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$107,500,000
CREDIT AGREEMENT
among
INAMED CORPORATION,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
GMAC COMMERCIAL CREDIT LLC,
as Documentation Agent,
BEAR STEARNS CORPORATE LENDING INC.
as Syndication Agent,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
Dated as of February 1, 2000
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BEAR, STEARNS & CO. INC., as Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 18
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 19
2.1 Term Commitments................................................ 19
2.2 Procedure for Term Loan Borrowing............................... 19
2.3 Repayment of Term Loans......................................... 19
2.4 Revolving Commitments........................................... 20
2.5 Procedure for Revolving Loan Borrowing.......................... 20
2.6 Swingline Commitment............................................ 21
2.7 Procedure for Swingline Borrowing; Refunding of Swingline
Loans........................................................... 21
2.8 Commitment Fees, etc............................................ 22
2.9 Termination or Reduction of Revolving Commitments............... 23
2.10 Optional Prepayments............................................ 23
2.11 Mandatory Prepayments and Commitment Reductions................. 23
2.12 Conversion and Continuation Options............................. 24
2.13 Limitations on Eurodollar Tranches.............................. 24
2.14 Interest Rates and Payment Dates................................ 25
2.15 Computation of Interest and Fees................................ 25
2.16 Inability to Determine Interest Rate............................ 25
2.17 Pro Rata Treatment and Payments................................. 26
2.18 Requirements of Law............................................. 27
2.19 Taxes........................................................... 28
2.20 Indemnity....................................................... 29
2.21 Change of Lending Office........................................ 30
2.22 Replacement of Lenders.......................................... 30
2.23 Evidence of Debt................................................ 30
2.24 Illegality...................................................... 31
SECTION 3. LETTERS OF CREDIT............................................. 31
3.1 L/C Commitment.................................................. 31
3.2 Procedure for Issuance of Letter of Credit...................... 31
3.3 Fees and Other Charges.......................................... 32
3.4 L/C Participations.............................................. 32
3.5 Reimbursement Obligation of the Borrower........................ 33
3.6 Obligations Absolute............................................ 33
3.7 Letter of Credit Payments....................................... 34
3.8 Applications.................................................... 34
SECTION 4. REPRESENTATIONS AND WARRANTIES................................ 34
4.1 Financial Condition............................................. 34
4.2 No Change....................................................... 35
4.3 Corporate Existence; Compliance with Law........................ 35
4.4 Corporate Power; Authorization; Enforceable Obligations......... 35
4.5 No Legal Bar.................................................... 35
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4.6 Litigation..................................................... 36
4.7 No Default..................................................... 36
4.8 Ownership of Property; Liens................................... 36
4.9 Intellectual Property.......................................... 36
4.10 Taxes.......................................................... 36
4.11 Federal Regulations............................................ 36
4.12 Labor Matters.................................................. 36
4.13 ERISA.......................................................... 37
4.14 Investment Company Act; Other Regulations...................... 37
4.15 Subsidiaries................................................... 37
4.16 Use of Proceeds................................................ 37
4.17 Environmental Matters.......................................... 37
4.18 Accuracy of Information, etc................................... 38
4.19 Security Documents............................................. 39
4.20 Solvency....................................................... 39
4.21 Year 2000 Matters.............................................. 39
SECTION 5. CONDITIONS PRECEDENT.......................................... 39
5.1 Conditions to Initial Extension of Credit...................... 39
5.2 Conditions to Each Extension of Credit......................... 42
SECTION 6. AFFIRMATIVE COVENANTS......................................... 42
6.1 Financial Statements........................................... 42
6.2 Certificates; Other Information................................ 42
6.3 Payment of Obligations......................................... 44
6.4 Maintenance of Existence; Compliance........................... 44
6.5 Maintenance of Property; Insurance............................. 44
6.6 Inspection of Property; Books and Records; Discussions......... 44
6.7 Notices........................................................ 44
6.8 Environmental Laws............................................. 45
6.9 Interest Rate Protection....................................... 45
6.10 Additional Collateral, etc..................................... 45
6.11 Further Assurances............................................. 46
SECTION 7. NEGATIVE COVENANTS............................................ 47
7.1 Financial Condition Covenants.................................. 47
7.2 Indebtedness................................................... 47
7.3 Liens.......................................................... 48
7.4 Fundamental Changes............................................ 49
7.5 Disposition of Property........................................ 50
7.6 Restricted Payments............................................ 50
7.7 Capital Expenditures........................................... 51
7.8 Investments.................................................... 51
7.9 Transactions with Affiliates................................... 52
7.10 Sales and Leasebacks........................................... 52
7.11 Changes in Fiscal Periods...................................... 53
7.12 Negative Pledge Clauses........................................ 53
7.13 Clauses Restricting Subsidiary Distributions................... 53
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7.14 Lines of Business.............................................. 54
SECTION 8. EVENTS OF DEFAULT............................................. 54
SECTION 9. THE AGENTS.................................................... 56
9.1 Appointment.................................................... 56
9.2 Delegation of Duties........................................... 57
9.3 Exculpatory Provisions......................................... 57
9.4 Reliance by Agents............................................. 57
9.5 Notice of Default.............................................. 57
9.6 Non-Reliance on Agents and Other Lenders....................... 58
9.7 Indemnification................................................ 58
9.8 Agent in Its Individual Capacity............................... 58
9.9 Successor Administrative Agent................................. 59
9.10 Agents Generally............................................... 59
9.11 The Lead Arranger.............................................. 59
9.12 The Documentation Agent........................................ 59
SECTION 10. MISCELLANEOUS................................................ 59
10.1 Amendments and Waivers........................................ 59
10.2 Notices....................................................... 60
10.3 No Waiver; Cumulative Remedies................................ 61
10.4 Survival of Representations and Warranties.................... 61
10.5 Payment of Expenses and Taxes................................. 61
10.6 Successors and Assigns; Participations and Assignments........ 62
10.7 Adjustments; Set-off.......................................... 64
10.8 Counterparts.................................................. 65
10.9 Severability.................................................. 65
10.10 Integration................................................... 65
10.11 GOVERNING LAW................................................. 65
10.12 Submission To Jurisdiction; Waivers........................... 65
10.13 Acknowledgments............................................... 66
10.14 Releases of Guarantees and Liens.............................. 66
10.15 Confidentiality............................................... 67
10.16 WAIVERS OF JURY TRIAL......................................... 67
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ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Commitments
4.4 Consents, Authorizations, Filings and Notices
4.6 Litigation
4.9 Intellectual Property
4.15 Subsidiaries
4.19 UCC Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.8 (i) Existing Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E-1 Form of Legal Opinion of Skadden, Arps, Slate, Meagher & Flom
E-2 Form of Legal Opinion of David Bamberger, General Counsel to the
Borrower
F Form of Tax Exemption Certificate
G-1 Form of Term Note
G-2 Form of Revolving Note
G-3 Form Swing Line Note
H Form of Standby Letter of Credit
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CREDIT AGREEMENT, dated as of February 1, 2000, among INAMED
CORPORATION, a Delaware corporation (the "Borrower"), the several banks and
other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), BEAR, STEARNS & CO. INC., as sole lead arranger and
sole book manager (in such capacity, the "Lead Arranger"), GMAC COMMERCIAL
CREDIT LLC, as documentation agent (in such capacity, the "Documentation
Agent"), BEAR STEARNS CORPORATE LENDING INC., as syndication agent (in such
capacity, the "Syndication Agent"), and FIRST UNION NATIONAL BANK, as
administrative agent (in such capacity, the "Administrative Agent").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.
"Acquired Debt": with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquisition": with respect to any Person, (a) the acquisition of all
of the Capital Stock of any other Person, (b) the acquisition of all or
substantially all of the assets of any other Person or (c) the acquisition of
all of the assets comprising a division or business unit of any other Person.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the recitals to this Agreement.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent, the
Documentation Agent, the Lead Arranger and the Administrative Agent, which term
shall include, for purposes of Section 9 only, the Issuing Lender.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding.
2
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Base Rate Loans Eurodollar Loans
--------------- ----------------
Revolving Loans,
Swingline Loans
and Term Loans 2.75% 3.75%
; provided, that from and after the date which is six months after the Closing
Date, the Applicable Margin will be determined pursuant to the Pricing Grid.
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Approved Fund": with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 7.5) that yields gross proceeds to the Borrower
or any of its Subsidiaries (valued at the initial principal amount thereof in
the case of non-cash proceeds consisting of notes or other debt and valued at
fair market value in the case of other non-cash proceeds) in excess of
$1,000,000.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit D.
"Assignor": as defined in Section 10.6(c).
"Available Revolving Commitment": as to any Revolving Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect over (b) such Lender's Revolving Extensions of Credit
then outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 2.8(a), the aggregate principal amount
of Swingline Loans then outstanding shall be deemed to be zero.
3
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 0.50%. For purposes hereof: "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the Reference Lender
as its prime rate in effect at its principal office in Charlotte, North Carolina
(the Prime Rate not being intended to be the lowest rate of interest charged by
the Reference Lender in connection with extensions of credit to debtors). Any
change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble to this Agreement.
"Borrowing Date": any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lenders to make Loans hereunder.
"Bridge Loan Agreement": the Loan Agreement, dated as of September 1,
1999, among the Borrower, Inamed Acquisition Corporation, the lenders from time
to time parties thereto and Ableco Finance LLC, as administrative agent.
"Business": as defined in Section 4.17(b).
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City or Charlotte, North Carolina are
authorized or required by law to close; provided, that with respect to notices
and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
4
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by Moody's
Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Cash In-License Fees": for any period, with respect to any Person,
the aggregate expenditures by such Person and its Subsidiaries for the right to
sell, use, market and/or distribute the products of another Person, but only to
the extent that such expenditures would be required to be capitalized under GAAP
on a consolidated balance sheet of such Person and its Subsidiaries.
"Closing Date": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied, which date is February 1, 2000.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"Commitment": as to any Lender, the sum of the Term Commitment and the
Revolving Commitment of such Lender.
"Commitment Fee Rate": 0.50% per annum.
5
"Commonly Controlled Entity": an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"Conduit Lender": any special purpose entity organized and
administered by any Lender for the purpose of making Loans hereunder otherwise
required to be made by such Lender and designated by such Lender in a written
instrument, subject to the consent of the Administrative Agent and the Borrower;
provided, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender, and provided,
further, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.18, 2.19, 2.20 or 10.5 than the designating Lender
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender or (b) be deemed to have any Commitment hereunder.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated January 2000 and furnished to the Lenders.
"Consolidated Domestic Current Assets": at any date, all amounts
(other than cash and Cash Equivalents) that would, in conformity with GAAP, be
set forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Domestic Subsidiaries at such
date.
"Consolidated Domestic Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Domestic Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of the Borrower and its Domestic Subsidiaries
and (b) without duplication of clause (a) above, all Indebtedness consisting of
Revolving Loans or Swingline Loans to the extent otherwise included therein.
"Consolidated Domestic Net Income": for any period, the consolidated
net income (or loss) of the Borrower and the Domestic Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Domestic Subsidiary or is merged into or consolidated with the
Borrower or any other Domestic Subsidiary, (b) the income (or deficit) of any
Person (other than a Domestic Subsidiary) in which the Borrower or any Domestic
Subsidiary has an ownership interest, except to the extent that any such income
is actually received by the Borrower or such Domestic Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Domestic Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by such Domestic Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Domestic Subsidiary.
6
"Consolidated Domestic Working Capital": at any date, the excess of
Consolidated Domestic Current Assets on such date over Consolidated Domestic
Current Liabilities on such date.
