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Exhibit
10.22
EXECUTION
COPY
SECOND-LIEN LOAN AND
GUARANTY AGREEMENT
dated as of April 13,
2005
among
RELIANT PHARMACEUTICALS,
INC.,
CERTAIN SUBSIDIARIES OF
RELIANT PHARMACEUTICALS, INC.,
as Guarantor
Subsidiaries,
VARIOUS
LENDERS,
GOLDMAN SACHS CREDIT
PARTNERS L.P.,
Lender, Lead Arranger,
Sole Bookrunner,
and Syndication
Agent
and
SILVER POINT FINANCE,
LLC
Administrative Agent and
Collateral Agent
$30,000,000 Senior Secured
Credit Facility
TABLE OF
CONTENTS
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Page
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| SECTION 1. |
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DEFINITIONS AND INTERPRETATION |
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1 |
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1.1.
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Definitions |
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1 |
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1.2.
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Accounting Terms |
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23 |
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1.3.
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Interpretation, etc |
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23 |
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| SECTION 2. |
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LOANS |
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23 |
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2.1.
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Term
Loans |
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23 |
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2.2.
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PIK
Loans |
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24 |
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2.3.
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[RESERVED] |
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24 |
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2.4.
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[RESERVED] |
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24 |
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2.5.
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Pro Rata
Shares; Availability of Funds |
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24 |
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2.6.
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Use of
Proceeds |
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25 |
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2.7.
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Evidence
of Debt; Register; Lenders’ Books and Records;
Notes |
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25 |
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2.8.
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Interest
on Loans |
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26 |
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2.9.
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[RESERVED] |
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26 |
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2.10.
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Default
Interest |
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26 |
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2.11.
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Fees |
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27 |
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2.12.
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[RESERVED] |
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27 |
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2.13.
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Voluntary
Prepayments |
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27 |
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2.14.
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Mandatory
Prepayments |
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28 |
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2.15.
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Application of Prepayments |
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30 |
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2.16.
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General
Provisions Regarding Payments |
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30 |
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2.17.
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Ratable
Sharing |
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31 |
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2.18.
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[RESERVED] |
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32 |
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2.19.
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Increased
Costs; Capital Adequacy |
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32 |
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2.20.
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Taxes;
Withholding, etc |
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33 |
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2.21.
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Obligation to Mitigate |
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35 |
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2.22.
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Defaulting Lenders |
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35 |
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2.23.
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Removal
or Replacement of a Lender |
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35 |
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| SECTION
3. |
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CONDITIONS PRECEDENT |
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36 |
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3.1.
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Closing
Date |
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36 |
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| SECTION
4. |
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REPRESENTATIONS AND WARRANTIES |
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40 |
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4.1.
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Organization; Requisite Power and Authority;
Qualification |
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40 |
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4.2.
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Capital
Stock and Ownership |
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40 |
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4.3.
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Due
Authorization |
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40 |
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4.4.
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No
Conflict, Violation, Default |
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40 |
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4.5.
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Governmental Consents |
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41 |
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4.6.
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Binding
Obligation |
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41 |
i
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4.7.
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Historical Financial Statements |
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41 |
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4.8.
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Projections |
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41 |
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4.9.
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No
Material Adverse Change |
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41 |
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4.10.
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Schedule
3.1(e) |
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42 |
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4.11.
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Adverse
Proceedings, etc |
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42 |
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4.12.
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Payment
of Taxes |
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42 |
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4.13.
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Properties |
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42 |
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4.14.
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Environmental Matters |
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43 |
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4.15.
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No
Defaults |
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44 |
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4.16.
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Material
Contracts |
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44 |
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4.17.
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Governmental Regulation |
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44 |
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4.18.
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Margin
Stock |
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45 |
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4.19.
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Employee
Matters |
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45 |
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4.20.
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Employee
Benefit Plans |
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45 |
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4.21.
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Certain
Fees |
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45 |
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4.22.
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Solvency |
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45 |
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4.23.
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[RESERVED] |
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45 |
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4.24.
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Permits,
Compliance with Statutes, etc |
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45 |
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4.25.
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Disclosure |
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46 |
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4.26.
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New Drug
Applications |
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46 |
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4.27.
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Quality
of Inventory |
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46 |
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4.28.
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Non-disclosure and Confidentiality Policies |
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46 |
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4.29.
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Non-compliance with Governmental Regulation |
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46 |
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| SECTION 5. |
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AFFIRMATIVE COVENANTS |
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47 |
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5.1.
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Financial
Statements and Other Reports |
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47 |
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5.2.
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Existence |
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50 |
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5.3.
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Payment
of Taxes and Claims |
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50 |
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5.4.
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Maintenance of Properties |
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51 |
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5.5.
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Insurance |
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51 |
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5.6.
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Inspections |
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51 |
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5.7.
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Lenders
Meetings |
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52 |
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5.8.
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Compliance with Laws |
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52 |
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5.9.
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Environmental |
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52 |
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5.10.
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Subsidiaries |
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53 |
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5.11.
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Additional Material Real Estate Assets |
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53 |
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5.12.
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Segregated Account for Working Capital Collateral |
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54 |
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5.13.
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[RESERVED] |
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54 |
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5.14.
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Further
Assurances |
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54 |
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5.15.
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Personal
Property Collateral Access Agreement |
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54 |
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| SECTION
6. |
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NEGATIVE
COVENANTS |
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54 |
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6.1.
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Indebtedness |
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54 |
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6.2.
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Liens |
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56 |
ii
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6.3.
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Equitable
Lien |
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58 |
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6.4.
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No
Further Negative Pledges |
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58 |
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6.5.
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Restricted Junior Payments |
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59 |
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6.6.
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Restrictions on Subsidiary Distributions |
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59 |
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6.7.
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Investments |
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59 |
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6.8.
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[RESERVED] |
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60 |
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6.9.
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Fundamental Changes; Disposition of Assets;
Acquisitions |
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60 |
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6.10.
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Disposal
of Subsidiary Interests |
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61 |
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6.11.
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Sales and
Lease-Backs |
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61 |
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6.12.
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Transactions with Shareholders and Affiliates |
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62 |
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6.13.
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Conduct
of Business |
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62 |
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6.14.
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[RESERVED] |
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62 |
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6.15.
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Provisions Related to Joint Ventures |
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62 |
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6.16.
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Amendments or Waivers with Respect to Certain
Indebtedness |
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62 |
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6.17.
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Fiscal
Year |
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62 |
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6.18.
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RP Sub
No. 1 |
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63 |
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| SECTION 7. |
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GUARANTY |
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63 |
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7.1.
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Guaranty
of the Obligations |
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63 |
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7.2.
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Contribution by Guarantor Subsidiaries |
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63 |
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7.3.
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Payment
by Guarantor Subsidiaries |
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63 |
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7.4.
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Liability
of Guarantor Subsidiaries Absolute |
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64 |
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7.5.
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Waivers
by Guarantor Subsidiaries |
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65 |
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7.6.
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Guarantor
Subsidiaries’ Rights of Subrogation, Contribution,
etc |
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66 |
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7.7.
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Subordination of Other Obligations |
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67 |
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7.8.
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Continuing Guaranty |
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67 |
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7.9.
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Authority
of Guarantor Subsidiaries or Company |
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67 |
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7.10.
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Financial
Condition of Company |
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67 |
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7.11.
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Bankruptcy, etc |
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67 |
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7.12.
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Discharge
of Guaranty Upon Sale of Guarantor Subsidiary |
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68 |
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| SECTION 8. |
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EVENTS OF
DEFAULT |
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68 |
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8.1.
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Events of
Default |
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68 |
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| SECTION
9. |
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AGENTS |
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70 |
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9.1.
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Appointment of Agents |
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70 |
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9.2.
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Powers
and Duties |
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71 |
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9.3.
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General
Immunity |
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71 |
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9.4.
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Agents
Entitled to Act as Lender |
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72 |
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9.5.
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Lenders’ Representations, Warranties and
Acknowledgment |
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72 |
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9.6.
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Right to
Indemnity |
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72 |
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9.7.
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Successor
Administrative Agent |
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72 |
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9.8.
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Collateral Documents and Guaranty |
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73 |
iii
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SECTION 10.
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MISCELLANEOUS |
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74 |
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10.1.
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Notices |
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74 |
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10.2.
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Expenses |
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74 |
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10.3.
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Indemnity |
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75 |
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10.4.
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Set-Off |
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75 |
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10.5.
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Amendments and Waivers |
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75 |
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10.6.
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Successors and Assigns; Participations |
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76 |
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10.7.
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Independence of Covenants |
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79 |
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10.8.
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Survival
of Representations, Warranties and Agreements |
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80 |
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10.9.
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No
Waiver; Remedies Cumulative |
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80 |
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10.10.
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Marshalling; Payments Set Aside |
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80 |
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10.11.
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Severability |
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80 |
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10.12.
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Obligations Several; Independent Nature of Lenders’
Rights |
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80 |
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10.13.
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Headings |
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80 |
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10.14.
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APPLICABLE LAW |
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81 |
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10.15.
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CONSENT
TO JURISDICTION |
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81 |
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10.16.
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WAIVER OF
JURY TRIAL |
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81 |
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10.17.
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Confidentiality |
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82 |
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10.18.
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Usury
Savings Clause |
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82 |
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10.19.
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Counterparts |
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82 |
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10.20.
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Effectiveness |
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83 |
iv
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| APPENDICES: |
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A |
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Commitments |
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B |
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Notice
Addresses |
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| SCHEDULES: |
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2.14(c) |
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Outstanding Warrants |
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3.1(e) |
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Liquidity
Option Agreements |
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4.1 |
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Jurisdictions of Organization and Qualification |
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4.2 |
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Capital
Stock and Ownership |
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4.7 |
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Certain
Liabilities |
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4.9 |
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Certain
Changes |
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4.11 |
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Adverse
Proceedings |
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4.12 |
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Taxes |
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4.13 |
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Title;
Real Estate Assets |
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4.13(c) |
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Intellectual Property Rights |
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4.16 |
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Material
Contracts |
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4.17(b) |
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Non-compliance with Governmental Regulation |
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4.24 |
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Legal
Compliance |
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6.1 (p) |
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Leased
and Financed Vehicles |
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6.2 (l) |
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Certain
Liens |
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6.7 |
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Certain
Investments |
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6.12 |
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Certain
Affiliate Transactions |
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| EXHIBITS: |
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A |
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Form of
Funding Notice |
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B-1 |
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Form of
Note |
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B-2 |
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Form of
PIK Note |
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C |
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Form of
Compliance Certificate |
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D |
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Form of
Opinion of Counsel |
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E |
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Form of
Assignment Agreement |
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F |
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Form of
Certificate Re Non-bank Status |
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G-1 |
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Form of
Closing Date Certificate |
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G-2 |
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Form of
Solvency Certificate |
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H |
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Form of
Counterpart Agreement |
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I |
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[RESERVED] |
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J |
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[RESERVED] |
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K |
|
Form of
Personal Property Collateral Access Agreement |
v
SECOND-LIEN LOAN AND
GUARANTY AGREEMENT
This SECOND-LIEN LOAN AND
GUARANTY AGREEMENT , dated as of April 13, 2005, is entered
into by and among RELIANT PHARMACEUTICALS, INC. , a
corporation organized under the laws of the state of Delaware (
“Company” ), CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantor Subsidiaries, the Lenders party hereto
from time to time, GOLDMAN SACHS CREDIT PARTNERS L.P. (
“GSCP” ), as Lender, Lead Arranger, Sole
Bookrunner and Syndication Agent, and SILVER POINT FINANCE,
LLC ( “Silver Point” ) as Administrative
Agent and Collateral Agent.
RECITALS:
WHEREAS, capitalized
terms used in these Recitals shall have the respective meanings set
forth for such terms in Section 1.1 hereof;
WHEREAS, Lenders have
agreed to make a term loan to Company, in an amount not to exceed
an aggregate principal amount of $30 million, the proceeds of which
will be used for general corporate purposes, working capital and
Permitted Acquisitions;
WHEREAS, Company has
agreed to secure all of its Obligations by granting to Collateral
Agent, for the benefit of Secured Parties, (1) a Second Priority
Lien on substantially all of its assets, including a pledge of all
of the Capital Stock of each of its Domestic Subsidiaries, if any,
and 65% of all of the Capital Stock of each of its Foreign
Subsidiaries, if any, but excluding the accounts receivable that
comprise the Working Capital Collateral, and (2) a third priority
lien on the Working Capital Collateral; and
WHEREAS, Guarantor
Subsidiaries have agreed to guarantee the obligations of Company
hereunder and, except in the case of RP Sub No. 1, to secure their
respective Obligations by granting to Collateral Agent, for the
benefit of Secured Parties, a Second Priority Lien on substantially
all of their respective assets, including a pledge of all of the
Capital Stock of each of their respective Domestic Subsidiaries, if
any, and 65% of all the Capital Stock of each of their respective
Foreign Subsidiaries, if any.
