CREDIT AGREEMENT, dated as of o, 1999, between Miravant Medical
Technologies, a Delaware corporation (the "Borrower") and o, a Swedish
corporation (the "Lender").
W I T N E S S E T H :
WHEREAS, the Borrower has requested the Lender to commit to lend to the
Borrower, for general corporate purposes, an aggregate amount not to exceed
$22,500,000, in the form of up to six term loans, with not more than one such
term loan to be made in each of the six calendar quarters between January 1,
1999 and June 30, 2000; and
WHEREAS, the Lender is willing to make such loans, and the additional loans
described in Section 3.01(b) hereof, on the terms and conditions provided
herein;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
Definitions
Section I.1. Definitions.
(a) Terms Generally. The definitions ascribed to terms in this Agreement
apply equally to both the singular and plural forms of such terms. Whenever the
context may require, any pronoun shall be deemed to include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be interpreted as if followed by the phrase "without
limitation". The phrase "individually or in the aggregate" shall be deemed
general in scope and not to refer to any specific Section or clause of this
Agreement. All references herein to the Preamble, Recitals, Articles, Sections,
Exhibits and Schedules shall be deemed references to the Preamble and Recitals,
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. The table of contents, headings and
captions herein shall not be given effect in interpreting or construing the
provisions of this Agreement. Except as otherwise expressly provided herein, all
references to "dollars" or "$" shall be deemed references to the lawful money of
the United States of America.
(b) Accounting Terms. Except as otherwise expressly provided herein, the
term "consolidated" and all other terms of an accounting nature shall be
interpreted and construed in accordance with GAAP, as in effect from time to
time; provided, however, that, for purposes of determining compliance with any
covenant set forth in Article VII, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement, applied on a basis
consistent with the construction thereof applied in preparing the Borrower's
audited financial statements referred to in Section 5.01(h).
(c) Other Terms. The following terms have the meanings ascribed to them
below or in the Sections of this Agreement indicated below:
"Additional Loans" means, collectively, Loans made pursuant to Section
3.01(b).
"Affiliate" means, with respect to any Person, any other Person that
controls, is controlled by, or is under common control with, such Person.
"Agreement" means this credit agreement, as it may be amended, modified or
supplemented from time to time.
"Approved Subsidiary" has the meaning assigned to such term in Section
8.02(a).
"Asset Disposition" by any Person means any transfer, conveyance, sale,
lease or other disposition by such Person or any of its Subsidiaries (including
a consolidation or merger or other sale of any such Subsidiary with, into or to
another Person in a transaction in which such Subsidiary ceases to be a
Subsidiary, but excluding a disposition by a Subsidiary of such Person to such
Person or a Wholly Owned Subsidiary of such Person or by such Person to a Wholly
Owned Subsidiary of such Person) of (i) shares of capital stock (other than
directors' qualifying shares) or other ownership interests of a Subsidiary of
such Person, (ii) substantially all of the assets of such Person or any of its
Subsidiaries representing a division or line of business or (iii) other assets
or rights of such Person or any of its Subsidiaries transferred, conveyed, sold,
leased or disposed of on or subsequent to the date of this Agreement for cash
consideration not in excess of, and having a book value or fair market value not
in excess of, $1,000,000 in the aggregate.
"Assignee" has the meaning assigned to such term in Section 8.02(a).
"Average Price" means the average of the Closing Prices of the Common Stock
for the 10 Trading Days immediately preceding the Maturity Date.
"Base Rate" means, for any day, a rate per annum equal to the rate of
interest from time to time publicly announced by Citibank, N.A. in The City of
New York as its prime commercial loan rate in effect on such day. The Base Rate
shall change as and when the foregoing rate shall change. Any change in the Base
Rate shall become effective as of the opening of business on the day of such
change.
"Board of Directors" means the board of directors of the Borrower.
"Borrower" has the meaning assigned to such term in the Preamble.
"Borrowing Amount" has the meaning set forth in Section 2.02.
"Borrowing Date" means, with respect to any Quarterly Loan, the Business
Day set forth in the relevant Borrowing Request as the date upon which the
Borrower desires to borrow such Quarterly Loan; provided, however, that such
Borrowing Date shall be not fewer than 10 Business Days and not more than 20
Business Days following the Lender's receipt of such Borrowing Request; and
provided, further, that the Borrowing Date with respect to any Loan for the
Quarter consisting of January, February and March, 1999 may be any Business Day
not fewer than five Business Days and not more than ten Business Days following
Lender's receipt of the Borrowing Request relating to such Loan.
"Borrowing Request" means a request by the Borrower for a Quarterly Loan,
which shall specify (i) the requested Borrowing Date, (ii) the Borrowing Amount
for such Quarterly Loan, and (iii) a calculation of the Exercise Price of the
related Warrants.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in The City of New York or in Los Angeles, California,
are authorized by law to close.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including that
portion of Capital Lease Obligations that is capitalized on the consolidated
balance sheet of the Borrower and its Subsidiaries) by the Borrower and its
Subsidiaries during such period that are included in the property, plant or
equipment reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries.
"Capital Lease Obligations" means, with respect to any Person, the
obligation of such Person to pay rent or other amounts under any lease with
respect to any property (whether real, personal or mixed) acquired or leased by
such Person that is required by GAAP to be accounted for as a liability on a
consolidated balance sheet of such Person.
"Closing Price" means the last reported sale price regular way on the day
in question or, in case no such sale takes place on such day, the reported
closing bid price regular way of the Common Stock, in each case on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if not listed or admitted to trading on any national securities
exchange, the closing bid price of the Common Stock on the Nasdaq National
Market. In the case of a closing price of Common Stock on the Nasdaq National
Market, such price shall mean the closing price reported in the New York City
edition of The Wall Street Journal or, if not so reported, another authoritative
source.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Common Stock" means the common stock, par value $.01 per share, of the
Company and any other stock of the Borrower into which such common stock may be
converted or reclassified (other than stock of the Borrower into which unissued
Common Stock has been reclassified) or that may be issued in respect of, in
exchange for, or in substitution of, such common stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations,
recapitalizations or other like events.
"Credit Documents" means, collectively, this Agreement; all of the Notes;
that certain Security Agreement, of even date herewith, between the Borrower, as
debtor, and the Lender, as secured party; and any documents executed and
delivered, or filings made, pursuant to or in connection with such Security
Agreement, including any financing statements filed by the Lender pursuant to
the Uniform Commercial Code and any filings made by the Lender with the Patent
and Trademark Office.
"Current Assets" means, at any date of determination, consolidated current
assets of the Borrower and its Subsidiaries.
"Current Liabilities" means, at any date of determination, consolidated
current liabilities of the Borrower and its Subsidiaries, less the amount of the
current portion of, and any accrued interest on, Indebtedness of the Borrower
and its Subsidiaries.
"Default" means any event or circumstance which, with the giving of notice
or the passage of time, or both, would be an Event of Default.
"Disclosure Package" has the meaning assigned to such term in Section
5.01(h).
"EBITDA" means, for any period, the sum of (i) consolidated net income of
the Borrower and its Subsidiaries for such period, adjusted to exclude
non-recurring gains and losses on unusual items and (ii) consolidated income
taxes, interest income, Interest Expense, depreciation, and amortization
(including, without limitation, amortization associated with goodwill, deferred
debt expenses, restricted stock and option costs and non-competition agreements)
of the Borrower and its Subsidiaries for such period.
"Effective Time" has the meaning assigned to such term in Section 6.01.
"Environmental Claim" means any claim, assertion, demand, notice of
violation, suit, administrative or judicial proceeding, regulatory action,
investigation, information request or order involving any hazardous substance,
Environmental Law, noise or odor pollution or any injury or threat of injury to
human health, property or the environment.
"Environmental Law" means any federal, state, local or foreign statute or
common law, regulation, order, decree, opinion or agency requirement as now in
effect or hereinafter adopted relating to (i) the handling, use, presence,
disposal or release of any hazardous substance or (ii) the protection,
preservation or restoration of the environment, natural resources or human
health or safety.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Group" means the Borrower and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code or are considered to be one employer
under Section 4001 of ERISA.
"Event of Default" has the meaning assigned to such term in Section 8.01.
"Excluded Taxes" means all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges imposed
on or measured by the overall net income of the Lender (or any office, branch or
Subsidiary of the Lender) or any franchise taxes, taxes on doing business or
taxes measured by capital or net worth imposed on the Lender (or any office,
branch or Subsidiary of the Lender), in each case imposed by the United States
of America or any political subdivision or taxing authority thereof or therein,
or taxes on or measured by the overall net income of any office, branch or
Subsidiary of the Lender or any taxes, levies, imposts, duties, deductions,
withholdings, fees, liabilities and similar changes imposed by any foreign
country or subdivision thereof.
"Exercise Price" has the meaning assigned to such term in the Warrant
Agreement.
"External Scaleup Costs" means the costs incurred by the Borrower
associated with the development of the scale-up of raw materials, the active
pharmaceutical ingredient and final dose formulation necessary to permit the
Product (as defined in that certain Amended and Restated Ophthalmology
Development & License Agreement between the Borrower and an affiliate of the
Lender) to be manufactured by an entity other than the Borrower. Such costs
include, but are not limited to, the costs of development work performed, raw
materials used in development and stability and equipment needed.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority).
"GAAP" means generally accepted accounting principles, as set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entities as may be approved by a significant segment of the accounting
profession of the United States of America.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guaranty" means, with respect to any Person, any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (ii) to
purchase property, securities or services for the purpose of assuring the holder
of such Indebtedness of the payment of such Indebtedness or (iii) to maintain
working capital, equity capital or the financial condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness.
The terms "Guaranteed", "Guaranteeing" and "Guarantor" shall have corresponding
meanings.
"Hazardous Substance" means any substance, in any concentration or mixture,
that is (i) listed, classified or regulated pursuant to any Environmental Law,
(ii) petroleum product or by-product, asbestos containing material,
polychlorinated biphenyls, radioactive material or radon or (iii) any waste or
other substance regulated by any Governmental Authority or any Environmental
Law.
"Indebtedness" means, with respect to any Person, (i) all obligations of
such Person for borrowed money or for the deferred purchase price of property or
services (including all obligations, contingent or otherwise, of such Person in
connection with letters of credit, bankers' acceptances, Interest Rate
Protection Agreements or other similar instruments, including currency swaps)
other than indebtedness to trade creditors and service providers incurred in the
ordinary course of business and payable on usual and customary terms, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the remedies available to the seller or
lender under such agreement are limited to repossession or sale of such
property), (iv) all Capital Lease Obligations of such Person, (v) all
obligations of the types described in clauses (i), (ii), (iii) or (iv) above
secured by (or for which the obligee has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in any property (including
accounts, contract rights and other intangibles) owned by such Person (up to the
value of such property), even though such Person has not assumed or become
liable for the payment of such Indebtedness, (vi) all preferred stock issued by
such Person or any Subsidiary of such Person, valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (vii) all Indebtedness of others Guaranteed by such Person and (viii)
all Indebtedness of any partnership of which such Person is a general partner.
"Indemnitee" has the meaning assigned to such term in Section 4.04(b).
"Interest Expense" means, for any period, consolidated interest expense
(including that attributable to Capital Lease Obligations) whether paid or
accrued, of the Borrower and its Subsidiaries with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries, including all commissions,
discounts and other fees and charges owed with respect to letter of credit and
bankers' acceptance financing and net costs under Interest Rate Protection
Agreements.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or similar hedging arrangement used by a
Person to fix or cap a floating rate of interest on Indebtedness to a negotiated
maximum rate or amount.
"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution to (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise), or purchase or acquisition of capital
stock, bonds, notes, debentures or other securities or evidence of Indebtedness
or other obligations of or issued by any other Person.
"Key Agreements" means, collectively, the License Agreement, effective July
1, 1989, between the University of Toledo, the Medical College of Ohio, St.
▇▇▇▇▇▇▇ Medical Center and the Borrower, as amended prior to the date hereof,
and the Development and Distribution Agreement, dated May 28, 1996, between
Iridex Corporation and the Borrower, as amended prior to the date hereof.
"Lender" has the meaning assigned to such term in the Preamble.
"Lien" means, with respect to any asset of a Person, (i) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (ii) the interest of a vendor or lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset,
and (iii) in the case of securities, any purchase option, call or similar right
of any other Person with respect to such securities.
