EXHIBIT 10.15
SECOND AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of August 17, 2001
among
aaiPHARMA INC.
as Borrower
CERTAIN OF THE SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO
as Guarantors
BANC OF AMERICA MEZZANINE CAPITAL LLC,
as a Lender
THE OTHER LENDERS
FROM TIME TO TIME PARTY HERETO
and
BANK OF AMERICA, N.A.
as Agent
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BANC OF AMERICA MEZZANINE CAPITAL LLC
Lead Underwriter
BANC OF AMERICA SECURITIES LLC
Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
SECTION 1 DEFINITIONS............................................................................................1
1.1 Definitions.....................................................................................1
1.2 Computation of Time Periods....................................................................28
1.3 Accounting Terms...............................................................................28
SECTION 2 CREDIT FACILITIES.....................................................................................29
2.1 Revolving Loans................................................................................29
2.2 Swing Line Loans Subfacility...................................................................31
2.3 Term Loan......................................................................................33
2.4 Letter of Credit Subfacility...................................................................34
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................................39
3.1 Default Rate...................................................................................39
3.2 Extension and Conversion.......................................................................39
3.3 Prepayments....................................................................................40
3.4 Termination and Reduction of Revolving Committed Amount........................................42
3.5 Fees...........................................................................................43
3.6 Capital Adequacy...............................................................................44
3.7 Limitation on Eurodollar Loans.................................................................44
3.8 Illegality.....................................................................................45
3.9 Requirements of Law............................................................................45
3.10 Treatment of Affected Loans....................................................................46
3.11 Taxes..........................................................................................47
3.12 Compensation...................................................................................48
3.13 Pro Rata Treatment.............................................................................49
3.14 Sharing of Payments............................................................................51
3.15 Payments, Computations, Etc....................................................................51
3.16 Evidence of Debt...............................................................................53
SECTION 4 GUARANTY..............................................................................................54
4.1 The Guaranty...................................................................................54
4.2 Obligations Unconditional......................................................................54
4.3 Reinstatement..................................................................................55
4.4 Certain Additional Waivers.....................................................................56
4.5 Remedies.......................................................................................56
4.6 Rights of Contribution.........................................................................56
4.7 Guarantee of Payment; Continuing Guarantee.....................................................57
SECTION 5 CONDITIONS............................................................................................57
5.1 Closing Conditions.............................................................................57
5.2 Conditions to all Extensions of Credit.........................................................62
SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................................63
6.1 Financial Condition............................................................................63
6.2 No Material Change.............................................................................64
6.3 Organization and Good Standing.................................................................64
6.4 Power; Authorization; Enforceable Obligations..................................................64
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6.5 No Conflicts...................................................................................64
6.6 No Default.....................................................................................65
6.7 Ownership of Properties........................................................................65
6.8 Indebtedness...................................................................................65
6.9 Litigation.....................................................................................65
6.10 Taxes..........................................................................................66
6.11 Compliance with Law............................................................................66
6.12 ERISA..........................................................................................66
6.13 Corporate Structure; Capital Stock, etc........................................................67
6.14 Governmental Regulations, Etc..................................................................68
6.15 Purpose of Loans and Letters of Credit.........................................................68
6.16 Environmental Matters..........................................................................68
6.17 Intellectual Property..........................................................................69
6.18 Solvency.......................................................................................70
6.19 Investments....................................................................................70
6.20 Business Locations.............................................................................70
6.21 Disclosure.....................................................................................70
6.22 No Burdensome Restrictions.....................................................................70
6.23 Brokers' Fees..................................................................................70
6.24 Labor Matters..................................................................................71
6.25 Nature of Business.............................................................................71
6.26 Intentionally Omitted..........................................................................71
6.27 Transactions with Affiliates...................................................................71
SECTION 7 AFFIRMATIVE COVENANTS.................................................................................71
7.1 Information Covenants..........................................................................72
7.2 Preservation of Existence and Franchises.......................................................75
7.3 Books and Records..............................................................................75
7.4 Compliance with Law............................................................................75
7.5 Payment of Taxes and Other Claims..............................................................76
7.6 Insurance......................................................................................76
7.7 Maintenance of Property........................................................................76
7.8 Use of Proceeds................................................................................77
7.9 Audits/Inspections.............................................................................77
7.10 Financial Covenants............................................................................77
7.11 Additional Guarantors..........................................................................78
7.12 Pledged Assets.................................................................................78
7.13 Post-Closing Deliveries........................................................................79
SECTION 8 NEGATIVE COVENANTS....................................................................................80
8.1 Indebtedness...................................................................................80
8.2 Liens..........................................................................................81
8.3 Nature of Business.............................................................................83
8.4 Consolidation, Merger, Dissolution, etc........................................................83
8.5 Asset Dispositions.............................................................................83
8.6 Investments....................................................................................84
8.7 Restricted Payments............................................................................86
8.8 Intentionally Omitted..........................................................................87
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8.9 Transactions with Affiliates...................................................................87
8.10 Fiscal Year; Organizational Documents..........................................................88
8.11 Limitation on Restricted Actions...............................................................88
8.12 Ownership of Subsidiaries......................................................................88
8.13 Sale Leasebacks................................................................................88
8.14 Capital Expenditures...........................................................................89
8.15 No Further Negative Pledges....................................................................89
8.16 Operating Lease Obligations....................................................................89
SECTION 9 EVENTS OF DEFAULT.....................................................................................89
9.1 Events of Default..............................................................................89
9.2 Acceleration; Remedies.........................................................................92
SECTION 10 AGENCY PROVISIONS....................................................................................92
10.1 Appointment and Authorization of Agent.........................................................92
10.2 Delegation of Duties...........................................................................93
10.3 Liability of Agent.............................................................................93
10.4 Reliance by Agent..............................................................................94
10.5 Notice of Default..............................................................................94
10.6 Credit Decision; Disclosure of Information by Agent............................................95
10.7 Indemnification of Agent.......................................................................95
10.8 Agent in its Individual Capacity...............................................................96
10.9 Successor Agent................................................................................96
10.10 Other Agents; Lead Managers....................................................................96
SECTION 11 MISCELLANEOUS........................................................................................97
11.1 Notices........................................................................................97
11.2 Right of Set-Off; Adjustments..................................................................98
11.3 Successors and Assigns.........................................................................99
11.4 No Waiver; Remedies Cumulative................................................................102
11.5 Expenses; Indemnification.....................................................................102
11.6 Amendments, Waivers and Consents..............................................................103
11.7 Counterparts..................................................................................105
11.8 Headings......................................................................................105
11.9 Survival......................................................................................105
11.10 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial........................105
11.11 Severability..................................................................................106
11.12 Entirety......................................................................................106
11.13 Binding Effect; Termination; Amendment and Restatement of Existing Loan Agreement.............106
11.14 Confidentiality...............................................................................107
11.15 Source of Funds...............................................................................108
11.16 Regulation D..................................................................................108
11.17 Conflict......................................................................................108
SECTION 12 MEZZANINE SECURITIES; EXTENSION OPTION..............................................................109
12.1 Refinancing with Mezzanine Securities.........................................................109
12.2 Extension Option..............................................................................109
12.3 Modifications Upon Exercise of Extension Option...............................................110
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SCHEDULES
Schedule 1.1 Excluded Property
Schedule 2.1(a) Lenders
Schedule 6.4 Required Consents, Authorizations, Notices and Filings
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13A Description of Corporate Capital and Ownership Structure
Schedule 6.13B Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Mortgaged Properties
Schedule 6.20(b) Collateral Locations
Schedule 6.20(c) Chief Executive Offices/Principal Places of Business
Schedule 6.27 Affiliate Transactions
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
Schedule 8.2 Liens
Schedule 8.6 Investments
Schedule 8.9 Transactions with Affiliates
Schedule 8.11 Limitation on Restricted Actions
EXHIBITS
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.2(b) Form of Swing Line Loan Request
Exhibit 2.2(e) Form of Swing Line Note
Exhibit 2.3(f) Form of Term Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(d) Form of Officer's Compliance Certificate
Exhibit 7.1(e) Form of Borrowing Base Certificate
Exhibit 7.11 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment and Assumption Agreement
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SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT, dated as of August 17,
2001 (as amended, modified, restated or supplemented from time to time, the
"Loan Agreement"), is by and among AAIPHARMA INC., formerly Applied Analytical
Industries, Inc., a Delaware corporation (the "Borrower"), the Guarantors (as
defined herein), BANC OF AMERICA MEZZANINE CAPITAL LLC ("BAMC"), the other
Lenders (as defined herein) from time to time party hereto and BANK OF AMERICA,
N.A. ("Bank of America"), as Agent for the Lenders (in such capacity, the
"Agent").
W I T N E S S E T H
WHEREAS, the Borrower, AAI Applied Analytical Industries Deutschland
GmbH & Co., KG, the Guarantors, certain foreign subsidiaries of the Borrower and
Bank of America entered into that certain Amended and Restated Loan Agreement,
dated as of November 30, 1999 (as amended, the "Existing Loan Agreement"), as
amended by that certain First Amendment to Loan Agreement dated as of May 31,
2001, as further amended by that certain Second Amendment to Loan Agreement
dated as of August 31, 2000, as further amended by that certain Third Amendment
to Loan Agreement dated as of November 30, 2000 and as further amended by that
certain Fourth Amendment to Loan Agreement dated as of June 29, 2001, whereby
Bank of America provided certain extensions of credit (the "Credit Facilities")
to the Borrower and the German Borrower.
WHEREAS, the Deutsche ▇▇▇▇ Credit Facility under the Existing Loan
Agreement has been repaid in full and the commitments therefor have been
terminated.
WHEREAS, Bank of America and the other Lenders have agreed to refinance
the Credit Facilities under the Existing Loan Agreement and the other agreements
entered into in connection therewith pursuant to the terms hereof.
WHEREAS, the parties hereto have agreed to amend and restate the
Existing Loan Agreement as set forth herein in order to provide bridge financing
to the Borrowers, which bridge financing may be extended to a permanent
financing pursuant to Section 12 hereof if certain conditions set forth therein
are satisfied.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Loan Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquired Product" means the intangible assets, assumed
contracts and specified inventory of AstraZeneca AB and/or its
subsidiaries associated with the products sold under the registered or
unregistered trademarks MVI-12, MVI-Pediatric, Aquasol A, Aquasol E and
any "reformulated" MVI-12 for use in conducting business in the United
States acquired by NeoSan pursuant to the Purchase Agreement.
"Acquisition", by any Person, means the acquisition by such
Person of all of the Capital Stock or all or substantially all of the
Property of another Person, whether or not involving a merger or
consolidation with such other Person.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding ten percent (10%) or more of the Voting
Stock in such Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Agency Services Address" means Bank of America, N.A., ▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such
other address as may be identified by written notice from the Agent to
the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any permitted successors or assigns.
"Agent-Related Persons" means the Agent (including any
successor administrative agent), together with its Affiliates
(including, in the case of Bank of America in its capacity as the
Agent, Banc of America Securities LLC), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Applicable Lending Office" means, for each Lender, the office
of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Borrower by written
notice as the office by which its Eurodollar Loans are made and
maintained.
"Applicable Percentage" means, subject to Section 12.3, for
purposes of calculating the applicable interest rate for any day for
any Loan, the applicable rate of the Unused Fee for any day for
purposes of Section 3.5(a) or the applicable rate of the Standby Letter
of Credit Fee and the Trade Letter of Credit Fee for any day for
purposes of Section 3.5(c), the appropriate applicable percentage
corresponding to the relevant period set forth below:
2
APPLICABLE PERCENTAGES
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FOR FOR FOR FOR LETTER
EURODOLLAR BASE RATE UNUSED OF CREDIT
PERIOD LOANS LOANS FEE FEES
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From the Closing Date to the date that is six 4.75% 3.75% 0.375% 2.25%
months from the Closing Date
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From the date that is six months from the Closing 6.00% 5.00% 0.375% 2.25%
Date to the date that is nine months from the
Closing Date
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On and after the date that is nine months from the 6.50% 5.50% 0.375% 2.25%
Closing Date
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Any adjustment in the Applicable Percentages shall be applicable to all
existing Loans as well as any new Loans made.
"Application Period" means, in respect of any Asset
Disposition, the period of 180 days (or such earlier date as provided
for reinvestment of the proceeds thereof under the documents evidencing
or governing any Subordinated Indebtedness) following the consummation
of such Asset Disposition.
"Approved Fund" means any Person (other than a natural Person)
that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity
or an Affiliate of an entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, in its
capacity as sole lead arranger and sole book manager.
"Asset Disposition" means any disposition (including pursuant
to a Sale and Leaseback Transaction) of any or all of the Property
(including without limitation the Capital Stock of a Subsidiary) of any
Consolidated Party whether by sale, lease, licensing, transfer or
otherwise, but other than pursuant to any casualty or condemnation
event; provided, however, that an Equity Issuance shall not constitute
an Asset Disposition.
"Asset Disposition Prepayment Event" means, with respect to
any Asset Disposition other than an Excluded Asset Disposition, the
failure of the Credit Parties to apply (or cause to be applied) the Net
Cash Proceeds of such Asset Disposition to Eligible Reinvestments
during the Application Period for such Asset Disposition.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit 11.3.
"BAMC" means Banc of America Mezzanine Capital LLC and its
successors.
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"BAMC Fee Letter" means that certain letter agreement, dated
as of July 12, 2001, among BAMC, the Arranger and the Borrower, as
amended, modified, restated or supplemented from time to time.
"Bank of America" means Bank of America, N.A. and its
successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following: (i) the entry of a decree or order
for relief by a court or governmental agency in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or the appointment by a court or governmental
agency of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or the ordering of the winding up or
liquidation of its affairs by a court or governmental agency; or (ii)
the commencement against such Person of an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or of any case, proceeding or other action for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or
other action shall remain undismissed for a period of sixty (60)
consecutive days, or the repossession or seizure by a creditor of such
Person of a substantial part of its Property; or (iii) such Person
shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent
to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment of or the taking possession by
a receiver, liquidator, assignee, secured creditor, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"Base Rate" means, for any day, a fluctuating rate per annum
equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and
(b) the Prime Rate in effect on such day.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Borrowing Base" means, as of any day, the sum of (a) 80% of
Eligible Receivables, plus (b) 60% of Eligible Inventory, plus (c) 50%
of Eligible Work-In-Progress, plus (d) from the Closing Date through
March 31, 2002, $5,000,000, in each case as set forth in the most
recent Borrowing Base Certificate delivered to the Agent and the
Lenders in accordance with the terms of Section 7.1(e).
"Borrowing Base Certificate" shall have the meaning assigned
to such term in Section 7.1(e).
4
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close, except that,
when used in connection with a Eurodollar Loan, such day shall also be
a day on which dealings between banks are carried on in Dollar deposits
in London, England.
"Businesses" means, at any time, a collective reference to the
businesses operated by the Consolidated Parties at such time.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is required to be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of
a partnership, partnership interests (whether general or limited), (iv)
in the case of a limited liability company, membership interests and
(v) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person (other than cash performance bonuses
and similar compensation arrangements not constituting equity).
"Cash Equivalents" means, as at any date, (a) securities
issued or directly and fully guaranteed or insured by the United States
or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than twelve months from the date of acquisition,
(b) Dollar denominated time deposits and certificates of deposit of (i)
any Lender, (ii) any domestic commercial bank of recognized standing
having capital and surplus in excess of $500,000,000 or (iii) any bank
whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each
case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing
within six months of the date of acquisition, (d) repurchase agreements
entered into by any Person with a bank or trust company (including any
of the Lenders) or recognized securities dealer having capital and
surplus in excess of $500,000,000 for direct obligations issued by or
fully guaranteed by the United States in which such Person shall have a
perfected first priority security interest (subject to no other Liens)
and having, on the date of purchase thereof, a fair market value of at
least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in
money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and at
least 95% of the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).
5
"Change of Control" means any of the following events: (a) the
sale, lease, transfer or other disposition (other than by way of merger
or consolidation), in one or a series of related transactions, of all
or substantially all of the assets of the Borrower and its Subsidiaries
taken as a whole to any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act), (b) any
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the Securities Exchange Act) other than ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or his
Related Parties, shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, or control
over, 35% or more of the outstanding Voting Stock of the Borrower, (c)
Continuing Directors shall fail to constitute a majority of the members
of the board of directors of the Borrower or (d) the occurrence of a
"Change of Control" (or any comparable term) under, and as defined in,
the documents evidencing or governing any Subordinated Indebtedness. As
used herein, "beneficial ownership" shall have the meaning provided in
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Collateral" means a collective reference to all real and
personal Property (other than Excluded Property) with respect to which
Liens in favor of the Agent are purported to be granted pursuant to and
in accordance with the terms of the Collateral Documents.
"Collateral Documents" means a collective reference to the
Pledge Agreement, the Security Agreement and the Mortgage Instruments.
"Commitment" means (i) with respect to each Lender, the
Revolving Commitment of such Lender and the Term Loan Commitment of
such Lender, (ii) with respect to the Swing Line Lender, the Swing Line
Committed Amount and (iii) with respect to the Issuing Lender, LOC
Commitments.
"Consolidated Capital Expenditures" means, as of any date for
the applicable period ending on such date with respect to the
Consolidated Parties on a consolidated basis, all capital expenditures,
as determined in accordance with GAAP; provided, however, that
Consolidated Capital Expenditures shall not include Eligible
Reinvestments made with proceeds of any Involuntary Disposition or
Permitted Asset Disposition.
"Consolidated Cash Taxes" means, as of any date for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, the aggregate of all taxes, as
determined in accordance with GAAP, to the extent the same are paid in
cash during such period.
6
"Consolidated EBITDA" means, as of any date, for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, the sum of (a) Consolidated Net
Income, plus (b) an amount which, in the determination of Consolidated
Net Income, has been deducted for (i) Consolidated Interest Expense,
(ii) income taxes, (iii) depreciation and amortization expense, (iv)
any other non-cash expenses, (v) scheduled rental payments under the
TROL and (vi) non-recurring cash charges and costs not to exceed
$5,000,000 arising in connection with the Transaction, all as
determined in accordance with GAAP minus (c) non-cash gains included in
Consolidated Net Income minus (d) Excess Royalties.
"Consolidated Interest Expense" means, as of any date for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, interest expense paid in cash
(including the amortization of debt discount and premium, the interest
component under Capital Leases and all unused fees and similar ongoing
fees), as determined in accordance with GAAP.
"Consolidated Net Income" means, as of any date for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, net income (excluding extraordinary
items) after interest expense, income taxes and depreciation and
amortization, all as determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date with respect to
the Consolidated Parties on a consolidated basis, shareholders' equity
or net worth, as determined in accordance with GAAP.
"Consolidated Parties" means a collective reference to the
Borrower and its Subsidiaries, and "Consolidated Party" means any one
of them.
"Consolidated Rental Expense" means, as of any date for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, rental expense under Operating Leases,
as determined in accordance with GAAP.
"Consolidated Scheduled Funded Debt Payments" means, as of any
date for the applicable period ending on such date with respect to the
Consolidated Parties on a consolidated basis, the sum of all scheduled
payments of principal on Funded Indebtedness (including the implied
principal component of payments due on Capital Leases and Synthetic
Leases, but excluding voluntary prepayments or mandatory prepayments
required pursuant to Section 3.3), as determined in accordance with
GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from
one Interest Period to the next Interest Period.
"Continuing Director" means, as of any date of determination,
any member of the board of directors of the Borrower who (x) was a
member of the board of directors of the Borrower as of the Closing Date
or (y) was nominated for election or elected to such board of directors
with the approval of a majority of the Continuing Directors who were
members of such board at the time of such nomination or election.
7
"Contractual Obligation" means, with respect to a Person, any
provision of (i) any security issued by such Person, including
provisions contained in the articles or certificate of incorporation or
bylaws or other organizational or governing documents of such Person,
or (ii) any agreement, franchise, license, lease, permit, undertaking,
contract, indenture, mortgage, deed of trust or other instrument or
understanding to which such Person is a party or by which it or any of
its assets or property is bound.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
inclusive, of a Base Rate Loan into a Eurodollar Loan.
"Credit Facilities" shall have the meaning assigned to such
term in the recitals hereto.
"Credit Parties" means a collective reference to the Borrower
and the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Loan
Agreement, the Notes, the Collateral Documents or any of the other Loan
Documents (including, but not limited to, any interest accruing after
the occurrence of a Bankruptcy Event with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (ii) all liabilities and obligations, whenever
arising, owing from any Credit Party to any Lender, or any Affiliate of
a Lender, arising under any Hedging Agreement.
"Debt Issuance" means the issuance by any Consolidated Party
of any Indebtedness of the type referred to in clause (a) or (b) of the
definition thereof set forth in this Section 1.1.
"Debt Issuance Prepayment Event" means the receipt by any
Consolidated Party of proceeds from any Debt Issuance other than an
Excluded Debt Issuance.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, as
determined by the Agent, (a) has failed to make a Loan or purchase a
Participation Interest required pursuant to the term of this Loan
Agreement within one Business Day of when due, (b) other than as set
forth in (a) above, has failed to pay to the Agent or any Lender an
amount owed by such Lender pursuant to the terms of this Loan Agreement
within one Business Day of when due, unless such amount is subject to a
good faith dispute or (c) has been deemed insolvent or has become
subject to a bankruptcy or insolvency proceeding or with respect to
which (or with respect to any of the assets of which) a receiver,
trustee or similar official has been appointed.
"Dollars" and "$" means dollars in lawful currency of the
United States.
8
"Domestic Subsidiary" means any direct or indirect Subsidiary
of the Borrower which is incorporated or organized under the laws of
any State of the United States or the District of Columbia.
"Eligible Assignee" means (i) a Lender, (ii) an Affiliate of a
Lender, (iii) an Approved Fund and (iv) any other Person (other than a
natural Person) approved by the Agent and, unless a Default or Event of
Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed), provided,
however, that neither the Borrower nor an Affiliate of the Borrower
shall qualify as an Eligible Assignee.
"Eligible Inventory" means, as of any date of determination
and without duplication, the lower of the aggregate book value (based
on a FIFO or a moving average cost valuation, consistently applied) or
fair market value of all raw materials and finished goods inventory, in
all cases, owned by the Borrower or any of its Subsidiaries less
appropriate reserves determined in accordance with GAAP but excluding
in any event (i) inventory which is (A) not subject to a perfected,
first priority Lien in favor of the Agent to secure the Credit Party
Obligations or (B) subject to any other Lien that is not a Permitted
Lien, (ii) inventory which is not in good condition or fails to meet
standards for sale or use imposed by governmental agencies, departments
or divisions having regulatory authority over such goods, (iii)
inventory which is not useable or salable at prices approximating their
cost in the ordinary course of the business, (iv) inventory located
outside of the United States, (v) inventory located at a location not
owned by the Borrower or any of its Subsidiaries with respect to which
the Agent shall not have received a landlord's, warehousemen's,
bailee's or appropriate waiver satisfactory to the Agent, (vi)
inventory which is leased or on consignment, (vii) inventory not at a
location of the Borrower or a Subsidiary of the Borrower which has been
disclosed to the Agent pursuant to this Loan Agreement and (viii)
inventory which fails to meet such other specifications and
requirements as may from time to time be established by the Agent in
its reasonable discretion.
"Eligible Receivables" means, as of any date of determination
and without duplication, the aggregate book value of all accounts
receivable, receivables, and obligations for payment created or arising
from the sale of inventory or the rendering of services in the ordinary
course of business (collectively, the "Receivables"), owned by or owing
to the Borrower or any of its Subsidiaries, net of allowances and
reserves for doubtful or uncollectible accounts and sales adjustments
consistent with such Person's internal policies and in any event in
accordance with GAAP, but excluding in any event (i) any Receivable
which is (a) not subject to a perfected, first priority Lien (other
than Permitted Liens) in favor of the Agent to secure the Credit Party
Obligations or (b) subject to any other Lien that is not a Permitted
Lien, (ii) Receivables which are more than 120 days past due or 150
days past invoice date (net of reserves for bad debts in connection
with any such Receivables), (iii) 50% of the book value of any
Receivable not otherwise excluded by clause (ii) above but owing from
an account debtor which is the account debtor on any existing
Receivable then excluded by such clause (ii), unless the exclusion by
such clause (ii) is a result of a legitimate dispute by the account
debtor and the applicable Receivable is no more than 150 days past due,
(iv) Receivables evidenced
9
by notes, chattel paper or other instruments, unless such notes,
chattel paper or instruments have been delivered to and are in the
possession of the Agent, (v) Receivables owing by an account debtor
which is not solvent or is subject to any bankruptcy or insolvency
proceeding of any kind, (vi) Receivables which are contingent or
subject to offset, deduction, counterclaim, dispute or other defense to
payment, in each case to the extent of such offset, deduction,
counterclaim, dispute or other defense, (vii) Receivables for which any
direct or indirect Subsidiary or any Affiliate is the account debtor,
(viii) Receivables representing a sale to the government of the United
States or any agency or instrumentality thereof unless the Federal
Assignment of Claims Act has been complied with to the satisfaction of
the Agent with respect to the granting of a security interest in such
Receivable, with or other similar applicable law and (ix) Receivables
which fail to meet such other specifications and requirements as may
from time to time be established by the Agent in its reasonable
discretion.
"Eligible Reinvestment" means (i) any acquisition (whether or
not constituting a capital expenditure, but not constituting an
Acquisition) of assets or any business (or any substantial part
thereof) used or useful in the same or a similar line of business as
the Borrower and its Subsidiaries were engaged in on the Closing Date
(or any reasonable extensions or expansions thereof) and (ii) any
Permitted Acquisition.
"Eligible Work-In-Progress" means, as of any date of
determination and without duplication, the aggregate book value of
Work-In-Progress less appropriate reserves determined in accordance
with GAAP but excluding in any event (i) Work-In-Progress which is (A)
not subject to a perfected, first priority Lien in favor of the Agent
to secure the Credit Party Obligations or (B) subject to any other Lien
that is not a Permitted Lien, and (ii) Work-In-Progress which fails to
meet such other specifications and requirements as may from time to
time be established by the Agent in its reasonable discretion.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws (including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Resource Conservation and Recovery Act of
1976, the Toxic Substances Control Act, the Water Pollution Control
Act, the Clean Air Act and the Hazardous Materials Transportation Act),
regulations, ordinances, rules, judgments, orders, decrees, permits,
licenses, agreements or other governmental restrictions relating to the
environment or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes into the environment including,
without limitation, ambient air, surface water, ground water, or land,
or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equity Issuance" means any issuance by any Consolidated Party
to any Person of (a) shares of its Capital Stock, (b) any shares of its
Capital Stock pursuant to the exercise of options or warrants, (c) any
shares of its Capital Stock pursuant to the conversion of any debt
securities to equity or (d) any options or warrants relating to its
Capital Stock. The term "Equity Issuance" shall not be deemed to
include any Asset Disposition.