NOW, THEREFORE, in
consideration of the premises and the agreements, provisions and
covenants herein contained, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS AND
INTERPRETATION
1.1. Definitions . The
following terms used herein, including in the preamble, recitals,
exhibits and schedules hereto, shall have the following
meanings:
“Administrative
Agent” as defined in the preamble hereto.
“Adverse
Proceeding” means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation
or arbitration (whether or not purportedly on behalf of Company or
any of its Subsidiaries) at law or in equity, or before or by any
Governmental Authority, domestic or foreign (including any
Environmental Claims), whether pending or, to the Knowledge of
Company or any of its Subsidiaries, threatened in writing against
or adversely affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries.
“Affected
Lender” as defined in Section 2.18(b).
“Affected
Loans” as defined in Section 2.18(b).
“Affiliate” means, as applied to any Person,
any other Person directly or indirectly controlling, controlled by,
or under common control with, that Person. For the purposes of this
definition, “control” (including, with correlative
meanings, the terms “controlling”, “controlled
by” and “under common control with”), as applied
to any Person, means the possession, directly or indirectly, of the
power (i) to vote 10% or more of the Securities having ordinary
voting power for the election of directors (or individuals
performing comparable functions) of such Person or (ii) to direct
or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by
contract or otherwise.
“Agent”
means each of GSCP, Syndication Agent, Administrative Agent, and
Collateral Agent.
“Aggregate Amounts
Due” as defined in Section 2.17.
“Aggregate
Payments” as defined in Section 7.2.
“Aggregate Proceeds
Threshold” means the greater of (x) $7,500,000 and (y)
the net proceeds from the sale or disposition of Axid
® OS. For purposes of
calculating the Aggregate Proceeds Threshold, any amounts paid or
required to be paid after the Closing Date to Eli Lilly and Company
in connection with Axid ® OS shall be deducted
from the proceeds of the sale or disposition of Axid
® OS, whether or not such
amounts have already been paid at the time of the Axid
® OS sale.
“Agreement” means this Second-Lien Loan and
Guaranty Agreement, dated as of April 13, 2005, as it may be
amended, restated, supplemented or otherwise modified from time to
time.
“Asset
Sale” means a sale, lease or sub-lease (as lessor or
sublessor), sale-and-leaseback, assignment, conveyance, transfer or
other disposition to, or any exchange of property with, any Person
(other than Company or any Guarantor Subsidiary, excluding RP Sub
No. 1), in one transaction or a series of transactions, of all or
any part of Company’s or any of its Subsidiaries’
businesses, assets (other than Cash or Cash Equivalents sold for
the fair market value thereof) or properties of any kind, whether
real, personal or mixed and whether tangible or intangible, whether
now owned or hereafter acquired, including, without limitation, the
Capital Stock of any of Company’s Subsidiaries, other than
(i) inventory sold, leased or otherwise disposed of in the ordinary
course of business (excluding any such sales by operations or
divisions discontinued or to be discontinued) and obsolete, worn
out or surplus property, (ii) licenses and sublicenses granted by
Company in the ordinary course of business to enable third parties
to manufacture inventory for sale by Company or its Subsidiaries,
or otherwise provide goods or services to Company or its
Subsidiaries, provided , that such licenses and
sublicenses do not permit the manufacture of products for, or the
provision of services to, Persons other than the Company or its
Subsidiaries and Persons providing services to Company and its
Subsidiaries, and (iii) any transfer of a Product to a PSF Joint
Venture or any receipt of funds from a PSF Counterpart pursuant to
the terms of an Eligible Product-Specific Financing.
“Assignment
Agreement” means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or
modifications as may be approved by Administrative
Agent.
2
“Authorized
Officer” means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer),
chief executive officer, president or one of its vice presidents
(or the equivalent thereof), and such Person’s chief
financial officer, treasurer or controller.
“Bankruptcy
Code” means Title 11 of the United States Code entitled
“ Bankruptcy, ” as now and hereafter in
effect, or any successor statute.
“Beneficiary” means each Agent and each
Lender.
“Business
Day” means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New
York or is a day on which banking institutions located in such
state are authorized or required by law or other governmental
action to close.
“Capital
Lease” means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee
that, in conformity with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
“Capital
Stock” means 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), including, without
limitation, any preferred interests and preferred shares,
partnership interests and membership interests, and any and all
warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
“Cash”
means money, currency or a credit balance in any demand or Deposit
Account.
“Cash
Equivalents” means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States
Government or (b) issued by any agency of the United States the
obligations of which are backed by the full faith and credit of the
United States, in each case maturing within one year after such
date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof, in each case maturing
within one year after such date and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at
least P-1 from Moody’s; (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at
the time of the acquisition thereof, a rating of at least A-1 from
S&P or at least P-1 from Moody’s; (iv) certificates of
deposit or bankers’ acceptances maturing within one year
after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia that (a)
is at least “ adequately capitalized ”
(as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000; and (v) shares of any
money market mutual fund that (a) has substantially all of its
assets invested continuously in the types of investments referred
to in clauses (i) and (ii) above, (b) has net assets of not less
than $500,000,000, and (c) has the highest rating obtainable from
either S&P or Moody’s.
“Certificate re
Non-Bank Status” means a certificate substantially in the
form of Exhibit F.
“ cGMPs ”
means the regulatory requirements for current good manufacturing
practices promulgated by the United States FDA under the Food and
Drug Act, including at 21 C.F.R. § 210 et seq ., and
under the Public Health Service Act, Biological Products, 21 C.F.R.
§§ 610-10, as the same may be amended from time to
time.
3
“Change of
Control” means, at any time,
(i) any Person or
“ group ” (within the meaning of Rules
13d-3 and 13d-5 under the Exchange Act) other than Specified
Holders (a) shall have acquired beneficial ownership of 50% or more
on a fully diluted basis of the voting and/or economic interest in
the Capital Stock of Company or (b) shall have obtained the power
(whether or not exercised) to elect a majority of the members of
the board of directors (or similar governing body) of Company;
or
(ii) any “
change of control ” or similar event under the
documentation evidencing the Third-Lien Term Loan shall have
occurred; or
(iii) prior to the
consummation of an initial public offering of the Capital Stock of
Company, the Specified Holders fail to hold at least 25% of the
Capital Stock of the Company.
“Closing
Date” means the date of this Agreement, which shall be
the date on which the Loans are made pursuant to Section
2.1.
“Closing Date
Certificate” means a Closing Date Certificate
substantially in the form of Exhibit G-1.
“Collateral” means, collectively, all of the
owned real property, personal property, mixed property (including
Capital Stock) and the Interest Reserve Fund (as defined under the
First-Lien Term Loan Agreement) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the
Obligations.
“Collateral
Agent” as defined in the preamble hereto.
“ Collateral
Documents ” means the Pledge and Security Agreement and
all other instruments, documents and agreements delivered by any
Credit Party pursuant to this Agreement or any of the other Credit
Documents in order to grant to Collateral Agent, for the benefit of
Secured Parties, a Lien on any owned real property, personal
property or mixed property of that Credit Party as security for the
Obligations.
“Collateral
Questionnaire” means a certificate in form satisfactory
to Collateral Agent that provides information with respect to the
personal or mixed property of each Credit Party.
“Commitment” means the commitment of a
Lender to make or otherwise fund a Loan pursuant to Section 2.1 and
“Commitments” means such commitments of all
Lenders in the aggregate. The amount of each Lender’s
Commitment is set forth on Appendix A or in the applicable
Assignment Agreement. The aggregate amount of the Commitments as of
the Closing Date is $30,000,000 before giving effect to the Loans
made on the Closing Date. For the avoidance of doubt, the making of
a Loan under Section 2.1 and the consequent termination of such
Lender’s Commitment do not limit the obligation of such
Lender to make a PIK Loan under Section 2.8(b)(i).
“Company”
as defined in the preamble hereto.
“Compliance
Certificate” means a Compliance Certificate substantially
in the form of Exhibit C.
4
“Consolidated
Adjusted EBITDA” means, for any period, an amount
determined for Company and its Subsidiaries on a consolidated basis
equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Net Income, (b) Consolidated Interest
Expense, (c) provisions for taxes based on income, (d) total
depreciation expense, (e) total amortization expense, and (f) other
non-Cash items reducing Consolidated Net Income (excluding any such
non-Cash item to the extent that it represents an accrual or
reserve for potential Cash items in any future period or
amortization of a prepaid Cash item that was paid in a prior
period), minus (ii) other non-Cash items increasing
Consolidated Net Income for such period (excluding any such
non-Cash item to the extent it represents the reversal of an
accrual or reserve for potential Cash item in any prior
period).
“Consolidated
Capital Expenditures” means, for any period, the
aggregate of all expenditures of Company and its Subsidiaries
during such period determined on a consolidated basis that, in
accordance with GAAP, are or should be included in “purchase
of property and equipment” or similar items reflected in the
consolidated statement of cash flows of Company and its
Subsidiaries.
“Consolidated Cash
Interest Expense” means, for any period, Consolidated
Interest Expense for such period, excluding any amount not payable
in Cash.
“Consolidated
Current Assets” means, as at any date of determination,
the total assets of Company and its Subsidiaries on a consolidated
basis that may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash
Equivalents.
“Consolidated
Current Liabilities” means, as at any date of
determination, the total liabilities of Company and its
Subsidiaries on a consolidated basis that may properly be
classified as current liabilities in conformity with GAAP,
excluding the current portion of long-term debt.
“Consolidated Excess
Cash Flow” means, for any period, an amount (if positive)
equal to: (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Adjusted EBITDA, plus (b) the
Consolidated Working Capital Adjustment, minus (ii) the sum,
without duplication, of the amounts for such period of (a)
repayments of Consolidated Total Debt, (b) Consolidated Capital
Expenditures (net of any proceeds of (y) any related financings
with respect to such expenditures and (z) any sales of assets used
to finance such expenditures), (c) Consolidated Cash Interest
Expense, (d) provisions for current taxes based on income of
Company and its Subsidiaries and payable in cash with respect to
such period, and (e) Cash payments made by the Company and its
consolidated subsidiaries as part of the purchase price for a
Permitted Acquisition and expenses incurred to consummate such
Permitted Acquisition.
“Consolidated
Interest Expense” means, for any period, total interest
expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest hereunder or
otherwise) of Company and its Subsidiaries on a consolidated basis
with respect to all outstanding Indebtedness of Company and its
Subsidiaries, including all commissions, discounts and other fees
and charges owed with respect to letters of credit and net costs
under Interest Rate Agreements, but excluding, however, any amounts
referred to in Section 2.11 payable before the Closing
Date.
“Consolidated Net
Income” means, for any period, (i) the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in
conformity with GAAP, minus (ii) (a) the income (or loss) of
any Person (other than a Subsidiary of Company) in which any other
Person (other than Company or any of its Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other
distributions actually paid to Company or any of its Subsidiaries
by such Person during such period, (b) the income (or loss) of
any
5
Person accrued prior to the date it
becomes a Subsidiary of Company or is merged into or consolidated
with Company or any of its Subsidiaries or that Person’s
assets are acquired by Company or any of its Subsidiaries, (c) the
income of any Subsidiary of Company to the extent that the
declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (d) any after-tax gains or losses
attributable to Asset Sales or returned surplus assets of any
Pension Plan, and (e) (to the extent not included in clauses (a)
through (d) above) any net extraordinary gains or net extraordinary
losses.
“Consolidated Total
Debt” means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.
“Consolidated
Working Capital” means, as at any date of determination,
the excess of Consolidated Current Assets over Consolidated Current
Liabilities.
“Consolidated
Working Capital Adjustment” means, for any period on a
consolidated basis, the amount (which may be a negative number) by
which Consolidated Working Capital as of the beginning of such
period exceeds (or is less than) Consolidated Working Capital as of
the end of such period.
“Contractual
Obligation” means, as applied to any Person, any
provision of any Security issued by that Person or of any
indenture, mortgage, deed of trust, contract, undertaking,
agreement or other instrument to which that Person is a party or by
which it or any of its properties is bound or to which it or any of
its properties is subject.
