Exhibit 10.1
[EXECUTION COPY]
LOAN AND SECURITY AGREEMENT
BY AND AMONG
SYNAVANT INC.
AND
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS BORROWERS,
AND
FOOTHILL CAPITAL CORPORATION
AS LENDER
DATED AS OF APRIL 27, 2001
TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION................................................................................1
1. DEFINITIONS AND CONSTRUCTION................................................................................1
1.1 DEFINITIONS..............................................................................................1
1.2 ACCOUNTING TERMS........................................................................................22
1.3 CODE....................................................................................................22
1.4 CONSTRUCTION............................................................................................22
1.5 SCHEDULES AND EXHIBITS..................................................................................23
1.6 ATTORNEYS' FEES.........................................................................................23
2. LOAN AND TERMS OF PAYMENT..................................................................................23
2. LOAN AND TERMS OF PAYMENT..................................................................................23
2.1 REVOLVER ADVANCES.......................................................................................23
2.2 BORROWING PROCEDURES AND SETTLEMENTS....................................................................24
2.3 PAYMENTS................................................................................................24
2.4 OVERADVANCES............................................................................................26
2.5 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND CALCULATIONS.............................26
2.6 CASH MANAGEMENT.........................................................................................28
2.7 CREDITING PAYMENTS; FLOAT CHARGE........................................................................29
2.8 DESIGNATED ACCOUNT......................................................................................29
2.9 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS..................................................29
2.10 FEES.................................................................................................30
2.11 LETTERS OF CREDIT....................................................................................30
2.12 CAPITAL REQUIREMENTS.................................................................................33
2.13 JOINT AND SEVERAL LIABILITY OF BORROWERS.............................................................34
3. CONDITIONS; TERM OF AGREEMENT..............................................................................37
3. CONDITIONS; TERM OF AGREEMENT..............................................................................37
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT.................................................37
3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT................................................40
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT........................................................41
3.4 TERM....................................................................................................42
3.5 EFFECT OF TERMINATION...................................................................................42
3.6 EARLY TERMINATION BY BORROWERS..........................................................................42
4. CREATION OF SECURITY INTEREST..............................................................................43
4. CREATION OF SECURITY INTEREST..............................................................................43
4.1 GRANT OF SECURITY INTEREST..............................................................................43
4.2 NEGOTIABLE COLLATERAL...................................................................................43
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE COLLATERAL..................................43
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED...........................................................44
4.5 POWER OF ATTORNEY.......................................................................................44
4.6 RIGHT TO INSPECT........................................................................................45
4.7 CONTROL AGREEMENTS......................................................................................45
5. REPRESENTATIONS AND WARRANTIES.............................................................................45
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5. REPRESENTATIONS AND WARRANTIES.............................................................................45
5.1 NO ENCUMBRANCES.........................................................................................45
5.2 ELIGIBLE ACCOUNTS.......................................................................................45
5.3 INVENTORY...............................................................................................46
5.4 EQUIPMENT...............................................................................................47
5.5 LOCATION OF INVENTORY AND EQUIPMENT.....................................................................47
5.6 INVENTORY RECORDS.......................................................................................47
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN................................................................47
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES........................................................47
5.9 DUE AUTHORIZATION; NO CONFLICT..........................................................................48
5.10 LITIGATION...........................................................................................49
5.11 NO MATERIAL ADVERSE CHANGE...........................................................................49
5.12 FRAUDULENT TRANSFER..................................................................................49
5.13 EMPLOYEE BENEFITS....................................................................................49
5.14 ENVIRONMENTAL CONDITION..............................................................................49
5.15 BROKERAGE FEES.......................................................................................50
5.16 INTELLECTUAL PROPERTY................................................................................50
5.17 DISTRIBUTION.........................................................................................50
5.18 LEASES...............................................................................................51
5.19 DDAS.................................................................................................51
5.20 COMPLETE DISCLOSURE..................................................................................51
5.21 INDEBTEDNESS.........................................................................................52
5.22 LICENSING AGREEMENTS.................................................................................52
5.23 UNCERTIFICATED SECURITIES............................................................................52
6. AFFIRMATIVE COVENANTS......................................................................................52
6. AFFIRMATIVE COVENANTS......................................................................................52
6.1 ACCOUNTING SYSTEM.......................................................................................52
6.2 COLLATERAL REPORTING....................................................................................52
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.............................................................53
6.4 RETURN..................................................................................................56
6.5 MAINTENANCE OF PROPERTIES...............................................................................56
6.6 TAXES...................................................................................................56
6.7 INSURANCE...............................................................................................57
6.8 LOCATION OF INVENTORY AND EQUIPMENT.....................................................................57
6.9 ADDITIONAL PLEDGE AGREEMENTS............................................................................58
6.10 SUPPLEMENTAL COPYRIGHT SECURITY AGREEMENTS...........................................................58
6.11 SHARED SERVICES......................................................................................58
6.12 COMPLIANCE WITH LAWS.................................................................................58
6.13 LEASES...............................................................................................58
6.14 BROKERAGE COMMISSIONS................................................................................58
6.15 SIEBEL AGREEMENTS....................................................................................58
6.16 EXISTENCE............................................................................................59
6.17 ENVIRONMENTAL........................................................................................59
6.18 DISCLOSURE UPDATES...................................................................................59
7. NEGATIVE COVENANTS.........................................................................................60
7. NEGATIVE COVENANTS.........................................................................................60
7.1 INDEBTEDNESS............................................................................................60
7.2 LIENS...................................................................................................60
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.....................................................................60
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7.4 DISPOSAL OF ASSETS......................................................................................61
7.5 CHANGE NAME.............................................................................................61
7.6 GUARANTEE...............................................................................................61
7.7 NATURE OF BUSINESS......................................................................................61
7.8 PREPAYMENTS AND AMENDMENTS..............................................................................61
7.9 CHANGE OF CONTROL.......................................................................................61
7.10 CONSIGNMENTS.........................................................................................61
7.11 DISTRIBUTIONS........................................................................................62
7.12 ACCOUNTING METHODS...................................................................................62
7.13 INVESTMENTS..........................................................................................62
7.14 TRANSACTIONS WITH AFFILIATES.........................................................................62
7.15 SUSPENSION...........................................................................................63
7.16 COMPENSATION.........................................................................................63
7.17 USE OF PROCEEDS......................................................................................63
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND EQUIPMENT WITH BAILEES...................63
7.19 SECURITIES ACCOUNTS..................................................................................63
7.20 FINANCIAL COVENANTS..................................................................................63
7.21 AMENDMENT TO MATERIAL DOCUMENTS......................................................................65
7.22 DISTRIBUTION AGREEMENT...............................................................................65
8. EVENTS OF DEFAULT..........................................................................................65
8. EVENTS OF DEFAULT..........................................................................................65
9. THE LENDER'S RIGHTS AND REMEDIES...........................................................................67
9. THE LENDER'S RIGHTS AND REMEDIES...........................................................................67
9.1 RIGHTS AND REMEDIES.....................................................................................67
9.2 REMEDIES CUMULATIVE.....................................................................................69
10. TAXES AND EXPENSES.........................................................................................70
10. TAXES AND EXPENSES.........................................................................................70
11. WAIVERS; INDEMNIFICATION...................................................................................70
11. WAIVERS; INDEMNIFICATION...................................................................................70
11.1 DEMAND; PROTEST......................................................................................70
11.2 LENDER'S LIABILITY FOR COLLATERAL....................................................................70
11.3 INDEMNIFICATION......................................................................................70
12. NOTICES....................................................................................................71
12. NOTICES....................................................................................................71
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.................................................................72
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.................................................................72
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.................................................................74
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.................................................................74
14.1 ASSIGNMENTS AND PARTICIPATIONS.......................................................................74
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14.2 SUCCESSORS...........................................................................................76
15. AMENDMENTS; WAIVERS........................................................................................76
15. AMENDMENTS; WAIVERS........................................................................................76
15.1 AMENDMENTS AND WAIVERS...............................................................................76
15.2 NO WAIVERS; CUMULATIVE REMEDIES......................................................................76
16. GENERAL PROVISIONS.........................................................................................76
16. GENERAL PROVISIONS.........................................................................................76
16.1 EFFECTIVENESS........................................................................................76
16.2 SECTION HEADINGS.....................................................................................76
16.3 INTERPRETATION.......................................................................................77
16.4 SEVERABILITY OF PROVISIONS...........................................................................77
16.5 WITHHOLDING TAXES....................................................................................77
16.6 AMENDMENTS IN WRITING................................................................................77
16.7 COUNTERPARTS; TELEFACSIMILE EXECUTION................................................................77
16.8 REVIVAL AND REINSTATEMENT OF OBLIGATIONS.............................................................78
16.9 INTEGRATION..........................................................................................78
16.10 PARENT AS AGENT FOR BORROWERS........................................................................78
16.11 JUDGMENT CURRENCY....................................................................................79
16.12 DOLLAR EQUIVALENT COMPUTATIONS.......................................................................79
16.13 TIME IS OF THE ESSENCE...............................................................................80
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Borrowing Request
Exhibit B-1 Form of Borrowing Base Certificate
Exhibit C-1 Form of Copyright Compliance Certificate
Exhibit D-1 Form of Compliance Certificate
Schedule A-1 Authorized Persons
Schedule P-1 Permitted Liens
Schedule R-1 Real Property Collateral
Schedule 2.6(a) Cash Management Banks
Schedule 3.1(o) Material Agreements
Schedule 3.2(b) Leased Locations
Schedule 3.2(c) Post Closing Stock Certificates
Schedule 3.2(g) Post Closing Lien Searches
Schedule 5.5 Locations of Inventory and Equipment
Schedule 5.7 Chief Executive Office; FEIN
Schedule 5.8(b) Capitalization of Borrowers
Schedule 5.8(c) Capitalization of Borrowers' Subsidiaries
Schedule 5.10 Litigation
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.19 Demand Deposit Accounts
Schedule 5.21 Permitted Indebtedness
Schedule 5.22 Licensing Agreements
Schedule 5.23 Uncertificated Securities
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is
entered into as of April 27, 2001, among FOOTHILL CAPITAL CORPORATION, a
California corporation ("Lender"), SYNAVANT INC., a Delaware corporation
("PARENT"), and each of Parent's Subsidiaries identified on the signature pages
hereof (such Subsidiaries, together with Parent, are referred to hereinafter
each individually as a "BORROWER", and individually and collectively, jointly
and severally, as "BORROWERS").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall have
the following definitions:
"ACCOUNT DEBTOR" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account, chattel paper,
or a General Intangible.
"ACCOUNTS" means all of Borrowers' now owned or hereafter
acquired right, title, and interest with respect to "accounts" (as that term is
defined in the Code), and any and all supporting obligations in respect thereof.
"ADDITIONAL DOCUMENTS" has the meaning set forth in SECTION
4.4.
"ADMINISTRATIVE BORROWER" has the meaning set forth in SECTION
16.10.
"ADVANCES" has the meaning set forth in SECTION 2.1.
"AFFILIATE" means, as applied to any Person, any other Person
who, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; PROVIDED, HOWEVER, that, in any event: (a) any Person which owns
directly or indirectly 10% or more of the securities having ordinary voting
power for the election of directors or other members of the governing body of a
Person or 10% or more of the partnership or other ownership interests of a
Person (other than as a limited partner of such Person) shall be deemed to
control such Person; (b) each director (or comparable manager) of a Person shall
be deemed to be an Affiliate of such Person; and (c) each partnership or joint
venture in which a Person is a partner or joint venturer shall be deemed to be
an Affiliate of such Person.
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"AGREEMENT" has the meaning set forth in the preamble hereto.
"APPLICABLE PREPAYMENT PREMIUM" means, as of any date of
determination, an amount equal to (a) during the period of time from and after
the date of the execution and delivery of this Agreement up to the date that is
the first anniversary of the Closing Date, 5% TIMES the Maximum Revolver Amount,
(b) during the period of time from and including the date that is the first
anniversary of the Closing Date up to the date that is the second anniversary of
the Closing Date, 4% TIMES the Maximum Revolver Amount, (c) during the period of
time from and including the date of the second anniversary of the Closing Date
up to the date that is the third anniversary of the Closing Date, 3% TIMES the
Maximum Revolver Amount, (d) during the period of time from and including the
date that is the third anniversary of the Closing Date up to the date that is
the fourth anniversary of the Closing Date, 2% TIMES the Maximum Revolver
Amount, and (e) during the period of time from and including the date that is
the fourth anniversary of the Closing Date up to the Maturity Date, 1% TIMES the
Maximum Revolver Amount.
"ASSIGNEE" has the meaning set forth in SECTION 14.1(a).
"AUTHORIZED PERSON" means any officer or other authorized
employee of Administrative Borrower identified on SCHEDULE A-1 attached hereto,
by name, title, office location and telephone number.
"AVAILABILITY" means, as of any date of determination, if such
date is a Business Day, and determined at the close of business on the
immediately preceding Business Day, if such date of determination is not a
Business Day, the amount that Borrowers are entitled to borrow as Advances under
SECTION 2.1 (after giving effect to all then outstanding Obligations and all
sublimits and reserves applicable hereunder).
"BANKRUPTCY CODE" means the United States Bankruptcy Code, as
in effect from time to time.
"BASE RATE" means, the rate of interest announced within ▇▇▇▇▇
Fargo at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of ▇▇▇▇▇ Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publication or publications as ▇▇▇▇▇ Fargo may designate.
"BASE RATE LOAN" means each portion of an Advance that bears
interest at a rate determined by reference to the Base Rate.
"BASE RATE MARGIN" means one percentage point (1%).
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"BENEFIT PLAN" means a "defined benefit plan" (as defined in
SECTION 3(35) of ERISA) for which any Borrower or any Subsidiary or ERISA
Affiliate of any Borrower has been an "employer" (as defined in SECTION 3(5) of
ERISA) within the past six years.
"BOARD OF DIRECTORS" means the board of directors (or
comparable managers) of Parent or any committee thereof duly authorized to act
on behalf thereof.
"BOOKS" means all of each Borrower's now owned or hereafter
acquired books and records (including all of its Records indicating,
summarizing, or evidencing its assets (including the Collateral) or liabilities,
all of its Records relating to its business operations or financial condition,
and all of its goods or General Intangibles related to such information).
"BORROWER" and "BORROWERS" have the respective meanings set
forth in the preamble to this Agreement.
"BORROWING" means a borrowing hereunder consisting of an
Advance.
"BORROWING BASE" has the meaning set forth in SECTION 2.1.
"BORROWING BASE CERTIFICATE" means a certificate in the form
of EXHIBIT B-1.
"BUSINESS DAY" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close and,
with respect to determining the Dollar Equivalent of an amount denominated in a
currency other than Dollar, a day on which banks in the capital of the country
of such foreign currency are authorized or required to close.
"CAPITAL LEASE" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATION" means any Indebtedness
represented by obligations under a Capital Lease.
"CASH EQUIVALENTS" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or ▇▇▇▇▇'▇,
(c) commercial paper maturing no more than 1 year from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or ▇▇▇▇▇'▇, and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof either
(i) issued by any bank organized under the laws of the United
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States or any state thereof which bank has a rating of A or A2, or better,
from S&P or ▇▇▇▇▇'▇, or (ii) certificates of deposit less than or equal to
$100,000 in the aggregate issued by any other bank insured by the Federal
Deposit Insurance Corporation.
"CASH MANAGEMENT ACCOUNT" has the meaning set forth in SECTION
2.6(a).
"CASH MANAGEMENT AGREEMENTS" means those certain cash
management service agreements, in form and substance satisfactory to Lender,
each of which is among Administrative Borrower, Lender, and one of the Cash
Management Banks.
"CASH MANAGEMENT BANK" has the meaning set forth in SECTION
2.6(a).
"CHANGE OF CONTROL" means (a) any "person" or "group" (within
the meaning of Sections 13(d) and 14(d) of the Exchange Act), becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 30%, or more, of the Stock of Parent having the right to vote for
the election of members of the Board of Directors, or (b) a majority of the
members of the Board of Directors do not constitute Continuing Directors, or (c)
any Borrower ceases to directly own and control 100% of the outstanding capital
Stock of each of its Subsidiaries extant as of the Closing Date.
"CLOSING DATE" means the date on which Lender sends the
Administrative Borrower written notice that each of the conditions precedent set
forth in SECTION 3.1 either have been satisfied or have been waived.
"CLOSING DATE BUSINESS PLAN" means the set of Projections of
Borrowers for the 1 year period following the Closing Date (on a month by month
basis), in form and substance (including as to scope and underlying assumptions)
satisfactory to Lender.
"CODE" means the Georgia Uniform Commercial Code, as in effect
from time to time.
"COLLATERAL" means all of each Borrower's now owned or
hereafter acquired right, title, and interest in and to each of the following:
(a) Accounts,
(b) Books,
(c) Equipment,
(d) General Intangibles,
(e) Inventory,
(f) Investment Property,
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(g) Negotiable Collateral,
(h) Real Property Collateral,
(i) the Distribution Agreement and all other IMS
Health Agreements,
(j) money or other assets of each such Borrower that
now or hereafter come into the possession, custody, or control of Lender, and
(k) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all Accounts, Books, Equipment,
General Intangibles, Inventory, Investment Property, Negotiable Collateral,
Real Property, money, deposit accounts, or other tangible or intangible
property resulting from the sale, exchange, collection, or other disposition
of any of the foregoing, or any portion thereof or interest therein, and the
proceeds thereof.
Notwithstanding anything herein to the contrary, the Collateral shall not
include (i) any agreement with a third party that prohibits the grant of a Lien
on (but not merely the assignment of or of any interest in) such agreement or
any of the Borrowers' rights thereunder without the consent of such party or
under which a consent to such grant is otherwise required, which consent has not
been obtained, except to the extent rights under such agreement are covered by
Section 9-318 (or such equivalent section) of the Code, or (ii) any license,
permit or other governmental approval that, under the terms and conditions of
such governmental approval or under applicable law, cannot be subjected to a
Lien in favor of Lender without the consent of the relevant party which consent
has not been obtained; PROVIDED, HOWEVER, that the Collateral shall include all
items excluded pursuant to clause (i) or (ii) from and after the date on which
the requisite consent is obtained.
"COLLATERAL ACCESS AGREEMENT" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in the Equipment or Inventory, in each case, in form and
substance satisfactory to Lender.
"COLLECTIONS" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds) of Borrowers.
"COPYRIGHT COMPLIANCE CERTIFICATE" means a certificate
substantially in the form of EXHIBIT C-1 delivered by the chief financial
officer of Parent to Lender.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT D-1 delivered by the chief financial officer of Parent to
Lender.
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"CONTINUING DIRECTOR" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Parent on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Parent (as such terms are used in Rule 14a-11 under the
Exchange Act) and whose initial assumption of office resulted from such contest
or the settlement thereof.
"CONTROL AGREEMENT" means a control agreement, in form and
substance satisfactory to Lender, executed and delivered by the applicable
Borrower, Lender, and the applicable securities intermediary with respect to a
Securities Account or a bank with respect to a deposit account.
"COPYRIGHT SECURITY AGREEMENT" means a copyright security
agreement executed and delivered by any Borrower and Lender, the form and
substance of which is satisfactory to Lender.
"DAILY BALANCE" means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any checking or other demand deposit account
maintained by any Borrower.
"DEFAULT" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"DESIGNATED ACCOUNT" means the account of Administrative
Borrower maintained with the Designated Account Bank designated in writing by
Administrative Borrower to Lender, or such other deposit account of
Administrative Borrower (located within the United States) that is hereafter
designated as such, in writing, by Administrative Borrower to Lender.
"DESIGNATED ACCOUNT BANK" means the bank whose name, address
and ABA number is designated in writing to Lender no later than 14 days after
the Closing Date.
"DILUTION" means, as of any date of determination, a
percentage based upon the experience of the immediately prior 90 days, that is
the result of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, credits (other than a credit created from a re-▇▇▇▇ of
an original invoice if the date of the rebilled invoice is the same as the date
of the original invoice, unless the re-billed amount is less than the original
invoice amount, in which case the difference between the original invoice amount
and the rebilled amount will be included as a credit), or other dilutive items
with respect to the
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Accounts during such period, by (b) Borrowers' Collections with respect to
Accounts during such period (excluding extraordinary items) PLUS the Dollar
amount of clause (a). To the extent that any of the items described in the
foregoing clauses (a) and (b) are denominated in a currency other than
Dollars, the Dollar amount of such item shall be deemed to be the Dollar
Equivalent of such item.
"DILUTION RESERVE" means, as of any date of determination, an
amount sufficient to reduce the advance rate against Eligible Accounts, by one
percentage point for each percentage point by which Dilution is in excess of 5%.