10
"Equity Issuance Prepayment Event" means the receipt by any
Consolidated Party of proceeds from any Equity Issuance other than an
Excluded Equity Issuance.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Consolidated Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes any
Consolidated Party and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by any Consolidated Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial
employer (as such term is defined in Section 4001(a)(2) of ERISA), or
the termination of a Multiple Employer Plan; (iii) the distribution of
a notice of intent to terminate or the actual termination of a Plan
pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution
of proceedings to terminate or the actual termination of a Plan by the
PBGC under Section 4042 of ERISA; (v) any event or condition which
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; (vi) the complete or partial withdrawal of any Consolidated Party
or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions
for imposition of a lien under Section 302(f) of ERISA exist with
respect to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate
based upon the Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect
to any Eurodollar Loan, a rate per annum determined by the Agent to be
equal to the quotient obtained by dividing (a) the Interbank Offered
Rate by (b) 1 minus the Eurodollar Reserve Percentage.
"Eurodollar Reserve Percentage" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day,
whether or not applicable to any Lender, under regulations issued from
time to time by the Board of Governors of the Federal Reserve System
for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate
Loan shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Event of Default" shall have the meaning assigned to such
term in Section 9.1.
"Excess Proceeds" shall have the meaning assigned to such term
in Section 7.6(b).
11
"Excess Royalties" means royalties and licensing fees in
excess of $3,000,000 in the aggregate in any fiscal quarter, earned by
the Consolidated Parties in connection with contracts related to U.S.
Patents for omeprazole and fluoxetine hydrochloride Form A.
"Excluded Asset Disposition" means, with respect to any
Consolidated Party, any Asset Disposition consisting of (i) the sale,
lease, license, transfer or other disposition of Property in the
ordinary course of such Consolidated Party's business (including
without limitation, the sale, lease, license or transfer of patents in
the ordinary course of such Consolidated Party's business), (ii) the
sale, lease, license, transfer or other disposition of machinery and
equipment no longer used or useful in the conduct of such Consolidated
Party's business, (iii) any sale, lease, license, transfer or other
disposition of Property by such Consolidated Party to any Credit Party,
provided that the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may
request so as to cause the Credit Parties to be in compliance with the
terms of Section 7.12 after giving effect to such transaction, (iv) any
Involuntary Disposition by such Consolidated Party, (v) any Asset
Disposition by such Consolidated Party constituting a Permitted
Investment and (vi) if such Consolidated Party is not a Credit Party,
any sale, lease, license, transfer or other disposition of Property by
such Consolidated Party to any Consolidated Party that is not a Credit
Party.
"Excluded Debt Issuance" means any Debt Issuance permitted by
Section 8.1 other than the Debt Issuance permitted by Section 8.1(f).
"Excluded Equity Issuance" means (i) any Equity Issuance by
any Consolidated Party to any Credit Party, (ii) any Equity Issuance by
the Borrower to the seller of a business acquired in a Permitted
Acquisition or (iii) any Equity Issuance by the Borrower the proceeds
of which are used to finance a Permitted Acquisition.
"Excluded Property" means, with respect to any Consolidated
Party, including any Person that becomes a Consolidated Party after the
Closing Date as contemplated by Section 7.11, (i) any real or personal
Property of such Consolidated Party (whether owned or leased) which is
located outside of the United States, (ii) any owned real Property of
such Consolidated Party located within the United States which has a
net book value of less than $1,000,000, provided that the aggregate net
book value of all real Property of all of the Consolidated Parties
excluded pursuant to this clause (ii) shall not exceed $3,000,000,
(iii) the leased real Property described on Schedule 1.1 and any other
leased real Property of such Credit Party located within the United
States which, at the written request of the Borrower, the Agent has
agreed in writing in its reasonable discretion is not material, (iv)
any leased personal Property of such Consolidated Party, (v) any
personal Property of such Consolidated Party (including, without
limitation, motor vehicles) in respect of which perfection of a Lien is
not either (A) governed by the Uniform Commercial Code or (B) effected
by appropriate evidence of the Lien being filed in either the United
States Copyright Office or the United States Patent and Trademark
Office, (vi) any Property of such Consolidated Party which, subject to
the terms of Section 8.11 and Section 8.15, is subject to a Lien of the
type described in Section 8.2(g) pursuant to documents which prohibit
such Consolidated Party from granting any other Liens in such Property,
(vii) the Kansas Property; provided that if the Kansas Property is
12
not sold on or before October 31, 2001 (or such later date as the Agent
and the Borrower may reasonably agree to) the Kansas Property shall no
longer be an Excluded Property, and (viii) Intellectual Property in
jurisdictions other than the United States.
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, executive vice
president, chief financial officer, controller or treasurer of such
Person.
"Extension of Credit" means, as to any Lender, the making of a
Loan by such Lender (or a participation therein by a Lender) or the
issuance of, or participation in, a Letter of Credit by such Lender.
"Extension Option" means the Borrower's option, inter alia, to
extend the Maturity Date and reset the Applicable Percentage, as more
fully set out in Section 12.2.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers
on such day, as published by the Federal Reserve Bank on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate
for such day shall be the average rate charged to Bank of America on
such day on such transactions as determined by the Agent.
"Fees" means all fees payable pursuant to Section 3.5.
"FIRREA" means the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, as amended, and any successor statute
thereto, as interpreted by the rules and regulations thereunder, as
amended, including, without limitation, 12 CFR part 34.41 to 34.47.
"Fixed Charge Coverage Ratio" means, as of the end of any
fiscal quarter of the Consolidated Parties for the four fiscal quarter
period (except as set forth below) ending on such date with respect to
the Consolidated Parties on a consolidated basis, the ratio of (a) the
sum of (i) Consolidated EBITDA for such period minus (ii) Consolidated
Capital Expenditures for such period minus (iii) Consolidated Cash
Taxes for such period to (b) the sum of (i) Consolidated Interest
Expense for such period plus (ii) Consolidated Scheduled Funded Debt
Payments for such period (excluding the principal payment due at
maturity under the TROL) plus (iii) scheduled rental payments in
connection with the TROL for such period; provided, however, that (i)
as of December 31, 2001, such ratio shall be calculated only for the
one fiscal quarter period ending as of such date, (ii) as of March 31,
2002, such ratio shall be calculated only for the two fiscal quarter
period ending as of such date and (iii) as of June 30, 2002, such ratio
shall be calculated only for the three fiscal quarter period ending as
of such date.
13
"Foreign Subsidiary" means any direct or indirect Subsidiary
of the Borrower which is not a Domestic Subsidiary.
"Fully Satisfied" means, with respect to the Credit Party
Obligations as of any date, that, as of such date, (a) all principal of
and interest accrued to such date which constitute Credit Party
Obligations shall have been irrevocably paid in full in cash, (b) all
fees, expenses and other amounts then due and payable which constitute
Credit Party Obligations shall have been irrevocably paid in cash, (c)
all outstanding Letters of Credit shall have been (i) terminated, (ii)
fully irrevocably cash collateralized or (iii) secured by one or more
letters of credit on terms and conditions, and with one or more
financial institutions, reasonably satisfactory to the Issuing Lender
and (d) the Commitments shall have been expired or terminated in full.
"Funded Indebtedness" means, with respect to any Person,
without duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest
payments are customarily made, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to
Property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the
ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of Property or services
purchased by such Person (other than (i) trade debt incurred in the
ordinary course of business and due within six months of the incurrence
thereof and (ii) such deferred purchase price obligations owing with
respect to the purchase of the Acquired Product) which would appear as
liabilities on a balance sheet of such Person, (e) the implied
principal component of all obligations of such Person under Capital
Leases, (f) the maximum amount of all performance and standby letters
of credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed); provided, however, there shall
be excluded from this amount the reimbursement obligations with respect
to undrawn standby letters of credit in an aggregate amount up to (but
not exceeding) $1,000,000, (g) all preferred Capital Stock issued by
such Person and which by the terms thereof could be (at the request of
the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration (other than as a result of a
Change of Control or an Asset Disposition that does not in fact result
in a redemption of such preferred Capital Stock) at any time prior to
the Maturity Date pursuant to the Borrower's 1995 option plan (as set
forth in documents filed with the Securities Exchange Commission) as
currently in place, (h) the principal portion of all obligations of
such Person under Synthetic Leases, (i) all obligations of such Person
to repurchase any securities issued by such Person at any time prior to
the Maturity Date which repurchase obligations are related to the
issuance thereof, including, without limitation, obligations commonly
known as residual equity appreciation potential shares, (j) the
aggregate amount of uncollected accounts receivable of such Person
subject at such time to a sale of receivables (or similar transaction)
to the extent such transaction is effected with recourse to such Person
(whether or not such transaction would be reflected on the balance
sheet of such Person in accordance with GAAP), (k) all Funded
Indebtedness of others secured by (or for which the holder of such
Funded Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on, or payable out of the proceeds of
production from, Property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (l) all
14
Guaranty Obligations of such Person with respect to Funded Indebtedness
of another Person and (m) the Funded Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner
or a joint venturer to the extent such Indebtedness is recourse to such
Person.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3 (except, in respect of Synthetic Leases, as otherwise
treated herein).
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantors" means each of the Persons identified is a
"Guarantor" or the signature pages hereto and each Person which may
hereafter execute a Joinder Agreement pursuant to Section 7.11,
together with their successors and permitted assigns, and "Guarantor"
means any one of them.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof; provided,
however, that with respect to the Borrower and its Subsidiaries, the
term Guaranty Obligations shall not include endorsements for collection
or deposit in the ordinary course of business. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set
forth therein) be deemed to be an amount equal to the amount required
to be recorded under Regulation S-X of the Securities Act.
"Hedging Agreements" means any interest rate protection
agreement or foreign currency exchange agreement.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such
Person (other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person (other than trade debt incurred in the ordinary course of
business and due within six months of the incurrence
15
thereof) which would appear as liabilities on a balance sheet of such
Person in accordance with GAAP, (e) all payment or purchase obligations
of such Person under take-or-pay or similar arrangements or under
commodities agreements, (f) the implied principal component of all
obligations of such Person under Capital Leases that are required to be
recorded in accordance with GAAP, (g) net termination obligations of
such Person under Hedging Agreements (calculated on any date as if the
Hedging Agreement was terminated on such date), (h) the maximum amount
of all performance and standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (i) all preferred Capital Stock issued by such Person
and which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration (other than as a result of a Change of
Control or an Asset Disposition that does not in fact result in a
redemption of such preferred Capital Stock) at any time prior to the
Maturity Date, (j) the principal portion of all obligations of such
Person under Synthetic Leases, (k) all obligations of such Person to
repurchase any securities issued by such Person at any time prior to
the Maturity Date which repurchase obligations are related to the
issuance thereof, including, without limitation, obligations commonly
known as residual equity appreciation potential shares, (l) the
aggregate amount of uncollected accounts receivable of such Person
subject at such time to a sale of receivables (or similar transaction)
to the extent such transaction is effected with recourse to such Person
(whether or not such transaction would be reflected on the balance
sheet of such Person in accordance with GAAP), (m) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on,
or payable out of the proceeds of production from, Property owned or
acquired by such Person, whether or not the obligations secured thereby
have been assumed, (n) all Guaranty Obligations of such Person with
respect to Indebtedness of another Person and (o) the Indebtedness of
any partnership or unincorporated joint venture in which such Person is
a general partner or a joint venturer to the extent such Indebtedness
is recourse to such Person.
"Indemnified Liabilities" shall have the meaning assigned to
such term in Section 11.5(b).
"Indemnitees" shall have the meaning assigned to such term in
Section 11.5(b).
"Interbank Offered Rate" means for any Interest Period with
respect to any Eurodollar Loan: (a) the rate per annum (rounded upward
to the next 1/100th of 1%) equal to the rate determined by the Agent to
be the offered rate that appears on the Dow ▇▇▇▇▇ Telerate Screen Page
3750 (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately
11:00 A.M. (London time) two Business Days prior to the first day of
such Interest Period, or (b) if the rate referenced in the preceding
clause (a) does not appear on such page or service or such page or
service shall cease to be available, the rate per annum (rounded upward
to the next 1/100th of 1%) equal to the rate determined by the Agent to
be the offered rate on such other page or other service that displays
an average British Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 A.M. (London time) two
16
Business Days prior to the first day of such Interest Period, or (c) if
the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Agent as the rate of
interest (rounded upward to the next 1/100th of 1%) at which deposits
in Dollars for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the Eurodollar Loan being
made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of
America's London Branch to major banks in the offshore Dollar market at
their request at approximately 11:00 A.M. (London time) two Business
Days prior to the first day of such Interest Period.
"Interest Coverage Ratio" means, as of the end of any fiscal
quarter of the Consolidated Parties for the four fiscal quarter period
(except as set forth below) ending on such date with respect to the
Consolidated Parties on a consolidated basis, the ratio of (a)
Consolidated EBITDA for such period to (b)the sum of (i) Consolidated
Interest Expense plus (ii) scheduled rental payments in connection with
the TROL for such period; provided, however, that (i) as of December
31, 2001, such ratio shall be calculated only for the one fiscal
quarter period ending as of such date, (ii) as of March 31, 2002, such
ratio shall be calculated only for the two fiscal quarter period ending
as of such date and (iii) as of June 30, 2002, such ratio shall be
calculated only for the three fiscal quarter period ending as of such
date.
"Interest Payment Date" means (a) as to Base Rate Loans and
Swing Line Loans, the last Business Day of each March, June, September
and December, the date of repayment of principal of such Loan and the
Maturity Date, and (b) as to Eurodollar Loans, the last day of each
applicable Interest Period, the date of repayment of principal of such
Loan and the Maturity Date, and in addition where the applicable
Interest Period for a Eurodollar Loan is greater than three months,
then also the date three months from the beginning of the Interest
Period and each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as a Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date and (c)
where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets (other than equipment, inventory, supplies or
other Property in the ordinary course of business and other than any
acquisition of assets constituting a Consolidated Capital Expenditure),
Capital Stock, bonds, notes, debentures, partnership, joint ventures or
other ownership interests or other securities of such other Person, (b)
any deposit with, or advance, loan or other extension of credit to,
such Person (other than deposits made in connection with the purchase
of equipment inventory and supplies in the ordinary course of business)
or (c) any
17
other capital contribution to or investment in such Person, including,
without limitation, any Guaranty Obligations (including any support for
a letter of credit issued on behalf of such Person) incurred for the
benefit of such Person and any Asset Disposition to such Person for
consideration less than the fair market value of the Property disposed
in such transaction, but excluding any Restricted Payment to such
Person. Investments which are capital contributions or purchases of
Capital Stock which have a right to participate in the profits of the
issuer thereof shall be valued at the amount actually contributed or
paid to purchase such Capital Stock as of the date of such contribution
or payment. Investments which are loans, advances, extensions of credit
or Guaranty Obligations shall be valued at the principal amount of such
loan, advance or extension of credit outstanding as of the date of
determination or, as applicable, the principal amount of the loan or
advance outstanding as of the date of determination actually guaranteed
by such Guaranty Obligation.
"Involuntary Disposition" means any loss of, damage to or
destruction of, or any condemnation or other taking for public use of,
any Property of any Consolidated Party.
"Involuntary Disposition Prepayment Event" means, with respect
to any Involuntary Disposition, the failure of the Credit Parties to
apply (or cause to be applied) an amount equal to the Excess Proceeds
of such Involuntary Disposition, if any, to make Eligible Reinvestments
(including but not limited to the repair or replacement of the Property
affected by such Involuntary Disposition) within the period of 180 days
following the date of receipt of such Excess Proceeds, subject to the
terms and conditions of Section 7.6(b) and provided that such 180 day
period may be extended for not more than an additional 180 days if (1)
the applicable Credit Party is diligently pursuing such Eligible
Reinvestment in good faith, but can not complete within the initial 180
days and (2) the Borrower is not otherwise in Default.
"Issuing Lender" means Bank of America.
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.11 hereto, executed and delivered by a new
Guarantor in accordance with the provisions of Section 7.11.
"Kansas Property" means that such real property owned by the
Borrower and located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇.
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender by
way of assignment in accordance with the terms hereof, together with
their successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
"Leverage Ratio" means, as of the end of any fiscal quarter of
the Consolidated Parties for the four fiscal quarter period (except as
set forth below) ending on such date with respect to the Consolidated
Parties on a consolidated basis, the ratio of (a) Funded Indebtedness
of the Consolidated Parties on a consolidated basis on the last day of
such
18
period to (b) Consolidated EBITDA for such period; provided, however,
that (i) as of December 31, 2001, Consolidated EBITDA shall be
determined based upon (x) Consolidated EBITDA for the one fiscal
quarter period ending as of such date multiplied by (y) 4, (ii) as of
March 31, 2002, Consolidated EBITDA shall be determined based upon (x)
Consolidated EBITDA for the two fiscal quarter period ending as of such
date multiplied by (y) 2 and (iii) as of June 30, 2002, Consolidated
EBITDA shall be determined based upon (x) Consolidated EBITDA for the
three fiscal quarter period ending as of such date multiplied by (y)
4/3.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans, the Term Loans
and/or the Swing Line Loans (or a portion of any Revolving Loan, Term
Loan or Swing Line Loan bearing interest at the Adjusted Base Rate or
the Adjusted Eurodollar Rate and referred to as a Base Rate Loan or a
Eurodollar Loan), individually or collectively, as appropriate.
"Loan Documents" means a collective reference to this Loan
Agreement, the Notes, each Joinder Agreement, the BAMC Fee Letter and
the Collateral Documents (in each case as the same may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time), and "Loan Document" means any one of them.
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such
term in Section 2.4
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, without duplication, the
sum of (i) the maximum amount which is, or at any time thereafter may
become, available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed by the Borrower.
19
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Consolidated Parties taken as a
whole, (ii) the ability of any Credit Party to perform any material
obligation under the Loan Documents to which it is a party or (iii) the
material rights and remedies of the Agent and the Lenders under the
Loan Documents.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date" means, subject to Section 12.3, September 30,
2002.
"Mezzanine Securities" means senior subordinated notes and/or
redeemable preferred stock issued by the Borrower, in each case which
may include warrants for common stock, pursuant to definitive
documentation reasonably acceptable to the Agent.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Mortgage Instruments" shall have the meaning assigned such
term in Section 5.1(e).
"Mortgage Policies" shall have the meaning assigned such term
in Section 5.1(e).
"Mortgaged Properties" shall have the meaning assigned such
term in Section 5.1(e).
"Multiemployer Plan" means a Plan which is a "multiemployer
plan" as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a
Multiemployer Plan) which any Consolidated Party or any ERISA Affiliate
and at least one employer other than the Consolidated Parties or any
ERISA Affiliate are contributing sponsors.
"NeoSan" means NeoSan Pharmaceuticals, Inc., a Delaware
corporation, together with any permitted successors and assigns.
"Net Cash Proceeds" means the aggregate cash or Cash
Equivalents proceeds received by any Consolidated Party in respect of
any Asset Disposition, Equity Issuance, Debt Issuance or Involuntary
Disposition, net of (a) direct costs (including, without limitation,
legal, accounting and investment banking fees, underwriting discounts
and commissions and sales commissions) (b) income or transfer taxes
paid or payable as a result thereof and (c) in the case of any Asset
Disposition, (i) the amount necessary to retire any Indebtedness
secured by a Permitted Lien required to be paid in connection with such
Asset Disposition on the related Property and (ii) reasonable reserves
approved by the Agent for indemnification obligations; it being
understood that "Net Cash Proceeds" shall include,
20
without limitation, any cash or Cash Equivalents received upon the sale
or other disposition of any non-cash consideration received by any such
Consolidated Party in any Asset Disposition, Equity Issuance, Debt
Issuance or Involuntary Disposition.
"Note" or "Notes" means the Revolving Notes, the Term Notes
and/or the Swing Line Note, individually or collectively, as
appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i) or Section 2.3(b).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" shall have the meaning assigned to such term in
Section 3.11(b).
"Participant" shall have the meaning assigned to such term in
Section 11.3(d).
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.4, Swing Line Loans as provided in Section 2.2 or in any
other Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Acquisition" means the Transaction and any other
Acquisition by the Borrower or any Subsidiary of the Borrower permitted
pursuant to the terms of Section 8.6(j)
"Permitted Asset Disposition" means (i) any Asset Disposition
permitted by Section 8.5 and (ii) any Excluded Asset Disposition.
"Permitted Investments" means, at any time, Investments by the
Consolidated Parties permitted to exist at such time pursuant to the
terms of Section 8.6.
"Permitted Liens" means, at any time, Liens in respect of
Property of the Consolidated Parties permitted to exist at such time
pursuant to the terms of Section 8.2.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party or any
21
ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" within
the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the amended and restated pledge
agreement dated as of the Closing Date to be executed in favor of the
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"Prime Rate" means, for any day, the per annum rate of
interest rate in effect for such day as publicly announced from time to
time by Bank of America as its "prime rate." Such rate is a rate set by
Bank of America based upon various factors including Bank of America's
costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in
such rate announced by Bank of America shall take effect at the opening
of business on the day specified in the public announcement of such
change.
"Principal Amortization Payment" means a principal payment on
the Term Loans as set forth in Section 2.3(d).
"Principal Amortization Payment Date" means the date a
Principal Amortization Payment is due.
"Pro Forma Basis" means, for purposes of calculating
(utilizing the principles set forth in the second paragraph of Section
1.3) compliance with each of the financial covenants set forth in
Section 7.10(a)-(e) in respect of a proposed transaction, that such
transaction shall be deemed to have occurred as of the first day of the
four fiscal-quarter period ending as of the most recent fiscal quarter
end preceding the date of such transaction with respect to which the
Agent has received the Required Financial Information. As used herein,
"transaction" shall mean (i) any incurrence or assumption of
Indebtedness as referred to in Section 8.1(f), (ii) any Asset
Disposition as referred to in Section 8.5 or (iii) any Acquisition as
referred to in Section 8.6(j). In connection with any calculation of
the financial covenants set forth in Section 7.10(a)-(e) upon giving
effect to a transaction on a Pro Forma Basis:
(A) for purposes of any such calculation in respect of any
incurrence or assumption of Indebtedness as referred to in
Section 8.1(f), any Indebtedness which is retired in
connection with such incurrence or assumption shall be
excluded and deemed to have been retired as of the first day
of the applicable period;
(B) for purposes of any such calculation in respect of any Asset
Disposition as referred to in Section 8.5, (1) income
statement items (whether positive or negative) attributable to
the Property disposed of shall be excluded and (2) any
Indebtedness which is retired in connection with such
transaction shall be excluded and deemed to have been retired
as of the first day of the applicable period; and
(C) for purposes of any such calculation in respect of any
Acquisition as referred to in Section 8.6(j):
22
(a) in the case of an Acquisition by a Consolidated Party
other than NeoSan, (1) any Indebtedness incurred by
any Consolidated Party in connection with such
transaction (x) shall be deemed to have been incurred
as of the first day of the applicable period and (y)
if such Indebtedness has a floating or formula rate,
shall have an implied rate of interest for the
applicable period for purposes of this definition
determined by utilizing the rate which is or would be
in effect with respect to such Indebtedness as at the
relevant date of determination, (2) income statement
items (whether positive or negative) attributable to
the Person or Property acquired shall be included
beginning as of the first day of the applicable
period and (3) pro forma adjustments may be included
to the extent that such adjustments would be
permitted under GAAP and give effect to events that
are (x) directly attributable to such transaction,
(y) expected to have a continuing impact on the
Consolidated Parties and (z) factually supportable;
and
(b) in the case of an Acquisition by NeoSan, (1) any
Indebtedness incurred by any Consolidated Party in
connection with such transaction (x) shall be deemed
to have been incurred as of the first day of the
applicable period and (y) if such Indebtedness has a
floating or formula rate, shall have an implied rate
of interest for the applicable period for purposes of
this definition determined by utilizing the rate
which is or would be in effect with respect to such
Indebtedness as at the relevant date of
determination, and (2) income statement items
(whether positive or negative) attributable to the
Person, Property or product acquired shall be
included to the extent of (x) historical revenues,
(y) historical SG&A items and (z) contracted
manufacturing costs.
"Pro Forma Compliance Certificate" means a certificate of an
Executive Officer of the Borrower delivered to the Agent in connection
with (i) any incurrence, assumption or retirement of Indebtedness as
referred to in Section 8.1(f), (ii) any Asset Disposition as referred
to in Section 8.5 or (iii) any Acquisition as referred to in Section
8.6(j), as applicable, and containing reasonably detailed calculations,
upon giving effect to the applicable transaction on a Pro Forma Basis,
of the Leverage Ratio, the Interest Coverage Ratio, the Fixed Charge
Coverage Ratio, Consolidated EBITDA and Consolidated Net Worth as of
the most recent fiscal quarter end preceding the date of the applicable
transaction with respect to which the Agent shall have received the
Required Financial Information.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Purchase Agreement" means that certain Asset Purchase
Agreement by and between AstraZeneca AB and NeoSan Pharmaceuticals
Inc., dated as of July 26, 2001, as it may be amended on or prior to
the Closing Date.
23
"Real Properties" means, at any time, a collective reference
to each of the facilities and real properties owned, leased or operated
by the Consolidated Parties at such time.
"Register" shall have the meaning assigned to such term in
Section 11.3(c).
"Regulation D, T, U, or X" means Regulation D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Related Party" or "Related Parties" means spouses, lineal
ancestors or descendants, natural or adopted, and spouses of lineal
ancestors or descendants, or trusts for the sole benefit of any of such
Persons.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Financial Information" means, with respect to the
applicable date, (i) the financial statements of the Consolidated
Parties required to be delivered pursuant to Section 7.1(a) or (b) for
the fiscal period or quarter ending as of such date, and (ii) the
certificate of an Executive Officer of the Borrower required by Section
7.1(d) to be delivered with the financial statements described in
clause (i) above.
"Required Lenders" means, at any time, Lenders (other than
Defaulting Lenders) holding in the aggregate at least a majority of (i)
the unfunded Commitments (and Participation Interests therein) and the
outstanding Loans (and Participation Interests therein) or (ii) if all
of the Commitments have been terminated, the outstanding Loans and
Participation Interests; provided, however, if there are only two
Lenders (counting, for these purposes, affiliated Lenders as a single
Lender), Required Lenders shall mean both such Lenders and, provided,
further, if there are only three Lenders (counting, for these purposes,
affiliated Lenders as a single Lender), Required Lenders shall mean
Lenders holding in the aggregate at least 66-2/3% of (i) the unfunded
Commitments (and Participation Interests therein) and the outstanding
Loans (and Participation Interests therein) or (ii) if all of the
Commitments have been terminated, the outstanding Loans and
Participation Interests.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or to
which any of its material property is subject.
"Restricted Payment" means (i) any dividend or other payment
or distribution, direct or indirect, on account of any shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding (including without limitation any payment in connection
with any dissolution, merger, consolidation or disposition involving
any Consolidated Party), or to the holders, in their capacity as such,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding (other than dividends or distributions
payable in Capital Stock of the applicable Person and dividends or
distributions payable (directly or indirectly through Subsidiaries) to
any Credit Party), (ii) any redemption,
24
retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class
of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding and (iv) any payment of the deferred
purchase price of Property acquired pursuant to the Purchase Agreement.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage (if
any) of the Revolving Committed Amount (i) to make Revolving Loans in
accordance with the provisions of Section 2.1(a) and (ii) to purchase
Participation Interests in Letters of Credit in accordance with the
provisions of Section 2.4(c).
"Revolving Commitment Percentage" means, for any Lender, the
percentage identified as its Revolving Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 11.3.
"Revolving Committed Amount" shall have the meaning assigned
to such term in Section 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" shall have the meaning assigned to such term
in Section 2.1(e).