“Contributing
Guarantors” as defined in Section 7.2.
“Counterpart
Agreement” means a Counterpart Agreement substantially in
the form of Exhibit H delivered by a Credit Party pursuant to
Section 5.10.
“Credit
Document” means any of this Agreement, the Notes, if any,
the Collateral Documents, the Term Loan Intercreditor Agreement,
the Working Capital Intercreditor Agreement and all other
documents, instruments or agreements executed and delivered by a
Credit Party for the benefit of any Agent, or any Lender in
connection herewith, and including, for the avoidance of doubt, any
Counterpart Agreement.
“Credit
Extension” means the making of the Loans.
“Credit
Party” means each Person (other than any Agent or any
Lender or any other representative thereof) from time to time party
to a Credit Document.
“Currency
Agreement” means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement, each of which is for the
purpose of hedging the foreign currency risk associated with
Company’s and its Subsidiaries’ operations and not for
speculative purposes.
“Default”
means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.
6
“Default
Excess” means, with respect to any Defaulting Lender, the
excess, if any, of such Defaulting Lender’s Pro Rata Share of
the aggregate outstanding principal amount of Loans of all Lenders
(calculated as if all Defaulting Lenders (other than such
Defaulting Lender) had funded all of their respective Defaulted
Loans) over the aggregate outstanding principal amount of all Loans
of such Defaulting Lender.
“Default
Period” means, with respect to any Defaulting Lender, the
period commencing on the date of the applicable Funding Default and
ending on the earliest of the following dates: (i) the date on
which the Obligations are declared or become immediately due and
payable, (ii) the date on which (a) the Default Excess with respect
to such Defaulting Lender shall have been reduced to zero (whether
by the funding by such Defaulting Lender of any Defaulted Loans of
such Defaulting Lender or by the non-pro rata application of any
voluntary or mandatory prepayments of the Loans in accordance with
the terms of Section 2.13 or Section 2.14 or by a combination
thereof) and (b) such Defaulting Lender shall have delivered to
Company and Administrative Agent a written reaffirmation of its
intention to honor its obligations hereunder with respect to its
Commitment, and (iii) the date on which Company, Administrative
Agent and Requisite Lenders waive all Funding Defaults of such
Defaulting Lender in writing.
“Defaulted
Loan” as defined in Section 2.22.
“Defaulting
Lender” as defined in Section 2.22.
“Deposit
Account” means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a negotiable
certificate of deposit.
“Dollars”
and the sign “$” mean the lawful money of the
United States of America.
“Domestic
Subsidiary” means any Subsidiary organized under the laws
of the United States of America, any State thereof or the District
of Columbia.
“Eligible
Assignee” means (i) any Lender, any Affiliate of any
Lender and any Related Fund (any two or more Related Funds being
treated as a single Eligible Assignee for all purposes hereof), and
(ii) any commercial bank, insurance company, investment or mutual
fund or other entity that is an “ accredited investor
” (as defined in Regulation D under the Securities
Act) and which extends credit or buys loans as one of its
businesses; provided , no Person that is or intends to be a
competitor of the Company (except any Person that is described in
clauses (i) or (ii) and is or may be deemed to be a competitor of
the Company solely by virtue of being a lender to, or
Non-Controlling Equity Investor (as defined below) with respect to
such a competitor), other than an Affiliate of Company or its
Subsidiaries, shall be an Eligible Assignee. For purposes of the
preceding sentence, “Non-Controlling Equity
Investor” means, with respect to the relevant entity, a
Person that (i) is not an Affiliate of such entity, (ii) does not
possess a seat on the board of directors (or individuals performing
comparable functions) of such entity and (iii) does not possess,
directly or indirectly, the power to elect a member of the board of
directors (or individuals performing comparable functions) of such
entity.
“Eligible
Product-Specific Financing” means any financing or Joint
Venture arrangement that conforms to the following
criteria:
(i) the Company has given the
Administrative Agent and the Lenders notice of any such financing
or arrangement at least 10 Business Days prior to the closing date
of any
7
such financing or arrangement
together with a reasonably detailed description of such
transaction, and the Requisite Lenders shall have approved in
writing such transaction prior to the closing date of such
transaction;
(ii) such financing or
arrangement is between (a) a Person that is not an Affiliate of
Company (such Person, the “PSF Counterpart” ),
and (b) Company or any of its Guarantor Subsidiaries (other than RP
Sub No. 1), with respect to a specific pharmaceutical product or
pharmaceutical product family or pharmaceutical formulation in the
development phase (collectively, a “Product” )
(including line extensions and improvements to approved products)
pursuant to which the PSF Counterpart agrees to lend, reimburse or
pay a portion of the development costs of such Product in exchange
for any one or a combination of the following: (1) rights of the
PSF Counterpart to share in the profits from the ultimate sale or
exploitation of such Product, (2) royalties payable to the PSF
Counterpart on the sale of such Product, (3) repayment to the PSF
Counterpart of development costs and agreed upon premiums upon
achievement of certain milestone events, or (4) repayment to the
PSF Counterpart of borrowed principal plus interest and fees
thereon, provided , however , that the Company and
its applicable Subsidiaries, taken as a whole, shall not enter into
more than two separate such arrangements, each involving a single
Product, during the term of this Agreement;
(iii) if such arrangement
involves the establishment of a Joint Venture (a “PSF
Joint Venture” ) in which the PSF Counterpart acquires
Capital Stock of the PSF Joint Venture, (a) the Company or its
applicable Subsidiary shall grant to the Collateral Agent, pursuant
to the Pledge and Security Agreement, a Second Priority Lien on all
of the Capital Stock in the PSF Joint Venture owned by the Company
or such Subsidiary, (b) the PSF Joint Venture shall engage in no
business other than entering into such arrangement, shall have no
Indebtedness other than the Indebtedness to the PSF Counterpart
contemplated in subparagraph (i) above and shall not grant a Lien
on any of its assets other than a Lien on the Product and related
rights in favor of the PSF Counterpart, and (c) the PSF Joint
Venture shall not be required to be a Guarantor Subsidiary or grant
a Lien on its assets in favor of the Collateral Agent;
(iv) copies of the final
documentation relating to each such arrangement or financing shall
be furnished reasonably promptly to the Administrative Agent and no
payments or distributions will be made to the PSF Counterpart in
respect of such arrangement other than pursuant to the terms of
such documentation; and
(v) no Default or Event of
Default shall have occurred and be continuing either before or
after giving effect to such financing or arrangement.
“Employee Benefit
Plan” means any “ employee benefit plan
” as defined in Section 3(3) of ERISA which is or was
sponsored, maintained or contributed to by, or required to be
contributed by, Company, any of its Subsidiaries or any of their
respective ERISA Affiliates.
“Environmental
Claim” means any written communication regarding any
investigation, notice, notice of violation, claim, action, suit,
proceeding, demand, abatement order or other order or directive
(conditional or otherwise), by any Governmental Authority or any
other Person, arising (i) pursuant to or in connection with any
actual or alleged violation of any Environmental Law; (ii) in
connection with any Hazardous Material or any actual or alleged
Hazardous Materials Activity; or (iii) in connection with any
actual or alleged damage, injury, threat or harm to health, safety,
natural resources or the environment.
8
“Environmental
Laws” means any and all current or future applicable
foreign or domestic, federal or state (or any subdivision of either
of them), statutes, ordinances, orders, rules, regulations,
judgments and Governmental Authorizations relating to (i)
environmental matters, including those relating to any Hazardous
Materials Activity; (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials; or (iii)
occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto, and the
regulations thereunder.
“ERISA
Affiliate” means, as applied to any Person, (i) any
corporation which is a member of a controlled group of
corporations, within the meaning of Section 414(b) of the Internal
Revenue Code, of which that Person is a member; (ii) any trade or
business (whether or not incorporated) which is a member of a group
of trades or businesses under common control, within the meaning of
Section 414(c) of the Internal Revenue Code, of which that Person
is a member; and (iii) any member of an affiliated service group,
within the meaning of Section 414(m) or (o) of the Internal Revenue
Code, of which that Person is a member. Any former ERISA Affiliate
of Company or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of Company or any such Subsidiary
within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary
and with respect to liabilities for which Company or such
Subsidiary could be liable under the Internal Revenue Code or
ERISA.
“ERISA
Event” means (i) a “ reportable event
” within the meaning of Section 4043 of ERISA and the
regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue
Code with respect to any Pension Plan (whether or not waived in
accordance with Section 412(d) of the Internal Revenue Code); (iii)
the provision by the administrator of any Pension Plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or
any of their respective ERISA Affiliates from any Pension Plan with
two or more contributing sponsors or the termination of any such
Pension Plan resulting in liability to Company, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant
to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC
of proceedings to terminate any Pension Plan, or the occurrence of
any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the
occurrence of an act or omission which could give rise to the
imposition on Company, or any of its Subsidiaries of fines,
penalties, taxes or related charges under Chapter 43 of the
Internal Revenue Code or under Section 409, Section 502(c), (i) or
(l), or Section 4071 of ERISA in respect of any Employee Benefit
Plan; (viii) the assertion of a material claim (other than routine
claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Company or any
of its Subsidiaries in connection with any Employee Benefit Plan;
(ix) receipt from the Internal Revenue Service of notice of the
failure of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (x) the imposition of a
Lien pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
9
“Event of
Default” means each of the conditions or events set forth
in Section 8.1.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
“Facility”
means any real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned,
leased, operated or used by Company or any of its Subsidiaries or
any of their respective predecessors or Affiliates.
“Fair Share
Contribution Amount” as defined in Section
7.2.
“Fair
Share” as defined in Section 7.2.
“FDA” as
defined in Section 4.17(b).
“FDA
Regulation” means any rule, regulation or administrative
order promulgated or issued by the FDA.
“Financial Officer
Certification” means, with respect to the financial
statements for which such certification is required, the
certification of the principal financial officer of Company that
such financial statements fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.
“Financial
Plan” as defined in Section 5.1(i).
“ First-Lien
Collateral Agent ” means the collateral agent under the
First-Lien Security Agreement.
“ First-Lien
Lenders ” means the lender(s) under the First-Lien Term
Loan Agreement.
“ First-Lien
Security Agreement ” means the pledge and security
agreement securing the collateral relating to the Indebtedness
under the First-Lien Term Loan Agreement, as it may be amended,
restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
“First-Lien Term
Loan Agreement” means the First-Lien Term Loan and
Guaranty Agreement, dated as of the date hereof, between Company
and certain lenders and agents, as it may be amended, restated,
supplemented or otherwise modified from time to time in accordance
with the terms hereof.
“First-Lien Term
Loan” means the term borrowing in an amount, not to
exceed an initial amount of $120 million, on the terms and
conditions set forth in the First-Lien Term Loan
Agreement.
“Fiscal
Quarter” means a fiscal quarter of any Fiscal
Year.
“Fiscal
Year” means the fiscal year of Company and its
Subsidiaries ending on December 31 of each calendar
year.
10
“Food and Drug
Act” means the Federal Food, Drug and Cosmetic Act, as
amended, 21 U.S.C. § 301 et seq . and any successor
act.
“Foreign
Subsidiary” means any Subsidiary that is not a Domestic
Subsidiary.
“Funding
Default” as defined in Section 2.22.
“Funding
Guarantor” as defined in Section 7.2.
“Funding
Notice” means a notice substantially in the form of
Exhibit A.
“GAAP”
means, subject to the limitations on the application thereof set
forth in Section 1.2, accounting principles generally accepted in
the United States in effect as of the date of determination
thereof.
“Governmental
Acts” means any act (including any order or decree) or
omission, of any present or future Governmental
Authority.
“Governmental
Authority” means any federal, state, municipal, national
or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to any government or any court, in each case whether associated
with a state of the United States, the United States, or a foreign
entity or government.
“Governmental
Authorization” means any permit, license, authorization,
directive, consent order or consent decree of or from any
Governmental Authority.
“Grantor”
as defined in the Pledge and Security Agreement.
“Guaranteed
Obligations” as defined in Section 7.1.
“Guarantor
Subsidiary” means each Domestic Subsidiary of Company,
excluding any PSF Joint Venture.
“Guaranty”
means the guaranty of each Guarantor Subsidiary set forth in
Section 7.
“Hazardous
Material” means any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any
Governmental Authority or which may or could pose a hazard to the
health and safety of the owners, occupants or any Persons in the
vicinity of any Facility or to the indoor or outdoor
environment.