"DISBURSEMENT LETTER" means an instructional letter executed
and delivered by Administrative Borrower to Lender regarding the extensions of
credit to be made on the Closing Date, the form and substance of which is
satisfactory to Lender.
"DISTRIBUTION" means the IMS Health spin-off of Parent
pursuant to the terms and conditions of the Distribution Agreement.
"DISTRIBUTION AGREEMENT" means that certain Distribution
Agreement dated as of August 31,2000, between IMS Health and Parent.
"DOLLAR" or " US $" shall mean the lawful currency of the
United States of America.
"DOLLAR EQUIVALENT" shall mean, with respect to any monetary
amount denominated in a currency other than Dollars, at any time for the
determination thereof, the amount of Dollars that would be required to convert
such foreign currency involved in such computation into Dollars at the spot rate
for the purchase of Dollars with the applicable foreign currency as quoted by
(i) the New York foreign exchange selling rates as of the date of determination
(or, if such day is not a Business Day, as of the immediately preceding Business
Day), as quoted in THE WALL STREET JOURNAL (Eastern Edition) under the "Currency
Trading -- Exchange Rates" or (ii) in the event such report shall not so appear,
the rate of exchange set forth for such date on the relevant Reuters currency
page, or (iii) in the event such rate of exchange shall not be so set forth, the
rate of exchange set forth in such other nationally recognized publication as
the Lender may, from time to time, designate to the Administrative Borrower in
writing.
"DUE DILIGENCE LETTER" means the due diligence letter sent by
Lender's counsel to Administrative Borrower, together with Administrative
Borrower's completed responses to the inquiries set forth therein, the form and
substance of such responses to be satisfactory to Lender.
"EBITDA" means, with respect to any fiscal period, Parent's
and its Subsidiaries consolidated net earnings (or loss), minus extraordinary
gains and foreign exchange gains plus extraordinary losses, foreign exchange
losses, interest expense, income
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taxes, and depreciation and amortization (including, amortization for costs
of licenses) for such period, as determined in accordance with GAAP.
"ELIGIBLE ACCOUNTS" means those Accounts created by one of
Borrowers in the ordinary course of its business, that arise out of its sale of
goods or rendition of services, that comply with each of the representations and
warranties respecting Eligible Accounts made by Borrowers under the Loan
Documents, and that are not excluded as ineligible by virtue of one or more of
the criteria set forth below; PROVIDED, HOWEVER, that such criteria may be fixed
and revised from time to time by Lender in Lender's Permitted Discretion to
address the results of any audit performed by Lender from time to time after the
Closing Date, including, without limitation, Lender's semi-annual review of
Borrowers' revenue streams derived from its recurring maintenance contracts. In
determining the amount to be included, Eligible Accounts shall be calculated net
of customer deposits and unapplied cash remitted to Borrowers. Eligible Accounts
shall not include the following:
(a) Accounts that the Account Debtor has failed
to pay within 90 days of original invoice date or Accounts with selling terms of
more than 30 days,
(b) Accounts owed by an Account Debtor where 50%
or more of all Accounts owed by that Account Debtor are deemed ineligible under
clause (a) above,
(c) Accounts with respect to which the Account
Debtor is an employee, Affiliate, or Lender of any Borrower,
(d) Accounts arising in a transaction wherein
goods are placed on consignment or are sold pursuant to a guaranteed sale, a
sale or return, a sale on approval, a ▇▇▇▇ and hold, or any other terms by
reason of which the payment by the Account Debtor may be conditional,
(e) Accounts that are not payable in Dollars,
(f) Accounts with respect to which the Account
Debtor either (i) does not maintain its chief executive office in the United
States, or (ii) is not organized under the laws of the United States, or any
state thereof (iii) is the government of any foreign country or sovereign state,
or of any state, province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other instrumentality
thereof, unless (y) the Account is supported by an irrevocable letter of credit
satisfactory to Lender (as to form, substance, and issuer or domestic confirming
bank) that has been delivered to Lender and is directly drawable by Lender, or
(z) the Account is covered by credit insurance in form, substance, and amount,
and by an insurer, satisfactory to Lender,
(g) Accounts with respect to which the Account
Debtor is either (i) the United States or any department, agency, or
instrumentality of such country (exclusive,
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however, of Accounts with respect to which the applicable Borrower has
complied, to the reasonable satisfaction of Lender, with the Assignment of
Claims Act, 31 USC Section 3727 (the "Assignment of Claims Act"), or (ii) any
state of the United States (exclusive, however, of (y) Accounts owed by any
such state that does not have a statutory counterpart to the Assignment of
Claims Act, or (z) Accounts owed by any such state that does have a statutory
counterpart to the Assignment of Claims Act, as to which the applicable
Borrower has complied to Lender's satisfaction),
(h) Accounts with respect to which (i) the
Account Debtor is a creditor of any Borrower, has or has asserted a right of
setoff, has disputed its liability, or has made any claim with respect to its
obligation to pay the Account, or (ii) ▇▇▇▇▇▇ is entitled to a fee or other
right of setoff under the ▇▇▇▇▇▇ Agreements, in either case, to the extent of
such fee, claim, right of setoff, or dispute,
(i) Accounts with respect to an Account Debtor
whose total obligations owing to Borrowers exceed 10% of all Eligible Accounts,
to the extent of the obligations owing by such Account Debtor in excess of such
percentage, other than Accounts for which the Account Debtor is either Pharmacia
Corporation, Novartis Pharmaceutical and Wyeth Ayerst Laboratory to the extent
that the Accounts owed by any one of the foregoing Account Debtors does not
exceed 25% of all Eligible Accounts and the Accounts owed by all of the
foregoing Account Debtors does not exceed 65% of all Eligible Accounts,
(j) Accounts with respect to which the Account
Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of
business, or as to which a Borrower has received notice of an imminent
Insolvency Proceeding or a material impairment of the financial condition of
such Account Debtor,
(k) Accounts with respect to which the Account
Debtor is located in the states of New Jersey, Minnesota, or West Virginia (or
any other state that requires a creditor to file a business activity report or
similar document in order to bring suit or otherwise enforce its remedies
against such Account Debtor in the courts or through any judicial process of
such state), unless the applicable Borrower has qualified to do business in New
Jersey, Minnesota, West Virginia, or such other states, or has filed a business
activities report with the applicable division of taxation, the department of
revenue, or with such other state, as appropriate, for the then-current year, or
is exempt from such filing requirement,
(l) Accounts, the collection of which, Lender,
in its Permitted Discretion, believes to be doubtful by reason of the Account
Debtor's financial condition,
(m) Accounts that are not subject to a valid and
perfected first priority Lender's Lien,
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(n) Accounts with respect to which (i) the goods
giving rise to such Account have not been shipped and billed to the Account
Debtor, or (ii) the services giving rise to such Account have not been performed
and billed to the Account Debtor,
(o) Accounts that represent the right to receive
progress payments or other advance ▇▇▇▇▇▇▇▇ that are due prior to the completion
of performance by the applicable Borrower of the subject contract for goods or
services, other than Accounts arising from services to be provided under
maintenance contracts in the aggregate amount not to exceed $5,000,000 in
Dollars, and
(p) Accounts that represent any pre-billed
postage payments.
"ENVIRONMENTAL ACTIONS" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of any Borrower or any predecessor in interest, (b) from adjoining
properties or businesses, or (c) from or onto any facilities which received
Hazardous Materials generated by any Borrower or any predecessor in interest.
"ENVIRONMENTAL LAW" means any applicable federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written policy or
rule of common law now or hereafter in effect and in each case as amended, or
any judicial or administrative interpretation thereof, including any judicial
or administrative order, consent decree or judgment, to the extent binding on
Borrowers, relating to the environment, employee health and safety, or
Hazardous Materials, including CERCLA; RCRA; the Federal Water Pollution
Control Act, 33 USC Section 1251 ET SEQ; the Toxic Substances Control Act, 15
USC, Section 2601 ET SEQ; the Clean Air Act, 42 USC Section 7401 ET SEQ.; the
Safe Drinking Water Act, 42 USC Section 3803 ET SEQ.; the Oil Pollution Act
of 1990, 33 USC Section 2701 ET SEQ.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 USC Section 11001 ET SEQ.; the
Hazardous Material Transportation Act, 49 USC Section 1801 ET SEQ.; and the
Occupational Safety and Health Act, 29 USC Section 651 ET SEQ. (to the extent
it regulates occupational exposure to Hazardous Materials); any state and
local or foreign counterparts or equivalents, in each case as amended from
time to time.
"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, or consultants
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
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"ENVIRONMENTAL LIEN" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"EQUIPMENT" means all of Borrowers' now owned or hereafter
acquired right, title, and interest with respect to equipment, machinery,
machine tools, motors, furniture, furnishings, fixtures, vehicles (including
motor vehicles), tools, parts, goods (other than consumer goods, farm products,
or Inventory), wherever located, including all attachments, accessories,
accessions, replacements, substitutions, additions, and improvements to any of
the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA AFFILIATE" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
a Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which a Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any Person subject to ERISA that is a party to an arrangement
with a Borrower and whose employees are aggregated with the employees of a
Borrower under IRC Section 414(o).
"EVENT OF DEFAULT" has the meaning set forth in SECTION 8.
"EXCESS AVAILABILITY" means the amount, as of the date any
determination thereof is to be made, equal to Availability MINUS the aggregate
amount, if any, of all trade payables of Borrowers aged in excess of their
historical levels with respect thereto and all book overdrafts in excess of
their historical practices with respect thereto, in each case as determined by
Lender in its Permitted Discretion.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
in effect from time to time.
"EXISTING LENDER" means ABN AMRO Bank N.V.
"FEE LETTER" means that certain fee letter, dated as of even
date herewith, between Borrowers and Lender, in form and substance satisfactory
to Lender.
"FEIN" means Federal Employer Identification Number.
"FUNDING DATE" means the date on which a Borrowing occurs.
"FUNDING LOSSES" has the meaning set forth in SECTION
2.13(b)(ii).
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"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"GENERAL INTANGIBLES" means all of Borrowers' now owned or
hereafter acquired right, title, and interest with respect to general
intangibles (including payment intangibles, contract rights, rights to payment,
rights arising under common law, statutes, or regulations, choses or things in
action, goodwill, patents, trade names, trademarks, servicemarks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports,
catalogs, money, deposit accounts, insurance premium rebates, tax refunds, and
tax refund claims), and any and all supporting obligations in respect thereof,
and any other personal property other than goods, Accounts, Investment Property,
and Negotiable Collateral.
"GOVERNING DOCUMENTS" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"GOVERNMENTAL AUTHORITY" means any federal, state, local, or
other governmental or administrative body (whether domestic or foreign),
instrumentality, department, or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body.
"HAZARDOUS MATERIALS" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"IMS HEALTH" means IMS Health Incorporated, a Delaware
corporation.
"IMS HEALTH AGREEMENTS" means, collectively, (i) the
Distribution Agreement, (ii) Xponent Data License Agreement, dated as of August
31, 2000, between IMS Health and the Parent, (iii) Tax Allocation Agreement,
dated as of August 31, 2000, between IMS Health and the Parent, (iv) all Shared
Transaction Services Agreements, dated as of August 31, 2000, between IMS Health
and the Parent, (v) Corporate Services Agreement, dated as of August 31, 2000,
between IMS Health and the Parent, (vi) Data and Telecommunications Services
Agreement, dated as of August 31, 2000, between IMS Health and the Parent, (vii)
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Cross License Agreement, dated as of August 31, 2000, between IMS Health and
the Parent, (viii) Information Services Agreement effective as of September
1, 2000, and (ix)Third Party Access Agreement, dated as of August 31, 2000,
between IMS Health and the Parent.
"IMS HEALTH COLLATERAL ASSIGNMENT" means the IMS Health
Collateral Assignment, dated as of the date hereof, between Parent and Lender,
as the same may be amended, modified, supplemented and restated from time to
time.
"INDEBTEDNESS" means (a) all obligations of a Borrower for
borrowed money, (b) all obligations of a Borrower evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations of a Borrower in respect of letters of credit, bankers acceptances,
interest rate swaps, or other financial products, (c) all obligations of a
Borrower under Capital Leases, (d) all obligations or liabilities of others
secured by a Lien on any asset of a Borrower, irrespective of whether such
obligation or liability is assumed, (e) all obligations of a Borrower for the
deferred purchase price of assets (other than trade debt incurred in the
ordinary course of a Borrower's business and repayable in accordance with
customary trade practices), and (f) any obligation of a Borrower guaranteeing or
intended to guarantee (whether directly or indirectly guaranteed, endorsed,
co-made, discounted, or sold with recourse to a Borrower) any obligation of any
other Person.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION
11.3.
"INDEMNIFIED PERSON" has the meaning set forth in SECTION
11.3.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, or any law relating to the relief
of debt, assignments for the benefit of creditors, formal or informal moratoria,
compositions, extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.
"INTANGIBLE ASSETS" means, with respect to any Person, that
portion of the book value of all of such Person's assets that would be treated
as intangibles under GAAP.
"INTERCOMPANY SUBORDINATION AGREEMENT" means a subordination
agreement executed and delivered by Borrowers and certain of their Subsidiaries
and Lender, dated as of the date hereof, as amended, restated, supplemented or
otherwise modified from time to time.
"INVENTORY" means all Borrowers' now owned or hereafter
acquired right, title, and interest with respect to inventory, including goods
held for sale or lease or to be furnished under a contract of service, goods
that are leased by a Borrower as lessor, goods that are furnished by a Borrower
under a contract of service, and raw materials, work in process, or materials
used or consumed in a Borrower's business.
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"INVESTMENT" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising from the
sale of goods or rendition of services in the ordinary course of business
consistent with past practice), purchases or other acquisitions for
consideration of Indebtedness or Stock, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"INVESTMENT PROPERTY" means all of Borrowers' now owned or
hereafter acquired right, title, and interest with respect to "investment
property" as that term is defined in the Code, and any and all supporting
obligations in respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.
"L/C" has the meaning set forth in SECTION 2.11(a).
"L/C DISBURSEMENT" means a payment made by Lender pursuant to
a Letter of Credit.
"L/C UNDERTAKING" has the meaning set forth in SECTION
2.11(a).
"LENDER" has the meaning set forth in the preamble to this
Agreement.
"LENDER'S ACCOUNT" means an account at a bank designated by
Lender from time to time as the account into which Borrowers shall make all
payments to Lender under this Agreement and the other Loan Documents; unless and
until Lender notifies Administrative Borrower to the contrary, Lender's Account
shall be that certain deposit account bearing account number 323-266193 and
maintained by Lender with The Chase Manhattan Bank, 4 New York Plaza, 15th
Floor, New York, New York 10004, ABA #▇▇▇▇▇▇▇▇▇.
"LENDER'S LIENS" means the Liens granted by Borrowers to
Lender under this Agreement or the other Loan Documents.
"LENDER EXPENSES" means all (a) costs or expenses (including
taxes, and insurance premiums) required to be paid by a Borrower under any of
the Loan Documents that are paid or incurred by Lender, (b) fees or charges paid
or incurred by Lender in connection with Lender's transactions with Borrowers,
including, fees or charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax lien,
litigation, and UCC searches and including searches with the patent and
trademark office, the copyright office, or the department of motor vehicles),
filing, recording, publication, appraisal (including periodic Collateral
appraisals or business
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valuations to the extent of the fees and charges (and up to the amount of any
limitation) contained in this Agreement, real estate surveys, real estate
title policies and endorsements, and environmental audits, (c) costs and
expenses incurred by Lender in the disbursement of funds to or for the
account of Borrowers (by wire transfer or otherwise), (d) charges paid or
incurred by Lender resulting from the dishonor of checks, (e) reasonable
costs and expenses paid or incurred by Lender to correct any default or
enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and expenses of
Lender related to audit examinations of the Books to the extent of the fees
and charges (and up to the amount of any limitation) contained in this
Agreement, (g) reasonable costs and expenses of third party claims or any
other suit paid or incurred by Lender in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan
Documents or Lender's relationship with any Borrower or any guarantor of the
Obligations, (h) Lender's reasonable fees and expenses (including attorneys'
fees) incurred in advising, structuring, drafting, reviewing, administering,
or amending the Loan Documents, and (i) Lender's reasonable fees and expenses
(including attorneys' fees) incurred in terminating, enforcing (including
attorneys' fees and expenses incurred in connection with a "workout," a
"restructuring," or an Insolvency Proceeding concerning any Borrower or in
exercising rights or remedies under the Loan Documents), or defending the
Loan Documents, irrespective of whether suit is brought, or in taking any
Remedial Action concerning the Collateral.
"LENDER-RELATED PERSON" means Lender, Lender's Affiliates, and
the officers, directors, employees, and agents of Lender.
"LETTER OF CREDIT" means an L/C or an L/C Undertaking, as the
context requires.
"LETTER OF CREDIT USAGE" means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters of Credit
PLUS 100% of the amount of outstanding time drafts accepted by an Underlying
Issuer as a result of drawings under Underlying Letters of Credit.
"LIEN" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset, whether
such interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
-15-
"LOAN ACCOUNT" has the meaning set forth in SECTION 2.9.
"LOAN DOCUMENTS" means this Agreement, the Cash Management
Agreements, the Control Agreements, any Copyright Security Agreement, the Due
Diligence Letter, the Fee Letter, the Letters of Credit, the Officers'
Certificate, the Pledge Agreements, the Trademark Security Agreement, the
Intercompany Subordination Agreement, the IMS Health Collateral Assignment, any
note or notes executed by a Borrower in connection with this Agreement and
payable to Lender, and any other agreement entered into, now or in the future,
by any Borrower and Lender in connection with this Agreement.
"MATERIAL ADVERSE CHANGE" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrowers taken as a whole,
(b) a material impairment of a Borrower's ability to perform its obligations
under the Loan Documents to which it is a party or of Lender's ability to
enforce the Obligations or realize upon the Collateral, or (c) a material
impairment of the enforceability or priority of the Lender's Liens with respect
to the Collateral as a result of an action or failure to act on the part of a
Borrower.
"MATURITY DATE" has the meaning set forth in SECTION 3.4.
"MAXIMUM REVOLVER AMOUNT" means $20,000,000.
"MORTGAGES" means, individually and collectively, one or more
mortgages, deeds of trust, deeds to secure debt, or such equivalent security
documents under the laws of the United States, executed and delivered by a
Borrower in favor of Lender, in form and substance satisfactory to Lender, that
encumber the Real Property Collateral and the related improvements thereto.
"NEGOTIABLE COLLATERAL" means all of Borrowers' now owned and
hereafter acquired right, title, and interest with respect to letters of credit,
letter of credit rights, instruments, promissory notes, drafts, documents, and
chattel paper (including electronic chattel paper and tangible chattel paper),
and any and all supporting obligations in respect thereof.
"NON-BORROWER SUBSIDIARY" means a Subsidiary of Parent that is
not a Borrower.
"OBLIGATIONS" means all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the Bankruptcy
Code, would have accrued), contingent reimbursement obligations with respect to
outstanding Letters of Credit, premiums, liabilities (including all amounts
charged to Borrowers' Loan Account pursuant hereto), obligations, fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Expenses (including any fees or expenses that, but for the provisions of the
Bankruptcy Code, would have accrued), lease payments, guaranties, covenants, and
duties of
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any kind and description owing by Borrowers to Lender pursuant to or
evidenced by the Loan Documents and irrespective of whether for the payment
of money, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and including all interest not
paid when due and all Lender Expenses that Borrowers are required to pay or
reimburse by the Loan Documents, by law, or otherwise. Any reference in this
Agreement or in the Loan Documents to the Obligations shall include all
amendments, changes, extensions, modifications, renewals replacements,
substitutions, and supplements, thereto and thereof, as applicable, both
prior and subsequent to any Insolvency Proceeding.
"OFFICERS' CERTIFICATE" means the representations and
warranties of officers form submitted by Lender to Administrative Borrower,
together with Borrowers' completed responses to the inquiries set forth therein,
the form and substance of such responses to be satisfactory to Lender.
"ORIGINATING LENDER" has the meaning set forth in SECTION
14.1(d).
"OVERADVANCE" has the meaning set forth in SECTION 2.5.
"PARTICIPANT" has the meaning set forth in SECTION 14.1(d).
"PARENT" has the meaning set forth in the preamble to this
Agreement.
"PAY-OFF LETTER" means a letter, in form and substance
satisfactory to Lender, from Existing Lender to Lender respecting the amount
necessary to repay in full all of the obligations of Borrowers owing to Existing
Lender and obtain a release of all of the Liens existing in favor of Existing
Lender in and to the assets of Borrowers.
"PERMITTED DISCRETION" means a determination made in good
faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment.