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"Sale and Leaseback Transaction" means any arrangement
pursuant to which any Consolidated Party, directly or indirectly,
becomes liable as lessee, guarantor or other surety with respect to any
lease, whether an Operating Lease or a Capital Lease, of any Property
(a) which such Consolidated Party has sold or transferred (or is to
sell or transfer) to a Person which is not a Consolidated Party or (b)
which such Consolidated Party intends to use for substantially the same
purpose as any other Property which has been sold or transferred (or is
to be sold or transferred) by such Consolidated Party to another Person
which is not a Consolidated Party in connection with such lease.
"Securities Act" means the Securities Act of 1933, as amended,
and all regulations issued pursuant thereto.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, and all regulations issued pursuant thereto.
"Security Agreement" means the amended and restated security
agreement dated as of the Closing Date to be executed in favor of the
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
25
"Senior Indebtedness" means all Funded Indebtedness other than
Subordinated Indebtedness.
"Senior Leverage Ratio" means, as of the end of any fiscal
quarter of the Consolidated Parties for the four quarter period (except
as set forth below) ending on such date with respect to the
Consolidated Parties on a consolidated basis, the ratio of (a) Senior
Indebtedness of the Consolidated Parties on a consolidated basis on the
last day of such period to (b) Consolidated EBITDA for such period;
provided, however, that (i) as of December 31, 2001, Consolidated
EBITDA shall be determined based upon (x) Consolidated EBITDA for the
one fiscal quarter period ending as of such date multiplied by (y) 4,
(ii) as of March 31, 2002, Consolidated EBITDA shall be determined
based upon (x) Consolidated EBITDA for the two fiscal quarter period
ending as of such date multiplied by (y) 2 and (iii) as of June 30,
2002, Consolidated EBITDA shall be determined based upon (x)
Consolidated EBITDA for the three fiscal quarter period ending as of
such date multiplied by (y) 4/3.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to pay
its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature in their ordinary course, (iii) such Person is
not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged
or is to engage, (iv) the fair value of the Property of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (v) the present
fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Standby Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.5(b)(i).
"Subordinated Indebtedness" means any Indebtedness evidenced
by the Mezzanine Securities and any other Indebtedness of the Borrower
which by its terms is subordinated to the Credit Party Obligations in a
manner and to an extent acceptable to the Agent and the Required
Lenders.
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or
classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether
26
or not at such time, any class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at such time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association,
joint venture or other entity of which such Person directly or
indirectly through Subsidiaries owns at such time more than 50% of the
Capital Stock.
"Swing Line Committed Amount" means FIVE MILLION DOLLARS
($5,000,000.00).
"Swing Line Lender" means Bank of America.
"Swing Line Loans" means the loans made by the Swing Line
Lender pursuant to Section 2.2.
"Swing Line Loan Note" means the promissory note of the
Borrower in favor of the Swing Line Lender evidencing the Swing Line
Loans provided pursuant to Section 2.2, as such promissory note may be
amended, modified, supplemented, extended, renewed or replaced from
time to time in and as evidenced by the form of Exhibit 2.2(e).
"Swing Line Loan Request" means a request by the Borrower for
a Swing Line Loan in substantially the form of Exhibit 2.2(b).
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an Operating Lease
under GAAP.
"Taxes" shall have the meaning assigned to such term in
Section 3.11(a).
"Term Loan" shall have the meaning assigned to such term in
Section 2.3(a).
"Term Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan in a
principal amount equal to such Lender's Term Loan Percentage (if any)
of the Term Loan Committed Amount.
"Term Loan Committed Amount" shall have the meaning assigned
to such term in Section 2.3(a).
"Term Loan Percentage" means, for any Lender, the percentage
identified as its Term Loan Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Term Note" shall have the meaning assigned to such term in
Section 2.3(f).
"Transaction" means the Borrower's acquisition of the Acquired
Product from AstraZeneca AB and/or its subsidiaries pursuant to the
Transaction Documents.
27
"Transaction Documents" shall have the meaning assigned to
such term in Section 5.1(j).
"TROL" means that certain tax retention operating lease, dated
as of October 2, 1998 among the Borrower, First Security Bank, N.A., as
Owner Trustee under the AAI Realty Trust 1998-1, the lenders and
holders from time to time party thereto, and NationsBank, N.A. (now
known as Bank of America, N.A.) as Agent, as amended, modified,
restated or supplemented from time to time.
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Unused Fee Calculation Period" shall have the meaning
assigned to such term in Section 3.5(a).
"Unused Revolving Committed Amount" means, for any period, the
amount by which (a) the then applicable Revolving Committed Amount
exceeds (b) the daily averages sum for such period of (i) the
outstanding aggregate principal amount of all Revolving Loans plus (ii)
the outstanding aggregate principal amount of all LOC Obligations.
"Voting Stock" means, with respect to any Person, Capital
Stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
"Work-In-Progress" means the accrued revenues that have been
recognized on a percentage-of-completion basis in connection with
fee-for-service contracts, such revenues being reflected on the balance
sheet of the Consolidated Parties as part of the category titled
"Work-in-progress".
"Wholly Owned Subsidiary" means any Person 100% of whose
Voting Stock is at the time owned by the Borrower directly or
indirectly through other Persons 100% of whose Voting Stock is at the
time owned, directly or indirectly, by the Borrower.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis; provided, however, that calculations of the implied principal component
of all obligations under any Synthetic Lease or the implied interest component
of any rent paid under any Synthetic Lease shall be made by the Borrower in
accordance with accepted financial practice and consistent with the terms of
such Synthetic Lease. All calculations made for the purposes of determining
compliance with this Loan Agreement shall (except as otherwise expressly
provided
28
herein) be made by application of GAAP applied on a basis consistent with the
most recent annual or quarterly financial statements delivered pursuant to
Section 7.1 (or, in connection with, or prior to, the delivery of the first
financial statements pursuant to Section 7.1, consistent with the financial
statements as at June 30, 2001); provided, however, if (a) the Credit Parties
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Agent or the Required Lenders shall
so object in writing within 60 days after delivery of such financial statements,
then such calculations shall be made on a basis consistent with the most recent
financial statements delivered by the Credit Parties to the Lenders as to which
no such objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made under the financial covenants set
forth in Section 7.10 (including without limitation for purposes of the
definition of "Pro Forma Basis" set forth in Section 1.1 unless otherwise
provided in such definition), (i) after consummation of any Asset Disposition
(A) income statement items (whether positive or negative) and capital
expenditures attributable to the Property disposed of shall be excluded to the
extent relating to any period occurring prior to the date of such transaction
and (B) Indebtedness which is retired shall be excluded and deemed to have been
retired as of the first day of the applicable period and (ii) after consummation
of any Acquisition (A) income statement items (whether positive or negative) and
capital expenditures attributable to the Person or Property acquired shall, to
the extent not otherwise included in such income statement items for the
Consolidated Parties in accordance with GAAP or in accordance with any defined
terms set forth in Section 1.1, be included to the extent relating to any period
applicable in such calculations, (B) to the extent not retired in connection
with such Acquisition, Indebtedness of the Person or Property acquired shall be
deemed to have been incurred as of the first day of the applicable period and
(C) pro forma adjustments may be included to the extent that such adjustments
would be permitted under GAAP and give effect to items that are (x) directly
attributable to such transaction, (y) expected to have a continuing impact on
the Consolidated Parties and (z) factually supportable.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Revolving Commitment. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Lender severally agrees to make
available to the Borrower such Lender's Revolving Commitment Percentage
of revolving credit loans requested by the Borrower in Dollars
("Revolving Loans") from time to time from the Closing Date until the
Maturity Date, or such earlier date as the Revolving Commitments shall
have been terminated as provided herein; provided, however, that the
sum of the aggregate outstanding principal amount of Revolving Loans
plus the aggregate amount of Swing Line Loans outstanding plus the
outstanding LOC Obligations shall not exceed the lesser of (i) TWENTY
FIVE MILLION DOLLARS ($25,000,000.00) (as such aggregate maximum amount
may be reduced from time to time as provided in Section 3.4, the
"Revolving Committed Amount") and (ii) the Borrowing Base;
29
provided, further, with regard to each Lender individually, such
Lender's outstanding Revolving Loans plus its Participation Interests
in Letters of Credit or LOC Obligations plus its Participation
Interests in Swing Line Loans shall not exceed such Lender's Revolving
Commitment Percentage of the Revolving Committed Amount. Revolving
Loans may consist of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrower may request; provided, however,
that no more than 6 Eurodollar Loans which are Revolving Loans shall be
outstanding hereunder at any time (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall
be considered as separate Eurodollar Loans, even if they begin on the
same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Revolving Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall
request a Revolving Loan borrowing by written notice (or
telephonic notice promptly confirmed in writing) to the Agent
not later than 11:00 A.M. (Charlotte, North Carolina time) on
the date of the requested borrowing in the case of Base Rate
Loans, and on the third Business Day prior to the date of the
requested borrowing in the case of Eurodollar Loans. Each such
request for borrowing shall be irrevocable and shall specify
(A) that a Revolving Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed, and (D) whether the
borrowing shall be comprised of Base Rate Loans, Eurodollar
Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor. If the Borrower
shall fail to specify in any such Notice of Borrowing (I) an
applicable Interest Period in the case of a Eurodollar Loan,
then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Revolving
Loan requested, then such notice shall be deemed to be a
request for a Base Rate Loan hereunder. The Agent shall give
notice to each affected Lender promptly upon receipt of each
Notice of Borrowing pursuant to this Section 2.1(b)(i), the
contents thereof and each such Lender's share of any borrowing
to be made pursuant thereto.
(ii) Minimum Amounts. Except for Revolving Loans
made for the purpose of reimbursing the Issuing Lender in
respect of a drawing under a Letter of Credit pursuant to
Section 2.4(e) or Swing Line Loans pursuant to Section 2.2(d),
each Eurodollar Loan or Base Rate Loan that is a Revolving
Loan shall be in a minimum aggregate principal amount of
$500,000 and integral multiples of $100,000 in excess thereof
(or the remaining amount of the Revolving Committed Amount, if
less).
(iii) Advances. Except for Revolving Loans made
for the purpose of reimbursing the Issuing Lender in respect
of a drawing under a Letter of Credit pursuant to Section
2.4(e) or Swing Line Loans pursuant to Section 2.2(d), each
Lender will make its Revolving Commitment Percentage of each
Revolving Loan borrowing available to the Agent for the
account of the Borrower as specified in
30
Section 3.15(a), or in such other manner as the Agent may
specify in writing, by 1:00 P.M. (Charlotte, North Carolina
time) on the date specified in the applicable Notice of
Borrowing in Dollars and in funds immediately available to the
Agent. Such borrowing will then be made available to the
Borrower by the Agent by crediting the account of the Borrower
on the books of such office with the aggregate of the amounts
made available to the Agent by the Lenders and in like funds
as received by the Agent.
(c) Repayment. The Borrower hereby promises to pay the
principal amount of all outstanding Revolving Loans in full on the
Maturity Date, unless accelerated sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of Base
Rate Loans, such Base Rate Loans shall bear interest at a per
annum rate equal to the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the Adjusted Eurodollar Rate.
The Borrower hereby promises to pay interest on Revolving Loans in
arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein).
(e) Revolving Notes. The Borrower hereby agrees that,
upon the request to the Agent by any Lender, the Borrower will execute
and deliver to such Lender a promissory note evidencing the Revolving
Loans of such Lender, substantially in the form of Exhibit 2.1(e), with
appropriate insertions as to date and principal amount (a "Revolving
Note").
2.2 SWING LINE LOANS SUBFACILITY.
(a) Swing Line Loans. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, the Swing Line Lender hereby agrees, to make loans (each
a "Swing Line Loan" and collectively, the "Swing Line Loans") to the
Borrower, in Dollars, at any time and from time to time, during the
period from and including the Effective Date to but not including the
Maturity Date (or such earlier date if the Commitments have been
terminated as provided herein); provided that (i) the aggregate
principal amount of the Swing Line Loans outstanding at any one time
shall not exceed the Swing Line Committed Amount and (ii) the aggregate
amount of outstanding Swing Line Loans plus the aggregate amount of
outstanding Revolving Loans plus LOC Obligations shall not exceed the
lesser of (A) the Revolving Committed Amount and (B) the Borrowing
Base. Subject to the terms of this Loan Agreement, the Borrower may
borrow, repay and reborrow Swing Line Loans.
(b) Borrowing Procedures. By no later than 1:00 p.m. on
the date of the requested borrowing of Swing Line Loans, the Borrower
shall provide telephone notice to
31
the Swing Line Lender, followed promptly by a written Swing Line Loan
Request in the form of Exhibit 2.2(b) (which maybe submitted by
telecopy) setting forth (i) the amount of the requested Swing Line Loan
and (ii) the date of the requested Swing Line Loan and complying in all
respects with Section 5.2. The Swing Line Lender shall initiate the
transfer of funds representing the Swing Line Loan advance to the
Borrower by 3:00 p.m. on the Business Day of the requested borrowing.
(c) Minimum Amounts. Each Swing Line Loan shall be in a
minimum amount of the lesser of $100,000 (and in integral multiples of
$25,000 in excess thereof) or the remaining amount available under the
Swing Line Committed Amount.
(d) Repayment and Participations of Swing Line Loans. The
Swing Line Loans shall bear interest at a rate mutually agreeable to
the Swing Line Lender and the Borrower at the time of the borrowing of
such Swing Line Loan, but in no event shall such rate exceed the
Adjusted Base Rate. The Borrower agrees to repay all Swing Line Loans
immediately upon the existence of a Default or Event of Default or
otherwise within three Business Days of demand therefor by the Swing
Line Lender. If the Borrower does not immediately notify the Swing Line
Lender that the Borrower intends to otherwise repay such Swing Line
Loan, the Borrower shall be deemed to have requested a Revolving Loan
advance comprised solely of Base Rate Loans in the amount of such Swing
Line Loans; provided, however, that any such demand shall be deemed to
have been given one Business Day prior to the Maturity Date and on the
date of the occurrence of any Event of Default described in Section 9.1
and upon acceleration of the indebtedness hereunder and the exercise of
remedies in accordance with the provisions of Section 9.2. Each Lender
hereby irrevocably agrees to make its pro rata share of each such
Revolving Loan in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such
borrowing may not comply with the minimum amount for advances of
Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii) whether a
Default or an Event of Default then exists, (iv) failure of any such
request or deemed request for a Revolving Loan to be made by the time
otherwise required hereunder, (v) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made
hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the
event that any Revolving Loan cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code with respect
to the Borrower or any other Credit Party), then each Lender hereby
agrees that it shall forthwith purchase (as of the date such borrowing
would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase)
from the Swing Line Lender such Participation Interests in the
outstanding Swing Line Loans as shall be necessary to cause each such
Lender to share in such Swing Line Loans ratably based upon its
Revolving Commitment Percentage of the Revolving Committed Amount
(determined before giving effect to any termination of the Commitments
pursuant to Section 3.4), provided that (A) all interest payable on the
Swing Line Loans shall be for the account of the Swing Line Lender
until the date as of which the respective Participation Interest is
purchased and (B) at the time any purchase of Participation Interests
pursuant to this sentence is actually made, the purchasing Lender shall
be required to pay to the Swing Line Lender, interest on the principal
amount of Participation Interests purchased for each day from the date
of demand
32
thereof, at a rate equal to, if paid within two Business Days of such
date, the Federal Funds Rate, and thereafter at a rate equal to the
Base Rate plus two percent (2%) per annum.
(e) Swing Line Loan Note. The Swing Line Loans made by
the Swing Line Lender shall be evidenced by a duly executed promissory
note of the Borrower to the Swing Line Lender in substantially the form
of Exhibit 2.2(e).
2.3 TERM LOAN.
(a) Term Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein each Lender severally agrees to make available to the
Borrower on the Closing Date such Lender's Term Loan Percentage of a
term loan in Dollars (the "Term Loan"; each component thereof may be
referred to herein as a "Term Loan") in the aggregate principal amount
of SIXTY MILLION DOLLARS ($60,000,000.00) (the "Term Loan Committed
Amount"). The Term Loan may consist of Base Rate Loans or Eurodollar
Loans, or a combination thereof, as the Borrower may request; provided,
however, that no more than 6 Eurodollar Loans which are Term Loans
shall be outstanding hereunder at any time (it being understood that,
for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on
the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Amounts repaid on the Term Loan may not be
reborrowed.
(b) Borrowing Procedures. The Borrower shall submit an
appropriate Notice of Borrowing to the Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) or such later time as the Agent and
the Borrower shall agree on the Closing Date, with respect to the
portion of the Term Loan initially consisting of a Base Rate Loan, or
on the third Business Day prior to the Closing Date, with respect to
the portion of the Term Loan initially consisting of one or more
Eurodollar Loans. Such Notice of Borrowing shall be irrevocable and
shall specify (i) that the funding of a Term Loan is requested and (ii)
whether the funding of the Term Loan shall be comprised of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar
Loans are requested, the Interest Period(s) therefor. If the Borrower
shall fail to deliver such Notice of Borrowing to the Agent by 11:00
A.M. (Charlotte, North Carolina time) on the third Business Day prior
to the Closing Date, then the full amount of the Term Loan shall be
disbursed on the Closing Date as a Base Rate Loan. Each Lender shall
make its Term Loan Percentage of the Term Loan available to the Agent
for the account of the Borrower at the office of the Agent specified in
Schedule 2.1(a), or at such other office as the Agent may designate in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the Closing
Date in Dollars and in funds immediately available to the Agent.
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate
Loan that is part of the Term Loan shall be in an aggregate principal
amount that is not less than $1,000,000 and integral multiples of
$100,000 (or the then remaining principal balance of the Term Loan, if
less).
33
(d) Repayment of Term Loan. The Borrower hereby promises
to pay the outstanding principal amount of the Term Loan in full on the
Maturity Date.
(e) Interest. Subject to the provisions of Section 3.1,
the Term Loan shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the
Term Loan shall be comprised in whole or in part of Base Rate
Loans, such Base Rate Loans shall bear interest at a per annum
rate equal to the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as the
Term Loan shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per
annum rate equal to the Adjusted Eurodollar Rate.
The Borrower hereby promises to pay interest on the Term Loan in
arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein).
(f) Term Notes. The Borrower hereby agrees that, upon the
request to the Agent by any Lender, the Borrower will execute and
deliver to such Lender a promissory note evidencing the Term Loans of
such Lender, substantially in the form of Exhibit 2.3(f), with
appropriate insertions as to date and principal amount (a "Term Note").
2.4 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth
herein, the Issuing Lender agrees to issue, and each Lender severally
agrees to participate in the issuance by the Issuing Lender of, standby
and trade Letters of Credit in Dollars from time to time from the
Closing Date until the date thirty (30) days prior to the Maturity Date
as the Borrower may request, in a form acceptable to the Issuing
Lender; provided, however, that (i) the LOC Obligations outstanding
shall not at any time exceed TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($2,500,000) (the "LOC Committed Amount") and (ii) the sum of the
aggregate outstanding principal amount of Revolving Loans plus LOC
Obligations plus Swing Line Loans outstanding shall not at any time
exceed the lesser of (A) the Revolving Committed Amount and (B) the
Borrowing Base. No Letter of Credit shall (x) have an original expiry
date more than one year from the date of issuance (provided that any
such Letter of Credit may contain customary "evergreen" provisions
pursuant to which the expiry date is automatically extended by a
specific time period unless the Issuing Lender gives notice to the
beneficiary of such Letter of Credit at least a specified time period
prior to the expiry date then in effect) or (y) as originally issued or
as extended, have an expiry date extending beyond the date thirty (30)
days prior to the Maturity Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry dates of each
Letter of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of
issuance. The Issuing Lender will, at least quarterly and more
34
frequently upon request, disseminate to each of the Lenders a detailed
report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein,
among other things, the beneficiary, the face amount and the expiry
date, as well as any payment or expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter
of Credit, shall be deemed to have purchased without recourse a
Participation Interest from the Issuing Lender in such Letter of Credit
and the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its pro rata share of the
obligations under such Letter of Credit (based on the respective
Revolving Commitment Percentages of the Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the
Issuing Lender and discharge when due, its pro rata share of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Lender's Participation Interest in any Letter
of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit,
each such Lender shall pay to the Issuing Lender its pro rata share of
such unreimbursed drawing in same day funds on the day of notification
by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) below. The obligation of each Lender to so
reimburse the Issuing Lender shall be absolute and unconditional and
shall not be affected by the occurrence of a Default, an Event of
Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower to
reimburse the Issuing Lender under any Letter of Credit, together with
interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower.
Unless the Borrower shall immediately notify the Issuing Lender that
the Borrower intends to otherwise reimburse the Issuing Lender for such
drawing, the Borrower shall be deemed to have requested that the
Lenders make a Revolving Loan in the amount of the drawing as provided
in subsection (e) below on the related Letter of Credit, the proceeds
of which will be used to satisfy the related reimbursement obligations.
The Borrower promises to reimburse the Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds. If
the Borrower shall fail to reimburse the Issuing Lender as provided
hereinabove, the Borrower promises to pay the Issuing Lender interest
on the unreimbursed amount of such drawing on demand at a per annum
rate equal to the Adjusted Base Rate plus 2%. The Borrower's
reimbursement obligations hereunder shall be absolute and unconditional
under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have
against the Issuing Lender, the Agent, the Lenders, the beneficiary of
the Letter of Credit drawn upon or any other Person, including without
limitation any defense based on any failure of the Borrower or any
other Credit Party to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the Agent
for the account of the Issuing Lender in Dollars and in immediately
available funds, the amount of such Lender's pro rata share of such
unreimbursed drawing. Such payment shall be made on the day such notice
is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M.
35
(Charlotte, North Carolina time), and otherwise such payment shall be
made at or before 12:00 Noon (Charlotte, North Carolina time) on the
Business Day next succeeding the day such notice is received. If such
Lender does not pay such amount to the Issuing Lender in full upon such
request, such Lender shall, on demand, pay to the Agent for the account
of the Issuing Lender interest on the unpaid amount during the period
from the date of such drawing until such Lender pays such amount to the
Issuing Lender in full at a rate per annum equal to, if paid within two
(2) Business Days of the date that such Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal
Funds Rate and thereafter at a rate equal to the Base Rate. Each
Lender's obligation to make such payment to the Issuing Lender, and the
right of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Loan Agreement or the
Commitments hereunder, the existence of a Default or Event of Default
or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a
Lender to the Issuing Lender, such Lender shall, automatically and
without any further action on the part of the Issuing Lender or such
Lender, acquire a Participation Interest in an amount equal to such
payment (excluding the portion of such payment constituting interest
owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower with
respect thereto.
(e) Repayment with Revolving Loans. On any day on which
the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance to reimburse a drawing under a Letter of Credit,
the Agent shall give notice to the Lenders that a Revolving Loan has
been requested or deemed requested by the Borrower to be made in
connection with a drawing under a Letter of Credit, in which case a
Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent the Borrower has complied with the procedures of
Section 2.1(b)(i) with respect thereto) shall be immediately made to
the Borrower by all Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) pro rata based on the respective
Revolving Commitment Percentages of the Lenders (determined before
giving effect to any termination of the Commitments pursuant to Section
9.2) and the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each such
Lender hereby irrevocably agrees to make its pro rata share of each
such Revolving Loan immediately upon any such request or deemed request
in the amount, in the manner and on the date specified in the preceding
sentence notwithstanding (i) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (vi)
any termination of the Commitments relating thereto immediately prior
to or contemporaneously with such borrowing. In the event that any
Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower or any other Credit Party), then each such Lender hereby
agrees that it shall forthwith purchase (as of the date such borrowing
would
36
otherwise have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such purchase) from the
Issuing Lender such Participation Interests in the outstanding LOC
Obligations as shall be necessary to cause each such Lender to share in
such LOC Obligations ratably (based upon the respective Revolving
Commitment Percentages of the Lenders (determined before giving effect
to any termination of the Commitments pursuant to Section 9.2)),
provided that at the time any purchase of Participation Interests
pursuant to this sentence is actually made, the purchasing Lender shall
be required to pay to the Issuing Lender, to the extent not paid to the
Issuing Lender by the Borrower in accordance with the terms of
subsection (d) above, interest on the principal amount of Participation
Interests purchased for each day from and including the day upon which
such borrowing would otherwise have occurred to but excluding the date
of payment for such Participation Interests, at the rate equal to, if
paid within two (2) Business Days of the date of the Revolving Loan
advance, the Federal Funds Rate, and thereafter at a rate equal to the
Base Rate.
(f) Designation of Consolidated Parties as Account
Parties. Notwithstanding anything to the contrary set forth in this
Loan Agreement, including without limitation Section 2.4(a), a Letter
of Credit issued hereunder may contain a statement to the effect that
such Letter of Credit is issued for the account of any Subsidiary of
the Borrower, provided that notwithstanding such statement, the
Borrower shall be the actual account party for all purposes of this
Loan Agreement for such Letter of Credit and such statement shall not
affect the Borrower's reimbursement obligations hereunder with respect
to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any
Letter of Credit shall, for purposes hereof, be treated in all respects
the same as the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may
have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits (the "UCP") or the International
Standby Practices 1998 (the "ISP98"), in either case as published as of
the date of issue by the International Chamber of Commerce, in which
case the UCP or the ISP98, as applicable, may be incorporated therein
and deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under
this Section 2.4, the Borrower hereby agrees to pay, and
protect, indemnify and save each Lender harmless from and
against, any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
attorneys' fees) that such Lender may incur or be subject to
as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or (B) the failure of such Lender to
honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present
or future de jure or de facto government or Governmental
Authority (all such acts or omissions, herein called
"Government Acts").
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(ii) As between the Borrower and the Lenders
(including the Issuing Lender), the Borrower shall assume all
risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. No Lender (including the Issuing
Lender) shall be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (D) for any loss or delay in
the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from
causes beyond the control of such Lender, including, without
limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by any Lender (including the
Issuing Lender), under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in
good faith, shall not put such Lender under any resulting
liability to the Borrower or any other Credit Party. It is the
intention of the parties that this Loan Agreement shall be
construed and applied to protect and indemnify each Lender
(including the Issuing Lender) against any and all risks
involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower (on behalf of
itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. No Lender
(including the Issuing Lender) shall, in any way, be liable
for any failure by such Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of such
Lender.
(iv) Nothing in this subsection (i) is intended
to limit the reimbursement obligations of the Borrower
contained in subsection (d) above. The obligations of the
Borrower under this subsection (i) shall survive the
termination of this Loan Agreement. No act or omission of any
current or prior beneficiary of a Letter of Credit shall in
any way affect or impair the rights of the Lenders (including
the Issuing Lender) to enforce any right, power or benefit
under this Loan Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (i), the Borrower shall have no
obligation to indemnify any Lender (including the Issuing
Lender) in respect of any liability incurred by such Lender
(A) arising solely out of the gross negligence or willful
misconduct of such Lender, as determined by a court of
competent jurisdiction, or (B) caused by such Lender's failure
to pay under any Letter of Credit after presentation to it of
a request strictly complying with the terms and conditions of
such Letter of Credit, as determined by a
38
court of competent jurisdiction, unless such payment is
prohibited by any law, regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders are only those expressly set forth in this
Loan Agreement and that the Issuing Lender shall be entitled to assume
that the conditions precedent set forth in Section 5.2 have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; provided, however, that
nothing set forth in this Section 2.4 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section
2.4 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(k) Conflict with LOC Documents. In the event of any
conflict between this Loan Agreement and any LOC Document (including
any letter of credit application), this Loan Agreement shall control.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of
Default, (i) the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Loan
Documents shall at the discretion of the Required Lenders (or automatically if
the Event of Default is pursuant to Section 9.1(f)) bear interest, payable on
demand, at a per annum rate 2% greater than the rate which would otherwise be
applicable (or if no rate is applicable, whether in respect of interest, fees or
other amounts, then the Adjusted Base Rate plus 2%) and (ii) the Standby Letter
of Credit Fee and the Trade Letter of Credit Fee shall accrue at a per annum
rate 2% greater than the rate which would otherwise be applicable.
