UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 13, 2018

 

TELIGENT, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware   001-08568   01-0355758
(State or other jurisdiction    (Commission File Number)   (I.R.S. Employer
of incorporation)       Identification No.)

 

105 Lincoln Avenue

Buena, New Jersey 08310

(Address of Principal Executive Offices)(Zip Code)

 

Registrant’s telephone number, including area code: (856) 697-1441

 

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company. ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 1.01Entry into a Material Definitive Agreement.

 

On December 13, 2018, Teligent, Inc. (the “Company”), pursuant to the previously disclosed Commitment Letter, dated November 12, 2018, between the Company and Ares Management LLC, entered into: (i) a First Lien Revolving Credit Agreement, by and among the Company, as the borrower, certain subsidiaries of the Company, as guarantors, the lenders from time to time party thereto, and ACF Finco I LP, as administrative agent (the “Revolver Credit Agreement”) and (ii) a Second Lien Credit Agreement, by and among the Company, as the borrower, certain subsidiaries of the Company, as guarantors, the lenders from time to time party thereto, and Ares Capital Corporation, as administrative agent (the “Second Lien Credit Agreement” and, together with the Revolver Credit Agreement, the “New Senior Credit Facilities”).

 

The New Senior Credit Facilities consist of (i) a $25.0 million senior revolving credit facility governed by the Revolver Credit Agreement (the “New Revolver”); (ii) a $50.0 million second lien initial term loan (the “New Initial Term Loan”); (iii) a $30.0 million second lien delayed draw term loan A (the “Delayed Draw Term Loan A”) and (iv) a $15.0 million second lien delayed draw term loan B (the “Delayed Draw Term Loan B” and, together with the Delayed Draw Term Loan A, the “Delayed Draw Term Loans” and, together with the New Initial Term Loan, the “New Term Loans”). The New Term Loans are governed by the Second Lien Credit Agreement. The Company’s ability to borrow under the New Revolver is subject to a “borrowing base” to be determined based upon eligible inventory, eligible equipment, eligible real estate and eligible receivables.

 

Maturity. The New Revolver matures on the earlier to occur of (a) six months prior to the maturity of the Company’s outstanding 4.75% Convertible Senior Notes due 2023 (the “2023 Notes”) and (b) December 13, 2023. The New Initial Term Loan matures on the earlier to occur of (a) three months prior to maturity of the 2023 Notes and (b) June 13, 2024. Commitments related to undrawn amounts of the Delayed Draw Term Loan A terminate on June 30, 2019, and drawn amounts under the Delayed Draw Term Loan A mature at the same time as the New Initial Term Loan. Commitments related to undrawn amounts of the Delayed Draw Term Loan B terminate on December 13, 2019, and drawn amounts under the Delayed Draw Term Loan B mature at the same time as the New Initial Term Loan.

 

Use of Proceeds. The proceeds from the New Senior Credit Facility will be used for, among other things, the refinancing of certain of the Company’s outstanding indebtedness, including repayment of all borrowings under the Credit Agreement, dated as of June 1, 2018, among the Company, as the borrower, certain subsidiaries of the Company, each as a guarantor, the lenders party thereto, and Cantor Fitzgerald Securities, as administrative agent (the “Existing Credit Agreement”), the repurchase or redemption of the Company’s outstanding 3.75% Convertible Senior Notes due 2019 (the “2019 Notes”), as well as a construction project at the Company’s Buena, New Jersey facility, working capital, capital expenditures and other general corporate purposes, all as further set forth in the Revolver Credit Agreement and the Second Lien Credit Agreement.

 

Interest and Fees. The interest rate under the New Revolver is calculated, at the option of the Company, at either the London Inter-Bank Offered Rate (or LIBOR) or the base rate, in each case, plus 2.75%. The interest rate on the New Term Loans is calculated, at the option of the Company, at either LIBOR plus 8.75% or the base rate plus 7.75%. Interest on the New Senior Credit Facilities is payable in cash except that interest on the New Term Loans is payable, at the option of the Company, in cash or in kind by being added to the principal balance thereof, until the earlier of December 13, 2020 and the date the Company has provided the lenders of the New Senior Credit Facilities financial statements demonstrating that the Company has attained twelve months of revenue of at least $125 million. A commitment fee of 1.0% per annum is payable by the Company quarterly in arrears on the unused portion of the Delayed Draw Term Loans.

 

Amortization and Prepayment. The New Senior Credit Facilities are not subject to amortization prior to maturity. Amounts drawn under the New Revolver may be prepaid at the option of the Company without premium or penalty, subject, in the case of acceleration of the New Revolver or termination of the revolving credit commitments thereunder, to certain call protections which vary depending on the time at which such prepayments are made. Amounts drawn under the New Revolver are subject to mandatory prepayment to the extent that aggregate extensions under the New Revolver exceed the lesser of the revolving credit commitment then in effect and the borrowing base then in effect, and upon the occurrence of certain events and conditions, including non-ordinary course asset dispositions, receipt of certain insurance proceeds and condemnation awards and issuances of certain debt obligations. Amounts outstanding under the New Term Loans may be prepaid at the option of the Company subject to applicable premiums, including a make-whole premium, and certain call protections which vary depending on the time at which such prepayments are made. Subject to payment of outstanding obligations under the New Revolver as a result of any corresponding mandatory prepayment requirements thereunder, amounts outstanding under the New Term Loans are subject to mandatory prepayment upon the occurrence of certain events and conditions, including non-ordinary course asset dispositions, receipt of certain insurance proceeds and condemnation awards, issuances of certain debt obligations and a change of control transaction.

 

 

 

 

Guarantees and Collateral. The New Senior Credit Facilities are guaranteed by the Company’s subsidiaries, subject to certain exceptions. The New Revolver and related obligations are secured by a first priority security interest in and lien on substantially all of the assets of the Company and the subsidiary guarantors (the “Collateral”), subject to certain exceptions. The New Term Loans and related obligations are secured by a second priority security interest in the Collateral, subject to certain exceptions.

 

Covenants and Other Provisions. The New Senior Credit Facilities contain customary borrowing conditions, affirmative, negative and reporting covenants, representations and warranties, and events of default, including cross-defaults on other material indebtedness, as well as events of default triggered by a change of control and certain actions initiated by the federal Food and Drug Administration. In addition, the Company is required to comply at certain times with certain financial covenants consisting of a minimum revenue test, a minimum adjusted EBITDA test and a maximum total net leverage ratio. If an event of default occurs, the lenders of the New Revolver would be entitled to take enforcement actions, including foreclosure on Collateral and acceleration of amounts owed under the New Revolver, and the lenders under the New Term Loans would also be entitled to take such actions, subject to any limitations set forth in an intercreditor agreement with respect to the New Term Loans.

 

On December 13, 2018, the Company issued a press release with respect to the New Senior Credit Facilities, which is attached as Exhibit 99.1 hereto.

 

The foregoing summary of the terms of the Revolver Credit Agreement, Second Lien Credit Agreement and the New Senior Credit Facilities do not purport to be complete descriptions and are subject to, and qualified in their entirety by, the full text of the Revolver Credit Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference, and the full text of the Second Lien Credit Agreement, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.

 

Item 1.02Termination of a Material Definitive Agreement.

 

On December 13, 2018, concurrently with the execution of the Revolver Credit Agreement and the Second Lien Credit Agreement and the closing of the New Senior Credit Facilities, the Company repaid in full all outstanding amounts under, and terminated, the credit facility provided by the Existing Credit Agreement. All guarantees and security interests granted by the Company and its subsidiaries under the Existing Credit Agreement were terminated. In connection with the termination of the Existing Credit Agreement, the Company incurred prepayment fees and other related costs of approximately $0.5 million during the quarter ended December 31, 2018.

 

Item 2.03Creation of a Direct Financial Obligation or an Obligation under Off-Balance Sheet Arrangements of a Registrant.

 

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

 

 

 

Item 9.01Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Exhibit Description
10.1   First Lien Revolving Credit Agreement, dated as of December 13, 2018, by and among Teligent, Inc., as Borrower, certain Subsidiaries thereof, as Guarantors, the Lenders from time to time party thereto, and ACF Finco I LP, as Administrative Agent
10.2   Second Lien Credit Agreement, dated as of December 13, 2018, by and among Teligent, Inc., as Borrower, certain Subsidiaries thereof, as Guarantors, the Lenders from time to time party thereto, and Ares Capital Corporation, as Administrative Agent
99.1   Press release, dated December 13, 2018

 

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

 

This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding the use the proceeds of the New Senior Credit Facilities in the manner currently anticipated (including to repay all amounts outstanding under and terminate the Existing Credit Agreement, to repurchase or redeem the 2019 Notes, and to fund the construction project at the Company’s Buena, New Jersey facility), and other statements identified by the use of words such as "anticipate," "believe," "could," "estimate," "expect," "feel," "forecast," "intend," "may," "plan," "potential," “predict,” "project," “seek,” "should," "would,” “will,” and similar expressions. These forward-looking statements are based on management’s current expectations. The forward-looking statements contained in this Current Report on Form 8-K are neither promises nor guarantees but involve and are subject to known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any results, performance or achievements expressed or implied by the forward-looking statements contained in this Current Report on Form 8-K, including, but not limited to, the following risks, uncertainties and factors: we may not repurchase or redeem the 2019 Notes on the timeframe expected or on the terms summarized herein or as otherwise may be acceptable to the Company, if at all; our inability to meet current or future regulatory requirements in connection with existing or future Abbreviated New Drug Applications; our inability to achieve profitability; our failure to obtain FDA approvals as anticipated; our inability to execute and implement our business plan and strategy; the potential lack of market acceptance of our products; our inability to protect our intellectual property rights; changes in global political, economic, business, competitive, market and regulatory factors; and our inability to complete successfully future product acquisitions. These and other important factors discussed under the caption “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2017, our subsequently filed Quarterly Reports on Form 10-Q, and our other filings made with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements contained in this Current Report on Form 8-K. Forward-looking statements reflect management's analysis as of the date of this Current Report on Form 8-K. The Company does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise, except as required by law.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  TELIGENT, INC.
   
Date: December 13, 2018 By:

/s/ Jason Grenfell-Gardner

    Name: Jason Grenfell-Gardner
    Title: Chief Executive Officer

 

 

 

Exhibit 10.1

 

Execution Version

 

FIRST LIEN REVOLVING CREDIT AGREEMENT

 

by and among

 

TELIGENT, INC.,

as Borrower,

 

Certain Subsidiaries thereof, as Guarantors,

 

The Lenders

from Time to Time Party Hereto,

 

and

 

ACF FINCO I LP,

as Administrative Agent,

 

Dated as of December 13, 2018

 

 

  

 

 

 

Article I Definitions 1
     
Section 1.01 Defined Terms 1
Section 1.02 Other Interpretive Provisions 39
Section 1.03 Accounting Terms and Determination 39
Section 1.04 Rounding 40
Section 1.05 References to Agreements, Laws, etc. 40
Section 1.06 Times of Day 40
Section 1.07 Timing of Payment of Performance 40
Section 1.08 Corporate Terminology 40
Section 1.09 UCC Definitions 40
     
Article II Amount and Terms of Loans 41
     
Section 2.01 Revolving Credit; Note 41
Section 2.02 Overadvances 41
Section 2.03 Protective Advances 42
Section 2.04 Reserves 43
Section 2.05 Borrowing Procedures; Settlement 43
Section 2.06 Collections 47
Section 2.07 Crediting of Funds 48
Section 2.08 Maintenance of Loan Account; Records of Administrative Agent 49
Section 2.09 Payments; Termination of Loans 50
Section 2.10 Interest 50
Section 2.11 Conversions and Continuations 51
Section 2.12 Pro Rata Borrowings 52
Section 2.13 Interest Periods 52
Section 2.14 Increased Costs, Illegality, etc. 53
Section 2.15 Compensation 55
Section 2.16 Change of Lending Office 55
Section 2.17 Notice of Certain Costs 55
     
Article III [RESERVED] 56
     
Article IV Fees and Commitment Terminations 56
     
Section 4.01 Fees 56
Section 4.02 Mandatory Termination of Commitments 56
Section 4.03 Field Examination Fees; Appraisals 56
     
Article V Payments 56
     
Section 5.01 Voluntary Prepayments; Termination of Commitments 56
Section 5.02 Mandatory Prepayments 58
Section 5.03 [Reserved] 58
Section 5.04 Net Payments 59
Section 5.05 Computations of Interest and Fees 61
     
Article VI Conditions Precedent 62
     
Section 6.01 Conditions Precedent to Initial Credit Extension 62
Section 6.02 Conditions Precedent to all Credit Extensions 66

  

 i

 

 

Article VII Representations, Warranties and Agreements 67
     
Section 7.01 Corporate Status 67
Section 7.02 Corporate Power and Authority 67
Section 7.03 No Violation 68
Section 7.04 Litigation, Labor Controversies, etc. 68
Section 7.05 Use of Proceeds; Regulations U and X 68
Section 7.06 Approvals, Consents, etc. 68
Section 7.07 Investment Company Act 69
Section 7.08 Full Disclosure 69
Section 7.09 Financial Condition; No Material Adverse Effect 69
Section 7.10 Tax Returns and Payments 70
Section 7.11 Compliance with ERISA 70
Section 7.12 Capitalization and Subsidiaries 71
Section 7.13 Intellectual Property; Licenses, etc. 71
Section 7.14 Environmental 72
Section 7.15 Ownership of Properties 72
Section 7.16 No Default 73
Section 7.17 Solvency 73
Section 7.18 [Intentionally Omitted] 73
Section 7.19 Compliance with Laws; Authorizations 73
Section 7.20 Contractual or Other Restrictions 73
Section 7.21 Transaction Documents 73
Section 7.22 Collective Bargaining Agreements 74
Section 7.23 Insurance 74
Section 7.24 Evidence of Other Indebtedness 74
Section 7.25 Deposit Accounts and Securities Accounts 74
Section 7.26 Foreign Assets Control Regulations; Anti-Money Laundering and Anti-Corruption Practices 75
Section 7.27 Patriot Act 75
Section 7.28 Status as Senior Debt; Second Lien Loan Documents 75
Section 7.29 Flood Insurance 75
Section 7.30 Location of Collateral; Equipment List 76
Section 7.31 Regulatory Matters 76
     
Article VIII Affirmative Covenants 80
     
Section 8.01 Financial Information, Reports, Notices and Information 80
Section 8.02 Books, Records and Inspections 85
Section 8.03 Maintenance of Insurance 85
Section 8.04 Payment of Taxes 86
Section 8.05 Maintenance of Existence; Compliance with Laws, etc. 86
Section 8.06 Environmental Compliance 87
Section 8.07 ERISA 88
Section 8.08 Maintenance of Property and Assets 89
Section 8.09 End of Fiscal Years; Fiscal Quarters 89
Section 8.10 Use of Proceeds 89
Section 8.11 Further Assurances; Additional Guarantors and Grantors 90

  

 ii

 

 

Section 8.12 Bank Accounts 92
Section 8.13 [Intentionally Omitted] 92
Section 8.14 Post-Closing 92
Section 8.15 Interest Payment Election 92
     
Article IX Negative Covenants 94
     
Section 9.01 Limitation on Indebtedness 94
Section 9.02 Limitation on Liens 96
Section 9.03 Consolidation, Merger, etc. 98
Section 9.04 Permitted Dispositions 98
Section 9.05 Investments 99
Section 9.06 Restricted Payments, etc. 101
Section 9.07 Modification of Certain Agreements 101
Section 9.08 Sale and Leaseback 102
Section 9.09 Transactions with Affiliates 102
Section 9.10 Restrictive Agreements, etc. 102
Section 9.11 Hedging Transactions 103
Section 9.12 Changes in Business 103
Section 9.13 Financial Performance Covenant 103
Section 9.14 Disqualified Capital Stock 104
Section 9.15 Removal of Collateral 104
Section 9.16 Voluntary Prepayments of Material Indebtedness 104
     
Article X Events of Default 104
     
Section 10.01 Listing of Events of Default 104
Section 10.02 Remedies Upon Event of Default 108
     
Article XI The Administrative Agent 109
     
Section 11.01 Appointment 109
Section 11.02 Delegation of Duties 109
Section 11.03 Exculpatory Provisions 109
Section 11.04 Reliance by Agents 110
Section 11.05 Notice of Default 110
Section 11.06 Non-Reliance on Agents and Other Lenders 110
Section 11.07 Indemnification 111
Section 11.08 Agent in Its Individual Capacity 111
Section 11.09 Successor Agents 112
Section 11.10 Agents Generally 112
Section 11.11 Restrictions on Actions by Lenders; Sharing of Payments 112
Section 11.12 Agency for Perfection 113
Section 11.13 Authorization to File Proof of Claim 113
Section 11.14 Credit Bids 113
Section 11.15 Binding Effect 114
     
Article XII Miscellaneous 114
     
Section 12.01 Amendments and Waivers 114
Section 12.02 Notices and Other Communications; Facsimile Copies 116

  

 iii

 

 

Section 12.03 No Waiver; Cumulative Remedies 117
Section 12.04 Survival of Representations and Warranties 117
Section 12.05 Payment of Expenses; Indemnification 117
Section 12.06 Successors and Assigns; Participations and Assignments 118
Section 12.07 Replacements of Lenders Under Certain Circumstances 122
Section 12.08 Securitization 123
Section 12.09 Adjustments; Set-off 123
Section 12.10 Counterparts 124
Section 12.11 Severability 124
Section 12.12 Integration 124
Section 12.13 GOVERNING LAW 125
Section 12.14 Submission to Jurisdiction; Waivers 125
Section 12.15 Acknowledgments 126
Section 12.16 WAIVERS OF JURY TRIAL 126
Section 12.17 Confidentiality 126
Section 12.18 Press Releases, etc. 128
Section 12.19 Releases of Guarantees and Liens 128
Section 12.20 USA Patriot Act 129
Section 12.21 No Fiduciary Duty 129
Section 12.22 Authorized Officers 129
Section 12.23 Acknowledgement and Consent to Bail-In of EEA Financial Institutions 129

  

SCHEDULES  
   
Schedule 1.01(a) Commitments
Schedule 1.01(b) Immaterial Subsidiaries
Schedule 1.01(c) Material Contracts
Schedule 7.04 Litigation
Schedule 7.12 Subsidiaries and Joint Ventures/Partnerships
Schedule 7.15 Real Property
Schedule 7.22 Collective Bargaining Agreements
Schedule 7.23 Insurance
Schedule 7.24 Evidence of Indebtedness
Schedule 7.25 Deposit Accounts and Securities Accounts
Schedule 7.30 Location of Collateral; Equipment List
Schedule 7.31 Regulatory Matters
Schedule 9.02 Liens
Schedule 12.02 Addresses for Notices

 

EXHIBITS  
   
Exhibit A-1 Form of Assignment and Acceptance
Exhibit B Borrowing Base Certificate
Exhibit C-1 Form of Compliance Certificate

 

 iv

 

 

Exhibit N-1 Form of Notice of Borrowing
Exhibit N-2 Form of Notice of Conversion or Continuation
Exhibit R-1 Form of Note
Exhibit P-1 Form of Perfection Certificate

 

 v

 

 

FIRST LIEN REVOLVING CREDIT AGREEMENT

 

THIS FIRST LIEN REVOLVING CREDIT AGREEMENT, dated as of December 13, 2018, is among TELIGENT, INC., a Delaware corporation (the “Borrower”), its Subsidiaries signatory hereto as guarantors or hereafter designated as Guarantors pursuant to Section 8.11, the lenders from time to time party hereto (each a “Lender” and, collectively, the “Lenders”), and ACF FINCO I LP, a Delaware limited partnership (“ACF”), as administrative agent and collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”).

 

RECITALS

 

WHEREAS, Borrower has requested that the Administrative Agent, Lenders and Borrower enter into this Agreement and that Lenders extend loans to Borrower under a revolving credit facility to support Borrower’s working capital needs and for other purposes as described in this Agreement.  Lenders are willing to extend such loans to Borrower subject to the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

Article I

 

Definitions

 

Section 1.01         Defined Terms.  As used herein, the following terms shall have the meanings specified in this Section 1.01 unless the context otherwise requires:

 

2019 Convertible Notes” shall mean the Borrower’s 3.75% senior notes due 2019.

 

2019 Convertible Notes Repurchase” shall mean the Borrower’s repurchase or redemption of all or any portion of the 2019 Convertible Notes, whether by tender offer, open-market purchases or otherwise.

 

2019 Convertible Notes Repurchase Blocked Account” shall mean a deposit account of Borrower maintained with Disbursement Bank that shall be subject to Administrative Agent’s and First Lien Agent’s sole dominion and control.

 

2023 Convertible Notes” shall mean the Borrower’s 4.75% senior notes due 2023.

 

ABR” shall mean, for any day, a fluctuating rate of interest per annum (rounded upward, if necessary, to the next highest 1/16 of 1%) equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus ½ of one percentage point (c) the Eurodollar Rate with a term of one month plus one percentage point, and (d) 2.00% per annum.  Changes in the rate of interest on that portion of any Loans maintained as ABR Loans will take effect simultaneously with each change in the ABR.

 

 

 

 

ABR Loan” shall mean each Loan bearing interest at ABR, as provided in Section 2.10(a).

 

Acceptable Appraisal” shall mean, with respect to an appraisal of Inventory, Equipment or Real Property, the most recent appraisal of such property received by Administrative Agent (a) from an appraisal company satisfactory to Administrative Agent, (b) the scope and methodology (including, to the extent relevant, any sampling procedure employed by such appraisal company) of which are satisfactory to Administrative Agent, and (c) the results of which are satisfactory to Administrative Agent, in each case, in Administrative Agent's Permitted Discretion.

 

ACF” shall have the meaning set forth in the preamble to this Agreement.

 

Administrative Agent” shall have the meaning set forth in the preamble to this Agreement.

 

Administrative Questionnaire” shall mean a questionnaire completed by each Lender, in a form approved by the Administrative Agent, in which such Lender, among other things, (a) designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Credit Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with such Lender’s compliance procedures and Applicable Laws, including federal and state securities laws and (b) designates an address, facsimile number, electronic mail address and/or telephone number for notices and communications with such Lender.

 

Affiliate” shall mean, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided, that, no Secured Party shall be an Affiliate of any Credit Party solely by reason of the provisions of the Credit Documents.  The term “Control” means either (a) the power to vote, or the beneficial ownership of, 10% or more of the voting Capital Stock of such Person or (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  The terms “Controlling” and “Controlled” have meanings correlative thereto.

 

Agreement” shall mean this Credit Agreement, as the same may be amended, amended and restated, supplemented, or otherwise modified from time to time.

 

Anti-Corruption Laws” shall mean any and all laws, rules or regulations relating to corruption or bribery, including, but not limited to, the FCPA and the U.K. Bribery Act 2010.

 

Anti-Money Laundering Laws” shall mean any and all laws, rules or regulations relating to money laundering or terrorism financing, including (a) 18 U.S.C. §§ 1956 and 1957; and (b) the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq., as amended by the PATRIOT Act, and its implementing regulations.

 

 2 

 

 

Anti-Terrorism Laws” shall mean any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, all as amended, supplemented or replaced from time to time.

 

Applicable Laws” shall mean, with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its Property or Products or to which such Person or any of its Property or Products is subject. For the avoidance of doubt, the term “Applicable Laws” shall include FATCA and any intergovernmental agreements with respect thereto between the United States and another jurisdiction.

 

Applicable Margin” shall mean a percentage per annum equal to, with respect to Loans, (i) that are Eurodollar Loans, 3.75 percentage points and (ii) that are ABR Loans, 2.75 percentage points.

 

Approved Fund” shall mean any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

 

Assignment and Acceptance” shall mean an assignment and acceptance substantially in the form of Exhibit A-1.

 

Attributable Indebtedness” shall mean, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.

 

Authorized Officer” shall mean, with respect to any Credit Party, the Chief Executive Officer, the Chief Financial Officer, or any other senior financial officer (to the extent that such senior financial officer is designated as such in writing to the Administrative Agent by such Credit Party) of such Credit Party.

 

“Availability” shall mean as of any date of determination, the amount that the Borrower is entitled to borrow as Loans under this Agreement.

 

Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

Bail-In Legislation” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

 3 

 

 

Bankruptcy Code” shall mean the Federal Bankruptcy Reform Act of 1978.

 

Blocked Account” shall mean an account established by Administrative Agent that shall (x) initially on the Closing Date be subject to the Credit Parties’ control and (y) subsequently, during any Cash Dominion Period, be subject to Administrative Agent’s sole dominion and control (including, but not limited to the sole power of withdrawal during any such Cash Dominion Period).

 

Board” shall mean the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

Board of Directors” shall mean the board of directors (or other similar body) of Borrower.

 

Borrower” shall have the meaning set forth in the preamble to this Agreement.

 

Borrowing” shall mean and include the incurrence of one Type of Loan on a given date (or resulting from conversions on a given date) having, in the case of Eurodollar Loans, the same Interest Period (provided, that ABR Loans incurred pursuant to Section 2.14(b) shall be considered part of any related Borrowing of Eurodollar Loans).

 

Borrowing Base” shall mean, at any time, an amount equal to:

 

(a)          the lesser of:

 

(i)          Total Commitment, and

 

(ii)         the sum of:

 

(A)         an amount not to exceed eighty-five percent (85%) of the aggregate amount of the result of Eligible Receivables less the Dilution Reserve, if any, at such time; plus

 

(B)         the least of (1) sixty percent (60%) of the Value of Eligible Inventory at such time, (2) eighty-five percent (85%) of the Net Orderly Liquidation Value of Eligible Inventory, (3) Twelve Million Five Hundred Thousand and 00/100 Dollars ($12,500,000.00), and (4) fifty percent (50%) of clause (a)(ii)(A) of the definition of Borrowing Base; plus

 

(C)         the lesser of (1) eighty-five percent (85%) of the appraised Net Orderly Liquidation Value of Eligible Equipment, and (2) Seven Million Five Hundred Thousand and 00/100 Dollars ($7,500,000.00); plus

 

(D)         the lesser of (1) thirty-five percent (35%) of the Fair Market Value of Eligible Real Property as such Fair Market Value is identified in the most recent Acceptable Appraisal of Real Property at such time, and (2) Seventeen Million Five Hundred Thousand and 00/100 Dollars ($17,500,000.00);

 

 4 

 

 

less

(b)          without duplication of any Reserves accounted for pursuant to clause (a)(ii) above, the aggregate amount of all Reserves in effect at such time.

 

Borrowing Base Certificate” shall have the meaning set forth in Section 8.01(e)(i).

 

Borrowing Capacity” shall have the meaning set forth in Section 2.01.

 

Budget” shall have the meaning set forth in Section 8.01(e).

 

Business Day” shall mean (a) any day excluding Saturday, Sunday and any day that shall be in the City of New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close, and (b) any day that is also a day for trading by and between banks in Dollar deposits in the interbank Eurodollar market.

 

Canadian Subsidiary” shall mean Teligent Canada.  

 

Capital Stock” shall mean any and all shares, interests, participations, units or other equivalents (however designated) of capital stock of a corporation, membership interests in a limited liability company, partnership interests of a limited partnership, any and all equivalent ownership interests in a Person and any and all warrants, rights or options to purchase any of the foregoing.

 

Capitalized Lease Obligations” shall mean, as applied to any Person, all obligations under Capitalized Leases of such Person or any of its Subsidiaries, in each case taken at the amount thereof accounted for as liabilities on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP.

 

Capitalized Leases” shall mean, as applied to any Person, all leases of property that have been or should be, in accordance with GAAP, recorded as capitalized leases on the balance sheet of such Person or any of its Subsidiaries, on a consolidated basis; provided, that for all purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP.

 

Cash Dominion Period” shall mean the period (a) commencing (i) on any day that Excess Availability is less than an amount equal to ten percent (10%) of the Commitments, at any time or (ii) upon the occurrence and during the continuance of any Event of Default, and (b) continuing until (i) to the extent that the Cash Dominion Period has occurred due to clause (a)(i) of this definition, for the previous ninety (90) consecutive calendar days, Excess Availability at all times has been greater than or equal to an amount equal to ten percent (10%) of the Commitments, and (ii) to the extent that the Cash Dominion Period has occurred due to clause (a)(ii) of this definition, such Event of Default is cured, waived or no longer exists for a period of at least thirty (30) days.

 

 5 

 

 

Cash Equivalents” shall mean:

 

(a)          any direct obligation of (or unconditional guarantee by) the United States (or any agency or political subdivision thereof, to the extent such obligations are supported by the full faith and credit of the United States) maturing not more than one year after the date of acquisition thereof;

 

(b)          commercial paper maturing not more than one hundred eighty (180) days from the date of issue and issued by (i) a corporation (other than an Affiliate of any Credit Party) organized under the laws of any state of the United States or of the District of Columbia and, at the time of acquisition thereof, rated A-1 or higher by S&P or P-1 or higher by Moody’s, or (ii) any Lender (or its holding company);

 

(c)          any certificate of deposit, time deposit or bankers acceptance, maturing not more than one hundred eighty (180) days after its date of issuance, which is issued by either: (i) a bank organized under the laws of the United States (or any state thereof) which has, at the time of acquisition thereof, (A) a credit rating of P2 or higher from Moody’s or A or higher from S&P and (B) a combined capital and surplus greater than $500,000,000, or (ii) a Lender;

 

(d)          any repurchase agreement having a term of thirty (30) days or less entered into with any Lender or any commercial banking institution satisfying, at the time of acquisition thereof, the criteria set forth in clause (c)(i) which (i) is secured by a fully perfected security interest in any obligation of the type described in clause (a), and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such Lender or commercial banking institution thereunder;

 

(e)          money market and mutual funds investing primarily in assets described in clauses (a) through (d) of this definition.

 

CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

Change of Control” shall mean an event or series of events by which: (a) any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder) shall acquire ownership, directly or indirectly, beneficially or of record, of Capital Stock of the Borrower representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Stock of the Borrower; (b) Borrower ceases to own one hundred percent (100%) of the issued and outstanding Capital Stock of Igen, Inc. (other than as a result of a transaction permitted by Section 9.03 or 9.04); (c) Igen, Inc. ceases to own one hundred percent (100%) of the issued and outstanding Capital Stock of Teligent Pharma, Inc. (other than as a result of a transaction permitted by Section 9.03 or 9.04), in each instance in clauses (b) and (c), free and clear of all Liens, rights, options, warrants or other similar agreements or understandings, other than Liens in favor of Administrative Agent), (d) during any period of 24 consecutive months commencing on or after the Closing Date, the occurrence of a change in the composition of the Board of Directors of Borrower such that a majority of the members of such Board of Directors are not Continuing Directors; or (e) a “change of control” (however so defined in the Second Lien Credit Agreement) shall occur.

 

 6 

 

 

Claims” shall have the meaning set forth in the definition of “Environmental Claims”.

 

Closing Date” shall mean December 13, 2018.

 

Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to the Code are to the Code, as in effect at the date of this Agreement, and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.

 

Collateral” shall mean any assets of any Credit Party or other collateral upon which Administrative Agent has been granted a Lien in connection with this Agreement.

 

Collateral Sale” shall have the meaning set forth in Section 11.14.

 

Collections” shall mean all cash, checks, credit card slips or receipts, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds) of the Credit Parties.

 

Commitment” shall mean, (a) with respect to each Lender that is a Lender on the date hereof, the amount set forth opposite such Lender’s name on and after the Closing Date, on Schedule 1.01(a) as such Lender’s “Commitment” and (b) in the case of any Lender that becomes a Lender after the date hereof, the amount specified as such Lender’s “Commitment” in the Assignment and Acceptance pursuant to which such Lender assumed a portion of the Total Commitment, in each case as the same may be changed from time to time pursuant to terms hereof.  The amount of the Commitments as of the date hereof is $25,000,000.

 

Compliance Certificate” shall mean a certificate duly completed and executed by an Authorized Officer of the Borrower substantially in the form of Exhibit C-1.

 

Confidential Information” shall have the meaning set forth in Section 12.17.

 

Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

Consolidated Adjusted EBITDA” shall mean, for a specified period, an amount determined for the Borrower and its Subsidiaries on a consolidated basis equal to

 

(f)          Consolidated Net Income,

 

plus

 

(g)          to the extent deducted in calculating Consolidated Net Income for such period, the sum of, without duplication, amounts for:

 

(i)          Consolidated Interest Expense (net of interest income),

 

(ii)         provisions for Taxes based on income,

 

 7 

 

 

(iii)        total depreciation expense,

 

(iv)        total amortization expense,

 

(v)         other non-cash charges reducing Consolidated Net Income (excluding any such non cash item (x) 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 or (y) relating to a write-down, write off or reserve with respect to Receivables or inventory),

 

(vi)        losses on asset sales, disposals or abandonments (other than (i) of current assets and (ii) asset sales, disposals or abandonments in the ordinary course of business),

 

(vii)       fees and expenses incurred in connection with the consummation of the Transactions on the Closing Date in an aggregate amount not to exceed $1,500,000, and to the extent disclosed to Administrative Agent,

 

(viii)      fees and expenses incurred in connection with a Permitted Acquisition or the refinancing or redemption of Indebtedness pursuant to Section 9.01(b) to the extent disclosed to Administrative Agent, provided, to the extent such transactions have not been consummated, in an amount not greater than $1,000,000 in the aggregate, and

 

(ix)         foreign exchange losses,

 

minus

 

(h)          to the extent included in calculating Consolidated Net Income for such period, the sum of, without duplication, amounts for:

 

(i)          other non-cash gains 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 a potential cash item in any prior period),

 

(ii)         gains on asset sales, disposals or abandonments (other than (A) of current assets and (B) asset sales, disposals or abandonments in the ordinary course of business),

 

(iii)        foreign exchange gains; and

 

(iv)        extraordinary gains and income;

 

provided; however, for purposes of determining the Total Net Leverage Ratio, Consolidated Adjusted EBITDA shall be determined on a Pro Forma Basis;

 

provided; further, that, notwithstanding the foregoing, the amount of Consolidated Adjusted EBITDA that is attributable to revenues from customers located in countries other than the United States and Canada shall not exceed 5% of the Consolidated Adjusted EBITDA of Borrower and its Subsidiaries on a consolidated basis for any specified period.  

 

 8 

 

 

Consolidated Capital Expenditures” shall mean, for any specified period, the sum of, without duplication, all expenditures made, directly or indirectly, by the Borrower and its Subsidiaries during such period, determined on a consolidated basis in accordance with GAAP, that are or should be reflected as additions to property, plant or equipment or similar items reflected in the consolidated statement of cash flows of the Borrower and its Subsidiaries, or have a useful life of more than one year.

 

Consolidated Interest Expense” shall mean, for any specified period, for the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, the sum of:  (a) all interest in respect of Indebtedness (including, without limitation, the interest component of any payments in respect of Capitalized Lease Obligations) accrued or capitalized during such period (whether or not actually paid during such period) plus (b) the net amount payable (or minus the net amount receivable) in respect of Hedging Obligations relating to interest during such period (whether or not actually paid or received during such period).

 

Consolidated Net Income” shall mean, for any specified period, the consolidated net income (or loss) of Borrower and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP; provided that there shall be excluded (i) the income (or loss) of any Person (other than consolidated Subsidiaries of Borrower) in which any Person (other than Borrower or any of its consolidated Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Borrower or any of its consolidated Subsidiaries by such Person during such specified period, (ii) the income (or loss) of any Person accrued prior to the date it becomes a consolidated Subsidiary of Borrower or is merged into or consolidated with Borrower or any of its consolidated Subsidiaries or such Person’s assets are acquired by Borrower or any of its consolidated Subsidiaries, and (iii) the income of any consolidated Subsidiary of Borrower (other than a Credit Party) to the extent that the declaration or payment of dividends or similar distributions by that consolidated 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 consolidated Subsidiary.