"PERMITTED DISPOSITIONS" means (a) sales or other dispositions
by Borrowers of Equipment that is substantially worn, damaged, or obsolete in
the ordinary course of the applicable Borrower's business, (b) sales by
Borrowers of Inventory to buyers in the ordinary course of business, (c) the use
or transfer of money or Cash Equivalents by Borrowers in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents, (d) the
licensing by Borrowers, on a non-exclusive basis, of patents, trademarks,
copyrights, and other intellectual property rights in the ordinary course of the
applicable Borrower's business, (e) the sale or transfer of certain lines of
business of Synavant Canada Ltd. and Synavant Australia Pty Ltd. pursuant to the
terms of the Distribution Agreement, and (f) the sale or transfer of (i) all
shares of stock of Permail Ltd., (ii) approximately 300,000 shares of Gartner
Group Inc. stock acquired by Parent pursuant to the terms of the Distribution
Agreement, and (iii) the Wilton Note acquired by Parent pursuant to the terms of
the Distribution Agreement; PROVIDED, HOWEVER, that for purposes of this clause
(f), (x) the net
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cash proceeds of such sales or transfers, other than the sale or transfer of
Permail Ltd., shall be deposited into Lender's Account and shall be used by
Lender to reduce the Obligations in accordance with the priorities set forth
in SECTION 2.3(b), but only if Advances are outstanding and then only to the
extent necessary to repay such Advances in accordance with such priorities,
(y) the Borrowers do not become liable, either directly or indirectly
(through the Tax Allocation Agreement, dated as of August 31, 2000, between
the Parent and IMS Health or otherwise), for any taxes of their own or of IMS
Health related to the spin-off of the Parent from IMS Health as a result of
such sales or transfers, and (z) no Default or Event of Default shall have
occurred and be continuing on the date of such sale or transfer, nor shall
either result from the making thereof.
"PERMITTED INVESTMENTS" means (a) investments in Cash
Equivalents, (b) investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, and (d) investments by any Borrower in any other Borrower
provided that if any such investment is in the form of Indebtedness, such
Indebtedness investment shall be subject to the terms and conditions of the
Intercompany Subordination Agreement.
"PERMITTED LIENS" means (a) Liens held by Lender, (b) Liens
for unpaid taxes that either (i) are not yet delinquent, or (ii) do not
constitute an Event of Default hereunder and are the subject of Permitted
Protests, (c) Liens set forth on SCHEDULE P-1, (d) the interests of lessors
under operating leases, (e) purchase money Liens or the interests of lessors
under Capital Leases to the extent that such Liens or interests secure Permitted
Purchase Money Indebtedness and so long as such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, (f) Liens arising by operation
of law in favor of warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of Borrowers' business
and not in connection with the borrowing of money, and which Liens either (i)
are for sums not yet delinquent, or (ii) are the subject of Permitted Protests,
(g) Liens arising from deposits made in connection with obtaining worker's
compensation or other unemployment insurance, (h) Liens or deposits to secure
performance of bids, tenders, or leases incurred in the ordinary course of
Borrowers' business and not in connection with the borrowing of money, (i) Liens
granted as security for surety or appeal bonds in connection with obtaining such
bonds in the ordinary course of Borrowers' business, (j) Liens resulting from
any judgment or award that is not an Event of Default hereunder, (k) Liens with
respect to the Real Property Collateral that are exceptions to the commitments
for title insurance issued in connection with the Mortgages, as accepted by
Lender, and (l) with respect to any Real Property that is not part of the Real
Property Collateral, easements, rights of way, and zoning restrictions that do
not materially interfere with or impair the use or operation thereof by
Borrowers.
"PERMITTED PROTEST" means the right of the applicable Borrower
to protest any Lien (other than any such Lien that secures the Obligations),
taxes (other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided
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that (a) a reserve with respect to such obligation is established on the
Books in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by the applicable Borrower in
good faith, and (c) Lender is satisfied that, while any such protest is
pending, there will be no impairment of the enforceability, validity, or
priority of any of the Lender's Liens.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" means, as of any date
of determination, Purchase Money Indebtedness incurred after the Closing Date in
an aggregate amount outstanding at any one time not in excess of $2,500,000.
"PERSON" means natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"PERSONAL PROPERTY COLLATERAL" means all Collateral other than
Real Property.
"PLEDGE AGREEMENTS" mean, collectively, (i) the US Pledge
Agreement, (ii) the share charge or other equivalent agreement, in form and
substance satisfactory to the Lender, executed and delivered after the Closing
Date, by and among certain of the Borrowers in favor of the Lender pledging
shares of stock or other equity interests in all Borrowers and their
Subsidiaries organized under the laws of the United Kingdom, and (iii) such
other pledge agreements, share charges and equivalent agreements executed by any
of the Borrowers or their Subsidiaries in favor of the Lender pursuant to
SECTION 3.2 or otherwise, in each case as amended, restated, supplemented or
otherwise modified from time to time.
"PROJECTIONS" means Parent's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
consistent basis with Parent's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 20 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
"REAL PROPERTY" means any estates or interests in real
property now owned or hereafter acquired by any Borrower and the improvements
thereto.
"REAL PROPERTY COLLATERAL" means the parcel or parcels of Real
Property identified on SCHEDULE R-1 and any Real Property hereafter acquired by
a Borrower.
"RECORD" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
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"REMEDIAL ACTION" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) 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, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC Section 9601.
"REPORT" has the meaning set forth in SECTION 16.17.
"RESERVE PERCENTAGE" means, on any day, for Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) 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 Lender, but so long as
Lender is not required or directed under applicable regulations to maintain such
reserves, the Reserve Percentage shall be zero.
"REVOLVER USAGE" means, as of any date of determination, the
sum of (a) the then extant amount of outstanding Advances, PLUS (b) the then
extant amount of the Letter of Credit Usage.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"SECURITIES ACCOUNT" means a "securities account" as that term
is defined in the Code.
"SHARED SERVICES" shall mean all services for management and
administration provided to Borrowers by IMS Health, or another service provider
satisfactory to Lender, including, without limitation: accounts payable,
payroll, payroll tax activities, sales and use tax compliance and research,
Escheat tax activities, accounting and maintenance of fixed assets, general
accounting activities (general ledger maintenance, account reconciliations, cash
concentration, bank activities and intercompany accounting), general corporate
accounting (trust activities, treasury activities), accounting system support,
other back-office processes and human resources services.
"SIEBEL" means Siebel Systems, Inc.
"SIEBEL AGREEMENTS" means, collectively, the (i) Value Added
Industry Remarketer Agreement, dated July 14, 2000, between Siebel and IMS
Health Strategic Technologies, Inc., (ii) Siebel Alliance Program Master
Agreement, dated July 14, 2000, between Siebel and IMS Health Strategic
Technologies, Inc., (iii) Software License and
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Services Agreement, dated July 14, 2000, and (iv) Master Preferred Escrow
Agreement, dated as of March 25, 1997, between Siebel and Data Securities
International, Inc.
"SIEBEL ESCROW AGREEMENT" means that certain Master Preferred
Escrow Agreement, dated as of March 26, 1997, among Data Securities
International, Inc., Siebel and any additional party joining thereto as a
preferred beneficiary, as the same may be amended, modified, supplemented and
restated from time to time.
"SOLVENT" means, with respect to any Person on a particular
date, that such Person is not insolvent (as such term is defined in the Uniform
Fraudulent Transfer Act).
"STOCK" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"SUBSIDIARY" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.
"SUPPLEMENTAL COPYRIGHT SECURITY AGREEMENT" means a
Supplemental Copyright Security Agreement executed and delivered by any Borrower
and Lender, the form and substance of which is satisfactory to Lender
"TANGIBLE NET WORTH" means, as of any date of determination,
the result of (a) the total stockholder's equity of Parent and its Subsidiaries,
MINUS (b) the sum of (i) all Intangible Assets of Parent and its Subsidiaries,
(ii) all of Parent's and its Subsidiaries' prepaid expenses, and (iii) all
amounts due to Parent and its Subsidiaries from Affiliates, in each case on a
consolidated basis.
"TAXES" has the meaning set forth in SECTION 16.5.
"TRADEMARK SECURITY AGREEMENT" means a trademark security
agreement executed and delivered by each Borrower and Lender, the form and
substance of which is satisfactory to Lender.
"UNDERLYING ISSUER" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of Lender for the benefit of Borrowers.
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"UNDERLYING LETTER OF CREDIT" means a letter of credit that
has been issued by an Underlying Issuer.
"US PLEDGE AGREEMENT" means that certain Pledge Agreement,
dated as of the date hereof, by and among each Borrower that owns an equity
interest in any Subsidiary of the Parent.
"VOIDABLE TRANSFER" has the meaning set forth in SECTION 16.8.
"▇▇▇▇▇ FARGO" means ▇▇▇▇▇ Fargo Bank, National Association, a
national banking association.
"WILTON NOTE" means the promissory note issued by DIV WILDEV,
LLC to IMS Health.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrowers" or the term "Parent" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to
include such Person's successors and assigns. Any requirement of a writing
contained herein or in the other Loan Documents shall be satisfied by the
transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
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1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
1.6 ATTORNEYS' FEES. Any reference in this Agreement to "attorneys' fees"
shall mean reasonable attorneys' fees actually incurred and not based upon a
percentage of the debt owed by the Borrowers under the Loan Documents and
without giving effect to any statutory presumptions.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, Lender agrees to make advances ("ADVANCES")
to Borrowers in an amount at any one time outstanding not to exceed an amount
equal to THE LESSER OF (i) the Maximum Revolver Amount, LESS the Letter of
Credit Usage, or (ii) the Borrowing Base LESS the Letter of Credit Usage. For
purposes of this Agreement, "BORROWING BASE," as of any date of determination,
shall mean the result of:
(x) THE LESSER OF
(a) (i) 85% of the sum of
the aggregate Dollar amount of Eligible
Accounts, LESS (ii) the amount, if any, of
the Dilution Reserve, and
(b) an amount equal to
Borrowers' Collections with respect to
Accounts for 75 days based upon the average
Collections per day over the immediately
preceding 90-day period, MINUS
(y) the aggregate amount of reserves, if any,
established by Lender under Section 2.1(b).
(b) Anything to the contrary in this Section 2.1
notwithstanding, Lender shall have the right to establish reserves in such
amounts, and with respect to such matters, as Lender in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base, including
reserves with respect to (i) sums that Borrowers are required to pay (such as
taxes, assessments, insurance premiums, or, in the case of leased assets, rents
or other amounts payable under such leases) and has failed to pay under any
Section of this Agreement or any other Loan Document, (ii) amounts owing by
Borrowers to any Person to the extent secured by a Lien on, or trust over, any
of the Collateral (other than any existing Permitted Lien set forth on SCHEDULE
P-1 which is specifically identified thereon as entitled to have priority over
the Lender's Liens), which Lien or trust, in the Permitted Discretion of Lender
likely would have a priority superior to the Lender's Liens (such as Liens or
trusts in
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favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers,
or suppliers, or Liens or trusts for AD VALOREM, excise, sales, or other
taxes where given priority under applicable law) in and to such item of the
Collateral, (iii) the potential devaluation of any foreign currency in which
a Letter of Credit has been denominated, against the Dollar, (iv) amounts to
replace the licensing agreements of any Borrower described on SCHEDULE 5.22,
and (v) any tax liabilities imposed on any of the Borrowers, whether incurred
or arising in connection with the spin-off of the Parent from IMS Health, the
Distribution Agreement or any other IMS Health Agreement, or otherwise. In
addition, a $5,000,000 reserve against the Borrowing Base shall also be
applied unless and until Lender otherwise agrees in writing. Lender shall
have no obligation to make additional Advances hereunder to the extent such
additional Advances would cause the Revolver Usage to exceed the Maximum
Revolver Amount.
(c) Amounts borrowed pursuant to this Section may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed at any time
during the term of this Agreement.
2.2 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made by a
written notice request by an Authorized Person delivered to Lender in the form
of EXHIBIT A-1 (which notice must be received by Lender no later than 10:00 a.m.
(California time) on the Business Day that is the requested Funding Date
specifying (i) the amount of such Borrowing, and (ii) the requested Funding
Date, which shall be a Business Day. At Lender's election, any Authorized Person
may also give Lender telephonic notice of such request by the required time,
with such telephonic notice to be confirmed in writing within 24 hours of the
giving of such notice in the form of EXHIBIT A-1.
(b) MAKING OF ADVANCES. If Lender has received a timely request
for a Borrowing in accordance with the provisions hereof, and subject to the
satisfaction of the applicable terms and conditions set forth herein, Lender
shall make the proceeds of such Advance available to Borrowers on the applicable
Funding Date by transferring available funds equal to such proceeds to
Administrative Borrower's Designated Account.
2.3 PAYMENTS.
(a) PAYMENTS BY BORROWERS. (i) Except as otherwise expressly
provided herein, all payments by Borrowers shall be made to Lender's
Account and shall be made in immediately available funds, no later
than 11:00 a.m. (California time) on the date specified herein. Any
payment received by Lender later than 11:00 a.m. (California time),
shall be deemed to have been received on the following Business Day
and any applicable interest or fee shall continue to accrue until such
following Business Day.
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(b) APPLICATION, AND REVERSAL OF PAYMENTS.
(i) All payments shall be remitted to Lender and all such
payments (other than payments received while no Default or Event of
Default has occurred and is continuing and which relate to the payment
of principal or interest of specific Obligations or which relate to
the payment of specific fees), and all proceeds of Accounts or other
Collateral received by Lender, shall be applied as follows:
A. FIRST, to pay any Lender Expenses then due to
Lender under the Loan Documents, until paid in full,
B. SECOND, to pay any fees then due to Lender
under the Loan Documents until paid in full,
C. THIRD, to pay interest due in respect of
Advances until paid in full,
D. FOURTH, to pay the principal of all Advances
until paid in full,
E. FIFTH, if an Event of Default has occurred and
is continuing, to be held by Lender, as cash collateral in
an amount up to 105% of the then extant Letter of Credit
Usage until paid in full,
F. SIXTH, to pay any other Obligations until paid
in full, and
G. SEVENTH, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto
under applicable law.
(ii) In each instance, so long as no Default or Event of
Default has occurred and is continuing, SECTION 2.3(b) shall not be
deemed to apply to any payment by Borrowers specified by Borrowers
to be for the payment of specific Obligations then due and payable
(or prepayable) under any provision of this Agreement.
(iii) For purposes of the foregoing, "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, whether or not the
same would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.
(iv) In the event of a direct conflict between the priority
provisions of this SECTION 2.3 and other provisions contained in any
other Loan
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Document, it is the intention of the parties hereto that 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 2.3 shall control and govern.
2.4 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations owed by Borrowers to Lender pursuant to SECTIONS 2.1 AND 2.11 is
greater than either the Dollar or percentage limitations set forth in SECTIONS
2.1 OR 2.11, (an "OVERADVANCE"), Borrowers immediately shall pay to Lender, in
cash, the amount of such excess, which amount shall be used by Lender to reduce
the Obligations in accordance with the priorities set forth in SECTION 2.3(b).
In addition, Borrowers hereby promise to pay the Obligations (including
principal, interest, fees, costs, and expenses) in Dollars in full to Lender as
and when due and payable under the terms of this Agreement and the other Loan
Documents.
2.5 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c) below, all
Obligations (except for undrawn Letters of Credit) that have been charged to
the Loan Account pursuant to the terms hereof shall bear interest on the
Daily Balance thereof at a per annum rate equal to the Base Rate plus the
Base Rate Margin.
(b) LETTER OF CREDIT FEE. Borrowers shall pay Lender a Letter of
Credit fee (in addition to the charges, commissions, fees, and costs set
forth in SECTION 2.11(e)) which shall accrue at a rate equal to 2.50% per
annum times the Daily Balance of the undrawn amount of all outstanding
Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the continuation
of an Event of Default,
(i) all Obligations (except for undrawn Letters of
Credit) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof at
a per annum rate equal to 4 percentage points (4%) above the per
annum rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for above shall be
increased to 4 percentage points (4%) above the per annum rate
otherwise applicable hereunder.
(d) PAYMENT. Interest, Letter of Credit fees, and all other fees
payable hereunder shall be due and payable, in arrears, on the first day of
each month at any time that Obligations or obligation to extend credit
hereunder are outstanding. Borrowers hereby
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authorize Lender, from time to time, without prior notice to Borrowers, to
charge such interest and fees, all Lender Expenses (as and when incurred),
the charges, commissions, fees, and costs provided for in SECTION 2.11(e) (as
and when accrued or incurred), the fees and costs provided for in SECTION
2.10 (as and when accrued or incurred), and all other payments as and when
due and payable under any Loan Document to Borrowers' Loan Account, which
amounts thereafter constitute Advances hereunder and shall accrue interest at
the rate then applicable to Advances hereunder; PROVIDED, HOWEVER, that if no
Advances are outstanding, Lender agrees that it will notify the
Administrative Borrower by e-mail of the amount of fees due under SECTION 2.7
and Section 2.10(a) and (b) for the immediately preceding month and will
permit the Borrowers to pay such fees directly to Lender rather than charging
the Borrowers' Loan Account for such fees so long as Lender receives such
fees no later than 11:00 a.m. (California time) on the second business day
after receipt of such notice, after which Lender shall charge such fees to
the Borrowers' Loan Account; PROVIDED, FURTHER, HOWEVER, that if no Advances
are outstanding, Lender agrees that it will provide the Administrative
Borrower with notice of any Lender Expenses due and payable and will permit
the Borrowers to pay such Lender Expenses directly to Lender rather than
charging the Borrowers' Loan Account for such Lender Expenses so long as
Lender receives payment of such Lender Expenses no later than 11:00 a.m.
(California time) on the second business day immediately following the date
of such notice, after which Lender shall charge such Lender Expenses to the
Borrowers' Loan Account. Any interest not paid when due shall be compounded
by being charged to Borrowers' Loan Account and shall thereafter constitute
Advances hereunder and shall accrue interest at the rate then applicable to
Advances that are Base Rate Loans hereunder.
(e) COMPUTATION. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual
number of days elapsed. In the event the Base Rate is changed from time to
time hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount
equal to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event
shall the interest rate or rates payable under this Agreement, plus any other
amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrowers and Lender, in executing and
delivering this Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated within it; PROVIDED, HOWEVER, that,
anything contained herein to the contrary notwithstanding, if said rate or
rates of interest or manner of payment exceeds the maximum allowable under
applicable law, then, IPSO FACTO, as of the date of this Agreement, Borrowers
are and shall be liable only for the payment of such maximum as allowed by
law, and payment received from Borrowers in excess of such legal maximum,
whenever received, shall be applied to reduce the principal balance of the
Obligations to the extent of such excess.
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2.6 CASH MANAGEMENT.
(a) Borrowers shall (i) establish and maintain cash management
services of a type and on terms satisfactory to Lender at one or more of the
banks set forth on SCHEDULE 2.6(a) (each a "CASH MANAGEMENT Bank"), and shall
request in writing and otherwise take such reasonable steps to ensure that
all of its Account Debtors forward payment of the amounts owed by them
directly to such Cash Management Bank, and (ii) deposit or cause to be
deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all Collections (including those sent
directly by Account Debtors to a Cash Management Bank) into a bank account in
Lender's name (a "CASH MANAGEMENT ACCOUNT") at one of the Cash Management
Banks.
(b) Each Cash Management Bank shall establish and maintain Cash
Management Agreements with Lender and Borrowers, in form and substance
acceptable to Lender. Each such Cash Management Agreement shall provide,
among other things, that (i) all items of payment deposited in such Cash
Management Account and proceeds thereof are held by such Cash Management Bank
Lender or bailee-in-possession for Lender, (ii) the Cash Management Bank has
no rights of setoff or recoupment or any other claim against the applicable
Cash Management Account, other than for payment of its service fees and other
charges directly related to the administration of such Cash Management
Account and for returned checks or other items of payment, and (iii) upon
receipt of instructions from Lender or Parent, it immediately will forward by
daily sweep all amounts in the applicable Cash Management Account to the
Lender's Account, until further notified by Lender (the "Stop Sweep Notice").
(c) Lender shall provide a Stop Sweep Notice to any Cash Management
Bank upon the Administrative Borrower's request; provided that no Advances
are outstanding and no Default or Event of Default has occurred and is
continuing.
