
shall be maintained by the Company at its principal office or, at the Company's
election and expense, by a Warrant Agent or the Company's transfer agent. The
Company shall be entitled to treat the registered Holder of any Warrant on the
Warrant Register as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in such Warrant
on the part of any other Person, and shall not be affected by any notice to the
contrary, except that, if and when any Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat the bearer thereof as the
owner of such Warrant for all purposes. Subject to Section 10, a Warrant, if
15
properly assigned, may be exercised by a new holder without a new Warrant first
having been issued.
12.2. Transfer of Warrants. Subject to compliance with Section 10, if
applicable, this Warrant and all rights hereunder are transferable in whole or
in part, without charge to the Holder hereof, upon surrender of this Warrant
with a properly executed Form of Assignment attached hereto as Exhibit B at the
principal office of the Company and Instrument of Accession, as described below,
to the Stockholder's Agreement. Upon any partial transfer, the Company shall at
its expense issue and deliver to the Holder a new Warrant of like tenor, in the
name of the Holder, which shall be exercisable for such number of shares of
Common Stock with respect to which rights under this Warrant were not so
transferred.
12.3. Replacement of Warrants. On receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or. in the case of any such
mutilation, on surrender of such Wan-ant to the Company at its principal office
and cancellation thereof, the Company at the Holder's expense shall execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12.4. Adjustments to Number of Shares. Notwithstanding any adjustment
in the number or kind of shares of Common Stock purchasable upon exercise of
this Warrant, any Warrant theretofore or thereafter issued may continue to
express the same number and kind of shares of Common Stock as are stated in this
Warrant, as initially issued.
12.5. Fractional Shares. Notwithstanding any adjustment pursuant to
Section 3 in the number of shares of Common Stock covered by this Warrant or any
other provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company
shall make payment to the Holder, at the time of exercise of this Warrant as
herein provided, in an amount in cash equal to such fraction multiplied by the
Current Market Price of a share of Common Stock on the date of Warrant exercise.
13. INTENTIONALLY OMITTED.
14. NO RIGHTS OR LIABILITIES AS SHAREHOLDER. Except as provided in
Section 21, nothing contained in this Warrant shall be construed as conferring
upon the Holder hereof any rights as a shareholder of the Company or as imposing
any obligation on the Holder to purchase any securities or as imposing any
liabilities on the Holder as a shareholder of the Company, whether such
obligation or liabilities are asserted by the Company or by creditors of the
Company.
15. NOTICES. All notices and other communications (and deliveries)
provided for or permitted hereunder shall be made in writing by hand delivery,
telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed (a) if to the Company, to the attention of [______] at its principal
office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other address
as may
16
hereafter be designated in writing by the Company to the Holder in accordance
with the provisions of this Section, or (b) if to the Holder, at its address as
it appears in the Warrant Register.
All such notices and communications (and deliveries) shall be deemed
to have been duly given: at the time delivered by hand, if personally delivered;
when receipt is acknowledged, if telecopied; on the next Business Day, if timely
delivered to a courier guaranteeing overnight delivery; and five days after
being deposited in the mail, if sent first class or certified mail, return
receipt requested, postage prepaid; provided, that the exercise of any Warrant
shall be effective in the manner provided in Section 2.
16. AMENDMENTS. This Warrant and any term hereof may not be amended,
modified, supplemented or terminated, and waivers or consents to departures from
the provisions hereof may not be established, without the written consent of the
Company and the individual holder of this Warrant. All Warrants may be amended
by the written consent of the Company and the holders of Warrants representing
at least a majority of the shares of Common Stock issuable upon exercise of all
of the Warrants then outstanding; provided however, that with respect to any
amendment, modification, supplement, termination or waiver of any provisions of
this Warrant that would adversely affect the rights of any individual holder, as
compared to the rights of any other holders, the Company shall seek from each
holder adversely affected, a consent in writing to such amendment, modification,
supplement, termination or waiver of such provisions of this Warrant, which
consent may be withheld by the individual holder in its sole discretion. If the
Company is unable to obtain a consent from each holder whose rights would be
adversely affected by the proposed amendment, modification, supplement,
termination or waiver of provisions of this Warrant, then such amendment,
modification, supplement, termination or waiver of provisions of this Warrant
shall not be adopted by the Company.