 

Consolidated Total Assets” shall mean the consolidated total assets of Borrower and its Subsidiaries determined in accordance with GAAP as of the date of the financial statements most recently delivered pursuant to Section 8.01 hereunder.

 

Consolidated Total Net Debt” shall mean, as of any date of determination, the outstanding principal amount of all Funded Debt less the aggregate amount of unrestricted cash and Cash Equivalents subject to a Control Agreement (not to exceed $10,000,000).

 

Contingent Liability” shall mean, for any Person, any agreement, undertaking or arrangement by which such Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the Capital Stock of any other Person.  The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby.

 

 9 

 

 

Continuing Director” shall mean (a) any member of the Board of Directors who was a director (or comparable manager) of Borrower on the Closing Date, and (b) any individual who becomes a member of the Board of Directors after the Closing Date if such individual was approved, appointed or nominated for election to the Board of Directors by a majority of the Continuing Directors, but excluding any such individual originally proposed for election in opposition to the Board of Directors in office at the Closing Date in an actual or threatened election contest relating to the election of the directors (or comparable managers) of Borrower and whose initial assumption of office resulted from such contest or the settlement thereof.

 

Control” shall have the meaning set forth in the definition of “Affiliate”.

 

Control Agreement” shall mean a control agreement, in form and substance reasonably satisfactory to Administrative Agent, executed and delivered by the applicable Credit Party, Administrative Agent, and the applicable securities intermediary or bank, which agreement is sufficient to give Administrative Agent “control” over each of such Credit Party’s securities accounts, deposit accounts or investment property, as the case may be.

 

Credit Documents” shall mean this Agreement, the Control Agreements, the Fee Letter, the Guarantee Agreement, the Security Documents, the Intercreditor Agreement, the Perfection Certificate, any Notes issued by the Borrower hereunder, any intercreditor or subordination agreements in favor of the Administrative Agent with respect to this Agreement, and any other agreement entered into now, or in the future, by any Credit Party, on the one hand, and the Administrative Agent or Lender, on the other hand, in connection with this Agreement.

 

Credit Extension” shall mean and include the making (but not the conversion or continuation) of a Loan.

 

Credit Party” shall mean the Borrower, each of the Guarantors and each other Person that becomes a Credit Party hereafter pursuant to the execution of joinder documents.

 

Default” shall mean any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

 

Default Rate” shall have the meaning set forth in Section 2.10(c).

 

 10 

 

 

Defaulting Lender” shall mean, subject to Section 2.05(d), any Lender that, as determined by the Administrative Agent, (a) has failed to (i) fund any portion of the Loans required to be funded by it hereunder for three (3) or more Business Days unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any other Lender any other amount required to be paid by it hereunder, (b) has notified the Borrower, or the Administrative Agent in writing that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements in which it commits to extend credit (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) or more Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing in a manner satisfactory to the Administrative Agent that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a bankruptcy or insolvency proceeding, (ii) had a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such capacity, (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment or (iv) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error.

 

“Dilution” shall mean, as of any date of determination, a percentage, based upon the experience of the immediately prior 12 months, that is the result of dividing the amount of (a) bad debt write-downs, discounts, advertising allowances, credits or other dilutive items with respect to Borrower’s Receivables during such period, by (b) Borrower’s gross sales with respect to Receivables during such period.

 

Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Receivables to the extent of any Dilution.

 

Disbursement Bank” shall mean Pacific Western Bank.  

 

Disposition” shall mean, with respect to any Person, any sale, transfer, lease, contribution, division or other conveyance (including by way of merger) of, or the granting of options, warrants or other rights to, any of such Person’s or their respective Subsidiaries’ assets (including Receivables and Capital Stock of Subsidiaries) to any other Person in a single transaction or series of transactions.

 

 11 

 

 

Disqualified Capital Stock” shall mean any Capital Stock that, by its terms (or by the terms of any security or other Capital Stock into which it is convertible or for which it is exchangeable) or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise (except as a result of a Change of Control or asset sale so long as any rights of the holders thereof upon the occurrence of a Change of Control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Total Commitments), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Capital Stock) (except as a result of a Change of Control or asset sale so long as any rights of the holders thereof upon the occurrence of a Change of Control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Total Commitments), in whole or in part, (c) provides for the scheduled payment of dividends in cash or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Capital Stock that would constitute Disqualified Capital Stock, in each case, prior to the date that is ninety-one (91) days after the latest Maturity Date; provided, that if such Capital Stock is issued pursuant to a plan for the benefit of employees of the Borrower or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

Dollars” and “$” shall mean dollars in lawful currency of the United States of America.

 

Domestic Holding Company” any Domestic Subsidiary substantially all of the assets of which consist of equity interests in one or more Foreign Subsidiaries.

 

Domestic Subsidiary” shall mean each Subsidiary of the Borrower that is organized under the Applicable Laws of the United States, any state, territory, protectorate or commonwealth thereof, or the District of Columbia.

 

Drug Application” shall mean a pending or approved new drug application, an abbreviated new drug application or a biologic license application, including a section 351(k) application, or an investigational new drug exemption, for any Teligent Product, as appropriate, as those terms are defined in the Food Drug Cosmetic Act and any and all Intellectual Property relating thereto, solely as applied to the Product covered thereunder.

 

EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;

 

EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

EEA Resolution Authority” shall mean any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

 12 

 

 

“Eligible Equipment” shall mean Equipment owned by any Credit Party that complies with each of the representations and warranties respecting Eligible Equipment made in the Credit Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Administrative Agent in Administrative Agent’s Permitted Discretion to address the results of any information with respect to the Credit Parties’ business or assets of which the Administrative Agent becomes aware after the Closing Date, including the results of any audit or appraisal performed by Administrative Agent from time to time after the Closing Date.  An item of Equipment shall not be included in Eligible Equipment if:

 

(a)          such Credit Party does not have good title to such Equipment;

 

(b)          such Credit Party does not have the right to subject such Equipment to a Lien in favor of the Administrative Agent;

 

(c)          such Equipment is not subject to a first priority perfected Lien in favor of the Administrative Agent free and clear of all other Liens of any nature whatsoever (except for Permitted Liens which do not have priority over the Lien in favor of the Administrative Agent);

 

(d)          the full purchase price for such Equipment has not been paid by such Credit Party;

 

(e)          such Equipment is not located on premises (i) owned by a Credit Party, or (ii) leased by a Credit Party where the lessor has delivered to the Administrative Agent a Collateral Access Agreement;

 

(f)          such Equipment is not in good working order and condition (ordinary wear and tear excepted) or is not used or held for use by the Credit Parties in the ordinary course of business;

 

(g)          such Equipment is subject to any agreement which restricts the ability of the Credit Parties to use, sell, transport or dispose of such Equipment or which restricts the Administrative Agent’s ability to take possession of, sell or otherwise dispose of such Equipment; or

 

(g)          such Equipment constitutes a “fixture” under the applicable laws of the jurisdiction in which such Equipment is located.

 

“Eligible Inventory” shall mean Inventory consisting of first quality finished goods held for sale in the ordinary course of business of any Credit Party that complies with each of the representations and warranties respecting Eligible Inventory made in the Credit Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Administrative Agent in Administrative Agent’s Permitted Discretion to address the results of any information with respect to the Credit Parties’ business or assets of which Administrative Agent becomes aware after the Closing Date, including the results of any audit or appraisal performed by Administrative Agent from time to time after the Closing Date.  For purposes of determining the amount to be advanced against Inventory in calculating the Borrowing Base, the “Value” of Inventory shall mean the lesser of cost or the fair market value of such Inventory.  An item of Inventory shall not be included in Eligible Inventory if:

 

(a)          such Credit Party does not have good, valid, and marketable title thereto;

 

 13 

 

 

(b)          such Credit Party does not have actual and exclusive possession thereof (either directly or through a bailee or agent of such Credit Party);

 

(c)          it is not located at one of the locations in the continental United States or Canada (other than Quebec) set forth on Schedule 7.30 (unless in-transit from one such location to another such location);

 

(d)          it is In-Transit Inventory;

 

(e)          it is located on real property leased by a Credit Party or in a contract warehouse, in each case, unless it is subject to a satisfactory landlord or warehousemen agreement executed by the lessor or warehouseman, as the case may be (provided, however, the Credit Parties shall have 60 days subsequent to the Closing Date (or such later date approved by the Administrative Agent) in which to obtain a landlord or warehousemen agreement for its leased or third party warehouse locations and Inventory at such leased or warehouse locations which would otherwise be “Eligible Inventory” but for such requirement shall be deemed to be “Eligible Inventory” during such period, subject to any Reserves in Administrative Agent’s Permitted Discretion);

 

(f)          it is the subject of a bill of lading or other document of title;

 

(g)          it is not subject to a valid and perfected first priority Lien in favor of the Administrative Agent free and clear of all other Liens of any nature whatsoever (except for Permitted Liens which do not have priority over the Lien in favor of the Administrative Agent) (provided, however, the Credit Parties shall have 60 days subsequent to the Closing Date (or such later date approved by the Administrative Agent) in which to join the Canadian Subsidiary as a Credit Party with a valid and perfect first priority Lien in favor of the Administrative Agent in compliance with the terms herein and  any Inventory held by the Canadian Subsidiary which would otherwise be “Eligible Inventory” but for such requirement shall be deemed to be “Eligible Inventory” during such period, subject to any Reserves in Administrative Agent’s Permitted Discretion);

 

(h)          it consists of goods returned or rejected by customers;

 

(i)          it consists of goods that are obsolete or slow moving, restrictive or custom items, work-in-process, raw materials, or goods that constitute spare parts, packaging supplies, labels and shipping materials, maintenance items, supplies used or consumed in a Credit Party’s business, bill and hold goods, defective goods, “seconds,” or Inventory acquired on consignment;

 

(j)          it shall have been in a Credit Party’s possession or control for a period of more than twelve (12) calendar months;

 

(k)          it is subject to a claim, lien or security interest (other than a Permitted Lien);

 

(l)          it is produced in violation of the Fair Labor Standards Act and subject to the “hot goods” provisions contained in Title 29 U.S.C. §215;

 

(m)          it is not salable in the United States or Canada;

 

 14 

 

 

(n)          if it is represented or covered by any Certificate of Title, Instrument, Document or Chattel Paper, a Credit Party is not the sole owner of each such Certificate Of Title, Instrument, Document or Chattel Paper (in the possession of a Credit Party), or it has been sold, assigned or otherwise transferred, and or it is subject to any claim, lien or security interest;

 

(o)          it is subject to third party trademark, licensing or other proprietary rights, unless the Administrative Agent is satisfied in its Permitted Discretion that such Inventory can be freely sold by Administrative Agent on and after the occurrence of an Event of a Default despite such third party rights;

 

(p)          it has not received FDA or Health Canada approval or it has previously received the applicable approval but such approval has been revoked, or if otherwise does not meet all standards imposed by any applicable Governmental Authority in all material respects, including with respect to its production, acquisition or importation (as the case may be); or

 

(q)          Administrative Agent shall have determined in its Permitted Discretion that it is unacceptable due to age, type, category, quality and/or quantity.

 

Eligible Real Property” shall mean Real Property owned in fee by a Credit Party that complies with each of the representations and warranties respecting Real Property made in the Credit Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any information with respect to the Credit Parties’ business or assets of which Administrative Agent becomes aware after the Closing Date, including any field examination or appraisal performed by or received by the Administrative Agent from time to time after the Closing Date.  An item of Real Property shall not be included in Eligible Real Property if:

 

(a)          it is not identified on Schedule 7.15 to the Agreement as of the Closing Date,

 

(b)          a Credit Party does not have good, valid, and marketable fee title thereto,

 

(c)          it is not Real Property with respect to which Administrative Agent has received (i) mortgagee title insurance policies issued by a title insurance company reasonably satisfactory to Administrative Agent in amounts reasonably satisfactory to Administrative Agent assuring Administrative Agent that the Mortgages on such Real Property are valid and enforceable first priority mortgage Liens on such Real Property free and clear of all Liens except Permitted Liens, and otherwise in form and substance reasonably satisfactory to Administrative Agent, (ii) ALTA surveys in form and substance reasonably satisfactory to Administrative Agent, (iii) phase-I environmental site reports if required by Section 8.14(a); and (iv) flood certifications (and, if applicable, acceptable flood insurance and FEMA form acknowledgements of insurance),

 

(d)          an Acceptable Appraisal of such item of Real Property has not been completed,

 

(e)          it is not Mortgaged Property subject to a valid and perfected first priority Agent’s Lien, or

 

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(g)          it is subject to any Lien other than Permitted Liens of the type described in Section 9.02 (a), (d), (f), (g), (h) or (n).

 

Eligible Receivable” shall mean each Receivable: for which the Records and accounts are located at the Credit Parties’ facilities where such Records are maintained as described in Schedule 7.30; arising out of a sale in the ordinary course of Borrower’s business; relating to a sale made by a Credit Party to a Person that is not an Affiliate of such Credit Party; that is not in dispute; with respect to which each representation with respect to Eligible Receivables set forth in this Agreement is accurate, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Administrative Agent in Administrative Agent’s Permitted Discretion to address the results of any information with respect to the Credit Parties’ business or assets of which the Administrative Agent has become aware after the Closing Date, including the results of any audit performed by Administrative Agent from time to time after the Closing Date.  In determining the amount to be included, Eligible Receivables shall be calculated net of customer deposits and unapplied cash.  Eligible Receivables shall not include the following:

 

(a)          more than one hundred twenty (120) consecutive calendar days has passed from the original invoice date for such Receivable; or

 

(b)          [intentionally omitted]; or

 

(c)          [intentionally omitted]; or

 

(d)          the Account Debtor (i) has filed a case for bankruptcy or reorganization under the Bankruptcy Code, or (ii) has had filed against it any case under the Bankruptcy Code, or (iii) has made an assignment for the benefit of creditors, or (iv) has failed, suspended business operations, become insolvent, (v) has had a receiver or a trustee appointed for all or a significant portion of its assets or affairs, or (vi) has provided notice, or the Administrative Agent has received notice, of an imminent insolvency proceeding of such Account Debtor; or

 

(e)          the Account Debtor is a supplier to or creditor of the Credit Parties; or

 

(f)          the Account Debtor has or asserts any right of offset with respect to any Receivable or asserts any claim or counterclaim against a Credit Party with respect to any Receivable (but such Receivable shall only be ineligible to the extent of such offset, claim or counterclaim); or

 

(g)          Borrower is not the sole owner of the Receivable; Borrower has sold, assigned or otherwise transferred all or any portion thereof; or any portion of the Receivable is subject to any claim, lien or security interest (other than a Permitted Lien); or

 

(h)          the sale giving rise to such receivable is to an Account Debtor domiciled outside of the continental United States and Canada; or

 

(i)          fifty percent (50%) or more of the Receivables of any Account Debtor and/or its Affiliates is ineligible, then all the Receivables of such Account Debtor and its Affiliates shall be treated as ineligible; or

 

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(j)          any portion of the Eligible Receivables of the Account Debtor and/or its Affiliates exceeds fifty percent (50%) of the total amount of all Eligible Receivables, then the amount of such excess shall be treated as ineligible; or

 

(k)          such Receivable relates to a sale of goods or services to the United States of America, or to a Governmental Authority, unless Borrower assigns its right to payment of such Receivable to Administrative Agent in compliance with the Assignment of Claims Act of 1940, as amended; or

 

(l)          such Receivable relates to a sale of goods or services to any State of the United States of America, or to any Governmental Authority, unless Borrower assigns its right to payment of such Receivable to Administrative Agent in compliance with all applicable laws, rules, regulations or administrative or judicial determinations relating to the assignment (in whole or in part) of any agreement or contract pursuant to which such sale was made; or

 

(m)          the goods or services covered by such Receivable were shipped to the customer or performed for the customer, as applicable, prior to or after the date of the invoice giving rise to such Receivable, or such Receivable consists of a sale to an Account Debtor: on consignment; on any bill and hold basis; on any guaranteed sale, sale or return, sale on approval or other repurchase or return basis; on any billing in advance of shipment or performance or other “pre-billing” basis; or under any payment plan, scheduled installment plan, or other extended payment terms basis, or such Receivable consists of milestone or progress billing or is subject to percentage of completion accounting; or

 

(n)          the Account Debtor is located in a state in which a Credit Party is deemed to be doing business under the laws of such state and such state denies creditors access to its courts in the absence of such Credit Party’s qualification to transact business in such state or of Borrower’s filing of any reports with such state, unless such Credit Party has qualified as a foreign corporation authorized to do business in such state and has filed all required reports; or

 

(o)          such Receivable is evidenced by chattel paper or an instrument of any kind which has not been assigned or endorsed and delivered to Administrative Agent, or such Receivable has been reduced to judgment; or

 

(p)          such Receivable arises from a sale of goods or services to an individual who is purchasing such goods primarily for personal, family or household purposes; or

 

(q)          Administrative Agent, in its Permitted Discretion, believes that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Account Debtor’s financial inability to pay; or

 

(r)          Administrative Agent does not have a valid and perfected first priority security interest in such Receivable (except for Permitted Liens which do not have priority over the Lien in favor of the Administrative Agent).

 

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Environmental Claims” shall mean any and all administrative, regulatory, adjudicatory or judicial actions, suits, demands, demand letters, claims, liens, fines, penalties, requests for information, inquiries, notices of noncompliance or violation, investigations (other than internal reports prepared by the Credit Parties in the ordinary course of such Person’s business) or proceedings relating in any way to any Environmental Law, any Hazardous Material (including any exposure to any Hazardous Material), or any permit issued, or any approval given, under any such Environmental Law (“Claims”), including (i) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial, investigation, monitoring or other actions or damages pursuant to any Environmental Law and (ii) any and all Claims by any Person seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the presence, Release of, or threat of Release of Hazardous Materials or arising from alleged injury or threat of injury to human health, public safety or the environment, pursuant to any Environmental Law.

 

Environmental Law” shall mean any federal, state, foreign, regional, county or local statute, law, rule, regulation, ordinance, and code now or hereafter in effect and in each case as amended, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, decree or judgment, relating to the protection of human health, safety or the environment or natural resources, including laws relating to the Release, threat of Release, manufacture, processing, distribution, use, presence, production, treatment, storage, disposal, transport, labeling or handling of, or exposure to, Hazardous Materials, including the Federal Water Pollution Control Act, the Resource Conservation and Recovery Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Clean Air Act and CERCLA, and other similar state and local statutes, and any regulations promulgated thereto.

 

ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.  Section references to ERISA are to ERISA as in effect at the date of this Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.

 

ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) that, together with any Credit Party or a Subsidiary thereof, is, or within the last six (6) years was, treated as a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

ERISA Event” shall mean (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived pursuant to applicable regulations), (b) any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each case whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) a determination that any Plan is, or is reasonably expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code), (e) the incurrence by Holdings, the Borrower, and Restricted Subsidiary or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan, (f) the receipt by Holdings, the Borrower, any Restricted Subsidiary or any ERISA Affiliate from the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (g) the cessation of operations at a facility of Holdings, the Borrower, any Restricted Subsidiary or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA, (h) the incurrence by Holdings, the Borrower any Restricted Subsidiary or any ERISA Affiliate of any liability with respect to its withdrawal or partial withdrawal from any Plan or Multiemployer Plan or (i) the receipt by Holdings, the Borrower, any Restricted Subsidiary or any ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability on it or a determination that a Multiemployer Plan is, or is reasonably expected to be, insolvent, within the meaning of Title IV of ERISA or in “endangered” or “critical” status, within the meaning of Section 305 of ERISA.

 

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EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

Eurodollar Loan” shall mean any Loan bearing interest at a rate determined by reference to the Eurodollar Rate.

 

Eurodollar Rate” shall mean, with respect to any Eurodollar Loan for any Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the greater of (a) 1.00% per annum and (b) an amount equal to (i) the rate per annum appearing on Bloomberg Professional Service Page BBAN1 offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two (2) business days prior to the first day of such interest period for a term comparable thereto; multiplied by (ii) the Statutory Reserve Rate.  If for any reason the rate referred to in clause (b)(i) is not available, for any such interest period, such rate will be (x) a comparable successor or alternative interbank rate for deposits in Dollars that it, at such time, broadly accepted by the loan market in lieu of the Eurodollar Rate and is reasonably acceptable to the Administrative Agent in consultation with the Borrower or (y) solely if no such broadly accepted comparable successor interbank rate exists at such time, a successor or alternative index rate as the Agent may reasonably determine in light of prevailing market practices and is reasonably acceptable to the Borrower; provided that, to the extent a successor or alternative index rate cannot be agreed upon in accordance with clause (x) or (y) above within five (5) Business Days after the Eurodollar Rate becomes unavailable, all Loans hereunder will be deemed to be ABR Loans (and shall bear interest accordingly) for purposes of the definition of “Applicable Margin” and Section 2.10, until such time as an alternative rate can be agreed upon in accordance with clause (x) or (y).

 

Event of Default” shall have the meaning set forth in Article X.

 

“Excess Availability” shall mean, as of any date of determination, the amount equal to Qualified Cash plus Availability, minus the aggregate amount, if any, of all trade payables of Borrower and its Subsidiaries aged in excess of historical levels with respect thereto and all book overdrafts of Borrower and its Subsidiaries in excess of historical practices with respect thereto, in each case as determined by Administrative Agent in Administrative Agent’s Permitted Discretion.

 

Excluded Account” means each deposit or securities accounts constituting (a) a zero balance account that sweeps on a daily basis into a deposit account subject to a Control Agreement, (b) a deposit account used solely to fund payroll obligations, health benefit or employee benefit obligations, trust fund Tax obligations, escrow arrangements, trust accounts or holding third-party insurance funds or funds owned by Persons other than the Credit Parties, (c) any other deposit or securities account so long as with respect to this clause (c), the aggregate amount on deposit in all such accounts does not exceed $750,000 at any one time, (d) a deposit account into which an Account Debtor makes payment under Medicare, Medicaid, TRICARE or any other health program operated by or financed in whole or in part by any foreign or domestic federal, state or local government so long as funds on deposit in such deposit account are transferred on each Business Day to an account subject to a Control Agreement or (e) a deposit account holding solely funds pledged as cash collateral to the extent permitted under Section 9.02(o).

 

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Excluded Subsidiary” shall mean (i) any Foreign Subsidiary or Domestic Holding Company, in each case solely to the extent that the inclusion of such Person as a Guarantor may result (or may be reasonably likely to result) in adverse tax consequences to the Borrower and its Subsidiaries, taken as a whole, as determined in good faith by the Borrower and notified in writing to the Administrative Agent and (ii) each Immaterial Subsidiary. For the avoidance of doubt, none of Teligent OU, a private limited company organized in Tallin, Republic of Estonia, Teligent Luxembourg S.a.r.l., a société a responsabilité limitée formed in Luxembourg, and Teligent Canada, a company formed in the province of British Columbia, shall constitute Excluded Subsidiaries.

 

Excluded Taxes” shall mean with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any Obligation of the Borrower hereunder, (a) income, franchise or similar Taxes imposed on (or measured by) its net income (i) by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b) any branch profits Taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) in the case of a Non-U.S. Lender, any withholding tax that is imposed on amounts payable to such Non-U.S. Lender at the time such Non-U.S. Lender becomes a party to this Agreement (or designates a new lending office, unless such designation was at the request of the Borrower), except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 5.04(a),  (d) Taxes imposed by reason of the failure of the Administrative Agent or such Lender to comply with its obligations under Section 5.04(b) and Section 5.04(c), or to the extent that such documentation fails to establish a complete exemption from applicable withholding Taxes, other than, in either case, due to a change in Applicable Laws after the Closing Date, and (e) U.S. federal withholding Taxes imposed under FATCA.

 

Existing Notes” shall mean the 2019 Convertible Notes and the 2023 Convertible Notes.

 

Fair Market Value” shall mean, as of any date of determination, the fair market value of Borrower’s Eligible Real Property that is estimated to be recoverable in an orderly sale in a 12-month marketing period of such Eligible Real Property net of all associated costs and expenses of such sale, such value to be as specified in the most recent Acceptable Appraisal of Real Property.

 

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FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, and any agreement entered into pursuant to Section 1471(b)(1) of the Code.

 

FCPA” shall mean the Foreign Corrupt Practices Act of 1977, as amended from time to time, and the rules and regulations thereunder.

 

FDA” shall mean the United States Food and Drug Administration and any successor thereto.

 

FDA Trigger Amount” shall mean $2,500,000, which such amount shall be increased to $5,000,000 if at any time, when tested, the revenue of Borrower and its Subsidiaries for the Test Period measured at the end of the most recently ended two consecutive fiscal quarters is greater than $100,000,000).  

 

Federal Funds Rate” shall mean, for any day, a fluctuating interest rate per annum equal to: (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next succeeding Business Day) by the Federal Reserve Bank of New York; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

 

Fee Letter” shall mean the Amended and Restated Fee Letter dated as of the date hereof by and between the Borrower, the Administrative Agent and the Second Lien Agent, as amended, restated, supplemented or otherwise modified from time to time.

 

Fees” shall mean all amounts payable pursuant to, or referred to in, Section 4.01 or the Fee Letter.

 

Financial Performance Covenants” shall mean the covenants set forth in Section 9.13.

 

Flood Hazard Property” shall have the meaning set forth in the definition of the term “Flood Insurance Requirements”.

 

Flood Insurance Laws” shall mean, collectively, (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto, (iv) the Flood Insurance Reform Act of 2004 and (v) the Biggert –Waters Flood Insurance Reform Act of 2012, as now or hereafter in effect of any successor statute thereto, in each case, together with all statutory and regulatory provisions consolidating, amending, replacing, supplementing, implementing  or interpreting any of the foregoing, as amended or modified from time to time.

 

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Flood Insurance Requirements” shall mean (i) a completed “life of loan” Federal Emergency Management Standard Flood Hazard Determination as to whether such real property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “Flood Hazard Property”) and (ii) if such real property is a Flood Hazard Property, evidence as to (A) whether the community in which such real property, or as applicable, the leasehold interest of such Credit Party in such real property, is located is participating in the National Flood Insurance Program, (B) the applicable Credit Party’s written acknowledgment of receipt of written notification from the Administrative Agent (1) as to the fact that such real property is a Flood Hazard Property and (2) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (C) copies of flood insurance policies under the National Flood Insurance Program (or private insurance endorsed to cause such private insurance to be fully compliant with the federal law as regards private placement insurance applicable to the National Flood Insurance Program, with financially sound and reputable insurance companies not Affiliates of the Borrower) or a declaration page, application accompanied by proof of premium payment for such policies, or such other documentation as is satisfactory to the Administrative Agent and each Lender, with confirmation of such satisfaction of such Lender to be made in writing (which, for purposes of such confirmation, shall include email) and such confirmation shall not be unreasonably withheld or delayed, in each case, for the Borrower and its Subsidiaries evidencing such flood insurance coverage in such amounts and with such deductibles as required by Flood Insurance Laws or as the Administrative Agent may request (but no less than required by applicable Flood Insurance Laws) and naming the Administrative Agent and its successors and/or assigns as sole loss payee on behalf of the Lenders.

 

Foreign Security Instrument” shall have the meaning set forth in Section 8.15(e)(i).

 

Foreign Subsidiary” shall mean each Subsidiary of a Credit Party that is not a Domestic Subsidiary.

 

Funded Debt” shall mean, as of any date of determination, all then outstanding Indebtedness of Borrower and its Subsidiaries, on a consolidated basis, of the type described in clauses (a), (b), (d) and (f) of the defined term “Indebtedness”.

 

GAAP” shall mean generally accepted accounting principles in the United States of America, as in effect from time to time; provided, that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then the Administrative Agent, the Lenders and the Credit Parties shall negotiate in good faith to effect such amendment and such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

Governmental Authority” shall mean the government of the United States, any foreign country or any multinational authority, or any state, commonwealth, protectorate or political subdivision thereof, and any entity, body or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the PBGC and other quasi-governmental entities established to perform such functions.

 

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Guarantee Agreement” shall mean a Guarantee Agreement, executed and delivered by each Guarantor in favor of the Administrative Agent for the benefit of the Secured Parties, in form and substance satisfactory to Administrative Agent.

 

Guarantee Obligations” shall mean, as to any Person, any Contingent Liability of such Person or other obligation of such Person guaranteeing or intended to guarantee any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or (d) otherwise to assure or hold harmless the owner of such Indebtedness against loss in respect thereof; provided, that the term “Guarantee Obligations” shall not include endorsements of instruments for deposit or collection in the ordinary course of business or customary and reasonable indemnity obligations in effect on the Closing Date, entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than with respect to Indebtedness).  The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

 

Guarantors” shall mean (a) each Person that is a Domestic Subsidiary on the Closing Date, (b) each Person that is a Foreign Subsidiary on the Closing Date, and (c) each Person that becomes a party to the Guarantee Agreement after the Closing Date pursuant to Section 8.11, in each case, other than any Excluded Subsidiary.

 

Hazardous Materials” shall mean (a) any petroleum or petroleum products, radioactive materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of “hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous waste”, “restricted hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, or “pollutants”, or words of similar import, under any Environmental Law; and (c) any other chemical, material or substance, which is classified, prohibited, limited or regulated by, or forming the basis of liability under any Environmental Law.

 

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Hedge Termination Value” shall mean, in respect of any one or more Hedging Obligations, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Obligations, (a) for any date on or after the date such Hedging Obligations have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging Obligations, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Obligations (which may include any Lender or any Affiliate of a Lender).

 

Hedging Obligations” shall mean, with respect to any Person, any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired under (a) any and all Hedging Transactions, (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions and (c) any and all renewals, extensions and modifications of any Hedging Transactions and any and all substitutions for any Hedging Transactions.

 

Hedging Transaction” of any Person shall mean (a) any transaction (including an agreement with respect to any such transaction) permitted under Section 9.11 now existing or hereafter entered into by such Person that is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction,  currency swap transaction, cross-currency rate swap transaction, currency option, spot transaction, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether or not any such transaction is governed by or subject to any master agreement and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

Historical Financial Statements” shall mean (a) audited consolidated financial statements of Borrower for the fiscal year ended December 31, 2016 as filed on March 15, 2017 with the SEC pursuant to an annual report on Form 10-K and December 31, 2017 as filed on March 19, 2018 with the SEC pursuant to an annual report on Form 10-K and (b) unaudited consolidated financial statements of the Borrower for the fiscal year to date periods ended March 31, 2018 as filed on May 15, 2018 with the SEC pursuant to a quarterly report on Form 10-Q, June 30, 2018 as filed on December 12, 2018 with the SEC pursuant to a quarterly report on Form 10-Q/A and September 30, 2018 as filed on December 12, 2018 with the SEC pursuant to a quarterly report on Form 10-Q.

 

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Immaterial Subsidiary” shall mean, at any date of determination, each Subsidiary of the Borrower that has been designated by the Borrower in writing to the Administrative Agent as an “Immaterial Subsidiary” for purposes of this Agreement; provided, that, (a) for purposes of this Agreement, at no time shall (i) the Consolidated Total Assets of all Immaterial Subsidiaries at the last day of the most recent Test Period be equal to or exceed 2.5% of the Consolidated Total Assets of the Borrower and its subsidiaries at such date or (ii) Consolidated Adjusted EBITDA for such Test Period of all Immaterial Subsidiaries equal or exceed 2.5% of the Consolidated Adjusted EBITDA of Borrower and its Subsidiaries for such period, (b) the Borrower shall not designate any new Immaterial Subsidiary if such designation would not comply with the provisions set forth in clause (a) above, and (c) if clause (a) shall not be satisfied at any time, then all such Subsidiaries shall be deemed to be non-Immaterial Subsidiaries unless and until the Borrower shall redesignate one or more Immaterial Subsidiaries as non-Immaterial Subsidiaries, in each case in a written notice to the Administrative Agent, and, as a result thereof, clause (a) shall be satisfied.  Each Immaterial Subsidiary existing as of the Closing Date is set forth on Schedule 1.01(b).  

 

In-Transit Inventory” shall mean Inventory that is being shipped or otherwise transported to a Credit Party from a point of origin within the continental United States or Canada or is being shipped or otherwise transported to a Credit Party from a point of origin outside of the continental United States or Canada.

 

Indebtedness” shall mean, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(i)          all indebtedness of such Person for borrowed money and all indebtedness of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(j)          the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) available under all letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

 

(k)          the Hedge Termination Value of all Hedging Obligations of such Person;

 

(l)          all obligations of such Person to pay the deferred purchase price of property or services, including earn-out obligations (other than (i) trade accounts payable in the ordinary course of business and (ii) to the extent such obligation is not due at any time prior to the date that is six months after the latest Maturity Date, any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP);

 

(m)          indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements and mortgage, industrial revenue bond, industrial development bond and similar financings), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

(n)          all Attributable Indebtedness;

 

 25 

 

 

(o)          all obligations of such Person in respect of Disqualified Capital Stock; and

 

(p)          all Guarantee Obligations of such Person in respect of any of the foregoing,

 

provided, that Indebtedness shall not include (i) prepaid or deferred revenue arising in the ordinary course of business, (ii) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy warranties or other unperformed obligations of the seller of such asset, (iii) endorsements of checks or drafts arising in the ordinary course of business, and (iv) preferred Capital Stock to the extent not constituting Disqualified Capital Stock.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, except to the extent such Person’s liability for such Indebtedness is otherwise limited and only to the extent such Indebtedness would be included in the calculation of Consolidated Total Net Debt.  The amount of any net Hedging Obligations on any date shall be deemed to be the Hedge Termination Value thereof as of such date.  The amount of Indebtedness of any Person for purposes of clause (e) above shall be deemed to be equal to the lesser of (x) the aggregate unpaid amount of such Indebtedness and (y) the fair market value of the property of such Person encumbered thereby as determined by such Person in good faith.

 

Intercreditor Agreement” shall mean the Intercreditor Agreement, dated as of the date hereof, by and between the Administrative Agent and Second Lien Agent, and acknowledged by the Credit Parties, as amended, restated, supplemented or otherwise modified from time to time.  

 

Interest Period” shall mean, with respect to any Eurodollar Loan, the interest period applicable thereto, as determined pursuant to Section 2.11.

 

Investment” shall mean, relative to any Person, (a) any loan, advance or extension of credit made by such Person to any other Person, including the purchase by such first Person of any bonds, notes, debentures or other debt securities of any such other Person; (b) Contingent Liabilities in favor of any other Person; and (c) any Capital Stock or other investment held by such Person in any other Person.  The amount of any Investment at any time shall be the original principal or capital amount thereof less all returns of principal or equity thereon made on or before such time and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property at the time of such Investment.

 

Lender” shall have the meaning set forth in the preamble to this Agreement.

 

Letter of Directionshall mean that certain executed letter of direction from Borrower addressed to Administrative Agent, on behalf of itself and Lenders, directing the disbursement on the Closing Date of the proceeds of the Loans made on such date.

 

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Lien” shall mean any mortgage, pledge, security interest, hypothecation, assignment for collateral purposes, lien (statutory or other) or similar encumbrance, and any easement, right-of-way, license, restriction (including zoning restrictions), defect, exception or irregularity in title or similar charge or encumbrance (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof); provided, that in no event shall an operating lease entered into in the ordinary course of business or any precautionary UCC filings made pursuant thereto by an applicable lessor or lessee, be deemed to be a Lien.

 

Loan” shall mean, individually, any Loan made by any Lender hereunder, and collectively, the Loans made by the Lenders hereunder.  “Loan” shall include any Swingline Loan, Overadvance and Protective Advance.

 

Loan Account” shall have the meaning set forth in Section 2.08.

 

Master Agreement” shall have the meaning set forth in the definition of the term “Hedging Transaction”.