"Consolidated EBITDA": for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income or franchise tax expense (whether federal, state, local, foreign or
otherwise), (b) interest expense, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs and (e) any other non-cash charges,
and minus, to the extent included in the statement of such Consolidated Net
Income for such period, any other non-cash income, all as determined on a
consolidated basis. For the purposes of calculating Consolidated EBITDA for any
period of four consecutive fiscal quarters (each, a "Reference Period") pursuant
to any determination of the Consolidated Leverage Ratio, (i) if at any time
during such Reference Period the Borrower or any Subsidiary shall have made any
Material Disposition, the Consolidated EBITDA for such Reference Period shall be
reduced by an amount equal to the Consolidated EBITDA (if positive) attributable
to the property that is the subject of such Material Disposition for such
Reference Period or increased by an amount equal to the Consolidated EBITDA (if
negative) attributable thereto for such Reference Period and (ii) if during such
Reference Period the Borrower or any Subsidiary shall have made a Material
Acquisition, Consolidated EBITDA for such Reference Period shall be calculated
after giving pro forma effect thereto as if such Material Acquisition occurred
on the first day of such Reference Period. As used in this definition, "Material
Acquisition" means any acquisition of property or series of related acquisitions
of property that (a) constitutes assets comprising all or substantially all of
an operating unit of a business or constitutes all or substantially all of the
common stock of a Person and (b) involves the payment of consideration by the
Borrower and its Subsidiaries in excess of $500,000; and "Material Disposition"
means any Disposition of property or series of related Dispositions of property
that yields gross proceeds to the Borrower or any of its Subsidiaries in excess
of $500,000.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
of (a) Consolidated EBITDA for such period less Cash In-License Fees for such
period to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b) the
aggregate amount actually paid by the Borrower and its Subsidiaries during such
period on account of Capital Expenditures (excluding the principal amount of
Indebtedness incurred during such period to finance such expenditures, but
including repayment of any such Indebtedness during such period), (c) scheduled
principal payments in respect of the Term Loans and (d) cash income taxes paid
by the Borrower and its Subsidiaries during such period.
"Consolidated Funded Debt": at any date, the aggregate principal
amount of all Funded Debt of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries for such period 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 letters of credit and
bankers' acceptance financing and net costs under Hedge Agreements in respect of
7
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP); provided that for the purpose of calculating the
Consolidated Fixed Charge Coverage Ratio, Consolidated Interest Expense shall be
calculated giving pro forma effect to the Loans to be made on the Closing Date
and the use of the proceeds thereof to consummate the Refinancing, as if such
events had occurred on October 1, 1999.
"Consolidated Leverage Ratio": as at the last day of any period, the
ratio of (a) Consolidated Funded Debt on such day to (b) Consolidated EBITDA
less Cash In-License Fees for such period.
"Consolidated Net Income": for any period, the consolidated net income
(or loss) of the Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Worth": at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date.
"Consolidated Total Debt": at any date, the aggregate principal amount
of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Continuing Directors": the directors of the Borrower on the Closing
Date, and each other director, if, in each case, such other director's
nomination for election to the board of directors of the Borrower is recommended
by at least a majority of the then Continuing Directors.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms "Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agent": as defined in the preamble to this Agreement.
8
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Dow Jones Markets screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Dow Jones Markets screen (or otherwise on
such screen), the "Eurodollar Base Rate" shall be determined by reference to
such other comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., Charlotte, North Carolina time,
two Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
9
"Eurodollar Tranche": the collective reference to Eurodollar Loans
under a particular Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Excess Cash Flow Percentage": 50%.
"Excess Domestic Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i) Consolidated
Domestic Net Income for such fiscal year, (ii) an amount equal to the amount of
all non-cash charges (including depreciation and amortization) deducted in
arriving at such Consolidated Domestic Net Income, (iii) decreases in
Consolidated Domestic Working Capital for such fiscal year, and (iv) an amount
equal to the aggregate net non-cash loss on the Disposition of Property by the
Borrower and the Subsidiary Guarantors during such fiscal year (other than sales
of inventory in the ordinary course of business), to the extent deducted in
arriving at such Consolidated Domestic Net Income over (b) the sum, without
duplication, of (i) an amount equal to the amount of all non-cash credits
included in arriving at such Consolidated Domestic Net Income, (ii) the
aggregate amount actually paid by the Borrower and the Subsidiary Guarantors in
cash during such fiscal year on account of Capital Expenditures (excluding the
principal amount of Indebtedness incurred to finance such expenditures and any
such expenditures financed with the proceeds of any Reinvestment Deferred
Amount, but including repayment of any such Indebtedness during such fiscal
year), (iii) the aggregate amount of all prepayments of Revolving Loans and
Swingline Loans during such fiscal year to the extent accompanying permanent
optional reductions of the Revolving Commitments and all optional prepayments of
the Term Loans during such fiscal year, (iv) the aggregate amount of all
regularly scheduled principal payments of Funded Debt (including the Term Loans)
of the Borrower and the Subsidiary Guarantors made during such fiscal year
(other than in respect of any revolving credit facility to the extent there is
not an equivalent permanent reduction in commitments thereunder), (v) increases
in Consolidated Domestic Working Capital for such fiscal year, and (vi) an
amount equal to the aggregate net non-cash gain on the Disposition of Property
by the Borrower and the Subsidiary Guarantors during such fiscal year (other
than sales of inventory in the ordinary course of business), to the extent
included in arriving at such Consolidated Domestic Net Income.
"Excess Domestic Cash Flow Application Date": as defined in Section
2.11(c).
"Excluded Foreign Subsidiary": McGhan Medical Mexico, S.A. de C.V.,a
corporation organized under the laws of Mexico, McGhan Medical Asia/Pacific
Ltd., a corporation organized under the laws of Hong Kong, Bioenterics Latin
America S.A. de C.V., a corporation organized under the laws of Mexico,
Biodermis Limited, a corporation organized under the laws of Ireland, Bioplexus
Limited, a corporation organized under the laws of Ireland, Collagen Scandinavia
A/S, a corporation organized under the laws of Denmark, Collagen Luxembourg
S.A., a corporation organized under the laws of Luxembourg and Collagen B.V., a
corporation organized under the laws of the Netherlands.
"Facility": each of (a) the Term Commitments and the Term Loans made
thereunder (the "Term Facility") and (d) the Revolving Commitments and the
extensions of credit made thereunder (the "Revolving Facility").
10
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person that
matures more than one year from the date of its creation or matures within one
year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrower, Indebtedness in respect of the
Loans, but excluding obligations in respect of undrawn letters of credit.
"Funding Office": the office of the Administrative Agent specified in
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time, except that for purposes of Section 7.1, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements referred to in Section 4.1(b). In the event that any
"Accounting Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then the Borrower and the Administrative Agent (on behalf of
the Required Lenders) agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such Accounting Changes
with the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such Accounting Changes as if such
Accounting Changes had not been made. Until such time as such an amendment shall
have been executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Changes had not occurred. "Accounting Changes" refers to changes in accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants or, if applicable, the SEC.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower and each Subsidiary
11
Guarantor as of the date hereof, substantially in the form of Exhibit A, as the
same may be amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Hedge Agreements": all interest rate swaps, caps or collar agreements
or similar arrangements dealing with interest rates or currency exchange rates
or the exchange of nominal interest obligations, either generally or under
specific contingencies.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) the liquidation value of all
redeemable preferred Capital Stock of such Person, (h) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in clauses (a)
through (g) above, (i) all obligations of the kind referred to in clauses (a)
through (h) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation, and
(j) for the purposes of Sections 7.2 and 8(e) only, all obligations of such
Person in respect of Hedge Agreements. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
12
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness expressly
provide that such Person is not liable therefor.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day that is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest Period
and (d) as to any Loan (other than any Revolving Loan that is a Base Rate Loan
and any Swingline Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day;
(ii) the Borrower may not select an Interest Period under a particular
Facility that would extend beyond the Revolving Termination Date or beyond
the date final payment is due on the Term Loans, as applicable;
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month; and
13
(iv) the Borrower shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during an Interest Period for
such Loan.
"Investments": as defined in Section 7.8.
"Issuing Lender": First Union National Bank, in its capacity as issuer
of any Letter of Credit.
"L/C Commitment": $25,000,000.
"L/C Fee Payment Date": the last day of each March, June, September
and December and the last day of the Revolving Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
Lenders other than the Issuing Lender.
"Lead Arranger": as defined in the recitals to this Agreement.
"Lenders": as defined in the preamble hereto; provided, that unless
the context otherwise requires, each reference herein to the Lenders shall be
deemed to include any Conduit Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents and the
Notes.
"Loan Parties": the Borrower and each Subsidiary of the Borrower that
is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the holders
of more than 50% of the aggregate unpaid principal amount of the Term Loans or
the Total Revolving Extensions of Credit, as the case may be, outstanding under
such Facility (or, in the case of the Revolving Facility, prior to any
termination of the Revolving Commitments, the holders of more than 50% of the
Total Revolving Commitments).
14
"Material Adverse Effect": a material adverse effect on (a) the
Refinancing, (b) the business, assets, property, results of operations,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole or (c) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights or remedies of the
Agents or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, recording fees, title transfer fees, appraisal fees, sales commissions,
amounts required to be applied to the repayment of Indebtedness secured by a
Lien expressly permitted hereunder on any asset that is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash
proceeds received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-U.S. Lender": as defined in Section 2.19(d).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to any Agent or to any Lender (or, in the case of
Specified Hedge Agreements, any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Specified Hedge
Agreement entered into with any Agent or Lender or any affiliate of any Agent or
Lender or any other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to any Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise; provided, that (i)
15
obligations of the Borrower or any Subsidiary under any Specified Hedge
Agreement shall be secured and guaranteed pursuant to the Security Documents
only to the extent that, and for so long as, the other Obligations are so
secured and guaranteed and (ii) any release of Collateral or Guarantors effected
in the manner permitted by this Agreement shall not require the consent of
holders of obligations under Specified Hedge Agreements.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 10.6(b).
"Permitted Acquisition": any Acquisition by the Borrower or any of its
Subsidiaries, provided that (a) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, (b) the assets or Person
acquired shall be in the same or similar line of business to the business of the
Borrower, (c) the Borrower shall have delivered at least five days prior to the
consummation of such Acquisition, a certificate of its chief financial officer
to the Administrative Agent demonstrating compliance on a pro forma basis with
the covenants set forth in Section 7.1 as if such Acquisition had been
consummated at the beginning of the relevant period, (d) such Acquisition is
initiated and consummated on a friendly basis and approved by the Board of
Directors of the target, (e) the cash consideration (including Acquired Debt)
for any such Acquisition does not exceed $5,000,000 and the aggregate cash
consideration (including Acquired Debt) for all such Acquisitions does not
exceed $25,000,000 during the term of this Agreement, (f) the aggregate stock
consideration (valued at fair market value on the date of such Acquisition) for
all such Acquisitions does not exceed $25,000,000 during the term of this
Agreement and (g) any Person which becomes a Domestic Subsidiary as a result of
such Acquisition shall become a Subsidiary Guarantor.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Investors": Appaloosa Management, L.P. and its Affiliates.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Prime Rate": as defined in the definition of "Base Rate."
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
16
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17(a).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of the Borrower or any of its Subsidiaries.
"Reference Lender": the Administrative Agent.
"Refinancing": as defined in Section 5.1(b).
"Refunded Swingline Loans": as defined in Section 2.7.
"Refunding Date": as defined in Section 2.7.
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith that are not applied to prepay the Term
Loans pursuant to Section 2.11(b) as a result of the delivery of a Reinvestment
Notice.