3.2 EXTENSION AND CONVERSION.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) Loans extended as, or converted
into, Eurodollar Loans shall be subject to the terms of the definition of
"Interest Period" set forth in Section 1.1 and shall be in such minimum amounts
as provided in, with respect to Revolving Loans, Section 2.1(b)(ii) with respect
to Swing Line Loans, Section 2.2(c) or with respect to the Term Loan, Section
2.3(c) (iii) no more than 6 Eurodollar Loans which are Revolving Loans and 6
Eurodollar Loans which are Term Loans shall be outstanding hereunder at any time
(it being understood that, for purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions may, in
39
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period) and (iv) any request for extension or conversion of a Eurodollar Loan
which shall fail to specify an Interest Period shall be deemed to be a request
for an Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the Agent
specified in Schedule 2.1(a), or at such other office as the Agent may designate
in writing, prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business
Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate
Loan, and on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan,
the date of the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if appropriate,
the applicable Interest Periods with respect thereto. In the event the Borrower
fails to request extension or conversion of any Eurodollar Loan in accordance
with this Section 3.2, or any such conversion or extension is not permitted or
required by this Section 3.2, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time; provided,
however, that each partial prepayment of Loans shall be in a minimum
principal amount of $1,000,000 and integral multiples of $100,000 in
excess thereof and subject to the foregoing terms, amounts prepaid
under this Section 3.3(a) shall be applied as the Borrower may elect;
provided that if the Borrower shall fail to specify with respect to any
voluntary prepayment, such voluntary prepayment shall be applied first
pro rata to Revolving Loans and Swing Line Loans then to the Term Loan,
in each case first to Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities. All prepayments under this
Section 3.3(a) shall be subject to Section 3.12, but otherwise without
premium or penalty, and shall be accompanied by interest on the
principal amount prepaid through the date of prepayment.
(b) Mandatory Prepayments.
(i) (A) Revolving Committed Amount. If at any time,
the sum of the aggregate outstanding principal amount
of Revolving Loans plus the aggregate outstanding
principal amount of Swing Line Loans plus LOC
Obligations shall exceed the lesser of (A) the
Revolving Committed Amount and (B) the Borrowing
Base, the Borrower, within two (2) Business Days,
shall prepay the Revolving Loans and (after all
Revolving Loans have been repaid) cash collateralize
the LOC Obligations, in an amount sufficient to
eliminate such excess.
(B) LOC Committed Amount. If at any time, the
sum of the aggregate principal amount of LOC
Obligations shall exceed the LOC Committed Amount,
the Borrower immediately shall cash collateralize the
LOC Obligations in an amount sufficient to eliminate
such excess.
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(ii) (A) Asset Dispositions. Immediately upon the
occurrence of any Asset Disposition Prepayment Event,
the Borrower shall prepay the Loans in an aggregate
amount equal to 100% of the Net Cash Proceeds of the
related Asset Disposition not applied (or caused to
be applied) by the Credit Parties during the related
Application Period to make Eligible Reinvestments as
contemplated by the terms of Section 8.5(f) (such
prepayment to be applied as set forth in clause (vi)
below).
(B) Involuntary Dispositions. Immediately upon
the occurrence of an Involuntary Disposition
Prepayment Event, the Borrower shall prepay the Loans
in an aggregate amount equal to 100% of the Excess
Proceeds (such prepayment to be applied as set forth
in clause (vi) below).
(iii) Debt Issuances. Promptly, but in any event within two
(2) Business Days, upon the occurrence of a Debt Issuance
Prepayment Event, the Borrower shall prepay the Term Loans in
an aggregate amount equal to 100% of the Net Cash Proceeds of
the related Debt Issuance (such prepayment to be applied as
set forth in clause (vi) below).
(iv) Equity Issuances. Promptly, but in any event within
two (2) Business Days, upon the occurrence of an Equity
Issuance Prepayment Event, the Borrower shall prepay the Term
Loans in an aggregate amount equal to 100% of the Net Cash
Proceeds of the related Equity Issuance (such prepayment to be
applied as set forth in clause (vi) below).
(v) Excess Royalties. At any time that the aggregate
amount of the outstanding Term Loans is greater that
$35,000,000, the Borrower shall prepay the Term Loans in an
aggregate amount equal to 50% of the Excess Royalties for such
fiscal quarter most recently ended (such prepayments to be
made within 30 days of the receipt of such royalty payments
(provided that the Borrower may accumulate and pay in one
payment such amounts received during the first 75 days after
the end of each fiscal quarter related to the prior quarter)
and such payments to be applied as set forth in clause (vi)
below).
(vi) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 3.3(b) shall be
applied as follows: (A) with respect to all amounts prepaid
pursuant to Section 3.3(b)(i)(A), pro rata to Revolving Loans
and Swing Line Loans and (after all Revolving Loans and Swing
Line Loans have been repaid) to a cash collateral account in
respect of LOC Obligations (B) with respect to all amounts
prepaid pursuant to Section 3.3(b)(i)(B), to a cash collateral
account in respect of LOC Obligations, (C) with respect to all
amounts prepaid pursuant to Section 3.3(b)(ii), first to the
Term Loan, and, after the Term Loan is paid in full, to the
Revolving Loans and Swing Line Loans (with, if an Event of
Default has occurred, a corresponding reduction in the
Revolving Committed Amount) and (D) with respect to all
amounts prepaid pursuant to Section 3.3(b)(iii), (iv) or (v),
to the Term Loan. Within the parameters of the applications
set forth above, prepayments shall be applied first to Base
Rate Loans and then to Eurodollar Loans
41
in direct order of Interest Period maturities. All prepayments
under this Section 3.3(b) shall be subject to Section 3.12,
but otherwise without premium or penalty, and shall be
accompanied by interest on the principal amount prepaid
through the date of prepayment.
(vii) Prepayment Account. If the Borrower is required to
make a mandatory prepayment of Eurodollar Loans under this
Section 3.3(b), the Borrower shall have the right, in lieu of
making such prepayment in full, to deposit an amount equal to
such mandatory prepayment with the Agent in a cash collateral
account maintained (pursuant to documentation reasonably
satisfactory to the Agent) by and in the sole dominion and
control of the Agent. Any amounts so deposited shall be held
by the Agent as collateral for the prepayment of such
Eurodollar Loans and shall be applied to the prepayment of the
applicable Eurodollar Loans at the end of the current Interest
Periods applicable thereto. At the request of the Borrower,
amounts so deposited shall be invested by the Agent in Cash
Equivalents maturing prior to the date or dates on which it is
anticipated that such amounts will be applied to prepay such
Eurodollar Loans; any interest earned on such Cash Equivalents
will be for the account of the Borrower and the Borrower will
deposit with the Agent the amount of any loss on any such Cash
Equivalents to the extent necessary in order that the amount
of the prepayment to be made with the deposited amounts shall
not be reduced.
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED
AMOUNT.
(a) Voluntary Reductions. The Borrower may from time to
time permanently reduce or terminate the Revolving Committed Amount in
whole or in part (in minimum aggregate amounts of $1,000,000 or in
integral multiples of $1,000,000 in excess thereof (or, if less, the
full remaining amount of the then applicable Revolving Committed
Amount)) upon five Business Days' prior written notice to the Agent;
provided, however, no such termination or reduction shall be made which
would cause the sum of the aggregate outstanding principal amount of
Revolving Loans plus the aggregate amount of outstanding Swing Line
Loans plus LOC Obligations to exceed the lesser of (A) the Revolving
Committed Amount and (B) the Borrowing Base, unless, concurrently with
such termination or reduction, the Revolving Loans are repaid to the
extent necessary to eliminate such excess. The Agent shall promptly
notify each affected Lender of receipt by the Agent of any notice from
the Borrower pursuant to this Section 3.4(a).
(b) Term Loan Commitments. The Term Loan Commitment of
each Lender, if any, shall automatically terminate at such time as such
Lender shall have made available to the Borrower such Lender's share of
the Term Loan.
(c) Mandatory Reductions. The Revolving Committed Amount
automatically shall be permanently reduced from time to time in
accordance with the terms of Section 3.3(b)(v).
(d) Maturity Date. Unless terminated sooner pursuant to
Section 3.4(a) or Section 9.2, the Revolving Commitments of the Lenders
and the LOC Commitment of the
42
Issuing Lender shall automatically terminate on the Maturity Date (as
such Maturity Date may be extended pursuant to the terms of Section
12.2).
(e) General. The Borrower shall pay to the Agent for the
account of the Lenders in accordance with the terms of Section 3.5(a),
on the date of each termination or reduction of the Revolving Committed
Amount, the Unused Fee accrued through the date of such termination or
reduction on the amount of the Revolving Committed Amount so terminated
or reduced.
3.5 FEES.
(a) Unused Fee. In consideration of the Revolving
Commitments of the Lenders hereunder, the Borrower promises to pay to
the Agent for the account of each Lender a fee (the "Unused Fee") on
the Unused Revolving Committed Amount computed at a per annum rate for
each day during the applicable Unused Fee Calculation Period
(hereinafter defined) at a rate equal to the Applicable Percentage in
effect from time to time. The Unused Fee shall commence to accrue on
July 12, 2001 and shall be due and payable in arrears on the Closing
Date and, thereafter, on the last Business Day of each March, June,
September and December (and on any date that the Revolving Committed
Amount is reduced and on the Maturity Date) for the immediately
preceding quarter (or portion thereof) (each such quarter or portion
thereof for which the Unused Fee is payable hereunder being herein
referred to as an "Unused Fee Calculation Period"), beginning with the
first of such dates to occur after the Closing Date. Notwithstanding
the foregoing, the Unused Fee due and payable on the Closing Date shall
be, with respect to the period from July 12, 2001 to the Closing Date,
net of the equivalent fee the Borrower is paying under the Existing
Loan Agreement.
(b) Agent's Fees. The Borrower promises to pay to the
Agent, for its own account and for the account of Banc of America
Securities LLC, as applicable, the fees referred to in the BAMC Fee
Letter.
(c) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In
consideration of the issuance of standby Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Standby Letter of Credit
Fee") on such Lender's Revolving Commitment Percentage of the
average daily maximum amount available to be drawn under each
such standby Letter of Credit computed at a per annum rate for
each day from the date of issuance to the date of expiration
equal to the Applicable Percentage. The Standby Letter of
Credit Fee will be payable quarterly in arrears on the last
Business Day of each March, June, September and December for
the immediately preceding quarter (or a portion thereof).
(ii) Trade Letter of Credit Drawing Fee. In
consideration of the issuance of trade Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Trade Letter of Credit
Fee") on such Lender's Revolving Commitment Percentage of the
average daily maximum amount available to be drawn under each
such trade Letter of Credit computed at
43
a per annum rate for each day from the date of issuance to the
date of expiration equal to the Applicable Percentage. The
Trade Letter of Credit Fee will be payable quarterly in
arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter
(or a portion thereof).
(iii) Issuing Lender Fees. In addition to the
Standby Letter of Credit Fee payable pursuant to clause (i)
above and the Trade Letter of Credit Fee payable pursuant to
clause (ii) above, the Borrower promises to pay to the Agent
for the account of the Issuing Lender without sharing by the
other Lenders (i) a letter of credit fronting fee of 0.125% on
the average daily maximum amount available to be drawn under
each Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration (which
fronting fee shall be payable quarterly in arrears on the last
Business Day of each March, June, September and December for
the immediately preceding quarter (or a portion thereof)) and
(ii) the customary charges from time to time of the Issuing
Lender with respect to the issuance, amendment, transfer,
administration, cancellation and conversion of, and drawings
under, such Letters of Credit.
3.6 CAPITAL ADEQUACY.
If any Lender has reasonably determined, after the date hereof, that
the adoption or the becoming effective of, or any change in, or any change by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
within thirty (30) days of notice from such Lender to the Borrower (such notice
to include reasonable detail as to such change), the Borrower shall be obligated
to pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction; provided that the Borrower shall not be obligated to
reimburse any Lender for such increase or reduction for any period ninety (90)
days prior to such Lender providing notice if such Lender was aware of the
circumstances that existed which would cause such increase or reduction during
such ninety (90) day prior-period. Each determination by any such Lender of
amounts owing under this Section shall if made in good faith, absent manifest
error, be conclusive and binding on the parties hereto.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Agent determines (which determination if made in
good faith shall be conclusive absent manifest error) that by reason of
circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such
Interest Period; or
44
(b) the Required Lenders determine (which determination
if made in good faith shall be conclusive absent manifest error) and
notify the Agent that the Eurodollar Rate will not adequately and
fairly reflect the cost to the Lenders of funding Eurodollar Loans for
such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Loan Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision of this Loan Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 REQUIREMENTS OF LAW.
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any applicable
law, rule, or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank, or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office)
with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect
to any Eurodollar Loans, its Notes, or its obligation to make
Eurodollar Loans, or change the basis of taxation of any
amounts payable to such Lender (or its Applicable Lending
Office) under this Loan Agreement or its Notes in respect of
any Eurodollar Loans (other than taxes imposed on the overall
net income of such Lender by the jurisdiction in which such
Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Eurodollar Reserve Percentage utilized in the
determination of the Adjusted Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, such Lender (or its
Applicable Lending Office), including the Commitment of such
Lender hereunder; or
(iii) shall impose on such Lender (or its
Applicable Lending Office) or the London interbank market any
other condition affecting this Loan Agreement or its Notes or
any of such extensions of credit or liabilities or
commitments;
45
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Loan Agreement or its
Notes with respect to any Eurodollar Loans, then the Borrower shall pay to such
Lender within thirty (30) days of notice from such Lender to the Borrower (such
notice to include reasonable detail as to such change) such amount or amounts as
will compensate such Lender for such increased cost or reduction. If any Lender
requests compensation by the Borrower under this Section 3.9, the Borrower may,
by notice to such Lender (with a copy to the Agent), suspend the obligation of
such Lender to make or Continue Eurodollar Loans, or to Convert Base Rate Loans
into Eurodollar Loans, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of Section 3.10 shall be
applicable); provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested. Each Lender shall promptly
notify the Borrower and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to compensation
pursuant to this Section 3.9 and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this Section 3.9
shall furnish to the Borrower and the Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive, if made in good faith, in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
(b) The Borrower shall not be required to compensate a
Lender pursuant to this Section 3.9 for any increased costs or
reductions incurred more than 90 days prior to the date that such
Lender notifies the Borrower of the change of law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided that, if the change of law giving rise
to such increased costs or reductions is retroactive, then such 90-day
period referred to above shall be extended to include the period of
retroactive effect thereof.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.7, 3.8 or 3.9 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for such Eurodollar Loans (or, in the
case of a Conversion, on such earlier date as such Lender may specify to the
Borrower with a copy to the Agent) and, unless and until such Lender gives
notice as provided below that the circumstances specified in Section 3.7, 3.8 or
3.9 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans
have been so Converted, all payments and prepayments of principal that
would otherwise be applied to such Lender's Eurodollar Loans shall be
applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued
by such Lender as Eurodollar Loans shall be made or Continued instead
as Base Rate Loans, and all Base Rate Loans of such Lender that would
otherwise be Converted into Eurodollar Loans shall remain as Base Rate
Loans.
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If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.7, 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 TAXES.
(a) Any and all payments by any Credit Party to or for
the account of any Lender or the Agent hereunder or under any other
Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, (i) by the
jurisdiction under the laws of which such Lender (or its Applicable
Lending Office) or the Agent (as the case may be) is organized or any
political subdivision thereof or (ii) by reason of any present or
former connection between the Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political
subdivision thereof, other than such a connection arising solely from
the Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced this Loan
Agreement or the Notes (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If any Credit Party shall be
required by law to deduct any Taxes from or in respect of any sum
payable under this Loan Agreement or any other Loan Document to any
Lender or the Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.11) such Lender or the Agent receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Credit
Party shall make such deductions, (iii) such Credit Party shall pay the
full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law, and (iv) such Credit Party
shall furnish to the Agent, at its address referred to in Section 11.1,
the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Loan Agreement or any other Loan Document or
from the execution or delivery of, or otherwise with respect to, this
Loan Agreement or any other Loan Document (hereinafter referred to as
"Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 3.11) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto. This indemnification shall be made
47
within thirty (30) days from the date the Agent or such Lender, or the
case may be, makes written demand therefor.
(d) Each Lender that is not a United States person under
Section 7701(a)(30) of the Code, on or prior to the date of its
execution and delivery of this Loan Agreement in the case of each
Lender listed on the signature pages hereof and on or prior to the date
on which it becomes a Lender in the case of each other Lender, and from
time to time thereafter if requested in writing by the Borrower or the
Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue
Service Form W-8 BEN or W-8 ECI, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender
is entitled to benefits under an income tax treaty to which the United
States is a party which reduces to zero the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant
to this Loan Agreement is effectively connected with the conduct of a
trade or business in the United States, (ii) Internal Revenue Service
Form W-8 or W-9, as appropriate, or any successor form prescribed by
the Internal Revenue Service, and/or (iii) any other form or
certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code),
certifying that such Lender is entitled to an exemption from tax on
payments pursuant to this Loan Agreement or any of the other Loan
Documents.
(e) For any period with respect to which a Lender has
failed to provide the Borrower and the Agent with the appropriate form
pursuant to Section 3.11(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 3.11(a) or 3.11(b) with
respect to Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from withholding tax, become
subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
(f) If any Credit Party is required to pay additional
amounts to or for the account of any Lender pursuant to this Section
3.11, then such Lender will agree to use reasonable efforts to change
the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Without prejudice to the survival of any other
agreement of the Credit Parties hereunder, the agreements and
obligations of the Credit Parties contained in this Section 3.11 shall
survive the repayment of the Loans, the LOC Obligations and other
obligations under the Loan Documents and the termination of the
Commitments hereunder.
3.12 COMPENSATION.
Upon demand of any Lender (with a copy to the Agent) from time to time,
the Borrower shall promptly compensate such Lender for and hold such Lender
harmless from any loss, cost or expense incurred by it as a result of:
48
(a) any Continuation, Conversion, payment or prepayment
of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than
the failure of such Lender to make a Loan) to prepay, borrow, Continue
or Convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower; or
(c) any assignment of a Eurodollar Loan on a day other
than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 3.17;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.12, each Lender shall be deemed to have funded each Eurodollar
Loan made by it at the Interbank Offered Rate for such Loan by a matching
deposit or other borrowing in the applicable offshore Dollar interbank market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Loan was in fact so funded. The covenants of the Borrower set forth
in this Section 3.12 shall survive the repayment of the Loans, the LOC
Obligations and other obligations under the Loan Documents and the termination
of the Commitments hereunder.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan (other than Swing Line Loans), each
payment or (subject to the terms of Section 3.3) prepayment of
principal of any Loan (other than Swing Line Loans) or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of interest on the Loans (other than Swing Line Loans) or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of Unused Fees, each payment of the Standby Letter of Credit Fee, each
payment of the Trade Letter of Credit Fee, each reduction of the
Revolving Committed Amount and each conversion or extension of any Loan
(other than Swing Line Loans), shall be allocated pro rata among the
Lenders in accordance with the respective principal amounts of their
outstanding Loans of the applicable type and Participation Interests in
Loans of the applicable type and Letters of Credit.
(b) Swing Line Loans. The Swing Line Lender shall
receive, for its own account, all payments or prepayments of principal
and interest with respect to the Swing Line Loans; provided, however,
upon the funding of the Participants' participation interests with
respect to a Swing Line Loan pursuant to Section 2.2(d), such
Participants shall be entitled to receive their pro rata share of any
payment or prepayment of principal and interest with respect to such
Swing Line Loan.
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(c) Advances.
(i) No Lender shall be responsible for the
failure or delay by any other Lender in its obligation to make
its ratable share of a borrowing hereunder; provided, however,
that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its
obligations hereunder.
(ii) Unless the Borrower or any Lender has
notified the Agent prior to the date any payment is required
to be made by it to the Agent hereunder, that the Borrower or
such Lender, as the case may be, will not make such payment,
the Agent may assume that the Borrower or such Lender, as the
case may be, has timely made such payment and may (but shall
not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to
the extent that such payment was not in fact made to the Agent
in immediately available funds, then:
(A) if the Borrower failed to make such
payment, each Lender shall forthwith on
demand repay to the Agent the portion of
such assumed payment that was made available
to such Lender in immediately available
funds, together with interest thereon in
respect of each day from and including the
date such amount was made available by the
Agent to such Lender to the date such amount
is repaid to the Agent in immediately
available funds, at the Federal Funds Rate
from time to time in effect; and
(B) if any Lender failed to make such
payment, such Lender shall forthwith on
demand pay to the Agent the amount thereof
in immediately available funds, together
with interest thereon for the period from
the date such amount was made available by
the Agent to the Borrower to the date such
amount is recovered by the Agent (the
"Compensation Period") at a rate per annum
equal to the Federal Funds Rate from time to
time in effect. If such Lender does not pay
such amount forthwith upon the Agent's
demand therefor, the Agent may make a demand
therefor upon the Borrower, and the Borrower
shall pay such amount to the Agent, together
with interest thereon for the Compensation
Period at a rate per annum equal to the rate
of interest applicable to the applicable
Borrowing.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights that
the Agent or the Borrower may have against any Lender as a result of
any default by such Lender hereunder. A notice of the Agent to any
Lender with respect to any amount owing under this subsection (c) shall
be conclusive, absent manifest error.
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3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Loan Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Loan Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Loan Agreement. The Lenders further agree among themselves
that if payment to a Lender obtained by such Lender through the exercise of a
right of setoff, banker's lien, counterclaim or other event as aforesaid shall
be rescinded or must otherwise be restored, each Lender which shall have shared
the benefit of such payment shall, by repurchase of a Participation Interest
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such a Participation Interest may, to the fullest extent
permitted by law, exercise all rights of payment, including setoff, banker's
lien or counterclaim, with respect to such Participation Interest as fully as if
such Lender were a holder of such Loan, LOC Obligations or other obligation in
the amount of such Participation Interest. Except as otherwise expressly
provided in this Loan Agreement, if any Lender shall fail to remit to the Agent
or any other Lender an amount payable by such Lender to the Agent or such other
Lender pursuant to this Loan Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Generally. Except as otherwise specifically provided
herein, all payments hereunder shall be made to the Agent in Dollars in
immediately available funds, without condition or deduction for any
counterclaim, defense, recoupment or setoff of any kind, at the Agent's
office specified in Schedule 2.1(a) not later than 2:00 P.M.
(Charlotte, North Carolina time) on the date when due. Payments
received after such time shall be deemed to have been received on the
next succeeding Business Day. The Agent may (but shall not be obligated
to) debit the amount of any such payment which is not made by such time
to any ordinary deposit account of the Borrower or any other Credit
Party maintained with the Agent (with notice to the Borrower or such
other Credit Party). The Borrower shall, at the time it makes any
payment under this Loan Agreement, specify to the Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that
it fails so to specify, or if such application would be inconsistent
with the terms hereof, the Agent shall distribute such
51
payment to the Lenders in such manner as the Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder,
subject to the terms of Section 3.13(a)). The Agent will distribute
such payments to such Lenders, if any such payment is received prior to
2:00 P.M. (Charlotte, North Carolina time) on a Business Day in like
funds as received prior to the end of such Business Day and otherwise
the Agent will distribute such payment to such Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated
to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (subject to
accrual of interest and Fees for the period of such extension), except
that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such
payment shall instead be made on the next preceding Business Day.
Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days
elapsed over a year of 360 days, except with respect to computation of
interest on Base Rate Loans and Swing Line Loans which shall be
calculated based on a year of 365 or 366 days, as appropriate. Interest
shall accrue from and include the date of borrowing, but exclude the
date of payment.
(b) Allocation of Payments After Acceleration.
Notwithstanding any other provisions of this Loan Agreement to the
contrary, after acceleration of the Credit Party Obligations pursuant
to Section 9.2, all amounts collected or received by the Agent or any
Lender on account of the Credit Party Obligations or any other amounts
outstanding under any of the Loan Documents or in respect of the
Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation reasonable
attorneys' fees) of the Agent in connection with enforcing the
rights of the Lenders under the Loan Documents and any
protective advances made by the Agent with respect to the
Collateral under or pursuant to the terms of the Collateral
Documents;
SECOND, to payment of any fees owed to the Agent or
the Swing Line Lender;
THIRD, to the payment of all of the Credit Party
Obligations consisting of accrued fees and interest;
FOURTH, to the payment of the outstanding principal
amount of the Credit Party Obligations (including the cash
collateralization of the outstanding LOC Obligations);
FIFTH, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation, reasonable
attorneys' fees) of each of the Lenders in connection with
enforcing its rights under the Loan Documents or otherwise
with respect to the Credit Party Obligations owing to such
Lender;
52
SIXTH, to all other Credit Party Obligations and
other obligations which shall have become due and payable
under the Loan Documents or otherwise and not repaid pursuant
to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to
whomever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category, (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Agent in a cash collateral account and
applied (A) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (B) then, following
the expiration of all Letters of Credit, to all other obligations of
the types described in clauses "FIFTH" and "SIXTH" above in the manner
provided in this Section 3.15(b).
3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts
evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Loan Agreement. Each Lender
will make reasonable efforts to maintain the accuracy of its account or
accounts and to promptly update its account or accounts from time to
time, as necessary.
(b) The Agent shall maintain the Register pursuant to
Section 11.3(c), and a subaccount for each Lender, in which Register
and subaccounts (taken together) shall be recorded (i) the amount, type
and Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to
each Lender hereunder and (iii) the amount of any sum received by the
Agent hereunder from or for the account of any Credit Party and each
Lender's share thereof. The Agent will make reasonable efforts to
maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register and
subaccounts maintained pursuant to clause (b) of this Section 3.16
(and, if consistent with the entries of the Agent, clause (a)) shall be
prima facie evidence of the existence and amounts of the obligations of
the Credit Parties therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain any such account, such
Register or such subaccount, as applicable, or any error therein, shall
not in any manner affect the obligation of the Credit Parties to repay
the Credit Party Obligations owing to such Lender.
3.17 MANDATORY ASSIGNMENT.
In the event any Lender delivers to the Borrower any notice in
accordance with Section 3.6, 3.8, 3.9, or 3.11, then, provided that no Default
or Event of Default has occurred and is continuing at such time, the Borrower
may, at its own expense (such expense to include any transfer fee
53
payable to the Agent under Section 11.3(b)), and in its sole discretion require
such Lender to transfer and assign in whole or in part, without recourse (in
accordance with and subject to the terms and conditions of Section 11.3(b)), all
or part of its interests, rights and obligations under this Loan Agreement to
any assignee which shall assume such assigned obligations, provided that (i)
such assignee shall be (a) any Lender or any Affiliate or Subsidiary of a
Lender, or (b) any other commercial bank, financial institution or "accredited
investor" (as defined in Regulation D of the Securities and Exchange Commission)
reasonably acceptable to the Agent, (ii) such assignment shall not conflict with
any law, rule or regulation or order of any court or other Governmental
Authority and (iii) the Borrower or such assignee shall have paid to the
assigning Lender in immediately available funds the principal of and interest
accrued to the date of such payment on the Loans made by it hereunder and all
other amounts owed to it hereunder (including, without limitation, any amounts
owing pursuant to Section 3.6, 3.8, 3.9, or 3.11).