 

Material Adverse Effect” shall mean (a) a material adverse effect on the business, assets, properties, liabilities (actual or contingent), operations, financial condition or results of operations of the Borrower and its Subsidiaries, taken as a whole, (b) a material impairment of the validity or enforceability of this Agreement or any of the other Credit Documents, (c) a material impairment in the Secured Parties’ ability to enforce their rights or remedies hereunder or under any of the other Credit Documents, or (d) a material impairment of the ability of the Borrower and its Subsidiaries, taken as a whole, to perform their payment and other material obligations under the Credit Documents to which they are parties.

 

Material Contractshall mean, as to any Person, (i) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate annual consideration payable to or by such Person or such Subsidiary of $1,500,000 or more (other than customer contracts), and (ii) all other contracts or agreements, the loss of which could reasonably be expected to result in a Material Adverse Effect.  A reasonably detailed description of each Material Contract is set forth on Schedule 1.01(c) as of the Closing Date and as of the last date such Schedule was required to be updated in accordance with Section 8.01(d).

 

Material Real Property” shall mean any Real Property that has a fair market value in excess of $1,500,000, as reasonably determined by the Borrower based on information available to it.

 

Maturity Date” shall mean the date that is the earliest of (a) five (5) years after the Closing Date, or, if such date is not a Business Day, the next succeeding Business Day, (b) the date on which the Commitments are voluntarily terminated pursuant to the terms hereof, (c) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise) and (d) the date that is six (6) months prior to the maturity date of the 2023 Convertible Notes.

 

Minimum Borrowing Amount” shall mean $100,000.

 

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Moody’s” shall mean Moody’s Investors Service, Inc. or any successor by merger or consolidation to its business.

 

Mortgage” shall mean a mortgage or a deed of trust, deed to secure debt, trust deed or other security document entered into by any applicable Credit Party and the Administrative Agent for the benefit of the Secured Parties in respect of any Real Property owned by such Credit Party, in such form as agreed between such Credit Party and the Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time.

 

Mortgaged Property” shall mean each parcel of Real Property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 8.11(d).

 

Multiemployer Plan” shall mean a “multiemployer plan” within the meaning of Section 3(37) of ERISA to which any Credit Party, any Subsidiary of a Credit Party or any ERISA Affiliate makes, is making, is obligated, or within the last six (6) years has been obligated, to make contributions, or with respect to which any Credit Party or any Subsidiary of a Credit Party has any liability, actual or contingent.

 

Net Orderly Liquidation Value” shall mean, with respect to Inventory or Equipment of any Credit Party, the orderly liquidation value thereof as determined in a manner acceptable to the Administrative Agent by an appraiser reasonably acceptable to the Administrative Agent, net of all costs of liquidation thereof.

 

Non-Consenting Lender” shall have the meaning set forth in Section 12.07(b).

 

Non-Excluded Taxes” shall have the meaning set forth in Section 5.04(a).

 

Non-U.S. Lender” shall have the meaning set forth in Section 5.04(b).

 

Note” shall have the meaning set forth in Section 2.01.

 

Notice of Borrowing” shall have the meaning set forth in Section 2.05(a).

 

Notice of Conversion or Continuation” shall have the meaning set forth in Section 2.11.

 

Obligations” shall mean all Loans, advances, debts, liabilities, obligations, covenants and duties owing by any Credit Party to any Lender, Agent, or any other Person required to be indemnified hereunder, that arise under any Credit Document, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired, including all fees, expenses and other amounts accruing during the pendency of any proceeding of the type described in Section 10.01(h), whether or not allowed in such proceeding.

 

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Organization Documents” shall mean, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

Other Connection Taxes” shall mean, with respect to any recipient, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan, or sold or assigned an interest in any Loan).

 

Other Taxes” shall mean any and all present or future stamp, court, documentary, intangible recording, filing or similar Taxes or any other excise or property Taxes, charges or similar levies (but excluding any Tax, charge or levy that constitutes an Excluded Tax) arising from any payment made hereunder or from the execution, delivery or enforcement of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement.

 

Overadvance” shall have the meaning set forth in Section 2.02(a).

 

Participant” shall have the meaning set forth in Section 12.06(c)(i).

 

Participant Register” shall have the meaning set forth in Section 12.06(c)(iii).

 

Patriot Act” shall have the meaning set forth in Section 12.20.

 

PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

 

Pension Plan” shall mean any single-employer plan, as defined in Section 4001(a)(15) of ERISA, and subject to Title IV of ERISA, Section 412 of the Code or Sections 302 or 303 of ERISA, that is or was within any of the preceding six plan years sponsored, maintained or contributed to (or to which there is or was an obligation to contribute or to make payments) by any Credit Party, Subsidiary of a Credit Party or an ERISA Affiliate thereof, or respect of which any Credit Party, Subsidiary of a Credit Party or an ERISA Affiliate thereof incurs or otherwise has any obligation or liability, contingent or otherwise.

 

Perfection Certificate” shall mean, individually and collectively, the certificates, substantially in the form of Exhibit P-1 or otherwise in form and substance satisfactory to the Administrative Agent, delivered by the Credit Parties to the Administrative Agent.

 

Permits” shall mean, with respect to any Person, any permit, approval, clearance, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other contractual obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or Products or to which such Person or any of its property or Products is subject, including without limitation all Registrations.

 

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Permitted Acquisition” shall mean any acquisition by a Credit Party of (i) all or substantially all of the assets of a target, which assets are located in the United States or (ii) 100% of the Capital Stock of a target organized under the laws of any State in the United States or the District of Columbia, in each case, to the extent that each of the following conditions shall have been satisfied:

 

(q)          the Borrower and its Subsidiaries (including any new Subsidiary) shall execute and deliver the agreements, instruments and other documents required by Section 8.11;

 

(r)          such acquisition shall not be hostile and shall have been approved by the board of directors (or other similar body) and/or the stockholders or other equityholders of the target;

 

(s)          no Event of Default shall then exist or would exist after giving effect thereto;

 

(t)          the average daily Excess Availability for the immediately preceding ninety (90) day period is not less than $5,000,000, and after giving effect to such proposed acquisition (including payment of the purchase price in accordance with clause (e) below), the Borrower shall have a minimum pro forma Excess Availability as of the date of consummation of such acquisition (after giving effect to the funding of all Loans and use of cash as of such date) of not less than $5,000,000;

 

(u)          the total consideration paid or payable for Permitted Acquisitions shall be funded solely with internally generated cash or net proceeds from an issuance of Capital Stock or Indebtedness permitted under Section 9.01(j); and

 

(v)         the pro forma Target Adjusted EBITDA of the target of each such acquisition, on a cumulative basis for the immediately preceding four fiscal quarters, shall be no less than $0.

 

Notwithstanding the foregoing and the definition of Borrowing Base, no Accounts, Inventory, Equipment or Real Property acquired in an Acquisition permitted hereunder shall be included in the Borrowing Base unless the Administrative Agent, in its Permitted Discretion, determines that such Accounts, Inventory, Equipment and Real Property conform to standards of eligibility established in accordance with this Agreement through completion of such audits, evaluations and appraisals thereof as Agent shall require (which appraisals, evaluations and audits shall be conducted at the expense of the Borrower and in form, scope and substance acceptable to the Administrative Agent in its Permitted Discretion).

 

Permitted Discretion” shall mean, in connection with a determination to be made by Administrative Agent under this Agreement, or in connection with an election by Administrative Agent to take or refrain from taking an action under this Agreement, Administrative Agent may make such determination, or elect to take or not take such action, as applicable, in good faith and in the exercise of reasonable business judgment from the perspective of a secured asset based lender.

 

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Permitted Liens” shall have the meaning set forth in Section 9.02.

 

Permitted Refinancing Indebtedness” shall mean Indebtedness issued or incurred (including by means of the extension or renewal of existing Indebtedness) to refinance, refund, extend, renew or replace existing Indebtedness of any Credit Party or any of its Subsidiaries permitted hereunder (the “Refinanced Indebtedness”); provided, that the original principal amount of such refinancing, refunding, extending, renewing or replacing Indebtedness does not exceed the principal amount of such Refinanced Indebtedness plus the amount of any interest, premiums or penalties required to be paid thereon plus fees and expenses associated therewith.

 

Person” shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or any Governmental Authority.

 

PIK Interest” shall have the meaning ascribed to such term in the Second Lien Credit Agreement.

 

PIK Termination Date” shall have the meaning ascribed to such term in the Second Lien Credit Agreement.

 

Plan” shall mean a Pension Plan or a Multiemployer Plan.

 

Pledged Stock” shall have the meaning given to such term in the Security Agreement.

 

Prepayment Premium” shall have the meaning set forth in Section 5.01(d).

 

Prepayment Premium Event” shall mean any termination or reduction in whole of Commitments (with a corresponding prepayment in whole of the Loans) or any acceleration of the Loans for any reason and at any time, including, without limitation, whether such reduction or termination or acceleration is (i) voluntary or mandatory, (ii) made when a Default or Event of Default is then outstanding, (iii) made in connection with a sale during any Event of Default or foreclosure upon the Collateral, (iv) the result of or subsequent to the acceleration of the Loans or the termination of the Commitments for any reason at any time, including, without limitation, as a result of the occurrence of any Event of Default and, in the case of insolvency, reorganization or like proceeding, whether or not a claim for the Prepayment Premium is allowed in such proceeding, (v) made pursuant to, or as the consequence of, any regulatory or judicial enforcement or other actions from any Governmental Authority or (vi) made pursuant to, or as the consequence of, any bankruptcy or insolvency proceeding, whether or not a claim for the Prepayment Premium is allowed in such proceeding.

 

Prime Rate” shall mean a variable per annum rate, as of any date of determination, equal to the rate as of such date published in The Wall Street Journal as being the “Prime Rate” (or, if more than one rate is published as the Prime Rate, then the highest of such rates).  The Prime Rate will change as of the date of publication in The Wall Street Journal of a Prime Rate that is different from that published on the preceding Business Day.  In the event that The Wall Street Journal shall, for any reason, fail or cease to publish the Prime Rate, the Administrative Agent shall choose a reasonably comparable index or source to use as the basis for the Prime Rate.

 

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Products” shall mean any item or any service that is researched or developed, created, tested, packaged, labeled, distributed, manufactured, managed, performed, or otherwise used, offered, marketed, sold, or handled by or on behalf of the Credit Parties or any of their Subsidiaries, whether marketed or in development.

 

Property” shall mean any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

 

Pro Forma Basis” shall mean, for purposes of calculating the Total Net Leverage Ratio:

 

(w)          Investments, acquisitions, mergers, consolidations and dispositions of any Subsidiary, line of business or division, that have been made by the specified Person or any of its Subsidiaries, or any Person or any of its Subsidiaries acquired by, merged or consolidated with the specified Person or any of its Subsidiaries, and including any related financing transactions and incurrences of Indebtedness, and including increases in ownership of Subsidiaries, during the applicable reference period or subsequent to such reference period and on or prior to the date of determination will be given pro forma effect, as if they had occurred on the first day of the applicable reference period;

 

(x)          any Person that is a Subsidiary on the date of determination will be deemed to have been a Subsidiary at all times during such reference period; and

 

(y)          any Person that is not a Subsidiary on the date of determination will be deemed not to have been a Subsidiary at any time during such reference period;

 

For purposes of this definition, whenever pro forma effect is given to a transaction, the pro forma calculations shall be made in good faith by an Authorized Officer of the Borrower and shall be reasonably satisfactory to the Administrative Agent.  Any such pro forma calculation may include adjustments appropriate, in the good faith determination of the Borrower as set forth in an officers’ certificate, to reflect operating expense reductions (but not revenue increases) expected to result from the applicable pro forma event if such adjustments are reasonably satisfactory to the Administrative Agent.

 

Pro Rata Share” shall mean (a) with respect to any Commitment of any Lender at any time, a percentage, the numerator of which shall be such Lender’s Commitment (or if such Commitments have been terminated or expired or the Loans have been declared to be due and payable, such Lender’s Loans), and the denominator of which shall be the sum of such Commitments of all Lenders (or if such Commitments have been terminated or expired or the Loans have been declared to be due and payable, all Loans of all Lenders) and (b) with respect to all Commitments of any Lender at any time, the numerator of which shall be the sum of such Lender’s Commitment (or if such Commitments have been terminated or expired or the Loans have been declared to be due and payable, such Lender’s Loans) and the denominator of which shall be the sum of all Lenders’ Commitments (or if such Commitments have been terminated or expired or the Loans have been declared to be due and payable, all Loans funded under such Commitments).

 

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Protective Advance” shall have the meaning set forth in Section 2.03(a).

 

Public Health Laws” shall mean all Applicable Laws relating to the procurement, development, manufacture, production, analysis, distribution, dispensing, importation, exportation, use, handling, quality, sale, or promotion of any drug, medical device, food, dietary supplement, or other product (including, without limitation, any ingredient or component of the foregoing products) subject to regulation under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §301 et seq.), the Controlled Substances Act, 21 U.S.C. §801 et seq., pharmacy laws, or consumer product safety laws and similar state laws, the False Claims Act, 31 U.S.C. §3729 et seq., the Antikickback Statute, 42 U.S.C. §1320a-7b(b), the Civil Monetary Penalty Law, 42 U.S.C. §1320a-7a, the Stark Law, 42 U.S.C. §1395nn, all laws relating to the disclosure of payments or other value to healthcare providers, including but not limited to the Physician Payments Sunshine Act, 42 C.F.R. §401-403, the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. §1320d et seq., as amended by the Health Information Technology for Economic and Clinical Health Act, and all other federal, state and local laws relating to the prevention of fraud and abuse, and the regulation of the Credit Party’s and its Subsidiaries’ Products and services to ensure they are not adulterated or misbranded.

 

Qualified Capital Stock” shall mean any Capital Stock that is not Disqualified Capital Stock.

 

Qualified Cash” shall mean, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of the Credit Parties and their Subsidiaries, in an aggregate amount not to exceed $2,500,000, that is on deposit in deposit accounts or in securities accounts, or any combination thereof, and which such deposit accounts and/or securities accounts are the subject of a Control Agreement, and are maintained by a branch office of the bank or securities intermediary located within the United States (for the avoidance of doubt, the cash that is on deposit in the 2019 Convertible Notes Repurchase Blocked Account shall not be Qualified Cash).

 

Real Property” shall mean, with respect to any Person, all right, title and interest of such Person (including, without limitation, any leasehold estate) in and to a parcel of real property owned, leased or operated by such Person together with, in each case, all improvements and appurtenant fixtures, equipment, personal property, easements and other property and rights incidental to the ownership, lease or operation thereof.

 

“Receivable” shall mean, with respect to each Credit Party, each (i) Account, (ii) Health-Care-Insurance Receivable, (iii) credit card receivable, (iv) right to payment under any contract, Document, Instrument, promissory note, Chattel Paper, or electronic chattel paper, (v) tax refund or right to receive any tax refund, (vi) bond or certificate owned or held by such Credit Party or held for the benefit of such Credit Party, (vi) right to payment for the sale, lease or license of any Inventory, Equipment or General Intangible, (vii) policy of insurance issued to or for the benefit of such Credit Party and each right to payment and Proceeds of such insurance, (viii) right to payment in connection with each Investment Property, Deposit Account, book account, credit or reserve, and (ix) form of obligation whatsoever owing to such Credit Party, together with all Instruments, Documents and Certificates of Title representing any of the foregoing, and all rights in any merchandise or Goods which any of the same may represent, all files and Records with respect to any collateral or security given by such Credit Party to Administrative Agent in the foregoing, together with all rights, title, security, Supporting Obligations and guarantees with respect to the foregoing, including any right of stoppage in transit, whether now owned or hereafter created or acquired by such Credit Party or in which such Credit Party now has or hereafter acquires any interest.

 

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Refinanced Indebtedness” shall have the meaning set forth in the definition of “Permitted Refinancing Indebtedness”.

 

Register” shall have the meaning set forth in Section 12.06(b)(iv).

 

Registrations” shall mean all Permits and exemptions issued or allowed by any Governmental Authority (including but not limited to new drug applications, abbreviated new drug applications, biologics license applications, including section 351(k) applications, drug master files, investigational new drug applications, over-the-counter drug monograph, drug establishment and listing forms, device pre-market approval applications, device pre-market notifications, investigational device exemptions, product recertifications, manufacturing approvals and authorizations, CE Marks, pricing and reimbursement approvals, labeling approvals or their foreign equivalent, controlled substance registrations, marketing and promotion registrations, and wholesale distributor permits held by, or applied by contract to, any Credit Party or any of its Subsidiaries, that are required for the research, development, testing, manufacture, distribution, promotion, marketing, storage, transportation, use and sale of the Products of any Credit Party or any of its Subsidiaries.

 

Regulatory Matters” shall mean, collectively, activities and Products that are subject to Public Health Laws.

 

Regulation D” shall mean Regulation D of the Board as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

 

Regulation U” shall mean Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

 

Regulation X” shall mean Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

 

Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the directors, officers, employees, agents, trustees, advisors of such Person and any Person that possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise.

 

Release” shall mean a “release”, as such term has the meaning set forth in CERCLA.

 

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Reportable Event” shall mean an event described in Section 4043 of ERISA and the regulations thereunder (excluding any such event for which the notice requirement has been waived by the PBGC).

 

Required Lenders” shall mean, at any date, Lenders having or holding a majority of (a) the Total Commitment or (b) if the Total Commitment has been terminated, the aggregate outstanding principal amount of the Loans; provided that the Commitment of, and the portion of the outstanding principal amount of the Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

Reserves” shall have the meaning set forth in Section 2.04.

 

Restricted Credit Party” shall mean Teligent OU, a private limited company organized in Tallin, Republic of Estonia, and any other Credit Party that is a Foreign Subsidiary and is organized under the laws of any jurisdiction other than Canada, in each case, unless otherwise agreed by the Administrative Agent.  

 

Restricted Credit Party Intercompany Investment Amount” shall mean at any time $5,000,000; provided; that, after the PIK Termination Date if (x) the Total Net Leverage Ratio, on a Pro Forma Basis, does not exceed 4.50:1.00, (y) the revenue of Borrower and its Subsidiaries for the Test Period measured at the end of the most recently ended two consecutive fiscal quarters is greater than $120,000,000 and (z) the pro forma average daily Excess Availability for the Test Period measured at the end of the most recently ended two consecutive fiscal quarters of the Credit Parties on a consolidated basis is greater than $10,000,000, Restricted Credit Party Intercompany Investment Amount shall mean $10,000,000.

 

Restricted Payment” shall mean, with respect to any Person, (a) the declaration or payment of any dividend on, or the making of any payment or distribution on account of, or setting apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of, any class of Capital Stock of such Person or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or the making of any other distribution in respect thereof, either directly or indirectly, whether in cash or property, (b) the payment or prepayment of principal of, or premium or interest or any other amount in respect of, any Indebtedness that is contractually subordinate to the Obligations unless such payment is permitted under the terms of the subordination agreement applicable thereto and (c) any payment in respect of earn-out obligations.

 

“SEC” means the Securities and Exchange Commission.

 

Second Lien Agent” shall mean Ares Capital Corporation, or any successor “Administrative Agent” as such term is defined in the Second Lien Credit Agreement.

 

Second Lien Credit Agreement” shall mean that certain Second Lien Credit Agreement of even date herewith among the Borrower, Ares Capital Corporation, as administrative agent, the lenders from time to time party thereto, and the other credit parties thereto, as such agreement may be amended, restated, supplemented or otherwise modified from time to time in accordance with the Intercreditor Agreement.

 

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Second Lien Indebtedness” shall mean Indebtedness under the Second Lien Loan Documents.

 

Second Lien Initial Term Loan” has the meaning set forth in the definition of Initial Term Loans set forth in the Second Lien Credit Agreement.

 

Second Lien Lenders” shall mean “Lenders” as such term is defined in the Second Lien Credit Agreement.

 

Second Lien Loan Documents” shall mean the Second Lien Credit Agreement and all agreements, documents and instruments at any time executed and/or delivered by any Credit Party or any other Person with, to or in favor of the Second Lien Agent, the Second Lien Lenders, or any of them, in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, restated, supplemented or otherwise modified from time to time in accordance with the Intercreditor Agreement.

 

S&P” shall mean Standard & Poor’s Ratings Services or any successor by merger or consolidation to its business.

 

Secured Parties” shall mean, collectively, (a) the Lenders, (b) the Administrative Agent, (c) the beneficiaries of each indemnification obligation undertaken by any Credit Party under the Credit Documents and (d) any successors, endorsees, transferees and assigns of each of the foregoing.

 

Security Agreement” shall mean a Security Agreement, by and among each Credit Party and the Administrative Agent for the benefit of the Secured Parties, in form and substance reasonably satisfactory to the Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time.

 

Security Documents” shall mean, collectively, the Security Agreement, any Mortgage and each other security agreement or other instrument or document executed and delivered pursuant to Section 8.11 or pursuant to any of the Security Documents to secure any of the Obligations.

 

Settlement” shall have the meaning set forth in Section 2.05(c)(i).

 

“Settlement Account” means Agent’s account at BMO Harris Bank N.A., Chicago, IL 60603, Account Name: ACF FINCO I LP Concentration Account; Account No. 3098704, ABA No. 071000288, or such other account as Agent may advise Borrower.

 

Settlement Date” shall have the meaning set forth in Section 2.05(c)(i).

 

Solvency Certificate” shall mean a solvency certificate dated as of the Closing Date, duly executed and delivered by an Authorized Officer of the Borrower to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent.

 

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Solvent” shall mean, with respect to any Person, at any date, that (a) the sum of such Person’s debt (including Contingent Liabilities) does not exceed the present fair saleable value of such Person’s present assets, (b) such Person’s capital is not unreasonably small in relation to its business as contemplated on such date, (c) such Person has not incurred and does not intend to incur debts including current obligations beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is “solvent” within the meaning given that term and similar terms under Applicable Laws relating to fraudulent transfers and conveyances.  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).

 

Statutory Reserve Rate” shall mean, for any day as applied to any Eurodollar Loan, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages that are in effect on that day (including any marginal, special, emergency or supplemental reserves), expressed as a decimal, as prescribed by the Board and to which the Administrative Agent is subject, for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to constitute Eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

Subordinated Intercompany Note” shall mean that certain subordinated intercompany note, in form and substance reasonably acceptable to Administrative Agent, executed by each of the Credit Parties and their respective Subsidiaries on the date hereof.  

 

Subsidiary” of any Person shall mean and include (a) any corporation more than 50% of whose Voting Stock having by the terms thereof power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (b) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries has more than a 50% voting equity interest at the time.  Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of a Credit Party.

 

Swingline Loan” shall have the meaning set forth in Section 2.05(a)(i).

 

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Target Adjusted EBITDA” shall mean, for any specified period, an amount determined for any Person equal to (a) the consolidated net income (or deficit) of such Person, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP after eliminating all extraordinary nonrecurring items of income, plus (b) without duplication and to the extent deducted in arriving at the consolidated net income of such Person, the sum of, without duplication, amounts for (i) total interest expense, (ii) provisions for Taxes based on income, (iii) total depreciation expense, (iv) total amortization expense, and (v) any other non-cash charges and expenses, reasonably acceptable to the Administrative Agent, deducted in arriving at the consolidated net income of such Person (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 an item that was paid in a prior period), minus (c) without duplication and to the extent included in arriving at the consolidated net income of such Person, amounts for non-cash gains (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for potential cash items in any prior period).

 

Taxes” shall mean all income, stamp or other taxes, duties, levies, imposts, charges, assessments, fees, deductions or withholdings, now or hereafter imposed, enacted, levied, collected, withheld or assessed by any Governmental Authority, and all interest, penalties, additions to tax or similar liabilities with respect thereto.

 

Teligent Product” shall mean any Product owned exclusively by Borrower and/or its Subsidiaries.

 

Test Period” shall mean, for any date of determination under this Agreement, the four consecutive fiscal quarters of Borrower most recently ended as of such date of determination.

 

Total Commitment” shall mean the sum of the Commitments.  On the Closing Date, the Total Commitment shall be $25,000,000 as set forth on Schedule 1.01(a).

 

Total Net Leverage Ratio” shall mean, as of the last day of any Test Period, the ratio of (a) Consolidated Total Net Debt as of such date to (b) Consolidated Adjusted EBITDA for such Test Period.

 

Transaction Documents” shall mean each of the documents executed and/or delivered in connection with the Transactions, including without limitation, the Credit Documents and the Second Lien Loan Documents.

 

Transactions” shall mean collectively, the transactions contemplated by the Loan Documents and the Second Lien Loan Documents.

 

Type” shall mean, as to any Loan, its nature as an ABR Loan or Eurodollar Loan.

 

UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of New York.

 

Unasserted Contingent Obligations” shall have the meaning given to such term in the Security Agreement.

 

Unfunded Current Liability” of any Pension Plan shall mean the amount, if any, by which the present value of all accumulated benefit obligations under such Pension Plan as of the close of its most recent plan year, determined in accordance with FASB Accounting Standards Codification 715: Compensation - Retirement Benefits, as in effect on the date hereof, exceeds the fair market value of the assets of such Pension Plan allocable to such accrued benefits.

 

U.S.” and “United States” shall mean the United States of America.

 

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Voting Stock” shall mean, with respect to any Person, shares of such Person’s Capital Stock having the right to vote for the election of directors (or Persons acting in a comparable capacity) of such Person under ordinary circumstances.

 

Write-Down and Conversion Powers” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

Section 1.02         Other Interpretive Provisions.  With reference to this Agreement and each other Credit Document, unless otherwise specified herein or in such other Credit Document:

 

(a)          The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b)          The words “herein”, “hereto”, “hereof” and “hereunder” and words of similar import when used in any Credit Document shall refer to such Credit Document as a whole and not to any particular provision thereof.

 

(c)          Article, Section, Exhibit and Schedule references are to the Credit Document in which such reference appears.

 

(d)          The term “including” is by way of example and not limitation.

 

(e)          The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(f)          In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including”.

 

(g)          Section headings herein and in the other Credit Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Credit Document.

 

Section 1.03         Accounting Terms and Determination.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, applied in a manner consistent with that used in preparing the Historical Financial Statements, except as otherwise specifically prescribed herein. No change in the accounting principles used in the preparation of any financial statement hereafter adopted by the Borrower shall be given effect for purposes of measuring compliance with any provisions of Article IX unless the Borrower, the Administrative Agent, the Administrative Agent and the Required Lenders agree to modify such provisions to reflect such changes in GAAP and, unless such provisions are modified, all financial statements, Compliance Certificates and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in GAAP.  Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to in Article IX shall be made, without giving effect to any election under  Accounting Standards Codification 825-10 or 470-20 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value.” A breach of any Financial Performance Covenant shall be deemed to have occurred as of the last day of the relevant specified measurement period, regardless of when the financial statements reflecting such breach are delivered to the Administrative Agent.

 

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Section 1.04         Rounding.  Any financial ratios required to be maintained or complied with by the Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

Section 1.05         References to Agreements, Laws, etc.  Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Credit Documents) and other Material Contracts shall be deemed to include all subsequent amendments, restatements, amendment and restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, amendment and restatements, extensions, supplements and other modifications are permitted by any Credit Document; and (b) references to any Applicable Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law.

 

Section 1.06         Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

Section 1.07         Timing of Payment of Performance.  When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment (other than as described in the definition of Interest Period) or performance shall extend to the immediately succeeding Business Day.

 

Section 1.08         Corporate Terminology.  Any reference to officers, shareholders, stock, shares, directors, boards of directors, corporate authority, articles of incorporation, bylaws or any other such references to matters relating to a corporation made herein or in any other Credit Document with respect to a Person that is not a corporation shall mean and be references to the comparable terms used with respect to such Person.

 

Section 1.09         UCC Definitions.  When used in this Agreement, the following terms have the same definitions as provided in Article 9 of the UCC, but for convenience in this Agreement the first letter of all such terms shall be capitalized : “Accession”, “Account”, “Account Debtor”, “Authenticate” (and all derivations thereof), “Certificate Of Title”, “Chattel Paper”, “Commercial Tort Claim”, “Deposit Account”, “Document”, “Equipment”, “General Intangible”, “Goods”, “Health-Care-Insurance Receivable”, “Instrument”, “Inventory”, “Investment Property”, “Letter-Of-Credit Right”, “Obligor”, “Proceeds” (as specifically defined in Section 9-102(64) of the UCC), “Record”, “Secondary Obligor”, “Secured Party”, “Software” and “Supporting Obligation”.

 

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Article II

 

Amount and Terms of Loans

 

Section 2.01         Revolving Credit; Note.  Subject to the terms and conditions of this Agreement, including, without limitation Section 6.02 hereof, on Borrower’s request prior to the Maturity Date, each Lender agrees (severally, not jointly or jointly and severally) that it shall make revolving loans to Borrower at any one time outstanding not to exceed the lesser of (a) such Lender’s Commitment and (b) such Lender’s Pro Rata Share of the Borrowing Base as reflected in the most recent Borrowing Base Certificate delivered by Borrower to the Administrative Agent (such lesser amount on an aggregate basis, the “Borrowing Capacity”); provided, that, it is understood and agreed that, on the Closing Date, the Borrowing Capacity shall be $25,000,000.  The maximum principal amount of any Loan (including Swingline Loans) shall not exceed an amount equal to the amount of the Borrowing Capacity less the aggregate amount of all Loans then outstanding.  Within the limits of the Borrowing Capacity, and subject to terms and conditions of this Agreement, prior to the Maturity Date, Borrower may borrow, repay and reborrow the principal amount of the Loans.  To the extent requested by any Lender, Borrower’s obligation to pay the principal of, and interest on, such Lender’s Pro Rata Share of Loans made to Borrower shall be evidenced by an Authenticated promissory note in favor of such Lender in form and content as attached to this Agreement in the form of Exhibit R-1 (any such note, a “Note”).

 

Section 2.02         Overadvances.  

 

(a)          Lenders shall not be required to make any Loan at any time in a principal amount that would, when aggregated with the amount of the Obligations then outstanding, exceed the Borrowing Capacity. If the Obligations of Borrower to Lenders incurred hereunder exceed the Borrowing Capacity for any reason (the amount of such excess to be referred to as an “Overadvance”), then (i) such Overadvance will constitute a Loan for purposes of this Agreement, (ii) payment of such Overadvance will be secured by the Collateral, (iii) subject to paragraph (b) below, Borrower shall immediately repay the amount of such Overadvance without notice or demand by Administrative Agent or any Lender, and (iv) each Lender may in such Lender’s sole discretion refrain from making any additional Loans until the Overadvance has been repaid to Lenders in full.

 

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(b)          Any contrary provision of this Agreement notwithstanding, the Lenders hereby authorize Administrative Agent, and Administrative Agent may, but is not obligated to, knowingly and intentionally, continue to make Loans to the Borrower notwithstanding that an Overadvance exists or thereby would be created, so long as (A) after giving effect to such Loans, the outstanding Obligations do not exceed the Borrowing Capacity by more than 10% of the Commitments, and (B) after giving effect to such Loans, the outstanding Obligations (except for and excluding amounts charged to the Loan Account for interest, fees, or expenses) do not exceed the Commitments.  In the event Administrative Agent obtains actual knowledge that the outstanding amount of Loans exceeds the amounts permitted by the immediately foregoing provisions, regardless of the amount of, or reason for, such excess, Administrative Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the Loan Account for interest, fees, or expenses) unless Administrative Agent determines that prior notice would result in imminent harm to the Collateral or its value, in which case Administrative Agent may make such Overadvances and provide notice as promptly as practical thereafter), and the Lenders thereupon shall, together with Administrative Agent, jointly determine the terms of arrangements that shall be implemented with Borrower intended to reduce, within a reasonable time, the outstanding principal amount of the Loans to the Borrower to an amount permitted by the preceding sentence.  In such circumstances, if any Lender objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders.  The foregoing provisions are meant for the benefit of the Lenders and Administrative Agent and are not meant for the benefit of the Borrower.  Each Lender shall be obligated to settle with Administrative Agent as provided in Section 2.05(c) for the amount of such Lender’s Pro Rata Share of any unintentional Overadvances by Administrative Agent reported to such Lender, any intentional Overadvances made as permitted under this Section 2.02(b), and any Overadvances resulting from the charging to the Loan Account of interest, fees, or expenses.

 

Section 2.03         Protective Advances.

 

(a)          Any contrary provision of this Agreement or any other Credit Document notwithstanding, Administrative Agent hereby is authorized by the Borrower and the Lenders, from time to time in Administrative Agent’s sole discretion, (A) after the occurrence and during the continuance of an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 6.02 are not satisfied, to make Loans to, or for the benefit of, the Borrower on behalf of the Lenders that Administrative Agent, in its sole discretion deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (any of the Loans described in this Section 2.03(a) shall be referred to as “Protective Advances”).  

 

(b)          Each Protective Advance and each Overadvance shall be deemed to be a Loan hereunder and, prior to Settlement therefor, all payments on the Protective Advances and Overadvances shall be payable to Administrative Agent solely for its own account.  The Protective Advances and Overadvances shall be repayable on demand, secured by Administrative Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Loans.  The ability of Administrative Agent to make Protective Advances is separate and distinct from its ability to make Overadvances and its ability to make Overadvances is separate and distinct from its ability to make Protective Advances.  For the avoidance of doubt, the limitations on Administrative Agent’s ability to make Protective Advances do not apply to Overadvances and the limitations on Administrative Agent’s ability to make Overadvances do not apply to Protective Advances.  The provisions of this Section 2.03(b) are for the exclusive benefit of Administrative Agent and the Lenders and are not intended to benefit any Borrower in any way.

 

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(c)          Each Lender shall be obligated to settle with Administrative Agent as provided in Section 2.05(c) for the amount of such Lender’s Pro Rata Share of any Protective Advances.

 

Section 2.04         Reserves.  Notwithstanding anything to the contrary in Section 2.01, Administrative Agent may at any time establish one or more reserves which, for the avoidance of doubt, shall include, without limitation, the Dilution Reserve, royalty reserves, and reserves relating to intercompany markups (“Reserves”) as Administrative Agent may deem appropriate in Administrative Agent’s Permitted Discretion.  The amount of any Reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition or circumstance or fact that is the basis for such Reserve and shall not be duplicative of any other Reserve established and currently maintained.  Upon establishment or increase in any Reserve, Administrative Agent agrees to make itself available to discuss same, and the Borrower may take such action as may be required so that the event, condition or circumstance no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent, in its Permitted Discretion.  A Reserve may limit the Borrowing Capacity, reduce the Borrowing Base (by reduction of an advance rate set forth in the Borrowing Base or otherwise), or otherwise restrict Borrower’s ability to borrow under the terms of this Agreement.  Administrative Agent shall endeavor to notify Borrower promptly after the establishment of any Reserve; provided, however, under no circumstance shall the delivery or receipt of any such notice constitute a condition to Administrative Agent’s establishment of any Reserve.  For the avoidance of doubt, subject to the foregoing, Administrative Agent may in Administrative Agent’s Permitted Discretion (but Administrative Agent shall have no obligation in any circumstance to) increase, reduce or release any Reserve that was previously established under this Section 2.04.

 

Section 2.05         Borrowing Procedures; Settlement.