"Reinvestment Event": any Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
the Borrower (directly or indirectly through a Subsidiary) intends and expects
to use all or a specified portion of the Net Cash Proceeds of a Recovery Event
to repair the assets which were the subject of such Recovery Event or to acquire
new assets which are substitutes for, and are similar to, the assets which were
the subject of such Recovery Event.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire or repair
fixed or capital assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months after such Reinvestment
17
Event and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire or repair fixed or capital assets useful
in the Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg.ss.4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments then in effect and (b) thereafter, the
sum of (i) the aggregate unpaid principal amount of the Term Loans then
outstanding and (ii) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Commitment": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Swingline Loans and
Letters of Credit in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading "Revolving Commitment" opposite such Lender's
name on Schedule 1.1A or in the Assignment and Acceptance pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original amount of the Total Revolving
Commitments is $25,000,000.
"Revolving Commitment Period": the period from and including the
Closing Date to the Revolving Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding and (c) such
Lender's Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.
"Revolving Lender": each Lender that has a Revolving Commitment or
that holds Revolving Loans.
"Revolving Loans": as defined in Section 2.4(a).
18
"Revolving Percentage": as to any Revolving Lender at any time, the
percentage which such Lender's Revolving Commitment then constitutes of the
Total Revolving Commitments (or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate amount of
such Lender's Revolving Extensions of Credit then outstanding constitutes of the
aggregate amount of the Revolving Extensions of Credit of all the Revolving
Lenders then outstanding).
"Revolving Termination Date": January 31, 2005.
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Hedge Agreement": any Hedge Agreement (a) entered into by
(i) the Borrower or any of its Subsidiaries and (ii) any Agent or Lender or any
affiliate thereof, as counterparty and (b) that has been designated by such
Agent or Lender, as the case may be, and the Borrower, by notice to the
Administrative Agent, as a Specified Hedge Agreement. The designation of any
Hedge Agreement as a Specified Hedge Agreement shall not create in favor of the
Agent, Lender or affiliate thereof that is a party thereto any rights in
connection with the management or release of any Collateral or of the
obligations of any Guarantor under the Guarantee and Collateral Agreement.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
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or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than any
Foreign Subsidiary.
"Swingline Commitment": the obligation of the Swingline Lender to make
Swingline Loans pursuant to Section 2.6 in an aggregate principal amount at any
one time outstanding not to exceed $10,000,000.
"Swingline Lender": the Administrative Agent, in its capacity as the
lender of Swingline Loans.
"Swingline Loans": as defined in Section 2.6.
"Swingline Participation Amount": as defined in Section 2.7.
"Syndication Agent": as defined in the preamble to this Agreement.
"Term Commitment": as to any Lender, the obligation of such Lender, if
any, to make a Term Loan to the Borrower hereunder in a principal amount not to
exceed the amount set forth under the heading "Term Commitment" opposite such
Lender's name on Schedule 1.1A. The original aggregate amount of the Term
Commitments is $82,500,000.
"Term Lender": each Lender that has a Term Commitment or is the holder
of a Term Loan.
"Term Loan": as defined in Section 2.1.
"Term Percentage": as to any Term Lender at any time, the percentage
which such Lender's Term Commitment then constitutes of the aggregate Term
Commitments (or, at any time after the Closing Date, the percentage which the
aggregate principal amount of such Lender's Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then
outstanding).
"Total Revolving Commitments": at any time, the aggregate amount of
the Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"United States": the United States of America.
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"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is
a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation", (iii) the word "incur" shall be construed to
mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words "incurred" and "incurrence" shall have correlative
meanings), and (iv) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments. Subject to the terms and conditions hereof, each
Term Lender severally agrees to make a term loan (a "Term Loan") to the Borrower
on the Closing Date in an amount not to exceed the amount of the Term Commitment
of such Lender; provided that the failure of any Lender to make any Term Loan
required to be made by it shall not relieve any other Lender of its obligations
to make a Term Loan hereunder. The Term Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.2 and 2.12.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable written notice (which notice must be received
by the Administrative Agent prior to 10:00 A.M., Charlotte, North Carolina time,
one Business Day prior to the anticipated Closing Date) requesting that the Term
Lenders make the Term Loans on the Closing Date and specifying the amount to be
borrowed. The Term Loans made on the Closing Date shall initially be Base Rate
Loans. Upon receipt of such notice the Administrative Agent shall promptly
notify each Term Lender thereof. Not later than 12:00 Noon, Charlotte, North
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Carolina time, on the Closing Date each Term Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the Term Loan or Term Loans to be made by such Lender. The
Administrative Agent shall credit the account of the Borrower on the books of
such office of the Administrative Agent with the aggregate of the amounts made
available to the Administrative Agent by the Term Lenders in immediately
available funds.
2.3 Repayment of Term Loans. The Term Loan of each Term Lender shall
mature in 20 consecutive quarterly installments, commencing on March 31, 2000,
each of which shall be in an amount equal to such Lender's Term Percentage
multiplied by the amount set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
March 31, 2000 $206,250
June 30, 2000 $206,250
September 30, 2000 $206,250
December 31, 2000 $206,250
March 31, 2001 $206,250
June 30, 2001 $206,250
September 30, 2001 $206,250
December 31, 2001 $206,250
March 31, 2002 $206,250
June 30, 2002 $206,250
September 30, 2002 $206,250
December 31, 2002 $206,250
March 31, 2003 $206,250
June 30, 2003 $206,250
September 30, 2003 $206,250
December 31, 2003 $206,250
March 31, 2004 $19,800,000
June 30, 2004 $19,800,000
September 30, 2004 $19,800,000
January 31, 2005 $19,800,000
2.4 Revolving Commitments. (a) Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make revolving credit loans in
Dollars ("Revolving Loans") to the Borrower from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender's Revolving Percentage of the sum
of (i) the L/C Obligations then outstanding and (ii) the aggregate principal
amount of the Swingline Loans then outstanding, does not exceed the amount of
such Lender's Revolving Commitment; provided that the failure of any Revolving
Lender to make any Revolving Loan required to be made by it shall not relieve
any other Revolving Lender from its obligations to make Revolving Loans
hereunder. During the Revolving Commitment Period the Borrower may use the
Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
The Revolving Loans may from time to time be Eurodollar Loans or Base Rate
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.5 and 2.12.
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(b) The Borrower shall repay all outstanding Revolving Loans on the
Revolving Termination Date.
2.5 Procedure for Revolving Loan Borrowing. The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable telephonic notice confirmed promptly in writing (which notice must
be received by the Administrative Agent prior to 12:00 Noon, Charlotte, North
Carolina time, (a) three Business Days prior to the requested Borrowing Date, in
the case of Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date, in the case of Base Rate Loans), specifying (i) the amount and
Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date, (iii)
in the case of Eurodollar Loans, the respective amounts of each such Type of
Loan and the respective lengths of the initial Interest Period therefor and (iv)
the location and number of the Borrower's account to which funds are to be
distributed. If no Interest Period is specified with respect to any requested
Eurodollar Loan, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. Any Revolving Loans made on the Closing Date
shall initially be Base Rate Loans. Each borrowing under the Revolving
Commitments shall be in an amount equal to (x) in the case of Base Rate Loans,
$1,000,000 or a whole multiple thereof (or, if the then aggregate Available
Revolving Commitments are less than $1,000,000, such lesser amount) and (y) in
the case of Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in
excess thereof; provided, that the Swingline Lender may request, on behalf of
the Borrower, borrowings under the Revolving Commitments that are Base Rate
Loans in other amounts pursuant to Section 2.7. Upon receipt of any such notice
from the Borrower, the Administrative Agent shall promptly notify each Revolving
Lender thereof. Each Revolving Lender will make the amount of its pro rata share
of each borrowing available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 12:00 Noon, Charlotte, North Carolina
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent crediting the account of
the Borrower on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Lenders and in like funds
as received by the Administrative Agent.
2.6 Swingline Commitment. (a) Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans ("Swingline
Loans") to the Borrower; provided that (i) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans hereunder, may exceed the Swingline Commitment then in effect)
and (ii) the Borrower shall not request, and the Swingline Lender shall not
make, any Swingline Loan if, after giving effect to the making of such Swingline
Loan, the aggregate amount of the Available Revolving Commitments would be less
than zero. During the Revolving Commitment Period, the Borrower may use the
Swingline Commitment by borrowing, repaying and reborrowing, all in accordance
with the terms and conditions hereof. Swingline Loans shall be Base Rate Loans
only.
(b) The Borrower shall repay all outstanding Swingline Loans on the
Revolving Termination Date.
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2.7 Procedure for Swingline Borrowing; Refunding of Swingline Loans.
(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender and the Administrative Agent irrevocable
telephonic notice confirmed promptly in writing (which telephonic notice must be
received by the Swingline Lender not later than 1:00 P.M., Charlotte, North
Carolina time, on the proposed Borrowing Date), specifying (i) the amount to be
borrowed and (ii) the requested Borrowing Date (which shall be a Business Day
during the Revolving Commitment Period). Each borrowing under the Swingline
Commitment shall be in an amount equal to $500,000 or a whole multiple of
$100,000 in excess thereof. Not later than 3:00 P.M., Charlotte, North Carolina
time, on the Borrowing Date specified in a notice in respect of Swingline Loans,
the Swingline Lender shall make available to the Borrower an amount in
immediately available funds equal to the amount of the Swingline Loan to be
made.
(b) The Swingline Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), on one Business
Day's notice given by the Swingline Lender no later than 12:00 Noon, Charlotte,
North Carolina time, request each Revolving Lender to make, and each Revolving
Lender hereby agrees to make, a Revolving Loan, in an amount equal to such
Revolving Lender's Revolving Percentage of the aggregate amount of the Swingline
Loans (the "Refunded Swingline Loans") outstanding on the date of such notice,
to repay the Swingline Lender. Each Revolving Lender shall make the amount of
such Revolving Loan available to the Administrative Agent at the Funding Office
in immediately available funds, not later than 10:00 A.M., Charlotte, North
Carolina time, one Business Day after the date of such notice. The proceeds of
such Revolving Loans shall be immediately made available by the Administrative
Agent to the Swingline Lender for application by the Swingline Lender to the
repayment of the Refunded Swingline Loans. The Borrower irrevocably authorizes
the Swingline Lender to charge the Borrower's accounts with the Administrative
Agent (up to the amount available in each such account) in order to immediately
pay the amount of such Refunded Swingline Loans to the extent amounts received
from the Revolving Lenders are not sufficient to repay in full such Refunded
Swingline Loans.
(c) If prior to the time a Revolving Loan would have otherwise been
made pursuant to Section 2.7(b), one of the events described in Section 8(f)
shall have occurred and be continuing with respect to the Borrower or if for any
other reason, as determined by the Swingline Lender in its sole discretion,
Revolving Loans may not be made as contemplated by Section 2.7(b), each
Revolving Lender shall, on the date such Revolving Loan was to have been made
pursuant to the notice referred to in Section 2.7(b) (the "Refunding Date"),
purchase for cash an undivided participating interest in the then outstanding
Swingline Loans by paying to the Swingline Lender an amount (the "Swingline
Participation Amount") equal to (i) such Revolving Lender's Revolving Percentage
times (ii) the sum of the aggregate principal amount of Swingline Loans then
outstanding that were to have been repaid with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has received from
any Revolving Lender such Lender's Swingline Participation Amount, the Swingline
Lender receives any payment on account of the Swingline Loans, the Swingline
Lender will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
24
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.
(e) Each Revolving Lender's obligation to make the Loans referred to
in Section 2.7(b) and to purchase participating interests pursuant to Section
2.7(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower; (iv)
any breach of this Agreement or any other Loan Document by the Borrower, any
other Loan Party or any other Revolving Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
The Administrative Agent shall notify the Borrower of any Refunded Swingline
Loans made in accordance with Section 2.7(b) or any participating interests
purchased in accordance with Section 2.7(c).
2.8 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the Closing Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Revolving Termination
Date, commencing on the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates previously agreed to in writing by the Borrower and
the Administrative Agent.