(d) So long as no Default or Event of Default has occurred and is
continuing, Administrative Borrower may amend SCHEDULE 2.6(a) to add or
replace a Cash Management Account Bank or Cash Management Account; PROVIDED,
HOWEVER, that (i) such prospective Cash Management Bank shall be satisfactory
to Lender and Lender shall have consented in writing in advance to the
opening of such Cash Management Account with the prospective Cash Management
Bank, and (ii) prior to the time of the opening of such Cash Management
Account, Borrowers and such prospective Cash Management Bank shall have
executed and delivered to Lender a Cash Management Agreement. Borrowers shall
close any of their Cash Management Accounts (and establish replacement cash
management accounts in accordance with the foregoing sentence) promptly and
in any event within 30 days of notice from Lender that the creditworthiness
of any Cash Management Bank is no longer acceptable in Lender's reasonable
judgment, or as promptly as practicable and in any event within 60 days of
notice from Lender that the operating performance, funds transfer, or
availability procedures or performance of the Cash Management Bank with
respect to Cash
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Management Accounts or Lender's liability under any Cash Management Agreement
with such Cash Management Bank is no longer acceptable in Lender's reasonable
judgment.
(e) The Cash Management Accounts shall be cash collateral accounts,
with all cash, checks and similar items of payment in such accounts securing
payment of the Obligations, and in which Borrowers are hereby deemed to have
granted a Lien to Lender.
2.7 CREDITING PAYMENTS; FLOAT CHARGE. The receipt of any payment item by
Lender (whether from transfers to Lender by the Cash Management Banks pursuant
to the Cash Management Agreements or otherwise) shall not be considered a
payment on account unless such payment item is a wire transfer of immediately
available federal funds made to the Lender's Account or unless and until such
payment item is honored when presented for payment. Should any payment item not
be honored when presented for payment, then Borrowers shall be deemed not to
have made such payment and interest shall be calculated accordingly. Anything to
the contrary contained herein notwithstanding, any payment item shall be deemed
received by Lender only if it is received into the Lender's Account on a
Business Day on or before 11:00 a.m. (California time). If any payment item is
received into the Lender's Account on a non-Business Day or after 11:00 a.m.
(California time) on a Business Day, it shall be deemed to have been received by
Lender as of the opening of business on the immediately following Business Day.
From and after the Closing Date, Lender shall be entitled to charge Borrowers
for two (2) Business Days of `clearance' or `float' at the rate applicable to
Base Rate Loans under SECTION 2.5 on all Collections that are received by
Borrowers (regardless of whether forwarded by the Cash Management Banks to
Lender). This across-the-board two (2) Business Day clearance or float charge on
all Collections is acknowledged by the parties to constitute an integral aspect
of the pricing of the financing of Borrowers and shall apply irrespective of
whether or not there are any outstanding monetary Obligations; the effect of
such clearance or float charge being the equivalent of charging two (2) Business
Days of interest on such Collections.
2.8 DESIGNATED ACCOUNT. Lender is authorized to make the Advances, and
Lender is authorized to issue the Letters of Credit, under this Agreement based
upon telephonic or other instructions received from anyone purporting to be an
Authorized Person, or without instructions if pursuant to SECTION 2.5(d).
Administrative Borrower agrees to establish and maintain the Designated Account
with the Designated Account Bank for the purpose of receiving the proceeds of
the Advances requested by Borrowers and made by Lender hereunder. Unless
otherwise agreed by Lender and Administrative Borrower, any Advance requested by
Borrowers and made by Lender hereunder shall be made to the Designated Account.
2.9 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Lender shall
maintain an account on its books in the name of Borrowers (the "LOAN ACCOUNT")
on which Borrowers will be charged with all Advances made by Lender to Borrowers
or for Borrowers' account, the Letters of Credit issued by Lender for Borrowers'
account, and with
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all other payment Obligations hereunder or under the other Loan Documents,
including, accrued interest, fees and expenses, and Lender Expenses. In
accordance with SECTION 2.7, the Loan Account will be credited with all
payments received by Lender from Borrowers or for Borrowers' account,
including all amounts received in the Lender's Account from any Cash
Management Bank. Lender shall render statements regarding the Loan Account to
Administrative Borrower, including principal, interest, fees, and including
an itemization of all charges and expenses constituting Lender Expenses
owing, and such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Borrowers and Lender
unless, within 30 days after receipt thereof by Administrative Borrower,
Administrative Borrower shall deliver to Lender written objection thereto
describing the error or errors contained in any such statements.
2.10 FEES. Borrowers shall pay to Lender the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter):
(a) UNUSED LINE FEE. During the term of this Agreement on the first
day of each month, an unused line fee in the amount equal to 0.25% per annum
times the result of (a) the Maximum Revolver Amount, less (b) the sum of (i)
the average Daily Balance of Advances that were outstanding during the
immediately preceding month, plus (ii) the average Daily Balance of the
Letter of Credit Usage during the immediately preceding month,
(b) FEE LETTER FEES. As and when due and payable under the terms
of the Fee Letter, Borrowers shall pay to Lender the fees set forth in the
Fee Letter, and
(c) AUDIT, APPRAISAL, AND VALUATION CHARGES. Audit, appraisal, and
valuation fees and charges as follows, (i) a fee of $850 pay day, per
auditor, plus out-of-pocket expenses for each financial audit of a Borrower
performed by personnel employed by Lender, (ii) if implemented, a one time
charge of $3,000 plus out-of-pocket expenses for expenses for the
establishment of electronic collateral reporting systems, (iii) actual costs
and out-of-pocket expenses incurred by each appraiser for each appraisal of
the Collateral performed by personnel employed by Lender, and (iv) the actual
charges paid or incurred by Lender if it elects to employ the services of one
or more third Persons to perform financial audits of Borrowers, to appraise
the Collateral, or any portion thereof, or to assess a Borrower's business
valuation; provided, however, that the number of (x) audits performed shall
be limited to quarterly audits and (y) appraisals performed shall be limited
to two appraisals per year; provided, that if there is any material adverse
change in the pharmaceutical industry or the pharmaceutical software
industry, Lender shall have the right to a third appraisal per year;
provided, further, if any Default or Event of Default has occurred and is
existing, the number of audits and appraisals performed shall be as often as
Lender deems necessary.
2.11 LETTERS OF CREDIT
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(a) Subject to the terms and conditions of this Agreement, Lender
agrees to issue letters of credit for the account of Borrowers (each, an
"L/C") or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, an "L/C UNDERTAKING") with respect to
letters of credit issued by an Underlying Issuer (as of the Closing Date, the
prospective Underlying Issuer is to be ▇▇▇▇▇ Fargo) for the account of
Borrowers. To request the issuance of an L/C or an L/C Undertaking (or the
amendment, renewal, or extension of an outstanding L/C or L/C Undertaking),
Administrative Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by
Lender) to Lender and Lender (reasonably in advance of the requested date of
issuance, amendment, renewal, or extension) a notice requesting the issuance
of an L/C or L/C Undertaking, or identifying the L/C or L/C Undertaking to be
amended, renewed, or extended, the date of issuance, amendment, renewal, or
extension, the date on which such L/C or L/C Undertaking is to expire, the
amount of such L/C or L/C Undertaking, the name and address of the
beneficiary thereof (or of the Underlying Letter of Credit, as applicable),
and such other information as shall be necessary to prepare, amend, renew, or
extend such L/C or L/C Undertaking. If requested by Lender, Borrowers also
shall be an applicant under the application with respect to any Underlying
Letter of Credit that is to be the subject of an L/C Undertaking. Lender
shall have no obligation to issue a Letter of Credit if any of the following
would result after giving effect to the requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the
Borrowing Base LESS the amount of outstanding Advances, or
(ii) the Letter of Credit Usage would exceed $5,000,000, or
(iii) the Letter of Credit Usage would exceed the Maximum
Revolver Amount LESS the then extant amount of outstanding Advances.
(b) Borrowers and Lender acknowledge and agree that certain
Underlying Letters of Credit may be issued to support letters of credit that
already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall have an expiry date no later
than 30 days prior to the Maturity Date and all such Letters of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to Lender (in the exercise of its Permitted Discretion), including
the requirement that the amounts payable thereunder must be payable in
Dollars, Euros, Canadian Dollars, Yen or other foreign currencies in which
Lender determines in its Permitted Discretion there is a liquid market for
exchanging such currency in Dollars. If Lender is obligated to advance funds
under a Letter of Credit, Borrowers immediately shall reimburse such L/C
Disbursement to Lender by paying to Lender an amount equal to such L/C
Disbursement not later than 11:00 a.m., California time, on the date that
such L/C Disbursement is made, if Administrative Borrower shall have received
written or telephonic notice of such L/C Disbursement prior to 10:00 a.m.,
California time, on such date, or, if
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such notice has not been received by Administrative Borrower prior to such
time on such date, then not later than 11:00 a.m., California time, on (i)
the Business Day that Administrative Borrower receives such notice, if such
notice is received prior to 10:00 a.m., California time, on the date of
receipt, and, in the absence of such reimbursement, the L/C Disbursement
immediately and automatically shall be deemed to be an Advance hereunder and,
thereafter, shall bear interest at the rate then applicable to Advances that
are Base Rate Loans under SECTION 2.5. To the extent an L/C Disbursement is
deemed to be an Advance hereunder, Borrowers' obligation to reimburse such
L/C Disbursement shall be discharged and replaced by the resulting Advance.
(c) Each Borrower hereby agrees to indemnify, save, defend, and
hold Lender harmless from any loss, cost, expense, or liability, and
attorneys' fees incurred by Lender arising out of or in connection with any
Letter of Credit; PROVIDED, HOWEVER, that no Borrower shall be obligated
hereunder to indemnify for any loss, cost, expense, or liability that is
caused by the gross negligence or willful misconduct of Lender. Each Borrower
agrees to be bound by the Underlying Issuer's regulations and interpretations
of any Underlying Letter of Credit or by Lender's interpretations of any L/C
issued by Lender to or for such Borrower's account, even though this
interpretation may be different from such Borrower's own, and each Borrower
understands and agrees that Lender shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrowers' instructions or those contained in the Letter of Credit or any
modifications, amendments, or supplements thereto. Each Borrower understands
that the L/C Undertakings may require Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify,
save, defend, and hold Lender harmless with respect to any loss, cost,
expense (including attorneys' fees), or liability incurred by Lender under
any L/C Undertaking as a result of Lender's indemnification of any Underlying
Issuer; PROVIDED, HOWEVER, that no Borrower shall be obligated hereunder to
indemnify for any loss, cost, expense, or liability that is caused by the
gross negligence or willful misconduct of Lender.
(d) Each Borrower hereby authorizes and directs any Underlying
Issuer to deliver to Lender all instruments, documents, and other writings
and property received by such Underlying Issuer pursuant to such Underlying
Letter of Credit and to accept and rely upon Lender's instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.
(e) Any and all charges, commissions, fees, and costs incurred by
Lender relating to Underlying Letters of Credit shall be Lender Expenses for
purposes of this Agreement and immediately shall be reimbursable by Borrowers
to Lender for the account of Lender; it being acknowledged and agreed by each
Borrower that, as of the Closing Date, the issuance charge imposed by the
prospective Underlying Issuer is .825% per annum times the face amount of
each Underlying Letter of Credit, that such issuance charge may be changed
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from time to time, and that the Underlying Issuer also imposes a schedule of
charges for amendments, extensions, drawings, and renewals.
(f) If by reason of (i) any change in any applicable law, treaty,
rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying
Issuer or Lender with any direction, request, or requirement (irrespective of
whether having the force of law) of any Governmental Authority or monetary
authority including, Regulation D of the Federal Reserve Board as from time
to time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued hereunder,
or
(ii) there shall be imposed on the Underlying Issuer or Lender any
other condition regarding any Underlying Letter of Credit or any Letter
of Credit issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to Lender of issuing, making, guaranteeing, or maintaining any Letter of Credit
or to reduce the amount receivable in respect thereof by Lender, then, and in
any such case, Lender may, at any time within a reasonable period after the
additional cost is incurred or the amount received is reduced, notify
Administrative Borrower, and Borrowers shall pay on demand such amounts as
Lender may specify to be necessary to compensate Lender for such additional cost
or reduced receipt, together with interest on such amount from the date of such
demand until payment in full thereof at the rate then applicable to Base Rate
Loans hereunder. The determination by Lender of any amount due pursuant to this
SECTION 2.11, as set forth in a certificate setting forth the calculation
thereof in reasonable detail, shall, in the absence of manifest or demonstrable
error, be final and conclusive and binding on all of the parties hereto.
2.12 CAPITAL REQUIREMENTS. If, after the date hereof, Lender determines that
(i) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by Lender
or its parent bank holding company with any guideline, request or directive of
any such entity regarding capital adequacy (whether or not having the force of
law), the effect of reducing the return on Lender's or such holding company's
capital as a consequence of Lender's obligations hereunder to a level below that
which Lender or such holding company could have achieved but for such adoption,
change, or compliance (taking into consideration Lender's or such holding
company's then existing policies with respect to capital adequacy and assuming
the full utilization of such entity's capital) by any amount deemed by Lender to
be material, then Lender may notify Administrative Borrower thereof. Following
receipt of such notice, Borrowers agree to pay Lender on demand the amount of
such reduction of return of capital as and when such reduction is determined,
payable within
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90 days after presentation by Lender of a statement in the amount and setting
forth in reasonable detail Lender's calculation thereof and the assumptions
upon which such calculation was based (which statement shall be deemed true
and correct absent manifest error). In determining such amount, Lender may
use any reasonable averaging and attribution methods.
2.13 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each of Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by Lender under this Agreement, for
the mutual benefit, directly and indirectly, of each of Borrowers and in
consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.
(b) Each of Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrowers, with respect to the
payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this SECTION 2.13), it being the
intention of the parties hereto that all the Obligations shall be the joint
and several obligations of each of the Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Borrowers will make such payment with respect to,
or perform, such Obligation.
(d) The Obligations of each Borrower under the provisions of this
SECTION 2.13 constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each such Borrower to the
full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other circumstances
whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each
Borrower hereby waives notice of acceptance of its joint and several
liability, notice of any Advances or Letters of Credit issued under or
pursuant to this Agreement, notice of the occurrence of any Default, Event of
Default, or of any demand for any payment under this Agreement, notice of any
action at any time taken or omitted by Lender under or in respect of any of
the Obligations, any requirement of diligence or to mitigate damages and,
generally, to the extent permitted by applicable law, all demands, notices
and other formalities of every kind in connection with this Agreement (except
as otherwise provided in this Agreement). Each Borrower hereby assents to,
and waives notice of, any extension or postponement of the time for the
payment of any of the Obligations, the acceptance of any payment of any of
the Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by Lender at any time or times in
respect of
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any default by any Borrower in the performance or satisfaction of any
term, covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Lender in respect of any of the Obligations, and
the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower. Without
limiting the generality of the foregoing, each of Borrowers assents to any
other action or delay in acting or failure to act on the part of Lender with
respect to the failure by any Borrower to comply with any of its respective
Obligations, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully
with applicable laws or regulations thereunder, which might, but for the
provisions of this SECTION 2.13 afford grounds for terminating, discharging
or relieving any Borrower, in whole or in part, from any of its Obligations
under this SECTION 2.13, it being the intention of each Borrower that, so
long as any of the Obligations hereunder remain unsatisfied, the Obligations
of such Borrower under this SECTION 2.13 shall not be discharged except by
performance and then only to the extent of such performance. The Obligations
of each Borrower under this SECTION 2.13 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or Lender.
The joint and several liability of the Borrowers hereunder shall continue in
full force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, constitution or place of formation
of any of the Borrowers or Lender.
(f) Each Borrower represents and warrants to Lender that such
Borrower is currently informed of the financial condition of Borrowers and of
all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Borrower further
represents and warrants to Lender that such Borrower has read and understands
the terms and conditions of the Loan Documents. Each Borrower hereby
covenants that such Borrower will continue to keep informed of Borrowers'
financial condition, the financial condition of other guarantors, if any, and
of all other circumstances which bear upon the risk of nonpayment or
nonperformance of the Obligations.
(g) Each of the Borrowers waives all rights and defenses arising
out of an election of remedies by Lender, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed Lender's rights of subrogation and
reimbursement against such Borrower by the operation of Section 580(d) of the
California Code of Civil Procedure or otherwise:
(h) Each of the Borrowers waives all rights and defenses that such
Borrower may have because the Obligations are secured by Real Property. This
means, among other things:
(i) Lender may collect from such Borrower without first
foreclosing on any Real or Personal Property Collateral pledged by
Borrowers.
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(ii) If Lender forecloses on any Real Property Collateral
pledged by Borrowers:
A. The amount of the Obligations may be reduced only
by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price.
B. Lender may collect from such Borrower even if Lender,
by foreclosing on the Real Property Collateral, has destroyed any
right such Borrower may have to collect from the other Borrowers.
This is an unconditional and irrevocable waiver of any rights and defenses such
Borrower may have because the Obligations are secured by Real Property. These
rights and defenses include, but are not limited to, any rights or defenses
based upon Section 580a, 580b, 580d or 726 of the California Code of Civil
Procedure.
(i) The provisions of this SECTION 2.13 are made for the
benefit of Lender and its respective successors and assigns, and may be enforced
by it or them from time to time against any or all of the Borrowers as often as
occasion therefor may arise and without requirement on the part of Lender,
successor, or assign first to marshal any of its or their claims or to exercise
any of its or their rights against any of the other Borrowers or to exhaust any
remedies available to it or them against any of the other Borrowers or to resort
to any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this SECTION 2.13
shall remain in effect until all of the Obligations shall have been paid in full
or otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by Lender upon the insolvency, bankruptcy or reorganization
of any of the Borrowers, or otherwise, the provisions of this SECTION 2.13 will
forthwith be reinstated in effect, as though such payment had not been made.
(j) Each of the Borrowers hereby agrees that it will not
enforce any of its rights of contribution or subrogation against the other
Borrowers with respect to any liability incurred by it hereunder or under any of
the other Loan Documents, any payments made by it to Lender with respect to any
of the Obligations or any collateral security therefor until such time as all of
the Obligations have been paid in full in cash. Any claim which any Borrower may
have against any other Borrower with respect to any payments to Lender hereunder
or under any other Loan Documents are hereby expressly made subordinate and
junior in right of payment, without limitation as to any increases in the
Obligations arising hereunder or thereunder, to the prior payment in full in
cash of the Obligations and, in the event of any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceeding under the
laws of any jurisdiction relating to any Borrower, its debts or its assets,
whether voluntary or involuntary, all such Obligations shall be paid in full in
cash before any payment or distribution of any character, whether in cash,
securities or other property, shall be made to any other Borrower therefor.
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(k) Each of the Borrowers hereby agrees that, after the
occurrence and during the continuance of any Default or Event of Default, the
payment of any amounts due with respect to the indebtedness owing by any
Borrower to any other Borrower is hereby subordinated to the prior payment in
full in cash of the Obligations. Each Borrower hereby agrees that after the
occurrence and during the continuance of any Default or Event of Default, such
Borrower will not demand, ▇▇▇ for or otherwise attempt to collect any
indebtedness of any other Borrower owing to such Borrower until the Obligations
shall have been paid in full in cash. If, notwithstanding the foregoing
sentence, such Borrower shall collect, enforce or receive any amounts in respect
of such indebtedness, such amounts shall be collected, enforced and received by
such Borrower as trustee for the Lender, and such Borrower shall deliver any
such amounts to Lender for application to the Obligations in accordance with
SECTION 2.3(b).
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The obligation
of Lender to make the initial Advance (or otherwise to extend any credit
provided for hereunder), is subject to the fulfillment, to the satisfaction of
Lender, of each of the conditions precedent set forth below:
(a) [Reserved];
(b) Lender shall have received all financing statements and
personal property security agreement filings required by Lender, duly
executed by the applicable Borrowers, Lender shall have received satisfactory
evidence, in its Permitted Discretion, of the filing of all such financing
statements, as well as copies of favorable UCC, tax, judgment and fixture
lien search reports in all necessary or appropriate jurisdictions and under
all legal and trade names (including former names) of the Borrowers requested
by the Lender, indicating that there are no prior Liens on any of the
Collateral other than Permitted Liens,
(c) Lender shall have received each of the following documents, in
form and substance satisfactory to Lender, duly executed, and each such
document shall be in full force and effect:
(i) the Disbursement Letter,
(ii) the Due Diligence Letter,
(iv) the Fee Letter,
(v) the Officers' Certificate,
(vi) the Trademark Security Agreement,
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(vii) the US Pledge Agreement, together with all certificates
representing the shares of Stock pledged thereunder, as well as Stock
powers with respect thereto endorsed in blank,
(viii) the Intercompany Subordination Agreement,
(ix) the IMS Health Collateral Assignment,
(x) the Pay-Off Letter, together with UCC termination statements
and other documentation evidencing the termination by Existing Lender
of its Liens in and to the properties and assets of Borrowers, and
(xi) such special resolutions of the Board of Directors and
shareholders of any Subsidiary incorporated in Canada relating to the
pledge of the shares of such Subsidiary as Lender shall request.