 

(a)          Borrower shall request each Loan by delivering an Authenticated Notice of Borrowing in the form of Exhibit N-1 (a “Notice of Borrowing”) to Administrative Agent (a) by facsimile, or (b) by electronic transmission including, without limitation, e-mail.  The Notice of Borrowing shall be irrevocable and shall specify (A) the aggregate principal amount of the Loans to be made pursuant to such Borrowing, (B) the date of Borrowing (which shall be a Business Day) and (C) whether the respective Borrowing shall consist of ABR Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be initially applicable thereto.  Borrower must verify Administrative Agent’s receipt of each Notice of Borrowing by telephone confirmation or, upon Borrower’s request, by Borrower’s receipt of confirming e-mail from Administrative Agent.  With respect to each Notice of Borrowing, each Lender agrees that Administrative Agent may in Administrative Agent’s sole discretion, but Administrative Agent shall not be obligated to, make such requested Loan to the Borrower on behalf of the Lenders as a Swingline Loan.  Upon receipt of a Notice of Borrowing, Administrative Agent, at its option and in its discretion shall do either of the following:

 

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(i)          in Administrative Agent’s sole discretion, advance the amount of the proposed Loan to the Borrower disproportionately (a “Swingline Loan”) out of the Administrative Agent’s own funds on behalf of Lenders, which advance shall be on the Funding Date specified in the relevant Notice of Borrowing, and thereby elect settlement in accordance with clause (c) below such that, upon such settlement, each Lender’s share of the outstanding Loans (including the amount of any such Swingline Loan settled on such date) equals its Pro Rata Share of the outstanding Loans; or

 

(ii)         promptly notify each Lender by facsimile, electronic mail or other similar from of transmission of the requested Loan and the proposed Funding Date, and thereupon each Lender shall remit to, so that Administrative Agent shall have received prior to 2:00 p.m. Eastern Time on the proposed Funding Date, in immediately available funds, the amount of such Lender’s Pro Rata Share of such Loan.

 

(b)          Subject to the terms and conditions of this Agreement, with proceeds of Swingline Loans or amounts received from the Lenders, Administrative Agent shall deliver the amount of the Loan requested in the Notice of Borrowing for credit to any account of Borrower (other than a payroll account) at a bank in the United States of America as Borrower may specify in writing (or, in the Letter of Direction, dated as of the date hereof) by wire transfer of immediately available funds (i) on the same day of Administrative Agent’s receipt of the Notice of Borrowing if Administrative Agent verifies that the Notice of Borrowing was received by Administrative Agent on or before 11 a.m. Eastern Time on a Business Day, or (ii) on the Business Day immediately following Administrative Agent’s receipt of the Notice of Borrowing if Administrative Agent verifies that the Notice of Borrowing was received by Administrative Agent after 11 a.m. Eastern Time on a Business Day, or Administrative Agent verifies that the Notice of Borrowing was received by Administrative Agent on any day that is not a Business Day.  Administrative Agent shall charge to the Loan Account the actual amount of usual and customary fees for the wire transfer of each Loan.  All Swingline Loans made under Section 2.5(a)(i) shall be subject to Settlement in accordance with Section 2.05(c) below; it being understood that all payments on any such Swingline Loans shall be payable solely to Administrative Agent until Settlement thereof shall have occurred.  For the avoidance of doubt, all Swingline Loans constitute Loans and Loans hereunder and constitute a utilization of the Borrowing Capacity.

 

(c)          It is agreed that each Lender’s funded portion of the Loans is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Loans.  Such agreement notwithstanding, Administrative Agent and the other Lenders agree (which agreement shall not be for the benefit of Borrower) that in order to facilitate the administration of this Agreement and the other Credit Documents, settlement among the Lenders as to the Loans (including Swingline Loans, Overadvances and Protective Advances) shall take place on a periodic basis in accordance with the following provisions:

 

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(i)          Administrative Agent shall request settlement (“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis if so determined by Administrative Agent (1) for itself, with respect to the outstanding Loans (including Swingline Loans, Protective Advances and Overadvances) and (2) with respect to Borrower’s or any Subsidiary’s collections or payments received, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 2:00 p.m. Eastern Time on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the “Settlement Date”).  Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Loans (including Swingline Loans, Protective Advances and Overadvances) for the period since the prior Settlement Date.  Subject to the terms and conditions contained herein:  (y) if the amount of the Loans (including Swingline Loans, Protective Advances and Overadvances) made by a Lender that is not a Defaulting Lender exceeds such Lender’s Pro Rata Share of the Loans (including Swingline Loans, Protective Advances and Overadvances) as of a Settlement Date, then Administrative Agent shall, by no later than 2:00 p.m. Eastern Time on the Settlement Date, transfer in immediately available funds to a deposit account of such Lender (as such Lender may designate), an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Loans (including Swingline Loans, Protective Advances and Overadvances), and (z) if the amount of the Loans (including Swingline Loans, Protective Advances and Overadvances) made by a Lender is less than such Lender’s Pro Rata Share of the Loans (including Swingline Loans, Protective Advances and Overadvances) as of a Settlement Date, such Lender shall no later than 2:00 p.m. Eastern Time on the Settlement Date transfer in immediately available funds to the Settlement Account, an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Loans (including Swingline Loans, Protective Advances and Overadvances).  If any such amount is not made available to Administrative Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Administrative Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at an equivalent rate as the rate accruing in respect of ABR Loans. Settlement shall occur under this Section 2.05(c) notwithstanding that the conditions precedent to making Loans under Article 4 have not been satisfied or the Commitments shall have terminated at such time.

 

(ii)         In determining whether a Lender’s balance of the Loans (including Swingline Loans, Protective Advances and Overadvances) is less than, equal to, or greater than such Lender’s Pro Rata Share of the Loans (including Swingline Loans, Protective Advances and Overadvances) as of a Settlement Date, Administrative Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments actually received in good funds by Administrative Agent with respect to the principal, interest and fees payable by the Borrower and allocable to the Lenders hereunder, and proceeds of Collateral.

 

(iii)        Between Settlement Dates, Administrative Agent may pay over to the Lenders any collections or payments received by Administrative Agent that in accordance with the terms of this Agreement would be applied to the reduction of the Loans, for application to Swingline Loans, Protective Advances or Overadvances.  During the period between Settlement Dates, with respect to any Loans (including Swingline Loans, Protective Advances and Overadvances) that Administrative Agent has funded since the prior Settlement Date, Administrative Agent shall be entitled to interest on the daily amount of such Loans at an equivalent rate as the rate accruing in respect of ABR Loans.

 

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(iv)        Anything in this Section 2.05(c) to the contrary notwithstanding, in the event that a Lender is a Defaulting Lender, Administrative Agent shall be entitled to refrain from remitting settlement amounts to the Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set forth in Section 2.05(d).

 

(v)         Each Lender acknowledges and agrees that its obligation to settle pursuant to this paragraph in respect of Loans (including Swingline Loans, Protective Advances and Overadvances) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of an Event of Default, the failure of any condition in Section 6.02 to be satisfied, or any reduction or termination of the Commitments or a reduction in the Borrowing Capacity, and that each such Settlement payment shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(d)          Administrative Agent shall not be obligated to transfer to a Defaulting Lender any payments made by the Borrower to Administrative Agent for the Defaulting Lender’s benefit or any collections or proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of such transfer to the Defaulting Lender, Administrative Agent shall transfer any such payments (i) first, to Administrative Agent to the extent of any Loans (including Swingline Loans, Protective Advances and Overadvances) that were made by Administrative Agent and that were required to be, but were not, repaid by the Defaulting Lender, (ii) second, to each non-Defaulting Lender ratably in accordance with their Commitments (but, in each case, only to the extent that such Defaulting Lender’s portion of a Loan (or other funding obligation) was funded by such other non-Defaulting Lender), (iii) to an account maintained by Administrative Agent, the proceeds of which shall be retained by Administrative Agent and may be made available to be re-advanced to or for the benefit of the Borrower as if such Defaulting Lender had made its portion of Loans (or other funding obligations) hereunder, and (iv) from and after the date on which all other Obligations have been paid in full, to such Defaulting Lender in accordance with Section 2.07(a)(viii).  Subject to the foregoing and the provisions in Section 2.18, Administrative Agent may hold and, in its sole discretion, re-lend to the Borrower for the account of such Defaulting Lender the amount of all such payments received and retained by Administrative Agent for the account of such Defaulting Lender.  Solely for the purposes of voting or consenting to matters with respect to the Credit Documents (including the calculation of Pro Rata Share in connection therewith).  The provisions of this Section 2.05(d) shall remain effective with respect to such Defaulting Lender until the earlier of (y) the date on which the non-Defaulting Lenders, Administrative Agent, and Borrower shall have waived, in writing, the application of this Section 2.05(d) to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder, pays to Administrative Agent all amounts owing by Defaulting Lender in respect of the amounts that it was obligated to fund hereunder, and, if requested by Administrative Agent, provides adequate assurance of its ability to perform its future obligations hereunder.  The operation of this Section 2.05(d) shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by the Borrower of its duties and obligations hereunder to Administrative Agent or to the Lenders other than such Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that it was obligated to fund hereunder shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle the Borrower, at its option, upon written notice to Administrative Agent, to arrange for a substitute Lender to assume the Commitment of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Administrative Agent.  In connection with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder, and agrees to execute and deliver a completed form of Assignment Agreement in favor of the substitute Lender (and agrees that it shall be deemed to have executed and delivered such document if it fails to do so) subject only to being repaid its share of the outstanding Obligations; provided, however, that any such assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of Administrative Agent’s, any Lender’s or the Borrower’s rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund.  In the event of a direct conflict between the priority provisions of this Section 2.05(d) and any other provision contained in this Agreement or any other Credit Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.05(d) shall control and govern.

 

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(e)          It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Loan (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.

 

(f)          The aggregate principal amount of each Borrowing of Loans shall be in multiples of $100,000 and, in each case, shall not be less than the Minimum Borrowing Amount with respect thereto.  More than one Borrowing may be incurred on any date; provided, that at no time shall there be outstanding more than 2 Borrowings of Eurodollar Loans under this Agreement.

 

Section 2.06         Collections.

 

(a)          Subject to Section 8.12, the Credit Parties shall instruct all their respective Account Debtors paying Receivables of the Credit Parties to a deposit account of a Credit Party that is subject to a Control Agreement.

 

(b)          Subject to Section 8.12, during any Cash Dominion Period, each Credit Party shall deliver all Proceeds of Collateral in its possession to a deposit account subject to a Control Agreement promptly after receipt.

 

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(c)          Subject to Section 8.12, during any Cash Dominion Period, Credit Parties shall cause Persons processing or collecting any credit card payments or Proceeds of Receivables on behalf of Credit Parties to deliver such payments or Proceeds to a deposit account subject to a Control Agreement promptly, but not less frequently than once every week.  

 

Section 2.07         Crediting of Funds.  

 

(a)          During any Cash Dominion Period, on each Business Day, Administrative Agent shall withdraw available funds from the Blocked Account, deposit such funds in the Settlement Account, and credit available funds received in the Settlement Account to the payment of the Obligations. Whether or not a Cash Dominion Period is in effect, Administrative Agent shall credit to the payment of the Obligations any other form of funds received by Administrative Agent in the Settlement Account for which Administrative Agent has received notice that such funds are collected and available to Administrative Agent (i) on the same day of Administrative Agent’s receipt of such notice if such notice is received by Administrative Agent on or before 2 p.m. Eastern Time on a Business Day, and (ii) on the Business Day immediately following Administrative Agent’s receipt of such notice if such notice is received by Administrative Agent after 2 p.m. Eastern Time on a Business Day, or if such notice is received by Administrative Agent on a day that is not a Business Day.  It is understood and agreed that transfer of funds from the Blocked Account to the Settlement Account may take up to two Business Days. Aggregate principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and payments of fees and expenses (other than fees or expenses that are for Administrative Agent’s separate account) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Obligation to which a particular fee relates.  

 

(b)          All payments and proceeds of Collateral received by Administrative Agent shall be applied, so long as no Event of Default has occurred and is continuing, to reduce the Loans outstanding (and thereafter to Borrower or such other Person entitled thereto under applicable law).  At any time that an Event of Default is continuing, all payments and proceeds of Collateral will be applied in the following order:

 

(i)          First, to pay any expenses or indemnities then due to Administrative Agent under Section 12.05 of this Agreement, until paid in full;

 

(ii)         Second, to pay any expenses or indemnities then due to Lenders under the Credit Documents, on a ratable basis, until paid in full;

 

(iii)        Third, to pay any fees then due to Administrative Agent (for its separate account) under the Credit Documents, until paid in full;

 

(iv)        Fourth, to pay any fees then due to Lenders then due to Lenders under the Credit Documents, on a ratable basis, until paid in full;

 

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(v)         Fifth, ratably to pay interest due in respect of the Protective Advances and Swingline Loans, until paid in full;

 

(vi)        Sixth, ratably to pay the principal amount of all Protective Advances and Swingline Loans until paid in full;

 

(vii)       Seventh, ratably to pay interest due in respect of the Loans (other than Protective Advances and Swingline Loans), until paid in full;

 

(viii)      Eighth, ratably to pay the principal amount of all Loans (other than Protective Advances and Swingline Loans) until paid in full;

 

(ix)         Ninth, to pay all other Obligations other than Obligations owed to Defaulting Lenders, ratably to each Person entitled to such amounts, until paid in full;

 

(x)          Tenth, to pay all Obligations owed to Defaulting Lenders, ratably to each Person entitled to such amounts, until paid in full; and

 

(xi)         Eleventh, to the Borrower or such other Person entitled thereto under applicable law.

 

(c)          All funds credited to the payment of the Obligations in accordance with clause (b) above are conditional upon final payment to Administrative Agent in cash or solvent credits of the items giving rise to such funds.  If any item credited to the payment of the Obligations is not paid to Administrative Agent (or payment thereof is rescinded or required to be returned by the Administrative Agent), the amount of any credit given for such item shall be charged to the balance of the Obligations whether or not the item is returned.

 

Section 2.08         Maintenance of Loan Account; Records of Administrative Agent. Administrative Agent shall maintain an account on its books in the name of Borrower (the “Loan Account”) on which Borrower will be charged with all Loans made by Administrative Agent or the Lenders to Borrower or for Borrower’s account and with all other payment Obligations hereunder or under the other Credit Documents, including, accrued interest, fees and expenses, and other amounts payable in accordance with Section 12.05.  In accordance with Section 2.06(a), the Loan Account will be credited with all payments received by Administrative Agent from any Credit Party or for Borrower’s account.  Administrative Agent shall render statements regarding the Loan Account to Borrower, including principal, interest, fees, an itemization of all charges and expenses, and other amounts owing in accordance with Section 12.05, and such statements, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrower and the Lenders unless, within 30 days after receipt thereof by Borrower, Borrower shall deliver to Administrative Agent written objection thereto describing the error or errors contained in any such statements.  No failure of Administrative Agent to render any Record or in making any annotation shall affect the obligation of Borrower to pay and perform the Obligations pursuant to the terms of this Agreement and the other Credit Documents.  This Section 2.08 and Section 12.06(c)(iii) shall be construed so that the Loans are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.

 

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Section 2.09         Payments; Termination of Loans.  (a)  On the Maturity Date, the Borrower shall pay to Administrative Agent, for the benefit of the Lenders, in cash the entire outstanding principal balance of the Loans, plus all accrued and unpaid interest thereon, plus all fees, costs, expenses and other amounts payable to Administrative Agent and Lenders in connection with the Loans, plus all other Obligations payable to Administrative Agent and Lenders pursuant to the terms of this Agreement and the other Credit Documents. No Lender shall be obligated to make or continue to extend any Loan or continue any Loan to Borrower hereunder after the Maturity Date.  All payments (including prepayments) to be made by Borrower on account of principal, interest, fees and other amounts payable hereunder are not subject to counterclaim, set-off, rights of rescission, or any other defense.  Subject to Section 5.04, and except as otherwise specifically provided herein, all payments under this Agreement shall be made by the Borrower, without set-off, rights of rescission, counterclaim or deduction of any kind, to the Administrative Agent for the ratable account of the Secured Parties entitled thereto.  

 

Section 2.10         Interest.  (a) The unpaid principal amount of each ABR Loan shall bear interest from the date of the Borrowing thereof at a rate per annum that shall at all times be the Applicable Margin plus the ABR in effect from time to time.

 

(a)          The unpaid principal amount of each Eurodollar Loan shall bear interest from the date of the Borrowing thereof at a rate per annum that shall at all times be the Applicable Margin in effect from time to time plus the relevant Eurodollar Rate.

 

(b)          From and after the occurrence and during the continuance of any Event of Default, upon notice by the Administrative Agent or the Required Lenders to the Borrower (or automatically while any Event of Default under Section 10.01(a) or Section 10.01(h) exists), the Borrower shall pay interest on the principal amount of all Loans and all other due and unpaid Obligations, to the extent permitted by Applicable Law, at the rate described in Section 2.10(a) or Section 2.10(b), as applicable, plus two (2) percentage points per annum (the “Default Rate”).  All such interest shall be payable on demand of the Administrative Agent or the Required Lenders and in cash.

 

(c)          Interest on each Loan shall accrue from and including the date of any Borrowing to but excluding the date of any repayment thereof and shall be payable (i) in respect of each ABR Loan, quarterly in arrears on the last day of each March, June, September and December, beginning with the fiscal quarter ending December 31, 2018, (ii) in respect of each Eurodollar Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three-month intervals after the first day of such Interest Period, and (iii) in respect of each Loan (except, other than in the case of prepayments, any Loans that are ABR Loans), on any prepayment (on the amount prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.

 

(d)          All computations of interest hereunder shall be made in accordance with Section 5.05.

 

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(e)          The Administrative Agent, upon determining the interest rate for any Borrowing of Eurodollar Loans, shall promptly notify the Borrower and the relevant Lenders thereof.  Each such determination shall, absent clearly demonstrable error, be final and conclusive and binding on all parties hereto.

 

(f)          In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable.  Agent, Borrower and the Lenders, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, that anything contained herein to the contrary notwithstanding, if such rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrower is and shall be liable only for the payment of such maximum amount as is allowed by law, and payment received from Borrower in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.

 

Section 2.11         Conversions and Continuations.  (a) The Borrower shall have the option on any Business Day to convert all or a portion equal to at least the Minimum Borrowing Amount of the outstanding principal amount of Loans of one Type into a Borrowing or Borrowings of another Type and the Borrower shall have the option on any Business Day to continue the outstanding principal amount of any Eurodollar Loans for an additional Interest Period; provided, that (i) no partial conversion of Eurodollar Loans shall reduce the outstanding principal amount of Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum Borrowing Amount, (ii) ABR Loans may not be converted into Eurodollar Loans if an Event of Default is in existence on the date of the proposed conversion and the Administrative Agent has, or the Required Lenders have determined in its or their sole discretion not to permit such conversion, (iii) Eurodollar Loans may not be continued as Eurodollar Loans for an additional Interest Period in excess of one month if an Event of Default is in existence on the date of the proposed continuation and the Administrative Agent has, or the Required Lenders have, determined in its or their sole discretion not to permit such continuation and (iv) Borrowings resulting from conversions pursuant to this Section 2.11 shall be limited in number as provided in Section 2.05(f).  Each such conversion or continuation shall be effected by the Borrower by giving the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) prior to 2:00 p.m. (New York time) at least three Business Days (or one Business Day in the case of a conversion into ABR Loans) (and in either case on not more than five Business Days) prior to such proposed conversion or continuation, in the form of Exhibit N-2 (each, a “Notice of Conversion or Continuation”) specifying the Loans to be so converted or continued, the Type of Loans to be converted or continued into and, if such Loans are to be converted into or continued as Eurodollar Loans, the Interest Period to be initially applicable thereto.  The Administrative Agent shall give each Lender notice as promptly as practicable of any such proposed conversion or continuation affecting any of its Loans.

 

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(a)          If any Event of Default is in existence at the time of any proposed continuation of any Eurodollar Loans for an Interest Period in excess of one month and the Administrative Agent has, or the Required Lenders have, determined in its or their sole discretion not to permit such continuation, such Eurodollar Loans shall be automatically continued on the last day of the current Interest Period into Eurodollar Loans with an Interest Period of one month.  If, upon the expiration of any Interest Period in respect of Eurodollar Loans, the Borrower has failed to elect a new Interest Period to be applicable thereto as provided in Section 2.11(a), the Borrower shall be deemed to have elected to convert such Borrowing of Eurodollar Loans into a Borrowing of ABR Loans effective as of the expiration date of such current Interest Period.

 

Section 2.12         Pro Rata Borrowings.  Each Borrowing of Loans under this Agreement shall be granted by the Lenders on the basis of their then-applicable Pro Rata Share of the Commitments.  It is understood that no Lender shall be responsible for any default by any other Lender in its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder.

 

Section 2.13         Interest Periods.  At the time the Borrower gives a Notice of Borrowing or a Notice of Conversion or Continuation in respect of the making of, or conversion into or continuation as, a Borrowing of Eurodollar Loans (in the case of the initial Interest Period applicable thereto) or prior to 2:00 p.m. (New York time) on the third Business Day (and in any event, on not more than five Business Days’ notice) prior to the expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans, the Borrower shall have, by giving the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) the right to elect the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of the Borrower, be a one (1), two (2), three (3) or six (6) month period:

 

(a)          the initial Interest Period for any Borrowing of Eurodollar Loans shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of ABR Loans) and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the immediately preceding Interest Period expires;

 

(b)          if any Interest Period relating to a Borrowing of Eurodollar Loans begins on the last Business Day of a calendar month or begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of the calendar month at the end of such Interest Period;

 

(c)          if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided, that if any Interest Period in respect of a Eurodollar Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day; and

 

(d)          the Borrower shall not be entitled to elect any Interest Period in respect of any Eurodollar Loan if such Interest Period would extend beyond the applicable Maturity Date of such Loan.

 

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Section 2.14         Increased Costs, Illegality, etc.  (a)  In the event that (x) in the case of clause (i) below, the Administrative Agent or (y) in the case of clauses (ii) and (iii) below, any Lender, in each case, shall have reasonably determined (which determination shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto):

 

(i)          on any date for determining the Eurodollar Rate for any Interest Period that (A) deposits in the principal amounts of the Loans comprising any Eurodollar Loan are not generally available in the relevant market or (B) by reason of any changes arising on or after the Closing Date affecting the interbank Eurodollar market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurodollar Rate; or

 

(ii)         at any time, after the later of the Closing Date and the date such entity became a Lender hereunder, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Eurodollar Loans (excluding all Taxes except any Other Connection Taxes that are not Connection Income Taxes) because of (A) any change since the date hereof in any Applicable Law (or in the interpretation or administration thereof and including the introduction of any new Applicable Law), such as, for example, without limitation, a change in official reserve requirements (but excluding changes in the rate of tax on the overall net income of such Lender), and/or (B) other circumstances affecting the interbank Eurodollar market or the position of such Lender in such market; or

 

(iii)        at any time, that the making or continuance of any Eurodollar Loan has become unlawful by compliance by such Lender in good faith with any Applicable Law (or would conflict with any such Applicable Law not having the force of law even though the failure to comply therewith would not be unlawful), or has become impracticable as a result of a contingency occurring after the date hereof that materially and adversely affects the interbank Eurodollar market,

 

then, and in any such event, such Lender (or the Administrative Agent, in the case of clause (i) above) shall promptly give notice (if by telephone, confirmed in writing) to the Borrower and the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders).  Thereafter (A) in the case of clause (i) above, Eurodollar Loans shall no longer be available until such time as the Administrative Agent notifies the Borrower, and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist (which notice the Administrative Agent agrees to give at such time when such circumstances no longer exist), and any Notice of Borrowing or Notice of Conversion or Continuation given by the Borrower with respect to Eurodollar Loans that have not yet been incurred shall be deemed rescinded by the Borrower, (B) in the case of clause (ii) above, the Borrower shall pay to such Lender, within 5 days after receipt of written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its reasonable discretion shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder (it being agreed that a written notice as to the additional amounts owed to such Lender, showing in reasonable detail the basis for the calculation thereof, submitted to the Borrower by such Lender shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto) and (C) in the case of clause (iii) above, the Borrower shall take one of the actions specified in Section 2.14(b) as promptly as possible and, in any event, within the time period required by law.

 

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(b)          At any time that any Eurodollar Loan is affected by the circumstances described in (i) Section 2.14(a)(ii), the Borrower may either (A) if the affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic notice (confirmed promptly in writing) thereof on the same date that the Borrower was notified by a Lender pursuant to Section 2.14(a)(ii) or (B) if the affected Eurodollar Loan is then outstanding, upon at least three (3) Business Days’ notice to the Administrative Agent, require the affected Lender to convert each such Eurodollar Loan into an ABR Loan; provided, that if more than one Lender is so affected at any time, then all affected Lenders must be treated in the same manner pursuant to this Section 2.14(b) or (ii) Section 2.14(a)(iii), (A) if the affected Eurodollar Loan is then being made pursuant to a Borrowing, such Borrowing shall automatically be deemed cancelled and rescinded and (B) if the affected Eurodollar Loan is then outstanding, each such Eurodollar Loan shall automatically be converted into an ABR Loan; provided, that if more than one Lender is affected at any time, then all affected Lenders must be treated in the same manner pursuant to this Section 2.14(b).

 

(c)          If, after the later of the date hereof, and that date such entity becomes a Lender hereunder, the adoption of any Applicable Law regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by a Lender or its parent with any request or directive made or adopted after such date regarding capital adequacy (whether or not having the force of law) of any such authority, association, central bank or comparable agency, has the effect of reducing the rate of return on such Lender’s or its parent’s capital or assets as a consequence of such Lender’s commitments or obligations hereunder to a level below that which such Lender or its parent could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender’s or its parent’s policies with respect to capital adequacy), then within 5 days after written demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or its parent for such reduction, it being understood and agreed, however, that a Lender shall not be entitled to such compensation as a result of such Lender’s compliance with, or pursuant to any request or directive to comply with, any such Applicable Law as in effect on the date hereof.  Each Lender (on its own behalf), upon determining in good faith that any additional amounts will be payable pursuant to this Section 2.14(c), will, as promptly as practicable upon ascertaining knowledge thereof, give written notice thereof to the Borrower, which notice shall set forth in reasonable detail the basis of the calculation of such additional amounts.  The failure to give any such notice, with respect to a particular event, within the time frame specified in Section 2.17, shall not release or diminish any of the Borrower’s obligations to pay additional amounts pursuant to this Section 2.14(c) for amounts accrued or incurred after the date of such notice with respect to such event.

 

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(d)          Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a change in Applicable Law, regardless of the date enacted, adopted or issued.

 

(e)          This Section 2.14 shall not apply to Taxes to the extent duplicative of Section 5.04.

 

Section 2.15         Compensation.  If (a) any payment of principal of a Eurodollar Loan is made by the Borrower to or for the account of a Lender other than on the last day of the Interest Period for such Eurodollar Loan as a result of a payment or conversion pursuant to Section 2.09, 2.11, 2.14, 5.01 or 5.02, as a result of acceleration of the maturity of the Loans pursuant to Article X or for any other reason, (b) any Borrowing of Eurodollar Loans is not made as a result of a withdrawn Notice of Borrowing (except with respect to a revocation as provided in Section 2.14), (c) any ABR Loan is not converted into a Eurodollar Loan as a result of a withdrawn Notice of Conversion or Continuation, (d) any Eurodollar Loan is not continued as a Eurodollar Loan as a result of a withdrawn Notice of Conversion or Continuation or (e) any prepayment of principal of a Eurodollar Loan is not made as a result of a withdrawn notice of prepayment pursuant to Section 5.01 or 5.02, the Borrower shall, after receipt of a written request by such Lender (which request shall set forth in reasonable detail the basis for requesting such amount), pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that such Lender may reasonably incur as a result of such payment, failure to convert, failure to continue, failure to prepay, reduction or failure to reduce, including any loss, cost or expense (excluding loss of anticipated profits) actually incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain such Eurodollar Loan.

 

Section 2.16         Change of Lending Office.  Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.14(a)(ii), 2.14(a)(iii), 2.14(b) or 5.04 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event; provided, that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of any such Section.  Nothing in this Section 2.16 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Section 2.14 or 5.04.

 

Section 2.17         Notice of Certain Costs.  Notwithstanding anything in this Agreement to the contrary, to the extent any notice required by Section 2.14, 2.15, or 5.04 is given by any Lender more than one hundred twenty (120) days after such Lender has knowledge (or should have had knowledge) of the occurrence of the event giving rise to the additional cost, reduction in amounts, loss, tax or other additional amounts described in such Sections, such Lender shall not be entitled to compensation under Section 2.14, 2.15, or 5.04, as the case may be, for any such amounts incurred or accruing prior to the giving of such notice to the Borrower.

 

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Article III

[RESERVED]

 

Article IV

Fees and Commitment Terminations

 

Section 4.01         Fees. The Borrower agrees to pay to the Administrative Agent, all the Fees set forth in the Fee Letter.

 

Section 4.02         Mandatory Termination of Commitments.  The Total Commitment shall terminate at 5:00 p.m. (New York time) on the Maturity Date.

 

Section 4.03         Field Examination Fees; Appraisals.  Borrower shall be liable for and promptly reimburse Administrative Agent for all reasonable and documented out-of-pocket fees, costs and expenses associated with periodic field examinations and appraisals of Collateral performed by Administrative Agent and/or Administrative Agent’s sub-agents, all as deemed necessary by Administrative Agent in its Permitted Discretion; provided, that, so long as no Event of Default has occurred and is continuing, Borrower shall not be liable for or shall not be required to reimburse Administrative Agent for such fees, costs or expenses with respect to more than one (1) field examination or one (1) appraisal for each of Receivables, Inventory, Equipment, and Real Property in any calendar year (which, for the avoidance of doubt, Administrative Agent may elect not to require in its sole discretion).  Borrower acknowledges and agrees that during the continuance of an Event of Default, Borrower shall be liable for and shall reimburse Administrative Agent for all fees, costs and expenses of all field examinations and appraisals conducted by Administrative Agent and/or its agents, without limit and regardless of the number of field examinations or appraisals conducted by Administrative Agent or its agents in any calendar year.  Administrative Agent agrees to provide Borrower with a copy of the report for any such field examination or appraisal so long as such report exists and, if requested, Borrower executes and deliver to Administrative Agent a non-reliance letter in satisfactory form.

 

Article V

Payments

 

Section 5.01         Voluntary Prepayments; Termination of Commitments.  

 

(a)          Subject to Section 5.01(d) below and the other terms and conditions set forth in this Section 5.01, the Borrower shall have the right to prepay the Loans, in whole or in part, from time to time without premium or penalty.  

 

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(b)          When making a voluntary partial prepayment, the Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of (i) its intent to make such prepayment, (ii) the amount of such prepayment and (iii) in the case of Eurodollar Loans, the specific Borrowing(s) pursuant to which such prepayment will be made, no later than (A) in the case of Eurodollar Loans, 2:00 p.m. (New York time) three (3) Business Days prior to, and (B) in the case of ABR Loans, 2:00 p.m. (New York time) on the date of such prepayment, and such prepayment shall promptly be transmitted by the Administrative Agent to each of the relevant Lenders, as the case may be.

 

(c)          Each voluntary partial prepayment of any Loans shall be in a multiple of $50,000 and in aggregate principal amount of at least $100,000; provided, that no partial prepayment of Eurodollar Loans outstanding under a single Borrowing shall reduce the outstanding Eurodollar Loans outstanding under such Borrowing to an amount less than the Minimum Borrowing Amount for Eurodollar Loans.

 

(d)          The Borrower may at any time terminate the Commitments upon payment in full of the Obligations subject to the terms of this Section 5.01(d).  In connection with any such termination, the Borrower shall notify the Administrative Agent of any election to terminate the Commitments at least fifteen (15) days prior to the effective date of such termination, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable (except that any notice of termination may specify a condition that such termination is contingent upon the occurrence of a refinancing transaction or other contingent event, in which event such notice will be subject to such refinancing transaction or other contingency) and any termination of the Commitments shall be permanent and subject to payment of any Prepayment Premium.  Notwithstanding any other provision in this Agreement, any termination of the Commitments and each other Prepayment Premium Event shall be subject to the following call protection (the “Prepayment Premium”):

 

(i)          after the Closing Date but on or before the first anniversary of the Closing Date, at a price equal to 100% of the principal amount of the Loans being prepaid plus all interest on the principal amount being prepaid that has accrued through the prepayment date plus a premium equal to 2.0% of the Commitment;

 

(ii)         after the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date, at a price equal to 100% of the principal amount of the Loans being prepaid plus all interest on the principal amount being prepaid that has accrued through the prepayment date plus a premium equal to 1.0% of the Commitment; and

 

(iii)        thereafter, at a price equal to 100% of the principal amount of the Loans being prepaid plus all interest on the principal amount being prepaid that has accrued through the prepayment date.

 

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Section 5.02         Mandatory Prepayments.  

 

(a)          Repayment of Loans.  If on any date the aggregate amount of the Loans exceeds the lesser of (i) the Total Commitment as then in effect and (ii) the Borrowing Base then in effect, the Borrower shall forthwith repay on such date the principal amount of Loans in an amount equal to such excess.  

 

(b)          Mandatory Prepayments under the Second Lien Financing Agreement.  In addition, until the Discharge of the First Lien Obligations (as defined in the Intercreditor Agreement), amounts otherwise required to be prepaid pursuant to Sections 5.02(a) – (c) of the Second Lien Credit Agreement shall instead be required to be paid under the terms of this Agreement (unless waived by the Administrative Agent) as if such provisions were fully set forth herein, provided, that any references set forth therein to “Term Loans” shall be deemed to be a reference to the Loans hereunder.  For the avoidance of doubt, to the extent (x) no Loans are outstanding or (y) any such mandatory prepayment of the Obligations arising from the same circumstances requiring the prepayment of the Second Lien Indebtedness hereunder is waived by the Administrative Agent, no mandatory prepayment shall be required under this Agreement and shall instead be applied to the prepayment of the Second Lien Indebtedness to the extent required under the Second Lien Loan Documents.

 

(c)          Application to Loans.  Subject to Section 2.07(b), with respect to each prepayment of Loans elected by the Borrower pursuant to Section 5.01 or required by Section 5.02, the Borrower may designate (i) the Types of Loans that are to be prepaid and the specific Borrowing(s) pursuant to which made and (ii) the Loans to be prepaid; provided, that (A) Eurodollar Loans may be designated for prepayment pursuant to this Section 5.02 only on the last day of an Interest Period applicable thereto unless all Eurodollar Loans with Interest Periods ending on such date of required prepayment and all ABR Loans have been paid in full; and (B) subject to 2.05(d), each prepayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans.  In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.15.  Any prepayment made pursuant to this Section 5.02 shall not result in a permanent reduction in any of the Commitments.

 

Section 5.03         [Reserved].  

 

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Section 5.04         Net Payments.  