2.9 Termination or Reduction of Revolving Commitments. The Borrower
shall have the right, upon not less than three Business Days' prior written
notice to the Administrative Agent (or telephonic notice confirmed promptly in
writing), to terminate the Revolving Commitments or, from time to time, to
reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Commitments then in effect.
2.10 Optional Prepayments. The Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable written notice (or telephonic notice confirmed promptly in writing)
delivered to the Administrative Agent prior to 12:00 Noon, Charlotte, North
Carolina time at least three Business Days prior thereto in the case of
Eurodollar Loans and at least one Business Day prior thereto in the case of Base
Rate Loans, which notice shall specify the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans or Base Rate Loans; provided, that
if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.20. Upon receipt of any such notice the
25
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Loans that are Base Rate Loans and Swingline Loans) accrued interest
to such date on the amount prepaid. Partial prepayments of Term Loans and
Revolving Loans shall be in an aggregate principal amount of $1,000,000 or a
whole multiple thereof. Partial prepayments of Swingline Loans shall be in an
aggregate principal amount of $100,000 or a whole multiple thereof. Any optional
prepayment of the Term Loans pursuant to this Section 2.10 made (i) on or prior
to the first anniversary of the Closing Date shall be accompanied by a
prepayment fee in the amount equal to 2% of the aggregate principal amount so
prepaid and (ii) after the first anniversary of the Closing Date and on or prior
to the second anniversary of the Closing Date shall be accompanied by a
prepayment fee in the amount equal to 1% of the aggregate principal amount so
prepaid.
2.11 Mandatory Prepayments and Commitment Reductions. (a) If any
Capital Stock or Indebtedness shall be issued or incurred by the Borrower or any
of its Subsidiaries (excluding any Indebtedness incurred in accordance with
Section 7.2 or any Capital Stock issued by a Subsidiary to the Borrower or to
another Subsidiary), an amount equal to 100% of the Net Cash Proceeds thereof
shall be applied on the date of such issuance or incurrence toward the
prepayment of the Term Loans as set forth in Sections 2.11(d) and 2.17(b).
(b) If on any date the Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect of a Recovery Event, such Net
Cash Proceeds shall be applied on such date toward the prepayment of the Term
Loans as set forth in Sections 2.11(d) and 2.17(b); provided, that, on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the prepayment of the Term Loans as set forth in Sections 2.11(d) and 2.17(b).
(c) If, for any fiscal year of the Borrower commencing after the
Closing Date, there shall be Excess Domestic Cash Flow, the Borrower shall, on
the relevant Excess Domestic Cash Flow Application Date, apply the Excess Cash
Flow Percentage of such Excess Domestic Cash Flow toward the prepayment of the
Term Loans as set forth in Sections 2.11(d) and 2.17(b). Each such prepayment
shall be made on a date (an "Excess Domestic Cash Flow Application Date") no
later than five days after the earlier of (i) the date on which the financial
statements of the Borrower referred to in Section 6.1(a), for the fiscal year
with respect to which such prepayment is made, are required to be delivered to
the Lenders and (ii) the date such financial statements are actually delivered.
(d) The application of any prepayment pursuant to Section 2.11 shall
be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each
prepayment of the Loans under Section 2.11 shall (i) be accompanied by accrued
interest to the date of such prepayment on the amount prepaid, (ii) not be
subject to any prepayment penalties or premiums and (iii) be subject to any
amounts owing pursuant to Section 2.20 in connection with such prepayment.
2.12 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans, upon
irrevocable written notice (or telephonic notice confirmed promptly in writing)
delivered to the Administrative Agent prior to 12:00 Noon, Charlotte, North
Carolina time, at least two Business Days prior thereto, provided that any such
conversion of Eurodollar Loans may only be made on the last day of an Interest
Period with respect thereto. The Borrower may elect from time to time to convert
26
Base Rate Loans to Eurodollar Loans upon irrevocable written notice (or
telephonic notice confirmed promptly in writing) prior to 12:00 Noon, Charlotte,
North Carolina time, at least three Business Days prior thereto (which notice
shall specify the length of the initial Interest Period therefor), provided that
no Base Rate Loan under a particular Facility may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
conversions. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto upon irrevocable
written notice (or telephonic notice confirmed promptly in writing) given by the
Borrower to the Administrative Agent prior to 12:00 Noon, Charlotte, North
Carolina time, at least three Business Days prior thereto, in accordance with
the applicable provisions of the term "Interest Period" set forth in Section
1.1, of the length of the next Interest Period to be applicable to such Loans;
provided that no Eurodollar Loan under a particular Facility may be continued as
such when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations, and provided, further, that if (i) such continuation is not
permitted pursuant to the preceding proviso such Eurodollar Loans shall be
automatically converted to Base Rate Loans on the last day of such then expiring
Interest Period and (ii) the Borrower shall fail to give any required notice as
described above in this paragraph, such Eurodollar Loans shall be continued as
Eurodollar Loans with an interest period of one month's duration. Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
2.13 Limitations on Eurodollar Tranches. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than five Eurodollar
Tranches shall be outstanding at any one time.
2.14 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to Base Rate Loans under the Revolving Facility plus 2%, and (ii) if
all or a portion of any interest payable on any Loan or Reimbursement Obligation
or any commitment fee or other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate then applicable
to Base Rate Loans under the relevant Facility plus 2% (or, in the case of any
such other amounts that do not relate to a particular Facility, the rate then
applicable to Base Rate Loans under the Revolving Facility plus 2%), in each
27
case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.15 Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to Base Rate Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate. Notwithstanding the foregoing, the failure of the
Administrative Agent to provide the Borrower or the Lenders with any notice
referred to in this subsection (a) shall not affect any obligations of the
Borrower or the Lenders hereunder.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.14(a).
2.16 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (w) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (x) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (y) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then-current
Interest Period, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans under the relevant Facility
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shall be made or continued as such, nor shall the Borrower have the right to
convert Loans under the relevant Facility to Eurodollar Loans.
2.17 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Percentages or Revolving
Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders. The amount of each principal prepayment of the Term
Loans shall be applied to reduce the then remaining installments of the Term
Loans, as the case may be, pro rata based upon the then remaining principal
amount thereof. Amounts prepaid on account of the Term Loans may not be
reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Loans shall be made pro
rata according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
Charlotte, North Carolina time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans under the relevant Facility, on demand, from the Borrower.
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(f) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.18 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(ii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this paragraph, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction;
provided that the Borrower shall not be required to compensate a Lender pursuant
to this paragraph for any amounts incurred more than six months prior to the
date that such Lender notifies the Borrower of such Lender's intention to claim
30
compensation therefor; and provided further that, if the circumstances giving
rise to such claim have a retroactive effect, then such six-month period shall
be extended to include the period of such retroactive effect.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 Taxes. (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
(i) taxes imposed on a net income basis on any Agent or any Lender by the
jurisdiction under the laws of which such Lender or Agent is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located and (ii) any branch profits taxes
imposed by the United States or any similar tax imposed in any other
jurisdiction in which the Borrower is located. If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings ("Non-
Excluded Taxes") or Other Taxes are required to be withheld from any amounts
payable to any Agent or any Lender hereunder, the amounts so payable to such
Agent or such Lender shall be increased to the extent necessary to yield to such
Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrower shall
not be required to increase any such amounts payable to any Lender with respect
to any Non-Excluded Taxes (i) that are attributable to such Lender's failure to
comply with the requirements of paragraph (d) or (e) of this Section or (ii)
that are United States withholding taxes imposed on amounts payable to such
Lender at the time the Lender becomes a party to this Agreement, except to the
extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as reasonably possible thereafter the Borrower shall send
to the Administrative Agent for its own account or for the account of the
relevant Agent or Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof or if not
available, evidence reasonably satisfactory to the Administrative Agent. If the
Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agents and the Lenders for any incremental taxes, interest or
penalties that may become payable by any Agent or any Lender as a result of any
such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-89ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
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payments of "portfolio interest", a statement substantially in the form of
Exhibit F and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
reasonable request of the Borrower or the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall
promptly notify the Borrower at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrower (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this paragraph, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this paragraph that
such Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(f) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.20 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
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2.21 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.18 or 2.19(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office or assign its rights and obligations hereunder
to another of its branches, offices or affiliates for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that
such designation or assignment is made on terms that, in the sole judgment of
such Lender, cause such Lender and its lending office(s) to suffer no economic,
legal or regulatory disadvantage, and provided, further, that nothing in this
Section shall affect or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to Section 2.18 or 2.19(a).
2.22 Replacement of Lenders. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.18 or 2.19(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.21 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.18 or 2.19(a), (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall
be liable to such replaced Lender under Section 2.20 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6 (provided that the
Borrower shall be obligated to pay the registration and processing fee referred
to therein), (viii) until such time as such replacement shall be consummated,
the Borrower shall pay all additional amounts (if any) required pursuant to
Section 2.18 or 2.19(a), as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights that the Borrower, the Administrative
Agent or any other Lender shall have against the replaced Lender.
2.23 Evidence of Debt. (a) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(b) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(c) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.23(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
33
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(d) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing any Term Loans, Revolving Loans or
Swing Line Loans, as the case may be, of such Lender, substantially in the forms
of Exhibit G-1, G-2 or G-3, respectively, with appropriate insertions as to date
and principal amount.
2.24 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.20.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Revolving Lenders
set forth in Section 3.4(a), agrees to issue standby letters of credit
substantially in the form of Exhibit H hereto ("Letters of Credit") for the
account of the Borrower on any Business Day during the Revolving Commitment
Period in such form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to issue any Letter of
Credit if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Commitments would be less than zero. Each Letter of Credit shall (i)
be denominated in Dollars, (ii) have a face amount of at least $100,000 (unless
otherwise agreed by the Issuing Lender) and (iii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the date
that is five Business Days prior to the Revolving Termination Date, provided
that any Letter of Credit with a one-year term may provide for the renewal
thereof for additional one-year periods (which shall in no event extend beyond
the date referred to in clause (y) above).
(b) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will notify the Administrative Agent of the amount, the beneficiary and the
requested expiration of the requested Letter of Credit, and upon receipt of
confirmation from the Administrative Agent that after giving effect to the
34
requested issuance, the Available Revolving Commitments would not be less than
zero, the Issuing Lender will process such Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall promptly issue
the Letter of Credit requested thereby (but in no event shall the Issuing Lender
be required to issue any Letter of Credit earlier than three Business Days after
its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may
be agreed to by the Issuing Lender and the Borrower. The Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower (with a copy to the
Administrative Agent) promptly following the issuance thereof. The Issuing
Lender shall promptly furnish to the Administrative Agent, which shall in turn
promptly furnish to the Lenders, notice of the issuance of each Letter of Credit
(including the amount thereof).
3.3 Fees and Other Charges. (a) The Borrower will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar Loans under the Revolving Facility,
shared ratably among the Revolving Lenders and payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date. In addition, the Borrower
shall pay to the Issuing Lender for its own account a fronting fee of 0.125% on
the daily average aggregate of the undrawn and unexpired amount of all Letters
of Credit, payable quarterly in arrears on each L/C Fee Payment Date after the
Issuance Date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions set forth below, for such L/C Participant's
own account and risk an undivided interest equal to such L/C Participant's
Revolving Percentage in the Issuing Lender's obligations and rights under and in
respect of each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Administrative Agent upon demand of the Issuing Lender an
amount equal to such L/C Participant's Revolving Percentage of the amount of
such draft, or any part thereof, that is not so reimbursed. The Administrative
Agent shall promptly forward such amounts to the Issuing Lender.