SECTION 4
GUARANTY
4.1 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided, as primary obligor and not as surety, the prompt
payment of the Credit Party Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Credit Party Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Credit Party Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Loan Documents or Hedging Agreements, the obligations of each
Guarantor under this Loan Agreement and the other Loan Documents shall be
limited to an aggregate amount equal to the largest amount that would not render
such obligations subject to avoidance under Section 548 of the Bankruptcy Code
or any comparable provisions of any applicable state law.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Loan Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all
54
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor for amounts paid under this Section 4 until such time as the
Credit Party Obligations have been Fully Satisfied. Without limiting the
generality of the foregoing, it is agreed that, to the fullest extent permitted
by law, the occurrence of any one or more of the following shall not alter or
impair the liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to
any Guarantor, the time for any performance of or compliance with any
of the Credit Party Obligations shall be extended, or such performance
or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of
any of the Loan Documents, any Hedging Agreement between any
Consolidated Party and any Lender, or any Affiliate of a Lender, or any
other agreement or instrument referred to in the Loan Documents or such
Hedging Agreements shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations
shall be accelerated, or any of the Credit Party Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Loan Documents, any Hedging Agreement between any
Consolidated Party and any Lender, or any Affiliate of a Lender, or any
other agreement or instrument referred to in the Loan Documents or such
Hedging Agreements shall be waived or any other guarantee of any of the
Credit Party Obligations or any security therefor shall be released,
impaired or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any
Lender or Lenders as security for any of the Credit Party Obligations
shall fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be
determined to be void or voidable (including, without limitation, for
the benefit of any creditor of any Guarantor) or shall be subordinated
to the claims of any Person (including, without limitation, any
creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Loan Documents,
any Hedging Agreement between any Consolidated Party and any Lender, or any
Affiliate of a Lender, or any other agreement or instrument referred to in the
Loan Documents or such Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel)
55
incurred by the Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Credit Party Obligations, except through the
exercise of rights of subrogation pursuant to Section 4.2 and through the
exercise of rights of contribution pursuant to Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Collateral Documents and that the
Lenders may exercise their remedies thereunder in accordance with the terms
thereof.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the Credit Party Obligations until such time
as the Credit Party Obligations have been Fully Satisfied, and none of the
Guarantors shall exercise any right or remedy under this Section 4.6 against any
other Guarantor until such Credit Party Obligations have been Fully Satisfied.
For purposes of this Section 4.6, (a) "Excess Payment" shall mean the amount
paid by any Guarantor in excess of its Pro Rata Share of any Credit Party
Obligations; (b) "Pro Rata Share" shall mean, for any Guarantor in respect of
any payment of Credit Party Obligations, the ratio (expressed as a percentage)
as of the date of such payment of Credit Party Obligations of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of all of the Credit Parties exceeds the amount of all of the debts
and liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Credit Parties hereunder) of
the Credit Parties; provided, however, that, for purposes of calculating the Pro
Rata Shares of the Guarantors in respect of any payment of Credit Party
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such
56
payment shall be deemed to have been a Guarantor on the date of such payment and
the financial information for such Guarantor as of the date such Guarantor
became a Guarantor shall be utilized for such Guarantor in connection with such
payment; and (c) "Contribution Share" shall mean, for any Guarantor in respect
of any Excess Payment made by any other Guarantor, the ratio (expressed as a
percentage) as of the date of such Excess Payment of (i) the amount by which the
aggregate present fair salable value of all of its assets and properties exceeds
the amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Credit Parties other than the maker of such Excess Payment exceeds the amount of
all of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of the Credit
Parties) of the Credit Parties other than the maker of such Excess Payment;
provided, however, that, for purposes of calculating the Contribution Shares of
the Guarantors in respect of any Excess Payment, any Guarantor that became a
Guarantor subsequent to the date of any such Excess Payment shall be deemed to
have been a Guarantor on the date of such Excess Payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such Excess Payment.
This Section 4.6 shall not be deemed to affect any right of subrogation,
indemnity, reimbursement or contribution that any Guarantor may have under
applicable law against the Borrower in respect of any payment of Credit Party
Obligations. Notwithstanding the foregoing, all rights of contribution against
any Guarantor shall terminate from and after such time, if ever, that such
Guarantor shall be relieved of its obligations pursuant to Section 8.5.
4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Loan Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letters of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions:
(a) Executed Loan Documents. Receipt by the Agent of duly
executed copies of: (i) this Loan Agreement, (ii) the Notes, (iii) the
Collateral Documents, (iv) the BAMC Fee Letter and (v) all other Loan
Documents.
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state
57
or other jurisdiction of its incorporation and certified by a
secretary or assistant secretary of such Credit Party to be
true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the
Board of Directors of each Credit Party approving and adopting
the Loan Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iv) Good Standing. Copies of certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could
have a Material Adverse Effect.
(v) Incumbency. An incumbency certificate of
each Credit Party certified by a secretary or assistant
secretary to be true and correct as of the Closing Date.
(c) Opinions of Counsel. The Agent shall have received,
in each case dated as of the Closing Date and in form and substance
reasonably satisfactory to the Agent:
(i) a legal opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, outside counsel for the Credit Parties;
(ii) a legal opinion of in-house counsel for the
Credit Parties with respect to various corporate and
organizational matters for each Credit Party; and
(iii) a legal opinion of special local North
Carolina counsel for the Credit Parties for the North Carolina
Mortgaged Property .
(d) Personal Property Collateral. The Agent shall have
received:
(i) searches of Uniform Commercial Code filings
in the jurisdiction of the chief executive office of each
Credit Party and each jurisdiction where any Collateral is
located or where a filing would need to be made in order to
perfect the Agent's security interest in the Collateral,
copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly executed UCC financing statements (or
amendments, if appropriate) for each appropriate jurisdiction
as is necessary, in the Agent's sole discretion, to perfect
the Agent's security interest in the Collateral;
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(iii) searches of ownership of, and Liens on,
intellectual property of each Credit Party in the appropriate
governmental offices;
(iv) all certificates evidencing any certificated
Capital Stock pledged to the Agent pursuant to the Pledge
Agreement, together with duly executed in blank, undated stock
powers attached thereto (unless, with respect to the pledged
Capital Stock of any Foreign Subsidiary, such stock powers are
deemed unnecessary by the Agent in its reasonable discretion
under the law of the jurisdiction of incorporation of such
Person);
(v) duly executed notices of grant of security
interest in the form required by the Security Agreement as are
necessary, in the Agent's sole discretion, to perfect the
Agent's security interest in the Collateral;
(vi) all instruments and chattel paper in the
possession of any of the Credit Parties, together with
allonges or assignments as may be necessary or appropriate to
perfect the Agent's security interest in the Collateral; and
(vii) duly executed consents as are necessary, in
the Agent's reasonable discretion, to perfect the Agent's
security interest in the Collateral.
(e) Real Property Collateral. The Agent shall have
received, in form and substance reasonably satisfactory to the Agent:
(i) fully executed and notarized mortgages,
deeds of trust or deeds to secure debt (each, as the same may
be amended, modified, restated or supplemented from time to
time, a "Mortgage Instrument" and collectively the "Mortgage
Instruments") encumbering the fee interest and/or leasehold
interest of any Credit Party in each of the Real Properties
(other than Excluded Properties) designated in Schedule
6.20(a) (each a "Mortgaged Property" and collectively the
"Mortgaged Properties");
(ii) an update of the ALTA mortgagee title
insurance policies issued by Commonwealth Land Title Company
of North Carolina (the "Mortgage Policies"), in amounts not
less than the respective amounts designated in Schedule
6.20(a) with respect to the North Carolina Mortgaged Property
(other than leasehold sites), assuring the Agent that each of
the Mortgage Instruments creates a valid and enforceable first
priority mortgage lien on the applicable Mortgaged Property,
free and clear of all defects and encumbrances except
Permitted Liens, which Mortgage Policies shall otherwise be in
form and substance reasonably satisfactory to the Agent and
shall include such endorsements as are reasonably requested by
the Agent;
(iii) for all real properties other than leasehold
properties, evidence as to (A) whether any Mortgaged Property
is in an area designated by the Federal Emergency Management
Agency as having special flood or mud slide hazards (a "Flood
Hazard Property") and (B) if any Mortgaged Property is a Flood
Hazard Property, (1) whether the community in which such
Mortgaged Property is
59
located is participating in the National Flood Insurance
Program, (2) the applicable Credit Party's written
acknowledgment of receipt of written notification from the
Agent (a) as to the fact that such Mortgaged Property is a
Flood Hazard Property and (b) as to whether the community in
which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (3)
copies of insurance policies or certificates of insurance of
the Consolidated Parties evidencing flood insurance
satisfactory to the Agent and naming the Agent as sole loss
payee on behalf of the Lenders;
(f) Opening Borrowing Base Report. Receipt by the Agent
of a Borrowing Base Certificate as of the Closing Date in a form
reasonably acceptable to the Agent.
(g) Availability. After giving effect to the Transaction,
including the initial Loans made hereunder on the Closing Date, the
Revolving Committed Amount and the amount of availability existing
under the Borrowing Base shall exceed the sum of the aggregate
outstanding principal amount of Revolving Loans by at least $8,000,000.
(h) Evidence of Insurance. Receipt by the Agent of copies
of insurance policies or certificates of insurance of the Consolidated
Parties evidencing liability and casualty insurance meeting the
requirements set forth in the Loan Documents, including, but not
limited to, naming the Agent as additional insured (in the case of
liability insurance) or loss payee (in the case of hazard insurance) on
behalf of the Lenders.
(i) Consents. Receipt by the Agent of evidence that all
governmental, shareholder and material third party consents (including
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ clearance) and approvals necessary or desirable in
connection with the Transaction and expiration of all applicable
waiting periods without any action being taken by any authority that
could restrain, prevent or impose any material adverse conditions on
the Transaction or that could seek or threaten any of the foregoing,
and no law or regulation shall be applicable which in the judgment of
the Agent could have such effect.
(j) Consummation of Transaction. The Agent's satisfactory
review of the Purchase Agreement (including all schedules and exhibits
thereto and, if applicable, any contemplated seller financing and/or
third-party service or supply agreement) (collectively, the
"Transaction Documents") regarding the acquisition of substantially all
of the Acquired Product which shall provide for an aggregate purchase
price not in excess of $100.0 million, with an amount not to exceed
$52.5 million payable at the closing of the acquisition of the Acquired
Product and the balance payable in installments on the first, second
and third anniversaries of such closing. The Transaction shall have
been consummated in accordance with the terms of the Transaction
Documents and in material compliance with applicable law and regulatory
approvals, all material conditions precedent to the obligations of the
buyer under the Purchase Agreement shall have been satisfied and the
Agent shall be satisfied that after giving effect to the Transaction,
including the application on the Closing Date of the proceeds of the
related financings and equity contributions, the Consolidated Parties
shall have no Indebtedness except for Indebtedness permitted under
Section 8.1. The Transaction Documents shall not have been altered,
amended or otherwise changed or supplemented in any material respect or
any material condition therein waived, without the prior written
consent of the Agent.
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(k) Officer's Certificates. The Agent shall have received
a certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date, in form and substance satisfactory to
the Agent, stating that (A) each Credit Party is in compliance with all
existing material financial obligations, (B) all material governmental,
shareholder and third party consents and approvals, if any, with
respect to the Loan Documents and the transactions contemplated thereby
have been obtained, (C) no action, suit, investigation or proceeding is
pending or threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect any Credit Party
or any transaction contemplated by the Loan Documents, if such action,
suit, investigation or proceeding would reasonably be expected to have
a Material Adverse Effect, (D) the transactions contemplated by the
Purchase Agreement have been consummated contemporaneously with funding
of the Facilities hereunder in accordance with the terms thereof and
(E) immediately after giving effect to the Transaction, (1) no Default
or Event of Default exists and (2) all representations and warranties
contained herein and in the other Loan Documents are true and correct
in all material respects.
(l) Solvency. The Agent shall have received (i) a
certificate executed by an Executive Officer of the Borrower as of the
Closing Date, in form and substance satisfactory to the Agent,
regarding the Solvency of each of the Credit Parties on a consolidated
basis and (ii) an opinion from an independent auditor or appraiser
acceptable to the Agent as to the Solvency of the Credit Parties on a
consolidated basis after giving effect to the Transaction.
(m) Fees and Expenses. Payment by the Credit Parties to
the Lenders and the Agent of all fees and expenses relating to the
Credit Facilities which are due and payable on the Closing Date,
including, without limitation, payment to the Agent of the fees set
forth in the BAMC Fee Letter.
(n) Additional Financial Information. The Agent shall
have received and, in each case been satisfied with, (i) a closing
balance sheet giving effect to the Transaction and the transactions
contemplated hereby and reflecting estimated purchase price accounting
adjustments, all meeting the requirements of Regulation S-X under the
Securities Act of 1933, as amended, applicable to a Registration
Statement under such act on Form S-1 and (ii) interim monthly financial
statements and monthly working capital detail for the trailing twelve
months and interim quarterly financial statements and quarterly working
capital detail for the first projected year (including, in the case of
projections, pro forma financial information giving effect to the
Transaction and the transactions contemplated hereby).
(o) Litigation, Etc. There shall not exist (a) any order,
decree, judgment, ruling or injunction which restrains the consummation
of the Transaction in the manner contemplated by the Transaction
Documents, and (b) any pending or threatened action, suit,
investigation or proceeding, which, if adversely determined, could
materially and adversely affect the Borrower or its subsidiaries, any
transaction contemplated hereby or the ability of the Borrower and its
subsidiaries or any other Guarantor to perform its obligations under
the documentation for the Credit Facilities or the ability of the
Lenders to exercise their rights thereunder.
61
(p) No Material Adverse Change. There shall not have
occurred a material adverse change since December 31, 2000 in the
business, assets, liabilities (actual or contingent), operations,
condition (financial or otherwise) or prospects of the Borrower or the
Acquired Product, in the case of the Borrower together with its
subsidiaries taken as a whole, or in the facts and information
regarding such entities and assets as represented to date.
(q) Other. Receipt by the Lenders of such other
documents, instruments, agreements or information as reasonably
requested by any Lender, including, but not limited to, information
regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership and contingent
liabilities of the Consolidated Parties.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan and
of the Issuing Lender to issue or extent any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of
any Revolving Loan, or any portion of the Term Loan, an appropriate
Notice of Borrowing or Notice of Extension/Conversion, (ii) in the case
of any Swing Line Loan, an appropriate Swing Line Loan Request and
(iii) in the case of any Letter of Credit, the Issuing Lender shall
have received an appropriate request for issuance in accordance with
the provisions of Section 2.4(b).
(b) The representations and warranties set forth in
Section 6 shall, subject to the limitations set forth therein, be true
and correct in all material respects as of such date (except for those
which expressly relate to an earlier date);
(c) No Default or Event of Default shall exist and be
continuing either immediately prior to or immediately after giving
effect thereto; and
(d) Immediately after giving effect to the making of such
Loan, in the case of a request for a Revolving Loan, (and the
application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the sum of the aggregate outstanding
principal amount of Revolving Loans plus the aggregate outstanding
principal amount of Swing Line Loans plus the LOC Obligations shall not
exceed the lesser of (A) the Revolving Committed Amount and (B) the
Borrowing Base and (ii) the LOC Obligations shall not exceed the LOC
Committed Amount.
The delivery of each Notice of Borrowing and each request for a Letter of Credit
pursuant to Section 2.4(b) shall constitute a representation and warranty by the
Credit Parties of the correctness of the matters specified in subsections (b),
(c) and (d) above.
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SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated and unaudited consolidating
balance sheets and income statements of the Consolidated Parties for
the fiscal years ended December 31, 1999 and December 31, 2000
(including the notes thereto) (i) have been audited (with respect to
such consolidated statements) by Ernst & Young LLP, (ii) have been
prepared in accordance with GAAP consistently applied throughout the
periods covered thereby and (iii) present fairly in all material
respects (on the basis disclosed in the footnotes to such financial
statements) the consolidated and consolidating financial condition,
results of operations and cash flows (consolidated only) of the
Consolidated Parties as of such date and for such periods. The
unaudited interim balance sheets of the Consolidated Parties as at the
end of, and the related unaudited interim statements of earnings and of
cash flows for the 6-month period ended June 30, 2001 and each fiscal
month and quarterly period ended after June 30, 2001 and prior to the
Closing Date (i) have been prepared in accordance with GAAP (except for
the omission of footnotes and subject to year end audit adjustment)
consistently applied throughout the periods covered thereby and (ii)
present fairly the consolidated and consolidating financial condition,
results of operations and cash flows (consolidated only) of the
Consolidated Parties as of such date and for such periods. During the
period from June 30, 2001 to and including the Closing Date, there has
been no sale, transfer or other disposition by any Consolidated Party
of any material part of the business or property of the Consolidated
Parties, taken as a whole, and no purchase or other acquisition (other
than the Transaction and the acquisition of substantially all of the
assets of the Pharmaceutical Education and Development Foundation of
the Medical University of South Carolina) by any of them of any
business or property (including any Capital Stock of any other Person)
material in relation to the consolidated financial condition of the
Consolidated Parties, taken as a whole, in each case, which is not
reflected in the foregoing financial statements or in the notes thereto
and has not otherwise been disclosed in writing to the Lenders on or
prior to the Closing Date. As of the Closing Date, the Borrower and its
Subsidiaries have no material liabilities (contingent or otherwise)
that are not reflected in the foregoing financial statements or in the
notes thereto.
(b) The pro forma consolidated balance sheet of the
Consolidated Parties as of the Closing Date giving effect to the
Acquisition in accordance with the terms of the Purchase Agreement and
reflecting estimated purchase accounting adjustments is based upon
reasonable assumptions made known to the Lenders and upon information
not known to be incorrect or misleading in any material respect.
(c) The financial statements delivered pursuant to
Section 7.1(a) and (b) have been prepared in accordance with GAAP
(except as may otherwise be permitted under Section 7.1(a) and (b)) and
present fairly in all material respects (in the case of such statements
delivered pursuant to Section 7.1(a), on the basis disclosed in the
footnotes to
63
such financial statements) the consolidated and consolidating financial
condition, results of operations and cash flows of the Consolidated
Parties as of such date and for such periods.
6.2 NO MATERIAL CHANGE.
Since December 31, 2000, there has been no development or event
relating to or affecting a Consolidated Party which has had or would reasonably
be expected to have a Material Adverse Effect.
6.3 ORGANIZATION AND GOOD STANDING.
Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not have or would not reasonably be
expected to have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate or other
necessary action to authorize the borrowings and other extensions of credit on
the terms and conditions of this Loan Agreement and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other similar act by or
in respect of, any Governmental Authority or any other Person is required to be
obtained or made by or on behalf of any Credit Party in connection with the
borrowings or other extensions of credit hereunder, with the execution,
delivery, performance, validity or enforceability of the Loan Documents to which
such Credit Party is a party or with the consummation of the Transaction, except
for (i) consents, authorizations, notices and filings described in Schedule 6.4,
all of which have been obtained or made or have the status described in such
Schedule 6.4 and (ii) filings and other actions to perfect the Liens created by
the Collateral Documents. This Loan Agreement has been, and each other Loan
Document to which any Credit Party is a party will be, duly executed and
delivered on behalf of the Credit Parties. This Loan Agreement constitutes, and
each other Loan Document to which any Credit Party is a party when executed and
delivered will constitute, a legal, valid and binding obligation of such Credit
Party enforceable against such party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) or by principles of
good faith and fair dealing.
6.5 NO CONFLICTS.
Neither the execution and delivery of the Loan Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and
64
provisions thereof by such Credit Party will (a) violate or conflict with any
provision of its articles or certificate of incorporation or bylaws or other
organizational or governing documents of such Person, (b) violate, contravene or
materially conflict with any Requirement of Law or any other law, regulation
(including, without limitation, Regulation U or Regulation X), order, writ,
judgment, injunction, decree or permit applicable to it, (c) violate, contravene
or conflict with contractual provisions of, or cause an event of default under,
any material indenture, loan agreement, mortgage, deed of trust, contract or
other agreement or instrument to which it is a party or by which it may be
bound, except in the case of clauses (b) and (c) where such violations or
conflicts would not be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect, or (d) result in or require the creation of any
Lien (other than those contemplated in or created in connection with the Loan
Documents) upon or with respect to its properties.
6.6 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could have a Material Adverse Effect. No Default or Event
of Default exists except as previously disclosed in writing to the Lenders.
6.7 OWNERSHIP OF PROPERTIES.
Except as set forth in Schedule 6.7, each Consolidated Party (i) holds
interests as lessee under valid leases in full force and effect with respect to
all material leased real and personal property used in connection with its
business, (ii) possesses or has rights to use licenses, patents, copyrights,
trademarks, service marks, trade names and other assets sufficient to enable it
to continue to conduct its business substantially as heretofore conducted and
without any material conflict with the rights of others, and (iii) has good
title to all of its other properties and assets reflected in the most recent
financial statements referred to in Section 6.1(a) (except as sold or otherwise
disposed of since the date thereof in the ordinary course of business and except
those properties which would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect), in each case under (i), (ii) and
(iii) above free and clear of all Liens other than Permitted Liens.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Consolidated
Parties have no material Indebtedness.
6.9 LITIGATION.
Except as disclosed in Schedule 6.9, there does not exist (i) any
order, decree, judgment, ruling or injunction which restrains the consummation
of the acquisition of the Acquired Product in the manner contemplated by the
Purchase Agreement or (ii) any pending or threatened action, suit or legal,
equitable, arbitration or administrative proceeding against any Consolidated
Party which would be reasonably expected to have a Material Adverse Effect.
65
6.10 TAXES.
Each Consolidated Party has filed, or caused to be filed, all tax
returns (Federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. No
Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party.
6.11 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not reasonably be expected to have a Material
Adverse Effect.
6.12 ERISA.
Except as disclosed and described in Schedule 6.12 attached hereto:
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no ERISA Event
has occurred, and, to the knowledge of the Executive Officers of the
Credit Parties, no event or condition has occurred or exists as a
result of which any ERISA Event could reasonably be expected to occur,
with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the
Code, whether or not waived, has occurred with respect to any
applicable Plan; (iii) each Plan has been maintained, operated, and
funded in material compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other
applicable Federal or state laws; and (iv) no Lien in favor of the PBGC
or a Plan has arisen, and, to the knowledge of the Executive Officers
of the Credit Parties, no event or condition has occurred or exists as
a result of which, such a Lien is reasonably likely to arise on account
of any Plan.
(b) The actuarial present value of all "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA), whether or
not vested, under each Single Employer Plan, as of the last annual
valuation date prior to the date on which this representation is made
or deemed made (determined, in each case, in accordance with Financial
Accounting Standards Board Statement 87, utilizing the actuarial
assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value
of the assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA
Affiliate has incurred, or, to the knowledge of the Executive Officers
of the Credit Parties, could be reasonably expected to incur, any
withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither any Consolidated Party nor any ERISA
66
Affiliate would become subject to any withdrawal liability under ERISA
if any Consolidated Party or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. Neither any Consolidated Party
nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the knowledge of the Executive
Officers of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) To the knowledge of the Executive Officers of the
Credit Parties, no prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which has
subjected or may subject any Consolidated Party or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any Person against any such
liability.
(e) Neither any Consolidated Party nor any ERISA
Affiliates has any material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the
Financial Accounting Standards Board Statement 106. Each Plan which is
a welfare plan (as defined in Section 3(1) of ERISA) to which Sections
601-609 of ERISA and Section 4980B of the Code apply has been
administered in material compliance with such sections.
(f) Neither the execution and delivery of this Loan
Agreement nor the consummation of the financing transactions
contemplated thereunder will involve any transaction which is subject
to the prohibitions of Sections 404, 406 or 407 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975
of the Code. The representation by the Credit Parties in the preceding
sentence is made in reliance upon and subject to the accuracy of the
Lenders' representation in Section 11.15 with respect to their source
of funds and is subject, in the event that the source of the funds used
by the Lenders in connection with this transaction is an insurance
company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995),
compliance with the regulations issued under Section 401(c)(1)(A) of
ERISA, or the issuance of any other prohibited transaction exemption or
similar relief, to the effect that assets in an insurance company's
general asset account do not constitute assets of an "employee benefit
plan" within the meaning of Section 3(3) of ERISA or a "plan" within
the meaning of Section 4975(e)(1) of the Code.
6.13 CORPORATE STRUCTURE; CAPITAL STOCK, ETC.
The corporate ownership structure of the Consolidated Parties as of the
Closing Date after giving effect to the Transaction is as described in Schedule
6.13A. Set forth on Schedule 6.13B is a complete and accurate list as of the
Closing Date with respect to the Borrower and each of its direct and indirect
Subsidiaries of (i) jurisdiction of incorporation, (ii) number of shares of each
class of Capital Stock outstanding, (iii) number and percentage of outstanding
shares of each class owned (directly or indirectly) by the Consolidated Parties
and (iv) number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with
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respect thereto as of the Closing Date. The outstanding Capital Stock of all
such Persons is validly issued, fully paid and non-assessable and is owned by
the Consolidated Parties, directly or indirectly, in the manner set forth on
Schedule 6.13B, free and clear of all Liens (other than those arising under or
contemplated in connection with the Loan Documents). Other than as set forth in
Schedule 6.13B, neither the Borrower nor any of its Subsidiaries has outstanding
any securities convertible into or exchangeable for its Capital Stock nor does
any such Person have outstanding any rights to subscribe for or to purchase or
any options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to its Capital Stock.
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) None of the transactions contemplated by this Loan
Agreement (including, without limitation, the direct or indirect use of
the proceeds of the Loans) will violate or result in a violation of the
Securities Act, the Securities Exchange Act or any of Regulations U and
X. If requested by any Lender or the Agent, the Borrower will furnish
to the Agent and each Lender a statement, in conformity with the
requirements of FR Form U-1 referred to in Regulation U, that no part
of the Letters of Credit or proceeds of the Loans will be used,
directly or indirectly, for the purpose of "buying" or "carrying" any
"margin stock" within the meaning of Regulations U and X, or for the
purpose of purchasing or carrying or trading in any securities.
(b) None of the Consolidated Parties is (i) an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended, (ii) a "holding company" as defined in, or otherwise subject
to regulation under, the Public Utility Holding Company Act of 1935, as
amended or (iii) subject to regulation under any other Federal or state
statute or regulation which limits its ability to incur Indebtedness.
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the
Borrower to effect the Transaction, to pay fees and expenses related to the
Transaction and transactions contemplated by the Loan Documents, to refinance
the outstanding principal amount of existing indebtedness of the Borrower and to
provide for working capital and general corporate purposes of the Borrower and
its Subsidiaries. The Letters of Credit shall be used only for or in connection
with appeal bonds, reimbursement obligations arising in connection with surety
and reclamation bonds, reinsurance, domestic or international trade transactions
and obligations not otherwise aforementioned relating to transactions entered
into by the applicable account party in the ordinary course of business.