"Loans" means, collectively, the Quarterly Loans and the Additional Loans.
"Material Adverse Effect" means any material and adverse effect on (i) the
consolidated business, properties, condition (financial or otherwise) or
operations, present or prospective, of the Borrower and its Subsidiaries, (ii)
the ability of the Borrower timely to perform any of its material obligations,
or of the Lender to exercise any remedy, under any Credit Document or (iii) the
legality, validity, binding nature or enforceability of any Credit Document.
"Maturity Date" means the fifth anniversary of the Borrowing Date for the
first Loan made pursuant to this Agreement.
"Maximum Quarterly Amount" means, (i) for the Quarter comprising January,
February and March, 1999, $3,750,000, and (ii) for any other Quarter (the
"Reference Quarter"), the sum of $3,750,000 plus either (A) if and only if no
Quarterly Loan was made in the Quarter immediately preceding the Reference
Quarter or the principal amount of the Quarterly Loan made in the Quarter
immediately preceding the Reference Quarter was less than $3,750,000, then the
amount equal to the amount by which $3,750,000 exceeds the principal amount of
the Quarterly Loan, if any, made in the Quarter immediately preceding the
Reference Quarter, or (B) if and only if the principal amount of the Quarterly
Loan made in the Quarter immediately preceding the Reference Quarter was equal
to or greater than $3,750,000, then zero.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any member of the ERISA Group is making or accruing
an obligation to make contributions or has within the preceding five plan years
made or accrued contributions.
"Net Available Asset Disposition Proceeds" means, with respect to any Asset
Disposition by any Person, all cash or readily marketable cash equivalents
received (including by way of sale or discounting of a note, instalment
receivable or other receivable, but excluding any other consideration received
in the form of assumption by the acquiree of Indebtedness or other obligations
relating to such properties or assets or received in any other noncash form)
therefrom by such Person, net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred and all federal,
state, provincial, foreign and local taxes required to be accrued as a liability
as a consequence of such Asset Disposition, (ii) all payments made by such
Person or its Subsidiaries on any Indebtedness which is secured by such assets
in accordance with the terms of any Lien upon or with respect to such assets or
which must by the terms of such Lien, or in order to obtain a necessary consent
to such Asset Disposition or by applicable law be repaid out of the proceeds
from such Asset Disposition, and (iii) all distributions and other payments made
to minority interest holders in Subsidiaries of such Person or joint ventures as
a result of such Asset Disposition.
"Net Available Securities Offering Proceeds" means, with respect to any
offer or sale of securities by any Person, all cash or readily marketable cash
equivalents received therefrom by such Person, net of all underwriting discounts
and commissions, SEC filing fees, legal fees and disbursements, printing fees,
fees of national securities exchanges or the Nasdaq National Market and auditing
fees incurred by such Person in connection with such offer or sale.
"New Site" has the meaning assigned to such term in Section 7.02(e)(ix).
"Note" means a promissory note of the Borrower in the form set forth in
Exhibit B, executed and delivered in accordance with Section 2.02, 3.01(b) or
6.02(b) in order to evidence a Loan.
"Operating Income" of any Person means, for any period, the consolidated
operating income (or loss) of such Person for such period determined on a
consolidated basis in accordance with generally accepted accounting principles;
provided that there shall be excluded therefrom (a) noncash expense items,
including but not limited to depreciation, amortization, noncash compensation
costs and reserves, (b) the operating income (or loss) of any Person acquired by
such Person or a Subsidiary of such Person in a pooling-of-interests transaction
for any period prior to the date of such transaction, (c) the operating income
(but not operating loss) of any Subsidiary of such Person which is subject to
restrictions which prevent the payment of dividends or the making of
distributions to such Person to the extent of such restrictions, (d) the
operating income (or loss) of any Person that is not a Subsidiary of such Person
except to the extent of the amount of dividends or other distributions actually
paid to such Person by such other Person during such period, (e) gains or losses
on Asset Dispositions by such Person or its Subsidiaries and (f) all
extraordinary gains and extraordinary losses.
"Ophthalmology Expense" means, for any period, the direct and indirect
costs incurred by the Company associated with the field of ophthalmology for
research, pharmaceutical, device and manufacturing development and preclinical
and clinical costs, including, (but not limited to) general and administrative
costs, internal scale-up costs, preclinical costs as required for NDA filing,
clinical and regulatory costs, drug and device development and manufacturing
costs and consultants, but excluding External Scaleup Costs.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
Governmental Authority).
"Pension Plan" means a Plan that (i) is an employee pension benefit plan,
as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) and (ii)
is subject to the provisions of Title IV of ERISA or is subject to the minimum
funding standards under Section 412 of the Code.
"Permitted Liens" means, collectively, the following: (i) Liens for taxes,
assessments or charges not yet due or that are being contested in good faith by
appropriate proceedings and (unless the amount thereof is not material to the
Borrower's consolidated financial condition) for which adequate reserves are
being maintained (in accordance with GAAP); (ii) deposits or pledges to secure
obligations under workers' compensation, social security or similar laws, or
under unemployment insurance; (iii) deposits or pledges to secure bids, tenders,
contracts (other than contracts constituting Indebtedness), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business; (iv) mechanics', workers',
materialmen's or similar Liens arising in the ordinary course of business with
respect to obligations which are not overdue for a period of more than 30 days
or which are being contested in good faith by appropriate proceedings; (v) Liens
securing judgments in an amount and for a period not constituting an Event of
Default under Section 8.01(i); (vi) minor imperfections of title on real estate
that do not interfere materially with the use of such property or render title
unmarketable; (vii) any Lien upon or in any property hereafter acquired by the
Borrower or a Subsidiary of the Borrower, provided that such Lien is created
contemporaneously with such acquisition to secure or provide for the payment or
financing of any part of the cost (including construction costs) thereof, and
provided, further, that such Lien attaches only to the property so acquired and
fixed improvements thereon, accessions thereto, replacements and proceeds
thereof, and substitutions therefor; (viii) Liens existing on the date hereof;
(ix) Liens on equipment leased by the Borrower or any Subsidiary of the Borrower
pursuant to a capital lease in the ordinary course of business (including
replacements and proceeds thereof, substitutions therefor and accessions
thereto) incurred solely for the purpose of financing the lease of such
equipment; (x) leases or subleases granted to others in the ordinary course of
Borrower's or its Subsidiary's business not interfering in any material respect
with the business of Borrower and its Subsidiaries taken as a whole, and any
interest or title of a lessor under any lease; (xi) Liens on assets that existed
at the time such assets were acquired by Borrower or any Subsidiary (including
Liens on assets of any corporation that existed at the time it became or becomes
a Subsidiary of the Borrower); provided such Liens were not granted in
contemplation of or in connection with the acquisition of such asset by Borrower
or any such Subsidiary; (xii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payments of customs duties in connection
with the importation of goods; (xiii) Liens which constitute rights of set-off
of a customary nature or banker's Liens with respect to amounts on deposit,
whether arising by operation of law or by contract, in connection with
arrangement entered into with banks in the ordinary course of business; (xiv)
Liens on insurance proceeds in favor of insurance companies granted solely as
security for financed premiums; and (xv) any Lien renewing, extending or
refinancing a Lien permitted by the foregoing, provided that the principal
amount secured is not increased and the Lien is not extended to other property
(other than by a substitution of like property).
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) which is maintained or contributed to by the
Borrower or any member of the ERISA Group.
"Quarter" means each of the six calendar quarters consisting of January,
February and March, 1999; April, May and June, 1999; July, August and September,
1999; October, November and December, 1999; January, February and ▇▇▇▇▇, ▇▇▇▇;
and April, May and June, 2000.
"Quarterly Loan" has the meaning assigned to such term in Section 2.01.
"Related Person" of any Person means, without limitation, any officer or
director of such Person or any other Person owning 5% or more of the outstanding
common stock of such Person or 5% or more of the Voting Stock of such Person.
For purpose of this Agreement, the Lender and its Affiliates shall not be deemed
to be Related Persons of the Borrower or any of its Subsidiaries.
"Repayment Shares" has the meaning assigned to such term in Section
2.03(b).
"Responsible Officer" means the chief executive officer, president, chief
financial officer, chief accounting officer or treasurer of the Borrower.
"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person which has
been or is being sold or transferred by such Person after the acquisition
thereof or the completion of construction or commencement of operation thereof
to such lender or investor or to any person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or asset.
"SEC" means the Securities and Exchange Commission (or any successor
Governmental Authority).
"Share Repayment Amount" has the meaning assigned to such term in Section
2.03(b).
"Shareholders' Equity" means, as of any date of determination, the total
consolidated shareholders' equity (determined without duplication) of the
Borrower and its Subsidiaries at such date.
"Solvent" means, with respect to a Person and a specified date of
determination, that at such date:
(a) the present fair saleable value of such Person's assets is in excess of
the total amount of such Person's probable liabilities on its existing debts and
obligations (including contingent liabilities) as they become absolute and
matured;
(b) such Person is able to pay its debts as they become due; and
(c) such Person does not have unreasonably small capital to carry on such
Person's business as theretofore operated and all businesses in which such
Person then is about to engage.
"Subsidiary" means, at any time and with respect to any Person, any other
Person the shares of stock or other ownership interests of which having ordinary
voting power to elect a majority of the board of directors or other matters of
such Person are at the time owned, or the management or policies of which is
otherwise at the time controlled, directly or indirectly through one or more
intermediaries (including other Subsidiaries) or both, by such first Person.
Unless otherwise qualified or the context indicates clearly to the contrary, all
references to a "Subsidiary" or "Subsidiaries" in this Agreement refer to a
Subsidiary or Subsidiaries of the Borrower.
"Surplus" has the meaning assigned to such term in Section 7.02(p).
"Taxes" has the meaning assigned to such term in Section 4.03.
"Trading Day" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a day on
which the Nasdaq National Market is open for the transaction of business.
"Voting Stock" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person.
"Warrant" has the meaning assigned to such term in the Warrant Agreement.
"Warrant Agreement" means the Warrant Agreement, of even date herewith,
between the Borrower and the Lender.
"Warrant Certificate" has the meaning assigned to such term in the Warrant
Agreement.
"Warrant Number" means, with respect to any Quarterly Loan, a number of
Warrants equal to the product of (i) the Borrowing Amount for such Quarterly
Loan, divided by (ii) 62.50.
"Wholly Owned Subsidiary" means, at any time and with respect to any
Person, a Subsidiary, all the shares of stock of all classes of which (other
than directors' qualifying shares) or other ownership interests at the time are
owned directly or indirectly by such Person and/or one or more other Wholly
Owned Subsidiaries of such Person.
ARTICLE II
The Credit Facility
Section II.1. Loans. Subject to the terms and conditions of this Agreement,
the Lender agrees to make a single term loan (each, a "Quarterly Loan") in
dollars to the Borrower not more than once in each Quarter in a principal amount
not to exceed the Maximum Quarterly Amount per Quarter. Each Quarterly Loan
shall be made on the applicable Borrowing Date only in a principal amount of
$1,000,000 or an integral multiple of $250,000 in excess thereof, but in no
event greater than the Maximum Quarterly Amount for such Quarter.
Section II.2. Borrowing Procedure. In order to borrow a Quarterly Loan, the
Borrower shall deliver a Borrowing Request to the treasurer of Lender, no later
than 12:00 Noon, New York time, on the thirtieth Business Day of the Quarter to
which the Loan relates; provided, however, that any Borrowing Request with
respect to a Quarterly Loan for the Quarter consisting of January, February and
March, 1999 may be furnished to the Lender at any time no later than 12:00 Noon,
New York time, on the fifteenth Business Day following the Effective Time. Each
Borrowing Request shall be accompanied by a duly executed Note in the form of
Exhibit B, dated as of the Borrowing Date and evidencing a loan in the principal
amount set forth in the Borrowing Request (the "Borrowing Amount", which shall
be $1,000,000 or an integral multiple of $250,000 in excess thereof but shall
not exceed the Maximum Quarterly Amount for such Quarter), and a duly executed
Warrant Certificate evidencing a number of Warrants equal to the Warrant Number.
Subject to satisfaction, or waiver by the Lender in writing, of each of the
applicable conditions precedent contained in Article VI, on the applicable
Borrowing Date the Lender shall make available to the Borrower the Borrowing
Amount.