(d) Lender shall have received a certificate from the Secretary of
each Borrower attesting to the resolutions of such Borrower's Board of
Directors authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Borrower is a party and
authorizing specific officers of such Borrower to execute the same;
(e) Lender shall have received copies of each Borrower's Governing
Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Borrower;
(f) Lender shall have received a certificate of status with respect
to each Borrower, dated within 10 days of the Closing Date, such certificate
to be issued by the appropriate officer of the jurisdiction of organization
of such Borrower, which certificate shall indicate that such Borrower is in
good standing in such jurisdiction;
(g) Lender shall have received certificates of status with respect
to each Borrower, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions
(other than the jurisdiction of organization of such Borrower) in which its
failure to be duly qualified or licensed would constitute a Material Adverse
Change, which certificates shall indicate that such Borrower is in good
standing in such jurisdictions;
(h) Lender shall have received a certificate of insurance, together
with the endorsements thereto, as are required by SECTION 6.7, the form and
substance of which shall be satisfactory to Lender;
(i) Lender shall have received the consent of IMS Health to the IMS
Health Collateral Assignment, in form and substance satisfactory to Lender;
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(j) Lender shall have received opinions of Borrowers' counsel in form
and substance satisfactory to Lender with respect to the Loan Documents
executed at closing, addressing U.S. and Canadian legal issues as the Lender
may request;
(k) Lender shall have received satisfactory evidence (including a
certificate of the chief financial officer of Parent) that all tax returns
required to be filed by Borrowers have been timely filed and all taxes upon
Borrowers or their properties, assets, income, and franchises (including Real
Property taxes and payroll taxes) have been paid prior to delinquency, except
such taxes that are the subject of a Permitted Protest;
(l) Borrowers shall have at least $15,000,000 of Availability and
cash on hand after giving effect to the initial extensions of credit
hereunder;
(m) Lender shall have completed its business, legal, and collateral
due diligence, including (1) a collateral audit and review of Borrowers'
books and records and verification of Borrowers' representations and
warranties to Lender, (2) review of the litigation filed against Dun &
Bradstreet and IMS Health by Information Resources, Inc., (3) review of the
tax-sharing arrangements with IMS Health and the liability assumed by the
Parent in connection with certain pending tax controversy matters, (4) review
of the documents relating to the spin-off of the Parent from IMS Health,
including without limitation the IMS Health Agreements, and (5) review of the
Siebel Agreements, in each case the results of which shall be satisfactory to
Lender;
(n) Borrowers shall pay all Lender Expenses incurred in connection
with the transactions evidenced by this Agreement;
(o) Lender shall have received copies of each of the agreements to
provide Shared Services to the Borrowers as set forth on SCHEDULE 3.1(o),
certified by an officer of the Parent, certifying each such document as being
a true, correct, and complete copy thereof and confirming the expiration date
for each type of Shared Services provided by IMS Health;
(p) Borrowers shall have received all licenses, approvals or evidence
of other actions required by any Governmental Authority in connection with
the execution and delivery by Borrowers of this Agreement or any other Loan
Document or with the consummation of the transactions contemplated hereby and
thereby;
(q) Lender shall have received evidence that CT Corporation has been
appointed as agent for service of process in Georgia for all Borrowers;
(r) all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to
Lender.
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3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of Lender to continue to make Advances (or otherwise extend credit
hereunder) is subject to the fulfillment, on or before the date applicable
thereto, of each of the conditions subsequent set forth below (and payment of
all Lender Expenses incurred in connection therewith) (the failure by
Borrowers to so perform or cause to be performed constituting an Event of
Default):
(a) within 45 days of the Closing Date, deliver to Lender each of the
following documents, in form and substance satisfactory to Lender, duly
executed, and each such document shall be in full force and effect:
(i) the Pledge Agreement, executed by Synavant LLC, with
respect to its pledge of 65% of the voting Stock and 100% of the
non-voting Stock of Synavant Nederland BV and Synavant Nederland
Finance BV (together with all certificates representing the shares of
Stock pledged thereunder, as well as Stock powers, or equivalent
instruments of transfer, with respect thereto endorsed in blank),
(ii) the Pledge Agreement, executed by Parent, with respect to
its pledge of 65% of the voting Stock and 100% of the non-voting Stock
of Synavant Italia S.r.L. (together with all certificates representing
the shares of Stock pledged thereunder, as well as Stock powers, or
equivalent instruments of transfer, with respect thereto endorsed in
blank),
(iii) the Pledge Agreement, executed by Synavant LLC, with
respect to its pledge of 65% of the voting Stock and 100% of the
non-voting Stock of Synavant UK Holdings Ltd. (together with all
certificates representing the shares of Stock pledged thereunder,
as well as Stock powers, or equivalent instruments of transfer,
with respect thereto endorsed in blank),
(iv) certificates and other documents of the type referred to in
SECTION 3.1(d), (e), (f) and (g), with respect to the Pledge Agreements
referred to in clauses (A) and (B) above and the Borrowers executing
such Pledge Agreements;
(v) opinions of Borrowers' counsel in form and substance
satisfactory to Lender with respect to such Pledge Agreements;
(vi) such other documents and legal matters in connection with
the transactions contemplated by this SECTION 3.2 as the Lender shall
require.
(b) within 30 days of the Closing Date, deliver to Lender certified
copies of the policies of insurance, together with the endorsements thereto,
as are required by SECTION 6.7, the form and substance of which shall be
satisfactory to Lender and its counsel;
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(c) within 15 days of the Closing Date, deliver to Lender all stock
certificates described in SCHEDULE 3.2(c) representing the shares of Stock
pledged under the U.S. Pledge Agreement, as well as Stock powers with respect
thereto endorsed in blank;
(d) within 30 days of the Closing Date, deliver to Lender (i) such
Collateral Access Agreements from lessors, warehousemen, bailees, and other
third persons as Lender may require, including the lessors of locations
described on SCHEDULE 3.2(b) located in the United States, and (ii) a copy of
the resolutions of the Parent ratifying the execution, delivery, and
performance of this Agreement and the other Loan Documents to which the
Parent is a party, certified by the Secretary or Assistant Secretary of the
Parent;
(e) within 30 days of the Closing Date, each Borrower shall apply for
copyright registration with the United States Copyright Office its copyrights
for current versions of its software, and each Borrower shall execute and
deliver to Lender a Copyright Security Agreement with respect to such copyrights
or applications therefor, and deliver to Lender such corporate authority
documents and opinions as Lender may request relating thereto.
(f) within 14 days of the Closing Date, (i) deliver to Lender the
Control Agreements and Cash Management Agreements, in form and substance
satisfactory to Lender, duly executed, and each such document shall be in
full force and effect; (ii) notify Lender in writing of the Designated
Account Bank and the account number of the Designated Banks; and (iii)
deliver to Lender the Intercompany Subordination Agreement and the related
intercompany notes, duly executed and delivered by each Non-Borrower
Subsidiary.
(g) within 5 Business Days of the Closing Date, deliver to Lender
the lien search results set forth on SCHEDULE 3.2(g).
(h) within 3 Business Days of the Closing Date, deliver to Lender
the original good standing certificates issued by the State of Delaware for
each of the Borrowers.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation of
Lender to make all Advances (or to extend any other credit hereunder) shall
be subject to the following conditions precedent:
(a) the representations and warranties contained in this Agreement
and the other Loan Documents shall be true and correct in all material
respects on and as of the date of such extension of credit, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);
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(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result
from the making thereof;
(c) no injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority
against any Borrower, Lender, or any of their Affiliates; and
(d) no Material Adverse Change shall have occurred.
3.4 TERM. This Agreement shall become effective upon the execution and
delivery hereof by Borrowers and Lender and shall continue in full force and
effect for a term ending on April 27, 2006 (the "MATURITY DATE"). The
foregoing notwithstanding, Lender shall have the right to terminate its
obligations under this Agreement immediately and without notice upon the
occurrence and during the continuation of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrowers
with respect to any outstanding Letters of Credit) immediately shall become
due and payable without notice or demand. No termination of this Agreement,
however, shall relieve or discharge Borrowers of their duties, Obligations,
or covenants hereunder and the Lender's Liens in the Collateral shall remain
in effect until all Obligations have been fully and finally discharged and
Lender's obligations to provide additional credit hereunder have been
terminated. When this Agreement has been terminated and all of the
Obligations have been fully and finally discharged, other than those
Obligations that survive the term of this Agreement by their terms, and
Lender's obligations to provide additional credit under the Loan Documents
have been terminated irrevocably, Lender will, at Borrowers' sole expense,
execute and deliver any UCC termination statements, lien releases, mortgage
releases, re-assignments of trademarks, discharges of security interests, and
other similar discharge or release documents (and, if applicable, in
recordable form) as are reasonably necessary to release, as of record, the
Lender's Liens and all notices of security interests and liens previously
filed by Lender with respect to the Obligations.
3.6 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at any
time upon 90 days prior written notice by Administrative Borrower to Lender,
to terminate this Agreement by paying to Lender, in cash, the Obligations
(including either (i) providing cash collateral to be held by Lender in an
amount equal to 105% of the then extant Letter of Credit Usage, or (ii)
causing the original Letters of Credit to be returned to Lender), in full,
together with the Applicable Prepayment Premium. If Administrative Borrower
has sent a notice of termination pursuant to the provisions of this Section,
then Lender's obligations to extend credit hereunder shall terminate and
Borrowers shall be obligated to repay the Obligations (including either (i)
providing cash collateral to be held by Lender in an amount equal to 105% of
the then extant Letter of Credit Usage, or (ii) causing the original Letters
of Credit
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to be returned to Lender), in full, together with the Applicable Prepayment
Premium, on the date set forth as the date of termination of this Agreement
in such notice. In the event of the termination of this Agreement and
repayment of the Obligations at any time prior to the Maturity Date, for any
other reason, including (a) termination upon the election of Lender to
terminate after the occurrence of an Event of Default, (b) foreclosure and
sale of Collateral, (c) sale of the Collateral in any Insolvency Proceeding,
or (d) restructure, reorganization or compromise of the Obligations by the
confirmation of a plan of reorganization, or any other plan of compromise,
restructure, or arrangement in any Insolvency Proceeding, then, in view of
the impracticability and extreme difficulty of ascertaining the actual amount
of damages to Lender or profits lost by Lender as a result of such early
termination, and by mutual agreement of the parties as to a reasonable
estimation and calculation of the lost profits or damages of Lender,
Borrowers shall pay the Applicable Prepayment Premium to Lender, measured as
of the date of such termination.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Each Borrower hereby grants to Lender a
continuing security interest in all of its right, title, and interest in all
currently existing and hereafter acquired or arising Personal Property
Collateral in order to secure prompt repayment of any and all of the
Obligations in accordance with the terms and conditions of the Loan Documents
and in order to secure prompt performance by Borrowers of each of their
covenants and duties under the Loan Documents. The Lender's Liens in and to
the Personal Property Collateral shall attach to all Personal Property
Collateral without further act on the part of Lender or Borrowers. Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, Borrowers have no
authority, express or implied, to dispose of any item or portion of the
Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, and if and to
the extent that perfection of priority of Lender's security interest is
dependent on or enhanced by possession, the applicable Borrower, immediately
upon the request of Lender, shall endorse and deliver physical possession of
such Negotiable Collateral to Lender.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time after the occurrence and during the continuation of
an Event of Default, Lender or Lender's designee may (a) notify Account
Debtors of Borrowers that the Accounts, chattel paper, or General Intangibles
have been assigned to Lender or that Lender has a security interest therein,
or (b) collect the Accounts, chattel paper, or General Intangibles directly
and charge the collection costs and expenses to the Loan Account. Each
Borrower agrees that it will hold in trust for Lender, as Lender's trustee,
any Collections that it receives and immediately will deliver said
Collections to Lender or a Cash Management Bank in their original form as
received by the applicable Borrower.
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4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time upon the
request of Lender, Borrowers shall execute and deliver to Lender, any and all
financing statements, original financing statements in lieu of continuation
statements, fixture filings, security agreements, pledges, fixed charges,
floating charges, debentures, assignments, endorsements of certificates of
title, and all other documents (the "Additional Documents") that Lender may
request in its Permitted Discretion, in form and substance satisfactory to
Lender, to perfect and continue perfected or better perfect the Lender's
Liens in the Collateral (whether now owned or hereafter arising or acquired),
to create and perfect Liens in favor of Lender in any Real Property acquired
after the Closing Date, and in order to fully consummate all of the
transactions contemplated hereby and under the other Loan Documents. To the
maximum extent permitted by applicable law, each Borrower authorizes Lender
to execute any such Additional Documents in the applicable Borrower's name
and authorize Lender to file such executed Additional Documents in any
appropriate filing office. In addition, on such periodic basis as Lender
shall require, Borrowers shall (a) provide Lender with a report of all new
patentable, copyrightable, or trademarkable materials acquired or generated
by Borrowers during the prior period, (b) cause all patents, copyrights, and
trademarks acquired or generated by Borrowers that are not already the
subject of a registration with the appropriate filing office (or an
application therefor diligently prosecuted) to be registered with such
appropriate filing office in a manner sufficient to impart constructive
notice of Borrowers' ownership thereof, and (c) cause to be prepared,
executed, and delivered to Lender supplemental schedules to the applicable
Loan Documents to identify such patents, copyrights, and trademarks as being
subject to the security interests created thereunder. Without limiting the
foregoing, to the extent deemed necessary by Lender, to comply with the
revisions to Article 9 of the Uniform Commercial Code, as revised by the
Official Code of Georgia Annotated, to take effect July 1, 2001, Borrower
shall execute any such additional documents to effect the grant of the
security interest herein conveyed and assigned to Lender.
4.5 POWER OF ATTORNEY. Each Borrower hereby irrevocably makes,
constitutes, and appoints Lender (and any of Lender's officers, employees, or
Lenders designated by Lender) as such Borrower's true and lawful attorney,
with power to (a) if such Borrower refuses to, or fails timely to execute and
deliver any of the documents described in SECTION 4.4, sign the name of such
Borrower on any of the documents described in SECTION 4.4, (b) at any time
that an Event of Default has occurred and is continuing, sign such Borrower's
name on any invoice or ▇▇▇▇ of lading relating to the Collateral, drafts
against Account Debtors, or notices to Account Debtors, (c) send requests for
verification of Accounts, (d) endorse such Borrower's name on any Collection
item that may come into Lender's possession, (e) at any time that an Event of
Default has occurred and is continuing, make, settle, and adjust all claims
under such Borrower's policies of insurance and make all determinations and
decisions with respect to such policies of insurance, and (f) at any time
that an Event of Default has occurred and is continuing, settle and adjust
disputes and claims respecting the Accounts, chattel paper, or General
Intangibles directly with Account Debtors, for amounts and upon terms that
Lender determines to be reasonable, and Lender may cause to be executed and
delivered any documents and releases that Lender determines to be necessary.
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The appointment of Lender as each Borrower's attorney, and each and every one
of its rights and powers, being coupled with an interest, is irrevocable
until all of the Obligations have been fully and finally repaid and performed
and Lender's obligations to extend credit hereunder are terminated.
4.6 RIGHT TO INSPECT. Lender (through any of its respective officers,
employees, or agents) shall have the right, from time to time hereafter to
inspect the Books and to check, test, and appraise the Collateral in order to
verify Borrowers' financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral.
4.7 CONTROL AGREEMENTS. Each Borrower agrees that it will not transfer
assets out of any Securities Accounts other than as permitted under SECTION
7.19 and, if to another securities intermediary, unless each of the
applicable Borrower, Lender, and the substitute securities intermediary have
entered into a Control Agreement. No arrangement contemplated hereby or by
any Control Agreement in respect of any Securities Accounts or other
Investment Property shall be modified by Borrowers without the prior written
consent of Lender. Upon the occurrence and during the continuance of a
Default or Event of Default, Lender may notify any securities intermediary to
liquidate the applicable Securities Account or any related Investment
Property maintained or held thereby and remit the proceeds thereof to the
Lender's Account.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce Lender to enter into this Agreement,
each Borrower makes the following representations and warranties to Lender
which shall be true, correct, and complete, in all material respects, as of
the date hereof, and shall be true, correct, and complete, in all material
respects, as of the Closing Date, and at and as of the date of the making of
each Advance (or other extension of credit) made thereafter, as though made
on and as of the date of such Advance (or other extension of credit) (except
to the extent that such representations and warranties relate solely to an
earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Each Borrower has good and indefeasible title to
its Collateral and the Real Property, free and clear of Liens except for
Permitted Liens.
5.2 ELIGIBLE ACCOUNTS. The Eligible Accounts are bona fide existing
payment obligations of Account Debtors created by the sale and delivery of
Inventory or the rendition of services to such Account Debtors in the
ordinary course of Borrowers' business, owed to Borrowers without defenses,
disputes, offsets, counterclaims, or rights of return or cancellation. As to
each Eligible Account, such Account is not:
(a) owed by an employee, Affiliate, or Lender of a Borrower,
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(b) on account of a transaction wherein goods were placed on
consignment or were sold pursuant to a guaranteed sale, a sale or return, a
sale on approval, a ▇▇▇▇ and hold, or on any other terms by reason of which
the payment by the Account Debtor may be conditional,
(c) payable in a currency other than Dollars,
(d) owed by an Account Debtor that has or has asserted a right of
setoff, has disputed its liability, or has made any claim with respect to its
obligation to pay the Account,
(e) owed by an Account Debtor that is subject to any Insolvency
Proceeding or is not Solvent or as to which a Borrower has received notice of
an imminent Insolvency Proceeding or a material impairment of the financial
condition of such Account Debtor,
(f) on account of a transaction as to which the goods giving rise to
such Account have not been shipped and billed to the Account Debtor or the
services giving rise to such Account have not been performed and accepted by
the Account Debtor,
(g) a right to receive progress payments or other advance ▇▇▇▇▇▇▇▇
that are due prior to the completion of performance by the applicable
Borrower of the subject contract for goods or services, other than Accounts
in the aggregate amount not to exceed $5,000,000 in Dollars arising from the
services to be provided under maintenance contracts,
(h) an Account that has not been billed to the customer, and
(i) an Account that represents any pre-billed postage payments.
5.3 INVENTORY. All Inventory is of good and merchantable quality, free
from defects and as used or held in Borrowers' businesses. As to each item of
Inventory, such Inventory is:
(a) owned by a Borrower free and clear of all Liens other than Liens
in favor of Lender,
(b) either located at one of the locations set forth on SCHEDULE 5.5
or in transit from one such location to another such location,
(c) not located on real property leased by a Borrower or in a
contract warehouse, in each case, unless subject to a Collateral Access
Agreement executed by the lessor, the warehouseman, or other third party, as
the case may be, and unless segregated or otherwise separately identifiable
from goods of others, if any, stored on the premises, and
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(d) not goods that have been returned or rejected by Borrowers'
customers.
5.4 EQUIPMENT. All of the Equipment is used or held for use in
Borrowers' business and is fit for such purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment are
not stored with a bailee, warehouseman, or similar party and are located only
at the locations identified on SCHEDULE 5.5, except as permitted by Section
5.3(b) or (c). Notwithstanding the foregoing, certain personal computers of
the Borrowers may be used and located from time to time at the residences of
Borrowers' employees.
5.6 INVENTORY RECORDS. Each Borrower keeps correct and accurate
records itemizing and describing the type, quality, and quantity of its
Inventory and the book value thereof.
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive office
of each Borrower is located at the address indicated in SCHEDULE 5.7 and each
Borrower's FEIN is identified in SCHEDULE 5.7.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES
(a) Each Borrower is duly organized and existing and in good standing
under the laws of the jurisdiction of its organization and qualified to do
business in any state where the failure to be so qualified reasonably could
be expected to have a Material Adverse Change.
(b) Set forth on SCHEDULE 5.8(b), is a complete and accurate
description of the authorized capital Stock of each Borrower, by class, and,
as of the Closing Date, a description of the number of shares of each such
class that are issued and outstanding. Other than as described on SCHEDULE
5.8(b), there are no subscriptions, options, warrants, or calls relating to
any shares of each Borrower's capital Stock, including any right of
conversion or exchange under any outstanding security or other instrument. No
Borrower is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its capital Stock or any
security convertible into or exchangeable for any of its capital Stock.
(c) Set forth on SCHEDULE 5.8(c), is a complete and accurate list of
each Borrower's direct and indirect Subsidiaries, showing: (i) the
jurisdiction of their organization; (ii) the number of shares of each class
of common and preferred Stock authorized for each of such Subsidiaries; and
(iii) the number and the percentage of the outstanding shares of each such
class owned directly or indirectly by the applicable Borrower. All of the
outstanding capital Stock of each such Subsidiary has been validly issued and
is fully paid and non-assessable.