“Hazardous Materials
Activity” means any past or current activity, event or
occurrence involving any Hazardous Materials, including the use,
manufacture, possession, storage, holding, presence, existence,
location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling
of any Hazardous Materials, and any corrective action or response
action with respect to any of the foregoing.
“Hedge
Agreement” means an interest rate agreement or a currency
agreement entered into in the ordinary course of Company’s or
any of its Subsidiaries’ businesses.
11
“HHS”
means the United States Department of Health and Human Services, or
any successor agency thereof.
“HHS
Regulation” means any rule, regulations or administrative
order promulgates or issued by the HHS.
“Highest Lawful
Rate” means the maximum lawful interest rate, if any,
that at any time or from time to time may be contracted for,
charged, or received under the laws applicable to any Lender which
are now in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a
higher maximum nonusurious interest rate than applicable laws now
allow.
“Historical
Financial Statements” means, collectively, (i) the
audited financial statements of Company for the 2001, 2002 and 2003
Fiscal Years, each consisting of a balance sheet and the related
statement of operations, member’s deficit and cash flows for
such Fiscal Year and notes thereto, (ii) the unaudited financial
statements of Company for the Fiscal Year ended December 31, 2004,
consisting of a balance sheet as of December 31, 2004 and the
related statements of operations and cash flows for such Fiscal
Year and a statement of stockholders’ equity from the prior
fiscal year end through December 31, 2004 and notes thereto, and
(iii) the unaudited financial statements of Company for the months
ending January 31, 2005 and February 28, 2005, consisting of a
balance sheet as of January 31, 2005 and as of February 28, 2005
and the related statements of operations and cash flows for such
month and a statement of stockholders’ equity from the prior
fiscal year end through February 28, 2005, and, in the case of
clause (ii), together with a Financial Officer Certification with
respect thereto.
“Increased-Cost
Lenders” as defined in Section 2.23.
“Indebtedness” as applied to any Person,
means, without duplication, (i) all indebtedness of such Person for
borrowed money; (ii) that portion of obligations of such Person
with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii) notes
payable and drafts accepted by such Person representing extensions
of credit whether or not representing obligations for borrowed
money; (iv) any obligation owed by such Person for all or any part
of the deferred purchase price of property or services (excluding
any such obligations incurred under ERISA), which purchase price is
(a) due more than six months from the date of incurrence of the
obligation in respect thereof to the extent classified as a
liability on a balance sheet in conformity with GAAP or (b)
evidenced by a note or similar written instrument; (v) all
indebtedness secured by any Lien on any property or asset owned or
held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to
the credit of that Person; (vi) the face amount of any letter of
credit (whether or not drawn) issued for the account of that Person
or as to which that Person is otherwise liable for reimbursement of
drawings; (vii) the direct or indirect guaranty, endorsement (other
than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another; (viii) any obligation of such
Person the primary purpose or intent of which is to provide
assurance to an obligee that the obligation of the obligor thereof
will be paid or discharged, or any agreement relating thereto will
be complied with, or the holders thereof will be protected (in
whole or in part) against loss in respect thereof; (ix) any
liability of such Person for an obligation of another through any
agreement (contingent or otherwise) (a) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (b) to maintain the solvency or any
balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under subclause
(a) or (b) of this clause (ix), the primary purpose or intent
thereof is as described in clause (viii) above; and (x) all
obligations of such Person in respect of any exchange traded or
over the counter derivative transaction, including any Hedge
Agreement.
12
“Indemnified
Liabilities” means, collectively, any and all
liabilities, obligations, losses, damages (including natural
resource damages), penalties, claims (including Environmental
Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or
other response action necessary to remove, remediate, clean up or
abate any Hazardous Materials Activity), expenses and disbursements
of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or
threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any
reasonable fees or reasonable expenses incurred by Indemnitees in
enforcing the indemnity under Section 10.3 herein), whether direct,
indirect or consequential and whether based on any federal, state
or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or
asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Credit Documents or
the transactions contemplated hereby or thereby (including the use
or intended use of the proceeds thereof, or any proper enforcement
of any of the Credit Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the
enforcement of the Guaranty)); or (ii) any Environmental Claim or
any Hazardous Materials Activity relating to or arising from,
directly or indirectly, any past or present activity, operation,
land ownership, or practice of Company or any of its
Subsidiaries.
“Indemnitee” as defined in Section
10.3(a).
“Intellectual
Property Rights” as defined in Section
4.13(c).
“Interest
Compounding Date” means each March 31, June 30, September
30, and December 31 of each year commencing on the first such date
to occur after the Closing Date and ending on the last such date to
occur prior to the Maturity Date. If such date is not a Business
Day, such Interest Compounding Date will be the next succeeding
Business Day.
“Interest
Period” means an interest period of three months, (i)
initially, commencing on the Closing Date and ending on June 30,
2005 and (ii) thereafter, commencing on the day on which the
immediately preceding Interest Period expires.
“Interest Rate
Agreement” means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement or other similar agreement or
arrangement, each of which is for the purpose of hedging the
interest rate exposure associated with Company’s and its
Subsidiaries’ operations and not for speculative
purposes.
“Interest
Rate” as defined in Section 2.8(a).
“Internal Revenue
Code” means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter, and any
successor statute, and the regulations thereunder.
“Investment” means (i) any direct or
indirect purchase or other acquisition by Company or any of its
Subsidiaries of, or of a beneficial interest in, any of the
Securities of any other Person (other than a Guarantor Subsidiary);
(ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Company from any
Person (other than Company or any
13
Guarantor Subsidiary), of any Capital
Stock of such Person; and (iii) any direct or indirect loan,
advance (other than advances to employees for moving, entertainment
and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Company
or any of its Subsidiaries to any other Person (other than Company
or any Guarantor Subsidiary), including all indebtedness and
accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be
the original cost of such Investment plus the cost of all additions
thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such
Investment. For purposes of this definition, RP Sub No. 1 shall not
be considered a Guarantor Subsidiary.
“Joint
Venture” means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other
legal form; provided , in no event shall any corporate
Subsidiary of any Person be considered to be a Joint Venture to
which such Person is a party.
“Knowledge” means, with respect to any
Credit Party, the actual knowledge of any Responsible Officer of
such Credit Party.
“Lender”
means each lender listed on the signature pages hereto as a Lender,
and any other Person that becomes a party hereto pursuant to an
Assignment Agreement.
“Lien”
means (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any
agreement to give any of the foregoing (other than an agreement to
grant a Lien on any Collateral that does not result in attachment
of the Lien within the meaning of 9-203 of the UCC until after the
payment in full of the Obligations and termination of all of the
Commitments), any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option,
trust or other preferential arrangement having the practical effect
of any of the foregoing and (ii) in the case of Securities, any
purchase option, call or similar right of a third-party with
respect to such Securities.
“Loan”
means a loan made by a Lender to Company pursuant to Section 2.1 or
a PIK Loan deemed to have been made by a Lender in the form of PIK
Interest pursuant to Section 2.8(b)(i).
“Loan
Exposure” means, with respect to any Lender, as of any
date of determination, the outstanding principal amount of the
Loans of such Lender; provided , at any time prior to the
making of the Loans, the Loan Exposure of any Lender shall be equal
to such Lender’s Commitment.
“Loan-to-Value
Ratio” means the ratio as of the date of determination of
(i) Consolidated Total Debt, on a pro forma basis as of such date,
to (ii) (x) the net present value, at a 10% discount rate, of all
future promotional revenues and/or reimbursements received for
Lescol ® projected to be received from
Novartis AG, plus (y) three times the net sales revenue of all
pharmaceutical products marketed for the four-Fiscal Quarter period
ending on the last day of the most recent Fiscal Quarter for which
financial statements have been delivered pursuant to Sections
5.1(b) or 5.1(c).
“Margin
Stock” as defined in Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to
time.
“Material Adverse
Effect” means any effect, event, change or state of fact
that, individually or in the aggregate, has resulted in, or would
be reasonably likely to result in, a material adverse effect with
respect to (i) the business operations, properties, assets or
condition (financial or otherwise) of Company and its Subsidiaries
taken as a whole; (ii) the industry taken as a whole or
the
14
business segment taken as a whole in
which Company or its Subsidiaries operate or rely upon if such
effect or development is reasonably likely to have a material
adverse effect on Company and its Subsidiaries taken as a whole;
(iii) the ability of any Credit Party to fully and timely perform
its Obligations; (iv) the legality, validity, binding effect or
enforceability against a Credit Party of a Credit Document to which
it is a party; or (v) the rights, remedies and benefits available
to, or conferred upon, any Agent, any Lender or any Secured Party
under any Credit Document.
“Material
Contract” means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the
Credit Documents) of which breach, nonperformance or cancellation
could reasonably be expected to have a Material Adverse
Effect.
“Material Real
Estate Asset” means any fee-owned Real Estate Asset
having a fair market value in excess of $2,000,000 as of the date
of the acquisition thereof.
“Maturity
Date” means the earlier of (i) September 30, 2008, and
(ii) the date that all Loans shall become due and payable in full
hereunder, whether by acceleration or otherwise.
“Merrill
Lynch” means Merrill Lynch Capital, Inc., as lender under
the Permitted Working Capital Facility, or any other lender
thereunder.
“Moody’s” means Moody’s
Investors Service, Inc.
“Multiemployer
Plan” means any Employee Benefit Plan that is a
“ multiemployer plan ” as defined in
Section 3(37) of ERISA.
“NAIC”
means The National Association of Insurance Commissioners, and any
successor thereto.
“Narrative
Report” means, with respect to the financial statements
for which such narrative report is required, a management’s
discussion and analysis of financial condition and results of
operations of Company and its Subsidiaries for the applicable
Fiscal Year to which such financial statements relate.
“Net Asset Sale
Proceeds” means, with respect to any Asset Sale, an
amount equal to: (i) Cash payments (including any Cash received by
way of deferred payment pursuant to, or by monetization of, a note
receivable or otherwise, but only as and when so received) received
by Company or any of its Subsidiaries from such Asset Sale,
minus (ii) any bona fide direct costs incurred in connection
with such Asset Sale, including (a) income or gains taxes payable
by the seller as a result of any gain recognized in connection with
such Asset Sale, (b) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness
(other than the Loans) that is secured by a Lien on the stock or
assets in question and that is required to be repaid under the
terms thereof as a result of such Asset Sale and (c) a reasonable
reserve for any indemnification payments (fixed or contingent)
attributable to seller’s indemnities and representations and
warranties to purchaser in respect of such Asset Sale undertaken by
Company or any of its Subsidiaries in connection with such Asset
Sale.
“Net
Insurance/Condemnation Proceeds” means an amount equal
to: (i) any Cash payments or proceeds received by Company or any of
its Subsidiaries (a) under any casualty insurance policy in respect
of a covered loss thereunder or (b) as a result of the taking of
any assets of Company or any of its Subsidiaries by any Person
pursuant to the power of eminent domain, condemnation or otherwise,
or pursuant to a sale of any such assets to a purchaser with such
power under threat of such a
15
taking, minus (ii) (a) any actual
and reasonable costs incurred by Company or any of its Subsidiaries
in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof, and (b) any bona
fide direct costs incurred in connection with any sale of such
assets as referred to in clause (i)(b) of this definition,
including income taxes payable as a result of any gain recognized
in connection therewith.
“Non-Consenting
Lender” as defined in Section 2.23.
“Non-US
Lender” as defined in Section 2.20(c).
“Note”
means a promissory note in the form of Exhibit B-1 (in the case of
a Loan made pursuant to Section 2.1) or Exhibit B-2 (in the case of
a PIK Loan deemed made pursuant to Section 2.8(b)(i)), as it may be
amended, supplemented or otherwise modified from time to
time.
“Obligations” means all obligations of every
nature of each Credit Party from time to time owed to the Agents
(including former Agents), the Lenders (including former Lenders or
their affiliates) or any of them under any Credit Document, whether
for principal, interest (including interest which, but for the
filing of a petition in bankruptcy with respect to such Credit
Party, would have accrued on any Obligation, whether or not a claim
is allowed against such Credit Party for such interest in the
related bankruptcy proceeding), fees, expenses, indemnification or
otherwise.
“ Obligee
Guarantor” as defined in Section 7.7.
“Organizational
Documents” means (i) with respect to any corporation, its
certificate or articles of incorporation or organization, as
amended, and its by-laws, as amended, (ii) with respect to any
limited partnership, its certificate of limited partnership, as
amended, and its partnership agreement, as amended, (iii) with
respect to any general partnership, its partnership agreement, as
amended, and (iv) with respect to any limited liability company,
its certificate of formation or comparable documents, as amended,
and its operating agreement, as amended. In the event any term or
condition of this Agreement or any other Credit Document requires
any Organizational Document to be certified by a secretary of state
or similar governmental official, the reference to any such
“ Organizational Document ” shall only be
to a document of a type customarily certified by such governmental
official.