(b) If any amount required to be paid by any L/C Participant to the
Administrative Agent for the account of the Issuing Lender pursuant to Section
3.4(a) in respect of any unreimbursed portion of any payment made by the
Administrative Agent for the account of the Issuing Lender under any Letter of
Credit is paid to the Administrative Agent for the account of the Issuing Lender
within three Business Days after the date such payment is due, such L/C
Participant shall pay to the Administrative Agent for the account of the Issuing
Lender on demand an amount equal to the product of (i) such amount, times (ii)
the daily average Federal Funds Effective Rate during the period from and
including the date such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
35
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to Section 3.4(a) is not made available to the
Administrative Agent for the account of the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans under the Revolving Facility. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.4(a), the Administrative
Agent or the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of interest on
account thereof, the Administrative Agent or the Issuing Lender, as the case may
be, will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by the
Administrative Agent or the Issuing Lender, as the case may be, shall be
required to be returned by the Administrative Agent or the Issuing Lender, such
L/C Participant shall return to the Administrative Agent for the account of the
Issuing Lender the portion thereof previously distributed by the Administrative
Agent or the Issuing Lender, as the case may be, to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower (such notice to be promptly delivered by the Issuing Lender to the
Borrower) of the date and amount of a draft presented under any Letter of Credit
and paid by the Issuing Lender for the amount of (a) such draft so paid and (b)
any taxes, fees, charges or other costs or expenses incurred by the Issuing
Lender in connection with such payment. Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in lawful money of
the United States and in immediately available funds. Interest shall be payable
on any and all amounts remaining unpaid by the Borrower under this Section from
the date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full at the rate set forth in (i)
until the second Business Day following the date of the applicable drawing,
Section 2.14(b) and (ii) thereafter, Section 2.14(c). Each drawing under any
Letter of Credit shall (unless an event of the type described in clause (i) or
(ii) of Section 8(f) shall have occurred and be continuing with respect to the
Borrower, in which case the procedures specified in Section 3.4 for funding by
L/C Participants shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing pursuant to Section 2.5 of Base Rate Loans
(or, at the option of the Administrative Agent and the Swing Line Lender in
their sole discretion, a borrowing pursuant to Section 2.7 of Swing Line Loans)
in the amount of such drawing. The Borrowing Date with respect to such borrowing
shall be the first date on which a borrowing of Revolving Loans (or, if
applicable, Swing Line Loans) could be made, pursuant to Section 2.5 or, if
applicable, Section 2.7, if the Administrative Agent had received a notice of
such borrowing at the time the Administrative Agent receives notice from the
relevant Issuing Lender of such drawing under such Letter of Credit.
3.6 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
36
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions resulting from the gross negligence or willful misconduct of the
Issuing Lender or the breach of its obligations under this Agreement. The
Borrower agrees that any action taken or omitted by the Issuing Lender under or
in connection with any Letter of Credit or the related drafts or documents, if
done in the absence of gross negligence or willful misconduct and in accordance
with the standards of care specified in the Uniform Commercial Code of the State
of New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, the
Borrower hereby represents and warrants to each Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at December
31, 1999 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies
of which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the Loans to be made
on the Closing Date and the use of proceeds thereof to consummate the
Refinancing and (ii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the Borrower as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at December 31, 1999, assuming
that the events specified in the preceding sentence had actually occurred at
such date.
(b) The audited consolidated balance sheets of the Borrower as at
December 31, 1998 and December 31, 1997, and the related consolidated statements
of income and of cash flows for the fiscal years ended on such dates, reported
on by and accompanied by an unqualified report from BDO Seidman LLP, present
37
fairly the consolidated financial condition of the Borrower as at such date, and
the consolidated results of its operations and its consolidated cash flows for
the respective fiscal years then ended. The unaudited consolidated balance sheet
of the Borrower as at September 30, 1999, and the related unaudited consolidated
statements of income and cash flows for the nine-month period ended on such
date, present fairly the consolidated financial condition of the Borrower as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the nine-month period then ended (subject to normal year-end
audit adjustments). All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). The Borrower and its
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph. During the period from December 31, 1998 to and
including the date hereof there has been no Disposition by the Borrower of any
material part of its business or property.
(c) The consolidated balance sheets of Collagen Aesthetics, Inc.
("Collagen") and its Subsidiaries as of June 30, 1999, and the related
consolidated statements of earnings, cash flows and stockholders' equity of
Collagen and its Subsidiaries for the fiscal year ended on such date, including
the notes and schedules thereto and accompanied by an opinion of Ernst & Young
LLP, independent certified public accountants of Collagen, copies of which have
been furnished to the Syndication Agent, present fairly the consolidated
financial condition of Collagen and its Subsidiaries as at such date and the
consolidated results of operations and cash flows of Collagen and its
Subsidiaries for the period ended on such date in accordance with GAAP applied
consistently throughout the periods involved, subject to year-end audit
adjustments.
4.2 No Change. Since September 30, 1999, there has been no development
or event that has had or could reasonably be expected to have a Material Adverse
Effect.
4.3 Corporate Existence; Compliance with Law. Each of the Borrower and
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan
Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower, to authorize the extensions of credit on the terms and conditions of
this Agreement. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Refinancing, the extensions of credit hereunder
or with the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except (i) consents, authorizations,
38
filings and notices described in Schedule 4.4, which consents, authorizations,
filings and notices have been obtained or made and are in full force and effect
and (ii) the filings referred to in Section 4.19. Each Loan Document has been
duly executed and delivered on behalf of each Loan Party party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of the Borrower or any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents). No Requirement of Law or Contractual
Obligation applicable to the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
4.6 Litigation. Except as disclosed on Schedule 4.6, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of the Borrower, threatened by or
against the Borrower or any of its Subsidiaries or against any of their
respective properties or revenues (a) with respect to any of the Loan Documents
or any of the transactions contemplated hereby or thereby, or (b) that could
reasonably be expected to have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other property, and none of such property is subject to any Lien except as
permitted by Section 7.3.
4.9 Intellectual Property. The Borrower and each of its Subsidiaries
owns, or is licensed to use, all Intellectual Property necessary for the conduct
of its business as currently conducted. Except as disclosed on Schedule 4.9, no
material claim has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does the Borrower know of any
valid basis for any such claim. The use of Intellectual Property by the Borrower
and its Subsidiaries does not infringe on the rights of any Person in any
material respect.
4.10 Taxes. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all material Federal, state and other tax returns that are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other material taxes, fees or other charges imposed on it or any of its property
39
by any Governmental Authority (other than any taxes the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no material tax
Lien (other than any Lien that is permitted to exist pursuant to 7.3 hereof) has
been filed, and, to the knowledge of the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
4.12 Labor Matters. Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against the Borrower or any of its Subsidiaries pending or, to
the knowledge of the Borrower, threatened; (b) hours worked by and payment made
to employees of the Borrower and its Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable Requirement of Law dealing
with such matters; and (c) all payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of the Borrower or the relevant
Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15 Subsidiaries. Except as disclosed to the Administrative Agent by
the Borrower in writing from time to time after the Closing Date, (a) Schedule
4.15 sets forth the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital Stock
40
owned by any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors' qualifying shares) of
any nature relating to any Capital Stock of the Borrower or any Subsidiary,
except as created by the Loan Documents. As of the date hereof, each of the
Excluded Foreign Subsidiaries has no assets or liabilities and does not conduct
business operations.
4.16 Use of Proceeds. The proceeds of the Term Loans shall be used to
consummate the Refinancing and to pay related fees and expenses. The proceeds of
the Revolving Loans and the Swingline Loans, and the Letters of Credit, shall be
used for general corporate purposes.
4.17 Environmental Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") do not contain, and
have not previously contained, any Materials of Environmental Concern in
amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability under, any
Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has received or
is aware of any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the Properties or
the business operated by the Borrower or any of its Subsidiaries (the
"Business"), nor does the Borrower have knowledge or reason to believe that
any such notice will be received or is being threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location that could give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation
of, or in a manner that could give rise to liability under, any applicable
Environmental Law;
(d) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or
the Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could give rise to liability under
Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or
41
about the Properties or violation of any Environmental Law with respect to
the Properties or the Business; and
(g) neither the Borrower nor any of its Subsidiaries has assumed any
liability of any other Person under Environmental Laws.
4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
by or on behalf of any Loan Party to the Administrative Agent or the Lenders, or
any of them, for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein not misleading. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact known
to any Loan Party that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.
4.19 Security Documents. The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings specified on Schedule
4.19(a) in appropriate form are filed in the offices specified on Schedule
4.19(a), the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 7.3).
4.20 Solvency. Each Loan Party is, and after giving effect to the
incurrence of all Indebtedness and obligations being incurred in connection
herewith will be and will continue to be, Solvent.
4.21 Year 2000 Matters. Any reprogramming required to permit the
proper functioning (but only to the extent that such proper functioning would
otherwise be impaired by the occurrence of the year 2000) in and following the
year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Borrower or any of its
Subsidiaries or used or relied upon in the conduct of their business (including
any such systems and other equipment supplied by others or with which the
42
computer systems of the Borrower or any of its Subsidiaries interface), and the
testing of all such systems and other equipment as so reprogrammed, have been
completed. The costs to the Borrower and its Subsidiaries for such reprogramming
and testing and for the other reasonably foreseeable consequences to them of any
improper functioning of other computer systems and equipment containing embedded
microchips due to the occurrence of the year 2000 could not reasonably be
expected to result in a Default or Event of Default or to have a Material
Adverse Effect. The computer systems of the Borrower and its Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the term
of this Agreement to be, sufficient for the conduct of their business as
currently conducted.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date (but in any event no later than February
1, 2000), of the following conditions precedent:
(a) Credit Agreement; Guarantee and Collateral Agreement. The
Syndication Agent shall have received (i) this Agreement, executed and
delivered by each Agent, the Borrower and each Person listed on Schedule
1.1A, (ii) the Guarantee and Collateral Agreement, executed and delivered
by the Borrower and each Subsidiary Guarantor and (iii) an Acknowledgment
and Consent in the form attached to the Guarantee and Collateral Agreement,
executed and delivered by each Issuer (as defined therein), if any, that is
not a Loan Party.
In the event that this Agreement has not been duly executed and
delivered by each Person listed on Schedule 1.1A on the date scheduled to
be the Closing Date, the condition referred to in clause (i) above shall
nevertheless be deemed satisfied if on such date the Borrower and the
Syndication Agent shall have designated one or more Persons (the
"Designated Lenders") to assume, in the aggregate, all of the Commitments
that would have been held by the Persons listed on Schedule 1.1A (the
"Non-Executing Persons") which have not so executed and delivered this
Agreement (subject to each such Designated Lender's consent and its
execution and delivery of this Agreement). Schedule 1.1A shall
automatically be deemed to be amended to reflect the respective Commitments
of the Designated Lenders and the omission of the Non-Executing Persons as
Lenders hereunder.
(b) Refinancing. Concurrently with the making of the Loans on the
Closing Date, the loans and all other amounts owing under the Bridge Loan
Agreement shall have been repaid in full and any Liens securing the Bridge
Loan Agreement shall have been terminated, in each case, pursuant to
documentation in form and substance reasonably satisfactory to the
Syndication Agent (collectively, the "Refinancing").
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of the Borrower for the 1998 and 1997 fiscal years and
(iii) unaudited interim consolidated financial statements of the Borrower
for each quarterly period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clause (ii) of this
paragraph as to which such financial statements are available, and such
financial statements shall not, in the reasonable judgment of the Lenders,
43
reflect any material adverse change in the consolidated financial condition
of the Borrower, as reflected in the financial statements or projections
contained in the Confidential Information Memorandum (such receipt to be
evidenced by such Lender's execution of this Agreement).
(d) Approvals. All governmental and third party approvals (including
landlords' and other consents) necessary in connection with the
Refinancing, the continuing operations of the Borrower and its Subsidiaries
and the transactions contemplated hereby shall have been obtained and be in
full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent
authority that would restrain, prevent or otherwise impose adverse
conditions on the Refinancing or the financing contemplated hereby.