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(d) Except as set forth on SCHEDULE 5.8(c), there are no
subscriptions, options, warrants, or calls relating to any shares of any
Borrower's Subsidiaries' capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. No Borrower or
any of its respective Subsidiaries is subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares of any
Borrower's Subsidiaries' capital Stock or any security convertible into or
exchangeable for any such capital Stock.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Borrower, the execution, delivery, and performance by
such Borrower of this Agreement and the Loan Documents to which it is a party
have been duly authorized by all necessary action on the part of such
Borrower.
(b) As to each Borrower, the execution, delivery, and performance by
such Borrower of this Agreement and the Loan Documents to which it is a party
do not and will not (i) violate any provision of federal, state, or local law
or regulation applicable to any Borrower, the Governing Documents of any
Borrower, or any order, judgment, or decree of any court or other
Governmental Authority binding on any Borrower, (ii) conflict with, result in
a breach of, or constitute (with due notice or lapse of time or both) a
default under any material contractual obligation of any Borrower, (iii)
result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of Borrower, other than Permitted
Liens, or (iv) require any approval of any Borrower's interestholders or any
approval or consent of any Person under any material contractual obligation
of any Borrower.
(c) Other than the filing of financing statements, fixture filings,
and Mortgages, the execution, delivery, and performance by each Borrower of
this Agreement and the Loan Documents to which such Borrower is a party do
not and will not require any registration with, consent, or approval of, or
notice to, or other action with or by, any Governmental Authority or other
Person.
(d) As to each Borrower, this Agreement and the other Loan Documents
to which such Borrower is a party, and all other documents contemplated
hereby and thereby, when executed and delivered by such Borrower will be the
legally valid and binding obligations of such Borrower, enforceable against
such Borrower in accordance with their respective terms, except as
enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or
limiting creditors' rights generally.
(e) The Lender's Liens are validly created, perfected, and first
priority Liens, subject only to Permitted Liens.
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5.10 LITIGATION. Other than those matters disclosed on SCHEDULE 5.10,
there are no actions, suits, or proceedings pending or, to the best knowledge
of Borrowers, threatened against Borrowers, or any of their Subsidiaries, as
applicable, except for (a) matters that are fully covered by insurance
(subject to customary deductibles), and (b) matters arising after the Closing
Date that, if decided adversely to Borrowers, or any of their Subsidiaries,
as applicable, reasonably could not be expected to result in a Material
Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Borrowers that have been delivered by Borrowers to Lender have been prepared
in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects, Borrowers'
financial condition as of the date thereof and results of operations for the
period then ended. There has not been a Material Adverse Change with respect
to Borrowers since the date of the latest financial statements submitted to
Lender on or before the Closing Date.
5.12 FRAUDULENT TRANSFER.
(a) each Borrower is Solvent.
(b) No transfer of property is being made by any Borrower and no
obligation is being incurred by any Borrower in connection with the
transactions contemplated by this Agreement or the other Loan Documents with
the intent to hinder, delay, or defraud either present or future creditors of
Borrowers.
5.13 EMPLOYEE BENEFITS. None of Borrowers, any of their Subsidiaries, or
any of their ERISA Affiliates maintains or contributes to any Benefit Plan.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on SCHEDULE 5.14, (a)
to Borrowers' actual knowledge, none of Borrowers' properties or assets has
ever been used by Borrowers or by previous owners or operators in the
disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials, where such production, storage, handling, treatment,
release or transport was in violation, in any material respect, of applicable
Environmental Law, (b) to Borrowers' actual knowledge, none of Borrowers'
properties or assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) none of Borrowers have received notice that a Lien arising
under any Environmental Law has attached to any revenues or to any Real
Property owned or operated by Borrowers, and (d) none of Borrowers have
received a summons, citation, notice, or directive from the Environmental
Protection Agency or any other federal or state governmental agency
concerning any action or omission by any Borrower resulting in the releasing
or disposing of Hazardous Materials into the environment.
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5.15 BROKERAGE FEES. Borrowers have not utilized the services of any
broker or finder in connection with Borrowers' obtaining financing from
Lender under this Agreement and no brokerage commission or finders fee is
payable by Borrowers in connection herewith.
5.16 INTELLECTUAL PROPERTY. Each Borrower owns, or holds licenses in, all
trademarks, trade names, copyrights, patents, patent rights, and licenses
that are necessary to the conduct of its business as currently conducted, and
such trademarks, trade names, copyrights, patents, patent rights have been
recorded, or will be recorded no later than 30 days after the Closing Date,
in the United States Patent and Trademark Office and the United States
Copyright Office, as the case may be. Attached hereto as SCHEDULE 5.16 is a
true, correct, and complete listing of all material patents, patent
applications, trademarks, trademark applications, copyrights, and copyright
registrations as to which each Borrower is the owner or is an exclusive
licensee.
5.17 DISTRIBUTION. (a) Each representation and statement made by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, on behalf of Parent, to ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, in connection with
the request by IMS Health for a legal opinion as to the tax consequences of
the Distribution and certain related transactions, was true, correct, and
complete in all respects when made and continues to be true, correct, and
complete through and as of the date hereof (except to the extent that such
representations and statements relate solely to an earlier date). All other
information provided by Parent to IMS Health and its advisors in connection
with the tax opinion of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇ was true, correct, and
complete in all respects.
(b) At the time of the Distribution and within six months thereafter,
Parent had no plan or intention to issue any shares of its common stock or of
any other class of stock or securities (including preferred stock, bonds,
debentures, notes, warrants, options, puts, etc.) other than compensatory
stock options (and shares of common stock issued upon exercise of
compensatory stock options) and bona fide loans from institutional lenders.
(c) At the time of the Distribution and within six months thereafter,
Parent was not a party to, and was not aware of, any plan, intention,
agreement, understanding, arrangement, or substantial negotiations whereby
10% or more (determined on the basis of either vote or value) of the Stock of
Parent would be acquired by any Person or group of Persons. For purposes of
the preceding sentence, (i) any options, warrants, rights or similar
securities or any convertible securities shall be treated as exercised or
converted, as the case may be, if such exercise or conversion would increase
the amount of Stock acquired, and (ii) asset acquisitions shall be treated as
stock acquisitions to the extent provided in Section 355(e)(3)(B) of the IRC.
(d) Excluding sales occurring in the ordinary course of trading
activity on public exchanges made by (i) stockholders of Parent owning less
than five percent (5%) of any class of Stock of Parent and (ii) Alliance
Capital Management, Fidelity Management & Research and Wellington Management
Company, Parent had no knowledge, at the time of
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the Distribution and within six months thereafter, of any plan or intention
by any person receiving stock of Parent in connection with the Distribution
to sell, exchange, transfer by gift, or otherwise dispose of, reduce the risk
of loss (by short sale or otherwise) of the holding of, enter into any
contract or other arrangement with respect to, or consent to the sale,
exchange or other disposition of any Stock or securities of Parent after the
Distribution.
(e) At the time of the Distribution and within six months thereafter,
Parent had no plan or intention, directly or indirectly through any of its
Subsidiaries, to redeem or otherwise to acquire any of its Stock outstanding
after the Distribution.
(f) At the time of the Distribution and within six months thereafter,
Parent had no plan or intention (i) to liquidate itself or any of its
Subsidiaries, (ii) to cause itself or any of its Subsidiaries to be merged
with any other corporation, (iii) to sell or otherwise to dispose of any of
its assets or the assets of any of its Subsidiaries (other than sales or
other dispositions in the ordinary course of business), or (iv) to
discontinue or substantially reduce (or to cause or allow any of its
Subsidiaries to discontinue or substantially reduce) the active conduct of
the trade or business which was relied upon to satisfy the five-year active
trade or business requirement set forth in Section 355(b) of the IRC.
5.18 LEASES. Borrowers enjoy peaceful and undisturbed possession under
all leases material to the business of Borrowers and to which Borrowers are
a party or under which Borrowers are operating. All of such leases are valid
and subsisting and no material default by Borrowers exists under any of
them. All real property locations leased by any Borrower are described on
SCHEDULE 3.2(b).
5.19 DDAS. Set forth on SCHEDULE 5.19 are all of the DDAs of each Borrower,
including, with respect to each depository (i) the name and address of such
depository, and (ii) the account numbers of the accounts maintained with such
depository.
5.20 COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of Borrowers in writing to Lender (including all
information contained in the Schedules hereto or in the other Loan Documents)
for purposes of or in connection with this Agreement, the other Loan
Documents or any transaction contemplated herein or therein is, and all other
such factual information (taken as a whole) hereafter furnished by or on
behalf of Borrowers in writing to the Lender will be, true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided. On the Closing Date, the Closing Date Projections represent, and as
of the date on which any other Projections are delivered to Lender, such
additional Projections represent Borrowers' good faith best estimate of its
future performance for the periods covered thereby.
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5.21 INDEBTEDNESS. Set forth on SCHEDULE 5.21 is a true and complete list
of all Indebtedness of each Borrower outstanding immediately prior to the
Closing Date that is to remain outstanding after the Closing Date and such
Schedule accurately reflects the aggregate principal amount of such
Indebtedness and the principal terms thereof.
5.22 LICENSING AGREEMENTS. Set forth on SCHEDULE 5.22 is a true and
complete list of all licensing agreements for software for which any Borrower
is the licensee, and such Schedule includes a description of the annual
amount payable by such Borrower under such licensing agreements.
5.23 UNCERTIFICATED SECURITIES. Set forth on SCHEDULE 5.23 is a true and
complete list of those Subsidiaries of the Parent, which pursuant to their
Governing Documents, do not evidence the equity interests of their
shareholders with stock certificates.
6. AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any
credit hereunder shall be available and until full and final payment of the
Obligations, Borrowers shall and shall cause each of their respective
Subsidiaries to do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables
Borrowers to produce financial statements in accordance with GAAP and
maintain records pertaining to the Collateral that contain information as
from time to time reasonably may be requested by Lender. Borrowers also shall
keep an inventory reporting system that shows all additions, sales, claims,
returns, and allowances with respect to the Inventory.
6.2 COLLATERAL REPORTING. Provide Lender with the following documents at
the following times in form satisfactory to Lender:
Daily (to the extent (a) sales journal, collection journal, and credit
Borrowers provide register since the last such schedule
electronic collateral
reporting to the
Lender)
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Weekly (b) a detailed calculation of the Borrowing Base
(including detail regarding those Accounts that are
not Eligible Accounts); to be provided during the
four (4) week period following the Closing Date, at
any time that there are Advances outstanding and at
any time that Excess Availability and cash on hand is
less than $5,000,000,
------------------------------------------------------------------------------------
Monthly (not later (c) a detailed calculation of the Borrowing Base
than the (including detail
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10th day of each regarding those Accounts that are not Eligible
month) Accounts)
(d) a detailed aging, by total, of the Accounts,
together with a reconciliation to the detailed
calculation of the Borrowing Base previously provided
to Lender,
(e) a summary aging, by vendor, of Borrowers'
accounts payable and any book overdraft, and
(f) a calculation of Dilution for the prior month.
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Quarterly (g) a detailed list of each Borrower's customers,
(h) a report regarding each Borrower's accrued, but
unpaid, ad valorem taxes, and
(i) a Copyright Compliance Certificate in the form
of EXHIBIT C-1.
------------------------------------------------------------------------------------
Upon request by Lender (j) copies of invoices in connection with the
Accounts, credit memos, remittance advices, deposit
slips, shipping and delivery documents in connection
with the Accounts and, for Inventory and Equipment
acquired by Borrowers, purchase orders and invoices,
(k) if a Default or an Event of Default has occurred
and is continuing, a detailed calculation of the
Borrowing Base (including detail regarding those
Accounts that are not Eligible Accounts) on a more
frequent basis than is being provided above, and
(l) such other reports as to the Collateral, or the
financial condition of Borrowers as Lender may
request.
-----------------------------------------------------------------------------------
In addition, each Borrower agrees to cooperate fully with
Lender to facilitate and implement a system of electronic collateral reporting
in order to provide electronic reporting of each of the items set forth above.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Lender:
(a) as soon as available, but in any event within 30 days
(45 days in the case of a month that is the end of one of the first 3 fiscal
quarters in a fiscal year) after the end of each month during each of
Parent's fiscal years,
(i) a company prepared consolidating (by Subsidiary)
income statement, showing revenue, operating income and EBITDA
of the Parent and each of its Subsidiaries' during such
period; and
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(ii) a certificate signed by the chief financial officer
of Parent to the effect that:
A. the representations and warranties of Borrowers
contained in this Agreement and the other Loan
Documents are true and correct in all material
respects on and as of the date of such certificate,
as though made on and as of such date (except to the
extent that such representations and warranties
relate solely to an earlier date), and
B. there does not exist any condition or event that
constitutes a Default or Event of Default (or, to the
extent of any non-compliance, describing such
non-compliance as to which he or she may have
knowledge and what action Borrowers have taken, are
taking, or propose to take with respect thereto), and
(b) as soon as available, but in any event within 45 days
after the end of each of Parent's fiscal quarters,
(i) a company prepared consolidated balance sheet, income
statement, and statement of cash flow covering Parent's and
its Subsidiaries' operations during such period, and
(ii) a certificate signed by the chief financial
officer of Parent to the effect that:
A. the financial statements delivered hereunder
have been prepared in accordance with GAAP (except for the
lack of footnotes and being subject to year-end audit
adjustments) and fairly present in all material respects
the financial condition of Parent and its Subsidiaries,
B. the representations and warranties of Borrowers
contained in this Agreement and the other Loan Documents are
true and correct in all material respects on and as of the
date of such certificate, as though made on and as of such
date (except to the extent that such representations and
warranties relate solely to an earlier date), and
C. there does not exist any condition or event that
constitutes a Default or Event of Default (or, to the extent
of any non-compliance, describing such non-compliance as to
which he or she may have knowledge and what action Borrowers
have taken, are taking, or propose to take with respect
thereto), and
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(iii) a Compliance Certificate demonstrating, in
reasonable detail, compliance at the end of such period with
the applicable financial covenants contained in SECTION 7.20,
and
(c) as soon as available, but in any event within 90 days
after the end of each of Parent's fiscal years,
(i) financial statements of Parent and its Subsidiaries
for each such fiscal year, audited by independent certified
public accountants reasonably acceptable to Lender and
certified, without any qualifications, by such accountants to
have been prepared in accordance with GAAP (such audited
financial statements to include a balance sheet, income
statement, and statement of cash flow and, if prepared,
such accountants' letter to management),
(ii) a certificate of such accountants addressed to
Lender stating that such accountants do not have knowledge
of the existence of any Default or Event of Default under
SECTION 7.20,
(d) as soon as available, but in any event within 30 days
prior to the start of each of Parent's fiscal years,
(i) copies of Borrowers' Projections, in form and
substance (including as to scope and underlying assumptions)
satisfactory to Lender, in its sole discretion, for the
forthcoming fiscal year, month by month, certified by the
chief financial officer of Parent as being such officer's good
faith best estimate of the financial performance of Parent and
its Subsidiaries during the period covered thereby,
(e) if and when filed by any Borrower,
(i) 10-Q quarterly reports, Form 10-K annual
reports, and Form 8-K current reports,
(ii) any other filings made by any Borrower with the
SEC,
(iii) copies of Borrowers' federal income tax returns,
and any amendments thereto, filed with the Internal Revenue
Service, and
(iv) any other information that is provided by Parent
to its shareholders generally,
(f) if and when filed by any Borrower and as requested by
Lender, satisfactory evidence of payment of applicable excise taxes in each
jurisdictions in which (i) any Borrower conducts business or is required to
pay any such excise tax, (ii) where any
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Borrower's failure to pay any such applicable excise tax would result in a
Lien on the properties or assets of any Borrower, or (iii) where any
Borrower's failure to pay any such applicable excise tax reasonably could be
expected to result in a Material Adverse Change,
(g) as soon as a Borrower has knowledge of any event or
condition that constitutes a Default or an Event of Default, notice thereof
and a statement of the curative action that Borrowers propose to take with
respect thereto, and
(h) upon the request of Lender, any other report reasonably
requested relating to the financial condition of Borrowers.
In addition to the financial statements referred to above,
Borrowers agree to deliver financial statements prepared on both a consolidated
and consolidating basis (other than the monthly income statement which will be
prepared on a consolidating basis only) and that no Borrower, or any Subsidiary
of a Borrower, will have a fiscal year different from that of Parent. Borrowers
agree that their independent certified public accountants are authorized to
communicate with Lender and to release to Lender whatever financial information
concerning Borrowers that Lender reasonably may request. Each Borrower waives
the right to assert a confidential relationship, if any, it may have with any
accounting firm or service bureau in connection with any information requested
by Lender pursuant to or in accordance with this Agreement, and agree that if a
Default or Event of Default has occurred and is continuing, Lender may contact
directly any such accounting firm or service bureau in order to obtain such
information.
6.4 RETURN. Cause returns and allowances as between Borrowers and their
Account Debtors, to be on the same basis and in accordance with the usual
customary practices of the applicable Borrower, as they exist at the time of
the execution and delivery of this Agreement.
6.5 MAINTENANCE OF PROPERTIES. Maintain and preserve all of its
properties which are necessary or useful in the proper conduct to its
business in good working order and condition, ordinary wear and tear
excepted, and comply at all times with the provisions of all leases to which
it is a party as lessee, so as to prevent any loss or forfeiture thereof or
thereunder.
6.6 TAXES. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against
Borrowers or any of their assets to be paid in full, before delinquency or
before the expiration of any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted
Protest. Borrowers will make timely payment or deposit of all tax payments
and withholding taxes required of it by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and
federal income taxes, and will, upon request, furnish Lender with proof
satisfactory to Lender indicating that the applicable Borrower has made such
payments or deposits. Borrowers shall deliver satisfactory evidence of
payment of
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applicable excise taxes in each jurisdictions in which any Borrower is
required to pay any such excise tax.
6.7 INSURANCE.
(a) At Borrowers' expense, maintain insurance respecting
its property and assets wherever located, covering loss or damage by fire,
theft, explosion, and all other hazards and risks as ordinarily are insured
against by other Persons engaged in the same or similar businesses. Borrowers
also shall maintain business interruption, public liability, and product
liability insurance, as well as insurance against larceny, embezzlement, and
criminal misappropriation. All such policies of insurance shall be in such
amounts and with such insurance companies as are reasonably satisfactory to
Lender. Borrowers shall deliver copies of all such policies to Lender with a
satisfactory lender's loss payable endorsement naming Lender as sole loss
payee or additional insured, as appropriate. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to give not less
than 30 days prior written notice to Lender in the event of cancellation of
the policy for any reason whatsoever.
(b) Administrative Borrower shall give Lender prompt notice
of any loss covered by such insurance. Lender shall have the exclusive right
to adjust any losses payable under any such insurance policies in excess of
$50,000, without any liability to Borrowers whatsoever in respect of such
adjustments. Any monies received as payment for any loss under any insurance
policy mentioned above (other than liability insurance policies) or as
payment of any award or compensation for condemnation or taking by eminent
domain, shall be paid over to Lender to be applied at the option of Lender
either to the prepayment of the Obligations or shall be disbursed to
Administrative Borrower under staged payment terms reasonably satisfactory to
Lender for application to the cost of repairs, replacements, or restorations.
Any such repairs, replacements, or restorations shall be effected with
reasonable promptness and shall be of a value at least equal to the value of
the items or property destroyed prior to such damage or destruction.
(c) Borrowers shall not take out separate insurance
concurrent in form or contributing in the event of loss with that required to
be maintained under this SECTION 6.7, unless Lender is included thereon as
named insured with the loss payable to Lender under a lender's loss payable
endorsement or its equivalent. Administrative Borrower immediately shall
notify Lender whenever such separate insurance is taken out, specifying the
insurer thereunder and full particulars as to the policies evidencing the
same, and copies of such policies promptly shall be provided to Lender.
6.8 LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment only at the locations identified on SCHEDULE 5.5; PROVIDED,
HOWEVER, that Administrative Borrower may amend SCHEDULE 5.5 so long as such
amendment occurs by written notice to Lender not less than 30 days prior to
the date on which the Inventory or Equipment is moved to such new location,
so long as such new location is within the continental United States, and so
long as, at the time of such written notification, the applicable Borrower
provides any
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financing statements or fixture filings necessary to perfect and continue
perfected the Lender's Liens on such assets and also provides to Lender a
Collateral Access Agreement.