6.16 ENVIRONMENTAL MATTERS.
Except as could not reasonably be expected to have a Material Adverse
Effect or as disclosed and described in Schedule 6.16 attached hereto:
(a) Each of the Real Properties and all operations at the
Real Properties are in compliance with all applicable Environmental
Laws, there is no violation of any Environmental Law with respect to
the Real Properties or the Businesses, and there are no
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conditions relating to the Real Properties or the Businesses that could
give rise to liability under any applicable Environmental Laws.
(b) None of the Real Properties contains, or to the
Credit Parties' knowledge has previously contained, any Materials of
Environmental Concern at, on or under the Real Properties in amounts or
concentrations that constitute or constituted a violation of, or could
give rise to liability under, Environmental Laws.
(c) No Consolidated Party has received any written or
verbal notice of, or inquiry from any Governmental Authority regarding,
any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Real Properties or the
Businesses, nor does any Executive Officer of any Credit Party have
knowledge or reason to believe that any such notice will be received or
is being threatened.
(d) To the knowledge of the Credit Parties, Materials of
Environmental Concern have not been transported or disposed of from the
Real Properties, or generated, treated, stored or disposed of at, on or
under any of the Real Properties or any other location, in each case by
or on behalf of any Consolidated Party in violation of, or in a manner
that could give rise to liability under, any applicable Environmental
Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the best knowledge of the
Executive Officers of the Credit Parties, threatened, under any
Environmental Law to which any Consolidated Party is or will be named
as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Consolidated Parties, the Real Properties or the
Businesses.
(f) To the knowledge of the Credit Parties, there has
been no release, or threat of release, of Materials of Environmental
Concern at or from the Real Properties, or arising from or related to
the operations (including, without limitation, disposal) of any
Consolidated Party in connection with the Real Properties or otherwise
in connection with the Businesses, in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws.
6.17 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, service marks, trade names, trade dress, patents, copyrights,
technology, know-how and processes (the "Intellectual Property") necessary for
each of them to conduct its business as currently conducted except for those the
failure to own or have such legal right to use could not have a Material Adverse
Effect. Set forth on Schedule 6.17 is a list of all Intellectual Property
registered or pending registration with the United States Copyright Office or
the United States Patent and Trademark Office and owned by each Consolidated
Party or that any Consolidated Party has the right to use. Except as provided on
Schedule 6.17, no claim has been asserted and is pending by any Person
challenging or questioning the use of the Intellectual Property or the validity
or effectiveness of the Intellectual Property, nor does any Credit Party know of
any such claim, and, to the knowledge of the Executive Officers of
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the Credit Parties, the use of the Intellectual Property by any Consolidated
Party or the granting of a right or a license in respect of the Intellectual
Property from any Consolidated Party does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, none of the Intellectual Property (other than Intellectual Property in
jurisdictions other than the United States) of the Consolidated Parties is
subject to any licensing agreement or similar arrangement except as set forth on
Schedule 6.17.
6.18 SOLVENCY.
The Credit Parties are Solvent on a consolidated basis.
6.19 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
6.20 BUSINESS LOCATIONS.
Set forth on Schedule 6.20(a) is a list of all Real Properties located
in the United States as of the Closing Date. Set forth on Schedule 6.20(b) is a
list of all locations where any tangible personal property of a Consolidated
Party is located as of the Closing Date. Set forth on Schedule 6.20(c) is the
chief executive office, jurisdiction of incorporation or formation and principal
place of business of each Consolidated Party as of the Closing Date.
6.21 DISCLOSURE.
Neither this Loan Agreement, nor any other Loan Document or Transaction
Document, nor any financial statements delivered to the Lenders nor any other
document, certificate or statement furnished to the Lenders by or on behalf of
any Consolidated Party in connection with the transactions contemplated hereby
taken as a whole contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein not materially misleading.
6.22 NO BURDENSOME RESTRICTIONS.
No Consolidated Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, could have a Material Adverse Effect.
6.23 BROKERS' FEES.
No Consolidated Party has any obligation to any Person in respect of
any finder's, broker's, investment banking or other similar fee in connection
with any of the transactions contemplated under the Loan Documents other than to
the Agent, Lenders and their Affiliates in connection therewith.
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6.24 LABOR MATTERS.
Except as set forth on Schedule 6.24, there are no collective
bargaining agreements or Multiemployer Plans covering the employees of a
Consolidated Party as of the Closing Date and none of the Consolidated Parties
has suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years.
6.25 NATURE OF BUSINESS.
As of the Closing Date, the Consolidated Parties are engaged in the
business of specialty pharmaceutical services with comprehensive drug
development capabilities with focus in fee-for-service pharmaceutical services,
drug product sales, pharmaceutical product development, and product life cycle
management and ancillary businesses.
6.26 INTENTIONALLY OMITTED.
6.27 TRANSACTIONS WITH AFFILIATES.
Except as set forth on Schedule 6.27 or disclosed in filings with the
Securities and Exchange Commission, there are no material Contractual
Obligations of the Borrower or any of its Subsidiaries to any of the officers,
directors, managers, shareholders, members, employees, Affiliates or their
respective Affiliates, or Related Parties, of the Borrower or any of its
Subsidiaries other than (i) for payment of salary for services rendered, (ii)
reimbursement for reasonable expenses incurred on behalf of the Borrower or its
Subsidiaries, (iii) for standard employee benefits made generally available to
all employees of the Borrower (including stock option agreements outstanding
under any stock option plan approved by the Board of Directors of the Borrower,
(iv) pursuant to any of the Loan Documents and (v) between or among Consolidated
Parties. None of the officers, directors, managers, shareholders, members,
employees, Affiliates, or their respective Affiliates or Related Parties, of the
Borrower or any of its Subsidiaries has incurred Indebtedness to the Borrower or
has any direct or indirect ownership interest in any Person with which the
Borrower is affiliated or, to the Borrower's best knowledge, with which the
Borrower or any of its Subsidiaries has a business relationship except that such
Person may own stock in publicly traded companies. Other than as set forth on
Schedule 6.27 or disclosed in filings with the Securities and Exchange
Commission, no officer, director, manager, shareholder, member, employee,
Affiliate (other than Consolidated Parties), or any of their respective
Affiliates or Related Parties, of the Borrower or any of its Subsidiaries, is,
directly or indirectly, interested in any material Contractual Obligation with
the Borrower. Except as may be expressly disclosed in notes to the financial
statements delivered pursuant to Section 7.1 hereof, the Borrower is not a
guarantor or indemnitor of any Indebtedness of any other Person.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that until such time as
this Loan Agreement has been terminated in accordance with the terms of Section
11.13:
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7.1 INFORMATION COVENANTS.
The Credit Parties will furnish, or cause to be furnished, to the Agent
and each of the Lenders:
(a) Annual Financial Statements. As soon as available,
and in any event within 90 days after the close of each fiscal year of
the Consolidated Parties, either (i) a copy of a report on Form 10-K,
or any successor form, and any amendments thereto, filed by the
Borrower with the Securities and Exchange Commission with respect to
the immediately preceding fiscal year or (ii) a consolidated and
consolidating balance sheet and income statement of the Consolidated
Parties as of the end of such fiscal year, together with related
consolidated statements of stockholders' equity and cash flows for such
fiscal year, in each case setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
audited (except as to consolidating statements) by independent
certified public accountants of recognized national standing reasonably
acceptable to the Agent and whose opinion shall be to the effect that
such financial statements have been prepared in accordance with GAAP
(except for changes with which such accountants concur) and shall not
be limited as to the scope of the audit or qualified as to the status
of the Consolidated Parties as a going concern or any other material
qualifications or exceptions.
(b) Quarterly Financial Statements. As soon as available,
and in any event within 45 days after the close of each of the first
three fiscal quarters of each fiscal year of the Consolidated Parties
(and, in addition, within 45 days after the close of the fiscal quarter
ending December 31, 2001), either (i) a copy of a report on Form 10-Q,
or any successor form, and any amendments thereto, filed by the
Borrower with the Securities and Exchange Commission with respect to
the immediately preceding fiscal quarter or (ii) an unaudited
consolidated and consolidating balance sheet and income statement of
the Consolidated Parties as of the end of such fiscal quarter, together
with related consolidated statements of stockholders' equity and cash
flows for such fiscal quarter, in each case setting forth in
comparative form consolidated and consolidating figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate of
an Executive Officer of the Borrower to the effect that such quarterly
financial statements fairly present in all material respects the
financial condition of the Consolidated Parties and have been prepared
in accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments and to the absence of footnotes
required by GAAP.
(c) Monthly Financial Statements. As soon as available,
and in any event within 30 days after the end of each of the first two
months of each fiscal quarter, a consolidated balance sheet and income
statement of the Consolidated Parties as of the end of such month,
together with related consolidated statements of stockholders' equity
and cash flows for such month, in each case setting forth in
comparative form consolidated figures for the corresponding month of
the preceding fiscal year, all such financial information described
above to be in reasonable form and detail (and to include, in the case
of the consolidated statements of stockholders' equity and cash flows,
revenue and volume data for any products acquired and/or marketed by
NeoSan) and reasonably acceptable to the Agent, and
72
accompanied by a certificate of an Executive Officer of the Borrower to
the effect that such monthly financial statements fairly present in all
material respects the financial condition of the Consolidated Parties
and have been prepared in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments.
(d) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of an Executive Officer of the Borrower substantially in
the form of Exhibit 7.1(d), (i) demonstrating compliance with the
financial covenants contained in Section 7.10 by calculation thereof as
of the end of each such fiscal period and (ii) stating that no Default
or Event of Default exists, or if any Default or Event of Default does
exist, specifying the nature and extent thereof and what action the
Credit Parties propose to take with respect thereto.
(e) Borrowing Base Certificates. Within 30 days after the
end of each calendar quarter, a certificate as of the end of the
immediately preceding month, substantially in the form of Exhibit
7.1(e) and certified by an Executive Officer of the Borrower to be true
and correct as of the date thereof (a "Borrowing Base Certificate").
(f) Annual Business Plan and Budgets. As soon as
available and in any event prior to the end of the first month of each
fiscal year of the Borrower, beginning with the fiscal year ending
December 31 2002, an annual business plan and budget of the
Consolidated Parties containing, among other things, pro forma
financial statements for such fiscal year (including a breakdown by
fiscal quarter). Such plan and budget shall be revised after the second
fiscal quarter of such fiscal year and such revised plan and budget
shall be delivered to the Agent as soon as available and in any event
no later than sixty (60) days after the end of such second fiscal
quarter.
(g) INTENTIONALLY OMITTED.
(h) Accountant's Certificate. Within the period for
delivery of the annual financial statements provided in Section 7.1(a),
a certificate of the accountants conducting the annual audit stating
that they have reviewed this Loan Agreement as it relates to accounting
and other financial matters and stating further whether, in the course
of their audit, they have become aware of any Default or Event of
Default and, if any such Default or Event of Default exists, specifying
the nature and extent thereof, provided that such accountants shall not
be liable by reason of any failure to obtain knowledge of any such
Default or Event of Default that would not be disclosed in the course
of their audit examination.
(i) Auditor's Reports. Promptly upon receipt thereof, a
copy of any other report or "management letter" submitted by
independent accountants to any Consolidated Party in connection with
any annual, interim or special audit of the books of such Person.
(j) Reports. Promptly upon transmission or receipt
thereof, (i) copies of any filings and registrations with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as any Consolidated Party shall send to its
shareholders or to a holder of any Indebtedness owed by any
Consolidated Party in its capacity as such a
73
holder and (ii) upon the request of the Agent, all reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(k) Notices. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written
notice to the Agent immediately of (i) the occurrence of an event or
condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Credit Parties propose
to take with respect thereto, and (ii) the occurrence of any of the
following with respect to any Consolidated Party (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding
against such Person which if adversely determined would be reasonably
likely to have a Material Adverse Effect or (B) the institution of any
proceedings against such Person with respect to, or the receipt of
notice by such Person of potential liability or responsibility for
violation, or alleged violation of any Federal, state or local law,
rule or regulation, including but not limited to, Environmental Laws,
the violation of which would be reasonably likely to have a Material
Adverse Effect.
(l) ERISA. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written
notice to the Agent promptly (and in any event within five Business
Days) of: (i) any event or condition, including, but not limited to,
any Reportable Event, that constitutes, or would be reasonably likely
to lead to, an ERISA Event; (ii) with respect to any Multiemployer
Plan, the receipt of notice as prescribed in ERISA or otherwise of any
withdrawal liability assessed against the Credit Parties or any ERISA
Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which any
Consolidated Party or any ERISA Affiliate is required to contribute to
each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Code with respect thereto;
or (iv) any change in the funding status of any Plan that could have a
Material Adverse Effect, together with a description of any such event
or condition or a copy of any such notice and a statement by an
Executive Officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any,
which has been or is being taken or is proposed to be taken by the
Credit Parties with respect thereto. Promptly upon request, the Credit
Parties shall furnish the Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return
(Form 5500 series), as well as all schedules and attachments thereto
required to be filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA and the Code, respectively, for each
"plan year" (within the meaning of Section 3(39) of ERISA).
(m) Environmental. Upon the reasonable written request of
the Agent, the Credit Parties will furnish or cause to be furnished to
the Agent, at the Credit Parties' expense, a report of an environmental
assessment of reasonable scope, form and depth, (including, where
appropriate, invasive soil or groundwater sampling) by a consultant
reasonably acceptable to the Agent as to the nature and extent of the
presence of any Materials of Environmental Concern on any Real
Properties (as defined in Section 6.16) and as to the
74
compliance by any Consolidated Party with Environmental Laws at such
Real Properties. If the Credit Parties fail to deliver such an
environmental report within seventy-five (75) days after receipt of
such written request then the Agent may arrange for same, and the
Consolidated Parties hereby grant to the Agent and their
representatives access to the Real Properties (to the extent such
Consolidated Party has rights thereto) pursuant to a reasonable access
agreement, to reasonably undertake such an assessment (including, where
appropriate, invasive soil or groundwater sampling). The reasonable
cost of any assessment arranged for by the Agent pursuant to this
provision will be payable by the Credit Parties on demand and added to
the obligations secured by the Collateral Documents.
(n) Additional Patents and Trademarks. At the time of
delivery of the financial statements and reports provided for in
Section 7.1(a), a report signed by an Executive Officer of the Borrower
setting forth (i) a list of registration numbers for all patents,
trademarks, service marks, trade names and copyrights awarded to any
Credit Party since the last day of the immediately preceding fiscal
year and (ii) a list of all patent applications, trademark
applications, service ▇▇▇▇ applications, trade name applications and
copyright applications submitted by any Credit Party since the last day
of the immediately preceding fiscal year and the status of each such
application, all in such form as shall be reasonably satisfactory to
the Agent.
(o) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of any Consolidated Party as the
Agent or the Required Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary not prohibited by Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority except to the extent the failure to do so would not be
reasonably likely to have a Material Adverse Effect.
7.3 BOOKS AND RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction would reasonably be expected to have a Material Adverse Effect.
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7.5 PAYMENT OF TAXES AND OTHER CLAIMS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent and (b) all lawful claims (including claims
for labor, materials and supplies) which, if unpaid, might give rise to a Lien
upon any of its properties; provided, however, that no Consolidated Party shall
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith by appropriate proceedings and as to which
adequate reserves therefor have been established in accordance with GAAP, unless
the failure to make any such payment (i) could give rise to an immediate right
to foreclose on a Lien securing such amounts or (ii) would reasonably be
expected to have a Material Adverse Effect.
7.6 INSURANCE.
(a) Each Credit Party will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect
insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in
such amounts, covering such risks and liabilities and with such
deductibles or self-insurance retentions as are in accordance with
normal industry practice. The Agent shall be named as loss payee or
mortgagee, as its interest may appear, and/or additional insured with
respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Agent, that it will give the Agent thirty
(30) days prior written notice before any such policy or policies shall
be altered or canceled. The present insurance coverage of the
Consolidated Parties is outlined as to carrier, policy number,
expiration date, type and amount on Schedule 7.6.
(b) In the event that the Consolidated Parties receive
Net Cash Proceeds in excess of $500,000 in aggregate amount during any
fiscal year of the Consolidated Parties ("Excess Proceeds") on account
of Involuntary Dispositions, the Credit Parties shall, within the
period of 180 days following the date of receipt of such Excess
Proceeds, apply (or cause to be applied) an amount equal to such Excess
Proceeds to (i) make Eligible Reinvestments (including but not limited
to the repair or replacement of the related Property) or (ii) prepay
the Loans (and cash collateralize LOC Obligations) in accordance with
the terms of Section 3.3(b)(ii)(B); provided, however, that such 180
day period may be extended for not more than an additional 180 days if
(i) the applicable Credit Party is diligently pursuing such Eligible
Reinvestment in good faith, but can not complete within the initial 180
days and (ii) the Borrower is not otherwise in Default. All insurance
proceeds shall be subject to the security interest of the Agent (for
the ratable benefit of the Lenders) under the Collateral Documents.
Pending final application of any Excess Proceeds, the Credit Parties
may apply such Excess Proceeds to temporarily reduce the Revolving
Loans or to make Permitted Investments.
7.7 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to, to
the extent consistent with ordinary prudent business practices, maintain and
preserve its properties and equipment
76
material to the conduct of its business in good repair, working order and
condition, normal wear and tear and Involuntary Dispositions excepted, and will
make, or cause to be made, in such properties and equipment from time to time
all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses; provided, however, a Credit Party
may discontinue the operation or maintenance of a property or piece of equipment
if the discontinuance (i) is desirable to the conduct of such Credit Party's
business and (ii) does not materially adversely affect the business of the
Credit Parties on a consolidated basis.
7.8 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.
7.9 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person. The Credit Parties agree
that the Agent, and its representatives, may, after the occurrence and during
the continuation of an Event of Default, conduct an audit of the Collateral, at
the expense of the Credit Parties.
7.10 FINANCIAL COVENANTS.
(a) Leverage Ratio. The Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties commencing with
the fiscal quarter ending on December 31, 2001, shall be less than or
equal to 4.0 to 1.0.
(b) Consolidated Net Worth. At all times after September
30, 2001, the Consolidated Net Worth of the Borrower shall be greater
than or equal to 85% of Consolidated Net Worth as of September 30,
2001, increased on a cumulative basis as of the end of each fiscal
quarter of the Consolidated Parties, commencing with the fiscal quarter
ending on December 31, 2001, by an amount equal to (i) 50% of
Consolidated Net Income (to the extent positive) for such fiscal
quarter plus (y) 100% of the Net Cash Proceeds of any Equity Issuances
consummated during such fiscal quarter.
(c) Interest Coverage Ratio. The Interest Coverage Ratio,
as of the last day of each fiscal quarter of the Consolidated Parties
commencing with the fiscal quarter ending on December 31, 2001, shall
be greater than or equal to 3.0 to 1.0.
(d) Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio, as of the last day of each fiscal quarter of the
Consolidated Parties commencing with the fiscal quarter ending on
December 31, 2001, shall be greater than or equal to 1.5 to 1.0.
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(e) Minimum Consolidated EBITDA. The sum of (i)
Consolidated EBITDA minus (ii) scheduled rental payments under the TROL
for the period from July 1, 2001 through the end of the fiscal quarter
indicated below shall be equal to or greater than the amounts set forth
below:
Minimum Consolidated
Quarter Ending EBITDA
-------------- --------------------
September 30, 2001 $ 2,000,000
December 31, 2001 $ 7,500,000
March 31, 2002 $14,000,000
June 30, 2002 $20,000,000
September 30, 2002 $26,000,000
7.11 ADDITIONAL GUARANTORS.
As soon as practicable and in any event within 30 days after any Person
becomes a direct or indirect domestic Subsidiary of any Credit Party, the Credit
Parties shall (i) provide the Agent with written notice thereof and shall cause
such Person to execute a Joinder Agreement in substantially the same form as
Exhibit 7.11, (ii) deliver such other documentation as the Agent may reasonably
request in connection with the foregoing, including, without limitation,
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the Joinder
Agreement) and other items of the types required to be delivered pursuant to
Section 5.1(b), all in form, content and scope reasonably satisfactory to the
Agent and (iii) otherwise comply with Section 7.12 in respect of such Person.
7.12 PLEDGED ASSETS.
Subject to the provisions of Section 7.13 , each Credit Party will (i)
cause all of its owned and leased real and personal Property other than Excluded
Property to be subject at all times to first priority, perfected and, in the
case of real Property (whether leased or owned), title insured Liens in favor of
the Agent to secure the Credit Party Obligations pursuant to the terms and
conditions of the Collateral Documents or, with respect to any such Property
acquired subsequent to the Closing Date, such other additional security
documents as the Agent shall reasonably request, subject in any case to
Permitted Liens and (ii) deliver such other documentation as the Agent may
reasonably request in connection with the foregoing, including, without
limitation, appropriate UCC-1 financing statements, real estate title insurance
policies, surveys, environmental reports, landlord's waivers, certified
resolutions and other organizational and authorizing documents of such Person,
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above and the perfection of the Agent's liens
thereunder) and other items of the types required to be delivered pursuant to
Section 5.1(d) and (e), all in form, content and scope reasonably satisfactory
to the Agent. Without limiting the generality of the above, the
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Credit Parties will cause (A) 100% of the issued and outstanding Capital Stock
of each Domestic Subsidiary and (B) 65% (or such greater percentage that, due to
a change in an applicable Requirement of Law after the date hereof, (1) would
not reasonably be expected to cause the undistributed earnings of such Foreign
Subsidiary as determined for United States federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's United States parent
and (2) would not reasonably be expected to cause any material adverse tax
consequences) of the issued and outstanding Capital Stock entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
and outstanding Capital Stock not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary owned directly by the
Borrower or a Domestic Subsidiary to be subject at all times to a first
priority, perfected Lien in favor of the Agent pursuant to the terms and
conditions of the Collateral Documents or such other security documents as the
Agent shall reasonably request; provided, however, this requirement shall not
apply to any Foreign Subsidiary if such Foreign Subsidiary (i) is currently
being liquidated, and such liquidation is completed on or prior to December 31,
2001 or (ii) has assets less than $250,000.
7.13 POST-CLOSING DELIVERIES.
(a) On or before October 31, 2001, the Credit Parties agree to
provide the Agent with (i) a pledge (pursuant to an appropriate pledge
agreement(s) satisfactory in form and substance to the Agent) of 65% (or such
greater percentage that, due to a change in an applicable Requirement of Law
after the date hereof, (A) could not reasonably be expected to cause the
undistributed earnings of Applied Analytical Industries Deutschland GmbH (the
"German Subsidiary") as determined for United Stated federal income tax purposes
to be treated as a deemed dividend of the German Subsidiary's United States
parent or (B) could not reasonably be expected to cause any material adverse tax
consequences) of the Capital Stock of the German Subsidiary, (ii) a legal
opinion of foreign counsel of the German Subsidiary in a form satisfactory to
the Agent, which shall cover the enforceability and perfection of the Agent's
security interest in each such pledged shares of the German Subsidiary and (iii)
certificates evidencing any such certificated Capital Stock, together with duly
executed in blank, undated stock powers attached thereto (unless, such stock
powers are deemed unnecessary by the Agent in its reasonable discretion under
the law of the jurisdiction of such German Subsidiary).
(b) On or before October 31, 2001, the Credit Parties agree to
provide the Agent with, in the case of each real property leasehold interest of
any Credit Party constituting Mortgaged Property, (a) such estoppel letters,
consents and waivers from the landlords on such real property as may be required
by the Agent, which estoppel letters shall be in the form and substance
reasonably satisfactory to the Agent and (b) evidence that the applicable lease,
a memorandum of lease with respect thereto, or other evidence of such lease in
form and substance reasonably satisfactory to the Agent, has been or will be
recorded in all places to the extent necessary or desirable, in the reasonable
judgment of the Agent, so as to enable the Mortgage Instrument encumbering such
leasehold interest to effectively create a valid and enforceable first priority
lien (subject to Permitted Liens) on such leasehold interest in favor of the
Agent (or such other Person as may be required or desired under local law) for
the benefit of Lenders;
(c) On or before September 15, 2001, the Credit Parties agree to
provide the Agent with contracts with Integrated Commercialization Solutions,
Inc. and Ventiv in form and substance reasonably satisfactory to the Agent. On
or before January 31, 2002, the Credit Parties
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agree to provide Agent with an executed supply agreement in customary form with
Novation LLC.
(d) On or before October 31, 2001, the Credit Parties agree to
provide the Agent with evidence reasonably satisfactory to the Agent of the
assignment, registration of assignment and registration of name change with the
United States Patent and Trademark Office of certain patents and trademarks that
constitute Collateral as the Agent may require.
(e) If the litigation set forth as Item 3 on Schedule 6.9, is not
settled, and dismissed of record with prejudice on or before October 31, 2001
(or such later date as the Agent and the Borrower may reasonably agree to), the
Credit Parties agree to provide the Agent on or before November 15, 2001 with
duly executed notices of grant of security interest in the form required by the
Security Agreement as are necessary, in the Agent's sole discretion, to perfect
the Agent's security interest in the following patents: Patent Nos. 6,187,345
and 6,228, 401.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that until such time as
this Loan Agreement has been terminated in accordance with the terms of Section
11.13:
8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Loan Agreement and
the other Loan Documents;
(b) Indebtedness of the Borrower and its Subsidiaries set
forth in Schedule 8.1 (and renewals, refinancings and extensions
thereof on terms and conditions no less favorable to such Person than
such existing Indebtedness); provided that the existing Synthetic Lease
may be refinanced on market terms by (i) a new Synthetic Lease covering
the same Property or (ii) new on-balance sheet financing so long as the
collateral for such financing includes only the Property subject to the
existing Synthetic Lease.
(c) purchase money Indebtedness (including obligations in
respect of Capital Leases or Synthetic Leases) hereafter incurred by
the Borrower or any of its Subsidiaries to finance the purchase of
fixed assets provided that (i) the total of all such Indebtedness for
all such Persons taken together shall not exceed an aggregate principal
amount of $5,000,000 at any one time outstanding; (ii) such
Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
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(d) obligations of the Borrower in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
(e) intercompany Indebtedness and Guarantees permitted
under Section 8.6;
(f) Indebtedness evidenced by Mezzanine Securities,
provided that (i) the Net Cash Proceeds of such Indebtedness are
applied in accordance with Section 3.3(b) and (ii) the terms of the
Mezzanine Securities are no less favorable to the Borrower than those
set forth on Schedule 12.1;
(g) Guaranty Obligations of Indebtedness and Operating
Leases permitted hereunder;
(h) any deferred purchase price of a Permitted
Acquisition to the extent such amount is (i) owed in connection with
the Transaction, (ii) owed in connection with the acquisition of
substantially all of the assets of the Pharmaceutical Education and
Development Foundation of the Medical University of South Carolina, or
(iii) otherwise permitted to be incurred pursuant to Section
8.6(j)(viii);
(i) endorsements in the ordinary course of business of
negotiable instruments for deposit or collection; and
(j) other Indebtedness hereafter incurred by the Borrower
or any of its Subsidiaries not to exceed an aggregate principal amount
of $2,000,000 at any one time outstanding; provided that any
Indebtedness incurred in excess of $1,000,000 pursuant to this
subclause (j) shall be permitted only if (A) the loan documentation
with respect to such Indebtedness shall not contain covenants or
default provisions relating to any Consolidated Party that are more
restrictive than the covenants and default provisions contained in the
Loan Documents, (B) the Borrower shall have delivered to the Agent a
Pro Forma Compliance Certificate demonstrating that, upon giving effect
on a Pro Forma Basis to the incurrence of such Indebtedness and to the
concurrent retirement of any other Indebtedness of any Consolidated
Party, the Credit Parties would be in compliance with the financial
covenants set forth in Section 7.10(a)-(e).