“PBGC”
means the Pension Benefit Guaranty Corporation or any successor
thereto.
“Pension
Plan” means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal
Revenue Code or Title IV or Section 302 of ERISA.
“Permitted
Acquisition” means (a) any acquisition by Company or any
Guarantor Subsidiary (other than RP Sub No. 1, Inc.), whether by
purchase, merger or otherwise, of all or substantially all of (1)
the assets, (2) the Capital Stock, or (3) a business line, product
line (regardless of the stage of development) or unit or a
division, of any Person whose primary business is the research,
development, testing, marketing, distribution or manufacture of
pharmaceuticals, or (b) a Permitted Minority Investment (any of (a)
or (b), an “Acquisition” ); provided
,
(i) immediately prior to, and
after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing or would result
therefrom;
16
(ii) all transactions in
connection therewith shall be consummated, in all material
respects, in accordance with all applicable laws and in conformity
with all applicable Governmental Authorizations;
(iii) in the case of the
Acquisition of Capital Stock, the Capital Stock (except for any
such Securities in the nature of directors’ qualifying shares
required pursuant to applicable law) acquired or otherwise issued
by such Person or any newly formed Subsidiary of Company in
connection with such acquisition shall be owned by Company or a
Guarantor Subsidiary thereof, if applicable, and Company shall have
taken, or caused to be taken, as of the date such Person becomes a
Subsidiary of Company, each of the actions set forth in Sections
5.10 and/or 5.11, as applicable;
(iv) the aggregate amount of
purchase price (as distinct from royalty fees, licensing fees,
promotional and marketing investments and similar payments) by
Company and its Subsidiaries in all such Acquisitions shall not (A)
exceed $30 million during the period from the Closing Date through
December 31, 2005 or (B) exceed $50 million during the period from
the Closing Date through the Maturity Date;
(v) after giving effect to
the purchase price of each Acquisition, the sum of Company’s
Cash on hand, Company’s Cash Equivalents on hand and the
remaining undrawn availability under the Permitted Working Capital
Facility following any such Acquisition shall be at least $20
million;
(vi) all assets acquired
shall become Collateral and shall be subject to a Second Priority
Lien pursuant to the Pledge and Security Agreement; and
(vii) Company shall have
delivered to Administrative Agent at least five Business Days prior
to such proposed Acquisition all information with respect to such
acquired assets reasonably requested by the Administrative Agent,
including, without limitation, the aggregate consideration for such
Acquisition and pro forma financial projections.
“Permitted
Liens” means each of the Liens permitted pursuant to
Section 6.2.
“Permitted Minority
Investment” means any acquisition by Company or any
Guarantor Subsidiary, whether by purchase or otherwise, of less
than all or substantially all of (1) the assets, (2) the Capital
Stock, or (3) a business line, product line (regardless of the
stage of development) or unit or a division, of any Person;
provided , that the primary business of such Person
is the research, development, testing, marketing, distribution or
manufacture of pharmaceuticals, and provided ,
further , that the aggregate amount invested by Company and
its Guarantor Subsidiaries in all such acquisitions from and after
September 3, 2004 does not exceed $2,000,000. For purposes of this
definition, RP Sub No. 1 shall not be considered a Guarantor
Subsidiary.
“Permitted Working
Capital Facility” means the Indebtedness of the Company
evidenced by the Credit Agreement, dated as of August 19, 2004, as
amended by the First Amendment dated as of October 20, 2004, among
Company and Merrill Lynch and other lenders from time to time party
thereunder, the Second Amendment dated as of the date hereof and as
further amended, restated, supplemented and otherwise modified from
time to time, pursuant to which Company may borrow up to a
principal amount of $25 million at any time outstanding, subject to
the terms and conditions thereof.
17
“Person”
means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies,
limited liability partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies,
land trusts, business trusts or other organizations, whether or not
legal entities, and Governmental Authorities.
“Personal Property
Collateral Access Agreement” means an agreement
substantially in the form of Exhibit K, with such amendments or
modifications as may be approved by Collateral Agent in its
reasonable discretion, permitting Collateral Agent to access
personal property of the Company or its Subsidiaries, held by a
third-party.
“PIK
Interest” as defined in Section 2.8(b)(i).
“PIK Loan”
as defined in Section 2.2.
“PIK Note”
as defined in Section 2.7(d).
“Pledge and Security
Agreement” means the Pledge and Security Agreement, dated
as of the date hereof, among the Collateral Agent, Company and
Guarantor Subsidiaries (other than RP Sub No. 1) from time to time
party thereto, as it may be amended, supplemented or otherwise
modified from time to time.
“Principal
Office” means, for Administrative Agent, its
“ Principal Office ” as set forth on
Appendix B, or such other office as it may from time to time
designate in writing to Company and each Lender.
“ Product
” as defined in the definition of “Eligible
Product-Specific Financing”, except that for the purposes of
Sections 4.26, 4.27 and 4.29, Products means the products currently
being developed, marketed, sold and/or offered for sale in the
Territory under the following trademarks/tradenames: DynaCirc
® (including DynaCirc ®
IR and DynaCirc CR ® ), Rythmol ®
, InnoPran ® (including InnoPran XL
® ), Antara ™ , Omacor ®
and Lescol ® and all successor products
thereto.
“Product Recall
Notice” means any written notice from the FDA stating
that any product or product line of any Credit Party or any of its
Subsidiaries has been or will be recalled.
“ Productive
Assets ” as defined in Section 2.14(a).
“Projections” as defined in Section
4.8.
“Pro Rata
Share” means, (i) with respect to all payments,
computations and other matters relating to the Loan Exposure of any
Lender, the percentage obtained by dividing (a) the Loan Exposure
of that Lender by (b) the aggregate Loan Exposure of all Lenders;
and (ii) with respect to the Commitment of any Lender, the
percentage obtained by dividing (a) the Commitment of that Lender
by (b) the aggregate Commitment of all Lenders.
“PSF
Counterpart” as defined in the definition of
“ Eligible Product-Specific Financing.
”
“PSF Joint
Venture” as defined in the definition of “
Eligible Product-Specific Financing. ”
18
“ Purchase
Option ” means each of the Lenders’ option and each
of the Third-Lien Lenders’ option, as the case may be, under
the Term Loan Intercreditor Agreement, to purchase the First-Lien
Term Loan and/or the Loans after an Event of Default and
acceleration.
“Real Estate
Asset” means, at any time of determination, any fee
interest then held by any Credit Party in any real
property.
“Receivables” as defined in the Pledge and
Security Agreement.
“Receivables-Related
Assets” means (i) all rights of enforcement and
collection, remedies, guarantees, supporting obligations,
letter-of-credit rights and security interests, in each case, to
the extent relating to the Receivables, (ii) all books and records,
information and data evidencing or describing the Receivables,
whether compiled or derived by Borrower or any of its Subsidiaries
or to which Borrower or any of its Subsidiaries is entitled, in
whatever form or medium, that at any time evidence or contain
information relating to any of the Receivables, (iii) all lockboxes
and other depositary accounts where the proceeds of Receivables are
deposited to the extent constituting proceeds of Receivables, (iv)
all accessions and additions to, and substitutions and replacements
of, any and all of the foregoing, and (v) all proceeds and products
of the foregoing (including, without limitation, payment
intangibles, as such term is defined in the UCC).
“Receivables
Records” as defined in the Pledge and Security
Agreement.
“Register”
as defined in Section 2.7(b).
“Regulation
D” means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
“ Regulatory
Approvals ” as defined in Section 4.17(b).
“Related
Fund” means, with respect to any Lender that is an
investment fund, any other investment fund that invests in or
originates commercial loans and that is managed or advised by the
same investment advisor as such Lender or by an Affiliate of such
investment advisor.
“Release”
means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of any Hazardous Material into the
environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous
Material), including the movement of any Hazardous Material through
the air, soil, surface water or groundwater.
“Replacement
Lender” as defined in Section 2.23.
“Required Prepayment
Date” as defined in Section 2.15(c).
“Requisite
Lenders” means one or more Lenders having or holding Loan
Exposures representing more than 50% of the aggregate Loan Exposure
of all Lenders; provided , however , that for
purposes of this definition, Company, any Specified Holder or any
Affiliate of Company or of a Specified Holder that has become a
Lender shall not be considered a Lender, unless the Third-Lien
Lenders have exercised their Purchase Option and hold 100% of the
Loans under this Agreement.
19
“Responsible
Officer” means, as applied to any Person, any individual
holding the position of chief executive officer, president, chief
financial officer, vice president-finance, treasurer, controller or
general counsel.
“Restricted Junior
Payment” means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of
Capital Stock of Company now or hereafter outstanding, except (a) a
dividend payable solely in shares of any class of Capital Stock to
the holders of that class or (b) any dividend, distribution or
other payment by a PSF Joint Venture to a PSF Counterpart; (ii) any
redemption, retirement, sinking fund or similar payment (including
redemptions and payments under any liquidity option agreements),
purchase or other acquisition for value, direct or indirect, of any
shares of any class of Capital Stock of Company now or hereafter
outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of Company now or
hereafter outstanding; (iv) management or similar fees payable to a
Specified Holder or any of its Affiliates (excluding Guarantor
Subsidiaries); and (v) any payment or prepayment of principal, cash
interest, premium (other than pursuant to the Third-Lien Term Loan
Agreement, as provided therein), if any, or redemption, purchase,
retirement, defeasance (including in substance or legal
defeasance), sinking fund or similar payment with respect to the
Third-Lien Term Loan.
“RP Sub No.
1” means RP Sub No. 1, Inc., a Delaware corporation, and
its successors.
“S&P”
means Standard & Poor’s Ratings Group, a division of The
McGraw-Hill Companies, Inc.
“Second
Priority” means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that
such Lien is the only Lien to which such Collateral is subject,
other than any Permitted Lien.
“Secured
Parties” has the meaning assigned to that term in the
Pledge and Security Agreement.
“Securities” means any stock, shares,
partnership interests, limited liability company interests, voting
trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement (e.g., stock
appreciation rights), options, warrants, bonds, debentures, notes,
or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any
instruments commonly known as “ securities
” or any certificates of interest, shares or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase
or acquire, any of the foregoing.
“Securities
Act” means the Securities Act of 1933, as amended from
time to time, and any successor statute.
“Silver
Point” as defined in the preamble hereto and each of its
Affiliates.
“Solvency
Certificate” means a Solvency Certificate of the
principal financial officer of Company substantially in the form of
Exhibit G-2.
“Solvent”
means, with respect to any Credit Party, that as of the date of
determination, both (i) (a) the sum of such Credit Party’s
debt (including contingent liabilities, but excluding liabilities
from mandatorily redeemable preferred shares that are not
redeemable prior to the Maturity Date) does
20
not exceed the present fair saleable
value of such Credit Party’s assets at such date of
determination; (b) such Credit Party’s capital is not
unreasonably small in relation to its business as contemplated on
the Closing Date and reflected in the Projections or with respect
to any transaction contemplated or undertaken after the Closing
Date; and (c) such Credit Party has not incurred and does not
intend to incur, or believe (nor should it reasonably believe) that
it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Credit
Party is “ solvent ” within the meaning
given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances in Delaware, Florida,
Massachusetts, Nebraska, New Jersey, New York and Ohio, and
relating to federal fraudulent conveyance law as set forth in
§ 548 of the Bankruptcy Code. For purposes of this definition,
the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the
criteria for accrual under Statement of Financial Accounting
Standard No. 5).
“Special Purpose
Entity” means a corporation or limited liability company
whose organizational documents contain limitations on business
activities, incurrence of Indebtedness and creation of
Liens.
“Specified
Holders” means collectively PharmBay Investors, L.L.C.,
The Bay City Capital Fund II, L.P. and The Bay City Capital Fund
III, L.P and their respective Affiliates.
“ Subsidiary
” means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting
power of shares of stock or other ownership interests entitled
(without regard to the occurrence of any contingency) to vote in
the election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the
power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or
indirectly, by that Person, or the accounts of which would be
consolidated with those of such Person in its consolidated
financial statements in accordance with GAAP, if such statements
were prepared as of such date, or one or more of the other
Subsidiaries of that Person or a combination thereof;
provided , in determining the percentage of ownership
interests of any Person controlled by another Person, no ownership
interest in the nature of a “qualifying share” of the
former Person shall be deemed to be outstanding.