 

(a)          Subject to the following sentence, all payments made by or on behalf of the Borrower under this Agreement or any other Credit Document shall be made free and clear of, and without deduction or withholding for or on account of, any current or future Taxes (including Other Taxes) other than Excluded Taxes.  If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) are required to be withheld from any amounts payable under this Agreement, the Borrower shall increase the amounts payable to the Administrative Agent or such Lender to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes, including any such Non-Excluded Taxes payable in respect of additional amounts paid pursuant to this Section 5.04(a)) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement.  Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as possible thereafter, the Borrower shall send to the Administrative Agent for its own account or for the account of such Secured Party, as the case may be, a certified copy of an original official receipt (or other evidence acceptable to such Lender, acting reasonably) received by the Borrower showing payment thereof.  If the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Borrower shall indemnify the Administrative Agent and the Lenders for any incremental Taxes, interest, costs or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure.  In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.  The agreements in this Section 5.04(a) shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

(b)          Each Lender that is not organized under the laws of the United States of America or any state thereof (a “Non-U.S. Lender”) shall:

 

(i)          deliver to the Borrower and the Administrative Agent two copies of either (A) in the case of Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, United States Internal Revenue Service Form W-8BEN (together with a certificate representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Code)),  (B) Internal Revenue Service Form W-8BEN or Form W-8ECI, or (C) to the extent a Non-U.S. Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-9, the certificate described in (A) above, if applicable, and/or other certification documents from each beneficial owner, as applicable; provided that if the Non-U.S. Lender is a partnership and one or more direct or indirect partners of such Non-U.S. Lender are claiming the portfolio interest exemption, such Non-U.S. Lender will provide the documents set forth in (A) above on behalf of each such direct and indirect partner, in each case properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S. federal withholding tax on payments by the Borrower under this Agreement;

 

(ii)         deliver to the Borrower and the Administrative Agent two further copies of any such form or certification (or any applicable successor form) promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender; and

 

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(iii)        obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by the Borrower or the Administrative Agent, unless in any such case any change in treaty, law or regulation has occurred prior to the date on which any such delivery would otherwise be required that renders any such form inapplicable or would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Borrower and the Administrative Agent, in which case such Lender shall not be required to provide any form under subparagraphs (i) or (ii) above.  Each Person that shall become a Participant pursuant to Section 12.06 or a Lender pursuant to Section 12.06 shall, upon the effectiveness of the related transfer, be required to provide all the forms and statements required pursuant to this Section 5.04(b) or Section 5.04(c), as applicable; provided, that in the case of a Participant such Participant shall furnish all such required forms and statements to the Lender from which the related participation shall have been purchased.  Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver.

 

(c)          Each Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by Applicable Law as will permit such payments to be made without withholding or at a reduced rate; provided, that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of such Lender.

 

(d)          The Borrower shall indemnify each Agent and each Lender within 10 days after written demand therefor, for the full amount of any Non-Excluded Taxes or Other Taxes paid by each Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Non-Excluded Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest, additions to tax and reasonable expenses arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or by each Agent on its own behalf or on behalf of a Lender shall be conclusive absent manifest error.

 

(e)          If a payment made to a Lender would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (iv), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

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(f)          If any Lender or the Administrative Agent determines, in its sole discretion, that it has received a refund of a Tax for which an additional payment has been made by the Borrower pursuant to this Section 5.04 or Section 12.05 of this Agreement, then such Lender or the Administrative Agent, as the case may be, shall reimburse the Borrower for such amount (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 5.04 and Section 12.05 with respect to the Tax giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender (including any Taxes imposed on the receipt of such refund) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

 

(g)          Any Lender claiming any additional amounts payable pursuant to this Section 5.04 shall use its reasonable efforts (consistent with its internal policies and requirements under Applicable Laws) to change the jurisdiction of its lending office if such a change would reduce any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the reasonable determination of such Lender, be otherwise disadvantageous to such Lender.

 

(h)          Each party’s obligations under this Section 5.04 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Loans and Commitments and the repayment, satisfaction or discharge of all obligations under any Credit Document.

 

Section 5.05         Computations of Interest and Fees.  All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of (a) 365 (or 366 as appropriate) days in the case of ABR Loans and (b) 360 days in all other cases.  Payments due on a day that is not a Business Day shall (except as otherwise required by Section 2.13(c)) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees in connection with that payment.

 

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Article VI

Conditions Precedent

 

Section 6.01         Conditions Precedent to Initial Credit Extension.  The making of the initial Credit Extension is subject to the satisfaction of the following conditions precedent on or before the Closing Date:

 

(a)          Credit Documents.  The Administrative Agent shall have received the following documents, duly executed by an Authorized Officer of each Credit Party and each other relevant party:

 

(i)          this Agreement;

 

(ii)         the Fee Letter;

 

(iii)        the Intercreditor Agreement;

 

(iv)        the Guarantee Agreement;

 

(v)         the Security Agreement;

 

(vi)        each Note requested by any Lender;

 

(vii)       the Mortgage in respect of the Real Property set forth on Schedule 7.15;

 

(viii)      the Notice of Borrowing, reasonably satisfactory to the Administrative Agent;

 

(ix)         the Letter of Direction and flow of funds, reasonably satisfactory to the Administrative Agent;

 

(x)          the Subordinated Intercompany Note; and

 

(xi)         each other Credit Document.

 

(b)          Collateral.  (i)  To the extent required under the Security Documents, all Capital Stock of each Subsidiary of each Credit Party shall have been pledged to the Administrative Agent.

 

(i)          [reserved].

 

(ii)         The Administrative Agent shall have received the results of a search of the UCC filings (or equivalent filings), in addition to tax Lien, judgment Lien, bankruptcy and litigation searches made with respect to each Credit Party, together with copies of the financing statements and other filings (or similar documents) disclosed by such searches, and accompanied by evidence satisfactory to the Administrative Agent that the Liens indicated in any such financing statement and other filings (or similar document) are Permitted Liens or have been released or will be released substantially simultaneously with the initial Credit Extensions hereunder.

 

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(iii)        The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent, the appropriate UCC (or equivalent) financing statements for filing in such office or offices as may be necessary or, in the opinion of Administrative Agent, desirable, to perfect the Administrative Agent’s Liens in and to the Collateral.

 

(c)          Legal Opinions.  The Administrative Agent shall have received executed legal opinion of K&L Gates LLP, counsel to the Borrower and the other Credit Parties, which opinion shall be addressed to the Administrative Agent and the Lenders and shall be in form and substance reasonably satisfactory to the Administrative Agent.

 

(d)          Second Lien Loan Documents.  

 

(i)          The Administrative Agent shall have received executed copies of the Second Lien Loan Documents, which shall be reasonably satisfactory to the Administrative Agent and shall be subject to the Intercreditor Agreement.

 

(ii)         The Administrative Agent shall have received evidence, in form and substance satisfactory to the Administrative Agent that, substantially simultaneously with the initial Credit Extension hereunder, the Second Lien Credit Agreement shall have been executed and delivered and the Second Lien Lenders shall have funded the Second Lien Initial Term Loan in connection therewith.

 

(e)          Legal and Collateral Due Diligence. The Administrative Agent shall have completed its legal and collateral due diligence, including a satisfactory review of regulatory due diligence and a satisfactory review of the terms of the Existing Notes.

 

(f)          Phase I Report. The Administrative Agent shall have received a phase-I environmental report with respect to each parcel composing the owned Real Property located in New Jersey (the environmental consultants retained for such reports, the scope of the reports, and the results thereof of which shall be reasonably satisfactory to Administrative Agent).

 

(g)          Officer’s Certificates.  The Administrative Agent shall have received a certificate for each Credit Party, dated the Closing Date, duly executed and delivered by such Credit Party’s General Counsel, other duly authorized officer, managing member or general partner, as applicable, as to:

 

(i)          resolutions of each such Person’s board of managers/directors (or other managing body, in the case of a Person that is not a corporation) then in full force and effect expressly and specifically authorizing, to the extent relevant, all aspects of the Credit Documents and the other Transaction Documents applicable to such Person and the execution, delivery and performance of each Credit Document and each other Transaction Document, in each case, to be executed by such Person;

 

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(ii)         the incumbency and signatures of its Authorized Officers and any other of its officers, managing member or general partner, as applicable, authorized to act with respect to each Credit Document to be executed by such Person;

 

(iii)        each such Person’s Organization Documents, as amended, modified or supplemented as of Closing Date, with the certificate or articles of incorporation or formation certified by the appropriate officer or official body of the jurisdiction of organization of such Person;

 

(iv)        (A) certificates of good standing with respect to each Credit Party, each dated within a recent date prior to the Closing Date, such certificates to be issued by the appropriate officer or official body of the jurisdiction of organization of such Credit Party, which certificate shall indicate that such Credit Party is in good standing in such jurisdiction, and (B) certificates of good standing with respect to each Credit Party, each dated within a recent date prior to the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions where such Credit Party is qualified to do business as a foreign entity and conducts material business operations, which certificates shall indicate that such Credit Party is in good standing in such jurisdictions,

 

which certificates shall provide that each Secured Party may conclusively rely thereon until it shall have received a further certificate of a General Counsel, other duly authorized officer, managing member or general partner, as applicable, of any such Person canceling or amending the prior certificate of such Person as provided in Section 8.01(k).

 

(h)          Other Documents and Certificates.  The Administrative Agent shall have received the following documents and certificates, each of which shall be dated the Closing Date and properly executed by an Authorized Officer of each applicable Credit Party, in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:

 

(i)          a certificate of an Authorized Officer of the Borrower, certifying as to such items as reasonably requested by the Administrative Agent, including without limitation:

 

(A)         the consummation of the Transactions, all in accordance with Applicable Laws and the Transaction Documents;

 

(B)         the receipt of all required approvals and consents of all Governmental Authorities and other third parties with respect to the consummation of the Transactions (if any) and the transactions contemplated by the Transaction Documents; and

 

(C)         the names of each of the officers and directors of each Credit Party as of the Closing Date.

 

(ii)         a Perfection Certificate of each Credit Party.

 

(i)          Solvency Certificate.  The Administrative Agent shall have received a Solvency Certificate of the chief financial officer of the Borrower, on behalf of the Credit Parties, confirming the Solvency of the Credit Parties and their Subsidiaries after giving effect to the Transactions.

 

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(j)          Financial Information. The Administrative Agent shall have received (or in the case of clause (i) below, made available to the Administrative Agent through the materials filed with the SEC) the following documents and reports (each in form and substance reasonably satisfactory to the Administrative Agent):

 

(i)          the Historical Financial Statements;

 

(ii)         the forecasted financial projections of the Credit Parties (including adjustments to Consolidated Adjusted EBITDA and projections for Consolidated Capital Expenditures) for the fiscal years 2018-2020 as of the Closing Date along with a pro forma balance sheet of the Borrower and its Subsidiaries giving effect to the Transactions; and

 

(iii)        a detailed sources and uses statement which reflects (A) the sources of all funds to be used by the Credit Parties to consummate the Transactions and to pay all transaction expenses incurred in connection therewith (including the fees, costs and expenses due and payable pursuant to the Fee Letter, Sections 4.01 and 12.05) and (B) all uses of such funds, which sources and uses shall be attached as an exhibit to the Notice of Borrowing delivered pursuant to Section 6.01(a).

 

(k)          Insurance. The Administrative Agent shall have received a certificate of insurance, together with the endorsements thereto, in each case, as to the insurance required by Section 8.03, in form and substance reasonably satisfactory to Administrative Agent.

 

(l)          Payment of Outstanding Indebtedness. (A) On the Closing Date, the Credit Parties and each of their respective Subsidiaries shall have no outstanding Indebtedness other than the Loans hereunder and the Indebtedness (if any) listed on Schedule 7.24, and the Administrative Agent shall have received copies of all documentation and instruments evidencing the discharge of all Indebtedness paid off in connection with the Transactions on the Closing Date, and (B) all Liens (other than Permitted Liens) securing payment of any such Indebtedness shall have been released and the Administrative Agent shall have received pay-off letters and all form UCC-3 termination statements and other instruments as may be reasonably requested by Administrative Agent in connection therewith. The terms, maturity and subordination of any indebtedness listed on Schedule 7.24 shall be satisfactory to the Administrative Agent.

 

(m)          Material Adverse Effect. There has been no Material Adverse Effect, since December 31, 2017.

 

(n)          Fees and Expenses. Each of the Administrative Agent and each Lender shall have received, for its own respective account, (i) all fees and expenses due and payable to such Person under the Fee Letter, and (ii) the reasonable fees, costs and expenses due and payable to such Person pursuant Sections 4.01 and 12.05 (including the reasonable and documented fees, disbursements and other charges of counsel) for which invoices have been presented at least one (1) Business Day prior to the Closing Date.

 

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(o)          Patriot Act Compliance. The Administrative Agent shall have received, at least 5 Business Days prior to the Closing Date, all documentation and other information required by banking regulatory authorities under applicable “know your customer” and Anti-Money Laundering Laws, rules and regulations, and any required Patriot Act compliance, the results of which are satisfactory to Administrative Agent in its sole discretion.

 

(p)          No Adverse Actions. The Administrative Agent shall be reasonably satisfied that there is no action or proceeding before any court or Governmental Authority, litigation or investigation, pending or threatened in writing against the Borrower or any other Credit Party, or any of their respective Subsidiaries wherein an unfavorable judgment, decree or order would (w) prevent the consummation of any of the Transactions, (x) declare unlawful any of the Transactions, (y) reasonably be expected to cause any of the Transactions to be rescinded, or (z) result in damages owing by ACF in connection with the consummation of the Transactions.

 

(q)          Background Checks. The Administrative Agent shall have received satisfactory background checks on key members of the Borrower.

 

(r)          Borrowing Base Certificate. Administrative Agent shall have received (i) an audit of Eligible Receivables and an Acceptable Appraisal of the Eligible Inventory, Equipment and Real Property, in each case the results of which shall be satisfactory to Administrative Agent and (ii) an acceptable Borrowing Base Certificate executed by the Chief Financial officer of the Borrower.

 

(s)          2019 Convertible Notes Repurchase Blocked Account. The Administrative Agent shall have received (i) satisfactory evidence of the formation of the 2019 Convertible Notes Repurchase Blocked Account and (ii) a Control Agreement, in form and substance satisfactory to the Administrative Agent for such 2019 Convertible Notes Repurchase Blocked Account.

 

Section 6.02         Conditions Precedent to all Credit Extensions.

 

(a)          No Default; Representations and Warranties. The agreement of each Lender to make any Loan requested to be made by it on any date is subject to the satisfaction of the condition precedent that at the time of each such Credit Extension and also after giving effect thereto, and in the case of the Credit Extensions on the Closing Date, both before and after giving effect to the consummation of the Transactions: (i) no Default or Event of Default shall have occurred and be continuing, (ii) all representations and warranties made by each Credit Party contained herein or in the other Credit Documents shall be true and correct in all material respects (except in the case of the initial Credit Extensions to occur on the Closing Date, in which case all representations and warranties made by each Credit Party contained herein or in the other Credit Documents shall be true and correct in all respects), in each case, with the same effect as though such representations and warranties had been made on and as of the date of such Credit Extension (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date); provided, that any representation or warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects on such respective dates, and (iii) no injunction, writ, restraining order, or other order of any nature restricting or prohibiting, directly or indirectly, such Credit Extension shall have been issued and remain in force by any Governmental Authority against the Borrower, the Administrative Agent, any Lender. The acceptance of the benefits of each Credit Extension shall constitute a representation and warranty by each Credit Party to each of the Lenders that all the applicable conditions specified above are satisfied as of that time.

 

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(b)          Borrowing Base Certificate. Prior to the making of each Loan, the Administrative Agent shall have received an executed Borrowing Base Certificate.

 

(c)          Notice of Borrowing. Prior to the making of each Loan, the Administrative Agent shall have received a Notice of Borrowing (whether in writing or by telephone) meeting the requirements of Section 2.05(a).

 

Article VII

Representations, Warranties and Agreements

 

In order to induce the Lenders to enter into this Agreement, make the Loans as provided for herein, the Credit Parties make the following representations and warranties as of the Closing Date and as of the date of making of each Loan thereafter, all of which shall survive the execution and delivery of this Agreement:

 

Section 7.01         Corporate Status. Each Credit Party and each of their Subsidiaries (a) is a duly organized or formed and validly existing corporation or other registered entity in good standing under the laws of the jurisdiction of its organization and has the corporate or other organizational power and authority to own its property and assets and to transact the business in which it is engaged and (b) has duly qualified and is authorized to do business and is in good standing in all jurisdictions where it does business or owns assets, except where the failure to be so qualified, authorized or in good standing could not reasonably be expected to result in a Material Adverse Effect.

 

Section 7.02         Corporate Power and Authority. Each Credit Party has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Credit Documents to which it is a party and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Credit Documents to which it is a party. Each Credit Party has duly executed and delivered the Credit Documents and each other Transaction Document to which it is a party and such Transaction Documents constitute the legal, valid and binding obligation of such Credit Party enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law).

 

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Section 7.03         No Violation. None of (a) the execution, delivery and performance by any Credit Party of the Credit Documents to which it is a party and compliance with the terms and provisions thereof, (b) the consummation of the Transactions, or (c) the consummation of the other transactions contemplated hereby or thereby on the relevant dates therefor will (i) contravene any applicable provision of any material Applicable Law of any Governmental Authority, (ii) result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of any Credit Party (other than Permitted Liens and Liens created under the Credit Documents) pursuant to, (A) the terms of any material indenture, loan agreement, lease agreement, mortgage or deed of trust (for the avoidance of doubt, including but not limited to, the Second Lien Loan Documents), or (B) any other Material Contracts, in the case of either clause (A) and (B) to which any Credit Party is a party or by which it or any of its property or assets is bound or (iii) violate any provision of the Organization Documents any Credit Party, except with respect to any conflict, breach or contravention or default (but not the creation of Liens) referred to in clauses (ii)(A) or (ii)(B), to the extent that such conflict, breach, contravention or default could not reasonably be expected to have a Material Adverse Effect.

 

Section 7.04         Litigation, Labor Controversies, etc. There is no litigation, action, proceeding or labor controversy (including without limitation, strikes, lockouts or slowdowns) against the Credit Parties or any of their respective Subsidiaries that is pending or, to the knowledge of any Credit Party, threatened in writing (a) except as disclosed in Schedule 7.04 and other matters that could not reasonably be expected to (x) have a Material Adverse Effect, or (y) result in monetary judgments or relief, individually or in the aggregate, in excess of $1,000,000, or (b) which purports to affect the legality, validity or enforceability of any Credit Document, any Transaction Document or the Transactions.

 

Section 7.05          Use of Proceeds; Regulations U and X. The proceeds of the Loans are intended to be and shall be used solely for the purposes set forth in and permitted by Section 8.10. No Credit Party is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of any Credit Extension will be used to purchase or carry margin stock or otherwise for a purpose which violates, or would be inconsistent with Regulation U or Regulation X. No Credit Party and no Subsidiary of any Credit Party owns any margin stock.

 

Section 7.06         Approvals, Consents, etc. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person, and no consent or approval under any contract or instrument (other than (a) those that have been duly obtained or made and which are in full force and effect, or if not obtained or made, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect and (b) the filing of UCC financing statements and other equivalent filings for foreign jurisdictions) is required for the consummation of the Transactions or the due execution, delivery or performance by any Credit Party of any Credit Document to which it is a party, or for the due execution, delivery or performance of the other Transaction Documents, in each case by any of the parties thereto. There does not exist any judgment, order, injunction or other restraint issued or filed with respect to the transactions contemplated by the Transaction Documents, the consummation of the Transactions, the making of any Credit Extension or the performance by the Credit Parties or any of their respective Subsidiaries of their Obligations under the Credit Documents.

 

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Section 7.07         Investment Company Act. No Credit Party is, or will be after giving effect to the Transactions and the transactions contemplated under the Credit Documents, an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940.

 

Section 7.08         Full Disclosure.

 

(a)          In connection with the execution of this Agreement and the Transactions, Credit Parties have disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which any Credit Party or any of its Subsidiaries is subject, and all other matters known to them, that, individually or in the aggregate, could reasonably be expected to have Material Adverse Effect. None of the factual information and data (taken as a whole) at any time furnished by any Credit Party, any of their respective Subsidiaries or any of their respective authorized representatives in writing to the Administrative Agent or any Lender (including all information contained in the representations and warranties, reports, exhibits or otherwise in the Credit Documents but excluding the Budget, any pro forma financial information or projections, which are subject to the requirements of clause (b) below) for purposes of or in connection with this Agreement or any of the Transactions contains any untrue statement of a material fact or omits to state any material fact necessary to make such information and data (taken as a whole) not materially misleading, in each case, at the time such information was provided in light of the circumstances under which such information or data was furnished.

 

(b)          The Budget, pro forma financial information and projections provided pursuant to this Agreement were prepared in good faith based upon assumptions believed by the Credit Parties to be reasonable at the time made in light of then current market conditions, it being recognized by the Agents and the Lenders that such projections as to future events are not to be viewed as facts , are subject to uncertainties and contingencies, and that actual results during the period or periods covered by any such projections are not guaranties of financial performance and may differ from the projected results and such differences may be material.

 

Section 7.09         Financial Condition; No Material Adverse Effect.

 

(a)          The Historical Financial Statements present fairly in all material respects the financial position and results of operations of the Credit Parties at the respective dates of such information and for the respective periods covered thereby, subject in the case of unaudited financial information, to changes resulting from normal year end audit adjustments and to the absence of footnotes. The Historical Financial Statements and all of the balance sheets, all statements of income and of cash flow and all other financial information furnished pursuant to Section 8.01 have been and will for all periods following the Closing Date be prepared in accordance with GAAP consistently applied. All of the financial information furnished pursuant to Section 8.01 presents fairly in all material respects the financial position and results of operations of the Credit Parties at the respective dates of such information and for the respective periods covered thereby, subject in the case of unaudited financial information, to changes resulting from normal year end audit adjustments and to the absence of footnotes.

 

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(b)          There are no material liabilities of any Credit Party of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in any such liabilities, other than those liabilities provided for or disclosed in the most recently delivered financial statements pursuant to Section 8.01.

 

(c)          Since December 31, 2017, there has been no circumstance, event or occurrence, and no fact is known to the Credit Parties that has resulted in or could reasonably be expected to result in a Material Adverse Effect.

 

Section 7.10         Tax Returns and Payments. Each Credit Party has filed all applicable federal and state income Tax returns and all other material Tax returns, domestic and foreign, required to be filed by them and has paid all material Taxes and assessments payable by them that have become due, other than those not yet delinquent or being diligently contested in good faith by appropriate proceedings and by proper proceedings which stay the enforcement of any Lien as to which such Credit Party has maintained adequate reserves in accordance with GAAP.

 

Section 7.11         Compliance with ERISA. Each Pension Plan is in compliance with ERISA, the Code and any Applicable Law; no Reportable Event has occurred (or is reasonably likely to occur) with respect to any Pension Plan; each Pension Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination or opinion letter from the Internal Revenue Service for all required amendments regarding its qualification thereunder that considers the law changes incorporated in the plan sponsor’s most recently expired remedial amendment cycle determined under the provisions of Rev. Proc. 2007-44, and nothing has occurred subsequent to the issuance of such determination letter which would reasonably be expected to prevent, or cause the loss of, such qualification. To the knowledge of the Credit Parties, (i) no Multiemployer Plan is insolvent or in reorganization or in endangered or critical status within the meaning of Section 432 of the Code or Section 4241 or 4245 of Title IV of ERISA (or is reasonably likely to be insolvent or in reorganization), and no written notice of any such insolvency or reorganization has been given to any of the Credit Parties, any of their respective Subsidiaries or any ERISA Affiliate; (ii) no Pension Plan is, or is reasonably expected to be, in “at risk” status (as defined in Section 430 of the Code or Section 303 of ERISA); (iii) no Pension Plan has failed to satisfy the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, including, without limitation, any obligation to make any required installment under Section 430(j) of the Code (whether or not waived in accordance with Section 412(c) of the Code or Section 302(c) of ERISA), (or is reasonably likely to do so); (iv) no failure to make any required contribution to a Multiemployer Plan when due has occurred; (v) none of the Credit Parties, any of their respective Subsidiaries or any ERISA Affiliate has incurred (or is reasonably expected to incur) any liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code or has been notified in writing that it will incur any liability under any of the foregoing Sections with respect to any Plan; (vi) no proceedings have been instituted (or are reasonably likely to be instituted) to terminate or to reorganize any Plan or to appoint a trustee to administer any Plan, and no written notice of any such proceedings has been given to any of the Credit Parties, any of their respective Subsidiaries or any ERISA Affiliate; and (vii) no Lien imposed under the Code or ERISA on the assets of any of the Credit Parties, any of their respective Subsidiaries or any ERISA Affiliate exists (or is reasonably likely to exist) nor have the Credit Parties, any of their respective Subsidiaries or any ERISA Affiliate been notified in writing that such a Lien will be imposed on the assets of any of the Credit Parties, any of their respective Subsidiaries or any ERISA Affiliate on account of any Plan. No Pension Plan has an Unfunded Current Liability that exceeds $1,000,000. No employee welfare benefit plan within the meaning of §3(1) or §3(2)(B) of ERISA of any Credit Party or any of their respective Subsidiaries, provides benefit coverage subsequent to termination of employment except as required by Title I, Subtitle B, Part 6 of ERISA or applicable state insurance laws. No liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA has been, or is reasonably expected to be, incurred. With respect to any Foreign Plan, (a) all employer and employee contributions required by applicable law or by the terms of such Foreign Plan have been made or, if applicable, accrued in accordance with normal accounting practices; (b) the accrued benefit obligations of each Foreign Plan (based on those assumptions used to fund such Foreign Plan) with respect to all current and former participants do not exceed the assets of such Foreign Plan; (c) each Foreign Plan that is required to be registered has been registered and has been maintained in good standing and applicable regulatory authorities; and (d) each Foreign Plan is in compliance in all material respects with applicable law and regulations and with the terms of such Foreign Plan.

 

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Section 7.12         Capitalization and Subsidiaries. Except as set forth on Schedule 7.12 as of the Closing Date and as of the last date such Schedule was required to be updated in accordance with Section 8.01(d), no Credit Party and no Subsidiary of any Credit Party (a) has any Subsidiaries or (b) is engaged in any joint venture or partnership with any other Person. All of the issued and outstanding Capital Stock of each of the Credit Parties and their Subsidiaries is validly issued, fully paid and non-assessable, free and clear of all Liens except those created under the Credit Documents. All such securities were issued in compliance with all Applicable Laws concerning the issuance of securities. Except as set forth in Schedule 7.12, there are no pre-emptive or other outstanding rights to purchase, options, warrants or similar rights or agreements (other than stock options granted to employees) pursuant to which any Credit Party may be required to issue, sell, repurchase or redeem any of its Capital Stock or any Capital Stock of its Subsidiaries.

 

Section 7.13         Intellectual Property; Licenses, etc. Each Credit Party and each of its Subsidiaries owns, or possesses the right to use, all of the material trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights that are reasonably necessary for the operation of their respective businesses. To the knowledge of each Credit Party, neither the use of such intellectual property, nor any slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed by such Credit Party, or any of such Credit Party’s Subsidiaries, infringes upon any intellectual property rights held by any other Person. Except as specifically set forth on Schedule 7.04 and as could not reasonably be expected to have a Material Adverse Effect, no claim or litigation regarding any of the foregoing is pending or, to the knowledge of such Credit Party threatened in writing.

 

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Section 7.14         Environmental. (a) Except as would not reasonably be expected to result in a Material Adverse Effect: (i) the Credit Parties and each of their respective Subsidiaries are in compliance with all Environmental Laws in all jurisdictions in which the Credit Parties or such Subsidiary, as the case may be, are currently doing business (including obtaining, maintaining in full force and effect, and complying with all Permits required under Environmental Laws to operate the business of the Credit Parties and their respective Subsidiaries as currently conducted); (ii) none of the Credit Parties or any of their respective Subsidiaries is subject to any Environmental Claim or any other liability under any Environmental Law that is pending or, to the knowledge of such Credit Party, threatened in writing; (iii) to the knowledge of the Credit Parties, there are no conditions relating to the formerly owned Real Property that could reasonably be expected to give rise to any Environmental Claim against any of the Credit Parties or any of their Subsidiaries and (iv) no Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Claims has attached to any Real Property of any of the Credit Parties or any of their Subsidiaries.

 

(a)          None of the Credit Parties or any of their respective Subsidiaries has treated, stored, transported, Released or disposed of Hazardous Materials at, from, on or under any currently or formerly owned Real Property, facility relating to its business, or, to the knowledge of any Credit Party, any other location, in each case, in a manner that could reasonably be expected to give rise to an Environmental Claim that could result in a Material Adverse Effect.

 

(b)          Each Credit Party has made available to the Administrative Agent copies of all existing material environmental assessment reports, assessments, reviews, audits, correspondence and other documents and data that have a material bearing on actual or potential Environmental Claims or compliance with Environmental Laws, in each case to the extent such reports, assessments, reviews, audits and documents and data are in their possession or reasonable control.

 

(c)          This Section 7.14 contains the sole and exclusive representations and warranties of the Credit Parties with respect to matters arising under or relating to Environmental Laws, Environmental Claims, Hazardous Materials, Releases, or any other environmental, health, or safety matters.

 

Section 7.15         Ownership of Properties. Set forth on Schedule 7.15 is a list of all of the Real Property owned or leased by any of the Credit Parties or their respective Subsidiaries as of the Closing Date and as of the last date such Schedule was required to be updated in accordance with Section 8.01(d), indicating in each case whether the respective property is owned or leased, the identity of the owner or lessor and the location of the respective property. Each Credit Party owns (a) in the case of owned Real Property, good, indefeasible and marketable fee simple title to such Real Property, (b) in the case of owned personal property, good and valid title to such personal property, and (c) in the case of leased Real Property or personal property, valid, subsisting, marketable, insurable and enforceable (except as may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws applicable to creditors’ rights generally and by generally applicable equitable principles, whether considered in an action at law or in equity) leasehold interests (as the case may be) in such leased property, in each case, free and clear in each case of all Liens, except for Permitted Liens.

 

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Section 7.16         No Default. None of the Credit Parties or any of their respective Subsidiaries is in default under or with respect to, or a party to, any Material Contract (copies of which have been received by the Administrative Agent) (other than any such Material Contract in respect of Indebtedness) that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Upon the effectiveness of this Agreement and the other Credit Documents, none of the Credit Parties or any of their respective Subsidiaries is in default under or with respect to any Material Contract in respect of Indebtedness the breach of which could reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continue or would result from the consummation of the transactions contemplated by this Agreement or any other Credit Document.

 

Section 7.17         Solvency. On the Closing Date after giving effect to the Transactions, the Borrower and its Subsidiaries, on a consolidated basis, are Solvent.

 

Section 7.18         [Intentionally Omitted].

 

Section 7.19         Compliance with Laws; Authorizations. Each Credit Party and each of its Subsidiaries (a) has complied and is complying with all Applicable Laws and (b) is in possession of and has all requisite Registrations, governmental licenses, authorizations, consents and approvals required under Applicable Laws, and (c) to the extent due and owing has fully paid all applicable user fees, to operate its business and relating to the Credit Party’s Products as currently conducted except, in each case, to the extent that failure to do so could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 7.20         Contractual or Other Restrictions. Other than the Credit Documents and to the extent permitted by Section 9.10, no Credit Party or any of its Subsidiaries is a party to any agreement or arrangement or subject to any Applicable Law that limits its ability to pay dividends to, or otherwise make Investments in or other payments to any Credit Party, that limits its ability to grant Liens in favor of the Administrative Agent or that otherwise limits its ability to perform the terms of the Credit Documents.

 

Section 7.21         Transaction Documents. All representations and warranties of (a) the Credit Parties set forth in the Transaction Documents and (b) to the best knowledge of the Credit Parties, of each other Person (other than Lenders) party to the Transaction Documents, were true and correct in all material respects as of the time as of which such representations and warranties were made and shall be true and correct in all material respects as of the Closing Date as if such representations and warranties were made on and as of such date (unless such representation or warranty is given as of a specific date). No default or event of default has occurred and is continuing under any Transaction Document. Each Transaction Document is in full force and effect, enforceable against each of the parties thereto (except as may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws applicable to creditors’ rights generally and by generally applicable equitable principles, whether considered in an action at law or in equity), no Transaction Document has been amended or modified except as disclosed to the Administrative Agent on or prior to the Closing Date or otherwise in accordance with Section 9.07, and no waiver or consent has been granted under any such document, except in accordance with Section 9.07. There are no agreements, contracts or other arrangements entered into by any Credit Party or Subsidiary of any Credit Party for the payment of fees, compensation or other similar amounts to any employee or member of the management of any Credit Party.

 

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Section 7.22         Collective Bargaining Agreements. Set forth on Schedule 7.22 is a list and description (including dates of termination) of all collective bargaining or similar agreements between or applicable to any Credit Party or any of its Subsidiaries and any union, labor organization or other bargaining agent in respect of the employees of any Credit Party or any of its Subsidiaries as of the date hereof or as of the last date such schedule was required to be updated in accordance with Section 8.01(d).

 

Section 7.23         Insurance. The properties of each Credit Party are insured with financially sound and reputable insurance companies which are not Affiliates of any Credit Party against loss and damage in such amounts, with such deductibles and covering such risks as are customarily carried by Persons of comparable size and of established reputation engaged in the same or similar businesses and owning similar properties in the general locations where such Credit Party operates, in each case as described on Schedule 7.23 as in effect on the Closing Date.

 

Section 7.24         Evidence of Other Indebtedness. Schedule 7.24 is a complete and correct list of each credit agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness or any extension of credit (or commitment for any extension of credit) to, any Credit Party outstanding on the Closing Date which will remain outstanding after the Closing Date (other than this Agreement and the other Credit Documents), and the aggregate principal or face amount outstanding or that may become outstanding under each such arrangement as of the Closing Date is correctly described in Schedule 7.24.

 

Section 7.25         Deposit Accounts and Securities Accounts. Set forth in Schedule 7.25 is a list of all of the deposit accounts and securities accounts of each Credit Party, including, with respect to each bank or securities intermediary at which such accounts are maintained by such Credit Party (a) the name and location of such Person and (b) the account numbers of the deposit accounts or securities accounts maintained with such Person, in each case, as of the Closing Date and as of the last date such Schedule was required to be updated in accordance with Section 8.01(d).

 

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Section 7.26         Foreign Assets Control Regulations; Anti-Money Laundering and Anti-Corruption Practices. Each Credit Party and each Subsidiary of each Credit Party is (x) in compliance with all U.S. economic sanctions laws, executive orders and implementing regulations (“Sanctions”) as promulgated by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), and (y) in compliance in all material respects with all applicable anti-money laundering and counter-terrorism financing provisions of the Bank Secrecy Act and all regulations issued pursuant to it. No Credit Party and no Subsidiary or Affiliate of a Credit Party (i) is a Person designated by the U.S. government on the list of the Specially Designated Nationals and Blocked Persons (the “SDN List”) with which a U.S. Person cannot deal with or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of U.S. economic sanctions laws such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person or (iii) is controlled by (including without limitation, by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person or entity on the SDN List or a foreign government that is the target of U.S. economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Credit Document would be prohibited under U.S. law. Each Credit Party and each Subsidiary of each Credit Party is in compliance in all material respects with all applicable Anti-Corruption Laws. None of the Credit Parties or any Subsidiary thereof, nor to the knowledge of the Borrower, any director, officer, agent, employee, or other person acting on behalf of a Credit Party or any Subsidiary, has taken any action, directly or indirectly, that would result in a violation in any material respect of applicable Anti-Corruption Laws. Each Credit Party and each Subsidiary of a Credit Party has instituted and will continue to maintain policies and procedures designed to promote compliance with Applicable Anti-Corruption laws.

 

Section 7.27         Patriot Act. The Credit Parties, each of their Subsidiaries and each of their controlled Affiliates are in compliance in all material respects with (a) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (b) the Patriot Act and (c) other federal or state laws relating to “know your customer” and Anti-Money Laundering Laws, rules and regulations. No part of the proceeds of any Loan will be used directly or indirectly for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.

 

Section 7.28         Status as Senior Debt; Second Lien Loan Documents.

 

(a)          The Obligations constitute “Senior Debt” or “First Lien Debt” or any similar designation under and as defined in any agreement governing the Second Lien Credit Agreement and the lien subordination provisions set forth in the Intercreditor Agreement are legally valid and enforceable against the parties thereto, subject to customary exceptions.

 

(b)          As of the Closing Date, the Borrower has delivered to the Administrative Agent a complete and correct copy of the Second Lien Loan Documents (including all schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection therewith).

 

Section 7.29         Flood Insurance. Borrower and its Subsidiaries maintain, if available, fully paid flood hazard insurance on all Real Property that is located in a special flood hazard area and that constitutes Collateral, on such terms and in such amounts as required by Flood Insurance Laws or as otherwise reasonably required by the Administrative Agent.