Section II.3. Repayment. (a) The aggregate outstanding principal of the
Loans shall be repaid in full, together with any accrued interest as of the date
of repayment, not later than the Maturity Date. Except as permitted by Section
2.03(b), such principal and interest shall be repaid in cash. Repaid Loans may
not be reborrowed.
(b) If and only if the Common Stock shall have been listed or admitted to
trading on a national securities exchange or quoted on the Nasdaq National
Market on each of the 180 calendar days preceding and including the Maturity
Date, then on, but not following, the Maturity Date, the Borrower may, at its
option, repay all or a portion of the aggregate principal of the Loans, together
with any accrued interest as of the Maturity Date, by delivering to the office
of the Lender theretofore designated in writing to the Borrower not later than
12:00 Noon, New York time, on the Maturity Date, (i) an unlegended certificate
for the number of shares of Common Stock (the "Repayment Shares") equal to the
product, rounded up to the nearest whole number, of (A) the portion of the
aggregate principal of the Loans to be repaid pursuant to this Section 2.03(b),
together with any accrued interest thereon as of the Maturity Date (the "Share
Repayment Amount"), divided by (B) the Average Price; (ii) an opinion of counsel
for the Borrower (which counsel shall be satisfactory to the Lender) in the form
of Exhibit C; (iii) evidence satisfactory to the Lender of the previous
expiration or termination of any waiting period (and any extension thereof)
applicable to the acquisition by the Lender of the Repayment Shares under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the
previous receipt of all governmental and contractual permits, consents and
approvals necessary in connection with such acquisition; (iv) evidence
satisfactory to the Lender of Borrower's compliance with Section 2.03(c); and
(v) a certified or official bank check in same day funds equal to the difference
of (A) the aggregate principal amount of the Loans, together with any accrued
interest as of the Maturity Date, minus (B) the Share Repayment Amount.
(c) The Borrower shall pay all transfer, stamp and other similar taxes that
may be imposed in respect of the issuance or delivery of the Repayment Shares
pursuant to Section 2.03(b) and any and all filing fees incurred by the Lender
pursuant to Section 2.03(b)(iv).
Section II.4. Prepayment. The Borrower may prepay portions of the Loans by
giving notice to the treasurer of the Lender, by telephone, telecopy or in
writing, not later than 12:00 Noon (if not in writing, to be so confirmed not
later than 2:00 P.M.), New York time, on the Business Day preceding the proposed
date of prepayment. Each such prepayment shall be in an aggregate principal
amount of ***** or integral multiples of ***** in excess thereof (or if the
aggregate amount of outstanding Loans is less than *****, then all of such
lesser amount), together with accrued interest on the principal being prepaid to
the date of prepayment; provided, however, that in the case of any prepayment
pursuant to Section 7.02(n), 7.02(o) or 7.02(p), such prepayment shall be in an
aggregate principal amount equal to ***** of the Net Available Asset Disposition
Proceeds, ***** of the Net Available Securities Offering Proceeds or ***** of
the amount of the Surplus, as the case may be, in any such case together with
accrued interest on the principal being repaid to the date of prepayment, up to
but not in excess of the aggregate principal amount of, and accrued interest on,
the outstanding Loans. Each partial prepayment shall be applied to the principal
amount of the Loan or Loans designated by the Lender in its sole discretion, and
the Lender will provide Borrower with reasonable notice concerning such
designation. Prepaid Loans may not be reborrowed.
*****Confidential Treatment Requested
ARTICLE III
Interest
Section III.1. Interest on Loans. (a) Each Loan shall bear interest from
the date made until the date repaid, payable pursuant to Section 3.01(b), at a
rate per annum equal to the Base Rate in effect from time to time, which rate
shall change as and when said Base Rate shall change.
(b) Interest on the Loans shall be payable in arrears on the last day of
each calendar quarter of each year (each such day, a "Quarterly Payment Date"),
commencing with the first such Quarterly Payment Date after the Effective Date,
and on the date such Loan is repaid or prepaid, in the manner set forth in
Section 4.01 or, if and only if permitted below, by the delivery of a Note
evidencing an additional loan made pursuant to this Agreement and having a
principal amount equal to the amount of such interest, as set forth below.
(i) On or prior to the fifth Business Day following each Quarterly
Payment Date prior to January 1, 2001, the Borrower shall execute and
deliver to the treasurer of the Lender a Note having a principal amount
equal to the aggregate amount of all interest on Loans (including
Additional Loans) payable on such Quarterly Payment Date. Each such Note
shall evidence an additional loan made pursuant to this Agreement and shall
bear interest in the manner and at the rate set forth in Section 3.01(a),
which interest shall be payable in the manner set forth in this Section
3.01(b).
(ii) All interest on Loans (including Additional Loans) payable on any
Quarterly Payment Date subsequent to December 31, 2000 shall be paid in the
manner set forth in Section 4.01; provided that if and only if EBITDA for
the calendar quarter ending on such Quarterly Payment Date does not exceed
the amount of such interest as is payable on such Quarterly Payment Date,
then, subject to Section 3.01(b)(iii), on or prior to the fifth Business
Day following such Quarterly Payment Date, the Borrower shall execute and
deliver to the treasurer of the Lender a Note having a principal amount
equal to the aggregate amount of all interest on Loans (including
Additional Loans) payable on such Quarterly Payment Date. Each such Note
shall evidence an additional loan made pursuant to this Agreement and shall
bear interest in the manner and at the rate set forth in Section 3.01(a),
which interest shall be payable in the manner set forth in this Section
3.01(b).
(iii) The Borrower shall not be entitled to pay interest on Loans in
the manner set forth in Section 3.01(b)(ii) in respect of interest payable
on any of the four Quarterly Payment Dates immediately following the
closing of a primary offering or sale of securities by the Borrower in
which the Net Available Securities Offering Proceeds from such offering or
sale equals or exceeds $5,000,000.
(c) No Warrants shall be issuable in connection with any Additional Loan.
Section III.2. Interest on Overdue Amounts. All overdue amounts (including
principal, interest and fees) hereunder, and, during the continuance of any
Event of Default that shall have occurred, each Loan shall bear interest,
payable on demand, at a rate per annum equal to the sum of (i) 10% and (ii) the
rate of interest applicable to such Loan, changing as and when such rate shall
change.
Section III.3. Day Counts. Interest on Loans shall be calculated on the
basis of (a) a 365- or, if applicable, a 366-day year for the actual number of
days elapsed.
Section III.4. Maximum Interest Rate. (a) Nothing in this Agreement shall
require the Borrower to pay interest at a rate exceeding the maximum rate
permitted by applicable law.
(b) If the amount of interest payable to the Lender on any interest payment
date in respect of the immediately preceding interest computation period,
computed pursuant to this Article III, would exceed the maximum amount permitted
by applicable law to be charged by the Lender, the amount of interest payable
for its account on such interest payment date shall automatically be reduced to
such maximum permissible amount.
(c) If the amount of interest payable to the Lender in respect of any
interest computation period is reduced pursuant to Section 3.04(b) and the
amount of interest payable for its account in respect of any subsequent interest
computation period would be less than the maximum amount permitted by law to be
charged by the Lender, then the amount of interest payable in respect of such
subsequent interest computation period shall be automatically increased to such
maximum permissible amount; provided that at no time shall the aggregate amount
by which interest paid to the Lender has been increased pursuant to this Section
3.04(c) exceed the aggregate amount by which interest paid to the Lender has
theretofore been reduced pursuant to Section 3.04(b).
ARTICLE IV
Disbursement and Payment
Section IV.1. Method and Time of Payments. (a) Except as specifically
permitted by Section 3.01(b), and except in the case of payments pursuant to
Sections 3.02, 4.02, 4.03, 4.04 or payments otherwise specified as payable upon
demand, which payments shall be made forthwith upon written demand therefor, all
payments by the Borrower hereunder shall be made without setoff or counterclaim
to the Lender in dollars and in immediately available funds at the office of the
Lender theretofore designated in writing to the Borrower not later than 2:00
p.m., New York time, on the later of the date when due or the fifth Business Day
following the Borrower's receipt of an oral or written confirmation made in
response to the request contemplated by Section 4.01(c).
(b) Whenever any payment from the Borrower shall be due on a day that is
not a Business Day, the date of payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of principal is extended by
operation of law or otherwise, interest thereon shall be payable for such
extended time.
(c) Promptly upon receipt of a request by the Borrower therefor (which
request may be made by telephone to the treasurer or any assistant treasurer of
Pharmacia & Upjohn, Inc.) the Lender shall confirm the Lender's calculation of
the amount of any payment due on a particular date.
Section IV.2. Compensation for Losses. If the Borrower revokes any
Borrowing Request, then the Borrower shall reimburse the Lender, promptly upon
demand therefor, for all fees and costs actually incurred or paid by the Lender
to third parties in respect of funds obtained by the Lender for the purpose of
making or maintaining the related Loan, or any portion thereof. If requested by
the Borrower, Lender shall provide to the Borrower reasonable documentation
concerning such fees and costs.
Section IV.3. Withholding. All payments under this Agreement and under the
Notes (including payments of principal and interest) shall be payable to the
Lender free and clear of any and all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges other
than Excluded Taxes (collectively, "Taxes"). If any Taxes are required to be
withheld or deducted from any amount payable under this Agreement, then the
amount payable under this Agreement shall be increased to the amount which,
after deduction from such increased amount of all Taxes required to be withheld
or deducted therefrom, will yield to the Lender the amount stated to be payable
under this Agreement; provided, however, that amounts payable under this
Agreement shall not be increased in respect of any Taxes required to be withheld
or deducted solely as a consequence of the Lender's status as a nonresident
alien, as such term is defined in the Code. The Borrower shall also hold the
Lender harmless and indemnify it for any stamp or other taxes with respect to
the preparation, execution, delivery, recording, performance or enforcement of
the Credit Documents (all of which shall be included within "Taxes"). If any of
the Taxes specified in this Section 4.03 are paid by the Lender, the Borrower
shall, upon demand of the Lender, promptly reimburse the Lender for such
payments, together with any interest, penalties and expenses incurred in
connection therewith. The Borrower shall deliver to the Lender certificates or
other valid vouchers for all Taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder.
Section IV.4. Expenses; Indemnity. (a) The Borrower agrees to pay or
reimburse the Lender for all reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, any other Credit Documents, and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Lender (but excluding fees and disbursements incurred on or prior to the date
hereof in negotiating and preparing the Credit Documents); provided, however,
that in the event of any litigation between the Borrower and the Lender
initiated prior to any Event of Default specified in Section 8.01(g) or (h) and
arising out of the matters set forth in Section 4.04(b)(i), the fees and
disbursements of counsel to the Lender shall be borne by the Borrower if and
only if the Lender is the prevailing party. The Borrower also agrees to
indemnify the Lender against any transfer taxes, documentary taxes, assessments
or charges made by any Governmental Authority by reason of the execution and
delivery of any Credit Document.
(b) The Borrower agrees to indemnify the Lender and its directors,
officers, employees, agents and Affiliates (for purposes of this paragraph,
each, an "Indemnitee") against, and to hold each Indemnitee harmless from, any
and all claims, liabilities, damages, losses, costs, charges and expenses
(including fees and expenses of counsel) incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery of any Credit Document or any agreement or instrument
contemplated by any Credit Document, the performance by the parties thereto of
their respective obligations under any Credit Document, the enforcement or
preservation by the parties thereto of their respective rights under any Credit
Document or the consummation of the transactions contemplated by any Credit
Document, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto. The provisions of this Section
4.04(b) shall not operate or be construed to indemnify the Lender against, or
hold it harmless from, any claims, liabilities, damages, losses, costs, charges
and expenses (including fees and expenses of counsel) incurred by or asserted
against the Lender arising out of or connected with any litigation initiated
prior to any Event of Default specified in Section 8.01(g) or (h) solely between
the Borrower and the Lender in which the Lender is not the prevailing party.
(c) All amounts due under this Section 4.04 shall be payable in immediately
available funds upon written demand therefor.
Section IV.5. Survival. The provisions of Sections 4.02, 4.03, 4.04 and
this Section 4.05 shall remain operative and in full force and effect regardless
of the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
invalidity or unenforceability of any term or provision of any Credit Document,
or any investigation made by or on behalf of the Lender.