(e) Lien Searches. The Syndication Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Borrower or its Subsidiaries except for liens
permitted by Section 7.3 or discharged on or prior to the Closing Date
pursuant to documentation reasonably satisfactory to the Syndication Agent.
(f) Fees. The Lenders and the Agents shall have received all fees
required to be paid, and all expenses for which invoices have been
presented, on or before the Closing Date. All such amounts will be paid
with proceeds of Loans made on the Closing Date and will be reflected in
the funding instructions given by the Borrower to the Syndication Agent on
or before the Closing Date.
(g) Closing Certificate. The Syndication Agent shall have received,
with a counterpart for each Lender, a certificate of each Loan Party, dated
the Closing Date, substantially in the form of Exhibit C, with appropriate
insertions and attachments.
(h) Legal Opinions. The Syndication Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, counsel to the Borrower and its Subsidiaries, substantially in
the form of Exhibit E-1; and
(ii) the legal opinion of David Bamberger, general counsel of the
Borrower and its Subsidiaries, substantially in the form of Exhibit
E-2.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Syndication Agent may
reasonably require.
(i) Pledged Stock; Stock Powers; Pledged Notes. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each
promissory note (if any) pledged to the Administrative Agent pursuant to
the Guarantee and Collateral Agreement endorsed (without recourse) in blank
(or accompanied by an executed transfer form in blank) by the pledgor
thereof.
44
(j) Filings, Registrations and Recordings. Each document (including
any Uniform Commercial Code financing statement) required by the Security
Documents or under law or reasonably requested by the Syndication Agent or
the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation and arrangements reasonably satisfactory to the
Syndication Agent for the filing, registration or recordation thereof shall
have been made.
(k) Solvency Certificate. The Syndication Agent shall have received a
solvency certificate from the chief financial officer of the Borrower.
(l) Financial Projections. Each of the Lenders shall have received and
be satisfied with financial projections for fiscal years 1999-2004 and a
written analysis of the business and prospects of the Borrower and its
subsidiaries for the period from the Closing Date through the final
maturity of the Term Loans.
(m) Minimum EBITDA. The Borrower shall have presented evidence and
supporting calculations reasonably satisfactory to the Syndication Agent
that the Borrower's Consolidated EBITDA for the 12-month period ended
September 30, 1999, calculated on a pro forma basis as if the Refinancing
had occurred on the first day of such period (which pro forma calculation
may include operating expense reductions and other cost savings to the
extent permitted under Regulation S-X of the SEC or to the extent otherwise
approved by the Syndication Agent), was at least $60,000,000.
(n) Insurance. The Syndication Agent shall have received insurance
certificates satisfying the requirements of Section 5.3(b) of the Guarantee
and Collateral Agreement.
5.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date (except to the extent that such representation or warranty
specifically refers to a particular date).
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
45
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or any Agent hereunder, the Borrower shall and shall cause
each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent, the
Syndication Agent and each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative
form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by BDO Seidman LLP or other independent
certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to the Administrative
Agent, the Syndication Agent and each Lender (or, in the case of clause (f), to
the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of each such Responsible Officer's knowledge, each Loan
Party during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this
Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii) in the case of quarterly or annual
financial statements, (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by the
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Borrower and its Subsidiaries with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal year
of the Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agent, a listing of any county or state
within the United States where any Loan Party keeps inventory or equipment
and of any Intellectual Property acquired by any Loan Party since the date
of the most recent list delivered pursuant to this clause (y) (or, in the
case of the first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45 days after
the end of each fiscal year of the Borrower, a detailed consolidated budget
for the following fiscal year (including a projected consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of the following
fiscal year, the related consolidated statements of projected cash flow,
projected changes in financial position and projected income and a
description of the underlying assumptions applicable thereto), and, as soon
as available, significant revisions, if any, of such budget and projections
with respect to such fiscal year (collectively, the "Projections"), which
Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on reasonable
estimates, information and assumptions and that such Responsible Officer
has no reason to believe that such Projections are incorrect or misleading
in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the portion
of the Projections covering such periods and to the comparable periods of
the previous year;
(e) within five days after the same are sent, copies of all financial
statements and reports that the Borrower sends to the holders of any class
of its debt securities or public equity securities and, within ten days
after the same are filed, copies of all financial statements and reports
that the Borrower may make to, or file with, the SEC; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
6.4 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and
keep in full force and effect its corporate existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii) above,
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
47
6.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted and (b) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.
6.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) following
reasonable notice by any Lender, permit representatives of such Lender to visit
and inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers and employees
of the Borrower and its Subsidiaries and with its independent certified public
accountants.
6.7 Notices. Promptly give notice to the Administrative Agent, the
Syndication Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding that may exist at any time between the Borrower
or any of its Subsidiaries and any Governmental Authority, that in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries (i) in which the amount involved is $5,000,000 or more and not
covered by insurance, (ii) in which injunctive or similar relief is sought
or (iii) which relates to any Loan Document;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan; and
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
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6.8 Environmental Laws. (a) Comply in all material respects with, and
require compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and require that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Interest Rate Protection. In the case of the Borrower, in the
event that the Consolidated Fixed Charge Coverage Ratio for any fiscal quarter
of the Borrower is less than 2.00 to 1.00, within 10 (ten) Business Days after
such occurrence, enter into, and thereafter maintain, Hedge Agreements to the
extent necessary to provide that at least 50% of the aggregate principal amount
of the Term Loans is subject to either a fixed interest rate or interest rate
protection for a period of not less than two years, which Hedge Agreements shall
have terms and conditions reasonably satisfactory to the Administrative Agent.
6.10 Additional Collateral, etc. (a) With respect to any property
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than (x) any property described in paragraph (b), (c) or (d) below, (y)
any property subject to a Lien expressly permitted by Section 7.3(g) and (z)
property acquired by any Foreign Subsidiary) as to which the Administrative
Agent, for the benefit of the Lenders, does not have a perfected Lien, promptly
(i) execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a security interest in such property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in such
property, including the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be required by the Guarantee and Collateral
Agreement or by law or as may be requested by the Administrative Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $5,000,000 acquired after
the Closing Date by the Borrower or any of its Subsidiaries (other than (x) any
such real property subject to a Lien expressly permitted by Section 7.3(g) and
(z) real property acquired by any Foreign Subsidiary), promptly (i) execute and
deliver a first priority mortgage, in favor of the Administrative Agent, for the
benefit of the Lenders, covering such real property, (ii) if requested by the
Administrative Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real property in an amount at least equal to the
purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor's certificate and (y) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such mortgage or deed of trust, each of the foregoing in form
and substance reasonably satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
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(c) With respect to any new Subsidiary (other than a Foreign
Subsidiary) created or acquired after the Closing Date by the Borrower or any of
its Subsidiaries, (which, for the purposes of this paragraph (c), shall include
any existing Subsidiary that ceases to be a Foreign Subsidiary) promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by the Borrower or any of its Subsidiaries, (ii)
deliver to the Administrative Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the Borrower or such Subsidiary, as the case may be,
(iii) cause such new Subsidiary (A) to become a party to the Guarantee and
Collateral Agreement, (B) to take such actions necessary or advisable to grant
to the Administrative Agent for the benefit of the Lenders a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such new Subsidiary, including the filing
of Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent and (C) to deliver to the Administrative
Agent a certificate of such Subsidiary, substantially in the form of Exhibit C,
with appropriate insertions and attachments, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Foreign Subsidiary created or acquired
after the Closing Date by the Borrower or any of its Subsidiaries or with
respect to any Excluded Foreign Subsidiary to the extent such Excluded Foreign
Subsidiary engages in any business or acquires any assets after the Closing
Date, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, and take such other action as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Administrative
Agent's security interest therein, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
6.11 Further Assurances. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds
thereof or with respect to any other property or assets hereafter acquired by
the Borrower or any Subsidiary which may be deemed to be part of the Collateral)
pursuant hereto or thereto. Upon the exercise by the Administrative Agent or any
Lender of any power, right, privilege or remedy pursuant to this Agreement or
the other Loan Documents which requires any consent, approval, recording
qualification or authorization of any Governmental Authority, the Borrower will
execute and deliver, or will cause the execution and delivery of, all
50
applications, certifications, instruments and other documents and papers that
the Administrative Agent or such Lenders may be required to obtain from the
Borrower or any of its Subsidiaries for such governmental consent, approval,
recording, qualification or authorization.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or any Agent hereunder, the Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
March 31, 2000 2.50 to 1.00
June 30, 2000 2.50 to 1.00
September 30, 2000 2.50 to 1.00
December 31, 2000 and
thereafter 2.00 to 1.00
; provided, that for the purposes of determining the ratio described above for
the fiscal quarters of the Borrower ending March 31, 2000 and June 30, 2000,
Consolidated EBITDA for the relevant period shall be deemed to equal
Consolidated EBITDA for the period commencing October 1, 1999 through March 31,
2000 or June 30, 2000, as the case may be, multiplied by 2 and 4/3,
respectively.
(b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower (or, if less, the number of full fiscal quarters subsequent to
September 30, 1999) to be less than 1.50 to 1.00.
(c) Consolidated Net Worth. Permit Consolidated Net Worth at any time
to be less than the sum of (i) $110,000,000, (ii) 50% of cumulative Consolidated
Net Income for each fiscal year of the Borrower (beginning with the fiscal year
ending December 31, 2000) for which Consolidated Net Income is positive, (iii)
100% of the Net Cash Proceeds of any offering by the Borrower of common equity
consummated after the Closing Date and (iv) 100% of any capital contribution
made to the Borrower or any of its Subsidiaries after the Closing Date by any
holder of the Borrower's Capital Stock.
7.2 Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
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(b) Indebtedness (i) of the Borrower to any Subsidiary, (ii) of any
Subsidiary Guarantor to the Borrower or any other Subsidiary, (iii) of any
Foreign Subsidiary to any Foreign Subsidiary and (iv) subject to Section
7.8(h), of any Foreign Subsidiary to the Borrower or any Subsidiary
Guarantor;
(c) Guarantee Obligations incurred in the ordinary course of business
by the Borrower or any of its Subsidiaries of obligations of any Subsidiary
Guarantor and, subject to Section 7.8(h), of any Foreign Subsidiary;
(d) Indebtedness outstanding on the date hereof and listed on Schedule
7.2(d) and any refinancings, refundings, renewals or extensions thereof
(without increasing, or shortening the maturity of, the principal amount
thereof);
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $10,000,000 at any one time outstanding;
(f) Hedge Agreements in respect of Indebtedness otherwise permitted
hereby that bears interest at a floating rate, so long as such agreements
are not entered into for speculative purposes;
(g) Indebtedness of Foreign Subsidiaries in an aggregate principal
amount not exceeding $5,000,000 at any one time outstanding for all Foreign
Subsidiaries;
(h) Indebtedness of the Borrower or its Subsidiaries in respect of
performance bonds, bid bonds, appeal bonds, surety bonds and similar
obligations and trade-related letters of credit, in each case provided in
the ordinary course of business and in no event in excess of $500,000 at
any one time outstanding for all such Indebtedness;
(i) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business; provided that such
Indebtedness is extinguished within five Business Days of its incurrence in
accordance with customary business practices;
(j) Indebtedness of any Person that becomes a Subsidiary after the
date hereof; provided that such Indebtedness exists at the time such Person
becomes a Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary; and
(k) additional Indebtedness of the Borrower or any of its Subsidiaries
in an aggregate principal amount (for the Borrower and all Subsidiaries)
not to exceed $5,000,000 at any one time outstanding.