6.9 ADDITIONAL PLEDGE AGREEMENTS. Upon Lender's request, in its sole
discretion, each Borrower and each of its Subsidiaries that owns Stock in a
Subsidiary of Parent not organized under the laws of the United States (or
any state thereof), shall duly execute and deliver a Pledge Agreement
(together with all certificates representing the shares of Stock pledged
thereunder, as well as Stock powers or equivalent instruments of transfer
with respect thereto endorsed in blank), pledging up to 66% of such voting
Stock and 100% of such non-voting Stock.
6.10 SUPPLEMENTAL COPYRIGHT SECURITY AGREEMENTS. As soon as available,
but in no event later than 5 days after the end of each fiscal quarter of the
Parent's fiscal year, record any current version of software developed during
such fiscal quarter with the United States Copyright Office, and
simultaneously therewith, deliver to Lender a Supplemental Copyright Security
Agreement duly executed by the Borrower that maintains ownership of such
software.
6.11 SHARED SERVICES. At least three (3) months prior to the expiration
of all agreements to provide Shared Services to the Borrowers by IMS Health,
all of which agreements are described on SCHEDULE 3.1(o), the applicable
Borrower shall enter into a new agreement of Shared Services, in form and
substance and with a service provider satisfactory to both Administrative
Borrower and Lender.
6.12 COMPLIANCE WITH LAWS. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, including
the Fair Labor Standards Act and the Americans With Disabilities Act, other
than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not result in and reasonably could
not be expected to result in a Material Adverse Change.
6.13 LEASES. Pay when due all rents and other amounts payable under any
leases to which any Borrower is a party or by which any Borrower's properties
and assets are bound, unless such payments are the subject of a Permitted
Protest.
6.14 BROKERAGE COMMISSIONS. Pay any and all brokerage commission or
finders fees incurred in connection with or as a result of Borrowers'
obtaining financing from Lender under this Agreement. Borrowers agree and
acknowledge that payment of all such brokerage commissions or finders fees
shall be the sole responsibility of Borrowers, and each Borrower agrees to
indemnify, defend, and hold Lender harmless from and against any claim of any
broker or finder arising out of Borrowers' obtaining financing from Lender
under this Agreement.
6.15 SIEBEL AGREEMENTS. Within 30 days after Lender's request, following
Lender's determination in its Permitted Discretion that either the financial
condition of
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Siebel or the performance by ▇▇▇▇▇▇ of its obligations under the Siebel
Agreements has deteriorated to a level that is adverse to the Borrowers or
their assets, Borrowers shall join the Siebel Escrow Agreement as a permitted
beneficiary and collaterally assign its rights thereunder to Lender (to the
extent permitted by the terms of the Siebel Escrow Agreement) pursuant to a
collateral assignment in form and substance satisfactory to Lender, together
with such certificates, documents and legal opinions related thereto as the
Lender shall require.
6.16 EXISTENCE. At all times preserve and keep in full force and effect
each Borrower's valid existence and good standing and any rights and
franchises material to Borrowers' businesses.
6.17 ENVIRONMENTAL.
(a) Keep any property either owned or operated by any
Borrower free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by
such Environmental Liens, (b) comply, in all material respects, with
Environmental Laws and provide to Lender documentation of such compliance
which Lender reasonably requests, (c) promptly notify Lender of any release
of a Hazardous Material of any reportable quantity from or onto property
owned or operated by any Borrower and take any Remedial Actions required to
▇▇▇▇▇ said release or otherwise to come into compliance with applicable
Environmental Law, and (d) promptly provide Lender with written notice within
10 days of the receipt of any of the following: (i) notice that an
Environmental Lien has been filed against any of the real or personal
property of any Borrower, (ii) commencement of any Environmental Action or
notice that an Environmental Action will be filed against any Borrower, and
(iii) notice of a violation, citation, or other administrative order which
reasonably could be expected to result in a Material Adverse Change.
Notwithstanding the foregoing, this covenant shall not apply to any property
securing the Wilton Note, other than the obligation of the Borrowers to
provide notice required under clause (c) and (d) for events arising after the
date that any Borrower accepts assignment of the Wilton Note, so long as (i)
IMS Health agrees to remediate such property and indemnify the Borrowers for
any liability associated with such property and (ii) the Borrowers do not
foreclose or take ownership of such property unless the agreement with IMS
Health referred to in clause (i) is on terms and conditions satisfactory to
Lender in its sole discretion .
6.18 DISCLOSURE UPDATES. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, (a) notify Lender if any written
information, exhibit, or report furnished to Lender contained any untrue
statement of a material fact or omitted to state any material fact necessary
to make the statements contained therein not misleading in light of the
circumstances in which made, and (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution,
acknowledgement, filing, or recordation thereof.
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7. NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Borrowers will not and will not permit any of their respective
Subsidiaries to do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan
Documents, together with Indebtedness owed to Underlying Issuers with respect
to Underlying Letters of Credit;
(b) Indebtedness set forth on SCHEDULE 5.21;
(c) Permitted Purchase Money Indebtedness;
(d) refinancings, renewals, or extensions of Indebtedness permitted
under clauses (b) and (c) of this SECTION 7.1 (and continuance or renewal of
any Permitted Liens associated therewith) so long as: (i) the terms and
conditions of such refinancings, renewals, or extensions do not, in Lender's
judgment, materially impair the prospects of repayment of the Obligations by
Borrowers or materially impair Borrowers' creditworthiness, (ii) such
refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended, (iii) such refinancings, renewals, or
extensions do not result in a shortening of the average weighted maturity of
the Indebtedness so refinanced, renewed, or extended, nor are they on terms
or conditions, that, taken as a whole, are materially more burdensome or
restrictive to the applicable Borrower, and (iv) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal, or
extension Indebtedness must be include subordination terms and conditions
that are at least as favorable to Lender as those that were applicable to the
refinanced, renewed, or extended Indebtedness; and
(e) Indebtedness composing of Permitted Investments and Investments
permitted under SECTION 7.13.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of
Permitted Liens to the extent that the original Indebtedness is refinanced,
renewed, or extended under SECTION 7.1(d) and so long as the replacement
Liens only encumber those assets that secured the refinanced, renewed, or
extended Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
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(a) Consummate any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock.
(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation
or dissolution).
(c) Convey, sell, lease, license, assign, transfer, or otherwise
dispose of, in one transaction or a series of transactions, all or any
substantial part of its assets.
7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of any of the assets
of any Borrower.
7.5 CHANGE NAME. Change any Borrower's name, FEIN, corporate structure or
identity, or add any new fictitious name; PROVIDED, HOWEVER, that a Borrower
may change its name upon at least 30 days prior written notice by
Administrative Borrower to Lender of such change and so long as, at the time
of such written notification, such Borrower provides any financing statements
or fixture filings necessary to perfect and continue perfected Lender's Liens.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable with
respect to the obligations of any third Person except by endorsement of
instruments or items of payment for deposit to the account of Borrowers or
which are transmitted or turned over to Lender.
7.7 NATURE OF BUSINESS. Make any change in the principal nature of
Borrowers' business of providing comprehensive pharmaceutical relationship
management solutions, interactive marketing services and e-business
application software to the pharmaceutical, biotechnology and healthcare
industries.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by SECTION
7.1(d), prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of any Borrower, other than the Obligations in accordance with
this Agreement, and
(b) Except in connection with a refinancing permitted by SECTION
7.1(d), directly or indirectly, amend, modify, alter, increase, or change any
of the terms or conditions of any agreement, instrument, document, indenture,
or other writing evidencing or concerning Indebtedness permitted under
SECTIONS 7.1(b) or (c).
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or indirectly,
any Change of Control.
7.10 CONSIGNMENTS. Consign any Inventory or sell any Inventory on ▇▇▇▇
and hold, sale or return, sale on approval, or other conditional terms of
sale.
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7.11 DISTRIBUTIONS. Other than distributions or declaration and payment
of dividends by a Borrower to another Borrower, make any distribution or
declare or pay any dividends (in cash or other property, other than common
Stock) on, or purchase, acquire, redeem, or retire any of any Borrower's
Stock, of any class, whether now or hereafter outstanding.
7.12 ACCOUNTING METHODS. Modify or change its method of accounting (other
than as may be required to conform to GAAP) or enter into, modify, or
terminate any agreement currently existing, or at any time hereafter entered
into with any third party accounting firm or service bureau for the
preparation or storage of Borrowers' accounting records without said
accounting firm or service bureau agreeing to provide Lender information
regarding the Collateral or Borrowers' financial condition.
7.13 INVESTMENTS. Directly or indirectly, make or acquire any Investment,
or incur any liabilities (including contingent obligations) for or in
connection with any Investment, except for (a) Permitted Investments,
PROVIDED, HOWEVER, that commencing 14 days after the Closing Date, Borrowers
shall not have Permitted Investments (other than in the Cash Management
Accounts and joint custodial accounts held for customers) in excess of
$100,000 outstanding at any one time unless the applicable Borrower and the
applicable securities intermediary or bank have entered into Control
Agreements or similar arrangements governing such Permitted Investments, as
Lender shall determine in its Permitted Discretion, to perfect (and further
establish) the Lender's Liens in such Permitted Investments, (b) Investments
by any Non-Borrower Subsidiary in another Non-Borrower Subsidiary, (c)
Investments by any Borrower in any Non-Borrower Subsidiary, PROVIDED, that
(i) the aggregate outstanding amount of all such Investments, less the
aggregate outstanding amount of all Investments by an Non-Borrower Subsidiary
in a Borrower, does not exceed $25,000,000; provided that such amount may
increase by $5,000,000 at the end of each six month anniversary of the
Closing Date, provided that no Advance is outstanding or has been outstanding
at any time in the previous six month period and no Advance will result from
such Investment and further provided that in no event shall such amount
exceed $40,000,000, (ii) immediately before and after giving effect to such
Investment, no Event of Default has occurred and is continuing, (iii) if such
Investment is in the form of Indebtedness, it is evidenced by a promissory
note, endorsed by the Borrower in blank and delivered to Lender and (iv) if
such Investment is in the form of equity, such equity is evidenced by a stock
or equivalent certificate that is delivered to Lender with appropriate
instruments of transfer, and (e) Investments by any Non-Borrower Subsidiary
in any Borrower, provided that such Investment is in the form of Indebtedness
and such Non-Borrower is a party to the Intercreditor Subordination Agreement.
7.14 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of any Borrower except for
transactions that are in the ordinary course of Borrowers' business, upon
fair and reasonable terms, that are fully
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disclosed to Lender, and that are no less favorable to Borrowers than would
be obtained in an arm's length transaction with a non-Affiliate.
7.15 SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.16 COMPENSATION. Increase the annual fee or per-meeting fees paid to
the members of its Board of Directors during any year by more than 15% over
the prior year; pay total cash compensation to the top fifteen compensated
employees for any fiscal year in an aggregate amount in excess of (i)
$7,300,000 for fiscal year 2002 and (ii) 125% of that paid in the prior
fiscal year for fiscal year 2001, 2003 and each fiscal year thereafter,
provided, that if no Event of Default has occurred, and after giving effect
to such payments, Excess Availability plus cash on hand exceeds $7,500,000,
125% shall be increased to 185%.
7.17 USE OF PROCEEDS. Use the proceeds of the Advances for any purpose
other than (a) on the Closing Date, (i) to repay in full the outstanding
principal, accrued interest, and accrued fees and expenses owing to Existing
Lender, and (ii) to pay transactional fees, costs, and expenses incurred in
connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent
with the terms and conditions hereof, for its lawful and permitted corporate
purposes, including the financing of working capital and capital
expenditures, excluding, however, the purchases of "margin securities" as
such term is defined in 12 CFR Section 220.2.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Relocate its chief executive office to a new location
without Administrative Borrower providing 30 days prior written notification
thereof to Lender and so long as, at the time of such written notification,
the applicable Borrower provides any financing statements or fixture filings,
necessary to perfect and continue perfected the Lender's Liens and also
provides to Lender a Collateral Access Agreement with respect to such new
location. The Inventory and Equipment shall not at any time now or hereafter
be stored with a bailee, warehouseman, or similar party without Lender's
prior written consent.
7.19 SECURITIES ACCOUNTS. Establish or maintain any Securities Account
unless Lender shall have received a Control Agreement in respect of such
Securities Account. Borrowers agree to not transfer assets out of any
Securities Account; PROVIDED, HOWEVER, that, so long as no Event of Default
has occurred and is continuing or would result therefrom, Borrowers may use
such assets (and the proceeds thereof) to the extent not prohibited by this
Agreement.
7.20 FINANCIAL COVENANTS.
(a) Fail to maintain
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(i) MINIMUM EBITDA. EBITDA, measured on a fiscal
quarter-end basis, of not less than the required amount set forth in
the following table for the applicable period set forth opposite
thereto;
------------------------------------------------------------------------------------------------------------
Applicable Amount Applicable Period
------------------------------------------------------------------------------------------------------------
- $6,462,000 For the 6 month period
ending June 30, 2001
------------------------------------------------------------------------------------------------------------
- $6,370,000 For the 9 month period
ending September 30, 2001
------------------------------------------------------------------------------------------------------------
- $3,311,000 For the 12 month period
ending December 31, 2001
------------------------------------------------------------------------------------------------------------
80% of the level of each such fiscal For the 12 month period
quarter set forth in the acceptable ending each fiscal quarter thereafter
Projections delivered to Lender
pursuant to Section 6.3(c)(i)
------------------------------------------------------------------------------------------------------------
(ii) TANGIBLE NET WORTH. Tangible Net Worth of at least
the required amount set forth in the following table as of the
applicable date set forth opposite thereto:
------------------------------------------------------------------------------------------------------------
Applicable Amount Applicable Date
------------------------------------------------------------------------------------------------------------
$16,665,000 As of June 30, 2001
------------------------------------------------------------------------------------------------------------
$14,680,000 As of September 30, 2001
------------------------------------------------------------------------------------------------------------
$16,000,000 As of December 31, 2001
------------------------------------------------------------------------------------------------------------
80% of the level of each such fiscal As of the last day of each fiscal quarter ending thereafter
quarter set forth in the acceptable
Projections delivered to Lender
pursuant to Section 6.3(c)(i)
------------------------------------------------------------------------------------------------------------
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(b) CAPITAL EXPENDITURES. Make capital expenditures during
the Parent's fiscal year ending December 31, 2001 in the aggregate amount in
excess of $6,000,000 and for each subsequent fiscal year thereafter in the
aggregate amount in excess of 120% of the level of such fiscal year set forth
in the acceptable Projections delivered to Lender pursuant to Section
6.3(c)(i).
7.21 AMENDMENT TO MATERIAL DOCUMENTS. The Borrowers will not, and will
not permit any Subsidiary or Affiliate to, amend, modify or waive any of its
rights under (a) its certificate of incorporation, bylaws or other
organizational documents, (b) the IMS Health Agreements or any other
agreement with IMS Health, or (c) the Siebel Agreements or any other
agreement with Siebel, other than amendments, modifications or waivers that
(i) do not result in an increase with respect to any Indebtedness owed by
Borrowers, or any of their Subsidiaries or Affiliates, under such agreements,
(ii) do not result in a shortening of the average weighted maturity of any
Indebtedness owed by Borrowers, or any of their Subsidiaries or Affiliates,
under such agreements, nor are they on terms or conditions, that, taken as a
whole, are materially more burdensome or restrictive to the applicable
Borrower, (iii) do not, in Lender's judgment, materially impair the prospects
of repayment of the Obligations by Borrowers or materially impair Borrowers'
creditworthiness, and (iv) is otherwise constitutes a Material Adverse Change.
7.22 DISTRIBUTION AGREEMENT. The Borrowers will not, and will not permit
any Subsidiary or Affiliate to, fail to comply with Sections 2.11(b) and (c)
of the Distribution Agreement referred to in clause (i) of the definition of
IMS Health Agreements.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "EVENT OF DEFAULT") under this Agreement:
If Borrowers fail to pay when due and payable or when declared
due and payable, all or any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due Lender,
reimbursement of Lender Expenses, or other amounts constituting Obligations);
PROVIDED, HOWEVER, that to the extent that the charging of interest or expenses
of the Lender to the Loan Account causes the aggregate Advances and Letter of
Credit Usage to exceed the Borrowing Base, no Event of Default shall arise until
Borrowers fail to pay principal in an amount equal to such excess within 2
Business Days after Lender notifies Administrative Borrower thereof;
If Borrowers fail to perform, keep, or observe: (a) any
term, provision, condition, covenant, or agreement contained in SECTION 6.2
and such failure continues for a period of five days after the date of such
failure; (b) any term, provision, condition, covenant or agreement contained
in SECTIONS 6.3, 6.4, 6.5, 6.6, 6.8, or 6.13 and such failure continues for a
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period of 15 days after the date of such failure; or (c) any other term,
provision, condition, covenant or agreement contained in this Agreement or in
any of the other Loan Documents;
If any material portion of any Borrower's or any of its
Subsidiaries' assets is attached, seized, subjected to a writ or distress
warrant, levied upon, or comes into the possession of any third Person;
If an Insolvency Proceeding is commenced by any Borrower or
any of its Subsidiaries;
If an Insolvency Proceeding is commenced against any
Borrower, or any of its Subsidiaries, and any of the following events occur:
(a) the applicable Borrower or the Subsidiary consents to the institution of
the Insolvency Proceeding against it, (b) the petition commencing the
Insolvency Proceeding is not timely controverted, (c) the petition commencing
the Insolvency Proceeding is not dismissed within 60 calendar days of the
date of the filing thereof; provided, however, that, during the pendency of
such period, Lender shall be relieved of its obligation to extend credit
hereunder, (d) an interim trustee is appointed to take possession of all or
any substantial portion of the properties or assets of, or to operate all or
any substantial portion of the business of, any Borrower or any of its
Subsidiaries, or (e) an order for relief shall have been entered therein;
If any Borrower or any of its Subsidiaries is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs and such injunction or
restraint is not released within 20 days; PROVIDED, HOWEVER, that during the
pendency of such period, Lender shall be relieved of their obligations to
extend credit hereunder;
If a notice of Lien, levy, or assessment is filed of record
with respect to any Borrower's or any of its Subsidiaries' assets by the
United States or any department, agency, or instrumentality thereof, or by
any state, county, municipal, or governmental agency, or if any taxes or
debts owing at any time hereafter to any one or more of such entities becomes
a Lien, whether ▇▇▇▇▇▇ or otherwise, upon any Borrower's or any of its
Subsidiaries' assets and the same is not paid before such payment is
delinquent;
If a judgment or other claim becomes a Lien or encumbrance
upon any material portion of any Borrower's or any of its Subsidiaries'
assets and such Lien is not satisfied or released within 10 days;
If there is a default in any material agreement to which
any Borrower or any of its Subsidiaries is a party and such default (a)
occurs at the final maturity of the obligations thereunder, or (b) results in
a right by the other party thereto, irrespective of whether exercised, to
accelerate the maturity of the applicable Borrower's or its Subsidiaries'
obligations thereunder, to terminate such agreement, or to refuse to renew
such agreement pursuant to an automatic renewal right therein;
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If any Borrower or any of its Subsidiaries makes any
payment on account of Indebtedness that has been contractually subordinated
in right of payment to the payment of the Obligations, except to the extent
such payment is permitted by the terms of the subordination provisions
applicable to such Indebtedness;
If any misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or Record made to
Lender by any Borrower, its Subsidiaries, or any officer, employee, agent, or
director of any Borrower or any of its Subsidiaries;
If this Agreement or any other Loan Document that purports
to create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby
or thereby; or
Any provision of any Loan Document shall at any time for
any reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Borrower, or a proceeding shall be
commenced by any Borrower, or by any Governmental Authority having
jurisdiction over any Borrower, seeking to establish the invalidity or
unenforceability thereof, or any Borrower shall deny that any Borrower has
any liability or obligation purported to be created under any Loan Document.