8.2 LIENS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or hereafter acquired, except for:
(a) Liens in favor of the Agent to secure the Credit
Party Obligations;
(b) Liens (other than Liens created or imposed under
ERISA) for taxes, assessments or governmental charges or levies not
more than 30 days past due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves determined
in accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
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(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not more than 30 days past due and are
unfiled and no other action has been taken to enforce the same or are
being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is
not yet subject to foreclosure, sale or loss on account thereof);
(d) Liens (other than Liens created or imposed under
ERISA) incurred or deposits made by any Consolidated Party in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money);
(e) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments
secured shall, within 60 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have
been discharged within 60 days after the expiration of any such stay;
(f) easements, rights-of-way, restrictions (including
zoning restrictions), minor defects or irregularities in title and
other similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended purposes;
(g) Liens on Property of any Person securing purchase
money Indebtedness (including Capital Leases and Synthetic Leases) of
such Person permitted under Section 8.1(c), provided that any such Lien
attaches to such Property concurrently with or within 90 days after the
acquisition thereof;
(h) leases or subleases granted to others not interfering
in any material respect with the business of any Consolidated Party;
(i) any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to,
leases permitted by this Loan Agreement;
(j) Liens deemed to exist in connection with Investments
in repurchase agreements permitted under Section 8.6;
(k) normal and customary rights of setoff upon deposits
of cash in favor of banks or other depository institutions;
(l) Liens of a collection bank arising under Section
4-210 of the Uniform Commercial Code on items in the course of
collection;
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(m) Liens of sellers of goods to the Borrower and any of
its Subsidiaries arising under Article 2 of the Uniform Commercial Code
or similar provisions of applicable law in the ordinary course of
business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses; and
(n) Liens existing as of the Closing Date and set forth
on Schedule 8.2; provided that (i) no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Closing Date and (ii) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced other than in accordance with Section 8.1(b).
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Consolidated Party to materially
alter the character or conduct of the business conducted by such Person as of
the Closing Date.
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
Except in connection with a Permitted Asset Disposition, the Credit
Parties will not permit any Consolidated Party to enter into any transaction of
merger or consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that, notwithstanding the foregoing
provisions of this Section 8.4 but subject to the terms of Sections 7.11 and
7.12, (a) the Borrower may merge or consolidate with any of its Subsidiaries
provided that the Borrower shall be the continuing or surviving corporation, (b)
any Credit Party other than the Borrower may merge or consolidate with any other
Credit Party other than the Borrower, (c) any Consolidated Party which is not a
Credit Party may be merged or consolidated with or into any Credit Party
provided that such Credit Party shall be the continuing or surviving
corporation, (d) any Consolidated Party which is not a Credit Party may be
merged or consolidated with or into any other Consolidated Party which is not a
Credit Party, (e) any Subsidiary of the Borrower may merge with any Person that
is not a Credit Party in connection with an Asset Disposition permitted under
Section 8.5, (f) the Borrower or any Subsidiary of the Borrower may merge with
any Person other than a Consolidated Party in connection with a Permitted
Acquisition provided that, if such transaction involves the Borrower, the
Borrower shall be the continuing or surviving corporation and (g) any Wholly
Owned Subsidiary of the Borrower may dissolve, liquidate or wind up its affairs
at any time provided that such dissolution, liquidation or winding up, as
applicable, would not be reasonably likely to have a Material Adverse Effect.
8.5 ASSET DISPOSITIONS.
The Credit Parties will not permit any Consolidated Party to make any
Asset Disposition other than an Excluded Asset Disposition unless (a) the
consideration paid in connection therewith shall be cash or Cash Equivalents,
such payment to be contemporaneous with consummation of transaction, and shall
be in an amount not less than the fair market value of the Property disposed of,
(b) if such transaction is a Sale and Leaseback Transaction, such transaction is
not prohibited by the terms of Section 8.13, (c) such transaction does not
involve the sale or other disposition of a minority equity interest in any
Consolidated Party, (d) such transaction does not involve a sale or other
disposition of receivables other than receivables owned by or attributable to
other Property concurrently being disposed of in a transaction otherwise
permitted under this Section 8.5, (e) the
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aggregate net book value of all of the assets sold or otherwise disposed of by
the Consolidated Parties in all such transactions after the Closing Date shall
not exceed (i) for the period from the Closing Date through December 31, 2001,
$400,000 plus the proceeds received from the sale of the Kansas Property, and
(ii) for each calendar year thereafter, $1,000,000, (f) the Credit Parties
shall, within the Application Period, apply (or cause to be applied) an amount
equal to the Net Cash Proceeds of such Asset Disposition to (i) make Eligible
Reinvestments or (ii) prepay the Loans (and cash collateralize LOC Obligations)
in accordance with the terms of Section 3.3(b)(ii)(A). Pending final application
of the Net Cash Proceeds of any Asset Disposition, the Consolidated Parties may
apply such Net Cash Proceeds to temporarily reduce the Revolving Loans or to
make Investments in Cash Equivalents.
Upon a sale of assets or the sale of Capital Stock of a Consolidated
Party permitted by this Section 8.5, the Agent shall (to the extent applicable)
deliver to the Credit Parties, upon the Credit Parties' request and at the
Credit Parties' expense, such documentation as is reasonably necessary to
evidence the release of the Agent's security interest, if any, in such assets or
Capital Stock, including, without limitation, amendments or terminations of UCC
financing statements, if any, the return of stock certificates, if any, and the
release of such Consolidated Party from all of its obligations, if any, under
the Loan Documents.
8.6 INVESTMENTS.
The Credit Parties will not permit any Consolidated Party to make any
Investments, except for:
(a) Investments consisting of cash and Cash Equivalents;
(b) Investments consisting of accounts receivable
created, acquired or made by any Consolidated Party in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms;
(c) Investments consisting of Capital Stock, obligations,
securities or other property received by any Consolidated Party in
settlement of accounts receivable or other indebtedness (created in the
ordinary course of business) from bankrupt obligors;
(d) Investments existing as of the Closing Date and set
forth in Schedule 8.6;
(e) Investments consisting of advances or loans to
directors, officers, employees, agents, customers or suppliers that do
not exceed $500,000 in the aggregate at any one time outstanding;
(f) Investments in the Borrower or any Credit Party;
(g) Investments in Foreign Subsidiaries in an aggregate
principal amount (excluding Investments of such type set forth in
Schedule 8.6) not to exceed $5,000,000 at any time outstanding;
(h) Investments consisting of equity securities listed on
the New York Stock Exchange, the American Stock Exchange or the
National Association of Securities Dealers
84
Automated Quotations system, provided that the purchase price paid for
all such equity securities held at any time shall not exceed $250,000;
(i) any Eligible Reinvestment of the proceeds of any
Involuntary Disposition as contemplated by Section 7.6(b) or of any
Asset Disposition as contemplated by Section 8.5(g); or
(j) Investments consisting of an Acquisition by the
Borrower or any Subsidiary of the Borrower, provided that:
(i) the Property acquired (or the Property of
the Person acquired) in such Acquisition is used or useful in
the same or a similar line of business as the Borrower and its
Subsidiaries were engaged in on the Closing Date (or any
reasonable extensions or expansions thereof);
(ii) the Agent shall have received all items in
respect of the Capital Stock or Property acquired in such
Acquisition required to be delivered by the terms of Section
7.11 and/or Section 7.12;
(iii) in the case of an Acquisition of the Capital
Stock of another Person, the board of directors (or other
comparable governing body) of such other Person shall have
duly approved such Acquisition;
(iv) the Borrower shall have delivered to the
Agent (A) a Pro Forma Compliance Certificate demonstrating
that, upon giving effect to such Acquisition on a Pro Forma
Basis, the Credit Parties would be in compliance with the
financial covenants set forth in Section 7.10(a)-(e) and (B) a
certificate of an Executive Officer of the Borrower, which:
(x) in the case of an Acquisition by a
Consolidated Party other than NeoSan, (1)
demonstrates that, upon giving effect to such
Acquisition, at least 90% of Consolidated EBITDA for
the most recently ended fiscal year period for each
of the Consolidated Parties and the acquired Person
or Property (in the aggregate) preceding the date of
such Acquisition with respect to which the Agent
shall have received the Required Financial
Information has been audited in accordance with GAAP,
in the case of the Borrower, as required by Section
7.1(a) and, in the case of the acquired Person or
Property, by an independent certified public
accountants of recognized national standing
reasonably acceptable to the Agent (whose opinion
shall not be limited as to the scope or qualified as
to going concern status or any other material
qualifications or exceptions) and (2) to the extent
that audited financial information for the acquired
Person or Property is required under the terms of the
foregoing clause (1), certifies that the quarterly
financial statements with respect to the Person or
Property acquired for each fiscal quarter period
ending after the date of the last audit and
immediately prior to the date of such Acquisition
have been prepared in accordance with GAAP (subject
to audit adjustments and the absence of
85
footnotes) and reviewed by independent certified
public accountants of recognized national standing
reasonably acceptable to the Agent; and
(y) in the case of an Acquisition by
NeoSan, certifies that the financial information
and/or projections for the acquired Person or
Property used in preparing the Pro Forma Compliance
Certificate have been prepared in good faith based
upon assumptions believed to be reasonable;
(v) the representations and warranties made by
the Credit Parties in any Loan Document shall be true and
correct in all material respects at and as if made as of the
date of such Acquisition (after giving effect thereto) except
to the extent such representations and warranties expressly
relate to an earlier date;
(vi) if such transaction involves the purchase of
an interest in a partnership between the Borrower (or a
Subsidiary of the Borrower) as a general partner and entities
unaffiliated with the Borrower or such Subsidiary as the other
partners, such transaction shall be effected by having such
equity interest acquired by a corporate holding company
directly or indirectly wholly-owned by the Borrower newly
formed for the sole purpose of effecting such transaction;
(vii) after giving effect to such Acquisition,
there shall be at least $2,500,000 of availability existing
under the Revolving Committed Amount and the Borrowing Base;
and
(viii) the aggregate consideration (including cash
and non-cash consideration and any assumption of Indebtedness,
but excluding consideration consisting of any Capital Stock of
the Borrower issued to the seller of the Capital Stock or
Property acquired in such Acquisition and consideration
consisting of the proceeds of any Equity Issuance by the
Borrower consummated subsequent to the Closing Date and the
proceeds of any Asset Disposition, Excluded Asset Disposition
or Involuntary Disposition consummated subsequent to the
Closing Date) paid by the Consolidated Parties for
Acquisitions occurring after the Closing Date shall not exceed
$5,000,000 per annum, excluding earnout payments not required
to be recorded in accordance with GAAP, so long as the maximum
aggregate amount that could be required to be paid with
respect to all outstanding earnout obligations (other than
earnouts with respect to the Transaction and the earnouts
related to the acquisition of substantially all of the assets
of the Pharmaceutical Education and Development Foundation of
the Medical University of South Carolina) shall not exceed
$5,000,000 per annum.
(k) Other Investments not to exceed, in the aggregate,
$2,000,000 per annum.
8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends or other distributions payable
to any Credit Party (directly or indirectly through Subsidiaries) and (b) as
permitted by Section 8.6 or Section 8.9, provided, that notwithstanding the
foregoing, (i) the
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Borrower may make purchases of shares pursuant to the 1995 Stock Option Plan for
an aggregate purchase price not to exceed $100,000, (ii) the Borrower may make
the $1,000,000 payment due on or about the first anniversary of the Closing Date
pursuant to the Purchase Agreement if no Event of Default exists after giving
effect to such payment and (iii) the Borrower may make the subsequent payments
required pursuant to the Purchase Agreement subject to certain restrictions to
be negotiated by the Agent and the Borrower in good faith after the Extension
Option has been exercised.
8.8 OTHER INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to:
(a) after the issuance thereof, amend or modify any of
the terms of any Subordinated Indebtedness of such Consolidated Party
if such amendment or modification would (i) add or change any terms in
a manner adverse to such Consolidated Party or to the Lenders, (ii)
shorten the final maturity or average life to maturity thereof, (iii)
require any payment thereon to be made sooner than originally
scheduled, (iv) increase the interest rate or fees applicable thereto
or (v) change any subordination provision thereof in a manner adverse
to the Lenders;
(b) make interest payments in respect of any Subordinated
Indebtedness in violation of the applicable subordination provisions;
(c) make (or give any notice with respect thereto) any
voluntary or optional payment or prepayment in respect of any
Subordinated Indebtedness; or
(d) make (or give any notice with respect thereto) any
redemption, acquisition for value or defeasance (including without
limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due),
refund, refinance or exchange of any Subordinated Indebtedness; or
(e) designate any Indebtedness of such Consolidated
Party, other than Indebtedness arising under the Loan Documents, as
"Designated Senior Debt" (or any like term) under any indenture or
other documentation for any Subordinated Indebtedness.
8.9 TRANSACTIONS WITH AFFILIATES.
Except as disclosed on Schedule 8.9 or disclosed in documents filed
with the Securities and Exchange Commission, the Credit Parties will not permit
any Consolidated Party to enter into or permit to exist any transaction or
series of transactions with any officer, director, shareholder, Subsidiary or
Affiliate of such Person other than (a) advances of working capital to any
Credit Party, (b) transfers of cash and assets to any Credit Party, (c)
intercompany transactions expressly permitted by this Loan Agreement, (d) normal
compensation and reimbursement of expenses of officers and directors and (e)
except as otherwise specifically limited in this Loan Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
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8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
The Credit Parties will not permit any Consolidated Party to change its
fiscal year or amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document).
8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its Property to any Credit Party, or (e) act as a Credit Party
and pledge its assets (other than Excluded Property) pursuant to the Loan
Documents or any renewals, refinancings, exchanges, refundings or extension
thereof, except (in respect of any of the matters referred to in clauses (a)-(d)
above) for such encumbrances or restrictions existing under or by reason of (i)
this Loan Agreement and the other Loan Documents, (ii) applicable law, (iii) any
document or instrument governing Indebtedness incurred pursuant to Section
8.1(c), provided that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith, (iv) any
Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (v) customary restrictions and
conditions contained in any agreement relating to the sale of any Property
permitted under Section 8.5 pending the consummation of such sale, or (vi) items
set forth on Schedule 8.11.
8.12 OWNERSHIP OF SUBSIDIARIES.
Notwithstanding any other provisions of this Loan Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (i)
permit any Person (other than the Borrower or any Wholly Owned Subsidiary of the
Borrower) to own any Capital Stock of any Subsidiary of the Borrower, except (A)
to qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock of
Foreign Subsidiaries, (B) as a result of or in connection with a dissolution,
merger, consolidation or disposition of a Subsidiary not prohibited by Section
8.4 or Section 8.5 or (C) the minority interests in the Chinese Subsidiaries as
set forth on Schedule 6.13B, (ii) permit any Subsidiary of the Borrower to issue
or have outstanding any shares of preferred Capital Stock or (iii) permit,
create, incur, assume or suffer to exist any Lien on any Capital Stock of any
Subsidiary of the Borrower, except for Permitted Liens.
8.13 SALE LEASEBACKS.
The Credit Parties will not permit any Consolidated Party to enter into
any Sale and Leaseback Transaction (other than in connection with, and to the
extent necessary for, the refinancing of Synthetic Leases existing as of the
Closing Date and set forth on Schedule 8.1) involving property costs in excess
of $1,000,000 per annum.
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8.14 CAPITAL EXPENDITURES.
The Credit Parties will not permit Consolidated Capital Expenditures
for any fiscal year to exceed $10,000,000 per annum, plus the unused amount
available for Consolidated Capital Expenditures under this Section 8.14 for the
immediately preceding fiscal year (excluding any carry forward available from
any prior fiscal year).
8.15 NO FURTHER NEGATIVE PLEDGES.
The Credit Parties will not permit any Consolidated Party to enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the existence of any Lien upon any of its Property in favor of the
Agent (for the benefit of the Lenders) for the purpose of securing the Credit
Party Obligations, whether now owned or hereafter acquired, or requiring the
grant of any security for any obligation if such Property is given as security
for the Credit Party Obligations, except (a) in connection with any document or
instrument governing Indebtedness incurred pursuant to Section 8.1(c), provided
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (b) in connection with any
Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien and (c) pursuant to customary
restrictions and conditions contained in any agreement relating to the sale of
any Property permitted under Section 8.5, pending the consummation of such sale.
8.16 OPERATING LEASE OBLIGATIONS.
The Credit Parties will not permit any Consolidated Party to enter
into, assume or permit to exist any obligations for the payment of rental under
Operating Leases which in the aggregate for all such Persons would exceed
$9,000,000 in any fiscal year.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence and during the
continuance of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any
principal of any of the Loans or any reimbursement obligations
arising from drawings under Letters of Credit, or
(ii) default, and such default shall continue for
three (3) or more Business Days, in the payment when due of
any interest on the Loans or any reimbursement obligations
arising from drawings under Letters of Credit or of any
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Fees or other amounts owing hereunder, under any of the other
Loan Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Loan Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
deemed to have been made; or
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance
of any term, covenant or agreement contained in Sections 7.2,
7.8, 7.10, 7.11 or 7.12 or Section 8;
(ii) default in the due performance or observance
of any term, covenant or agreement contained in Sections
7.1(a), (b), (c) or (d) and such default shall continue
unremedied for a period of at least 5 days after the earlier
of an Executive Officer of a Credit Party becoming aware of
such default or notice thereof by the Agent; or
(iii) default in the due performance or observance
by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b), (c)(i) or (c)(ii) of this
Section 9.1) contained in this Loan Agreement or any other
Loan Document and such default shall continue unremedied for a
period of at least 30 days after the earlier of an Executive
Officer of a Credit Party becoming aware of such default or
notice thereof by the Agent; or
(d) Other Loan Documents. Except as a result of or in
connection with a dissolution, merger or disposition of a Subsidiary
not prohibited by Section 8.4 or Section 8.5, any Loan Document shall
fail to be in full force and effect or to give the Agent and/or the
Lenders the Liens, rights, powers and privileges purported to be
created thereby, or any Credit Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection
with a dissolution, merger or disposition of a Subsidiary not
prohibited by Section 8.4 or Section 8.5, the guaranty given by any
Guarantor hereunder (including any Person after the Closing Date in
accordance with Section 7.11) or any provision thereof shall cease to
be in full force and effect, or any Guarantor (including any Person
after the Closing Date in accordance with Section 7.11) hereunder or
any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such guaranty, or any
Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur
with respect to any Consolidated Party; or
(g) Defaults under Other Agreements.
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(i) Any Consolidated Party shall default in the
performance or observance (beyond the applicable grace period
with respect thereto, if any) or any material obligation or
condition of any contract or lease material to the
Consolidated Parties taken as a whole if such default could
reasonably be expected to have a Material Adverse Effect; or
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Loan Agreement) in excess
of $2,000,000 in the aggregate for the Consolidated Parties
taken as a whole, (A) either (1) a default in any payment
shall occur and continue (beyond the applicable grace period
with respect thereto, if any) with respect to any such
Indebtedness, or (2) a default in the observance or
performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or exist,
the effect of which default or other event or condition is to
cause, or permit, the holder or holders of such Indebtedness
(or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of
time is required), any such Indebtedness to become due prior
to its stated maturity; or (B) any such Indebtedness shall be
declared due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment, prior to the
stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against one or more of the Consolidated Parties involving a
liability of $2,000,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage and has the ability to perform) and any such
judgments or decrees shall not have been vacated, discharged or stayed
or bonded pending appeal within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if
such event or condition could involve possible taxes, penalties, and
other liabilities in an aggregate amount in excess of $2,000,000: (i)
any "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Code, whether or not
waived, shall exist with respect to any Plan, or any lien shall arise
on the assets of any Consolidated Party or any ERISA Affiliate in favor
of the PBGC or a Plan; (ii) an ERISA Event shall occur with respect to
a Single Employer Plan, which is, in the reasonable opinion of the
Agent, likely to result in the termination of such Plan for purposes of
Title IV of ERISA; (iii) an ERISA Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in (A) the
termination of such Plan for purposes of Title IV of ERISA, or (B) any
Consolidated Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency (within the meaning of
Section 4245 of ERISA) of such Plan; or (iv) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code) or breach of fiduciary responsibility shall occur which may
subject any Consolidated Party or any ERISA Affiliate to any liability
under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which
any Consolidated Party or any ERISA Affiliate has agreed or is required
to indemnify any person against any such liability; or
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(j) Ownership. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence and during the continuance of an Event of Default,
the Agent may or, upon the request and direction of the Required Lenders, shall,
by written notice to the Credit Parties take any of the following actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid Credit Party
Obligations to be due, whereupon the same shall be immediately due and
payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Credit Parties.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower hereby promises to pay, upon receipt of such notice) to the
Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the
LOC Obligations in respect of subsequent drawings under all then
outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Loan Documents including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then, without the
giving of any notice or other action by the Agent or the Lenders, (i) the
Commitments automatically shall terminate, (ii) all of the outstanding Credit
Party Obligations automatically shall immediately become due and payable, and
(iii) the Borrower automatically shall be obligated (and hereby promises) to pay
to the Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding Letters
of Credit in an amount equal to the maximum aggregate amount which may be drawn
under all Letters of Credits then outstanding.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT AND AUTHORIZATION OF AGENT.
(a) Each Lender hereby irrevocably (subject to Section
10.9) appoints, designates and authorizes the Agent to take such action
on its behalf under the provisions of this Loan Agreement and each
other Loan Document and to exercise such powers and
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perform such duties as are expressly delegated to it by the terms of
this Loan Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere herein or in any other
Loan Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent have or be
deemed to have any fiduciary relationship with any Lender or
participant, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Loan
Agreement or any other Loan Document or otherwise exist against the
Agent. Without limiting the generality of the foregoing sentence, the
use of the term "Agent" herein and in the other Loan Documents with
reference to the Agent is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of
any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
(b) The Issuing Lender shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents
associated therewith until such time (and except for so long) as the
Agent may agree at the request of the Required Lenders to act for the
Issuing Lender with respect thereto; provided, however, that the
Issuing Lender shall have all of the benefits and immunities (i)
provided to the Agent in this Section 10 with respect to any acts taken
or omissions suffered by the Issuing Lender in connection with Letters
of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Agent" as used in this
Section 10 included the Issuing Lender with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the
Issuing Lender.
10.2 DELEGATION OF DUTIES.
The Agent may execute any of its duties under this Loan Agreement or
any other Loan Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects in the absence of gross negligence or willful misconduct.
10.3 LIABILITY OF AGENT.
No Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Loan
Agreement or any other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with
its duties expressly set forth herein), or (b) be responsible in any manner to
any Lender or participant for any recital, statement, representation or warranty
made by any Credit Party or any officer thereof, contained herein or in any
other Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Loan Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Loan Agreement
or any other Loan Document, or for any failure of any Credit Party or any other
party to any Loan Document to perform its obligations hereunder or thereunder.
No Agent-Related Person shall be under any obligation to any Lender or
participant to ascertain or to inquire as to the observance
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or performance of any of the agreements contained in, or conditions of, this
Loan Agreement or any other Loan Document, or to inspect the properties, books
or records of any Credit Party or any Affiliate thereof.
10.4 RELIANCE BY AGENT.
(a) The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to
any Credit Party), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or refusing
to take any action under any Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing
to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Loan
Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders or all the Lenders, if required
hereunder, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and
participants. Where this Loan Agreement expressly permits or prohibits
an action unless the Required Lenders otherwise determine, the Agent
shall, and in all other instances, the Agent may, but shall not be
required to, initiate any solicitation for the consent or a vote of the
Lenders.
(b) For purposes of determining compliance with the
conditions specified in Section 5.1, each Lender that has signed this
Loan Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter either
sent by the Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender.
10.5 NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the Agent
for the account of the Lenders, unless the Agent shall have received written
notice from a Lender or the Borrower referring to this Loan Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Lenders of its receipt of any
such notice. The Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
Section 9.2; provided, however, that unless and until the Agent has received any
such direction, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.
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10.6 CREDIT DECISION; DISCLOSURE OF INFORMATION BY AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Agent hereinafter
taken, including any consent to and acceptance of any assignment or review of
the affairs of any Credit Party or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Credit
Parties and their respective Subsidiaries, and all applicable Requirements of
Law relating to the transactions contemplated hereby, and made its own decision
to enter into this Loan Agreement and to extend credit to the Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Loan Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Credit Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent herein, the Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of any of the Credit Parties or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.
10.7 INDEMNIFICATION OF AGENT.
Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees) that may be incurred by or asserted or awarded against any
Agent-Related Person, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Loan Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans, except to the extent such claim,
damage, loss, liability, cost, or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including reasonable attorneys fees and the allocated
costs of internal counsel) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Loan
Agreement, any other Loan Document, or
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any document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Commitments, the
payment of all Credit Party Obligations hereunder and the resignation or
replacement of the Agent.
10.8 AGENT IN ITS INDIVIDUAL CAPACITY.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Agent or the Issuing Lender
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive information regarding any Credit Party or its Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Credit Party or such Affiliate) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, Bank
of America shall have the same rights and powers under this Loan Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Agent or the Issuing Lender, and the terms "Lender" and "Lenders" include
Bank of America in its individual capacity.
10.9 SUCCESSOR AGENT.
The Agent may resign as Agent upon 30 days' notice to the Lenders. If
the Agent resigns under this Loan Agreement, the Required Lenders shall appoint
from among the Lenders a successor administrative agent for the Lenders which
successor administrative agent shall be consented to by the Borrower at all
times other than during the existence of an Event of Default (which consent of
the Borrower shall not be unreasonably withheld or delayed). If no successor
administrative agent is appointed prior to the effective date of the resignation
of the Agent, the Agent may appoint, after consulting with the Lenders and the
Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, such
successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
administrative agent and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 10 and Sections 11.4 and 11.9 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Loan Agreement. If no successor administrative agent has
accepted appointment as Agent by the date which is 30 days following a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.
10.10 OTHER AGENTS; LEAD MANAGERS.
None of the Lenders identified on the facing page or signature pages of
this Loan Agreement as a "Syndication Agent", "Documentation Agent", "Co-Agent",
"Lead Underwriter" or "Sole Lead Arranger and Sole Book Manager" shall have any
right, power, obligation,
96
liability, responsibility or duty under this Loan Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of the
Lenders so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders so identified in deciding to enter into this Loan
Agreement or in taking or not taking action hereunder.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid (or pursuant to an invoice arrangement) to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case to the respective parties at the address, in the
case of the Credit Parties and the Agent, set forth below, and, in the case of
the Lenders, set forth on Schedule 2.1(a), or at such other address as such
party may specify by written notice to the other parties hereto:
if to any Credit Party:
aaiPharma, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Jr.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy of notices under Section 11.3(b) to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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if to the Agent:
Bank of America, N.A.
▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇. Code: NC1-001-15-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Banc of America Mezzanine Capital LLC
Bank of America Corporate Center
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Banc of America Mezzanine Capital LLC
Bank of America Corporate Center
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Bank of America, N.A.
Bank of America Corporate Center
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11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of
Default, each Lender (and each of its Affiliates) is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time
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or demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender (or any of its Affiliates) to or for the credit or the
account of any Credit Party against any and all of the obligations of such
Person now or hereafter existing under this Loan Agreement, under the Notes,
under any other Loan Document or otherwise, irrespective of whether such Lender
shall have made any demand hereunder or thereunder and although such obligations
may be unmatured. Each Lender agrees promptly to notify any affected Credit
Party after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this Section 11.2
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that such Lender may have.
11.3 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Loan Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that none of
the Credit Parties may assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by any Credit Party
without such consent shall be null and void). Nothing in this Loan
Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated
hereby, the Indemnified Parties) any legal or equitable right, remedy
or claim under or by reason of this Loan Agreement.
(b) Any Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this
Loan Agreement (including all or a portion of its Commitment and the
Loans (including for purposes of this subsection (b), its Participation
Interests) at the time owing to it); provided that (i) except in the
case of an assignment of the entire remaining amount of the assigning
Lender's Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding
thereunder) or principal outstanding balance of the Term Loan of the
assigning Lender subject to each such assignment, determined as of the
date the Assignment and Assumption Agreement with respect to such
assignment is delivered to the Agent, shall not be less than $5,000,000
in the case of any assignment of a Revolving Commitment, or $1,000,000,
in the case of any assignment of a Term Loan, unless each of the Agent
and, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably
withheld or delayed), (ii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights
and obligations under this Loan Agreement with respect to the Loans or
the Commitments assigned, except that this clause (ii) shall not (x)
apply to rights in respect of outstanding Swing Line Loans or (y)
prohibit any Lender from assigning all or a portion of its rights and
obligations among separate tranches on a non-pro rata basis, and (iii)
the parties to each assignment shall execute and deliver to the Agent
an Assignment and Assumption Agreement, together with a processing and
recordation fee of $3,500. Subject to acceptance and recording thereof
by the Agent pursuant to subsection (c), from and after the effective
date specified in each Assignment and
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Assumption Agreement, the Eligible Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment
and Assumption Agreement, have the rights and obligations of a Lender
under this Loan Agreement, and the assigning Lender thereunder shall,
to the extent of the interest assigned by such Assignment and
Assumption Agreement, be released from its obligations under this Loan
Agreement (and, in the case of an Assignment and Assumption Agreement
covering all of the assigning Lender's rights and obligations under
this Loan Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 3.11, 3.12
and 11.5). Upon request, the Borrower (at its expense) shall execute
and deliver new or replacement Notes to the assigning Lender and the
assignee Lender. Any assignment or transfer by a Lender of rights or
obligations under this Loan Agreement that does not comply with this
subsection shall be treated for purposes of this Loan Agreement as a
sale by such Lender of a participation in such rights and obligations
in accordance with subsection (d) of this Section.
(c) The Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at is address referred to in Section
11.1 a copy of each Assignment and Assumption Agreement delivered to it
and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amount of the Loans
owing to, each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, and
the Credit Parties, the Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as
a Lender hereunder for all purposes of this Loan Agreement,
notwithstanding notice to the contrary. The Register shall be available
for inspection by the Credit Parties and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(d) Any Lender may, without the consent of, or notice to,
the Credit Parties or the Agent, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Loan Agreement (including
all or a portion of its Commitments and/or the Loans (including such
Lender's Participation Interests) owing to it); provided that (i) such
Lender's obligations under this Loan Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Credit
Parties, the Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights
and obligations under this Loan Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Loan
Agreement and to approve any amendment, modification or waiver of any
provision of this Loan Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent
of the Participant, agree to any amendment, waiver or other
modification that would (i) postpone any date upon which any payment of
money is scheduled to be paid to such Participant, (ii) reduce the
principal, interest, fees or other amounts payable to such Participant,
(iii) except as the result of or in connection with a dissolution,
merger or disposition of a Consolidated Party not prohibited by Section
8.4 or 8.5, release all or substantially all of the Guarantors from
their obligations under the Loan Documents or (iv) except as the result
of or in connection with an Asset Disposition not prohibited by Section
8.5, release all or substantially all of the Collateral.
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Subject to subsection (e) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 3.6,
3.9, 3.11 and 3.12 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection (b) of this
Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.2 as though it were a Lender,
provided such Participant agrees to be subject to Section 3.14 as
though it were a Lender.
(e) A Participant shall not be entitled to receive any
greater payment under Section 3.6, 3.7 or 3.11 than the applicable
Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower's prior
written consent. A Participant that is not a United States person under
Section 7701(a)(30) of the Code shall not be entitled to the benefits
of Section 3.11 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit
of the Borrower, to comply with Section 3.11(d) as though it were a
Lender.
(f) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Loan
Agreement (including under its Notes, if any) to secure obligations of
such Lender, including any pledge or assignment to secure obligations
to a Federal Reserve Bank; provided that no such pledge or assignment
shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) If the consent of the Borrower to an assignment or to
an Eligible Assignee is required hereunder (including a consent to an
assignment which does not meet the minimum assignment threshold
specified in clause (i) of the proviso to the first sentence of Section
11.3(b)), the Borrower shall be deemed to have given its consent five
Business Days after the date notice thereof has been delivered by the
assigning Lender (through the Agent) unless such consent is expressly
refused by the Borrower prior to such fifth Business Day.
(h) Notwithstanding anything to the contrary contained
herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America may, (i)
upon five Business Days' notice to the Borrower, terminate its Swing
Line Commitment and (ii) upon 30 days' notice to the Borrower and the
Lenders, resign as Issuing Lender. In the event of any such termination
of its Swing Line Commitment or resignation as Issuing Lender, the
Borrower shall be entitled to appoint from among the Lenders a
successor Swing Line Lender or Issuing Lender hereunder; provided,
however, that no failure by the Borrower to appoint any such successor
shall affect the termination of Bank of America's Swing Line Commitment
or the resignation of Bank of America as Issuing Lender, as the case
may be. If Bank of America terminates its Swing Line Commitment, it
shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding
as of the effective date of such termination, including the right to
require the Lenders to make Revolving Loans or fund their Participation
Interests in outstanding Swing Line Loans pursuant to Section 2.2(d).
Bank of America shall retain all the rights and obligations of the
Issuing Lender hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as Issuing
Lender and all LOC
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Obligations with respect thereto (including the right to require thc
Lenders to make Revolving Loans or fund their Participation Interests
pursuant to Section 2.4).
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Loan
Document and no course of dealing between the Agent or any Lender and any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Loan Document preclude any other or further exercise thereof or the exercise of
any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which the Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Credit Parties to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Credit Parties jointly and severally agree to pay
on demand all costs and expenses of the Agent in connection with the
syndication, preparation, execution, delivery, administration,
modification, and amendment of this Loan Agreement, the other Loan
Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of
counsel for the Agent with respect thereto and with respect to advising
the Agent as to its rights and responsibilities under the Loan
Documents. The Credit Parties further jointly and severally agree to
pay on demand all costs and expenses of the Agent and the Lenders, if
any (including, without limitation, reasonable attorneys' fees and
expenses), in connection with any work-out or restructuring relating to
the Credit Facilities or any enforcement (whether through negotiations,
legal proceedings, or otherwise) of any of the Loan Documents.
(b) Whether or not the transactions contemplated hereby
are consummated, the Borrower agrees to indemnify, save and hold
harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against:
(a) any and all claims, demands, actions or causes of action that are
asserted against any Indemnitee by any Person (other than the Agent or
any Lender) relating directly or indirectly to a claim, demand, action
or cause of action that such Person asserts or may assert against any
Credit Party, any Affiliate of any Credit Party or any of their
respective officers or directors; (b) any and all claims, demands,
actions or causes of action that may at any time (including at any time
following repayment of the Credit Party Obligations and the resignation
or removal of the Agent or the replacement of any Lender) be asserted
or imposed against any Indemnitee, arising out of or relating to, the
Loan Documents, any predecessor Loan Documents, the Commitments, the
use or contemplated use of the proceeds of any Extension of Credit, or
the relationship of any Credit Party, the Agent and the Lenders under
this Loan Agreement or any other Loan Document; (c) any administrative
or investigative proceeding by any Governmental Authority arising out
of or related to a claim, demand, action or cause of action described
in subsection (a) or (b)
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above; and (d) any and all liabilities (including liabilities under
indemnities), losses, costs or expenses (including reasonable fees and
costs of counsel) that any Indemnitee suffers or incurs as a result of
the assertion of any foregoing claim, demand, action, cause of action
or proceeding, or as a result of the preparation of any defense in
connection with any foregoing claim, demand, action, cause of action or
proceeding, in all cases, whether or not arising out of the negligence
of an Indemnitee, and whether or not an Indemnitee is a party to such
claim, demand, action, cause of action or proceeding (all the
foregoing, collectively, the "Indemnified Liabilities"); provided that
no Indemnitee shall be entitled to indemnification for any claim caused
by its own gross negligence or willful misconduct or for any loss
asserted against it by another Indemnitee. The agreements in this
Section shall survive the termination of the Commitments and repayment
of all the other Credit Party Obligations.
(c) Without prejudice to the survival of any other
agreement of the Credit Parties hereunder, the agreements and
obligations of the Credit Parties contained in this Section 11.5 shall
survive the repayment of the Credit Party Obligations and the
termination of the Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Loan Agreement nor any other Loan Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, each of the Credit Parties
party thereto and the Required Lenders, provided, however, that:
(a) without the consent of each Lender affected thereby,
neither this Loan Agreement nor any other Loan Document may be amended,
changed, waived, discharged or terminated so as to
(i) extend any Commitment or the final maturity
of any Loan or of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit, or
extend or waive any Principal Amortization Payment of any
Loan, or any portion thereof,
(ii) reduce the rate or extend the time of
payment of interest on any Loan or of any reimbursement
obligation, or any portion thereof, arising from drawings
under Letters of Credit (other than as a result of waiving the
applicability of any post-default increase in interest rates)
or of any Fees,
(iii) reduce or waive the principal amount of any
Loan or of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the
amount thereof in effect (it being understood and agreed that
a waiver of any condition precedent set forth in Section 5.2
or of any Default or Event of Default or mandatory reduction
in the Commitments shall not constitute a change in the terms
of any Commitment of any Lender),
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(v) except as the result of or in connection
with an Asset Disposition not prohibited by Section 8.5,
release all or substantially all of the Collateral,
(vi) except as the result of or in connection
with a dissolution, merger or disposition of a Consolidated
Party not prohibited by Section 8.4 or Section 8.5, release
the Borrower or substantially all of the other Credit Parties
from its or their obligations under the Loan Documents,
(vii) amend, modify or waive any provision of
Section 3.13,
(viii) amend, modify or waive any provision of this
Section 11.6,
(ix) reduce any percentage specified in, or
otherwise modify, the definition of Required Lenders, or
(x) consent to the assignment or transfer by the
Borrower or all or substantially all of the other Credit
Parties of any of its or their rights and obligations under
(or in respect of) the Loan Documents except as permitted
thereby;
(b) without the consent of Lenders (other than Defaulting
Lenders) holding in the aggregate at least a majority of the
outstanding Term Loans (and Participation Interests therein), (i)
Section 3.15 may not be amended, changed, waived, discharged or
terminated so as to alter the manner of application of any payment in
respect of the Credit Party Obligations or proceeds of Collateral and
(ii) Section 3.3(b)(vi) may not be amended, changed, waived, discharged
or terminated so as to alter the manner of application of proceeds of
any mandatory prepayment required by Section 3.3(b)(ii), (iii), (iv) or
(v) hereof;
(c) without the consent of the Agent, no provision of
Section 10 may be amended, changed, waived, discharged or terminated;
and
(d) without the consent of the Swing Line Lender, no
provision of Section 2.2 may be amended, changed, waived, discharged or
terminated; and
(e) without the consent of the Issuing Lender, no
provision of Section 2.4 may be amended, changed, marked, discharged or
terminated.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender
is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and
(y) the Required Lenders shall determine whether or not to allow a
Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding and such determination shall be binding on all of
the Lenders.
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11.7 COUNTERPARTS.
This Loan Agreement may be executed in any number of counterparts, each
of which when so executed shall be an original, but all of which shall
constitute one and the same instrument. It shall not be necessary in making
proof of this Loan Agreement to produce or account for more than one such
counterpart for each of the parties hereto. Delivery by facsimile by any of the
parties hereto of an executed counterpart of this Loan Agreement shall be as
effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 HEADINGS.
The headings of the sections hereof are provided for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Loan Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Loan Agreement, the making of the Loans the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Loan Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive until this Loan Agreement shall be terminated in accordance
with the terms of Section 11.13(b).
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.
(a) THIS LOAN AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
PROVIDED THEREIN, THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Any legal action or proceeding with respect to this
Loan Agreement or any other Loan Document may be brought in the courts
of the State of New York in New York County, or of the United States
for the Southern District of New York, and, by execution and delivery
of this Loan Agreement, each of the Credit Parties hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the nonexclusive jurisdiction of such courts. Each of
the Credit Parties further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address set out for notices
pursuant to Section 11.1, such service to become effective three (3)
days after such mailing. Nothing herein shall affect the right of the
Agent or any Lender to serve process in any other manner permitted by
law or to commence legal proceedings or to otherwise proceed against
any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives
any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
connection with this Loan Agreement or any other Loan
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Document brought in the courts referred to in subsection (a) above and
hereby further irrevocably waives and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
(c) EACH PARTY TO THIS LOAN AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY
OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS LOAN AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY
OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.11 SEVERABILITY.
If any provision of any of the Loan Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Loan Agreement together with the other Loan Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Loan Documents or the transactions
contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION; AMENDMENT AND
RESTATEMENT OF EXISTING LOAN AGREEMENT.
(a) This Loan Agreement shall become effective at such
time on or after the Closing Date when it shall have been executed by
each Credit Party and the Agent, and the Agent shall have received
copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Lender, and thereafter this Loan Agreement shall
be binding upon and inure to the benefit of each Credit Party, the
Agent and each Lender and their respective successors and assigns. The
Credit Parties and the Lenders (including the Issuing Lender) each
hereby agrees that, at such time as this Loan Agreement shall have
become effective pursuant to the terms of the immediately preceding
sentence, (i) the Existing Loan Agreement automatically shall be deemed
amended and restated in its entirety by this Loan Agreement, and all
obligations and commitments outstanding under the Existing Loan
Agreement shall be governed by the terms of this Loan Agreement (as
such obligations or commitments may be modified or amended hereunder)
and (ii) all of the
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promissory notes executed by the Borrowers in connection with the
Existing Loan Agreement automatically shall be substituted and replaced
by the amended and restated promissory notes executed in connection
with this Loan Agreement, and the Lenders agree to promptly return such
prior notes to the Borrower.
(b) The term of this Loan Agreement shall be until the
Credit Party Obligations are Fully Satisfied.
(c) Each of the Credit Parties hereby acknowledges and
agrees that it has no claims, counterclaims, offsets, or defenses to
the Loan Documents and the performance of its obligations thereunder,
or if such Credit Party has any such claims, counterclaims, offsets, or
defenses to the Loan Documents or any transaction related to the Loan
Documents, the same are hereby waived, relinquished and released in
consideration of the Lenders' execution and delivery of this Loan
Agreement.
11.14 CONFIDENTIALITY.
Each of the Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Loan
Agreement; (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Loan Agreement or the enforcement of
rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section 11.14, to (i) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Loan Agreement or
(ii) any direct or indirect contractual counterparty or prospective counterparty
(or such contractual counterparty's or prospective counterparty's professional
advisor) to any credit derivative transaction relating to Credit Party
Obligations; (g) with the consent of the Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 11.14 or (ii) becomes available to the Agent or any Lender on a
nonconfidential basis from a source other than the Consolidated Parties; or (i)
to the National Association of Insurance Commissioners or any other similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's or its Affiliates' investment portfolio in
connection with ratings issued with respect to such Lender or its Affiliates.
For the purposes of this Section, "Information" means all information received
from the Credit Parties relating to the Consolidated Parties or their business,
other than any such information that is available to the Agent or any Lender on
a nonconfidential basis prior to disclosure by the Consolidated Parties;
provided that, in the case of information received from the Consolidated Parties
after the date hereof, such information is clearly identified in writing at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section 11.14 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
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11.15 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to
any separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this clause (b), all employee benefit plans maintained by
the same employer or employee organization are deemed to be a single
plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance
company has complied with all of the requirements of the regulations
issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 REGULATION D.
Each of the Lenders hereby represents and warrants to the Borrower that
it is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires or loans on
the ordinary course of business and that it will make or acquire Loans for its
own account in the ordinary course of business.
11.17 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Loan Document, on
the other hand, this Loan Agreement shall control.
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SECTION 12
MEZZANINE SECURITIES; EXTENSION OPTION
12.1 REFINANCING WITH MEZZANINE SECURITIES.
On or after the date that is six months from the Closing Date, the
Agent may, by notice to the Borrower, cause the Borrower to issue, and the
Borrower hereby agrees promptly upon such notice to take all such actions as are
necessary to issue, Mezzanine Securities which are on market terms at the time
of such issue and are otherwise acceptable to the Borrower and Banc of America
Mezzanine Capital LLC, the Net Cash Proceeds of which shall (i) be sufficient to
reduce the Senior Leverage Ratio to less than or equal to 2.50 to 1.0
(specifically including any unfunded commitments under this Loan Agreement in
the calculation of clause (a) of such ratio but excluding the principal balance
outstanding under the TROL) and (ii) be applied in accordance with Section
3.3(b); provided, however, that, notwithstanding the foregoing, in the event the
Borrower achieves a minimum Consolidated EBITDA of at least $8,500,000 for the
six month period beginning July 1, 2001 and ending December 31, 2001, the
earliest date the Agent may specify for the issuance of such Mezzanine
Securities shall be the date that is nine months from the Closing Date. The
final maturity date of the Mezzanine Securities shall not be earlier than the
later of (x) the date that is six months after the Maturity Date (as such date
may be extended pursuant to the Extension Option) and (y) the fifth anniversary
of the issuance of such Mezzanine Securities. The calculation of the amount
necessary to achieve the Senior Leverage Ratio set forth in (i) shall be
accompanied by a certificate substantially in the form of Exhibit 7.1(d).
Notwithstanding any notice being delivered in connection with the issuance of
Mezzanine Securities as set forth above, the Borrower shall have the right to
prepay the Credit Party Obligations pursuant to the terms hereof.
12.2 EXTENSION OPTION.
If, on or after the date that is six months from the Closing Date and
prior to September 30, 2002, (i) the Senior Leverage Ratio is less than or equal
to 2.50 to 1.0 (specifically including any unfunded commitments under this Loan
Agreement in the calculation of clause (a) of such ratio but excluding the
principal balance outstanding under the TROL) as a result of the issuance of
Mezzanine Securities as provided in Section 12.1 or otherwise as evidenced by
the officer's certificate most recently delivered pursuant to Section 7.1(d),
(ii) the Leverage Ratio is less than or equal to 3.50 to 1.0 (specifically
including any unfunded commitments under this Loan Agreement in the calculation
of clause (a) of such ratio but excluding the principal balance outstanding
under the TROL) as evidenced by the officer's certificate most recently
delivered pursuant to Section 7.1(d), (iii) each of the conditions precedent set
forth in Section 5.2 is then satisfied (or waived by all of the Lenders, as
applicable), and (iv) the Borrower and the Lenders have agreed on or prior to
September 30, 2002 on the new financial covenants, pricing levels and other
items described in Section 12.3 below to be negotiated in connection with the
Extension Option, then the Borrowers may exercise the Extension Option, by
notice to the Agent and the Lenders, to (i) extend the Maturity Date to December
31, 2006, with the Term Loans being subject to scheduled amortization as set
forth in Section 12.3, and (ii) otherwise modify the terms of this Loan
Agreement as set forth in Section 12.3. In connection with the exercise of the
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Extension Option, the Borrower shall deliver a certificate substantially in the
form of Exhibit 7.1(d) demonstrating compliance with the provisions of this
Section 12.2.
12.3 MODIFICATIONS UPON EXERCISE OF EXTENSION OPTION.
Upon the Borrowers' exercise of the Extension Option, the following
definitions and sections are modified (or added, if applicable) as indicated
below:
(a) The definitions for "Applicable Percentage" "Excess Cash Flow" and
"Maturity Date" in Section 1.1 are modified in their entirety or added, as
applicable, or as follows:
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Loan or the applicable
rate of the Unused Fee for any day for purposes of Section 3.5(a), the
appropriate applicable percentage set forth below:
APPLICABLE PERCENTAGES
---------------------------------------------------------
FOR FOR FOR FOR LETTER OF
EURODOLLAR BASE RATE UNUSED FEE CREDIT FEES
PERIOD LOANS LOANS
------ ---------- --------- ---------- -------------
On and after the date the Extension 2.75% 1.75% 0.375% 2.25%
Option is exercised
Any adjustment in the Applicable Percentages shall be applicable to all
existing Loans as well as any new Loans made.
The preceding definition of "Applicable Percentage" shall be modified by a
performance-based pricing grid to be negotiated in good faith based upon the
most current financial projections prior to the time the Extension Option is
exercised.
"Excess Cash Flow" means, with respect to any fiscal year
period of the Consolidated Parties on a consolidated basis, an amount
equal to, in each case without duplication, (a) Consolidated EBITDA
minus (b) Consolidated Capital Expenditures minus (c) Consolidated
Interest Expense minus (d) Federal, state and other taxes actually paid
by the Consolidated Parties on a consolidated basis minus (e)
Consolidated Scheduled Funded Debt Payments minus (f) voluntary
prepayments of Term Loans outstanding under this Loan Agreement minus
(g) earnout payments related to acquisitions that are paid in cash and
that are not deducted in calculating Consolidated EBITDA minus (h) the
cash portion of the purchase price of any Permitted Acquisition that is
not financed by the applicable purchaser.
"Maturity Date" means December 31, 2006.
(b) Section 2.3(d) is modified in its entirety to read as follows:
(d) Repayment of Term Loan. The Borrower hereby promises
to pay the outstanding principal amount of the Term Loan in equal
consecutive quarterly
110
installments as follows (as such installments may hereafter be adjusted
as a result of prepayments made pursuant to Section 3.3), in each case
unless accelerated sooner pursuant to Section 9.2:
TERM
PRINCIPAL LOAN PRINCIPAL
AMORTIZATION PAYMENT DATES AMORTIZATION
PAYMENT
--------------------------------------------- ----------------------
On or before December 31, 2002 0%
--------------------------------------------- ----------------------
Three quarter period ending September 30, 15%
2003
--------------------------------------------- ----------------------
Four quarter period ending September 30, 20%
2004
--------------------------------------------- ----------------------
Four quarter period ending September 30, 25%
2005
--------------------------------------------- ----------------------
Four quarter period ending September 30, 30%
2006
--------------------------------------------- ----------------------
Quarter period ending December 31, 2006 10%
(c) Sections 3.3(b)(v) is hereby deleted in its entirety and
replaced with a new subclause (v) to read as follows:
(v) Excess Cash Flow. Within 90 days after the end of
each fiscal year (commencing with the fiscal year ending December 31,
2002), the Borrowers shall prepay the Term Loans in an amount equal to
the sum of (A) 75% (if the Senior Leverage Ratio as of the end of such
fiscal year is equal to or greater than 2.0 to 1.0) or 50% (if the
Senior Leverage Ratio as of the end of such fiscal year is less than
2.0 to 1.0) of Excess Cash Flow for such prior fiscal year minus (B)
the amount of any voluntary prepayments made during such fiscal year of
the Term Loan or (to the extent accompanied by a reduction in the
Revolving Committed Amount) the Revolving Loans (such prepayment to be
applied as set forth in clause (vi) below).
(d) Sections 3.3(b)(vi) is modified in its entirety to read as
follows:
(vi) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 3.3(b) shall be applied as
follows: (A) with respect to all amounts prepaid pursuant to Section
3.3(b)(i)(A), pro rata to Revolving Loans and Swing Line Loans and
(after all Revolving Loans and Swing Line Loans have been repaid) to
cash collateral account in respect of LOC Obligations, (B) with respect
to all amounts prepaid pursuant to Section 3.3(b)(i)(B) to a cash
collateral account in respect of LOC Obligations, (C) with respect to
all amounts prepaid pursuant to Section 3.3(b)(ii), first to the Term
Loan (to the remaining Principal Amortization
111
Payments in inverse order of maturities thereof), and after the Term
Loan is paid in full to the Revolving Loans and Swing Line Loans (with,
if an Event of Default has occurred, a corresponding reduction in the
Revolving Committed Amount) and (D) with respect to all amounts prepaid
pursuant to Section 3.3(b)(iii), (iv) or (v), to the Term Loan (to the
remaining Principal Amortization Payments in inverse order of
maturities thereof). Within the parameters of the applications set
forth above, prepayments shall be applied first to Base Rate Loans and
then to Eurodollar Loans in direct order of Interest Period maturities.
All prepayments under this Section 3.3(b) shall be subject to Section
3.12, but otherwise without premium or penalty, and shall be
accompanied by interest on the principal amount prepaid through the
date of prepayment.
(e) Section 7.1(g) is modified in its entirety to read as follows:
(g) Compliance With Certain Provisions of the Loan
Agreement. Within 90 days after the end of each fiscal year of the
Credit Parties, a certificate containing information regarding (i) the
calculation of Excess Cash Flow and (ii) the amount of all Asset
Dispositions (other than Excluded Asset Dispositions), Debt Issuances
(other than Excluded Debt Issuances) and Equity Issuances (other than
Excluded Equity Issuances) that were made during the prior fiscal year.
(f) A new Section 7.14 is added after Section 7.13 to read as
follows:
7.14 INTEREST RATE PROTECTION.
The Credit Parties shall cause the Borrower to
maintain protection against fluctuations in interest rates
pursuant to one or more Hedging Agreements reasonably
satisfactory to the Agent and providing coverage in a notional
amount equal to at least 50% of the Term Loan.
(g) The new financial covenant levels for purposes of Section 7.10
shall be negotiated in good faith based on the most current financial
projections prior to the time the Extension Option is exercised.
[SIGNATURE PAGE TO FOLLOW]
112
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Loan Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: aaiPHARMA INC.
By:
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Name:
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Title:
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SUBSIDIARY
GUARANTORS: APPLIED ANALYTICAL INDUSTRIES
LEARNING CENTER, INC.
AAI TECHNOLOGIES, INC.
AAI INTERNATIONAL, INC.
AAI PROPERTIES, INC.
KANSAS CITY ANALYTICAL SERVICES, INC.
MEDICAL & TECHNICAL RESEARCH
ASSOCIATES, INC.
AAI JAPAN, INC.
NEOSAN PHARMACEUTICALS, INC.
By:
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Name:
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Title:
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AGENT: BANK OF AMERICA, N.A.
individually in its capacity as a
Lender and in its capacity as Agent
By:
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Name:
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Title:
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LENDERS: BANC OF AMERICA MEZZANINE
CAPITAL LLC
By:
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Name:
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Title:
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By:
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Name:
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Title:
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