ARTICLE V
Representations and Warranties
Section V.1. Representations and Warranties. The Borrower represents and
warrants to the Lender as follows:
(a) Subsidiaries. At the date hereof, the Borrower has no Subsidiaries
other than those Persons listed on Schedule 5.01(a).
(b) Good Standing and Power. The Borrower and each of its Subsidiaries is a
corporation, duly incorporated and validly existing in good standing under the
laws of the jurisdiction of its incorporation; each has the corporate power to
own its property and to carry on its business as now being conducted; and each
is duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it therein or in which
the transaction of its business makes such qualification necessary, except where
the failure to be so qualified, or to be in good standing, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(c) Corporate Authority. The Borrower has full corporate power and
authority to execute and deliver, and to incur and perform its obligations
under, each of the Credit Documents, all of which have been duly authorized by
all proper and necessary corporate action. No consent or approval of
stockholders is required as a condition to the validity or performance of, or
the exercise by the Lender of any of its rights or remedies under, any Credit
Document.
(d) Authorizations. All authorizations, consents, approvals, registrations,
notices, exemptions and licenses with or from any Governmental Authority or
other Person necessary for the execution, delivery and performance by the
Borrower of, and the incurrence and performance of each of its obligations
under, each of the Credit Documents, and the exercise by the Lender of its
remedies under each of the Credit Documents have been effected or obtained and
are in full force and effect.
(e) Binding Obligation. This Agreement constitutes and, when issued in
accordance with the terms hereof, each Note will constitute the valid and
legally binding obligation of the Borrower enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(f) Litigation. There are no proceedings or investigations now pending or,
to the knowledge of the Borrower, threatened before any court or arbitrator or
before or by any Governmental Authority which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(g) No Conflicts. There is no statute, regulation, rule, order or judgment,
and no provision of any agreement or instrument binding upon the Borrower or any
of its Subsidiaries, or affecting their properties, and no provision of the
certificate of incorporation or bylaws (or similar constitutive instruments) of
the Borrower or any of its Subsidiaries, that would prohibit, conflict with or
in any way impair the execution or delivery of, or the incurrence or performance
of any obligations of the Borrower under, any Credit Document, or result in or
require the creation or imposition of any Lien on property of the Borrower or
any of its Subsidiaries as a consequence of the execution, delivery and
performance of any Credit Document.
(h) Financial Condition. Except as disclosed in filings made by the
Borrower with the SEC prior to the date hereof or in the press releases issued
by the Company since September 30, 1998 and prior to the date hereof and
attached to that certain letter, dated the date hereof, from an officer of the
Borrower to an employee of the Lender making reference to this Section (such
filings and such press releases collectively, the "Disclosure Package"), (i) The
consolidated balance sheet of the Borrower as of December 31, 1997, together
with consolidated statements of income, shareholders' equity and cash flows for
the fiscal year then ended, reported upon by Ernst & Young LLP, and the
unaudited consolidated balance sheet of the Borrower as of September 30, 1998,
together with consolidated statements of income and cash flows for the nine
months then ended, heretofore delivered to the Lender, present fairly, in all
material respects, the Borrower's consolidated financial condition and
consolidated results of operations as of the dates and for the periods referred
to and have been prepared in accordance with GAAP consistently applied
throughout the period involved. There are no material liabilities (whether known
or unknown, direct or indirect, fixed or contingent, and of any nature
whatsoever) of the Borrower or any of its Subsidiaries as of the date of such
balance sheet that are not reflected therein or in the notes thereto.
(ii) Except as disclosed in the Disclosure Package, there has been no
material adverse change in the business, properties, condition (financial
or otherwise) or operations, present or prospective, of the Borrower and
its Subsidiaries since the date of the balance sheet dated December 31,
1997 referred to in Section 5.01(h)(i). Except as disclosed in the
Disclosure Package, since December 31, 1997, there has not occurred or
arisen any event, condition or circumstance that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(i) Taxes. Each of the Borrower and its Subsidiaries has filed or caused to
be filed all tax returns that are required to be filed and paid all taxes that
are required to be shown to be due and payable on said returns or on any
assessment made against it or any of its property and all other taxes,
assessments, fees, liabilities, penalties or other charges imposed on it or any
of its property by any Governmental Authority, except for any taxes,
assessments, fees, liabilities, penalties or other charges which are being
contested in good faith and (unless the amount thereof is not material to the
Borrower's consolidated financial condition) for which adequate reserves have
been established in accordance with GAAP.
(j) Use of Proceeds. The proceeds of the Loans will be used by the Borrower
for general corporate purposes.
(k) Margin Regulations. The making of the Loans and the use of the proceeds
thereof as contemplated by the Credit Documents will not violate or be
inconsistent with any of the provisions of Regulation U, T or X (or any
successor regulation or regulations) of the Federal Reserve Board.
(l) Compliance with ERISA. Each member of the ERISA Group is in compliance
with the applicable provisions of ERISA and the Code with respect to each Plan,
except for any failure so to comply that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. No member of
the ERISA Group has (i) an accumulated funding deficiency under Section 412 of
the Code in respect of any Pension Plan, whether or not waived, (ii) failed to
make any contribution or payment to any Pension Plan, or made any amendment to
any Pension Plan, which has resulted or could result in the imposition of a Lien
or the posting of a bond or other security under Section 302(f) of ERISA or
Section 401(a)(29) of the Code, (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA, all of which have been paid or (iv) engaged in a transaction with respect
to a Plan, which (assuming the taxable period of such transaction, within the
meaning of Section 4975(f)(2) of the Code, to have expired as of the date
hereof) has resulted or could reasonably be expected to result in such member
being subject to a material tax or penalty imposed by Section 4975 of the Code
or Section 502 of ERISA.
(m) Not an Investment Company. Neither the Borrower nor any of its
Subsidiaries 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, or (ii) subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, each as amended, or any foreign,
federal, state or local statute or regulation limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
(n) Properties. Each of the Borrower and its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all of its respective
properties and assets (excluding intellectual property) that are reflected on
the consolidated balance sheet of the Borrower as of September 30, 1998 referred
to in Section 5.01(h), except for such immaterial properties and assets as have
been disposed of in the ordinary course of business and except for minor defects
in title that do not interfere with the ability of the Borrower or any of its
Subsidiaries to conduct its business as now conducted. Except as set forth in
the Disclosure Package, the Borrower and its Subsidiaries own or are licensed to
use or otherwise have the right to use (or could obtain such ownership or
licences or rights on terms not materially adverse to the Borrower and its
Subsidiaries, taken as a whole) all of the intellectual property rights that are
reasonably necessary for the operation of their respective businesses. All such
assets and properties are so owned or held free and clear of all Liens, except
Permitted Encumbrances.
(o) Compliance with Laws and Charter Documents.
(i) As a result of the Borrower's performing any of its obligations under
the Credit Documents, neither the Borrower nor any of its Subsidiaries will be
in violation of (a) any law, statute, rule, regulation or order of any
Governmental Authority (including Environmental Laws) applicable to it or its
properties or assets or (b) its certificate of incorporation or bylaws.
(ii) Neither the Borrower nor any of its Subsidiaries is in violation of
(A) any law, statute, rule, regulation or order of any Governmental Authority
(including Environmental Laws) applicable to it or its properties, except for
any violations which could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, or (B) its certificate of
incorporation or bylaws.
(iii) Each of the Borrower and its Subsidiaries has all authorizations,
consents, approvals, registrations, franchises, licenses and permits, with or
from Governmental Authorities and other Persons as are necessary for it to own
its properties and conduct its business as now conducted and the absence of
which could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(p) Environmental Protection. To the Borrower's knowledge, based upon
reasonable investigation, all real property owned or leased by the Borrower or
any of its Subsidiaries is free of contamination from any substance that could
result in the incurrence of material liabilities, or constituent thereof,
currently identified or listed as hazardous or toxic pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
9601, et seq., or any other Environmental Laws, or any other substance which has
in the past or could at any time in the future cause or constitute a health,
safety or environmental hazard to any person or property, including asbestos in
any building, petroleum products, PCBs, pesticides, or radioactive materials. To
the Borrower's knowledge, based upon reasonable investigation, neither the
Borrower nor any of its Subsidiaries has caused or suffered to occur any release
of any Hazardous Substance into the environment or any other conditions that,
individually or in the aggregate, could reasonably be expected to result in the
incurrence of material liabilities or any material violations of any
Environmental Laws. To the Borrower's knowledge, based upon reasonable
investigation, neither the Borrower nor any of its Subsidiaries has caused or
suffered to occur any condition on any of their property that could give rise to
the imposition of any lien under the Environmental Laws. Except as disclosed in
the Disclosure Package, to the Borrower's knowledge, based on reasonable
investigation, neither the Borrower nor any Subsidiary is engaged in any
manufacturing or any other operations, other than the use of petroleum products
for vehicles, that require the use, handling, transportation, storage or
disposal of any Hazardous Substance, where such operations require permits or
are otherwise regulated pursuant to the Environmental Laws.
(q) Insurance. All of the properties and operations of the Borrower and
each of its Subsidiaries of a character usually insured by companies of
established reputation engaged in the same or a similar business similarly
situated are adequately insured, by financially sound and reputable insurers,
against loss or damage of the kinds and in amounts customarily insured against
by such Persons, and the Borrower and each of its Subsidiaries carry, with such
insurers in customary amounts, such other insurance as is usually carried by
companies of established reputation engaged in the same or a similar business
similarly situated.
(r) Adverse Contracts. Except as disclosed in the Disclosure Package,
neither the Borrower nor any of its Subsidiaries is a party to, nor is it or any
of its property subject to or bound by, any agreement or instrument which
restricts its ability to conduct its business, or could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(s) Solvency. The Borrower and each of its Subsidiaries is and, after
giving effect to Loans and the other transactions contemplated hereby, and after
payment of all estimated legal, investment banking, accounting and other fees
related thereto, the Borrower and each of its Subsidiaries will be Solvent.
Neither the Borrower nor any of its Subsidiaries is and, after giving effect to
Loans and the other transactions contemplated hereby, and after payment of all
estimated legal, investment banking, accounting and other fees related thereto,
the Borrower and each of its Subsidiaries will not be insolvent (as defined in
any of Uniform Laws Annotated, Uniform Fraudulent Transfer Act ss. 2 (West
1985); Cal. Civ. Code ss. 3439.02 (West 1997); and Del. Code ▇▇▇. tit. 6, ss.
1302 (1997)).
(t) Disclosure. All information relating to the Borrower or its
Subsidiaries delivered in writing to the Lender in connection with the
negotiation, execution and delivery of this Agreement and the other Credit
Documents, taken together with the information set forth in the Disclosure
Package, is true and complete in all material respects. There is no material
fact of which the Borrower is aware which, individually or in the aggregate,
would reasonably be expected adversely to influence the Lender's credit analysis
relating to the Borrower and its Subsidiaries which has not been disclosed to
the Disclosure Package.
Section V.2 Survival. All representations and warranties made by the
Borrower in this Agreement, and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement, shall
(i) be considered to have been relied upon by the Lender, (ii) survive the
making of Loans regardless of any investigation made by, or on behalf of, the
Lender, and (iii) continue in full force and effect so long as any Loan, or
other amount payable under any Credit Document remains unpaid.
ARTICLE VI
Conditions Precedent
Section VI.1. Conditions to the Availability of the Commitment. The
obligations of the Lender hereunder are subject to, and no Quarterly Loans shall
be made until the earliest time (the "Effective Time") (which shall be no later
than the close of business in The City of New York on the fifth Business Day
following the Closing contemplated by that certain Equity Investment Agreement,
dated as of January 15, 1999, among the Borrower and certain Affiliates of the
Lender) on which each of the following conditions precedent shall have been
either satisfied or waived in writing by the Lender:
(a) This Agreement. The Agreement shall have been duly executed and
delivered by each of the Lender and the Borrower and each of the other Credit
Documents shall have been duly executed and delivered by each of the parties
thereto.
(b) Evidence of Corporate Action. The Lender shall have received the
following:
(i) a copy of the Certificate of Incorporation, of the Borrower, as in
effect on the Effective Date, certified by the Secretary of State of the State
of Delaware, and a certificate from such Secretary of State as to the good
standing of the Borrower, in each case as of a date reasonably close to the
Effective Date; and
(ii) a certificate of the Secretary or an Assistant Secretary of the
Borrower, dated the Effective Date, and stating (A) that attached thereto is a
true and complete copy of the bylaws of the Borrower as in effect on such date
and at all times since the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower authorizing the execution,
delivery and performance of this Agreement, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, (C) that
the certificate of incorporation of the Borrower has not been amended since the
date of the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above, and (D) as to the incumbency and
signature of each officer executing this Agreement or any document delivered in
connection herewith on behalf of the Borrower.