“Syndication
Agent” as defined in the preamble hereto.
“Tax”
means any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever
called (including interest and penalties), by whomsoever, on
whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided , “ Tax on the overall net
income ” of a Person shall be construed as a reference
to a tax imposed by the jurisdiction in which that Person is
organized or in which that Person’s applicable principal
office (and/or, in the case of a Lender, its lending office) is
located on all or part of the net income (whether worldwide, or
only insofar as such income is considered to arise in or to relate
to a particular jurisdiction, or otherwise) of that Person (and/or,
in the case of a Lender, its applicable lending office).
“Terminated
Lender” as defined in Section 2.23.
“ Term Loan
Intercreditor Agreement ” means an intercreditor and lien
subordination agreement, dated as of the date hereof, between the
Collateral Agent, the First-Lien Collateral Agent and the
Third-Lien Collateral Agent, that provides for the subordination of
the Third-Lien Collateral Agent’s lien on the Collateral to
the Lien of the Collateral Agent and the subordination of the Lien
of the Collateral Agent on the Collateral to the First-Lien
Collateral Agent’s lien, each on terms reasonably
satisfactory to the Collateral Agent and the Requisite
Lenders.
21
“ Territory
” means the United States.
“ Third-Lien
Collateral Agent ” means the collateral agent under the
Third-Lien Security Agreement.
“ Third-Lien
Lenders ” means the Lender(s) under the Third-Lien Term
Loan Agreement.
“ Third-Lien
Security Agreement ” means the pledge and security
agreement securing the collateral relating to the Indebtedness
under the Third-Lien Term Loan Agreement, as it may be amended,
restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
“Third-Lien Term
Loan Agreement” means the Third-Lien Term Loan and
Guaranty Agreement, dated as of the date hereof, between Company
and certain lenders and agents, as it may be amended, restated,
supplemented or otherwise modified from time to time in accordance
with the terms hereof.
“Third-Lien Term
Loan” means the term borrowing on the terms and
conditions set forth in the Third-Lien Term Loan Agreement,
provided , that (a) the aggregate amount of such loan
facility shall not exceed an initial amount of $49.625 million,
exclusive of interest permitted to be capitalized thereunder; (b)
the maturity date of such loan shall be not earlier than three
months after the Maturity Date; (c) no payments of principal or
cash interest prior to maturity of such loan shall be permitted so
long as any Obligations are outstanding; and (d) the security
interest of the Third-Lien Collateral Agent shall rank junior to
the security interest of the Collateral Agent hereunder.
“Transaction
Costs” means (i) the fees, and (ii) the reasonable costs
and expenses payable by Company or any of Company’s
Subsidiaries on or before the Closing Date in connection with the
transactions contemplated by the Credit Documents.
“UCC”
means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable
jurisdiction.
“Waivable
Prepayment” as defined in Section 2.15(c).
“Working Capital
Collateral” means the collateral, including (i) all
accounts receivable for goods sold and services rendered by Company
or any of Company’s Subsidiaries, and rents license fees, and
“payment intangibles” (as that term is defined in the
UCC now or hereafter in effect) in respect of the foregoing and all
proceeds or any of the foregoing (“Accounts”)
(including, without limitation, all Accounts constituting proceeds
of inventory); (ii) all rights of enforcement and collection,
remedies, guarantees, supporting obligations, letter-of-credit
rights and security interests, in each case, in respect of the
Accounts; (iii) all books and records, information and data
evidencing or describing the Accounts, whether compiled or derived
by Company or any of its subsidiaries or to which the Company or
any of its subsidiaries is entitled, in whatever form or medium,
that at any time evidence or contain information relating to any of
the Accounts or are otherwise necessary or helpful in the
collection thereof or realization thereon; (iv) the lockbox where
the proceeds of Accounts are deposited (including any and all funds
and other payments deposited therein); (v) all accessions and
additions to, and substitutions and
22
replacements of, any and all of the
foregoing; and (vi) all proceeds and products of the foregoing
(including, without limitation, payment intangibles, as such term
is defined in the UCC), securing the Permitted Working Capital
Facility, on which Merrill Lynch has a Lien pursuant to the Working
Capital Facility Security Agreement.
“ Working Capital
Facility Security Agreement” means the Second Amended and
Restated Security Agreement, dated as of April 13, 2005, between
Company and Merrill Lynch as agent.
“Working Capital
Intercreditor Agreement” means an intercreditor and lien
subordination agreement, dated as of the date hereof, among the
Collateral Agent, the First-Lien Collateral Agent, the Third-Lien
Collateral Agent and Merrill Lynch, pursuant to which the Lenders,
the First-Lien Lenders, and the Third-Lien Lenders shall agree not
to take enforcement action with respect to the Working Capital
Collateral until the Working Capital Facility shall be paid in
full; and otherwise in a form reasonably satisfactory to the
Collateral Agent and the Requisite Lenders.
1.2. Accounting Terms
. Except as otherwise expressly provided herein, all accounting
terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other
information required to be delivered by Company to Lenders pursuant
to Section 5.1(a), 5.1(b) and 5.1(c) shall be prepared in
accordance with GAAP as in effect at the time of such preparation.
Subject to the foregoing, calculations in connection with the
definitions, covenants and other provisions hereof shall utilize
accounting principles and policies in conformity with those used to
prepare the Historical Financial Statements.
1.3. Interpretation,
etc . Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural,
depending on the reference. References herein to any Section,
Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a
Schedule or an Exhibit, as the case may be, hereof unless otherwise
specifically provided. The use herein of the word “
include ” or “ including ” ,
when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to
similar items or matters, whether or not limiting language (such as
“ without limitation ” or “
but not limited to ” or words of similar import) is
used with reference thereto, but rather shall be deemed to refer to
all other items or matters that fall within the broadest possible
scope of such general statement, term or matter.
SECTION 2. LOANS
2.1. Term
Loans.
(a) Loans and
Commitments . Subject to the terms and conditions hereof, each
Lender severally agrees to make, on the Closing Date, a Loan to
Company in an amount equal to such Lender’s Commitment, such
that the total Loans of all Lenders made on the Closing Date shall
be $30 million. Any amount borrowed under this Section 2.1(a) and
subsequently repaid or prepaid may not be reborrowed. Subject to
Sections 2.13(a) and 2.14, all amounts owed hereunder with respect
to the Loans shall be paid in full no later than the Maturity Date.
Each Lender’s Commitment shall terminate immediately and
without further action on the Closing Date after giving effect to
the funding of such Lender’s Commitment on such date. For the
avoidance of doubt, the making of a Loan under this Section 2.1 and
the consequent termination of such Lender’s Commitment on the
Closing Date do not limit the obligation of such Lender to make a
PIK Loan under Section 2.8(b)(i).
23
(b) Borrowing Mechanics
for Term Loans .
(i) Company shall deliver to
Administrative Agent a fully executed Funding Notice not later than
1:00 p.m. (New York City time) on the Closing Date. Promptly upon
receipt by Administrative Agent of such Funding Notice,
Administrative Agent shall notify each Lender of the proposed
borrowing.
(ii) Upon satisfaction or
waiver of the conditions precedent specified in Section 3.1, each
Lender shall make its Loan available to Administrative Agent not
later than 12:00 p.m. (New York City time) on the Closing Date, by
wire transfer of same day funds in Dollars, at the Principal
Office. Upon satisfaction or waiver of the conditions precedent
specified in Section 3.1, Administrative Agent shall make the
proceeds of the Loan available to Company on the Closing Date by
causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Company as designated in
the Funding Notice by Company.
2.2. PIK Loans .
Subject to the terms hereof and Section 2.8(b)(ii), each Lender
severally agrees to make, pursuant to Section 2.8(b)(i), on each
Interest Compounding Date, a PIK Loan to Company in an amount equal
to the Lender’s respective Pro Rata Share of all interest
accrued on Loans during the Interest Period ending on such Interest
Compounding Date (such loans, “PIK Loans” ). An
amount borrowed under this Section 2.2 and subsequently repaid or
prepaid may not be reborrowed. Subject to Section 2.13(a) and 2.14,
all amounts owed hereunder with respect to the Loans shall be paid
in full no later than the Maturity Date.
2.3.
[RESERVED].
2.4.
[RESERVED].
2.5. Pro Rata Shares;
Availability of Funds.
(a) Pro Rata Shares .
All Loans shall be made, and all participations purchased under
Section 2.17, by Lenders simultaneously and proportionately to
their respective Pro Rata Shares, it being understood that no
Lender shall be responsible for any default by any other Lender in
such other Lender’s obligation to make a Loan requested under
this Agreement or purchase a participation required hereby under
Section 2.17 nor shall any Commitment of any Lender be increased or
decreased as a result of a default by any other Lender in such
other Lender’s obligation to make a Loan requested under this
Agreement or purchase a participation required hereby under Section
2.17.
(b) Availability of
Funds . Unless Administrative Agent shall have been notified by
any Lender prior to the Closing Date that such Lender does not
intend to make available to Administrative Agent the amount of such
Lender’s Loan requested on the Closing Date, Administrative
Agent may assume that such Lender has made such amount available to
Administrative Agent on the Closing Date or Administrative Agent
shall make available to Company a corresponding amount on the
Closing Date. If such corresponding amount is not in fact made
available to Administrative Agent by such Lender but Administrative
Agent has made such amount available to Company, Administrative
Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each
day from the Closing Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business
Days and thereafter at the Interest Rate. If Administrative Agent
has made such amount available to Company but such Lender does not
pay such corresponding amount forthwith upon
24
Administrative Agent’s demand
therefor, Administrative Agent shall promptly notify Company and
Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day
from the Closing Date until the date such amount is paid to
Administrative Agent, at the Interest Rate. Nothing in this Section
2.5(b) shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment hereunder or to prejudice any rights that
Company may have against any Lender as a result of any default by
such Lender hereunder.
2.6. Use of Proceeds .
The proceeds of the Loans made pursuant to Section 2.1 shall be
used by Company for general corporate purposes, working capital and
Permitted Acquisitions, and to pay fees and expenses related
thereto. No portion of the proceeds of any Credit Extension shall
be used in any manner that causes or might cause such Credit
Extension or the application of such proceeds to violate Regulation
T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation thereof or to
violate the Exchange Act.
2.7. Evidence of Debt;
Register; Lenders’ Books and Records; Notes.
(a) Lenders’
Evidence of Debt . Each Lender shall maintain on its internal
records an account or accounts evidencing the Obligations of
Company to such Lender, including the amounts of the Loans made or
deemed made by it, accrued and capitalized interest and fees
thereon and each repayment and prepayment in respect thereof. Any
such recordation shall be conclusive and binding on Company, absent
manifest error; provided , that the failure to make
any such recordation, or any error in such recordation, shall not
affect any Lender’s Commitment or Company’s Obligations
in respect of any applicable Loans; and provided ,
further , in the event of any inconsistency between the
Register and any Lender’s records, the recordations in the
Register (if applicable) shall govern.
(b) Register .
Administrative Agent shall maintain at the Principal Office a
register for the recordation of the names and addresses of Lenders
and the Commitments and Loans of each Lender from time to time (the
“Register” ). The Register shall be available
for inspection by Company or any Lender at any reasonable time and
from time to time upon reasonable prior notice. Administrative
Agent shall record in the Register the Commitments and the Loans,
and each repayment or prepayment in respect of the principal amount
of the Loans, and any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error;
provided , failure to make any such recordation, or any
error in such recordation, shall not affect any Lender’s
Commitment or Company’s Obligations in respect of any Loan.
Company hereby designates Silver Point to serve as Company’s
agent solely for purposes of maintaining the Register as provided
in this Section 2.7, and Company hereby agrees that, to the extent
Silver Point serves in such capacity, Silver Point and its
officers, directors, employees, agents and affiliates shall
constitute “ Indemnitees. ”
(c) Notes . If so
requested by any Lender by written notice to Company (with a copy
to Administrative Agent) at least two Business Days prior to the
Closing Date, or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified
in such notice, to any Person who is an assignee of such Lender
pursuant to Section 10.6) on the Closing Date (or, if such notice
is delivered after the Closing Date, promptly after Company’s
receipt of such notice) a Note or Notes to evidence such
Lender’s Loans.