7.3 Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, whether now owned or hereafter acquired, except for:
52
(a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are not
overdue for a period of more than 30 days or that are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Section 7.2(d), and any Liens in
connection with the refinancing of any Indebtedness secured by such Liens,
provided that no such Lien is spread to cover any additional property after
the Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(e) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
within 180 days of the acquisition of such fixed or capital assets, (ii)
such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (iii) the amount of Indebtedness secured
thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into by
the Borrower or any other Subsidiary in the ordinary course of its business
and covering only the assets so leased;
(j) Liens existing on any property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary or existing on any property or
asset of any Person that becomes a Subsidiary after the date hereof prior
to the time such Person becomes a Subsidiary; provided that (i) such Lien
is not created in contemplation of or in connection with such acquisition
or such Person becoming a Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Borrower or any
Subsidiary and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof; and
53
(k) Liens not otherwise permitted by this Section so long as the
aggregate outstanding principal amount of the obligations secured thereby
does not exceed (as to the Borrower and all Subsidiaries) $5,000,000 at any
one time.
7.4 Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower or any Person acquired by the
Borrower may be merged or consolidated with or into the Borrower (provided
that the Borrower shall be the continuing or surviving corporation) or with
or into any Subsidiary Guarantor (provided that the Subsidiary Guarantor
shall be the continuing or surviving corporation) or, subject to Section
7.8(h), with or into any Foreign Subsidiary;
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor, or, subject to Section 7.8(h), any Foreign
Subsidiary; and
(c) any Subsidiary may liquidate or dissolve if (i) the Borrower
determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and is not materially disadvantageous to the
Lenders and (ii) any related Dispositions of property are permitted under
Section 7.5.
7.5 Disposition of Property. Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Subsidiary Guarantor or, subject to Section 7.8(h), any
Foreign Subsidiary; and
(e) the Disposition of other property; provided that the fair market
value of such property plus the aggregate value of all sale and leaseback
transactions entered into by the Borrower pursuant to clause (b) of Section
7.10, does not exceed $25,000,000 in the aggregate during the term of this
Agreement.
7.6 Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any Subsidiary, whether now
or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
54
the Borrower or any Subsidiary, or enter into any derivatives or other
transaction with any financial institution, commodities or stock exchange or
clearinghouse (a "Derivatives Counterparty") obligating the Borrower or any
Subsidiary to make payments to such Derivatives Counterparty as a result of any
change in market value of any such Capital Stock (collectively, "Restricted
Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the Borrower or any
Wholly Owned Subsidiary Guarantor;
(b) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may make a single purchase of its common stock
or common stock options from present or former directors, officers or
employees of the Borrower or any Subsidiary upon the death, disability or
termination of employment of such officer or employee, provided, that the
aggregate amount of such purchase shall not exceed $5,000,000;
(c) a Subsidiary of the Borrower may make dividends or other payments
or distributions to (i) a Person that is not an Affiliate of the Borrower
or any of its Subsidiaries or (ii) a Person that is an Affiliate of NovaMed
Inc. in connection with the strategic alliance between the Borrower and
NovaMed Inc. described in Section 7.8(k), provided that each such dividend
or other payment or distribution is made to such Person concurrently with a
dividend or other payment or distribution, as the case may be, to the
Borrower or any of its Wholly Owned Subsidiaries on a pro rata basis in
accordance with their respective ownership interests in the Subsidiary
making such dividend or other payment or distribution; and
(d) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may purchase its common stock; provided that
the aggregate amount of such purchases during any fiscal year of the
Borrower may not exceed 25% of Consolidated Domestic Net Income for the
immediately preceding fiscal year of the Borrower.
7.7 Capital Expenditures. Make or commit to make any Capital
Expenditure, except Capital Expenditures of the Borrower and its Subsidiaries in
the ordinary course of business not exceeding (i) an aggregate amount of
$20,000,000 during the fiscal years of the Borrower ending December 31, 2000 and
December 31, 2001; provided that no more than $15,000,000 of such amount shall
be expended in either such fiscal year and (ii) $7,500,000 during any fiscal
year of the Borrower occurring thereafter.
7.8 Investments. Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
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(d) loans and advances to directors, officers and employees of the
Borrower or any Subsidiary of the Borrower in the ordinary course of
business (including for travel, entertainment and relocation expenses) in
an aggregate amount for the Borrower or any Subsidiary of the Borrower not
to exceed $2,500,000 at any one time outstanding;
(e) Investments made by the Borrower or any of its Subsidiaries with
the proceeds of any Reinvestment Deferred Amount in order to repair assets
which were the subject of a Recovery Event or to acquire new assets which
are substitutes for, and are similar to, the assets which were the subject
of a Recovery Event;
(f) intercompany Investments by the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such Investment,
is a Subsidiary Guarantor;
(g) the Borrower and its Subsidiaries may make Investments in account
debtors received in connection with the bankruptcy or reorganization, or in
settlement of delinquent obligations, of customers in the ordinary course
of business and in accordance with applicable collection and credit
policies established by the Borrower or its applicable Subsidiary;
(h) intercompany Investments by the Borrower or any of its
Subsidiaries in any Person, that, prior to such Investment, is a Foreign
Subsidiary (including, without limitation, Guarantee Obligations with
respect to obligations of any such Foreign Subsidiary, loans made to any
such Foreign Subsidiary and Investments resulting from mergers with or
sales of assets to any such Foreign Subsidiary) in an aggregate amount
(valued at cost) not to exceed, together with any Investment pursuant to
paragraph (i) of this Section that results in the creation or acquisition
of a Foreign Subsidiary or the acquisition of assets by a Foreign
Subsidiary or any Investment in the Capital Stock of any Person which is
incorporated outside the United States of America, $5,000,000 during the
term of this Agreement;
(i) the Borrower and its Subsidiaries may maintain Investments
existing on the Closing Date and described in Schedule 7.8(i);
(j) the Borrower and its Subsidiaries may make Investments in an
aggregate amount not to exceed $5,000,000 pursuant to the strategic
alliance between the Borrower and Advanced Tissue Sciences, Inc. set forth
in the letter agreement dated as of May 10, 1999 between Advanced Tissue
Sciences, Inc. and the Borrower;
(k) the Borrower and its Subsidiaries may make Investments in an
aggregate amount not to exceed $2,500,000 pursuant to the strategic
alliance between the Borrower and NovaMed Inc. set forth in the letter
agreement dated March 25, 1999 between NovaMed Inc. and the Borrower;
(l) Investments resulting from Capital Expenditures permitted under
Section 7.7;
(m) Permitted Acquisitions; and
(n) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost) not to exceed $1,000,000 during the term
of this Agreement.
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7.9 Transactions with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrower or any Subsidiary Guarantor) unless such
transaction is (a) not prohibited under this Agreement, (b) in the ordinary
course of business of the Borrower or such Subsidiary, as the case may be, and
(c) upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person that is not an Affiliate.
7.10 Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by the Borrower or any Subsidiary of real or personal
property that has been or is to be sold or transferred by the Borrower or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Borrower or such Subsidiary, except for (a) any such sale and
leaseback transactions which result in the creation of Capital Lease
Obligations, which shall be permitted to the extent such Capital Lease
obligations are permitted under Section 7.2, and (b) any such sale and leaseback
transactions (other than any such transaction which results in the creation of a
Capital Lease Obligation) the aggregate value of which, together with the
aggregate value of all Dispositions of property made pursuant to Section 7.5(e),
do not exceed $25,000,000.
7.11 Changes in Fiscal Periods. Permit the fiscal year of the Borrower
to end on a day other than December 31 or change the Borrower's method of
determining fiscal quarters; provided that the Borrower may make one election
after the Closing Date to change its fiscal year end, if the Borrower enters
into such amendments to this Agreement as the Administrative Agent shall request
to reflect such change, including modifications to Section 7, such that the
covenants affected by such change shall have the same effect (or, in any case,
be substantively no less favorable to the Lenders, in the determination of the
Administrative Agent) after giving effect thereto as if such change were not
made. The Lenders hereby authorize the Administrative Agent to enter into such
amendments to effect such modifications, if any, in accordance with the
provisions of this Section.
7.12 Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of the Borrower or
any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its property or revenues, whether now owned or hereafter acquired,
to secure its obligations under the Loan Documents to which it is a party other
than (a) this Agreement and the other Loan Documents, (b) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby) or any agreements governing any
Indebtedness permitted under Section 7.2 (in which case any prohibition or
limitation shall permit the obligation of the Borrower and its Subsidiaries in
respect of the Loan Documents (any extension, renewal, refunding, refinancing,
replacement or increase thereof) to be secured by any and all of the assets of
the Borrower and its Subsidiaries), (c) any instrument governing Acquired Debt
or Capital Stock of a Person acquired by the Borrower or any of its Subsidiaries
as in effect at the time of such acquisition (except to the extent such Acquired
Debt was incurred or such Capital Stock was issued or incurred or its terms
amended in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the property or
any Person, other than the Person or the property of the Person, so acquired and
(d) customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices.
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7.13 Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) any instrument governing Acquired Debt or Capital Stock of a Person
acquired by the Borrower or any of its Subsidiaries as in effect at the time of
such acquisition (except to the extent such Acquired Debt was incurred or such
Capital Stock was issued or incurred or its terms amended in connection with or
in contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the property or any Person, other than the Person
or the property of the Person, so acquired and (iv) customary non-assignment
provisions in leases entered into in the ordinary course of business and
consistent with past practices.
7.14 Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or that are
reasonably related thereto.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
respect to the Borrower only), Section 6.7(a) or Section 7 of this
Agreement or Sections 5.6 and 5.8(b) of the Guarantee and Collateral
Agreement; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after notice
to the Borrower from the Administrative Agent or the Required Lenders; or
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(e) the Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including any
Guarantee Obligation, but excluding the Loans) on the scheduled or original
due date with respect thereto; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf of such
holder or beneficiary) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity to become
subject to a mandatory offer to purchase by the obligor thereunder or (in
the case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; provided, that a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless, at such time, one or more defaults,
events or conditions of the type described in clauses (i), (ii) and (iii)
of this paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $5,000,000; or
(f) (i) the Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above that
(A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets that results in
the entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any of its Subsidiaries shall generally not,
or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
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purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected
to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage) of $5,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported
to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) (i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), excluding the Permitted Investors, shall become, or
obtain rights (whether by means or warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of more than 35% of the
outstanding common stock of the Borrower; or (ii) the board of directors of
the Borrower shall cease to consist of a majority of Continuing Directors;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
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Revolving Commitments shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints each Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes such Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing result from
its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party a party thereto to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
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9.4 Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
the Borrower), independent accountants and other experts selected by such Agent.
Each Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action. The
Agents shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders (or, if so specified by this Agreement, all
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.
9.5 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all Lenders or any other
instructing group of Lenders specified by this Agreement); provided that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
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otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The Agents shall have the right to deduct any amount owed to
it by any Lender under this Section 9.7 from any payment made by it to such
Lender hereunder. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. The Syndication Agent may, at any time,
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by notice to the Lenders and the Administrative Agent, resign as Syndication
Agent hereunder, whereupon the duties, rights, obligations and responsibilities
of the Syndication Agent hereunder shall automatically be assumed by, and inure
to the benefit of, the Administrative Agent, without any further act by the
Syndication Agent, the Administrative Agent or any Lender. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
9.10 Agents Generally. Except as expressly set forth herein, neither
the Administrative Agent nor the Syndication Agent shall have any duties or
responsibilities hereunder in its capacity as such.
9.11 The Lead Arranger. The Lead Arranger, in its capacity as such,
shall have no duties or responsibilities, and shall incur no liability, under
this Agreement and other Loan Documents.