(c) Opinions of Counsel. The Lender shall have received a favorable written
opinion, dated the Effective Date, of Nida & ▇▇▇▇▇▇▇ PC, counsel for the
Borrower, in substantially the form of Exhibit D.
(d) Representations and Warranties. The representations and warranties
contained in Section 5.01 shall be true and correct on the Effective Date, and
the Lender shall have received a certificate, signed by a Responsible Officer of
the Borrower, to that effect.
(e) Other Documents. The Lender shall have received such other
certificates, opinions and other documents as the Lender reasonably may require.
Section VI.2. Conditions to All Quarterly Loans. The obligations of each
Lender to make each Quarterly Loan are subject to the conditions precedent that,
on the date of each Quarterly Loan and after giving effect thereto, each of the
following conditions precedent shall have been satisfied, or waived in writing
by the Lender:
(a) Borrowing Request. The Lender shall have received a Borrowing Request
in accordance with the terms of this Agreement.
(b) Note. The Lender shall have received a duly executed Note in the form
of Exhibit B, dated as of the Borrowing Date and evidencing a Quarterly Loan in
an aggregate principal equal to the Borrowing Amount.
(c) Warrant Certificate. The Borrower shall have duly issued to the Lender
a number of Warrants equal to the Warrant Number in connection with such
Quarterly Loan and shall have duly executed and delivered to the Lender a
Warrant Certificate evidencing such Warrants.
(d) No Default. No Default or Event of Default shall have occurred and be
continuing, nor shall any Default or Event of Default occur as a result of the
making of such Quarterly Loan.
(e) Representations and Warranties; Covenants. The representations and
warranties contained in Section 5.01 shall have been true and correct when made
and (except to the extent that any representation or warranty speaks as of a
date certain) shall be true and correct on the Borrowing Date with the same
effect as though such representations and warranties were made on such Borrowing
Date; and the Borrower shall have complied with all of its covenants and
agreements under the Credit Documents.
Section VI.3. Satisfaction of Conditions Precedent. Each of (i) the
delivery by the Borrower of a Borrowing Request (unless the Borrower notifies
the Lender in writing to the contrary prior to the Borrowing Date) and (ii) the
acceptance of the proceeds of a Quarterly Loan shall be deemed to constitute a
certification by the Borrower that, as of the Borrowing Date, each of the
conditions precedent contained in Sections 6.02(d) and (e) has been satisfied
with respect to any Loans then being made.
ARTICLE VII
Covenants
Section VII.1. Affirmative Covenants. Until satisfaction in full of all the
obligations of the Borrower under the Credit Documents, the Borrower will:
(a) Financial Statements; Compliance Certificates. Furnish to the Lender:
(i) as soon as available, but in no event more than 60 days following the
end of each of the first three quarters of each fiscal year, copies of the
Borrower's Quarterly Report on Form 10-Q being filed with the SEC, which shall
include a consolidated balance sheet and consolidated income statement of the
Borrower and its Subsidiaries for such quarter;
(ii) as soon as available, but in no event more than 100 days following the
end of each fiscal year, a copy of the Borrower's Annual Report on Form 10-K
being filed with the SEC, which shall include the consolidated financial
statements of the Borrower and its Subsidiaries, together with a report thereon
by Ernst & Young LLP (or another firm of independent certified public
accountants reasonably satisfactory to the Lender), for such year;
(iii) together with each report delivered pursuant to Sections 7.01(a)(i)
and (ii), a certificate of the Borrower, signed by a Responsible Officer, in
substantially the form of Exhibit E, stating whether, as of the last date of the
financial statements included in such report, any event has occurred or
circumstance existed which, individually or in the aggregate, constituted a
Default or Event of Default (and, if so, detailing the facts with respect
thereto) and whether the Borrower was in compliance with the covenants set forth
in this Article VII, together with calculations to establish the Borrower's
compliance with the covenants contained in Section 7.03;
(iv) promptly upon the filing by the Borrower with the SEC or any national
securities exchange or national quotation system of any registration statement
(other than a registration statement on Form S-8 or an equivalent form) or
regular periodic report (other than the reports referred to in Sections
7.01(a)(i) and (ii)), notification of such filing; and, at the request of any
Lender, the Borrower shall deliver to such Lender a copy of such filing
(excluding exhibits);
(v) promptly upon the mailing thereof to the shareholders of the Borrower
generally copies of all financial statements, reports and proxy statements so
mailed;
(vi) within five Business Days of any Responsible Officer of the Borrower
obtaining knowledge of any Default or Event of Default of any type specified in
Section 8.01(a), (b), (d), (f), (g), (h) or (l), if such Default or Event of
Default is then continuing, a certificate of a Responsible Officer of the
Borrower stating that such certificate is a "Notice of Default" and setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(vii) within ten Business Days of any Responsible Officer of the Borrower
obtaining knowledge of any Default or Event of Default of any type specified in
Section 8.01(c),(e), (i), (j) or (k), if such Default or Event of Default is
then continuing, a certificate of a Responsible Officer of the Borrower stating
that such certificate is a "Notice of Default" and setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto; and
(viii) such additional information, reports or statements, regarding the
business, financial condition or results of operations of the Borrower and its
Subsidiaries, as the Lender from time to time may reasonably request.
(b) Corporate Existence. Except as permitted by Section 7.02(a), maintain,
and cause each Subsidiary to maintain, its corporate existence in good standing
and qualify and remain qualified to do business in each jurisdiction in which
the character of the properties owned or leased by it therein or in which the
transaction of its business is such that the failure to qualify, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(c) Conduct of Business. Engage in as its principal business the
development of photoselective drugs and light producing and light delivery
medical devices and related or ancillary businesses, including but not limited
to the businesses of the Borrower described in the Disclosure Package; preserve,
renew and keep in full force and effect, and cause each of its Subsidiaries to
preserve, renew and keep in full force and effect, all franchises and licenses
necessary or desirable in the normal conduct of its and its Subsidiaries'
business and the loss of which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and comply, and cause
each of its Subsidiaries to comply, with all applicable laws, orders, rules and
regulations of all Governmental Authorities the failure with which so to comply,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(d) Authorizations. Obtain, make and keep in full force and effect all
authorizations from and registrations with Governmental Authorities required for
the validity or enforceability of the Credit Documents.
(e) Taxes. Pay and discharge, and cause each of its Subsidiaries to pay and
discharge, all taxes, assessments and governmental charges upon it, its income
and its properties prior to the date on which penalties are attached thereto,
except to the extent that (i) such taxes, assessments and governmental charges
shall be contested in good faith and by appropriate proceedings by the Borrower
or such Subsidiary, as the case may be, (ii) unless the amount thereof is not
material to the Borrower's consolidated financial condition, adequate reserves
are maintained (in accordance with GAAP) by the Borrower or such Subsidiary, as
the case may be, with respect thereto, and (iii) any failure to pay and
discharge such taxes, assessments and governmental charges could not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(f) Insurance. Maintain, and cause each of its Subsidiaries to maintain,
insurance with reputable insurance companies against such risks, of such types
(including general liability), on such properties and in such amounts as is
customarily maintained by similar businesses similarly situated, and provide to
the Lender a certificate or certificates of insurance showing that the Lender
has been named as loss payee by endorsement to the policies for such insurance.
(g) Inspection. Permit, and cause each of its Subsidiaries to permit, upon
no fewer than five Business Days' notice, the Lender to have one or more of
their officers and employees, or any other Person designated by the Lender, to
visit and inspect any of the properties of the Borrower and such Subsidiary and
to examine the minute books, books of account and other corporate and financial
records of the Borrower and such Subsidiary, and discuss its affairs, finances
and accounts with its officers and with the Borrower's independent accountants,
during normal business hours and at such other reasonable times, for the purpose
of monitoring the Borrower's compliance with its obligations under agreements to
which the Lender is a party and for no other purpose.
(h) Maintenance of Records. For the Borrower and each of its Subsidiaries
(i) keep proper books of record and account in which entries sufficient to
provide financial statements in accordance with GAAP will be made of all
dealings or transactions of or in relation to its business and affairs; (ii) set
up on its books reserves with respect to all taxes, assessments, charges,
reviews and claims; and (iii) on a current basis, set up on its books, from its
earnings, appropriate reserves against doubtful accounts receivable, advances
and investments and all other proper reserves (including by reason of
enumeration, reserves for premiums, if any, due on required prepayments and
reserves for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its business. (All
determinations pursuant to this Section 7.01(h) shall be made in accordance
with, or as required by, GAAP.)
(i) Maintenance of Property. Maintain, keep and preserve and cause each of
its Subsidiaries to maintain, keep and preserve all of its properties in good
repair, working order and condition and from time to time make all necessary and
proper repairs, renewals, replacements, and improvements thereto, except to the
extent that any failure so to maintain, keep and preserve such properties,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(j) ERISA. Furnish to the Lender:
(i) within ten days after a Responsible Officer learns that any "reportable
event" (as defined in Section 4043(c) of ERISA), other than a reportable event
for which the 30-day notice requirement has been waived by the PBGC, has
occurred with respect to a Pension Plan, a statement setting forth details as to
such reportable event and the action proposed to be taken with respect thereto;
(ii) within ten days after receipt thereof, a copy of any notice that any
member of the ERISA Group may receive from the PBGC relating to the intention of
the PBGC to terminate any Pension Plan or to appoint a trustee to administer any
Plan;
(iii) within ten days after filing with any affected party (as such term is
defined in Section 4001 of ERISA) of a notice of intent to terminate a Pension
Plan, a copy of such notice and a statement setting forth the details of such
termination, including the amount of liability, if any, of any member of the
ERISA Group under Title IV of ERISA;
(iv) within ten days after the adoption of a material amendment to a
Pension Plan if, after giving effect to such amendment, the Pension Plan is a
plan described in Section 4021(b) of ERISA, a statement setting forth the
details thereof;
(v) within 30 days after withdrawal from a Pension Plan during a plan year
for which any member of the ERISA Group could be subject to liability under
Section 4063 or 4064 of ERISA, a statement setting forth the details thereof,
including the amount of such liability;
(vi) within 30 days after cessation of operations by any member of the
ERISA Group at a facility under the circumstances described in Section 4062(e)
of ERISA, a statement setting forth the details thereof, including the amount of
liability of the Borrower or a member of the ERISA Group under Title IV of
ERISA;
(vii) within ten days after adoption of an amendment to a Pension Plan
which would require security to be given to the Pension Plan pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA, a statement setting forth the
details thereof, including the amount of such security;
(viii) within ten days after failure by any member of the ERISA Group to
make payment to a Pension Plan which would give rise to a lien in favor of the
Plan under Section 302(f) of ERISA, a statement setting forth the details
thereof, including the amount of such lien;
(ix) within ten days after the due date for filing with the PBGC, pursuant
to Section 412(n) of the Code, of a notice of failure to make a required
installment or other payment with respect to a Pension Plan, a statement setting
forth details as to such failure and the action proposed to be taken with
respect thereto; and
(x) within 30 days after receipt thereof by any member of the ERISA Group
from the sponsor of a Multiemployer Plan, a copy of each notice concerning the
imposition of withdrawal liability or the termination or reorganization of a
Multiemployer Plan.
(k) Notice of Defaults and Adverse Developments. Promptly notify the Lender
upon the discovery by any Responsible Officer of the occurrence of (i) any
Default or Event of Default; (ii) any event, development or circumstance whereby
the financial statements most recently furnished to the Lender fail to present
fairly, in all material respects, and in accordance with GAAP, the financial
condition and operating results of the Borrower and its Subsidiaries as of the
date of such financial statements; (iii) any material litigation or proceedings
that are instituted or threatened (to the knowledge of the Borrower) against the
Borrower or any of its Subsidiaries or any of their respective assets; (iv) any
event, development or circumstance which, individually or in the aggregate,
could reasonably be expected to result in an event or default (or, with the
giving of notice or lapse of time or both, an event of default) under any
Indebtedness and the amount hereof; and (v) any other development in the
business or affairs of the Borrower or any of its Subsidiaries if the effect
thereof would reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect; in each case describing the nature thereof and the
action the Borrower proposes to take with respect thereto.