(d) PIK Notes . If so
requested by any Lender by written notice to Company (with a copy
to Administrative Agent) at least two Business Days prior to an
Interest Compounding Date, or at any time thereafter, Company shall
execute and deliver to such Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of such
Lender pursuant to Section 10.6) on such Interest Compounding Date
(or, if such notice is delivered after such Interest Compounding
Date,
25
promptly after Company’s receipt
of such notice) a PIK Note, substantially in the form of Exhibit
B-2 attached hereto (each, a “PIK Note” ) and
pursuant to Section 2.8(b)(i), to evidence such Lender’s PIK
Loans. No Note or PIK Note shall be issued for interest paid in
cash on an Interest Compounding Date pursuant to the option in
Section 2.8(b)(ii).
2.8. Interest on
Loans.
(a) Except as otherwise set
forth herein, each Loan (including, for the avoidance of doubt,
each PIK Loan) shall bear interest on the unpaid principal amount
thereof from the date made or deemed made through repayment
(whether by acceleration or otherwise) thereof at a rate per annum
equal to 17.00% (the “Interest Rate”) . Such
interest shall accrue on each Loan during each Interest
Period.
(b) (i) On each Interest
Compounding Date, interest accrued during the immediately preceding
Interest Period on any Loan shall automatically be deemed to be a
PIK Loan made by the applicable Lender hereunder evidenced by an
entry in accordance with Section 2.7(a) and, if so elected in
writing by such Lender pursuant to Section 2.7(d), through the
issuance to such Lender, on or prior to such Interest Compounding
Date, of a PIK Note with an aggregate principal amount equal to
100% of the amount of interest accrued on the Loan Exposure of such
Lender during the Interest Period ending on the Business Day
immediately preceding such Interest Compounding Date (such
interest, “ PIK Interest ”); provided ,
however , (ii) that in the event Company shall have paid in
full 50% or more of the initial principal amount under the
First-Lien Term Loan, Company may, at its option and upon
two-Business Days’ notice to the Administrative Agent, on
each Interest Compounding Date, pay in cash all of the interest
accrued during the immediately preceding Interest Period. For the
avoidance of doubt, interest paid pursuant to the option contained
in this Section 2.8(b)(ii) on the applicable Interest Compounding
Date, will not be deemed a PIK Loan, or any other Loan, and will
not be capitalized.
(c) Each PIK Loan
representing PIK Interest shall be due and payable on the Maturity
Date in cash unless earlier prepaid pursuant to Section 2.13 or
2.14.
(d) Interest accrued pursuant
to Section 2.8(a) shall be computed on the basis of a 365-day or
366-day year, as the case may be, for the actual number of days
elapsed in the period during which it accrues. In computing
interest on any Loan, the date of the making or deemed making of
such Loan or the first day of an Interest Period applicable to such
Loan shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan shall
be excluded; provided , if a Loan is repaid on the same day
on which it is made, one day’s interest shall be paid on that
Loan.
(e) Except as otherwise set
forth herein, interest on each Loan shall be payable in arrears (i)
upon any prepayment of that Loan, whether voluntary or mandatory,
to the extent accrued on the amount being prepaid and (ii) on the
Maturity Date. The interest payable on any prepayment of a PIK Loan
shall equal the interest accrued on the principal amount thereof
paid or prepaid from and including the most recent Interest
Compounding Date to but excluding the date of payment.
2.9.
[RESERVED].
2.10. Default Interest
. Upon the occurrence and during the continuance of an Event of
Default, (i) the principal amount of all Loans outstanding, and
(ii) to the extent permitted by applicable law, any interest, fees
or other amounts (other than principal) which are not paid, or in
the case of interest, accrued, when due, whether by acceleration or
otherwise, shall thereafter bear interest (including post-petition
interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws
26
(including any such interest which, but
for the filing of a petition in bankruptcy, would have accrued,
whether or not a claim is allowed for such interest in the related
bankruptcy proceeding)) and be payable on demand at a rate that is
2% per annum in excess of the interest rate otherwise payable
hereunder, with respect to the applicable Loans (or, in the case of
any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable hereunder), it being
understood that PIK Interest does not constitute a default. Payment
or acceptance of the increased rates of interest provided for in
this Section 2.10 is not a permitted alternative to timely payment
and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.
2.11. Fees . Company
agrees to pay to Agents such fees and expenses in the amounts and
at the times separately agreed upon in writing.
2.12.
[RESERVED].
2.13. Voluntary
Prepayments.
(a) Voluntary
Prepayments .
(i) The Company may not
voluntarily prepay Loans prior to the first anniversary of the
Closing Date.
(ii) Any time and from time
to time after the first anniversary of the Closing Date,
provided , there are no amounts outstanding under the
First-Lien Term Loan, and any permitted refinancings thereof:
Company may prepay any such Loans on any Business Day in whole or
in part, in an aggregate minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount.
(iii) All such prepayments
shall be made upon not less than one Business Day’s prior
written or telephonic notice, given to Administrative Agent by
11:00 a.m. (New York City time) on the date required and, if given
by telephone, promptly confirmed in writing to Administrative Agent
(and Administrative Agent will notify each Lender). Upon the giving
of any such notice, the principal amount of the Loans specified in
such notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be applied
as specified in Section 2.15(a).
(iv) [Reserved].
(b) [Reserved].
(c) [Reserved].
(d) Prepayment Premium
. In the event that for any reason any Loans are prepaid in whole
or in part after the first anniversary of the Closing Date and
prior to the Maturity Date, whether pursuant to this Section 2.13
or otherwise, except as provided in Sections 2.14 and 2.23, Company
shall pay to Lenders having Loan Exposure a call premium equal to
(i) four percent of the principal amount prepaid, for all
prepayments made at any time after the first anniversary of the
Closing Date but on or prior to the second anniversary of the
Closing Date, and (ii) two percent of the principal amount prepaid,
for all prepayments made at any time after the second anniversary
of the Closing Date but on or prior to the third anniversary of the
Closing Date. Prepayments after the third anniversary of the
Closing Date through the Maturity Date shall not have any call
premiums.
27
2.14. Mandatory
Prepayments . In the event that there are no amounts
outstanding under the First-Lien Term Loan, and any permitted
refinancings thereof, or the First-Lien Lenders decline an offer of
prepayment in accordance with the terms of the First-Lien Term Loan
Agreement, and subject to each Lender’s option to waive such
payment pursuant to Section 2.15(c), the Company shall make
mandatory payments as follows:
(a) Asset Sales . No
later than the second Business Day following the date of receipt by
Company or any of its Subsidiaries of any Net Asset Sale Proceeds,
Company shall prepay the Loans in an aggregate amount equal to such
Net Asset Sale Proceeds; provided , so long as no Event of
Default shall have occurred and be continuing, Company shall have
the option, directly or through one or more of its Guarantor
Subsidiaries (other than RP Sub No. 1), to invest, within 180
Business Days after receipt thereof, any Net Asset Sale Proceeds,
up to an aggregate amount for all such invested Net Asset Sale
Proceeds after the Closing Date not to exceed the Aggregate
Proceeds Threshold, in productive assets of the general type used
in the business of Company and its Subsidiaries (“
Productive Assets ”); provided , further
, that if aggregate Net Asset Sale Proceeds plus Cash proceeds
relating to Capital Stock referenced in Sections 2.14(c)(ii) and
2.14(c)(iii) from the Closing Date through the applicable date of
determination do not exceed $3,000,000, Company shall have no
obligation to prepay the Loans or reinvest the proceeds thereof;
provided , further , that for the first two Fiscal
Quarters following the Closing Date, all proceeds from a sale of
Axid ® OS that shall not require a
mandatory prepayment pursuant to the foregoing shall (i) be held in
escrow until such time that Company has delivered a duly executed
and completed Compliance Certificate certifying compliance with the
covenants under this Agreement for the first two Fiscal Quarters
following the Closing Date, and (ii) upon delivery of such
Compliance Certificates, such escrowed proceeds shall be released
to Company for reinvestment in Productive Assets. Otherwise, in the
event such Compliance Certificate prerequisite has not been
satisfied, the escrowed proceeds shall remain in escrow pending
Requisite Lender request for the application of such proceeds to
the payment of Loans or a waiver permitting proceeds to be released
from escrow and returned to Company.
(b) Insurance/Condemnation
Proceeds . No later than the second Business Day following the
date of receipt by Company or any of its Subsidiaries, or
Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds, Company shall prepay the Loans in
an aggregate amount equal to such Net Insurance/Condemnation
Proceeds; provided , so long as no Event of Default shall
have occurred and be continuing, Company shall have the option,
directly or through one or more of its Subsidiaries, to invest,
within 180 Business Days after receipt thereof, any Net
Insurance/Condemnation Proceeds, up to an aggregate amount for all
such invested Net Insurance/Condemnation Proceeds after the Closing
Date not to exceed $7,500,000, in Productive Assets, which
investment may include the repair, restoration or replacement of
the applicable assets thereof.
(c) Issuance of Equity
Securities . Company shall prepay the Loans no later than the
second Business Day following receipt by Company or any of its
Subsidiaries of all Cash proceeds (net of underwriting discounts
and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses) received
from a capital contribution to, or the issuance of any Capital
Stock, except for (i) equity securities issued in an initial public
offering, provided , that any net Cash proceeds from
an initial public offering not applied towards prepayment of the
Loans are invested in Productive Assets; (ii) Capital Stock issued
in connection with warrants outstanding as of December 31, 2004 (as
specified on Schedule 2.14(c)) of Company or any of its
Subsidiaries; (iii) Capital Stock or options issued pursuant to any
employee stock, arrangement, stock option compensation plan,
employment agreement or similar such plans; and (iv) Capital Stock
and warrants issued to Third-Lien
28
Lenders under the Third-Lien Term Loan
Agreement; provided , further , that if net Cash
proceeds from Capital Stock referenced in subclause (ii) and (iii)
in this clause (c) plus the aggregate Net Asset Sales Proceeds
exceed $3,000,000, all net Cash proceeds from Capital Stock
referenced in subclause (ii) and (iii) in this clause (c) in excess
of such $3,000,000 threshold shall be invested in Productive Assets
or applied towards a prepayment of the Loans.
(d) Issuance of Debt .
On the date of receipt by Company or any of its Subsidiaries of any
Cash proceeds from the incurrence of any Indebtedness of Company or
any of its Subsidiaries (other than with respect to any
Indebtedness permitted to be incurred pursuant to Section 6.1),
Company shall prepay the Loans in an aggregate amount equal to 100%
of such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses.
(e) Consolidated Excess
Cash Flow . In the event that there shall be Consolidated
Excess Cash Flow for any Fiscal Year, Company shall, no later than
105 days after the end of such Fiscal Year, prepay the Loans in an
aggregate amount equal to 50% of such Consolidated Excess Cash
Flow.
(f) Prepayment
Certificate . Concurrently with any prepayment of the Loans
pursuant to Sections 2.14(a) through 2.14(d), Company shall deliver
to Administrative Agent a certificate of an Authorized Officer
demonstrating the calculation of the amount of the applicable net
proceeds. In the event that Company shall subsequently determine
that the actual amount received exceeded the amount set forth in
such certificate, Company shall promptly make an additional
prepayment of the Loans in the amount of such excess, and Company
shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation
of such excess.
(g) Prepayment Premium
. No mandatory prepayments shall be made prior to the first
anniversary of the Closing Date or prior to the payment in full of
all amounts under the First-Lien Term Loan. In the event that for
any reason any Loans are prepaid in whole or in part after the
first anniversary of the Closing Date and prior to the Maturity
Date, whether pursuant to this Section 2.14 or otherwise, except as
provided in Section 2.23, Company shall pay to Lenders having Loan
Exposure a call premium equal to (i) four percent of the principal
amount prepaid, for all prepayments made at any time after the
first anniversary of the Closing Date but on or prior to the second
anniversary of the Closing Date, and (ii) two percent of the
principal amount prepaid, for all prepayments made at any time
after the second anniversary of the Closing Date but on or prior to
the third anniversary of the Closing Date. Prepayments after the
third anniversary of the Closing Date through the Maturity Date
shall not have any call premiums.