9.12 The Documentation Agent. The Documentation Agent, in its capacity
as such, shall have no duties or responsibilities, and shall incur no liability,
under this Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or releasing any
Collateral or any Subsidiary Guarantor (other than, in each case, any such
release in connection with any Disposition expressly permitted under Section
7.5) or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent (with the consent of the Required Lenders), as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder (except (x) in connection with the waiver of
applicability of any post-default increase in interest rates, which waiver shall
be effective with the consent of the Majority Facility Lenders of each adversely
affected Facility) and (y) that any amendment or modification of defined terms
used in the financial covenants in this Agreement shall not constitute a
reduction in the rate of interest or fees for purposes of this clause (i)) or
extend the scheduled date of any payment thereof, or increase the amount or
extend the expiration date of any Lender's Revolving Commitment, in each case
without the written consent of each Lender directly affected thereby; (ii)
eliminate or reduce the voting rights of any Lender under this Section 10.1
without the written consent of such Lender; (iii) reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of the
Collateral or release all or substantially all of the Subsidiary Guarantors from
their obligations under the Guarantee and Collateral Agreement, in each case
64
without the written consent of all Lenders; (iv) amend, modify or waive any
condition precedent to any extension of credit under the Revolving Facility set
forth in Section 5.2 (including in connection with any waiver of an existing
Default or Event of Default) without the written consent of the Majority
Facility Lenders with respect to the Revolving Facility; (v) reduce the
percentage specified in the definition of Majority Facility Lenders with respect
to any Facility without the written consent of all Lenders under such Facility;
(vi) amend, modify or waive any provision of Section 9 without the written
consent of each Agent adversely affected thereby; (vii) amend, modify or waive
any provision of Section 2.6 or 2.7 without the written consent of the Swingline
Lender; or (viii) amend, modify or waive any provision of Section 3 without the
written consent of the Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Agents and all future holders
of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Agents shall be restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
For the avoidance of doubt, this Agreement may be amended (or amended
and restated) with the written consent of the Required Lenders, the Syndication
Agent, the Administrative Agent and the Borrower (a) to add one or more
additional credit facilities to this Agreement and to permit the extensions of
credit from time to time outstanding thereunder and the accrued interest and
fees in respect thereof (collectively, the "Additional Extensions of Credit") to
share ratably in the benefits of this Agreement and the other Loan Documents
with the Term Loans and Revolving Extensions of Credit and the accrued interest
and fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders and Majority
Facility Lenders; provided, that no such amendment shall permit the Additional
Extensions of Credit to share ratably with or with preference to the Term Loans
in the application of mandatory prepayments without the consent of the Majority
Facility Lenders with respect to the Term Facility or otherwise to share ratably
with or with preference to the Revolving Extensions of Credit without the
consent of the Majority Facility Lenders with respect to the Revolving Facility.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the Agents, and
as set forth in an administrative questionnaire delivered to the Administrative
Agent in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto:
The Borrower: Inamed Corporation
11 Penn Plaza
Suite 946
New York, New York 10001
Telecopy: (212) 273-9622
Telephone: (212) 273-3430
65
The Administrative Agent: First Union National Bank
201 South College Street, CP-23
Charlotte, North Carolina 28288-0680
Attention: Syndication Agency Services
Telecopy: (704) 383-0835
Telephone: (704) 383-3721
with a copy to: Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246
Attention: Richard L. Mack
Telecopy: (704) 378-4000
Telephone: (704) 377-2536
The Syndication Agent: Bear Stearns Corporate Lending Inc.
245 Park Avenue
New York, NY 10167
Attention: Andrea LaBonte
Telecopy: (212) 272-9743
Telephone: (212) 272-0832
provided that any notice, request or demand to or upon any Agent, the Issuing
Lender, or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse each Agent for all its out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including the reasonable fees and disbursements of counsel to such Agent and
filing and recording fees and expenses, with statements with respect to the
foregoing to be submitted to the Borrower prior to the Closing Date (in the case
of amounts to be paid on the Closing Date) and from time to time thereafter on a
quarterly basis or such other periodic basis as such Agent shall deem
appropriate, (b) to pay or reimburse each Lender and such Agent for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other
documents, including the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Lender and of counsel
66
to such Agent, (c) to pay, indemnify, and hold each Lender and such Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, that may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and each Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower any of
its Subsidiaries or any of the Properties and the reasonable fees and expenses
of legal counsel in connection with claims, actions or proceedings by any
Indemnitee against any Loan Party under any Loan Document (all the foregoing in
this clause (d), collectively, the "Indemnified Liabilities"), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities result
from the gross negligence or willful misconduct of such Indemnitee or from the
breach of its obligations under this Agreement. Without limiting the foregoing,
and to the extent permitted by applicable law, the Borrower agrees not to assert
and to cause its Subsidiaries not to assert, and hereby waives and agrees to
cause its Subsidiaries to waive, all rights for contribution or any other rights
of recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this Section 10.5 shall
be payable not later than 10 days after written demand therefor. Statements
payable by the Borrower pursuant to this Section 10.5 shall be submitted to
Michael Doty (Telephone No. 212-273-3430) (Telecopy No. 212-273-9622) at the
address of the Borrower set forth in Section 10.2, or to such other Person or
address as may be hereafter designated by the Borrower in a written notice to
the Administrative Agent. The agreements in this Section 10.5 shall survive
repayment of the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender other than any Conduit Lender may, without the consent
of the Borrower, in accordance with applicable law, at any time sell to one or
more banks, financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
67
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Loans or
any fees payable hereunder, or postpone the date of the final maturity of the
Loans, in each case to the extent subject to such participation. The Borrower
agrees that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.18, 2.19 and 2.20
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; provided that, in the case of Section
2.19, such Participant shall have complied with the requirements of said Section
and provided, further, that no Participant shall be entitled to receive any
greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender other than any Conduit Lender (an "Assignor") may, in
accordance with applicable law, at any time and from time to time assign to any
Lender, any affiliate of any Lender or any Approved Fund or, with the consent of
the Borrower, the Syndication Agent and the Administrative Agent (which, in each
case, shall not be unreasonably withheld or delayed), to an additional bank,
financial institution or other entity (an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance, executed by such Assignee, such
Assignor and any other Person whose consent is required pursuant to this
paragraph, and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that no such assignment to an Assignee
(other than any Lender, any affiliate of any Lender or any Approved Fund) shall
be in an aggregate principal amount of less than $1,000,000 (other than in the
case of an assignment of all of a Lender's interests under this Agreement),
unless otherwise agreed by the Borrower and the Administrative Agent. For
purposes of the proviso contained in the preceding sentence, the amount
described therein shall be aggregated in respect of each Lender and its related
Approved Funds, if any. Any such assignment need not be ratable as among the
Facilities. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto). Notwithstanding any provision of this Section 10.6, the consent of the
Borrower shall not be required for any assignment that occurs when an Event of
Default pursuant to Section 8(f) shall have occurred and be continuing with
respect to the Borrower. Notwithstanding the foregoing, any Conduit Lender may
assign at any time to its designating Lender hereunder without the consent of
the Borrower or the Administrative Agent any or all of the Loans it may have
funded hereunder and pursuant to its designation agreement and without regard to
the limitations set forth in the first sentence of this Section 10.6(c).
68
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each other Loan Party, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Loans and any Notes evidencing the Loans recorded therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance, and thereupon one or more new Notes shall be issued
to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor, an Assignee and any other Person whose consent is required by Section
10.6(c), together with payment by the parties to such assignment to the
Administrative Agent of a registration and processing fee of $3,000 (or, in the
case of assignments by or to the Syndication Agent and its affiliates, $500),
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) record the information contained therein in the Register on
the effective date determined pursuant thereto.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 10.6 concerning assignments of Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (f) above.
(h) Each of the Borrower, each Lender and the Administrative Agent
hereby confirms that it will not institute against a Conduit Lender or join any
other Person in instituting against a Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
state bankruptcy or similar law, for one year and one day after the payment in
full of the latest maturing commercial paper note issued by such Conduit Lender;
provided, however, that each Lender designating any Conduit Lender hereby agrees
to indemnify, save and hold harmless each other party hereto for any loss, cost,
damage or expense arising out of its inability to institute such a proceeding
against such Conduit Lender during such period of forbearance.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "Benefitted
Lender") shall receive any payment of all or part of the Obligations owing to
it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
69
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Agents and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by any Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
70
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) 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 10.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) 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 sue in any other jurisdiction; and
(e) 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 any special, exemplary, punitive or consequential damages.
10.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) no Agent or Lender has any fiduciary relationship with or duty to
the Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the Agents and
Lenders, on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
10.14 Releases of Guarantees and Liens. (a) Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 10.1) to take any action requested by the Borrower having the effect
of releasing any Collateral or guarantee obligations (i) to the extent necessary
to permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 10.1 or (ii) under the
circumstances described in paragraph (b) below.
(b) At such time as the Loans, the Reimbursement Obligations and the
other obligations under the Loan Documents (other than obligations under or in
71
respect of Hedge Agreements) shall have been paid in full, the Commitments have
been terminated and no Letters of Credit shall be outstanding, the Collateral
shall be released from the Liens created by the Security Documents, and the
Security Documents and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Loan Party under
the Security Documents shall terminate, all without delivery of any instrument
or performance of any act by any Person.
10.15 Confidentiality. Each Agent and each Lender agrees to keep
confidential all non- public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to any Agent, any other Lender, any
affiliate of any Agent or Lender or any Approved Fund, (b) to any actual or
prospective Transferee or Hedge Agreement counterparty that agrees to comply
with the provisions of this Section, (c) to its employees, directors, agents,
attorneys, accountants and other professional advisors or those of any of its
affiliates, (d) upon the request or demand of any Governmental Authority, (e) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f) if requested or
required to do so in connection with any litigation or similar proceeding, (g)
that has been publicly disclosed, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender, (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document or
(j) to any direct or indirect contractual counterparty in swap agreements or
such contractual counterparty's professional advisor (so long as such
contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section 10.15).
10.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
INAMED CORPORATION
By: /s/ Ilan Reich
-----------------------------------
Name: Ilan Reich
Title:
FIRST UNION NATIONAL BANK, as
Administrative Agent and as a Lender
By: /s/ Paul Solitario
-----------------------------------
Name: Paul Solitario
Title:
BEAR STEARNS CORPORATE LENDING INC., as
Syndication Agent and as a Lender
By: /s/ Mark S. Lies
-----------------------------------
Name: Mark S. Lies
Title:
GMAC COMMERCIAL CREDIT LLC, as
Documentation Agent and as a Lender
By: /s/ Sam Cirili
-----------------------------------
Name: Sam Cirili
Title:
73
Annex A
PRICING GRID FOR REVOLVING LOANS, SWINGLINE LOANS,
TERM LOANS AND COMMITMENT FEES
=========================== ========================== ===============
Consolidated Applicable Margin Applicable
Leverage Ratio for Eurodollar Loans Margin for
Base Rate
Loans
- --------------------------- -------------------------- ---------------
> 2.00 to 1.00 3.50% 2.50%
-
- --------------------------- -------------------------- ---------------
< 2.00 to 1.00
and > 1.50 to 1.00 3.25% 2.25%
-
- --------------------------- -------------------------- ---------------
< 1.50 to 1.00 3.00% 2.00%
=========================== ========================== ===============
Changes in the Applicable Margin resulting from changes in the Consolidated
Leverage Ratio shall become effective on the date (the "Adjustment Date") that
is three Business Days after the date on which financial statements are
delivered to the Lenders pursuant to Section 6.1 and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified in Section 6.1, then, until the date that is three Business Days after
the date on which such financial statements are delivered, the highest rate set
forth in each column of the Pricing Grid shall apply. In addition, at all times
while an Event of Default shall have occurred and be continuing, the highest
rate set forth in each column of the Pricing Grid shall apply. Each
determination of the Consolidated Leverage Ratio pursuant to the Pricing Grid
shall be made in a manner consistent with the determination thereof pursuant to
Section 7.1.