17. DESCRIPTIVE HEADINGS, ETC. The headings in this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Warrant otherwise
requires: (a) words of any gender shall be deemed to include each other gender;
(b) words using the singular or plural number shall also include the plural or
singular number, respectively; (c) the words "hereof, "herein" and "hereunder"
and words of similar import when used in this Warrant shall refer to this
Warrant as a whole and not to any particular provision of this Warrant, and
Section and paragraph references are to the Sections and paragraphs of this
Warrant unless otherwise specified; (d) the word "including" and words of
similar import when used in this Warrant shall mean "including, without
limitation," unless otherwise specified; (e) "or" is not exclusive; and (f)
provisions apply to successive events and transactions.
18. GOVERNING LAW. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving effect to the
conflict of laws principles thereof).
19. JUDICIAL PROCEEDINGS. Any legal action, suit or proceeding brought
with respect to this Warrant may be brought in any federal court of the Southern
District of New York or any state court located in New York County, State of New
York, and by execution and delivery of this Warrant, the Company and each Holder
hereby irrevocably and unconditionally
17
waives any claim (by way of motion, as a defense or otherwise) of improper
venue, that it is not subject personally to the jurisdiction of such court, that
such courts are an inconvenient forum or that this Warrant or the subject matter
may not be enforced in or by such court. The Company and the Holder hereby
irrevocably and unconditionally consents to the service of process of any of the
aforementioned courts in any such action, suit or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, at its address
set forth or provided for in Section 15, such service to become effective 10
days after such mailing. Nothing herein contained shall be deemed to affect the
right of any party to serve process in any manner permitted by law or commence
legal proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section.
20. INVESTOR RIGHTS AGREEMENT. The Company agrees to cause the other
parties thereto to amend the Investor Rights Agreement so that the shares of
Common Stock (and Other Securities) issuable upon exercise of this Warrant (or
upon conversion of any shares of Common Stock issued upon such exercise) shall
constitute Registrablc Shares (as such term is defined in the Investor Rights
Agreement). Each holder of this Warrant shall be entitled to all of the benefits
afforded to a holder of any such Registrable Shares under the Investor Rights
Agreement and such holder, by its acceptance of this Warrant, agrees to be bound
by and to comply with the terms and conditions of the Investor Rights Agreement
applicable to such holder as a holder of such Registrable Shares.
21. EXPIRATION; CALL RIGHT.
21.1. The right to exercise this Warrant shall expire at 5:00 p.m.,
New York City time, on the earlier of (a) June ____, 2012, (b) the date
that a Qualified Public Offering (as such term is defined in the Company's
Certificate of Incorporation as amended from time to time) covering shares
of Common Stock underlying this Warrant is consummated, subject to Section
21.2 below or (c) the sale of substantially all of the assets of the
Company or the consolidation or merger of the Company with or into another
Person (regardless of whether or not the Company is the surviving entity)
(the "Expiration Date").
21.2. Upon the consummation of a Qualified Public Offering, (the "Call
Event"), each of The Holders will have been deemed to have provided a Form
of Election to Purchase Share; pursuant to Section 2.1 and will be required
to pay the Company the aggregate Purchase Price and the Company will be
required to deliver the shares of Common Stock underlying this Warrant, all
in accordance with the terms of Section 2.1 and the other terms of this
Warrant.
21.3. Other than as described in Section 21.2 above, the exercise of
this Warrant shall be subject to and governed by all the provisions
relating to such exercise contained herein.
22. STOCKHOLDERS' AGREEMENT. The Company acknowledges and agrees that,
upon issuance of this Warrant, the Holder shall be required to execute an
Instrument of Accession (as such term is defined in the Stockholders Agreement)
to the Stockholders'
18
Agreement and that Holder shall be entitled to all the benefits of, and bear all
the obligations of, a Common Stockholder (as such term is defined in the
Stockholders' Agreement) thereunder. The Company agrees to cause the other
parties thereto to amend the Stockholders' Agreement to enable the Holder to
participate on a pro rata basis with the Preferred Stockholders of the Company
in the Right of Co-Sale provided by Section 5.1 of the Stockholders' Agreement.