(l) Environmental Matters. (i) Comply, and cause each of its Subsidiaries
to comply, in all material respects with all applicable Environmental Laws, (ii)
notify the Lender promptly after becoming aware of any Environmental Claim, or
any fact or circumstance that is reasonably likely to result in an Environmental
Claim or a material violation of any Environmental Law, with respect to the
Borrower's or any of its Subsidiaries' properties or facilities, and (iii)
promptly forward to the Lender a copy of any material order, notice, permit,
application, or any other communication or report received in connection with
any such matters as they may affect such premises.
Section VII.2. Negative Covenants. Until satisfaction in full of all the
obligations of the Borrower under the Credit Documents, the Borrower will not:
(a) Mergers, Consolidations and Sales of Assets. Enter into any merger,
consolidation or share exchange, or acquire assets of any Person, or sell, lease
or otherwise dispose of any of its assets, or permit any of its Subsidiaries so
to do, except that (i) any such Subsidiary may merge or consolidate (A) with or
into the Borrower, if the Borrower shall be the continuing or surviving
corporation, or (B) with or into any one or more Wholly Owned Subsidiary of the
Borrower,(ii) the Borrower or any Subsidiary of the Borrower may make any Asset
Disposition to the extent permitted by Section 7.02(n) and (iii) the Borrower or
any Subsidiary of the Borrower may acquire assets for cash consideration which,
together with all other cash consideration paid by the Borrower or any
Subsidiary for assets on or following the date of this Agreement, does not
exceed *****, and may acquire assets in exchange for shares of Common Stock
having a market value at the time of issuance which, together with the market
value at time of issuance of all other shares of Common Stock issued by the
Borrower in consideration for or in connection with the acquisition of assets on
or following the date of this Agreement, does not exceed *****; provided that
the amount of Indebtedness assumed or incurred by the Borrower or any Subsidiary
of the Borrower in connection with the acquisition of assets on or following the
date of this Agreement pursuant to this Section 7.02(a)(iii) may not exceed
****** of the sum of the cash consideration paid, and the market value at time
of issuance of Common Stock issued, in consideration therefor or in connection
therewith.
*****Confidential Treatment Requested
(b) Liens. Create, incur, assume or suffer to exist any Lien, other than
Permitted Liens, upon or in any of its or any of its Subsidiaries' property or
assets, whether now owned or hereafter acquired.
(c) Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, or permit any of its Subsidiaries so to do, except:
(i) Indebtedness to the Lender under the Credit Documents,
(ii) Indebtedness of the Borrower or any of its Subsidiaries secured by
Liens specifically permitted by Section 7.02(b),
(iii) Guaranties to the extent permitted by Section 7.02(d),
(iv) Indebtedness existing on the date hereof,
(v) Indebtedness of Borrower to any Subsidiary, and Indebtedness of any
Subsidiary to Borrower or any other Subsidiary, and
(vi) Extension, refinancings, modifications, amendments and restatements of
any of items of Permitted Indebtedness (i) through (v) above, provided that the
principal amount thereof is not increased.
(d) Contingent Liabilities. Assume, Guaranty, endorse, contingently agree
to purchase or otherwise become liable upon the obligation of any other Person,
or permit any of its Subsidiaries to do so, except:
(i) in connection with a merger or consolidation permitted by Section
7.02(a),
(ii) by the endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business,
(iii) Guaranties by the Borrower of contractual obligations (other than for
the payment of Indebtedness) of any of its Wholly Owned Subsidiaries, and
(iv) Guaranties existing on the date hereof, but not extensions thereof.
(e) Loans and Investments. Make any Investment or permit any of its
Subsidiaries to do so, except:
(i) Investments existing on the date hereof,
(ii) Investments consisting of the endorsement of negotiable instrument for
deposit or collection or similar transaction in the ordinary course of business,
(iii) Investments accepted in connection with asset dispositions permitted
by Section 7.02(n),
(iv) Investments of the Borrower in or to Subsidiaries of the Borrower or
of Subsidiaries of the Borrower in or to other Subsidiaries of the Borrower or
in or to the Borrower,
(v) Investments consisting of travel advances, employee relocation loans
and other employee loans and advances in the ordinary course of business,
(vi) Investments consisting of loans to employees, officers or directors of
the Borrower or its Subsidiaries outstanding on the date of this Agreement and
not exceeding an aggregate principal balance of *****, relating to the purchase
or equity securities of the Borrower or its Subsidiaries pursuant to employee
stock purchase plans approved by the Borrower's Board of Directors,
*****Confidential Treatment Requested
(vii) Investments consisting of loans to employees, officers or directors
of the Borrower and its Subsidiaries made on or subsequent to the date of this
Agreement and not exceeding an aggregate principal balance of ***** at any time
outstanding,
*****Confidential Treatment Requested
(viii) Investments in the form of debt securities or other evidence of
Indebtedness of Ramus Medical Technologies acquired or received on or subsequent
to the date of this Agreement pursuant to agreements or instruments in effect on
the date of this Agreement and having an aggregate principal amount not
exceeding *****,
*****Confidential Treatment Requested
(ix) *****
*****Confidential Treatment Requested
(x) Investments (including debt obligations) received in connection with
the bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of business,
(xi) Investments pursuant to or arising under currency agreements or
interest rate agreements entered into in the ordinary course of business,
(xii) Investments consisting of notes receivable of, or prepaid royalties
and other credit extensions, to customers and suppliers made or received in the
ordinary course of business, and
(xiii) Investments in the form of deposit accounts and marketable
securities made pursuant to the cash management policy adopted by the Borrower's
Board of Directors and furnished to the Lender prior to the date of this
Agreement.
(f) Capital Expenditures. Make any Capital Expenditures, or permit any of
its Subsidiaries to do so, exceeding ***** in the aggregate for the Borrower and
the Subsidiaries in any one calendar year; provided that following the earliest
to occur of (i) *****
*****Confidential Treatment Requested
(g) Redemptions, etc. Redeem, defease (including but not limited to legal
or covenant defeasance), repurchase, retire or otherwise acquire or retire for
value prior to any scheduled maturity, repayment or sinking fund payment,
Indebtedness, other than Indebtedness to the Lender under the Credit Documents,
or permit any of its Subsidiaries to do so.
(h) Dividends and Purchase of Stock. Declare any dividends (other than
dividends payable in capital stock of the Borrower) on any shares of any class
of capital stock, or purchase, acquire, redeem or retire, or apply any property
or assets to the purchase, acquisition, redemption or retirement of, or set
apart any sum for the payment of any dividends on, or for the purchase,
acquisition, redemption or retirement of, or make any other distribution by
reduction of capital or otherwise in respect of, any shares of any class of
capital stock of the Borrower or any of its Subsidiaries or any options,
warrants or rights to purchase or acquire shares of any class of capital stock
of the Borrower or any such Subsidiary, or permit any of its Subsidiaries which
is not a Wholly Owned Subsidiary to do so, except that
(i) the Borrower may purchase, redeem or otherwise acquire shares of Common
Stock pursuant to any agreement existing on the date hereof between it, or any
Subsidiary of the Borrower, and any officer, director, employee or consultant to
the Borrower or any of its Subsidiaries, in which the Borrower is obligated or
has the option to repurchase from such officer, director, employee or consultant
shares of Common Stock upon such Person's termination of employment or the
services with the Borrower or any such Subsidiary,
(ii) the Borrower may convert, exchange or redeem any Indebtedness
outstanding on the date hereof which by its terms is convertible or exchangeable
or constitutes the right to purchase any shares of any class of capital stock of
the Borrower,
(iii) *****
*****Confidential Treatment Requested
(iv) *****
*****Confidential Treatment Requested
(i) Stock of Subsidiaries. Sell, pledge or otherwise dispose of any shares
of capital stock of any of its Subsidiaries (except in connection with a merger
or consolidation of a Wholly Owned Subsidiary of the Borrower permitted by
Section 7.02(a) or with the dissolution of any Subsidiary of the Borrower) or
permit any of its Subsidiaries to issue any additional shares of capital stock
except pro rata to its stockholders.
(j) Distributions by Subsidiaries. Suffer to exist, or permit any of its
Subsidiaries to suffer to exist, any consensual encumbrance or restriction on
the ability of any such Subsidiary (i) to pay, directly or indirectly, dividends
or make any other distributions in respect of its capital stock or pay any
Indebtedness or other obligation owed to the Borrower or any other Subsidiary of
the Borrower; (ii) to make loans or advances to the Borrower or any Subsidiary
of the Borrower; or (iii) to transfer any of its property or assets to the
Borrower.
(k) Related Agreements. Amend, modify or waive, or permit to be amended,
modified or waived, any provision of the Key Agreements unless, within not less
than 30 days prior to such amendment, modification or waiver, the Borrower shall
have given the Lender notice thereof, including all relevant terms and
conditions thereof, and the Lender shall have consented in writing thereto.
(l) Sale and Leaseback Transactions. Enter into, or permit any of its
Subsidiaries to enter into, any Sale and Leaseback Transaction.
(m) Transactions with Affiliates and Related Persons. Directly or
indirectly enter into, or permit any of its Subsidiaries to directly or
indirectly enter into, on or following the date hereof, any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property, the rendering of any service or the making of any loan or advance, but
excluding transactions between the Borrower and Wholly Owned Subsidiaries of the
Borrower) with any Affiliate or Related Person of the Borrower or any of its
Subsidiaries.
(n) Asset Dispositions. Make any Asset Disposition, or permit any of its
Subsidiaries to make any Asset Disposition, in one or more related transactions,
unless
(i) the Borrower (or such Subsidiary, as the case may be) receives
consideration at the time of such disposition at least equal to the fair market
value of the shares or assets disposed of (which shall be as determined in good
faith by the Board of Directors and evidenced by a resolution adopted thereby),
(ii) the consideration for such disposition consists of cash or readily
marketable cash equivalents or the assumption of Indebtedness of the Borrower or
other obligations relating to such assets and release from all liability on the
Indebtedness or other obligations assumed, and
(iii) ***** of the Net Available Asset Disposition Proceeds from such
disposition (including from the sale of any marketable cash equivalents received
therein) are applied by the Borrower (or such Subsidiary, as the case may be),
within 48 hours of the receipt thereof, to prepayment of Loans pursuant to
Section 2.04.
*****Confidential Treatment Requested
(o) Securities Offerings. Sell or offer to sell any securities, or permit
any of its Subsidiaries to offer or sell any securities, in one or more related
transactions, unless
(i) the consideration for such disposition consists of cash, and
(ii) ***** of the Net Available Securities Offering Proceeds from such
offering or sale are applied by the Borrower (or such Subsidiary, as the case
may be), within 48 hours of the receipt thereof, to prepayment of Loans pursuant
to Section 2.04.
*****Confidential Treatment Requested
(p) Surplus Cashflows. Fail to apply to the prepayment of Loans pursuant to
Section 2.04 at least ***** of the amount (the "Surplus") by which EBITDA in any
calendar quarter exceeds *****.
*****Confidential Treatment Requested
Section VII.3 Financial Covenants. Until satisfaction in full of all the
obligations of the Borrower under the Credit Documents, the Borrower will not:
(a) Shareholders' Equity. Permit Shareholders' Equity as of the last day of
any calendar quarter designated below to be less than the amount set forth
opposite such quarter below.
Calendar quarter ending Shareholders' Equity
March 31, 1999 *****
June 30, 1999 *****
September 30, 1999 *****
December 31, 1999 *****
March 31, 2000 *****
June 30, 2000 *****
Each calendar quarter
ending after June 30, 2000 *****
*****Confidential Treatment Requested
(b) Current Ratio. Permit the ratio of Current Assets to Current
Liabilities to be less than ***** at any time.