 

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Section 7.30         Location of Collateral; Equipment List. Schedule 7.30 lists:

 

(a)          all places at which Records relating to the Collateral, including, but not limited to, all Documents and Instruments relating to Receivables and Inventory, are maintained by Borrower or by any other Person;

 

(b)          except for In-Transit Inventory, all places where Credit Parties maintain, or will maintain, Inventory, and whether the premises are owned or leased by Credit Parties or whether the premises are the premises of a warehouseman, bailee or other third party, and if owned by a third party, the name and address of such third party; and

 

(c)          subject to Section 9.15, all places where the Credit Parties’ equipment is located and whether the premises are owned or leased by Credit Parties or whether the premises are the premises of a warehouseman, bailee or other third party, and if owned by a third party, the name and address of such third party.

 

Section 7.31         Regulatory Matters.

 

(a)          Schedule 7.31 sets forth, as of the Closing Date, a complete and correct list of all material Registrations held by each Credit Party and its Subsidiaries. Such listed material Registrations are the only material Registrations that are required for the Credit Parties and their Subsidiaries to conduct their respective businesses as presently or previously conducted or as proposed to be conducted. Each Credit Party and its Subsidiaries has, and it and its Products are in conformance with, all Registrations required to conduct its respective businesses as now or currently proposed to be conducted except where the failure to have such Registrations would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. To the knowledge of each Credit Party and its Subsidiaries, neither the FDA nor other Governmental Authority has provided notice of or is considering limiting, suspending, revoking or otherwise restricting such Registrations or changing the regulatory status or marketing classification or labeling or other material parameter affecting the Products of the Credit Parties or any of their respective Subsidiaries. To the knowledge of each Credit Party and its Subsidiaries, there is no false or misleading information or significant omission in any Product application or other submission to the FDA or other Governmental Authority administering Public Health Laws. The Credit Parties and their respective Subsidiaries have fulfilled and performed, in all material respects, their obligations under each material Registration, and, to the knowledge of each Credit Party and its Subsidiaries, no event has occurred or condition or state of facts exists which would constitute a breach or default, or would cause revocation, modification, suspension, or termination of any such Registration. To the knowledge of each Credit Party and its Subsidiaries, no event has occurred or condition or state of facts exists which would present potential product liability related, in whole or in part, to Regulatory Matters. To the knowledge of each Credit Party and its Subsidiaries, any third party that is a manufacturer or contractor for the Credit Parties or any of their respective Subsidiaries is in compliance with all material Registrations required by the FDA or comparable Governmental Authority and all Public Health Laws insofar as they reasonably pertain to the Products of the Credit Parties and their respective Subsidiaries, except to the extent that failure to be in such compliance would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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(b)          All Products researched, developed, investigated, manufactured, prepared, assembled, packaged, tested, labeled, distributed, sold or marketed by or on behalf of the Credit Parties or their respective Subsidiaries that are subject to Public Health Laws, to the knowledge of each Credit Party and its Subsidiaries, have been and are being researched, developed, investigated, manufactured, prepared, assembled, packaged, tested, labeled, distributed, sold and marketed in compliance with the Public Health Laws or any other Applicable Law, including, without limitation, clinical and non-clinical testing, product approval or clearance, current good manufacturing practices, labeling, advertising and promotion, record-keeping, establishment registration and listing, and adverse event reporting, and all other required importation and distribution requirements, except to the extent that failure to be in such compliance would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(c)          No Credit Party nor its Subsidiaries is subject to any material obligation arising under an administrative or regulatory action, proceeding, investigation or inspection by or on behalf of a Governmental Authority, warning letter, notice of violation letter, untitled letter, consent decree, request for information or any other notice or communication, response or commitment made to or with a Governmental Authority with respect to Regulatory Matters, and Public Health Laws, and, to the knowledge of each Credit Party and its Subsidiaries, no such obligation has been threatened in writing. There is no, and there is no act, omission, event, or circumstance of which any Credit Party or any of its Subsidiaries has knowledge that would reasonably be expected to give rise to or lead to, any civil, criminal or administrative action, suit, demand, claim, complaint, hearing, investigation, demand letter, warning letter, FDA Form 483, penalty, fine, reprimand, sanction, data integrity review, proceeding or request for information pending against any Credit Party or its Subsidiaries, and, to each Credit Party’s and its Subsidiary’s knowledge, no Credit Party nor its Subsidiaries has any liability (whether actual or contingent) for failure to comply with any Public Health Laws. There has not been any violation of any Public Health Laws by any Credit Party or its Subsidiaries in its Product research or development efforts, testing submissions, record keeping, importation, and reports to the FDA, DEA or any other Governmental Authority that could reasonably be expected to require or lead to investigation, corrective action or enforcement, regulatory or administrative action that would reasonably be expected, in the aggregate, to have a Material Adverse Effect. To the knowledge of each Credit Party and each of their respective Subsidiaries, there are no civil or criminal proceedings relating to any Credit Party or any of its Subsidiaries or any officer, director or employee of any Credit Party or Subsidiary of any Credit Party that involve an alleged violation of any Public Health Law.

 

(d)          As of the Closing Date, no Credit Party nor its Subsidiaries is undergoing any inspection related to Regulatory Matters, or any other Governmental Authority investigation, except as set forth on Schedule 7.31; nor are there any uncompleted corrective or preventative actions resulting from any FDA cGMP inspections related to a Product during the period of the last three calendar years.

 

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(e)          During the period of three calendar years immediately preceding the Closing Date, no Credit Party nor any Subsidiary of any Credit Party has introduced into commercial distribution any Products manufactured by or on behalf of any Credit Party or any Subsidiary of a Credit Party or distributed any products on behalf of another manufacturer that were upon their shipment by any Credit Party or any of its Subsidiaries knowingly adulterated or misbranded in violation of 21 U.S.C. § 331. No Credit Party nor any Subsidiary of any Credit Party has received any notice of communication from any Governmental Authority alleging material noncompliance with any Applicable Law. No Product has been seized, withdrawn, recalled (voluntary or otherwise), detained, or subject to a suspension (other than in the ordinary course of business) relating to research, testing, manufacturing, distribution, or commercialization activity, and there are no facts or circumstances reasonably likely to cause (i) the seizure, denial, withdrawal, recall (voluntary or otherwise), detention, public health notification, safety alert or suspension of manufacturing or other activity relating to any Product; (ii) a change in the labeling of any Product suggesting a compliance or safety issue or risk; or (iii) a termination, seizure or suspension of manufacturing, researching, distributing or marketing of any Product. No proceedings in the United States or any other jurisdiction seeking the withdrawal, recall (voluntary or otherwise), revocation, suspension, import detention, or seizure of any Product are pending or threatened in writing against any Credit Party or any of its Subsidiaries.

 

(f)          No Credit Party nor any Subsidiary of any Credit Party nor any of their respective officers, directors or employees or, to the knowledge of each Credit Party and its Subsidiaries, agents or contractors (i) have been excluded or debarred from any federal healthcare program (including without limitation Medicare or Medicaid) or any other federal program or (ii) have received notice from the FDA or any other Governmental Authority with respect to debarment or disqualification of any Person that would reasonably be expected to have, in the aggregate, a Material Adverse Effect. No Credit Party nor any Subsidiary of any Credit Party nor any of their respective officers, directors or employees or, to the knowledge of each Credit Party and its Subsidiaries, agents or contractors have been convicted of any crime or engaged in any conduct for which (x) debarment is mandated or permitted by 21 U.S.C. § 335a or (y) such Person could be excluded or otherwise deemed ineligible from participating in the federal health care programs under Section 1128 of the Social Security Act or any similar law. No officer and to the knowledge of each Credit Party and its Subsidiaries, no employee or agent of any Credit Party or its Subsidiaries, has (A) made any untrue statement of material fact or fraudulent statement to the FDA or any other Governmental Authority; (B) failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Authority; or (C) committed an act, made a statement, or failed to make a statement that would reasonably be expected to provide the basis for the FDA or any other Governmental Authority to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” as set forth in 56 Fed. Reg. 46191 (September 10, 1991); or (D) been investigated by FDA or any other Governmental Authority, including but not limited to the Office of the Inspector General for the Department of Health and Human Services, or the Department of Justice, for data or healthcare program fraud. Neither Credit Party or any of its subsidiaries, nor any of their respective officers, directors, employees, or, to their knowledge, contractors, have made or offered any payment, gratuity, or other thing of value that is prohibited by any Applicable Law to personnel of the FDA or any other Governmental Authority.

 

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(g)          [Intentionally Omitted].

 

(h)          Except as set forth on Schedule 7.31: (i) each Credit Party and its Subsidiaries and, to their knowledge, their respective contract manufacturers are, and have been for the past three calendar years, in compliance with, and each Product in current commercial distribution has been and is imported, researched, manufactured, tested, processed, prepared, packaged, labeled, marketed, stored and held in compliance with, the current Good Manufacturing Practice regulations set forth in 21 C.F.R. Parts 210 and 211, as applicable, (ii) each Credit Party and its Subsidiaries has been and is in compliance with the written standard operating procedures, record-keeping and reporting requirements implemented by Credit Party or its subsidiaries or required by the FDA or any comparable Governmental Authority pertaining to the Product, including but not limited to reporting of adverse events involving the Products, (iii) all Products are and have been labeled, promoted, marketed, and advertised in accordance with their Registration and approved labeling, and (iv) each Credit Party and its Subsidiaries’ establishments are registered with the FDA and each Product is listed with the FDA under the applicable FDA regulations except, in each case, to the extent that failure to be in such compliance would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(i)          There are no civil, criminal, or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, proceedings, demand letters, or other communications relating to any alleged hazard or alleged defect in design, manufacture, materials, or workmanship, including, without limitation, any failure to warn or alleged breach of express or implied warranty or representation, relating to any Product provided by the Credit Party or its Subsidiaries, or alleging that any Products are otherwise unsafe or ineffective for their intended use, that are presently pending or threatened in writing. Since January 1, 2013, neither any Credit Party nor its Subsidiaries have made any modification to any Product because of warranty, product liability, regulatory, or other claims or communications concerning alleged hazards or defects in such product, that has had or would reasonably be expected to have a Material Adverse Effect.

 

(j)          The Credit Party and its Subsidiaries have timely filed all reports, documents, applications, notices, Permits, and copies of any contracts required by any Applicable Laws to be filed or furnished to any Governmental Authority, including, without limitation, the FDA, DEA and state agencies, except where the failure to so timely file would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Such reports, documents, applications, notices, Permits, and copies of any contracts were complete and correct in all respects on the date filed (or were corrected in or supplemented by a subsequent filing such that no liability exists in respect to the Credit Party or its Subsidiaries with respect to such filings or lack thereof), except as would not reasonably be expected to have a Material Adverse Effect.

 

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Article VIII

Affirmative Covenants

 

The Credit Parties hereby covenant and agree that on the Closing Date and thereafter, until the Total Commitments have been terminated and the Loans and all other Obligations incurred hereunder (other than Unasserted Contingent Obligations) are paid in full in accordance with the terms of this Agreement:

 

Section 8.01         Financial Information, Reports, Notices and Information. The Credit Parties will furnish each Agent for further distribution to each Lender copies of the following financial statements, reports, notices and information, provided, that as to any information contained in materials filed with the SEC, the Borrower shall not be separately required to furnish such information under Sections 8.01(b) and (c) below):

 

(a)          Monthly Financial Statements. As soon as available and in any event within thirty (30) days after the end of each month, (i) (x) unaudited consolidated balance sheets of the Borrower and its Subsidiaries as of the end of such month, and (y) unaudited consolidated statements of income and cash flow of the Borrower and its Subsidiaries as of the end of such month and for the portion of the fiscal year then ended, in each case, including in comparative form the figures for the corresponding month in the preceding fiscal year of Borrower, and year-to-date portion of, the immediately preceding fiscal year of Borrower, (ii) a schedule of Consolidated Adjusted EBITDA for the year-to-date portion of such fiscal year ending concurrently with such month, including, in comparative form Consolidated Adjusted EBITDA, for the same year-to-date period in the immediately preceding fiscal year and (iii) a monthly liquidity forecast in a form reasonably acceptable to Administrative Agent.

 

(b)          Quarterly Financial Statements. As soon as available and in any event within forty-five (45) days after the end of each of the first three (3) fiscal quarters of Borrower, (i)(A) unaudited consolidated balance sheets of the Borrower and its Subsidiaries as of the end of such fiscal quarter, and (B) unaudited consolidated statements of income and cash flow of the Borrower and its Subsidiaries for such fiscal quarter, in each case, and for the period commencing at the end of the previous fiscal year of Borrower and ending with the end of such fiscal quarter, including (in each of clause (A) and (B)), in comparative form to the figures for the corresponding fiscal quarter in, and year-to-date portion of, the immediately preceding fiscal year of Borrower, certified as complete and correct by an Authorized Officer of the Borrower, (ii) a schedule of Consolidated Adjusted EBITDA (A) for the year-to-date portion of such fiscal year of Borrower ending concurrently with such fiscal quarter, including, in comparative form for the same year-to-date period in the immediately preceding fiscal year of Borrower and (B) commencing with the fiscal quarter ending September 30, 2019, for the Test Period ending concurrently with such fiscal quarter, including, in comparative form for the Test Period immediately preceding such reported period, and (iii) a management discussion and analysis (with reasonable detail and specificity) of the results of operations for the fiscal periods reported, including, in comparative form the figures for the corresponding fiscal quarter in, and year-to-date portion of, the immediately preceding fiscal year of Borrower, and a comparison to projections for such fiscal quarter, and period commencing at the end of the previous fiscal year of Borrower and ending with the end of such fiscal quarter.

 

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(c)          Annual Financial Statements. As soon as available and in any event within ninety (90) days after the end of each fiscal year of Borrower, (i) copies of the consolidated balance sheets of the Borrower and its Subsidiaries, and the related consolidated and consolidating statements of income and cash flows of the Borrower and its Subsidiaries for such fiscal year, setting forth in comparative form the figures for the immediately preceding fiscal year, such consolidated statements to be audited and certified accompanied by a report and unqualified opinion of Deloitte or another independent firm of certified public accountants of nationally recognized standing reasonably acceptable to the Administrative Agent (which report and opinion shall (x) state that such financial statements present fairly in all material respects the financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior years and (y) not be subject to any “going concern” or like qualifications or exceptions or any qualifications or exception as to the scope of the audit), together with a management discussion and analysis (with reasonable detail and specificity) of the results of operations for the fiscal periods reported and (ii) a schedule of Consolidated Adjusted EBITDA for such fiscal year, including, in comparative form for the same year to date period in the immediately preceding fiscal year.

 

(d)          Compliance Certificates. Concurrently with the delivery of the financial information pursuant to clauses (b) and (c) above, a Compliance Certificate, executed by an Authorized Officer of the Borrower, (i) showing compliance with the Financial Performance Covenants and stating that no Default or Event of Default has occurred and is continuing (or, if a Default or an Event of Default has occurred, specifying the details of such Default or Event of Default and the actions taken or to be taken with respect thereto) and containing the applicable certifications set forth in Section 7.09 with respect thereto, (ii) specifying any change in the identity of the Subsidiaries as at the end of such fiscal year or period, as the case may be, from the Subsidiaries identified to the Lenders on the Closing Date or the most recent fiscal year or period, as the case may be, (iii) including a written supplement substantially in the form of Schedules 1-5, as applicable, to the Security Agreement with respect to any assets and property acquired by any Credit Party after the date hereof or since the date of the most recently delivered Compliance Certificate, as applicable, all in reasonable detail, and (iv) to the extent applicable, a written supplement updating Schedules 1.01(b), 1.01(c) (including delivery of copies of (a)(x) each Material Contract entered into since the Closing Date or the most recently delivered Compliance Certificate, as applicable, and (y) each material amendment or modification of any Material Contract entered into since the Closing Date or the most recently delivered Compliance Certificate, as applicable), 7.12, 7.15, 7.22, 7.23, 7.25 and 7.30 (it being agreed that Borrower may deliver at any time and from time to time written supplements to any such Schedules to make the representations and warranties set forth herein or in the Security Agreement, as applicable, true and correct) and each such written supplement shall be deemed to immediately and automatically amend such Schedule as then in effect.

 

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(e)          Collateral Reporting. Borrower shall deliver to Administrative Agent, or shall cause to be delivered to Administrative Agent:

 

(i)          Borrowing Base Certificates. A satisfactorily completed and authenticated certificate in the form of Exhibit B (a “Borrowing Base Certificate”) together with accompanying sales journals, cash receipts journals and detailed sales credit reports (a) contemporaneously with each request for a Loan and (b) on a monthly basis (within thirty (30) days after the end of each month). In addition, Borrower shall provide to Administrative Agent with each Borrowing Base Certificate a report showing in reasonable detail all sales to Account Debtors (i) on consignment or on approval, under all bill and hold, guaranteed sale, sale or return, billing in advance of shipment, and other “pre-billing” arrangements, and (ii) under all payment plans, scheduled installment plans, extended payment terms or on any other repurchase or return basis. Borrower shall also furnish to Administrative Agent adjusted trial balances for the Borrower’s top customers as well as any aging provided by the Borrower’s third-party logistics provider. On Administrative Agent’s request, Borrower shall also furnish to Administrative Agent (i) copies of invoices to customers and related shipping and delivery receipts or warehouse receipts for all Inventory covered by each such invoice and (ii) any additional reports deemed necessary and requested by Administrative Agent as determined in Administrative Agent’s Permitted Discretion.

 

(ii)         A/R and A/P Aging; Perpetual Inventory Report; Bank Statements; Equipment. Monthly, concurrently with the delivery of the Borrowing Base Certificate under 8.01(e)(i), (A) a detailed report of Borrower’s agings of accounts receivable and accounts payable (each, based on the respective invoice dates), (B) a reconciliation to the general ledger with respect to Gross to Net Receivables, accounts payable, Inventory and Equipment, (C) copies of monthly bank statements showing the cash balances of Borrower and its Subsidiaries, (D) a perpetual inventory report and (E) a detailed report regarding Borrower’s Equipment, specifying the net book value thereof.

 

(iii)        Ineligible Collateral. Monthly, concurrently with the delivery of the Borrowing Base Certificate under 8.01(e)(i), a report showing (A) Borrower’s Receivables that are not Eligible Receivables, (B) Borrower’s Inventory that is not Eligible Inventory, including, but not limited to, an analysis of all Inventory of Borrower for which the Value of each item of such Inventory exceeds the average Value of such item for the preceding twelve (12) consecutive calendar months, (C) Borrower’s Equipment that is not Eligible Equipment and (D) Borrower’s Real Property that is not Eligible Real Property.

 

(iv)        Physical Inventory Report. Annually within fifteen (15) calendar days of the end of each fiscal year, prepared as of such fiscal year end, a report of Borrower’s physical inventory audit conducted as of such date.

 

(f)          Budget. Within thirty (30) days prior to the commencement of each fiscal year of Borrower, commencing with its fiscal year 2019, the forecasted financial projections for the then current fiscal year and the next succeeding fiscal year (on a month-by-month basis, as well as for each following fiscal year to the last Maturity Date, on an annual basis), in each case (including projections for Consolidated Capital Expenditures, a projected consolidated balance sheet of the Borrower and its Subsidiaries as of the end of the following fiscal year, the related consolidated statements of projected cash flow, projected changes in financial position and projected income and a description of the underlying assumptions applicable thereto), in each case, as customarily prepared by management of the Credit Parties for their internal use consistent in scope with the financial statements provided pursuant to Section 8.01(c), setting forth the principal assumptions on which such projections are based (such projections and the projections delivered as of the Closing Date pursuant to Section 6.01(j)(ii), collectively, the “Budget”).

 

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(g)          Defaults. As soon as possible and in any event within five (5) Business Days after an Authorized Officer of the Borrower or any of its Subsidiaries obtains knowledge thereof, notice from an Authorized Officer of the Borrower of (i) the occurrence of any event that constitutes a Default or an Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action the applicable Credit Parties propose to take with respect thereto or (ii) the occurrence of a breach or non-performance of, or any default under, any other Material Contracts of any Credit Party or any Subsidiary of a Credit Party, or any violation of, or non-compliance with any Applicable Laws, in each case, which would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.

 

(h)          Other Litigation. As soon as possible and in any event within five (5) Business Days after an Authorized Officer of the Borrower or any of its Subsidiaries obtains knowledge thereof, notice from an Authorized Officer of the Borrower of (i) the commencement of, or any material development in, any litigation, action, proceeding or labor controversy or proceeding affecting any Credit Party or any Subsidiary of any Credit Party or its respective property (A) in which the amount of damages claimed is $1,000,000 or more, (B) which would reasonably be expected to have a Material Adverse Effect, (C) which purports to affect the legality, validity or enforceability of any Credit Document, any other Transaction Document or (D) in which the relief sought is an injunction or other stay of the performance of this Agreement, any other Credit Document or any Transaction Document or any other document or instrument referred to in Section 9.07, or (ii) the occurrence of any material adverse development with respect to any litigation, action, proceeding or labor controversy described in Schedule 7.04, and, in each case together with a statement of an Authorized Officer of the Borrower, which notice shall specify the nature thereof, and what actions the applicable Credit Parties propose to take with respect thereto, and, to the extent the Administrative Agent requests, copies of all documentation related thereto.

 

(i)          Transaction Documents. As soon as possible and in any event within five (5) Business Days after any Credit Party obtains knowledge of the occurrence of a breach or default or notice of termination by any party under, or material amendment entered into by any party to, any Transaction Document or any other document or instrument referred to in Section 9.07, a statement of an Authorized Officer of the Borrower setting forth details of such breach or default or notice of termination and the actions taken or to be taken with respect thereto and, if applicable, a copy of such amendment.

 

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(j)          Management Letters. Promptly upon, and in any event within five (5) Business Days after, receipt thereof, copies of all “management letters” submitted to any Credit Party by the independent public accountants referred to in Section 8.01(c) in connection with each audit made by such accountants.

 

(k)          Corporate Information. Promptly upon, and in any event within five (5) Business Days after, becoming aware of any additional corporate or limited liability company information or division information of the type delivered pursuant to Section 6.01(f), or of any change to such information delivered on or prior to the Closing Date or pursuant to this Section 8.01 or otherwise under the Credit Documents, a certificate, certified to the extent of any change from a prior certification, from the secretary, assistant secretary, managing member or general partner of such Credit Party notifying the Administrative Agent of such information or change and attaching thereto any relevant documentation in connection therewith.

 

(l)          Other Information. With reasonable promptness, such other information (financial or otherwise) as the Administrative Agent on its own behalf or on behalf of any Lender may reasonably request in writing from time to time.

 

(m)          Insurance Report. Substantially concurrently with the delivery of the financial statements provided for in Section 8.01(c), a report of a reputable insurance broker with respect to insurance policies maintained by the Credit Parties, as the Administrative Agent on its own behalf or on behalf of any Lender may reasonably request in writing from time to time.

 

(n)          Customer and Vendor Lists. On each June 30 and December 31 a list of all of Borrower’s and its Subsidiaries’ customers and vendors, including the addresses, telephone and facsimile numbers of each customer and vendor as of such date.

 

(o)          FDA Notices. Promptly, and in no event later than three (3) Business Days after an Authorized Officer becomes aware thereof, notify and provide copies to the Administrative Agent of any notice and related correspondence that (i) the FDA or any other similar Governmental Authority is limiting, suspending or revoking any material Registration, changing the Product Approval, manufacturing process or facilities, distribution pathway or parameters, or label or labeling of the Products of the Credit Parties or their respective Subsidiaries, or considering any of the foregoing; (ii) any Credit Party or any of its Subsidiaries becoming subject to any administrative or regulatory action, including FDA application integrity review, Form FDA 483 observation or other inspection-related or audit documents, warning letter, untitled letter, notice of violation letter, penalty, fine, sanction or reprimand, or other notice, response or commitment made to or with the FDA or any comparable Governmental Authority, or any Product of any Credit Party or any of its Subsidiaries being seized, withdrawn, recalled (voluntarily or otherwise), detained, or subject to a suspension of manufacturing, or the commencement of any proceedings in the United States or any other jurisdiction seeking the withdrawal, recall (voluntary or otherwise), suspension, import detention, or seizure of any Product are pending or threatened in writing against the Credit Parties or their respective Subsidiaries; and (iii) any voluntary withdrawal or recall of any Product by any Credit Party or any of its Subsidiaries in an aggregate amount of $500,000 or which would, in the aggregate, have a Material Adverse Effect.

 

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(a)          2019 Convertible Notes Repurchase Documentation. Promptly, and in any event not later than three (3) Business Days after each 2019 Convertible Notes Repurchase, (i) cause the 2019 Convertible Notes so repurchased to be delivered to the trustee and cancelled and (ii) provide all information and documentation available to the Borrower relating to such 2019 Convertible Notes Repurchase and such cancellation to the Administrative Agent.

 

Section 8.02         Books, Records and Inspections. The Borrower will, and will cause each of its Subsidiaries to, maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP consistently applied shall be made of all material financial transactions and matters involving the assets and business of the Credit Parties or such Subsidiary, as the case may be. The Borrower will, and will cause each of its Subsidiaries to, permit representatives and independent contractors of the Administrative Agent to visit and inspect any of its properties (to the extent authorized pursuant to any leases for such properties), to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom (subject to applicable confidentiality agreements or undertakings and copyright laws), and to discuss its affairs, finances and accounts with its directors and officers (provided, that an authorized representative of the Credit Parties shall allowed to be present and that any such inspection of properties shall not include any invasive or physically intrusive environmental sampling), all at the expense of the Credit Parties and (unless an Event of Default then exists) as often as the Administrative Agent may reasonably request at reasonable times during normal business hours, upon reasonable advance notice to the Credit Parties; provided that during any calendar year, absent the continuation of an Event of Default, reasonable expenses of a reasonable number of people in connection with only one (1) inspection by Administrative Agent shall be at the Borrower’s expense and reimbursable under this Agreement. Any information obtained by the Administrative Agent pursuant to this (a) may be shared with the Administrative Agent or any Lender upon the request of such Secured Party.

 

Section 8.03         Maintenance of Insurance.

 

(a)          The Borrower will, and will cause each of its Subsidiaries to, at all times maintain in full force and effect, with insurance companies that the Borrower believes (in its reasonable business judgment) are financially sound and reputable at the time the relevant coverage is placed or renewed, insurance in at least such amounts and against at least such risks (and with such risk retentions) as are usually insured against in the same general area by companies engaged in businesses similar to those engaged in by the Credit Parties; and will furnish to the Administrative Agent for further delivery to the Lenders, upon written request from the Administrative Agent, information presented in reasonable detail as to the insurance so carried, including (i) endorsements to (A) all “All Risk” policies naming the Administrative Agent, on behalf of the Secured Parties, as loss payee and (B) all general liability and other liability policies naming the Administrative Agent, on behalf of the Secured Parties, as additional insured and (ii) legends providing that no cancellation, material reduction in amount or material change in insurance coverage thereof shall be effective until at least thirty (30) days after receipt by the Administrative Agent of written notice thereof.

 

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(b)          Within forty-five (45) days after the Closing Date, the Borrower shall have delivered to the Administrative Agent copies of each insurance policy (or binders in respect thereof), in form and substance reasonably satisfactory to the Administrative Agent.

 

(c)          Without limiting the foregoing, the Borrower will, and will cause each of its Subsidiaries to, (i) maintain, if available, fully paid flood hazard insurance on all owned or leased Real Property that is located in a special flood hazard area and that constitutes Collateral, on such terms and in such amounts as required by Flood Insurance Laws or as otherwise reasonably required by the Administrative Agent or any Lender, (ii) furnish to the Administrative Agent evidence of the renewal (and payment of renewal premiums therefor) of all such policies prior to the expiration or lapse thereof, and (iii) furnish to the Administrative Agent prompt written notice of any redesignation of any such owned or leased improved Real Property into or out of a special flood hazard area.

 

Section 8.04         Payment of Taxes. The Credit Parties will pay and discharge, and will cause each of their respective Subsidiaries to pay and discharge, all material Taxes payable by them that have become due, other than those not yet delinquent or being diligently contested in good faith and by proper proceedings which stay the enforcement of any Lien as to which such Credit Party has maintained adequate reserves in accordance with GAAP.

 

Section 8.05         Maintenance of Existence; Compliance with Laws, etc.

 

(a)          Each Credit Party will, and will cause its Subsidiaries to, (a) preserve and maintain in full force and effect its organizational existence and good standing under the laws of its jurisdiction of incorporation, organization or formation as applicable, except as permitted by Section 9.03, and (b) preserve and maintain its good standing under the laws of each state or other jurisdiction where such Person is required to be so qualified, to do business as a foreign entity except, in the case of this clause (b) where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

(b)          Each Credit Party shall, and shall cause each of its Subsidiaries to, comply with all Applicable Laws and Permits (including without limitation, all Registrations) of any Governmental Authority having jurisdiction over it, its business or its Products, except where such failures to comply would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Without limiting the generality of the foregoing, each Credit Party and its Subsidiaries shall comply with all material Public Health Laws and their implementation by any applicable Governmental Authority and all lawful requests of any Governmental Authority applicable to its Products. All Products developed, manufactured, tested, distributed or marketed by any Credit Party or any of its Subsidiaries that are subject to the jurisdiction of the FDA or comparable Governmental Authority shall be developed, tested, manufactured, distributed and marketed in compliance with the Public Health Laws and any other Applicable Laws, including, without limitation, product approval or premarket notification, good manufacturing practices, labeling, advertising, record-keeping, and adverse event reporting, and have been and are being tested, investigated, distributed, marketed, and sold in compliance with Public Health Laws and all other Applicable Laws.

 

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Section 8.06         Environmental Compliance.

 

(a)          Each Credit Party will, and will cause its Subsidiaries to, use and operate all of its and their facilities and Real Property in compliance with all Environmental Laws, keep all necessary permits, approvals, certificates, licenses and other authorizations relating to environmental matters in effect and remain in compliance therewith, and handle all Hazardous Materials in compliance with all Environmental Laws, and keep its and their Real Property free of any Lien imposed by any Environmental Law, in each case, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

(b)          The Borrower will promptly give notice to the Administrative Agent upon any Credit Party or Subsidiary thereof becoming aware of: (i) any violation by any Credit Party or any of its Subsidiaries of any Environmental Law which could reasonably be expected to result in a Material Adverse Effect, (ii) any proceeding against or investigation of any Credit Party under any Environmental Law, including a written request for information or a written notice of violation or potential environmental liability from any Governmental Authority or any other Person, which could reasonably be expected to result in a Material Adverse Effect, (iii) the occurrence or discovery of a new Release or new threat of a Release (or discovery of any Release or threat of a Release previously undisclosed by any Credit Party to Administrative Agent) at, on, under or from any of the Real Property of any Credit Party or any facility or assets therein in excess of reportable or allowable standards or levels under any Environmental Law, or under circumstances, or in a manner or amount which could reasonably be expected to result in a Material Adverse Effect, or (iv) any Environmental Claim arising or existing on or after the Closing Date which could reasonably be expected to result in a Material Adverse Effect.

 

(c)          In the event of a Release of any Hazardous Material on any Real Property of any Credit Party which could reasonably be expected to result in material liability on the part of any Credit Party under any Environmental Law, such Credit Party, upon discovery thereof, shall take all necessary steps to initiate and expeditiously complete all response, corrective and other action to mitigate and resolve any such violation or potential liability in accordance with and to the extent required of such Credit Party under Environmental Law, and shall keep the Administrative Agent informed on a regular basis of their actions and the results of such actions; provided, however, that no Credit Party (or its respective Subsidiaries) shall be required to undertake any such response, corrective action or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

 

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(d)          Each Credit Party shall provide the Administrative Agent with copies of any material demand, request for information, notice, submittal, documentation or correspondence received or provided by any Credit Party or any of its Subsidiaries from or to any Governmental Authority or other Person under any Environmental Law. Such notice, submittal or documentation shall be provided to the Administrative Agent promptly and, in any event, within five (5) Business Days after such material is provided to any Governmental Authority or third party.

 

(e)          At the written request of the Administrative Agent, the Borrower shall obtain and provide, at its sole expense, an environmental site assessment (including, without limitation, the results of any groundwater or other testing, conducted at the Administrative Agent’s reasonable request) concerning any Real Property now or hereafter owned, leased or operated by any Credit Party or any of its Subsidiaries, conducted by an environmental consulting firm approved by the Administrative Agent indicating, to the reasonable satisfaction of the Administrative Agent, the likely presence or absence of Hazardous Materials and the potential cost of any required action in connection with any Hazardous Materials on, at, under or emanating from such Real Property; provided, that such request may be made only if (i) there has occurred and is continuing an Event of Default, or (ii) circumstances exist that in the reasonable judgment of the Administrative Agent could be expected to result in a material violation of or material liability under any Environmental Law on the part of any Credit Party or its respective Subsidiaries; provided further, if the Borrower fails to provide the same within ninety (90) days after such request was made, the Administrative Agent may but is under no obligation to conduct the same, and the Credit Parties shall grant and hereby do grant to the Administrative Agent and its agents access to such Real Property and specifically grants the Administrative Agent an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment, all at the Borrower’s sole cost and expense.

 

Section 8.07         ERISA. (a) Promptly after any Credit Party or any Subsidiary of any Credit Party knows or has reason to know of the occurrence of any of the following events (including such events previously disclosed or exempt from disclosure hereunder, to the extent the liability therefor remains outstanding), the Borrower will deliver to the Administrative Agent and each Lender a certificate of an Authorized Officer of the Borrower setting forth details as to such occurrence and the action, if any, that such Credit Party, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices (required, proposed or otherwise) given to or filed with or by such Credit Party, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant (other than notices relating to an individual participant’s benefits) or the Plan administrator and all documentation with respect thereto: that a Reportable Event has occurred; that a failure to satisfy the minimum funding standard of Section 412 of the Code or Section 302 of ERISA (whether or not waived in accordance with Section 412(c) of the Code or Section 302(c) of ERISA) has occurred (or is reasonably likely to occur) or an application is to be made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412, 430 or 431 of the Code with respect to a Plan; the failure to make a required contribution to any Plan if such failure is sufficient to give rise to a Lien under Section 303(k) or 4068 of ERISA or under Section 430(k) of the Code; that a Pension Plan having an Unfunded Current Liability has been or is to be terminated, reorganized or partitioned under Title IV of ERISA (including the giving of written notice thereof); the taking of any action with respect to a Plan which would reasonably be expected to result in the requirement that any Credit Party furnish a bond or other security to the PBGC or such Plan; that a proceeding has been instituted against a Credit Party, a Subsidiary thereof or an ERISA Affiliate pursuant to Section 515 of ERISA to collect a delinquent contribution to a Multiemployer Plan; or that the PBGC has notified any Credit Party, any Subsidiary thereof or any ERISA Affiliate of its intention to appoint a trustee to administer any Plan; or the occurrence of any event with respect to any Plan which could result in the incurrence by any Credit Party or any Subsidiary of any Credit Party of any material liability (including any contingent or secondary liability), fine or penalty.

 

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(a)          Promptly following any request therefor, copies of any documents or notices described in Sections 101(f), 101(k) or 101(l) of ERISA that any Credit Party, any of its Subsidiaries or any ERISA Affiliate may reasonably request with respect to any Plan; provided, that if any Credit Party, any of its Subsidiaries or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Plan, the applicable Credit Party, the applicable Subsidiary(ies) or the ERISA Affiliate(s) shall promptly make a request for such documents or notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof.