23. REPRESENTATIONS. Holder by accepting this Warrant shall be deemed
to have made the representations and warranties to the Company contained on
Exhibit C hereto.
[Signature Page Follows]
19
IN WITNESS WHEREOF, the Company has executed and delivered this
Warrant as of the date first above written.
XANODYNE PHARMACEUTICALS, INC.
By:
------------------------------------
Name:
Title:
{WARRANT SIGNATURE PAGE}
20
EXHIBIT A to
Common Stock Purchase Warrant
[FORM OF]
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the Warrant to
purchase _____ shares of Common Stock, par value $0.01 per share ("Common
Stock"), of XANODYNE PHARMACEUTICALS, INC. and hereby [makes payment of
$________ therefor] [or] [makes payment therefor by reduction pursuant to
Section 2.1(b)(ii) of the Warrant of the number of shares of Common Stock
otherwise issuable to the Holder upon Warrant exercise by _______ shares] [or]
[makes payment therefor by delivery of the following Common Stock Certificates
of the Company (properly endorsed for transfer in blank) for cancellation by the
Company pursuant to Section 2.1(b)(iii) of the Warrant, certificates of which
are attached hereto for cancellation _______________________ [list certificates
by number and amount]]. The undersigned hereby requests that certificates for
such shares be issued and delivered as follows:
ISSUE TO:
----------------------------------------------------------------------
(NAME)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
--------------------------------------------------------------------------------
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:
--------------------------------------------------------------------
(NAME)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased (and/or reduced)
hereby is less than the number of shares of Common Stock covered by the Warrant,
the undersigned requests that a new Warrant representing the number of shares of
Common Stock not so purchased (or reduced) be issued and delivered as follows:
ISSUE TO:
----------------------------------------------------------------------
(NAME OF HOLDER)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO:
--------------------------------------------------------------------
(NAME OF HOLDER)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
Dated: , 200 [NAME OF HOLDER]
------------ -
By
-------------------------------------
Name:
Title:
EXHIBIT B to
Common Stock Purchase Warrant
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase Common Stock, par value $__________ per share ("Common Stock") of
XANODYNE PHARMACEUTICALS, INC. represented by the Warrant, with respect to the
number of shares of Common Stock set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint ___________ Attorney to make
such transfer on the books of XANODYNE PHARMACEUTICALS, INC. maintained for that
purpose, with full power of substitution in the premises.
Dated: , 200 [NAME OF HOLDER]
------------ -
By:
------------------------------------
Name:
Title:
EXHIBIT C to
Common Stock Purchase Warrant
1. Representations of the Holder. The Holder represents and warrants to the
Company as follows:
1.1 Investment. Holder is acquiring this Warrant and shares of Common Stock
issuable upon exercise of this Warrant for Holder's own account for investment
and not with a view to, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling the same.
Holder has no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the disposition thereof.
1.2 Restricted Securities. Holder acknowledges that this Warrant and shares of
Common Stock issuable upon exercise of this Warrant consist of restricted
securities that are unregistered; that neither this Warrant nor such shares may
be sold, transferred, or otherwise disposed of without registration under the
Securities Act unless an exemption from such registration is available; that in
the absence of an effective registration statement covering this Warrant and
such shares or an available exemption from registration under the Securities
Act, the Warrants and Warrant Shares must be held indefinitely. In particular,
Holder is aware that this Warrant and such shares may not be sold pursuant to
Rule 144 promulgated under the Securities Act unless all of the conditions of
that Rule are met and that among the conditions for use of Rule 144 may be the
availability of current information to the public about the Company, information
that is not now made available. Holder understands that this Warrant and such
shares will be subject to the restrictions on exercise, conversion and transfer
as set forth in the instruments governing such shares and in the Stockholders'
Agreement, and to the extent applicable, each certificate, instrument or other
document evidencing such shares shall be endorsed with the legends set forth in
the Stockholders' Agreement.
1.3 Economic Risk; Sophistication. Holder is able to bear the economic risk of
an investment in this Warrant and shares of Common Stock issuable upon exercise
of this Warrant acquired by him or it pursuant to this Warrant and has
sufficient knowledge and experience in financial and business matters that he or
it is capable of evaluating the merits and risks of the proposed investment in
the Company and Holder is able financially to bear the risks thereof.