(h) First-Year
Proceeds . Notwithstanding the foregoing in clauses (a) –
(e) above, in the event the Company would, but for the requirement
in the first sentence of Section 2.14(g), be required to prepay the
Loans pursuant to Sections 2.14(a) through 2.14(e) above prior to
the first anniversary of the Closing Date, Company shall not make
any prepayments and shall instead transfer the proceeds otherwise
required to be prepaid to the Administrative Agent, who shall hold
all such funds sufficient to pay the principal amount of such
prepayment in escrow in an interest-bearing account until (i) the
first Business Day after the first anniversary of the Closing Date
or (ii) such date that a Lender requests payment, in writing, of
the proceeds; and on that date Administrative Agent shall apply all
amounts (or the requested amounts, as applicable) as mandatory
prepayments pursuant to Section 2.15(b) with the applicable call
premiums pursuant to Section 2.14(g) to be paid by the Company as
if such prepayments were made on the first Business Day after the
first anniversary of the Closing Date. Any interest earned on
amounts held in escrow shall be credited to the Company and Company
may apply such interest towards any call premiums or interest due
on any prepayments. Pending the Administrative Agent’s
application of funds
29
to make such prepayment, such funds
shall be held as part of the Collateral. The Administrative Agent
shall give Company and each lender three (3) Business Days’
prior written or telephonic notice of the date on which such funds
will be applied to prepayments of the Loans. Company shall pay
interest on the amount so prepaid (until applied to the Loans)
pursuant to Sections 2.16(a) and (b).
2.15. Application of
Prepayments.
(a) Application of
Voluntary Prepayments . Any prepayment of any Loan pursuant to
Section 2.13 shall be applied to prepay Loans of the Lenders in
accordance with their respective Pro Rata Shares.
(b) Application of
Mandatory Prepayments . Any amount required to be paid pursuant
to Sections 2.14(a) through 2.14(e) shall be applied to prepay
Loans of the Lenders in accordance with their respective Pro Rata
Shares.
(c) Waivable Mandatory
Prepayment . Anything contained herein to the contrary
notwithstanding, so long as any Loans are outstanding, in the event
the Company is required to make a mandatory prepayment (a
“Waivable Prepayment” ) of the Loans whether
pursuant to Section 2.14 herein or as a result of an exercise by
any First-Lien Lenders of their rights to waive a mandatory
prepayment pursuant to the First-Lien Term Loan Agreement, then
Company shall, within two Business Days of knowledge of such
Waivable Prepayment, notify Administrative Agent in writing of the
amount of such prepayment, and Administrative Agent shall promptly
thereafter notify each Lender holding an outstanding Loan of the
amount of such Lender’s Pro Rata Share of such Waivable
Prepayment and such Lender’s option to refuse such amount.
Each such Lender may exercise such option by giving written notice,
or telephonic notice followed within one Business Day with written
notice, to Company and Administrative Agent of its election to do
so, on or before noon New York time on the second Business Day
following receipt of the Company’s notice (the
“Required Prepayment Date” ), it being
understood that any Lender that does not notify Company and
Administrative Agent of its election to exercise such option by
noon New York time on the Required Prepayment Date shall be deemed
to have elected, as of such date, not to exercise such option. On
the Required Prepayment Date, Company shall pay to Administrative
Agent an amount equal to that portion of the Waivable Prepayment
payable to those Lenders that have elected not to exercise such
option, to prepay the Loans of such Lenders in accordance with
Section 2.15(b). Such portion of the Waivable Prepayment not
payable due to the election by any Lender to waive rights to the
Waivable Prepayment shall be offered to any Lender, who shall have
the right to receive such Lender’s pro rata share (as between
those non-waiving Lenders) of any additional amount of the Waivable
Prepayment waived by other Lenders; provided ,
however , that no Lender shall receive or be paid any amount
in excess of such Lender’s Loan Exposure`. In the event all
Lenders have waived their rights to receive the Waivable
Prepayment, the Company shall offer to the Third-Lien Lenders any
remaining, unpaid portion of the Waivable Prepayment not payable
due to the election by all Lenders to waive rights to the Waivable
Prepayment.
(d) [Reserved].
2.16. General Provisions
Regarding Payments.
(a) All payments by Company
of principal of the Loans, interest, fees and other Obligations
shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 1:00 p.m. (New
York City time) on the date due at the Principal Office for the
account of Lenders.
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(b) All payments in respect
of the principal amount of any Loan shall be accompanied by payment
of accrued interest on the principal amount being repaid or
prepaid.
(c) Administrative Agent
shall promptly distribute to each Lender at such address as such
Lender shall indicate in writing, such Lender’s applicable
Pro Rata Share of all payments and prepayments of principal and
interest due hereunder, together with all other amounts due
thereto, including, without limitation, all fees payable with
respect thereto, to the extent received by Administrative
Agent.
(d) [Reserved].
(e) [Reserved].
(f) Company hereby authorizes
Administrative Agent to charge Company’s accounts (if any)
with Administrative Agent in order to cause timely payment to be
made to Administrative Agent of all principal, interest, fees and
expenses due hereunder (subject to sufficient funds being available
in its accounts for that purpose).
(g) Administrative Agent may
deem, at Administrative Agent’s sole discretion, any payment
by or on behalf of Company hereunder that is not made in same day
funds prior to 1:00 p.m. (New York City time) on the due date
thereof at the Principal Office to be a nonconforming payment. Any
such payment shall not be deemed to have been received by
Administrative Agent until the later of (i) the time such funds
become available funds, and (ii) the applicable next Business Day.
Administrative Agent shall give prompt telephonic notice to Company
and each applicable Lender (confirmed in writing) if any payment is
nonconforming. Any nonconforming payment may constitute or become a
Default or Event of Default in accordance with the terms of Section
8.1(a). Interest shall continue to accrue on any principal as to
which a nonconforming payment is made until such funds become
available funds (but in no event less than the period from the date
of such payment to the next succeeding applicable Business Day) at
the rate determined pursuant to Section 2.10 from the date such
amount was due and payable until the date such amount is paid in
full.
(h) If an Event of Default
shall have occurred and not otherwise been waived, and the maturity
of the Obligations shall have been accelerated pursuant to Section
8.1, all payments or proceeds received by Agents hereunder in
respect of any of the Obligations, shall be applied first ,
to the payment of all reasonable costs and expenses of such sale,
collection or other realization, including reasonable compensation
to the Collateral Agent and its agents and counsel, and all other
reasonable expenses, liabilities and advances made or incurred by
the Collateral Agent in connection therewith, and all amounts for
which the Collateral Agent is entitled to indemnification hereunder
(in its capacity as the Collateral Agent and not as a Lender) and
all advances made by the Collateral Agent hereunder for the account
of the applicable Grantor, and to the payment of all costs and
expenses paid or incurred by the Collateral Agent in connection
with the exercise of any right or remedy hereunder or under the
Credit Agreement, all in accordance with the terms hereof or
thereof; second , to the extent of any excess of such
proceeds, to the payment of all other Obligations for the ratable
benefit of the Lenders; and third , to the extent of any
excess of such proceeds, to the payment to, or upon the order of,
Company or Guarantor Subsidiary or to whosoever may be lawfully
entitled to receive the same or as a court of competent
jurisdiction may direct.
2.17. Ratable Sharing
. Lenders hereby agree among themselves that, except as otherwise
provided in Section 2.16(h), if any of them shall, whether by
voluntary payment, through the exercise of any right of set-off or
banker’s lien, by counterclaim or cross action or by the
enforcement of any right under the Credit Documents or otherwise,
or as adequate protection of a deposit treated as cash
collateral
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under the Bankruptcy Code, receive
payment or reduction of a proportion of the aggregate amount of
principal, interest, fees and other amounts then due and owing to
such Lender hereunder or under the other Credit Documents
(collectively, the “Aggregate Amounts Due” to
such Lender) which is greater than the proportion received by any
other Lender in respect of the Aggregate Amounts Due to such other
Lender, then the Lender receiving such proportionately greater
payment shall (a) notify Administrative Agent and each other Lender
of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in
the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders
in proportion to the Aggregate Amounts Due to them; provided
, if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender
upon the bankruptcy or reorganization of Company or otherwise,
those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees
that any holder of a participation so purchased may exercise any
and all rights of banker’s lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with
respect thereto as fully as if that holder were owed the amount of
the participation held by that holder.
2.18.
[RESERVED].
2.19. Increased Costs;
Capital Adequacy.
(a) Compensation For
Increased Costs and Taxes . Subject to the provisions of
Section 2.20 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall
reasonably determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or
any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law,
treaty or governmental rule, regulation or order), or any
determination of a court or governmental authority, in each case
that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of
law): (i) subjects such Lender (or its applicable lending office)
to any additional Tax (other than any Tax on the overall net income
of such Lender) with respect to this Agreement or any of the other
Credit Documents or any of its obligations hereunder or thereunder
or any payments to such Lender (or its applicable lending office)
of principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any
office of such Lender; or (iii) imposes any other condition (other
than with respect to a Tax matter) on or affecting such Lender (or
its applicable lending office); and the result of any of the
foregoing is to increase the cost to such Lender of agreeing to
make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending
office) with respect thereto; then, in any such case, Company shall
promptly pay to such Lender, upon receipt of the statement referred
to in the next sentence, such additional amount or amounts (in the
form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any
such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts
owed to such Lender under this Section 2.19(a), which statement
shall be conclusive and binding upon all parties hereto absent
manifest error.
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(b) Capital Adequacy
Adjustment . In the event that any Lender shall have reasonably
determined that the adoption, effectiveness, phase-in or
applicability after the Closing Date of any law, rule or regulation
(or any provision thereof) regarding capital adequacy, or any
change therein or in the interpretation or administration thereof
by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Lender (or its applicable lending office) with
any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender
or any corporation controlling such Lender as a consequence of, or
with reference to, such Lender’s Loans or other obligations
hereunder with respect to the Loans to a level below that which
such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change
or compliance (taking into consideration the policies of such
Lender or such controlling corporation with regard to capital
adequacy), then from time to time, within five Business Days after
receipt by Company from such Lender of the statement referred to in
the next sentence, Company shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction.
Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the
basis for calculating the additional amounts owed to Lender under
this Section 2.19(b), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
2.20. Taxes; Withholding,
etc.
(a) Payments to Be Free
and Clear . All sums payable by any Credit Party hereunder and
under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax
on the overall net income of any Lender) imposed, levied,
collected, withheld or assessed by or within the United States of
America or any political subdivision in or of the United States of
America or any other jurisdiction from or to which a payment is
made by or on behalf of any Credit Party or by any federation or
organization of which the United States of America or any such
jurisdiction is a member at the time of payment.
(b) Withholding of
Taxes . If any Credit Party or any other Person is required by
law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by any Credit Party to Administrative
Agent or any Lender under any of the Credit Documents: (i) Company
shall notify Administrative Agent of any such requirement or any
change in any such requirement as soon as practicable after Company
becomes aware of it; (ii) Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to be made (if
the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or
such Lender, as the case may be) on behalf of and in the name of
Administrative Agent or such Lender; (iii) the sum payable by such
Credit Party in respect of which the relevant deduction,
withholding or payment is required shall be increased to the extent
necessary to ensure that, after the making of that deduction,
withholding or payment, Administrative Agent or such Lender, as the
case may be, receives on the due date a net sum equal to what it
would have received had no such deduction, withholding or payment
been required or made; and (iv) within thirty days after paying any
sum from which it is required by law to make any deduction or
withholding, and within thirty days after the due date of payment
of any Tax which it is required by clause (ii) above to pay,
Company shall deliver to Administrative Agent evidence satisfactory
to the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing or
other authority; provided , no such additional amount shall
be required to
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be paid to any Lender under clause (iii)
above except to the extent that any change after the date hereof
(in the case of each Lender listed on the signature pages hereof on
the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the
case of each other Lender) in any such requirement for a deduction,
withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from
that in effect at the date hereof or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such
Lender.
(c) Evidence of Exemption
From U.S. Withholding Tax . Each Lender that is not a United
States Person (as such term is defined in Section 7701(a)(30) of
the Internal Revenue Code) for United States federal income tax
purposes (a “Non-US Lender” ) shall deliver to
Administrative Agent for transmission to Company, on or prior to
the Closing Date (in the case of each Lender listed on the
signature pages hereof on the Closing Date) or on or prior to the
date of the Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), and at such other times
as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (i) two original copies of Internal Revenue Service
Form W-8BEN or W-8ECI (or any successor forms), properly completed
and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested
by Company to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest, fees
or other amounts payable under any of the Credit Documents, or (ii)
if such Lender is not a “ bank ” or other
Person described in Section 881(c)(3) of the Internal Revenue Code
and cannot deliver either Internal Revenue Service Form W-8BEN or
W-8ECI pursuant to clause (i) above, a Certificate re Non-Bank
Status together with two original copies of Internal Revenue
Service Form W-8 (or any successor form), properly completed and
duly executed by such Lender, and such other documentation required
under the Internal Revenue Code and reasonably requested by Company
to establish that such Lender is not subject to deduction or
withholding of Unite
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