 

Section 8.08         Maintenance of Property and Assets. Each Credit Party will, and will cause its Subsidiaries to, maintain, preserve, protect and keep its properties and assets in good repair, working order and condition (ordinary wear and tear excepted and subject to dispositions permitted pursuant to Section 9.04), and make necessary repairs, renewals and replacements thereof and will maintain and renew as necessary all licenses, permits and other clearances necessary to use and occupy such properties and assets, in each case so that the business carried on by such Person may be properly conducted at all times, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

Section 8.09         End of Fiscal Years; Fiscal Quarters. The Credit Parties will, for financial reporting purposes, cause (a) each of their, and each of their Subsidiaries’, fiscal years to end on December 31 of each year and (b) each of their and each of their Subsidiaries’, fiscal quarters to end on dates consistent with such fiscal year-end; provided, that the Credit Parties may change their, and each of their respective Subsidiaries’, fiscal year end (and change the end of the fiscal quarters in a corresponding manner) upon thirty (30) days’ prior written notice to the Administrative Agent.

 

Section 8.10         Use of Proceeds. The proceeds of the Loans shall be used for (a) refinancing Indebtedness pursuant to Section 9.01(b) (other than with respect to the 2023 Convertible Notes), (b) paying fees and expenses incurred in connection with the Transactions, which fees and expenses shall be paid on the Closing Date, and (c) working capital requirements and general corporate purposes of the Borrower and its Subsidiaries, in each case, to the extent not prohibited by this Agreement. The Credit Parties shall not use the proceeds of any Credit Extension made hereunder, or use or allow its respective directors, officers, employees and agents to use, the proceeds of any extension of credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, Anti-Terrorism Laws or Anti-Money Laundering Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Person on the SDN List or (iii) in any manner that would result in the violation of any Sanctions applicable to any party

 

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Section 8.11         Further Assurances; Additional Guarantors and Grantors.

 

(a)          The Credit Parties will and will cause their Subsidiaries to execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust (excluding leasehold deeds of trust) and other documents), which may be required under any Applicable Law, or which the Administrative Agent may reasonably request, in order to grant, preserve, protect and perfect the validity and priority of the security interests created or intended to be created by the Security Agreement, any Mortgage or any other Security Document, all at the sole cost and expense of the Borrower.

 

(b)          Subject to any applicable limitations set forth in the Guarantee Agreement and the Security Agreement, as applicable, the Credit Parties will promptly upon the formation or acquisition thereof (and in any event within thirty (30) days after the formation, division or acquisition thereof (or such later date as agreed by the Administrative Agent)) cause any direct or indirect Subsidiary formed or otherwise purchased or acquired after the Closing Date to execute (i) a supplement to the Guarantee Agreement in the form of Annex I to the Guarantee Agreement or a guarantee in form and substance reasonably satisfactory to Administrative Agent, and (ii) a supplement to the Security Agreement in the form of Annex I to the Security Agreement, or a security agreement in form and substance reasonably satisfactory to Administrative Agent; provided, however, that no Excluded Subsidiary shall be required to execute the documentation described in clauses (i) and (ii) above.

 

(c)          Subject to any applicable limitations set forth in the Security Agreement, the Credit Parties (i) will promptly upon the formation or acquisition thereof (and in any event within thirty (30) days after the formation or acquisition thereof (or such later date as agreed by the Administrative Agent)) pledge to the Administrative Agent for the benefit of the Secured Parties, all the Capital Stock of each Subsidiary Administrative held by such Credit Party in each case, formed or otherwise purchased or acquired after the Closing Date; provided, however, that, with respect to any pledge of the Capital Stock of any Foreign Subsidiary or Domestic Holding Company , such pledge shall be limited to 65% of the issued and outstanding Voting Stock and 100% of the outstanding non-voting Capital Stock of each Foreign Subsidiary and Domestic Holding Company to the extent that providing greater than such amount would result in adverse tax consequences to the Credit Parties, and (ii) will promptly deliver to the Administrative Agent any promissory notes executed after the Closing Date evidencing Indebtedness of any Credit Party or Subsidiary of any Credit Party that is owing to any other Credit Party or any other promissory notes executed after the Closing Date evidencing Indebtedness in excess of $250,000 owing to the Credit Parties.

 

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(d)          Subject to any applicable limitations set forth in any applicable Security Document, if any fee simple interest in Material Real Property is acquired by any Credit Party after the Closing Date, the Borrower will notify the Administrative Agent and the Lenders thereof and will cause such assets to be subjected to a Lien securing the applicable Obligations and will take, and cause the other Credit Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and/or perfect such Liens consistent with the applicable requirements of the Security Documents, including actions described in this Section 8.11, all at the sole cost and expense of the Borrower within 60 days after the acquisition of such Material Real Property (or such longer period as the Administrative Agent may agree). Any Mortgage delivered to the Administrative Agent in accordance with the preceding sentence shall be accompanied by (A) a policy or policies (or unconditional binding commitment thereof) of title insurance issued by a nationally recognized title insurance company insuring the Lien of each Mortgage as a valid Lien (with the priority described therein) on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 9.02, together with such endorsements as the Administrative Agent may reasonably request and (B) if requested by the Administrative Agent, an opinion of local counsel to the applicable Credit Party(ies) in form and substance reasonably satisfactory to the Administrative Agent. In addition to the obligations set forth in Section 8.03(a), the Credit Parties shall, in connection with the grant to the Administrative Agent for the benefit of the Secured Parties of any Mortgage with respect to any Real Property, (X) provide at least twenty (20) days' prior written notice to the Administrative Agent of the contemplated pledge of such Real Property as Collateral, (Y) the Borrower shall provide each of the documents and determinations required by the Real Property Flood Insurance Requirements and (Z) notwithstanding anything to the contrary contained herein or in any other Credit Document, the Administrative Agent shall not enter into, accept or record (and no Credit Party shall be required to grant) any mortgage in respect of such Real Property until the Administrative Agent shall have received written confirmation (which shall, for purposes hereunder, include email) from each Lender that flood insurance compliance has been completed by such Lender with respect to such Real Property (such written confirmation not to be unreasonably withheld or delayed).  Any increase, extension or renewal of this Agreement shall be subject to flood insurance due diligence and flood insurance compliance reasonably satisfactory to the Administrative Agent and each Lender.

 

(e)          Notwithstanding anything herein to the contrary, if the Administrative Agent determines that the cost of creating or perfecting any Lien on any property is excessive in relation to the practical benefits afforded to the Lenders thereby, then such property may be excluded from the Collateral for all purposes of the Credit Documents.

 

(f)          For the avoidance of doubt, for all purposes under this Section 8.11, the formation and acquisition of a Person shall be deemed to include any formations and acquisitions by division; provided that compliance with the requirements of this Section 8.11 shall not cure any Default or Event of Default for the occurrence of such division.

 

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(g)          From and after the Closing Date, any Drug Applications and comparable applications required outside of the United States submitted after the Closing Date for Teligent Products shall be held exclusively by Borrower or a Guarantor that is a Domestic Subsidiary, unless prohibited by applicable law or otherwise approved by the Administrative Agent.

 

Section 8.12         Bank Accounts.

 

(a)          Within 30 days after the Closing Date (or such longer period as the Administrative Agent may agree), the Borrower shall establish and deliver to Administrative Agent a Control Agreement with respect to each of the Credit Parties’ respective securities accounts, deposit accounts and investment property set forth on Schedule 7.25 (other than Excluded Accounts); provided, that, so long as no Event of Default has occurred and is continuing, the Credit Parties may establish new deposit accounts or securities accounts so long as, prior to the time such account is established: (i) the Credit Parties have delivered to the Administrative Agent and Administrative Agent an amended Schedule 7.25 including such account and (ii) the Credit Parties have delivered to Administrative Agent a Control Agreement with respect to such account (other than any Excluded Account).

 

(b)          If, after the occurrence and during the continuance of an Event of Default, any of the Credit Parties receive or otherwise have dominion over or control of any Collections or other amounts, the Borrower shall hold, and shall cause each other Credit Party to hold, such Collections and amounts in trust for the Administrative Agent and shall not commingle such Collections with any other funds of any Credit Party or other Person or deposit such Collections in any account other than those accounts set forth on Schedule 7.25 (unless otherwise instructed by the Administrative Agent).

 

Section 8.13         [Intentionally Omitted].

 

Section 8.14         2019 Convertible Notes Repurchase Blocked Account. $14,399,036.01 from the proceeds of the Loans shall be deposited in the 2019 Convertible Notes Repurchase Blocked Account and the Administrative Agent authorizes and agrees to direct the Second Lien Agent to direct the Disbursement Bank to release the funds deposited in the 2019 Convertible Notes Repurchase Blocked Account upon satisfaction of the release conditions as set forth in the Second Lien Credit Agreement. It is understood and agreed that the release of proceeds of the Loans from the 2019 Convertible Notes Repurchase Blocked Account shall be subject to no conditions other than as set forth in the immediately preceding sentence and the Administrative Agent shall direct the Second Lien Agent to direct the Disbursement Bank to release such funds on the date of satisfying such conditions.

 

Section 8.15         Post-Closing.

 

(a)          Landlord Agreements. Within sixty (60) days of the Closing Date (or such later date approved by Administrative Agent), the Borrower shall use commercially reasonable efforts to obtain and deliver to Administrative Agent a landlord agreement from each lessor of a leased location identified on Schedule 7.15, which agreements shall be reasonably satisfactory in form and substance to Administrative Agent.

 

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(b)          Bailee Waivers. Within sixty (60) days of the Closing Date (or such later date approved by Administrative Agent), the Borrower shall use commercially reasonable efforts to obtain and deliver to Administrative Agent a bailee waiver for each location for which a bailee arrangement is in place, which agreements shall be reasonably satisfactory in form and substance to Administrative Agent.

 

(c)          Stock Certificates. Within three (3) Business Days following the Closing Date (or such later date approved by Administrative Agent), the Administrative Agent shall have received all existing certificates representing securities (if such securities are certificated securities for purposes of Article 8 of the UCC) pledged under the Security Agreement, accompanied by instruments of transfer and undated stock powers endorsed in blank.

 

(d)          Transfer Letters. Within thirty (30) days following the Closing Date (or such later date approved by Administrative Agent), the Administrative Agent shall have received a Transfer Letter (as defined in the Security Agreement) executed in blank covering each pending or issued Drug Application (as defined in the Security Agreement).

 

(e)          Certificate of Occupancy. Within thirty (30) days following the Closing Date (or such later date approved by Administrative Agent), Borrower shall have received a certificate of occupancy from the applicable Governmental Authority in respect of its manufacturing facility in Buena, New Jersey.

 

(f)          Foreign Collateral Documents. Within (i) sixty (60) days for each Credit Party organized under the laws of Canada (or a province thereof) and Luxembourg and (ii) ninety (90) days for each Credit Party organized under the laws of Estonia, in each case following the Closing Date (or such later date as shall be approved by the Administrative Agent), shall deliver the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by an authorized officer of such applicable Credit Party and in form and substance reasonably satisfactory to the Administrative Agent:

 

(A)         a security agreement or similar agreement expressed to be governed by the laws of Canada (or a province thereof), Luxembourg or Estonia, as applicable (as amended, restated, supplemented or otherwise modified from time to time, each a “Foreign Security Instrument”), with respect to which such Credit Party grants or conveys to the Administrative Agent a Lien in the present and future Collateral (or any similarly defined term set forth therein in such agreement) of such Credit Party on substantially similar terms as the Security Agreement but giving effect to any substantive or procedural legal requirements of the applicable jurisdiction, together with:

 

(B)         to the extent applicable, filings in form appropriate for filing in all jurisdictions that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created under each Foreign Security Instrument, covering the Collateral described therein;

 

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(C)         copies of applicable lien searches or equivalent reports, each of a recent date listing all effective lien notices or comparable documents (together with copies of such documents) that name any such Credit Party as debtor and that are filed in those jurisdictions in which any such Credit Party is organized or maintains its principal place of business, in each case, to the extent such searches or reports are available at a reasonable expense in such jurisdiction; and

 

(D)         a stock pledge expressed to be governed by the laws of Canada (or a province thereof), Luxembourg or Estonia, as applicable, with respect to which the parent of such Credit Party grants or conveys to the Administrative Agent a pledge in the stock (or local equivalent) of such Credit Party on substantially similar terms as the Security Agreement but giving effect to any substantive or procedural legal requirements of the applicable jurisdiction.

 

(g)          such certificates of resolutions or other action, incumbency certificates and/or other certificates of authorized officers of each such Credit Party as the Administrative Agent may require evidencing the identity, authority and capacity of each such Credit Party and its authorized officers to act as an authorized officer in connection with the Foreign Security Instrument to which such Credit Party is a party; and

 

(h)          such other documents and certifications as the Administrative Agent may reasonably require to evidence that each Credit Party is duly organized or formed, is validly existing and in good standing and qualified in its jurisdiction of organization or maintains its principal place of business.

 

Section 8.16         Interest Payment Election. If at any time the Borrower has the option to pay interest on the Second Lien Indebtedness in the form of PIK Interest (as opposed to paying such interest in cash), the Borrower shall make such election and make all such interest payments in the form of PIK Interest.

 

Article IX

Negative Covenants

 

Each Credit Parties hereby covenants and agrees that on the Closing Date and thereafter, until the Total Commitments have been terminated and the Loans and all other Obligations incurred hereunder (other than Unasserted Contingent Obligations) are paid in full in accordance with the terms of this Agreement:

 

Section 9.01         Limitation on Indebtedness. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee, suffer to exist or otherwise become directly or indirectly liable, contingently or otherwise with respect to any Indebtedness, except for:

 

(a)          Indebtedness in respect of the Obligations;

 

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(b)          Indebtedness existing as of the Closing Date which is identified in Schedule 7.24 and which is not otherwise permitted by this Section 9.01, and, except with respect to the Existing Notes, Permitted Refinancing Indebtedness thereof;

 

(c)          unsecured Indebtedness (i) incurred in the ordinary course of business of such Credit Party and its Subsidiaries in respect of open accounts extended by suppliers on normal trade terms in connection with purchases of goods and services which are not overdue for a period of more than ninety (90) days or, if overdue for more than ninety (90) days, as to which a dispute exists and adequate reserves in conformity with GAAP have been established on the books of such Credit Party or Subsidiary and (ii) in respect of performance, surety or appeal bonds, bid bonds and similar obligations provided in the ordinary course of business, but excluding (in each case) Indebtedness incurred through the borrowing of money or Contingent Liabilities in respect thereof;

 

(d)          Indebtedness (i) evidencing the deferred purchase price of newly acquired property or incurred to finance the acquisition, replacement or construction of any property of such Credit Party and its Subsidiaries (pursuant to purchase money mortgages or otherwise, whether owed to the seller or a third party), provided, that such Indebtedness is incurred within one hundred twenty (120) days after such acquisition, replacement or construction of such property, and (ii) Capitalized Lease Liabilities, and, with respect to each of clause (i) and (ii), Permitted Refinancing Indebtedness thereof; provided, that the aggregate amount of all Indebtedness outstanding pursuant to this clause (d) shall not at any time exceed $2,500,000;

 

(e)          Intercompany Indebtedness permitted pursuant to Section 9.05;

 

(f)          Contingent Liabilities of the Credit Parties and their Subsidiaries arising in the ordinary course of business with respect to surety and appeals bonds, bid bonds, performance bonds and other similar obligations;

 

(g)          Guarantee Obligations of any Credit Party in respect of Indebtedness otherwise permitted hereunder; provided that if such Indebtedness is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the same extent;

 

(h)          Hedging Obligations not prohibited by Section 9.11;

 

(i)          Second Lien Indebtedness in an aggregate principal amount not to exceed the Second Lien Cap Amount (as defined in the Intercreditor Agreement);

 

(j)          unsecured Indebtedness arising in connection with Permitted Acquisitions (including, without limitation, seller notes and earnouts) incurred after the PIK Termination Date, provided, that (i) the maximum amount of Indebtedness shall not exceed $25,000,000 in the aggregate or represent more than twenty percent (20%) of the purchase price for any Permitted Acquisition, (ii) all such Indebtedness shall be subordinated in right of payment to the Obligations and Second Lien Indebtedness on terms and conditions reasonably satisfactory to the Administrative Agent and Second Lien Agent, and (iii) the Total Net Leverage Ratio on a Pro Forma Basis after giving effect to such Permitted Acquisition shall not exceed 4.50:1.00;

 

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(k)          Indebtedness incurred in the ordinary course of business to finance insurance policy premiums;

 

(l)           Indebtedness incurred in the ordinary course of business in respect of netting services, overdraft protection, returned items, employee credit card programs and other similar services in connection with cash management and deposit accounts;

 

(m)          Letters of credit and reimbursement obligations in respect thereof in favor of suppliers, landlords and other counterparties at any one time outstanding not to exceed $2,000,000 and Permitted Refinancings thereof; and

 

(n)          other unsecured Indebtedness not to exceed $1,000,000 at any time outstanding.

 

Section 9.02         Limitation on Liens. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien upon any property or assets of any kind (real or personal, tangible or intangible) of any such Person (including its Capital Stock), whether now owned or hereafter acquired, except for the following (collectively, the “Permitted Liens”):

 

(a)          Liens securing the Obligations;

 

(b)          Liens existing as of the Closing Date and disclosed in Schedule 9.02 securing Indebtedness permitted under Section 9.01(b) (other than the Existing Notes) and any renewals or extensions thereof; provided, that no such Lien shall (1) secure Indebtedness under any Existing Notes or (2) encumber any additional property and the principal amount of Indebtedness secured by such Lien shall not be increased (as such Indebtedness may be permanently reduced subsequent to the Closing Date) except to the extent permitted by Section 9.01(b);

 

(c)          Liens securing Capitalized Lease Liabilities and Liens securing Indebtedness of the type permitted under Section 9.01(d)(i); provided, that (i) the principal amount of the Indebtedness secured thereby does not exceed the cost of the applicable property at the time of such acquisition, replacement or construction and (ii) such Lien secures only the assets that are the subject of the Indebtedness referred to in such clause and proceeds thereof;

 

(d)          Liens arising by operation of law in favor of carriers, warehousemen, mechanics, materialmen, suppliers, laborers and landlords and other similar Liens incurred in the ordinary course of business for amounts not overdue or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been established on its books;

 

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(e)          Liens incurred or deposits made in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders, statutory obligations, bids, leases or other similar obligations (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety, bid, appeal or performance bonds;

 

(f)          judgment Liens not constituting an Event of Default under Section 10.01(f);

 

(g)          easements, rights-of-way, zoning restrictions, minor defects or irregularities in title and other similar encumbrances not interfering in any material respect with the value or use of the property to which such Lien is attached and other Liens on any Real Property subject to a Mortgage that are identified in any title insurance policy issued in favor of the Administrative Agent;

 

(h)          Liens for Taxes, assessments or other governmental charges or levies not yet due and payable or the non-payment of which is permitted by Section 7.10;

 

(i)          Liens arising in the ordinary course of business by virtue of any contractual, statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies covering deposit or securities accounts (including funds or other assets credited thereto) or other funds maintained with a depository institution or securities intermediary, so long as the applicable provisions of Section 8.12 have been complied with, in respect of such deposit accounts (other than Excluded Accounts);

 

(j)          Non-exclusive licenses, leases and sublicenses, and subleases granted by any Credit Party or any Subsidiary of a Credit Party or leases or subleases by any Credit Party or any Subsidiary of a Credit Party, in the ordinary course of its business and covering only the assets so licensed, sublicensed, leased, or subleased;

 

(k)          Liens that are customary rights of set-off relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness;

 

(l)          Liens arising from precautionary Uniform Commercial Code financing statements (or similar filings under other applicable law) regarding operating leases or consignment or bailee arrangements in the ordinary course of business;

 

(m)          Liens in favor of the Borrower or any other Credit Party securing intercompany Indebtedness permitted under the Credit Documents so long as any such Liens on the Collateral are subordinated to the Liens securing the Obligations in a manner reasonably satisfactory to the Administrative Agent and the Borrower;

 

(n)          Liens securing Second Lien Indebtedness to the extent permitted by Section 9.01(i), to the extent such Liens are subject to the Intercreditor Agreement;

 

(o)          Cash collateral securing Indebtedness permitted under Section 9.01(m) in an amount not to exceed 110% of the amount of such Indebtedness; and

 

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(p)          Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business.

 

Section 9.03         Consolidation, Merger, etc. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other Person or purchase or otherwise acquire all or substantially all of the assets of any Person (or any division thereof) except Permitted Acquisitions, provided, that (a) any Credit Party or Subsidiary of any Credit Party may liquidate or dissolve voluntarily into, and may merge with and into, the Borrower (so long as the Borrower is the surviving entity), (b) any Guarantor may liquidate or dissolve voluntarily into, and may merge with and into any Credit Party, (c) any Subsidiary that is not a Credit Party may liquidate or dissolve voluntarily into, and may merge with and into any other Subsidiary, (d) the assets or Capital Stock of any Credit Party may be purchased or otherwise acquired by any other Credit Party, (e) the assets or Capital Stock of any Subsidiary that is not a Credit Party may be purchased or otherwise acquired by the Borrower or any Subsidiary Party and (f) any Subsidiary of any Credit Party may file a certificate of division, adopt a plan of division or otherwise take any action to effectuate a division pursuant to Section 18-217 of the Delaware Limited Liability Company Act (or any analogous action taken pursuant to Applicable Law with respect to any corporation, limited liability company, partnership or other entity) so long as such surviving Person shall have complied with the requirements of Section 8.11 within the time periods set forth therein.

 

Section 9.04         Permitted Dispositions. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, make a Disposition, or enter into any agreement to make a Disposition, of such Credit Party’s or such other Person’s assets (including Receivables and Capital Stock of Subsidiaries) to any Person in one transaction or a series of transactions unless such Disposition:

 

(a)          is in the ordinary course of its business and is of obsolete or worn out property or property no longer used or useful in its business;

 

(b)          is a sale of Inventory in the ordinary course of business;

 

(c)          is the leasing, subleasing or licensing, as lessor, of real or personal property no longer used or useful in such Person’s business or otherwise in the ordinary course of business;

 

(d)          is a sale or disposition of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment, or the proceeds of such Dispositions are reasonably promptly applied to the purchase price of similar replacement equipment, all in the ordinary course of business;

 

(e)          is otherwise permitted by Section 9.02(j) or 9.03;

 

(f)          is a Disposition of property by one Credit Party (other than a Restricted Credit Party) to another Credit Party (other than a Restricted Credit Party);

 

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(g)          is a Disposition of property by a non-Credit Party or a Restricted Credit Party to a Credit Party if the purchase price of said property is not higher than its fair market value;

 

(h)          is a Disposition of property by a non-Credit Party or a Restricted Credit Party to a non-Credit Party or Restricted Credit Party;

 

(i)          is a Disposition of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business or consistent with past practice (and not for financing purposes);

 

(j)          is the lapse, abandonment or other Disposition of intellectual property that is in the reasonable judgment of the Borrower or its Subsidiaries no longer economically practicable or commercially desirable to maintain or necessary for the conduct of the business of the Borrower or its Subsidiaries;

 

(k)          is a Disposition not otherwise permitted hereunder which is made for fair market value, so long as (i) at the time of such Disposition, no Event of Default has occurred and is continuing, (ii) not less than at least seventy-five percent (75%) of the consideration paid in connection therewith shall be cash or Cash Equivalents paid contemporaneously with such Disposition and (iii) the aggregate fair market value of all assets so sold shall not exceed $2,500,000 in the aggregate; or

 

(l)          is a Disposition of cash or Cash Equivalents,

 

provided, that, notwithstanding the foregoing, in no event shall any Credit Party, or shall any Credit Party permit any of its Subsidiaries to, (i) directly or indirectly, issue, sell, assign or otherwise dispose of any Capital Stock of any of its Subsidiaries, except (1) to qualify directors if required by applicable law or (2) pursuant to clause (f) or (g) above or (ii) to file a certificate of division, adopt a plan of division or otherwise take any action to effectuate a division pursuant to Section 18-217 of the Delaware Limited Liability Company Act (or any analogous action taken pursuant to Applicable Law with respect to any corporation, limited liability company, partnership or other entity).

 

Section 9.05         Investments. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, purchase, make, incur, assume or permit to exist any Investment in any other Person, except:

 

(a)          Investments existing on the Closing Date and identified in Schedule 7.12;

 

(b)          Investments in cash and Cash Equivalents;

 

(c)          Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

 

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(d)          Investments by way of contributions to capital or purchases of Capital Stock (i) outstanding as of the date hereof and (ii) hereafter (x) by any Credit Party in any other Credit Party (other than a Restricted Credit Party), (y) by any Subsidiary that is not a Credit Party in any Subsidiary that is not a Credit Party and (z) by a Credit Party in any Subsidiary that is not a Credit Party or that is a Restricted Credit Party so long as at the time of the Investment pursuant to this clause (z) no Event of Default has occurred and is continuing and the aggregate amount of such Investments, together with the aggregate amount of Investments pursuant to Section 9.05(g)(z), shall not exceed the Restricted Credit Party Intercompany Investment Amount;

 

(e)          Investments constituting (i) Receivables arising, (ii) trade debt granted, or (iii) deposits made in connection with the purchase price of goods or services, in each case in the ordinary course of business;

 

(f)          Investments consisting of any deferred portion of the sales price received by any Credit Party in connection with any Disposition permitted under Section 9.04;

 

(g)          Investments consisting of intercompany loans, other extensions of credit or other Investments (i) outstanding as of the date hereof and (ii) hereafter (x) by a Credit Party to any other Credit Party (other than Restricted Credit Parties), (y) by a Subsidiary that is not a Credit Party to a Credit Party or another Subsidiary that is not a Credit Party or (z) by a Credit Party to any Subsidiary that is not a Credit Party or that is a Restricted Credit Party so long as at the time of such Investment pursuant to this clause (z), no Event of Default has occurred and is continuing and the aggregate amount of all such Investments, together with the aggregate amount of all Investments pursuant to of Section 9.05(d)(ii)(z), does not exceed the Restricted Credit Party Intercompany Investment Amount at any one time outstanding; provided, that, any intercompany Indebtedness described in clauses (i) and (ii) above: (1) shall be evidenced by one or more promissory notes in form and substance reasonably satisfactory to the Administrative Agent, duly executed and delivered in pledge to the Administrative Agent pursuant to the Security Documents, and shall not be forgiven or otherwise discharged for any consideration other than and to the extent of repayment in cash; and (2) shall be subordinated to the Obligations pursuant to the subordination terms set forth therein;

 

(h)          Investments constituting Permitted Acquisitions;

 

(i)          the maintenance of deposit accounts in the ordinary course of business so long as the applicable provisions of Section 8.12 have been complied with in respect of such deposit accounts;

 

(j)          [reserved];

 

(k)          Investments in any Person to the extent such Investment represents the non-cash portion of the consideration received in a Disposition permitted pursuant to Section 9(j);

 

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(l)          loans and advances to current or former employees, officers, directors, consultants and advisors in the ordinary course of business or in connection with relocations, indemnification, or reimbursement in respect of liabilities relating to them serving in any such capacity, including business travel and entertainment expenses, not to exceed $150,000 in the aggregate at any time outstanding; and

 

(m)          after the PIK Termination Date and so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount not to exceed $2,500,000.

 

Section 9.06         Restricted Payments, etc. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, make any Restricted Payment, or make any deposit for any Restricted Payment, other than:

 

(a)          payments by any Subsidiary of the Borrower to the Borrower or its direct parent so long as such parent is a direct or indirect wholly-owned subsidiary of the Borrower;

 

(b)          Restricted Payments by any Credit Party or any of its Subsidiaries to pay dividends with respect to its Capital Stock payable solely in additional shares of its common stock (other than Disqualified Capital Stock);

 

(c)          regularly scheduled, non-accelerated payments with respect to Indebtedness subordinated to the Obligations (including, without limitation, seller notes and earnout obligations) permitted by Section 9.01(j) to the extent expressly permitted by the applicable subordination agreement or such other subordination terms with respect thereto; and

 

(d)          conversion of the 2019 Convertible Notes and the 2023 Convertible Notes into equity interests of the Borrower in accordance with the terms thereof.

 

Section 9.07         Modification of Certain Agreements. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, consent to any amendment, supplement, waiver or other modification of, or enter into any forbearance from exercising any rights with respect to the terms or provisions contained in (a) any of Second Lien Loan Documents except to the extent permitted by the Intercreditor Agreement, (b) any of the Organization Documents if such amendment, modification or change would (i) require any mandatory redemption date of any Capital Stock, (ii) require any cash dividends or other payments in cash to be made earlier than the Maturity Date, (iii) in the case of a Credit Party, modify any name, jurisdiction of organization, organizational identification number or federal identification number unless at least ten (10) Business Days prior written notice shall be given to the Administrative Agent or (iv) otherwise be materially adverse to the interests of the Agents or the Lenders in any respect, or (c) any document, agreement or instrument evidencing or governing any Indebtedness that has been subordinated to the Obligations in right of payment or any Liens that have been subordinated in priority to the Liens of the Administrative Agent unless such amendment, supplement, waiver or other modification is permitted under the terms of the subordination agreement applicable thereto, or (d) any Material Contract, except to the extent that such amendment, modification or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of the Lender.

 

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Section 9.08         Sale and Leaseback. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, enter into any agreement or arrangement providing for the sale or transfer by it of any property (now owned or hereafter acquired) to a Person and the subsequent lease or rental of such property or other similar property from such Person.

 

Section 9.09         Transactions with Affiliates. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, enter into or cause or permit to exist any arrangement, transaction or contract (including for the purchase, lease or exchange of property or the rendering of services) with any Affiliate except (a) on fair and reasonable terms no less favorable to such Credit Party or such Subsidiary than it could obtain in an arm’s-length transaction with a Person that is not an Affiliate, (b) any transaction expressly permitted under Section 9.03, Section 9.05(d), Section 9.05(g) or Section 9.06, (c) customary fees to, and indemnifications of, non-officer directors of the Credit Parties and their respective Subsidiaries and (d) the payment of reasonable and customary compensation and indemnification arrangements and benefit plans for officers and employees of the Credit Parties and their respective Subsidiaries in the ordinary course of business.

 

Section 9.10         Restrictive Agreements, etc. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, enter into any agreement (other than a Transaction Document) prohibiting:

 

(a)          the creation or assumption by any Credit Party of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired;

 

(b)          the ability of such Person to amend or otherwise modify any Credit Document; or

 

(c)          the ability of such Person to make any payments, directly or indirectly, to the Credit Parties, including by way of dividends, advances, repayments of loans, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments.

 

The foregoing prohibitions shall not apply to (i) agreements entered into in connection with the Second Lien Credit Agreement or (ii) customary restrictions of the type described in clause (a) above (which do not prohibit the Credit Parties from complying with or performing the terms of this Agreement and the other Credit Documents) which are contained in any agreement, (A) governing any Indebtedness permitted by Section 9.01(d) as to assets financed with the proceeds of such Indebtedness, (B) for the creation or assumption of any Lien on the sublet or assignment of any leasehold interest of any Credit Party or any of its Subsidiaries entered into in the ordinary course of business, (C) for the assignment of any contract entered into by any Credit Party or any of its Subsidiaries in the ordinary course of business or (D) for the transfer of any asset pending the close of the sale of such asset pursuant to a Disposition permitted under this Agreement;

 

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Section 9.11         Hedging Transactions. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, enter into any Hedging Transaction, except (a) Hedging Transactions entered into to hedge or mitigate risks to which such Credit Party or such Subsidiary has actual exposure (other than those in respect of Capital Stock) and (b) Hedging Transactions entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rate, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of such Credit Party or such Subsidiary.

 

Section 9.12         Changes in Business. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to engage in any business other than the businesses the Credit Parties and their Subsidiaries are engaged in as of the date hereof and other businesses that are reasonably related thereto or reasonable extensions thereof.

 

Section 9.13         Financial Performance Covenant. The Credit Parties will not permit:

 

(a)          Minimum Revenue. The revenue of the Credit Parties on a consolidated basis to be less than $55,000,000 for each twelve-month period ending December 31, 2018, March 31, 2019 and June 30, 2019.

 

(b)          Consolidated Adjusted EBITDA. The Consolidated Adjusted EBITDA, as of the last day of each Test Period set forth below, to be less than the amount set forth below opposite such measurement date:

 

Test Period  Consolidated Adjusted EBITDA 
4 Quarters ending September 30, 2019  $3,000,000 
4 Quarters ending December 31, 2019  $5,000,000 
4 Quarters ending March 31, 2020  $10,000,000 
4 Quarters ending June 30, 2020  $16,000,000 
4 Quarters ending September 30, 2020  $20,000,000 

 

(c)          Total Net Leverage Ratio. The Total Net Leverage Ratio, as of the last day of each Test Period set forth below, to be greater than the ratio set forth below opposite such measurement date:

 

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Test Period     Leverage Ratio   
4 Quarters ending December 31, 2020    5.25:1.00   
4 Quarters ending March 31, 2021    4.75:1.00   
4 Quarters ending June 30, 2021    4.75:1.00   
4 Quarters ending September 30, 2021    4.75:1.00   
4 Quarters ending December 31, 2021    4.75:1.00   
4 Quarters ending March 31, 2022 and ending each fiscal quarter thereafter    4.50:1.00   

 

Section 9.14         Disqualified Capital Stock. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, issue any Disqualified Capital Stock.

 

Section 9.15         Removal of Collateral. No Credit Party shall remove, or cause or permit to be removed, any of the Collateral from the premises where such Collateral is currently located and described in Schedule 7.30 (as such schedule may be updated from time to time in accordance with the Security Agreement), except in connection with (a) dispositions permitted under Section 9.04, and (b) off-site repairs of Equipment in the ordinary course of Borrower’s and its Subsidiaries’ business as conducted on the Closing Date.

 

Section 9.16         Voluntary Prepayments of Material Indebtedness.

 

(a)          No Credit Party shall make any voluntary prepayment of Second Lien Indebtedness unless, after giving effect to any such prepayment, (a) Excess Availability shall be at least $10,000,000 and (b) no Default or Event of Default shall have occurred and be continuing.

 

(b)          No Credit Party shall make any voluntary prepayment of 2019 Convertible Notes unless such prepayment is funded from the proceeds of (x) Second Lien Indebtedness funded in accordance with the Second Lien Credit Agreement or (y) the issuance of Capital Stock.

 

(c)          No Credit Party shall make any voluntary prepayment of 2023 Convertible Notes unless such prepayment is funded from the proceeds of the issuance of Capital Stock.

 

Article X

Events of Default

 

Section 10.01         Listing of Events of Default. Each of the following events or occurrences described in this Section 10.01 shall constitute an “Event of Default”:

 

(a)          Non-Payment of Obligations. The Borrower shall default in the payment of:

 

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(i)          any principal of any Loan when such amount is due; or

 

(ii)         any interest on any Loan when such amount is due and such default shall continue unremedied for a period of five (5) Business Days after such amount is due; or

 

(iii)        any fee described in Article IV or any other monetary Obligation under the Credit Documents when such amount is due and such default shall continue unremedied for a period of five (5) Business Days after such amount is due.

 

(b)          Breach of Warranty. Any representation or warranty of any Credit Party made or deemed to be made in any Credit Document (including any certificates delivered pursuant to Article VI) which, by its terms, is subject to a materiality qualifier, is or shall be incorrect in any respect when made or deemed to have been made or any other representation or warranty of any Credit Party made or deemed to be made in any Credit Document (including any certificates delivered pursuant to Article VI) is or shall be incorrect in any material respect when made or deemed to have been made.