*****Confidential Treatment Requested
(c) *****
(d) *****
*****Confidential Treatment Requested
ARTICLE VIII
Events of Default
Section VIII.1. Events of Default. If one or more of the following events
(each, an "Event of Default") shall occur:
(a) the Borrower shall fail duly to pay any principal of any Loan when due,
whether at maturity, by notice of intention to prepay or otherwise; or
(b) the Borrower shall fail duly to pay any interest, fee or any other
amount payable under the Credit Documents within five Business Days after the
same shall be due, in the manner set forth in this Agreement; or
(c) the Borrower shall fail duly to observe or perform any term, covenant,
or agreement contained in Section 7.02 or 7.03; or
(d) the Borrower shall fail duly to observe or perform any other term,
covenant or agreement contained in this Agreement, and such failure shall have
continued unremedied for a period of 30 days following written notice to the
Borrower thereof; or
(e) any representation or warranty made or deemed made by the Borrower in a
Credit Document, or any statement or representation made in any certificate,
report or opinion delivered by or on behalf of the Borrower in connection with a
Credit Document, shall prove to have been false or misleading in any material
respect when so made or deemed made; or
(f) the Borrower or any of its Subsidiary shall fail to pay any
Indebtedness (other than obligations hereunder) in an amount of ***** or more
when due; or any such Indebtedness having an aggregate principal amount
outstanding of ***** or more shall become or be declared to be due prior to the
expressed maturity thereof; or
*****Confidential Treatment Requested
(g) an involuntary case or other proceeding shall be commenced against the
Borrower or any of its Subsidiaries seeking liquidation, reorganization or other
relief with respect to it or its debts under any applicable bankruptcy,
insolvency, reorganization or similar law or seeking the appointment of a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
more than 60 days; or an order or decree approving or ordering any of the
foregoing shall be entered and continued unstayed and in effect; or
(h) the Borrower or any of its Subsidiaries shall commence a voluntary case
or proceeding under any applicable bankruptcy, insolvency, reorganization or
similar law or any other case or proceeding to be adjudicated a bankrupt or
insolvent, or any of them shall consent to the entry of a decree or order for
relief in respect of the Borrower or any such Subsidiary in an involuntary case
or proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against any of them, or any of them shall file a petition or answer
or consent seeking reorganization or relief under any applicable law, or any of
them shall consent to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Borrower or any such Subsidiary or any
substantial part of their respective property, or any of them shall make an
assignment for the benefit of creditors, or any of them shall admit in writing
its inability to pay its debts generally as they become due, or the Borrower or
any Subsidiary shall take corporate action in furtherance of any such action; or
(i) one or more judgments against the Borrower or any of its Subsidiaries
or attachments against its property, which in the aggregate exceed *****, or the
operation or result of which could be to interfere materially and adversely with
the conduct of the business of the Borrower or any such Subsidiary remain
unpaid, unstayed on appeal, undischarged, unbonded, or undismissed for a period
of more than 30 days; or
*****Confidential Treatment Requested
(j) notice of intent to terminate a Pension Plan shall have been filed with
any affected party (as defined in Section 4001 of ERISA), or notice of an
application by the PBGC to institute proceedings to terminate a Pension Plan
pursuant to Section 4042 of ERISA shall have been received by any member of the
ERISA Group, in each case only if the amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA) as of the date such notice is filed or
received exceeds $500,000; any member of the ERISA Group incurs liability under
Sections 4062(e), 4063 or 4064 of ERISA in respect of a Pension Plan in an
amount in excess of $1,000,000; an amendment is adopted to a Pension Plan which
would require security to be given to such Pension Plan pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA in an amount in excess of
$1,000,000; any member of the ERISA Group fails to make a payment to a Pension
Plan which would give rise to a Lien in favor of such Plan under Section 302(f)
of ERISA in an amount in excess of $500,000; or
(k) any court or governmental or regulatory authority shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which prohibits, enjoins or otherwise
restricts, in a manner that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, any of the transactions
contemplated under the Credit Documents; or
(l) any person or group of persons (within the meaning of Section 13 or 14
of the Securities Exchange Act of 1934, as amended), other than the Lender and
its Affiliates and other than any person or group of persons which has
beneficial ownership of 5% or more of the outstanding shares of Common Stock as
of the date of this Agreement, shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of 19.9% or more of the outstanding shares of Common Stock; or,
during any period of 24 consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of the Borrower; then, and at
any time during the continuance of such Event of Default, the Lender may, by
written notice to the Borrower declare any Loans then outstanding to be due,
whereupon the principal of the Loans so declared to be due, together with
accrued interest thereon and any unpaid amounts accrued under the Credit
Documents, shall become forthwith due, without presentment, demand, protest or
any other notice of any kind (all of which are hereby expressly waived by the
Borrower).
Section VIII.2. Assignments. (a) Upon reasonable prior notice having been
given to the Borrower, the Lender may at any time assign to one or more of The
Pharmacia & Upjohn Company, Pharmacia & Upjohn B.V., Pharmacia & Upjohn AB or
Pharmacia & Upjohn S.p.A. (any such entity, an "Approved Subsidiary") all, or a
proportionate part of all, of its rights and obligations under this Agreement,
and such Approved Subsidiary shall assume such rights and obligations, pursuant
to a written instrument executed by such Approved Subsidiary and the Lender. If
there shall have occurred an Event of Default that is continuing, the Lender may
assign to any Person, other than a Person which engages in, as its principal
business or one of its principal businesses, the development of photoselective
drugs or light producing and light delivery medical devices (any such assignee,
or any Approved Subsidiary referred to in the previous sentence being referred
to as an "Assignee"), all, or a proportionate part of all, of its rights and
obligations under this Agreement, and such Assignee shall assume such rights and
obligations, pursuant to a written instrument executed by such Assignee and the
Lender. Any such Assignee shall have all the rights and obligations of the
Lender, and the Lender shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required.
(b) No Assignee of the Lender's rights shall be entitled to receive any
greater payment under Section 4.03 or 4.04 than the Lender would have been
entitled to receive with respect to the rights transferred, and amounts payable
under this Agreement shall not be increased in respect of any Taxes required to
be withheld or deducted solely as a consequence of the Lender's status as a
nonresident alien, as such term is defined in the Code.
Section VIII.3. Certain Pledges. Notwithstanding any other provision in
this Agreement, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under this Agreement and any Note held
by it in favor of any Person.
ARTICLE IX
Miscellaneous
SECTION IX.1. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
SECTION IX.2. WAIVER OF JURY. THE BORROWER AND THE LENDER EACH HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE NOTES OR
THE RELATIONSHIPS ESTABLISHED HEREUNDER.
Section IX.3. Jurisdiction and Venue; Service of Process. (a) The Borrower
and the Lender each hereby irrevocably submits to the non-exclusive jurisdiction
of any state or federal court in the Borough of Manhattan, The City of New York
for the purpose of any suit, action, proceeding or judgment relating to or
arising out of any Credit Document and to the laying of venue in the Borough of
Manhattan, The City of New York. The Borrower and the Lender each hereby
irrevocably waives, to the fullest extent permitted by applicable law, any
objection to the laying of the venue of any such suit, action or proceeding
brought in the aforesaid courts and hereby irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
(b) The Borrower agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.07 or at such other address of
which the Lender shall have been notified pursuant thereto. The Borrower further
agrees that nothing herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to ▇▇▇ any other
jurisdiction.
(c) Each of the Borrower and the Lender waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal action
or proceeding referred to in this Section 9.03 any special, exemplary, punitive
or consequential damages. The waiver set forth in this Section 9.03(c) shall
terminate automatically upon the occurrence of a "Separation Event" as defined
in that certain stockholder rights protection plan of Pharmacia & Upjohn, Inc.
in effect on the date of this Agreement, as it may from time to time be amended.
Section IX.4. Set-off. The Borrower hereby authorizes the Lender and each
of its Affiliates, upon the occurrence of an Event of Default and at any time
and from time to time during the continuance thereof, to the fullest extent
permitted by law, to set-off and apply any and all sums payable by such Lender
or any such Affiliate to or for the credit or the account of the Borrower or any
of its Affiliates against any of the obligations of the Borrower or any of its
Affiliates, now or hereafter existing under any Credit Document, irrespective of
whether the Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of the Lender and its Affiliates
under this Section 9.04 are in addition to other rights and remedies (including
other rights of set-off) which the Lender and its Affiliates may have.
Section IX.5. Amendments and Waivers. (a) Any provision of this Agreement
may be amended, modified, supplemented or waived, but only by a written
amendment or supplement, or written waiver, signed by the Borrower and the
Lender.
(b) Except to the extent expressly set forth therein, any waiver shall be
effective only in the specific instance and for the specific purpose for which
such waiver is given.
Section IX.6. Cumulative Rights; No Waiver. Each and every right granted to
the Lender hereunder or under any other document delivered in connection
herewith, or allowed the Lender by law or equity, shall be cumulative and not
exclusive and may be exercised from time to time. No failure on the part of the
Lender to exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by the Lender of any
right preclude any other or future exercise thereof or the exercise of any other
right.
Section IX.7. Notices. (a) Any communication, demand or notice to be given
hereunder will be duly given when delivered in writing or by telecopy to a party
at its address as indicated below or such other address as such party may
specify in a notice to each other party hereto. A communication, demand or
notice given pursuant to this Section 9.07 shall be addressed:
If to the Borrower, to
Miravant Medical Technologies
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with copies (which, in and of themselves, shall not constitute notice) to
Nida & ▇▇▇▇▇▇▇ PC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
If to the Lender, to
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer
and
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:Senior Vice President of Business Development
and
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy (which, in and of itself, shall not constitute notice) to
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
This Section 9.07 shall not apply to notices referred to in Article II of
this Agreement, except to the extent set forth therein.
(b) Unless otherwise provided to the contrary herein, any notice which is
required to be given in writing pursuant to the terms of this Agreement may be
given by telecopy.
Section IX.8. Certain Acknowledgments. The Borrower hereby confirms and
acknowledges that the Lender does not have any fiduciary or similar relationship
to the Borrower and that the relationship established by the Credit Documents
between the Lender and the Borrower is solely that of creditor and debtor and
(b) that no joint venture exists between the Borrower and the Lender.
Section IX.9. Separability. In case any one or more of the provisions
contained in any Credit Document shall be invalid, illegal or unenforceable in
any respect under any law, the validity, legality and enforceability of the
remaining provisions contained herein or in any other Credit Document shall not
in any way be affected or impaired thereby.
Section IX.10. Parties in Interest. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Lender and their respective
successors and assigns, except that the Borrower may not assign any of its
rights hereunder without the prior written consent of the Lender, and any
purported assignment by the Borrower without such consent shall be void.
Section IX.11. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all the counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
MIRAVANT MEDICAL TECHNOLOGIES
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Subsidiaries of the Borrower
Exhibit A
Form of Borrowing Request
[Date]*
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Borrowing Request
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of o, 1999 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), between
Miravant Medical Technologies and o. Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Credit Agreement.
The Borrower hereby gives you notice, pursuant to Section 2.02(a) of the
Credit Agreement, that it requests a Quarterly Loan in a principal amount equal
to the Borrowing Amount set forth below, to be made on the Borrowing Date set
forth below.
Borrowing Date:** _________, ____
Borrowing Amount:*** $___________
A-4
Warrant Number:**** ___________
A duly executed Note in the form of Exhibit B to the Credit Agreement,
dated as of the Borrowing Date set forth above and evidencing a Quarterly Loan
in a principal amount equal to the Borrowing Amount set forth above, is
enclosed.
A duly executed Warrant Certificate evidencing a number of Warrants equal
to the Warrant Number is enclosed. The Exercise Price for each such Warrant is
$______, and the closing bid prices for the 10 Trading Days preceding this bid
request and a calculation of the Exercise Price are set out below. The Exercise
Price is the sum of [A] plus [B].
Trading Day Closing Bid Price
1. $
2.
3.
4.
5.
6.
7.
8.
9.
10.
Total ____________________
/ 10 ____________________ [A]
x 0.40 ____________________ [B]
[A]+[B] ____________________
Very truly yours,
MIRAVANT MEDICAL TECHNOLOGIES
By:
Name:
Title:
Form of Note
PROMISSORY NOTE
$[Principal Amount] [Date]
MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the
"Borrower"), for value received, promises to pay to the order of o (the
"Lender"), on [MATURITY DATE], the principal sum of $[PRINCIPAL AMOUNT] pursuant
to and in the manner contemplated by that certain Credit Agreement, dated as of
o, 1999 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), between the Borrower and the Lender.
The Borrower also promises to pay interest on the unpaid
principal amount hereof from time to time outstanding, from the date hereof
until the date of repayment, at the rate or rates per annum and on the date or
dates determined pursuant to the Credit Agreement.