1.4 Accredited Investor. Holder meets the criteria of an "accredited investor"
as defined in Rule 501(a) of Regulation D adopted under the Securities Act.
1.5 Investigation. Holder has been furnished with, and has had an opportunity to
read, the Second Amendment, this Warrant and Loan Documents to which he or it is
a party and all materials relating to the business, finances, operations, and
prospects of the Company that have been reasonably requested by Holder. Holder
understands that this Warrant and shares of Common Stock issuable upon exercise
of this Warrant are being or will be issued without any particular offering or
disclosure document, but acknowledges that Holder has been given ample
opportunity to ask questions and request information of. and receive answers
from, Company officials concerning the business, finances and operations of the
Company.
1.6 Blue Sky Approvals. The address set forth in the first paragraph of this
Warrant is true, complete and correct, and is the principal address of Holder.
Holder agrees that the Company can rely on such address for purposes of
compliance with state and federal securities laws.
1.7 Organization and Standing. Holder is a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
its respective state or country of organization.
1.8 Authority. The execution, delivery and performance by Holder of this
Warrant, Stockholders Agreement and Investor Rights Agreement and the
consummation by Holder of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action. This Warrant, the
Stockholders Agreement and Investor Rights Agreement has been duly executed and
delivered by the Holder and constitute valid and binding obligations of the
Holder enforceable in accordance with their respective terms, except, (i) as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally and (ii) as may be limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies."
Table of Contents
Page
----
1. DEFINITIONS.......................................................... 1
2. EXERCISE OF WARRANT.................................................. 5
2.1. Manner of Exercise; Payment of the Purchase Price.............. 5
2.2. When Exercise Effective........................................ 5
2.3. Delivery of Stock Certificates, Etc.; Charges, Taxes and
Expenses....................................................... 6
3. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE.................... 7
3.1. General; Warrant Quantity...................................... 7
3.2. Adjustment of Warrant Quantity................................. 7
3.3. Treatment of Stock Dividends, Stock Splits, etc................ 9
3.4. Computation of Consideration................................... 9
3.5. Adjustments for Combinations, etc.............................. 10
3.6. Dilution in Case of Other Securities........................... 10
3.7. De Minimis Adjustments......................................... 10
3.8. Abandoned Dividend or Distribution............................. 11
4. CONSOLIDATION, MERGER, ETC........................................... 11
4.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc............................................ 11
4.2. Assumption of Obligations...................................... 11
5. OTHER DILUTIVE EVENTS................................................ 11
6. NO IMPAIRMENT........................................................ 12
7. CERTIFICATE AS TO ADJUSTMENTS........................................ 12
8. NOTICES OF CORPORATE ACTION.......................................... 13
9. REGISTRATION OF COMMON STOCK......................................... 13
10. RESTRICTIONS ON TRANSFER............................................. 14
10.1. Restrictive Legends............................................ 14
10.2. Transfer to Comply With the Securities Act..................... 14
10.3. Termination of Restrictions.................................... 14
11. RESERVATION OF STOCK, ETC............................................ 15
12. REGISTRATION AND TRANSFER OF WARRANTS. ETC........................... 15
12.1. Warrant Register; Ownership of Warrants........................ 15
12.2. Transfer of Warrants........................................... 16
12.3. Replacement of Warrants........................................ 16
12.4. Adjustments to Number of Shares................................ 16
12.5. Fractional Shares.............................................. 16
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Table of Contents
(continued)
Page
----
13. INTENTIONALLY OMITTED................................................ 16
14. NO RIGHTS OR LIABILITIES AS SHAREHOLDER.............................. 16
15. NOTICES.............................................................. 16
16. AMENDMENTS........................................................... 17
17. DESCRIPTIVE HEADINGS, ETC............................................ 17
18. GOVERNING LAW........................................................ 17
19. JUDICIAL PROCEEDINGS................................................. 17
20. INVESTOR RIGHTS AGREEMENT............................................ 18
21. EXPIRATION; CALL RIGHT............................................... 18
22. STOCKHOLDERS' AGREEMENT.............................................. 18
23. REPRESENTATIONS...................................................... 19
ii