9. THE LENDER'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, Lender (at its election but without
notice of its election and without demand) may do any one or more of the
following, all of which are authorized by Borrowers:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due
and payable;
(b) Cease advancing money or extending credit to or for the
benefit of Borrowers under this Agreement, under any of the Loan Documents,
or under any other agreement between Borrowers and Lender;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of Lender, but without
affecting any of the Lender's Liens in the Collateral and without affecting
the Obligations;
(d) Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which Lender considers advisable,
and in such cases, Lender will credit the Loan Account with only the net
amounts received by Lender in payment of such disputed Accounts after
deducting all Lender Expenses incurred or expended in connection therewith;
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(e) Cause Borrowers to hold all returned Inventory in trust
for Lender, segregate all returned Inventory from all other assets of
Borrowers or in Borrowers' possession and conspicuously label said returned
Inventory as the property of Lender;
(f) Without notice to or demand upon any Borrower, make
such payments and do such acts as Lender considers necessary or reasonable to
protect its security interests in the Collateral. Each Borrower agrees to
assemble the Personal Property Collateral if Lender so requires, and to make
the Personal Property Collateral available to Lender at a place that Lender
may designate which is reasonably convenient to both parties. Each Borrower
authorizes Lender to enter the premises where the Personal Property
Collateral is located, to take and maintain possession of the Personal
Property Collateral, or any part of it, and to pay, purchase, contest, or
compromise any Lien that in Lender's determination appears to conflict with
the Lender's Liens and to pay all expenses incurred in connection therewith
and to charge Borrowers' Loan Account therefor. With respect to any of
Borrowers' owned or leased premises, each Borrower hereby grants Lender a
license to enter into possession of such premises and to occupy the same,
without charge, in order to exercise any of Lender's rights or remedies
provided herein, at law, in equity, or otherwise;
(g) Without notice to any Borrower (such notice being
expressly waived), and without constituting a retention of any collateral in
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of any
Borrower held by Lender (including any amounts received in the Cash
Management Accounts), or (ii) Indebtedness at any time owing to or for the
credit or the account of any Borrower held by Lender;
(h) Hold, as cash collateral, any and all balances and
deposits of any Borrower held by Lender, and any amounts received in the Cash
Management Accounts, to secure the full and final repayment of all of the
Obligations;
(i) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Personal Property Collateral. Each Borrower hereby
grants to Lender a license or other right to use, without charge, such
Borrower's labels, patents, copyrights, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a
similar nature, as it pertains to the Personal Property Collateral, in
completing production of, advertising for sale, and selling any Personal
Property Collateral and such Borrower's rights under all licenses and all
franchise agreements shall inure to Lender's benefit;
(j) Sell the Personal Property Collateral at either a
public or private sale, or both, by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places
(including Borrowers' premises) as Lender determines is commercially
reasonable. It is not necessary that the Personal Property Collateral be
present at any such sale;
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(k) Lender shall give notice of the disposition of the
Personal Property Collateral as follows:
(i) Lender shall give Administrative Borrower (for the
benefit of the applicable Borrower) a notice in writing of
the time and place of public sale, or, if the sale is a
private sale or some other disposition other than a public
sale is to be made of the Personal Property Collateral, then
the time on or after which the private sale or other
disposition is to be made; and
(ii) The notice shall be personally delivered or mailed,
postage prepaid, to Administrative Borrower as provided in
SECTION 12, at least 10 days before the earliest time of
disposition set forth in the notice; no notice needs to be
given prior to the disposition of any portion of the Personal
Property Collateral that is perishable or threatens to
decline speedily in value or that is of a type customarily
sold on a recognized market;
(l) Lender may credit bid and purchase at any public sale;
(m) Lender may seek the appointment of a receiver or keeper
to take possession of all or any portion of the Collateral or to operate same
and, to the maximum extent permitted by law, may seek the appointment of such
a receiver without the requirement of prior notice or a hearing;
(n) Lender shall have all other rights and remedies
available to it at law or in equity pursuant to any other Loan Documents; and
(o) Any deficiency that exists after disposition of the
Personal Property Collateral as provided above will be paid immediately by
Borrowers. Any excess will be returned, without interest and subject to the
rights of third Persons, by Lender to Administrative Borrower (for the
benefit of the applicable Borrower).
Without limiting the foregoing, Lender agrees to notify the Administrative
Borrower promptly of the exercise of its rights and remedies under Sections
9.1(a), 9.1(c), 9.1(j), 9.1(o) and to the extent of the sale of any Personal
Property Collateral, 9.1(i), but failure to provide such notice to the
Administrative Borrower is not a requirement to the exercise of, and will not
affect the enforceability of, Lender's right and remedies under Sections
9.1(a), 9.1(c), 9.1(j), 9.1(o) and 9.1(i).
9.2 REMEDIES CUMULATIVE. The rights and remedies of Lender under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. Lender shall have all other rights and remedies not inconsistent
herewith as provided under the Code, by law, or in equity. No exercise by
Lender of one right or remedy shall be deemed an election, and no waiver by
Lender of any Event of Default shall be deemed a continuing waiver. No delay
by Lender shall constitute a waiver, election, or acquiescence by it.
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10. TAXES AND EXPENSES.
If any Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or
assets, rents or other amounts payable under such leases) due to third
Persons, or fails to make any deposits or furnish any required proof of
payment or deposit, all as required under the terms of this Agreement, then,
Lender, in its sole discretion and without prior notice to any Borrower, may
do any or all of the following: (a) make payment of the same or any part
thereof, (b) set up such reserves in Borrowers' Loan Account as Lender deems
necessary to protect Lender from the exposure created by such failure, or (c)
in the case of the failure to comply with SECTION 6.7 hereof, obtain and
maintain insurance policies of the type described in SECTION 6.7 and take any
action with respect to such policies as Lender deems prudent. Any such
amounts paid by Lender shall constitute Lender Expenses and any such payments
shall not constitute an agreement by Lender to make similar payments in the
future or a waiver by Lender of any Event of Default under this Agreement.
Lender need not inquire as to, or contest the validity of, any such expense,
tax, or Lien and the receipt of the usual official notice for the payment
thereof shall be conclusive evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or
renewal of documents, instruments, chattel paper, and guarantees at any time
held by Lender on which any such Borrower may in any way be liable.
11.2 LENDER'S LIABILITY FOR COLLATERAL. Each Borrower hereby agrees that:
(a) so long as Lender complies with its obligations, if any, under the Code,
Lender shall not in any way or manner be liable or responsible for: (i) the
safekeeping of the Collateral, (ii) any loss or damage thereto occurring or
arising in any manner or fashion from any cause, (iii) any diminution in the
value thereof, or (iv) any act or default of any carrier, warehouseman,
bailee, forwarding agency, or other Person, and (b) all risk of loss, damage,
or destruction of the Collateral shall be borne by Borrowers.
11.3 INDEMNIFICATION. Each Borrower shall pay, indemnify, defend, and
hold the Lender-Related Persons, each Participant, and each of their
respective officers, directors, employees, agents, and attorneys-in-fact
(each, an "INDEMNIFIED PERSON") harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, and damages, and all attorneys' fees and
disbursements and other costs and expenses actually incurred in connection
therewith (as and when they are incurred and irrespective of whether suit is
brought), at any time asserted against, imposed upon, or incurred by any of
them (a) in connection with or as a result of or related to the execution,
delivery, enforcement, performance, or administration of this Agreement, any
of the other Loan Documents, or the transactions contemplated hereby or
thereby, and (b) with
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respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event, or circumstance in any manner related
thereto (all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"). The
foregoing to the contrary notwithstanding, Borrowers shall have no obligation
to any Indemnified Person under this SECTION 11.3 with respect to any
Indemnified Liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or willful misconduct
of such Indemnified Person. This provision shall survive the termination of
this Agreement and the repayment of the Obligations. If any Indemnified
Person makes any payment to any other Indemnified Person with respect to an
Indemnified Liability as to which Borrowers were required to indemnify the
Indemnified Person receiving such payment, the Indemnified Person making such
payment is entitled to be indemnified and reimbursed by Borrowers with
respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN
WHOLE OR IN PART CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF
SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Borrowers or Lender to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Administrative Borrower or Lender, as applicable,
may designate to each other in accordance herewith), or telefacsimile to
Borrowers in care of Administrative Borrower or to Lender, as the case may be,
at its address set forth below:
If to Administrative
Borrower: Synavant Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: Synavant Inc.
Office of General Counsel
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
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with further
copies to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: Foothill Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Business Finance Division
Manager
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Lender and Borrowers may change the address at which they are
to receive notices hereunder, by notice in writing in the foregoing manner given
to the other party. All notices or demands sent in accordance with this SECTION
12, other than notices by Lender in connection with enforcement rights against
the Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices sent by
Lender in connection with the exercise of enforcement rights against Collateral
under the provisions of the Code shall be deemed sent when deposited in the mail
or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above. The Administrative Borrower
hereby designates the email addresses of ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇;
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇; and ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇ as appropriate email addresses
to which Lender should send notices of the fees due and payable under Section
2.5(d).
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT
IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND
THERETO WITH RESPECT TO ALL MATTERS
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ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF GEORGIA.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL
BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTIES OF ▇▇▇▇▇▇, DEKALB, ▇▇▇▇ AND GWINNETT, STATE OF GEORGIA, PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT LENDER'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWERS AND LENDER WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).
BORROWERS AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF
THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWERS AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
Each Borrower hereby irrevocably designates, appoints and
empowers CT Corporation System, whose present address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as its authorized agent to receive, for and on its
behalf and its property, service of process in the State of Georgia when and as
such legal actions or proceedings may be brought in the courts of the State of
Georgia or of the United States of America sitting in Georgia, and such service
of process shall be deemed complete upon the date of delivery thereof to such
agent whether or not such agent gives notice thereof to such Borrower, or upon
the earliest of any other date permitted by applicable law. Each Borrower shall
furnish the consent of CT Corporation System to act as agent of said Borrower on
or prior to the Closing Date. It is understood that a copy of said process
served on said agent as the agent of said Borrower will as soon as practicable
be forwarded to said Borrower, at its address set
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forth below, but its failure to receive such copy shall not affect in any way
the service of said process on said agent as the agent of said Borrower. Each
Borrower irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of the
copies thereof by certified mail, return receipt requested, postage prepaid,
to it at its address set forth herein, such service to become effective upon
the earlier of (i) the date 10 calendar days after such mailing or (ii) any
earlier date permitted by applicable law. Each Borrower agrees that it will
at all times continuously maintain an agent to receive service of process in
the State of Georgia on behalf of itself and its properties and in the event
that, for any reason, the agent named above or its successor shall no longer
serve as its agent to receive service of process in the State of Georgia on
its behalf, it shall promptly appoint a successor so to serve and shall
advise the Lender (and shall furnish to the Lender the consent of any
successor agent so to act). Nothing in this Section 13 shall affect the right
of the Lender to bring proceedings against any Borrower in the courts of any
other jurisdiction or to serve process in any other manner permitted by
applicable law.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Lender may assign and delegate to one or more assignees
(each an "ASSIGNEE") all, or any ratable part of all, of the Obligations and
the other rights and obligations of Lender hereunder and under the other Loan
Documents; PROVIDED, HOWEVER, that Borrowers may continue to deal solely and
directly with Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment
instructions, addresses, and related information with respect to the
Assignee, have been given to Administrative Borrower by Lender and the
Assignee under an appropriate assignment and acceptance agreement in form and
substance satisfactory to Lender.
(b) From and after the date that Lender provides
Administrative Borrower with such written notice and executed assignment and
acceptance agreement, (i) the Assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned
to it pursuant to such assignment and acceptance agreement, shall have the
assigned and delegated rights and obligations of Lender under the Loan
Documents, and (ii) Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned and delegated
by it pursuant to such assignment and acceptance agreement, relinquish its
rights (except with respect to SECTION 11.3 hereof) and be released from its
obligations under this Agreement (and in the case of an assignment and
acceptance agreement covering all or the remaining portion of Lender's rights
and obligations under this Agreement and the other Loan Documents, Lender
shall cease to be a party hereto and thereto), and such assignment shall
affect a novation between Borrowers and the Assignee.
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(c) Immediately upon Borrower's receipt of such fully
executed assignment and acceptance agreement, this Agreement shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the rights and
duties of Lender arising therefrom.
(d) Lender may at any time sell to one or more commercial
banks, financial institutions, or other Persons not Affiliates of Lender (a
"PARTICIPANT") participating interests in Obligations and the other rights
and interests of Lender hereunder and under the other Loan Documents;
PROVIDED, HOWEVER, that (i) Lender shall remain the "Lender" for all purposes
of this Agreement and the other Loan Documents and the Participant receiving
the participating interest in the Obligations and the other rights and
interests of Lender hereunder shall not constitute a "Lender" hereunder or
under the other Loan Documents and Lender's obligations under this Agreement
shall remain unchanged, (ii) Lender shall remain solely responsible for the
performance of such obligations, (iii) Borrowers and Lender shall continue to
deal solely and directly with each other in connection with Lender's rights
and obligations under this Agreement and the other Loan Documents, (iv)
Lender shall not transfer or grant any participating interest under which the
Participant has the right to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan Document, except to
the extent such amendment to, or consent or waiver with respect to this
Agreement or of any other Loan Document would (A) extend the final maturity
date of the Obligations hereunder in which such Participant is participating,
(B) reduce the interest rate applicable to the Obligations hereunder in which
such Participant is participating, (C) release all or a material portion of
the Collateral or guaranties (except to the extent expressly provided herein
or in any of the Loan Documents) supporting the Obligations hereunder in
which such Participant is participating, (D) postpone the payment of, or
reduce the amount of, the interest or fees payable to such Participant
through Lender, or (E) change the amount or due dates of scheduled principal
repayments or prepayments or premiums; and (v) all amounts payable by
Borrowers hereunder shall be determined as if Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating interest
in amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under this
Agreement. The rights of any Participant only shall be derivative through
Lender and no Participant shall have any rights under this Agreement or the
other Loan Documents or any direct rights as to Borrowers, the Collections,
the Collateral, or otherwise in respect of the Obligations. No Participant
shall have the right to participate directly in the making of decisions by
Lender.
(e) In connection with any such assignment or participation
or proposed assignment or participation, a Lender may disclose all documents
and information which it now or hereafter may have relating to Borrowers or
Borrowers' business.
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(f) Any other provision in this Agreement notwithstanding,
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
Bank or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; PROVIDED,
HOWEVER, that Borrowers may not assign this Agreement or any rights or duties
hereunder without Lender's prior written consent and any prohibited
assignment shall be absolutely void AB INITIO. No consent to assignment by
Lender shall release any Borrower from its Obligations. Lender may assign
this Agreement and the other Loan Documents and its rights and duties
hereunder and thereunder pursuant to SECTION 14.1 hereof and, except as
expressly required pursuant to SECTION 14.1 hereof, no consent or approval by
any Borrower is required in connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrowers therefrom, shall be effective unless the same shall be
in writing and signed by Lender and Administrative Borrower (on behalf of all
Borrowers) and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given
15.2 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Lender to exercise
any right, remedy, or option under this Agreement or, any other Loan
Document, or delay by Lender in exercising the same, will operate as a waiver
thereof. No waiver by Lender will be effective unless it is in writing, and
then only to the extent specifically stated. No waiver by Lender on any
occasion shall affect or diminish Lender's rights thereafter to require
strict performance by Borrowers of any provision of this Agreement. Lender's
rights under this Agreement and the other Loan Documents will be cumulative
and not exclusive of any other right or remedy that Lender may have.
16. GENERAL PROVISIONS.
16.1 EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by Borrowers and Lender.
16.2 SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
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16.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Lender or Borrowers,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
16.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall
be severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
16.5 WITHHOLDING TAXES. All payments made by Borrowers hereunder or under
any note will be made without setoff, counterclaim, or other defense, except
as required by applicable law other than for Taxes (as defined below). All
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed or
levied by the United States, or any state, local or foreign government or by
any department, agency or other political subdivision or taxing authority
thereof or therein (but excluding, any tax imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein (i) measured
by or based on the net income or net profits of Lender, or (ii) to the extent
that such tax results from a change in the circumstances of Lender, including
a change in the residence, place of organization, or principal place of
business of Lender, or a change in the branch or lending office of Lender
participating in the transactions set forth herein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "TAXES"). If any Taxes are so levied or imposed,
each Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts
due under this Agreement or under any note, including any amount paid
pursuant to this SECTION 16.5 after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein;
PROVIDED, HOWEVER, that Borrowers shall not be required to increase any such
amounts payable to Lender if the increase in such amount payable results from
Lender's own willful misconduct or gross negligence. Borrowers will furnish
to Lender as promptly as possible after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing
such payment by Borrowers.
16.6 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing signed by Lender and each of Borrowers.
16.7 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to
be an original, and all of which, when taken together, shall constitute but
one and the same Agreement. Delivery of an executed counterpart of this
Agreement by telefacsimile shall be equally as effective as
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delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile 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.
16.8 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Borrower or the transfer to Lender of any
property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors' rights,
including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money
or transfers of property (collectively, a "VOIDABLE TRANSFER"), and if Lender
is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then,
as to any such Voidable Transfer, or the amount thereof that Lender is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys' fees of Lender related thereto, the liability of
Borrowers automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.
16.9 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.
16.10 PARENT AS AGENT FOR BORROWERS. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the "ADMINISTRATIVE BORROWER") which appointment shall remain in full force
and effect unless and until Lender shall have received prior written notice
signed by each Borrower that such appointment has been revoked and that
another Borrower has been appointed Administrative Borrower. Each Borrower
hereby irrevocably appoints and authorizes the Administrative Borrower (i) to
provide Lender with all notices with respect to Advances and Letters of
Credit obtained for the benefit of any Borrower and all other notices and
instructions under this Agreement and (ii) to take such action as the
Administrative Borrower deems appropriate on its behalf to obtain Advances
and Letters of Credit and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement. It is
understood that the handling of the Loan Account and Collateral of Borrowers
in a combined fashion, as more fully set forth herein, is done solely as an
accommodation to Borrowers in order to utilize the collective borrowing
powers of Borrowers in the most efficient and economical manner and at their
request, and that Lender shall not incur liability to any Borrower as a
result hereof. Each Borrower expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a
combined fashion since the successful operation of each Borrower is dependent
on the continued successful performance of the integrated group. To induce
Lender to do so, and in consideration thereof, each Borrower hereby jointly
and
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severally agrees to indemnify Lender harmless against any and all liability,
expense, loss or claim of damage or injury, made against Lender by any
Borrower or by any third party whosoever, arising from or incurred by reason
of (a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) Lender's relying on any instructions of the Administrative
Borrower, or (c) any other action taken by Lender hereunder or under the
other Loan Documents, except that Borrowers will have no liability to any
Lender-Related Person under this SECTION 16.10 with respect to any liability
that has been finally determined by a court of competent jurisdiction to have
resulted solely from the gross negligence or willful misconduct of such
Lender-Related Person.
16.11 JUDGMENT CURRENCY.
(a) The Borrowers' obligations hereunder and the other Loan
Documents to make payments in the lawful currency of the United States shall not
be discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than Dollars, except to the
extent that such tender or recovery actually results in the effective receipt by
Lender of the full amount of Dollars expressed to be payable to Lender under
this Agreement or the other Loan Documents. If for the purpose of obtaining or
enforcing judgment against any Borrower in any court or in any jurisdiction, it
becomes necessary to convert into or from any currency other than Dollars (such
other currency being hereinafter referred to as the "JUDGMENT CURRENCY") an
amount due in Dollars, the conversion shall be made, and the currency equivalent
determined, in each case, as on the day immediately preceding the day on which
the judgment is given (such Business Day being hereafter referred to as the
"JUDGMENT CURRENCY CONVERSION Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Borrowers covenant and agree to pay, or cause to be paid,
such additional amounts, if any (but in any event not a lesser amount), as may
be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange quoted by ▇▇▇▇▇ Fargo Bank, N.A. at its
prevailing rate for such currency exchange on the date of payment, will produce
the amount of Dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial award at the rate of
exchange prevailing on the Judgment Currency Conversion Date.
For purposes of determining the currency equivalent for this
SECTION 16.11, such amounts shall include any premium and costs payable in
connection with the purchase of Dollars.
16.12 DOLLAR EQUIVALENT COMPUTATIONS.
Unless otherwise provided herein, to the extent that the
determination of compliance with any requirement of this Agreement requires
the conversion to Dollars of foreign currency amounts, such Dollar amount
shall be computed using the Dollar
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Equivalent of the amount of such foreign currency at the time such item is to
be calculated or is to be or was incurred, created or suffered or permitted
to exist, or assumed or transferred or sold for purposes of this Agreement
(except if such item was incurred, created or assumed, or suffered or
permitted to exist or transferred or sold prior to the Closing Date, such
conversion shall be made based on the Dollar Equivalent of the amounts of
such foreign currency at the date hereof).
16.3 TIME IS OF THE ESSENCE. Time is of the essence.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
BORROWERS:
SYNAVANT INC.,
a Delaware corporation
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
NEW ST, INC.,
a Delaware corporation
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
SYNAVANT LLC,
a Delaware limited liability company
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
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SYNAVANT LATIN AMERICA INC.,
a Delaware corporation
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
SYNAVANT TURKEY INC.,
a Delaware corporation
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
SYNAVANT PHILIPPINES INC.,
a Delaware corporation
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
SYNAVANT TAIWAN INC.,
a Delaware corporation
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
SYNAVANT KOREA INC.,
a Delaware corporation
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.,
a Delaware corporation
By: __________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
LENDER:
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: __________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
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