Payments of both principal and interest are to be made in
lawful money of the United States of America in funds immediately available to
the Lender at its office or offices designated in accordance with the Credit
Agreement, or, if and only if specifically permitted by Section 2.01(b) of the
Credit Agreement, in the manner set forth in such Section 2.01(b).
All parties hereto, whether as makers, endorsers, or
otherwise, severally waive diligence, presentment, demand, protest and notice of
any kind whatsoever. The failure or forbearance by the holder to exercise any of
its rights hereunder in any particular instance shall in no event constitute a
waiver thereof.
The Credit Agreement, among other things, contains provisions
for the acceleration of the maturity hereof upon the happening of certain events
and for the amendment or waiver of certain provisions of the Credit Agreement
and/or this Note, all upon the terms and conditions therein specified.
Capitalized terms used and not otherwise defined herein have the meanings
ascribed thereto in the Credit Agreement.
THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
B-[PG NUMBER]
This Note is not negotiable and may be assigned only upon the
terms and conditions specified in the Credit Agreement.
MIRAVANT MEDICAL TECHNOLOGIES
By:
Name:
Title:
Exhibit C
Form of Opinion of Counsel for the Borrower
to be Delivered Upon Payment of Shares
[TO COME]
Form of Opinion of Counsel for the
Borrower to be Delivered at the Effective Time
[Effective Date]
Pharmacia & Upjohn, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with the execution and delivery today of the
Credit Agreement, dated as of o, 1999 (the "Credit Agreement"), between Miravant
Medical Technologies, Inc., a Delaware corporation (the "Borrower"), and o, a
Swedish corporation (the "Lender"), the Security Agreement, dated as of o, 1999
(the "Security Agreement"), among the Borrower, as debtor, and the Lender, as
Secured Party, and [add references to other Credit Documents] (collectively with
the Credit Agreement and the Security Agreement, the "Credit Documents"), we, as
counsel for the Borrower, have examined such corporate records, certificates and
other documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion. Upon the basis of such
examination, it is our opinion that:
(1) The Borrower has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware.
(2) Each of the Credit Documents has been duly authorized,
executed and delivered, and, if and when duly executed and delivered in
accordance with the terms of the Credit Agreement, any Notes will be
duly authorized, executed and delivered by the Borrower; and each of
the Credit Documents (other than any Notes) constitutes, and each Note
(if and when duly executed and delivered in accordance with the terms
of the Credit Agreement) will constitute, the valid and legally binding
obligation of the Borrower enforceable in accordance with its
respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
D-[PG NUMBER]
(3) [Opinion on the Warrants and Exercise Shares]
(4) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Borrower under the
Federal laws of the United States and the laws of the State of New York
for the borrowing by the Borrower from the Lender under the Credit
Agreement, the execution and delivery of each of the Credit Documents
to the Lender and the performance by the Company of its obligations
thereunder have been obtained or made; provided, however, that, insofar
as performance by the Borrower of its obligations under each of the
Credit Documents is concerned, we express no opinion as to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights or as to general equity principles.
(5) The Borrower is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940.
For purposes of this letter, terms defined in the Credit
Agreement have the meanings set forth therein.
The foregoing opinion is limited to the Federal laws of the
United States and the laws of the State of New York, and we are expressing no
opinion as to the effect of the laws of any other jurisdiction.
With your approval, we have relied as to certain matters on
information obtained from public officials, officers of the Borrower and other
sources believed by us to be responsible, and we have assumed that each of the
Credit Documents has been duly authorized, executed and delivered by the parties
thereto other than the Borrower and its Affiliates, and that the signatures on
all documents examined by us are genuine, assumptions which we have not
independently verified.
This letter is delivered by us as counsel for the Borrower to
you, and is solely for your benefit.
Very truly yours,
NIDA & ▇▇▇▇▇▇▇ PC
Form of Compliance Certificate
COMPLIANCE CERTIFICATE
[For the Fiscal Quarter ending ________]
[For the Fiscal Year ending ________]
Reference is made to the Credit Agreement, dated as of o, 1999
(as amended, modified or supplemented from time to time, the "Credit
Agreement"), between Miravant Medical Technologies (the "Borrower") and o.
Pursuant to Section 7.01(a)(iii) of the Credit Agreement, the undersigned
Responsible Officer of the Borrower hereby certifies on behalf of the Borrower
that:
(a) During the period of four consecutive fiscal quarters
ended on ____________, __, such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as follows: [Specify with particularity].
The financial statements referred to in Section 7.01(a) of the
Credit Agreement which are delivered concurrently with the delivery of this
Compliance Certificate fairly present the financial position, results of
operations, cash flows and changes in shareholders' equity of the Borrower and
its Subsidiaries, subject to normal year-end audit adjustments which are not
expected to be material in amount.*
(b) The covenant calculations set forth below are based on the
Borrower's [audited] balance sheet and statements of earnings, cash flows and
shareholders' equity for the fiscal [quarter] [year] ended ___________, ____
(the "Period-End Date").
[Insert calculations demonstrating compliance with Section 7.03 of the Credit
Agreement]
IN WITNESS WHEREOF, on behalf of the Borrower, the undersigned has
hereto set his or her hand.
Dated:_________, ___
MIRAVANT MEDICAL TECHNOLOGIES
By: _______________________________
A Responsible Officer
CREDIT AGREEMENT
dated as of
o, 1999
between
MIRAVANT MEDICAL TECHNOLOGIES
and
o
-vii-
TABLE OF CONTENTS
ARTICLE IDefinitions
Section 1.01. Definitions........................................................................................1
(a) Terms Generally.................................................................................1
(b) Accounting Terms................................................................................2
(c) Other Terms.....................................................................................2
ARTICLE IIThe Credit Facility
Section 2.01. Loans.............................................................................................15
Section 2.02. Borrowing Procedure...............................................................................16
Section 2.03. Repayment.........................................................................................16
Section 2.04. Prepayment........................................................................................17
ARTICLE IIIInterest
Section 3.01. Interest on Loans.................................................................................18
Section 3.02. Interest on Overdue Amounts.......................................................................19
Section 3.03. Day Counts........................................................................................19
Section 3.04. Maximum Interest Rate.............................................................................19
ARTICLE IVDisbursement and Payment
Section 4.01. Method and Time of Payments.......................................................................20
---------------------------
Section 4.02. Compensation for Losses...........................................................................20
-----------------------
Section 4.03. Withholding.......................................................................................21
-----------
Section 4.04. Expenses; Indemnity...............................................................................21
-------------------
Section 4.05. Survival..........................................................................................22
--------
ARTICLE VRepresentations and Warranties
Section 5.01. Representations and Warranties....................................................................23
------------------------------
(a) Subsidiaries...................................................................................23
------------
(b) Good Standing and Power........................................................................23
-----------------------
(c) Corporate Authority............................................................................23
-------------------
(d) Authorizations.................................................................................23
--------------
(e) Binding Obligation.............................................................................23
------------------
(f) Litigation.....................................................................................24
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(g) No Conflicts...................................................................................24
------------
(h) Financial Condition............................................................................24
-------------------
(i) Taxes..........................................................................................25
-----
(j) Use of Proceeds................................................................................25
---------------
(k) Margin Regulations.............................................................................25
------------------
(l) Compliance with ERISA..........................................................................25
---------------------
(m) Not an Investment Company......................................................................26
-------------------------
(n) Properties.....................................................................................26
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(o) Compliance with Laws and Charter Documents.....................................................26
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(p) Environmental Protection.......................................................................27
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(q) Insurance......................................................................................28
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(r) Adverse Contracts..............................................................................28
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(s) Solvency.......................................................................................28
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(t) Disclosure.....................................................................................28
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Section 5.02 Survival...........................................................................................29
ARTICLE VIConditions Precedent
Section 6.01. Conditions to the Availability of the
Commitment............................................................................29
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(a) This Agreement.................................................................................29
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(b) Evidence of Corporate Action...................................................................29
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(c) Opinions of Counsel............................................................................30
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(d) Representations and Warranties.................................................................30
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(e) Other Documents................................................................................30
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Section 6.02. Conditions to All Quarterly Loans.................................................................30
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(a) Borrowing Request..............................................................................30
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(b) Note...........................................................................................30
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(c) Warrant Certificate............................................................................30
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(d) No Default.....................................................................................31
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(e) Representations and Warranties; Covenants......................................................31
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Section 6.03. Satisfaction of Conditions Precedent..............................................................31
ARTICLE VIICovenants
Section 7.01. Affirmative Covenants.............................................................................31
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(a) Financial Statements; Compliance Certificates..................................................31
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(b) Corporate Existence............................................................................33
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(c) Conduct of Business............................................................................33
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(d) Authorizations.................................................................................33
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(e) Taxes..........................................................................................34
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(f) Insurance......................................................................................34
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(g) Inspection.....................................................................................34
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(h) Maintenance of Records.........................................................................34
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(i) Maintenance of Property........................................................................35
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(j) ERISA..........................................................................................35
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(k) Notice of Defaults and Adverse Developments....................................................36
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(l) Environmental Matters..........................................................................37
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Section 7.02. Negative Covenants................................................................................37
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(a) Mergers, Consolidations and Sales of Assets....................................................37
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(b) Liens..........................................................................................38
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(c) Indebtedness...................................................................................38
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(d) Contingent Liabilities.........................................................................38
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(e) Loans and Investments..........................................................................39
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(f) Capital Expenditures...........................................................................40
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(g) Redemptions, etc...............................................................................41
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(h) Dividends and Purchase of Stock................................................................41
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(i) Stock of Subsidiaries..........................................................................42
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(j) Distributions by Subsidiaries..................................................................42
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(k) Related Agreements.............................................................................42
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(l) Sale and Leaseback Transactions................................................................43
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(m) Transactions with Affiliates and Related Persons...............................................43
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(n) Asset Dispositions.............................................................................43
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(o) Securities Offerings...........................................................................43
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(p) Surplus Cashflows..............................................................................44
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Section 7.03 Financial Covenants................................................................................44
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(a) Shareholders' Equity...........................................................................44
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(b) Current Ratio..................................................................................44
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(c) Minimum Operating Income.......................................................................44
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(d) Ophthalmology Expense..........................................................................44
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ARTICLE VIIIEvents of Default
Section 8.01. Events of Default.................................................................................45
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(a) ...............................................................................................45
(b) ...............................................................................................45
(c) ...............................................................................................45
(d) ...............................................................................................45
(e) ...............................................................................................45
(f) ...............................................................................................45
(g) ...............................................................................................45
(h) ...............................................................................................46
(i) ...............................................................................................46
(j) ...............................................................................................46
(k) ...............................................................................................47
(l) ...............................................................................................47
Section 8.02. Assignments.......................................................................................47
(b) ...............................................................................................48
Section 8.03. Certain Pledges...................................................................................48
ARTICLE IXMiscellaneous
SECTION 9.01. APPLICABLE LAW....................................................................................48
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SECTION 9.02. WAIVER OF JURY....................................................................................49
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Section 9.03. Jurisdiction and Venue; Service of Process........................................................49
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Section 9.04. Set-off...........................................................................................49
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Section 9.05. Amendments and Waivers............................................................................50
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Section 9.06. Cumulative Rights; No Waiver......................................................................50
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Section 9.07. Notices...........................................................................................50
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Section 9.08. Certain Acknowledgments...........................................................................52
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Section 9.09. Separability......................................................................................52
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Section 9.10. Parties in Interest...............................................................................52
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Section 9.11. Execution in Counterparts.........................................................................53
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SCHEDULES
Schedule 5.01(a) Subsidiaries of the Borrower
EXHIBITS
Exhibit A Form of Borrowing Request
Exhibit B Form of Note
Exhibit C Form of Opinion of Counsel for the Borrower to be Delivered Upon Payment of Shares
Exhibit D Form of Opinion of Counsel for the Borrower to be Delivered at the Effective Time
Exhibit E Form of Compliance Certificate
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* See Section 2.02 the Credit Agreement.
** See the definition of "Borrowing Date" in Section 1.01(c) of the Credit Agreement.
*** See Section 2.01 and the definition of "Maximum Quarterly Amount" in Section 1.01(c) of the Credit Agreement.
**** See the definition of "Warrant Number" in Section 1.01(c) of the Credit Agreement.
* Insert only in Compliance Certificates accompanying quarterly financial statements delivered pursuant to Section 7.01(a) of
the Credit Agreement.