 

(c)          Non-Performance of Certain Covenants and Obligations. Any Credit Party shall default in the due performance or observance of any of its obligations under (i) Section 8.01(a) – (d), Section 8.01(e)(i)-(iii), Section 8.01(g), (a) (other than to the limited extent such Section requires books and records to be kept in accordance with GAAP which shall instead be subject to Section 10.01(d)), Section 8.03, Section 8.05(a), Section 8.10, Section 8.11(b), Section 8.11(c), Section 8.12, 8.17, Article IX or the Fee Letter (other than any payment obligations under the Fee Letter which shall instead be subject to Section 10.01(a)(iii)) or (ii) Section 8.01(e)(iv), Section 8.01(f), Section 8.01(h), Section 8.01(o) and such default shall continue unremedied for a period of five (5) Business Days after the earlier of (x) any officer of any Credit Party shall first have knowledge thereof or (y) any Credit Party receives written notice from the Administrative Agent or the Required Lenders in respect thereof.

 

(d)          Non-Performance of Other Covenants and Obligations. Any Credit Party shall default in the due performance and observance of any obligation contained in any Credit Document executed by it (other than as specified in Section 10.01(a), Section 10.01(b) or Section 10.01(c)), and such default shall continue unremedied for a period of thirty (30) Business Days after the earlier of (i) any officer of any Credit Party shall first have knowledge thereof or (ii) any Credit Party receives written notice from the Administrative Agent or the Required Lenders in respect thereof.

 

(e)          Default on Other Indebtedness. (i) A default shall occur in the payment of any amount when due (subject to any applicable grace period or cure period), whether by acceleration or otherwise, of any principal or stated amount of, or interest or fees on, any Indebtedness (other than the Obligations) of any Credit Party, or Subsidiary of any Credit Party having a principal or stated amount, individually or in the aggregate, in excess of $1,500,000, or a default shall occur in the performance or observance of any obligation or condition with respect to any such Indebtedness if the effect of such default is to accelerate the maturity of such Indebtedness or to permit the holder or holders of such Indebtedness, or any trustee or agent for such holders, to cause or declare such Indebtedness to become immediately due and payable or (ii) a default shall occur (after expiration of any available grace or cure periods) in the performance or observance of any obligation or condition with respect to any Indebtedness which has been subordinated (whether as to payment or Lien priority) to the Obligations or the Administrative Agent’s Liens or any such Indebtedness shall be required to be or prepaid, redeemed, purchased or defeased, or require an offer to purchase or defease such Indebtedness to be made, prior to its expressed maturity.

 

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(f)          Judgments. Any judgment or order for the payment of money individually or in the aggregate in excess of $1,000,000 (exclusive of any amounts fully covered by insurance (less any applicable deductible) and as to which the insurer has been notified of the claim and has not disputed coverage) shall be rendered against any Credit Party or any of its Subsidiaries and such judgment shall not have been vacated or discharged or stayed or bonded pending appeal within thirty (30) days after the entry thereof or enforcement proceedings shall have been commenced by any creditor upon such judgment or order.

 

(g)          Plans. An ERISA Event occurs that has resulted or could reasonably be expected to result in a Material Adverse Effect.

 

(h)          Bankruptcy, Insolvency, etc. Any Credit Party or any of its Subsidiaries shall:

 

(i)          become insolvent or generally fail to pay, or admit in writing its inability or unwillingness generally to pay, its debts as they become due;

 

(ii)         apply for, consent to, or acquiesce in the appointment of a trustee, receiver, sequestrator or other custodian for any substantial part of the assets or other property of any such Person, or make a general assignment for the benefit of creditors;

 

(iii)        in the absence of such application, consent or acquiesce to or permit or suffer to exist, the appointment of a trustee, receiver, sequestrator or other custodian for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within sixty (60) days; provided, that each Credit Party hereby expressly authorizes each Secured Party to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their rights under the Credit Documents;

 

(iv)        permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law or any dissolution, winding up or liquidation proceeding, in respect thereof, and, if any such case or proceeding is not commenced by such Person, such case or proceeding shall be consented to or acquiesced in by such Person, or shall result in the entry of an order for relief or shall remain for sixty (60) days undismissed; provided, that each Credit Party hereby expressly authorizes each Secured Party to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their rights under the Credit Documents; or

 

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(v)         take any action authorizing, or in furtherance of, any of the foregoing.

 

(i)          Impairment of Security, etc. Any Credit Document or any Lien granted thereunder with respect to any portion of the Collateral (except (i) in accordance with its terms or (ii) with respect to immaterial assets), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Credit Party thereto, or any Credit Party or any other Person shall contest in writing such effectiveness, validity, binding nature or enforceability; or, except as permitted under any Credit Document, any Lien on the Collateral (except with respect to immaterial assets) shall cease to be a perfected Lien (other than as a result of the Administrative Agent’s failure to take any action within its control).

 

(j)          Change of Control. Any Change of Control shall occur.

 

(k)          Restraint of Operations; Loss of Assets. If any Credit Party or any Subsidiary of a Credit Party is enjoined, restrained, or in any way prevented by court order or other Governmental Authority from continuing to conduct all or any material part of its business affairs or if any material portion of any Credit Party’s or any of its Subsidiaries’ assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any third Person and the same is not discharged before the earlier of 30 days after the date it first arises or 5 days prior to the date on which such property or asset is subject to forfeiture by such Credit Party or the applicable Subsidiary.

 

(l)          Damage; Casualty. Any event occurs, whether or not insured or insurable, as a result of which revenue-producing activities cease or are substantially curtailed at facilities of the Credit Parties generating more than 35% of the Borrower’s consolidated revenues for the fiscal year preceding such event and such cessation or curtailment continues for more than forty-five (45) days.

 

(m)          Subordination and Intercreditor Agreements and Second Lien Intercreditor Agreement. (i) The subordination provisions of any subordination agreement or any subordination provisions governing any subordinated Indebtedness shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Credit Party or any Affiliate of a Credit Party shall contest in writing the validity or enforceability thereof or deny in writing that it has any further liability or obligation thereunder, or the Obligations, for any reason shall not have the priority contemplated by such subordination provisions (other than as a result of the Administrative Agent’s failure to take any action within its control) or (ii) any lien subordination or any other material provision of the Intercreditor Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Credit Party or any Affiliate of a Credit Party shall contest in writing the validity or enforceability thereof or deny in writing that it has any further liability or obligation thereunder.

 

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(n)          FDA Matters. (i) The FDA or any other Governmental Authority initiates enforcement action including but not limited to any inspection against any Credit Party or any of its Subsidiaries, or any suppliers that causes such Credit Party or Subsidiary to recall, withdraw, remove or discontinue manufacturing, shipping or marketing any of its Products the result of which could reasonably be expected to result in aggregate liability and expense to the Credit Parties and their Subsidiaries of the FDA Trigger Amount or more or would reasonably be expected to have a Material Adverse Effect; (ii) the FDA requires Credit Party or its Subsidiaries to modify the label or labeling of any Product as a result of a safety or compliance risk, or seeks to restrict in any way, the distribution of any of Credit Party’s or its Subsidiaries’ Products, which would reasonably be expected, in the aggregate to have a Material Adverse Effect; (iii) the FDA or any other Governmental Authority issues a warning letter or other communication to any Credit Party or any of its Subsidiaries with respect to any Regulatory Matter which if not promptly resolved would reasonably be expected, in the aggregate, to have a Material Adverse Effect; (iv) any Credit Party or any of its Subsidiaries conducts a mandated or voluntary recall or market withdrawal which could reasonably be expected to result in aggregate liability and expense to the Credit Parties and their Subsidiaries of the FDA Trigger Amount or more; or (v) any Credit Party or any of its Subsidiaries enters into a settlement agreement with the FDA or any other Governmental Authority that results in aggregate liability as to any single or related series of transactions, incidents or conditions, of the FDA Trigger Amount or more, or that would reasonably be expected to have a Material Adverse Effect.

 

Section 10.02         Remedies Upon Event of Default. If any Event of Default shall occur for any reason, whether voluntary or involuntary, and be continuing, the Administrative Agent may, and upon the direction of the Required Lenders shall, by notice to the Borrower (a) permanently reduce the Commitment in whole or in part or (b) declare all or any portion of the outstanding principal amount of the Loans and other Obligations to be due and payable and the Commitments (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of such Loans and other Obligations which shall be so declared due and payable shall be and become immediately due and payable, without further notice, demand or presentment, and the Commitments shall terminate. The Lenders and the Administrative Agent shall have all other rights and remedies available at law or in equity or pursuant to any Credit Documents.

 

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Article XI

The Administrative Agent

 

Section 11.01         Appointment. Each Lender (and, if applicable, each other Secured Party) hereby appoints ACF as its Administrative Agent under and for purposes of each Credit Document and hereby authorizes the Administrative Agent to act on behalf of such Lender (or, if applicable, each other Secured Party) under each Credit Document and, in the absence of other written instructions from the Lenders pursuant to the terms of the Credit Documents received from time to time by the Administrative Agent, to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof, together with such powers as may be incidental thereto. Each Lender (and, if applicable, each other Secured Party) hereby irrevocably designates and appoints the Administrative Agent as the agent of such Lender. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender or other Secured Party, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Credit Document or otherwise exist against the Administrative Agent.

 

Section 11.02         Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement and the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care.

 

Section 11.03         Exculpatory Provisions. Neither the Administrative Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Credit Document (except to the extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful misconduct) or (b) responsible in any manner to any of the Lenders or any other Secured Party for any recitals, statements, representations or warranties made by any Credit Party or any officer thereof contained in this Agreement or any other Credit Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Credit Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Credit Document or for any failure of any Credit Party or other Person to perform its obligations hereunder or thereunder. The Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Credit Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any bankruptcy or insolvency law or other similar law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any bankruptcy or insolvency law or other similar law. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Credit Document, or to inspect the properties, books or records of any Credit Party.

 

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Section 11.04         Reliance by Agents. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, electronic mail, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including counsel to the Credit Parties), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all or other requisite Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Credit Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans and all other Secured Parties.

 

Section 11.05         Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder, except with respect to any Default or Event of Default in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders unless the Administrative Agent has received notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders or any other instructing group of Lenders specified by this Agreement); provided, that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as the Administrative Agent shall deem advisable in the best interests of the Secured Parties.

 

Section 11.06         Non-Reliance on Agents and Other Lenders. Each Lender (and, if applicable, each other Secured Party) expressly acknowledges that neither the Administrative Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or Affiliates have made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of a Credit Party or any Affiliate of a Credit Party, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender or any other Secured Party. Each Lender (and, if applicable, each other Secured Party) represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender or any other Secured Party, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Credit Parties and their Affiliates and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender (and, if applicable, each other Secured Party) also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender or any other Secured Party, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Credit Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Credit Parties and their Affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender or any other Secured Party with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Credit Party or any Affiliate of a Credit Party that may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

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Section 11.07         Indemnification. The Lenders agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Credit Parties and without limiting the obligation of the Credit Parties to do so), ratably according to their respective Total Credit Exposure in effect on the date on which indemnification is sought under this Section 11.07 (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Total Credit Exposure immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Credit Documents, any Specified Hedging Agreement or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the Administrative Agent’s gross negligence or willful misconduct. The agreements in this Section 11.07 shall survive the payment of the Loans and all other amounts payable hereunder.

 

Section 11.08         Agent in Its Individual Capacity. The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Credit Party as though the Administrative Agent were not the Administrative Agent. With respect to its Loans made or renewed by it, the Administrative Agent shall have the same rights and powers under this Agreement and the other Credit Documents as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms “Lender”, “Lenders”, “Secured Party” and “Secured Parties” shall include the Administrative Agent in its individual capacity.

 

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Section 11.09         Successor Agents. The Administrative Agent may resign as Administrative Agent, upon twenty (20) days’ notice to the Lenders and the Borrower. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Credit Documents, then the Required Lenders shall appoint from among the Lenders a successor agent, which successor agent shall (unless an Event of Default shall have occurred and be continuing) be subject to approval by the Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights (other than any rights to indemnity payments owed to the retiring Administrative Agent), powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights (other than any rights to indemnity payments owed to the retiring Administrative Agent), powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement or any holders of the Loans. If no applicable successor agent has accepted appointment as Administrative Agent by the date that is twenty (20) days following such retiring Administrative Agent’s notice of resignation, such retiring Agent’s resignation shall nevertheless thereupon become effective (except that in the case of any Collateral held by the Administrative Agent for the benefit of the Secured Parties under any of the Credit Documents, the Administrative Agent will continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. After an Agent’s resignation as the Administrative Agent, the provisions of this Article XI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Agent under this Agreement and the other Credit Documents.

 

Section 11.10         Agents Generally. Except as expressly set forth herein, the Administrative Agent shall not have any duties or responsibilities hereunder in its capacity as such.

 

Section 11.11         Restrictions on Actions by Lenders; Sharing of Payments.

 

(a)          Each of the Lenders agrees that it shall not, without the express written consent of the Administrative Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of Administrative Agent, set off against the Obligations, any amounts owing by such Lender to any Credit Party or any of their respective Subsidiaries or any deposit accounts of any Credit Party or any of their respective Subsidiaries now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Administrative Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Credit Document against any Credit Party or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

 

(b)          Subject to Section 12.09, if, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from the Administrative Agent pursuant to the terms of this Agreement, or (ii) payments from the Administrative Agent in excess of such Lender’s pro rata share of all such distributions by the Administrative Agent, such Lender promptly shall (A) turn the same over to the Administrative Agent, in kind, and with such endorsements as may be required to negotiate the same to the Administrative Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their pro rata shares; provided, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

 

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Section 11.12         Agency for Perfection. Administrative Agent hereby appoints each other Secured Party as its agent (and each Secured Party hereby accepts such appointment) for the purpose of perfecting the Administrative Agent’s Liens in assets which, in accordance with Article 7 or Article 8, as applicable, of the Uniform Commercial Code of any applicable state can be perfected only by possession or control. Should any Secured Party obtain possession or control of any such Collateral, such Secured Party shall notify Administrative Agent thereof, and, promptly upon Administrative Agent’s request therefor shall deliver possession or control of such Collateral to Administrative Agent or in accordance with Administrative Agent’s instructions.

 

Section 11.13         Authorization to File Proof of Claim. In case of the pendency of any bankruptcy, insolvency or other similar proceeding with respect to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable or whether the Administrative Agent shall have made any demand therefor) shall be entitled: (i) to file and prove a claim in such proceeding for the full amount of the principal and interest owing and unpaid in respect of the Loans and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for reimbursement under Section 12.05) allowed in such proceeding; and (ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any trustee, liquidator or another similar official in any such proceedings is hereby authorized by each Lender to make such payments to the Administrative Agent for the account of such Lender. Nothing contained herein shall be deemed to authorize the Administrative Agent to consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the obligations of the Credit Party hereunder or the rights of any Lender, or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

 

Section 11.14         Credit Bids. Each Credit Party and each Secured Party hereby irrevocably authorizes Administrative Agent, based upon the written instruction of the Required Lenders, to bid and purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted (i) by the Administrative Agent under the provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the Code (ii) under the provisions of the Bankruptcy Code, including Section 363, 365 and/or 1129 of the Bankruptcy Code or (iii) by the Administrative Agent (whether by judicial action or otherwise, including a foreclosure sale) in accordance with applicable law (clauses (i), (ii) an (iii), a “Collateral Sale”); and in connection with any Collateral Sale based upon the written instruction of Required Lenders, the Administrative Agent may accept non-cash consideration, including debt and equity securities issued by such acquisition vehicle under the direction or control of the Administrative Agent and the Administrative Agent may offset all or any portion of the Obligations against the purchase price of such Collateral. Each Secured Party hereby agrees that, except as otherwise provided in any Credit Documents, or with the written consent of the Administrative Agent and the Required Lenders, it will not take any enforcement action, accelerate obligations under any Credit Documents, or exercise any right that it might otherwise have under applicable law to credit bid at foreclosure sales, UCC sales or other similar dispositions of Collateral.

 

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Section 11.15         Binding Effect. Each Secured Party, by accepting the benefits of the Credit Documents, agrees that (i) any action taken by the Administrative Agent or the Required Lenders (or, if expressly required hereby, a greater proportion of the Lenders) in accordance with the provisions of the Credit Documents, (ii) any action taken by the Administrative Agent in reliance upon the instructions of Required Lenders (or, where so required, such greater proportion) and (iii) the exercise by the Administrative Agent or the Required Lenders (or, where so required, such greater proportion) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Secured Parties.

 

Article XII

Miscellaneous

 

Section 12.01         Amendments and Waivers. Neither this Agreement nor any other Credit Document, nor any terms hereof or thereof, may be amended, supplemented or modified except in accordance with the provisions of this Section 12.01. The Required Lenders may, or, with the consent of the Required Lenders or the Administrative Agent, as applicable, may, from time to time, (a) enter into with the relevant Credit Party or Credit Parties written amendments, supplements or modifications hereto and to the other Credit Documents for the purpose of adding any provisions to this Agreement or the other Credit Documents or changing in any manner the rights of the Lenders or the Credit Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Credit Documents or any Default or Event of Default and its consequences; provided, that no such waiver, amendment, supplement or modification shall directly:

 

(i)          (A) reduce or forgive any portion of any Loan or extend the final expiration date of any Lender’s Commitment or extend the final scheduled maturity date of any Loan or reduce the stated interest rate (it being understood that only the consent of the Required Lenders shall be necessary to waive any obligation of the Borrower to pay interest at the Default Rate or amend Section 2.10(c)), or (B) reduce or forgive any portion or extend the date for the payment, of any interest or fee payable hereunder (other than as a result of waiving the applicability of any post-default increase in interest rates), or (C) amend or modify any provisions of Section 12.09(b) or any other provision that provides for the pro rata nature of disbursements by or payments to Lenders, in each case without the written consent of each Lender directly and adversely affected thereby;

 

(ii)         amend, modify or waive any provision of this Section 12.01 or reduce the percentages specified in the definitions of the term “Required Lenders” or consent to the assignment or transfer by any Credit Party of its rights and obligations under any Credit Document to which it is a party (except as permitted pursuant to Section 9.03), in each case without the written consent of each Lender directly and adversely affected thereby;

 

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(iii)        increase the aggregate amount of any Commitment of any Lender without the consent of such Lender;

 

(iv)        amend, modify or waive any provision of Article XI applicable to the Administrative Agent without the written consent of the Administrative Agent;

 

(v)         release all or substantially all of the Guarantors under the Guarantee Agreement (except as expressly permitted by the Guarantee Agreement), or release all or substantially all of the Collateral under the Security Agreement and the Mortgages (except as expressly permitted thereby and in Section 12.19), in each case without the prior written consent of each Lender;

 

(vi)        amend Section 2.10 so as to permit Interest Period intervals greater than six months if not agreed to by all applicable Lenders; or

 

Notwithstanding the foregoing or anything to the contrary herein:

 

(i)          this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent, and the Borrower (x) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Credit Documents with the Loans and the accrued interest and fees in respect thereof and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders;

 

(ii)         no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended, and amounts payable to such Lender hereunder may not be permanently reduced without the consent of such Lender (other than reductions in fees and interest in which such reduction does not disproportionately affect such Lender);

 

(iii)        schedules to this Agreement and the Security Agreement may be amended or supplemented by the delivery of a Compliance Certificate in accordance with, and solely to the extent set forth in, Section 8.01(d); and

 

(iv)        this Agreement and any other Credit Document may be amended solely with the consent of the Administrative Agent and the Borrower without the need to obtain the consent of any other Lender if such amendment is delivered in order to (x) correct or cure ambiguities, errors, omissions, defects, (y) effect administrative changes of a technical or immaterial nature or (z) correct or cure incorrect cross references or similar inaccuracies in this Agreement or the applicable Credit Document, in each case with regards to clauses (x) through (z), the correction of which is not adverse to the interest of any Lender. Guarantees, collateral documents, security documents, intercreditor agreements, and related documents executed in connection with this Agreement may be amended, modified, terminated or waived, and consent to any departure therefrom may be given, without the consent of any Lender if such amendment, modification, waiver or consent is given in order to cause such guarantee, collateral document, security document, intercreditor agreement or related document to be consistent with this Agreement and the other Credit Documents. Any such amendment shall become effective without any further consent of any other party to such Credit Document.

 

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Section 12.02         Notices and Other Communications; Facsimile Copies.

 

(a)          General. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder or under any other Credit Document shall be in writing (including by electronic transmission). All such written notices shall be mailed, e-mailed or delivered to the applicable address or electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)          if to the Credit Parties, the Administrative Agent, to the address, electronic mail address or telephone number specified for such Person on Schedule 12.02 or to such other address, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and

 

(ii)         if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the Borrower, and the Administrative Agent.

 

All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, three (3) Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of Section 12.02(c)), when delivered; provided, that notices and other communications to the Administrative Agent pursuant to Article II shall not be effective until actually received by such Person.

 

(b)          Effectiveness of Electronic Documents and Signatures. Credit Documents may be transmitted and/or signed by e-mail or other electronic communication. The effectiveness of any such documents and signatures shall have the same force and effect as manually signed originals and shall be binding on all Credit Parties, the Administrative Agent and the Lenders.

 

(c)          Reliance by the Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Notices of Borrowing) purportedly given by or on behalf of any Credit Party even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. All telephonic notices to the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

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Section 12.03         No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Credit Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

Section 12.04         Survival of Representations and Warranties. All representations and warranties made hereunder and in the other Credit Documents shall survive the execution and delivery of this Agreement and the making of the Loans hereunder.

 

Section 12.05         Payment of Expenses; Indemnification. The Borrower agrees, subject to any limitations set forth in the Fee Letter, (a) to pay or reimburse the Agents for all their reasonable and documented out-of-pocket costs and expenses incurred in connection with the development, preparation, negotiation and execution of, and any amendment, waiver, supplement or modification to, this Agreement and the other Credit Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable and documented fees, disbursements and other charges of one counsel (and, to the extent necessary, one local counsel in any relevant jurisdiction and, if reasonably required, one regulatory counsel) to the Agents and the Second Lien Agent (unless the Agents and the Second Lien Agent are not affiliated), (b) to pay or reimburse each Lender and the Agents for all their reasonable and documented out-of-pocket costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Credit Documents and any such other documents, including the reasonable and documented fees, disbursements and other charges of counsel to the Agents and the Lenders and other third party advisors to the Agents, and (c) to pay, indemnify and hold harmless each Lender and the Agents and their respective Related Parties from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, and reasonable out-of-pocket costs, expenses or disbursements of any kind or nature whatsoever, including reasonable and documented fees, disbursements and other charges of one counsel, arising as a result of the execution, delivery, enforcement, performance and administration of this Agreement, the other Credit Documents and any such other documents, including any of the foregoing relating to the violation of, noncompliance with or liability under, any Environmental Law on the part of any Credit Party or any of its Subsidiaries or any actual or alleged presence of Hazardous Materials as a result of the operations of each Credit Party or any of its Subsidiaries, including at any of their Real Property (all the foregoing in this clause (c), collectively, the “indemnified liabilities”); provided, that the Credit Parties shall have no obligation hereunder to the Agents or any Lender nor any of their Related Parties with respect to indemnified liabilities arising from (i) the gross negligence or willful misconduct of the party to be indemnified or one of their Related Parties; (ii) disputes among the Agents, the Lenders and/or their transferees; or (iii) diminution in value of any Real Property of any Credit Party resulting from the presence of Hazardous Materials existing at such Real Property on or before the Closing Date. The agreements in this Section 12.05 shall survive repayment of the Loans and all other amounts payable hereunder and termination of this Agreement. To the fullest extent permitted by Applicable Law, no Credit Party shall assert, and each Credit Party hereby waives, any claim against any Lender, the Administrative Agent and their respective Related Parties, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Credit Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Lender, no Agent nor any of their respective Related Parties shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby.

 

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Section 12.06         Successors and Assigns; Participations and Assignments.

 

(a)          The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) except as set forth in Section 9.03, no Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by any Credit Party without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 12.06. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in paragraph (c) of this Section 12.06) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. Notwithstanding anything to the contrary herein, (a) any Lender shall be permitted to pledge or grant a security interest in all or any portion of such Lender’s rights hereunder including, but not limited to, any Loans (without the consent of, or notice to or any other action by, any other party hereto) to secure the obligations of such Lender or any of its Affiliates to any Person providing any loan, letter of credit or other extension of credit to or for the account of such Lender or any of its Affiliates and any agent, trustee or representative of such Person and (b) the Administrative Agent shall be permitted to pledge or grant a security interest in all or any portion of their respective rights hereunder or under the other Credit Documents, including, but not limited to, rights to payment (without the consent of, or notice to or any other action by, any other party hereto), to secure the obligations of the Administrative Agent or any of its Affiliates to any Person providing any loan, letter of credit or other extension of credit to or for the account of the Administrative Agent or any of its Affiliates and any agent, trustee or representative of such Person.

 

(b)          (i)          Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (other than to a Defaulting Lender or to the Borrower or to any of the Borrower’s Affiliates or Subsidiaries) (each, an “Eligible Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent (which consent in each case shall not be unreasonably withheld or delayed) of:

 

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(A)         the Borrower; provided, that (1) no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if Default or an Event of Default pursuant to Section 10.01(a), 10.01(c) (solely with respect to a default under Section 8.01(a), (b), (c), (d) or (e) or Section 9.13) or Section 10.01(h) has occurred and is continuing, any other assignee and (2) the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof;

 

(B)         the Administrative Agent; provided, that no consent of the Administrative Agent shall be required for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund.

 

(ii)         Assignments shall be subject to the following additional conditions:

 

(A)         except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000, unless each of the Borrower and the Administrative Agent otherwise consents, which consent, in each case, shall not be unreasonably withheld or delayed; provided, however, that no such consent of the Borrower shall be required if an Event of Default under Section 10.01(a), (c) (solely in respect of a breach of Section 8.01(a), (b), (c), (d) or (e), or Section 9.13) or Section 10.01(h) has occurred and is continuing; and provided further, that contemporaneous assignments to a single assignee made by affiliated Lenders or related Approved Funds and contemporaneous assignments by a single assignor to affiliated Lenders or related Approved Funds shall be aggregated for purposes of meeting the minimum assignment amount requirements stated above;

 

(B)         each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement; provided, that this paragraph shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of Commitments or Loans;

 

(C)         the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500; provided, that only one such fee shall be payable in connection with simultaneous assignments to two or more Approved Funds; and

 

(D)         the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(E)         No Lender may assign or otherwise transfer its rights or obligations hereunder to any of the Credit Parties.

 

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In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to such assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee (by its execution and delivery of the applicable Assignment and Acceptance to the Administrative Agent) and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full Pro Rata Share of all Loans. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

(iii)        Subject to acceptance and recording thereof pursuant to paragraph (b)(v) of this Section 12.06, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 5.04 and 12.05); provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.06 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section 12.06.

 

(iv)        The Administrative Agent, acting for this purpose on behalf of the Borrower (but not as an agent, fiduciary or for any other purposes), shall maintain a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Total Commitments of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). Further, the Register shall contain the name and address of the Administrative Agent and the lending office through which each such Person acts under this Agreement. The entries in the Register shall be conclusive absent manifest error, and the Credit Parties, the Administrative Agent, and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register, as in effect at the close of business on the preceding Business Day, shall be available for inspection by the Borrower, and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

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(v)         Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder) and any written consent to such assignment required by paragraph (b)(i) of this Section 12.06, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless and until it has been recorded in the Register as provided in this paragraph.

 

(c)          (i)          Any Lender may, without the consent of the Borrower, or the Administrative Agent, sell participations to one or more banks or other entities (other than a natural person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided, that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement or any other Credit Document; provided, that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in clause (i) of the first proviso to Section 12.01. Subject to paragraph (c)(ii) of this Section 12.06, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15, and 5.04 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 12.06. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.09(b) as though it were a Lender, provided, that such Participant agrees to be subject to Section 12.09(a) as though it were a Lender.

 

(i)          A Participant shall not be entitled to receive any greater payment under Section 2.14, 2.15 or 5.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 5.04 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 5.04(b) as though it were a Lender.

 

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(ii)         Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Lender’s obligations hereunder (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Credit Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall not have any responsibility for maintaining a Participant Register.

 

Section 12.07         Replacements of Lenders Under Certain Circumstances.

 

(a)          The Borrower, at its sole cost and expense, shall be permitted to replace any Lender (or any Participant), other than an Affiliate of the Administrative Agent, that (i) requests reimbursement for amounts owing pursuant to Section 2.14, Section 2.15, Section 2.16 or Section 5.04, or (ii) is affected in the manner described in Section 2.14(a)(iii) and as a result thereof any of the actions described in such Section is required to be taken, provided, that (A) such replacement does not conflict with any Applicable Law, (B) no Default or Event of Default shall have occurred and be continuing at the time of such replacement, (C) the Borrower shall repay (or the replacement bank or institution shall purchase, at par) all Loans and other amounts (other than any disputed amounts) pursuant to Section 2.14, Section 2.15, Section 2.16 or Section 5.04, as the case may be, owing to such replaced Lender prior to the date of replacement, (D) the replacement bank or institution, if not already a Lender, and the terms and conditions of such replacement, shall be reasonably satisfactory to the Administrative Agent, (E) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 12.06 (except that such replaced Lender shall not be obligated to pay any processing and recordation fee required pursuant thereto) and (F) any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

 

(b)          If any Lender (a “Non-Consenting Lender”) has failed to consent to a proposed amendment, waiver, discharge or termination, which pursuant to the terms of Section 12.01 requires the consent of all of the Lenders affected or the Required Lenders and with respect to which the Required Lenders shall have granted their consent, then, provided that no Default or Event of Default then exists, the Borrower shall have the right (unless such Non-Consenting Lender grants such consent), at its own cost and expense, to replace such Non-Consenting Lender by requiring such Non-Consenting Lender to assign its Loans and Commitments to one or more assignees reasonably acceptable to the Administrative Agent, provided, that: (i) all Obligations of the Borrower owing to such Non-Consenting Lender being replaced shall be paid in full to such Non-Consenting Lender concurrently with such assignment and (ii) the replacement Lender shall purchase the foregoing by paying to such Non-Consenting Lender a price equal to the principal amount thereof plus accrued and unpaid interest thereon. In connection with any such assignment, the Borrower, the Administrative Agent, such Non-Consenting Lender and the replacement Lender shall otherwise comply with Section 12.06 (except that such Non-Consenting Lender shall not be obligated to pay any processing and recordation fee required pursuant thereto).

 

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Section 12.08         Securitization. The Credit Parties hereby acknowledge that the Lenders and their Affiliates may securitize the Loans (a “Securitization”) through the pledge of the Loans as collateral security for loans to the Lenders or their Affiliates or through the sale of the Loans or the issuance of direct or indirect interests in the Loans to their controlled Affiliates, which loans to the Lenders or their Affiliates or direct or indirect interests will be rated by Moody’s, S&P or one or more other rating agencies. The Credit Parties shall, to the extent commercially reasonable, cooperate with the Lenders and their Affiliates to effect any and all Securitizations. Notwithstanding the foregoing, no such Securitization shall release the Lender party thereto from any of its obligations hereunder or substitute any pledgee, secured party or any other party to such Securitization for such Lender as a party hereto and no change in ownership of the Loans may be effected except pursuant to Section 12.06.

 

Section 12.09         Adjustments; Set-off. (a) If any Lender (a “Benefited Lender”) shall at any time receive any payment of all or part of its Loans, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 10.01(h), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender’s Loans or interest thereon, such Benefited Lender shall (i) notify the Administrative Agent of such fact and (ii) purchase for cash from the other Lenders a participating interest in such portion of each such other Lender’s Loans, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided, that (x) if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest and (y) the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender) or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant (as to which the provisions of this Section shall apply).

 

Notwithstanding the foregoing, in the event that any Defaulting Lender shall exercise any such right of setoff, (1) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.05(d) and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (2) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.

 

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Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Credit Party in the amount of such participation.

 

(a)          After the occurrence and during the continuance of an Event of Default, to the extent consented to by Administrative Agent, in addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to the Borrower or any other Credit Party, any such notice being expressly waived by the Credit Parties to the extent permitted by Applicable Law, upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower, as the case may be. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender; provided, that the failure to give such notice shall not affect the validity of such set-off and application.

 

Section 12.10         Counterparts. This Agreement and the other Credit Documents may be executed by one or more of the parties thereto on any number of separate counterparts (including by electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower, and the Administrative Agent.

 

Section 12.11         Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 12.11, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law), as determined in good faith by the Administrative Agent, then such provisions shall be deemed to be in effect only to the extent not so limited.

 

Section 12.12         Integration. This Agreement and the other Credit Documents represent the agreement of the Credit Parties, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any party hereto or thereto relative to the subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents.

 

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Section 12.13         GOVERNING LAW. THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS (UNLESS EXPRESSLY PROVIDED OTHERWISE THEREIN) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Section 12.14         Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:

 

(a)          agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, any Lender, or any Affiliate of the foregoing in any way relating to this Agreement or any other Credit Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such federal court;

 

(b)          consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c)          agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the applicable party at its respective address set forth on Schedule 12.02 or on Schedule 1.01(a) or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

 

(d)          agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Credit Document against the Borrower or any other Credit Party or their respective properties in the courts of any jurisdiction;

 

(e)          waives, to the maximum extent not prohibited by law, all rights of rescission, setoff, counterclaims, and other defenses in connection with the repayment of the Obligations; and

 

 

(f)          waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 12.14 any special, exemplary, punitive or consequential damages.

 

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Section 12.15         Acknowledgments. Each Credit Party hereby acknowledges that:

 

(a)          it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents;

 

(b)          neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to the Credit Parties arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Administrative Agent and Lenders, on one hand, and the Credit Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)          no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Credit Parties and the Lenders.

 

Section 12.16         WAIVERS OF JURY TRIAL. THE CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

Section 12.17         Confidentiality. Each Agent and Lender shall hold all Confidential Information confidential in accordance with its customary procedure for handling confidential information of this nature and (in the case of a Lender that is a bank) in accordance with safe and sound banking practices; provided, that Confidential Information may be disclosed by the Administrative Agent or Lender:

 

(a)          as required by any governmental agency or representative thereof (including, without limitation, public disclosures by the Administrative Agent, Lender, or any of their Related Parties required by the SEC or any other governmental or regulatory authority);

 

(b)          pursuant to legal process;

 

(c)          in connection with the enforcement of any rights or exercise of any remedies by the Administrative Agent or Lender under this Agreement or any other Credit Document or any action or proceeding relating to this Agreement or any other Credit Document;

 

(d)          to the Administrative Agent’s or Lender’s attorneys, professional advisors, independent auditors or Affiliates,

 

(e)          in connection with:

 

(i)          the establishment of any special purpose funding vehicle with respect to the Loans,

 

(ii)         any Securitization permitted under Section 12.08;

 

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(iii)        any prospective assignment of, or participation in, its rights and obligations pursuant to Section 12.06, to prospective assignees or Participants, as the case may be;

 

(iv)        any Hedging Transaction entered into or proposed to be entered into in connection with the Loans made hereunder, to actual or proposed direct or indirect contractual counterparties; and

 

(v)         any actual or proposed credit facility for loans, letters of credit or other extensions of credit to or for the account of the Administrative Agent or Lender or any of its Affiliates, to any Person providing or proposing to provide such loan, letter of credit or other extension of credit or any agent, trustee or representative of such Person; or

 

(f)          with the consent of the Borrower;

 

provided, that in the case of clause (e) hereof, the Person to whom Confidential Information is so disclosed is advised of and has been directed to comply with the provisions of this Section 12.17.

 

For purposes of this Section, “Confidential Information” means all information received from a Credit Party or any Subsidiary, whether directly or from a Credit Party or a Subsidiary’s managers, officers, employees, attorneys, agents, or other advisors, relating to the Credit Parties or any Subsidiary or any of their respective businesses, other than any such information that is available to the Agents or any Secured Party on a nonconfidential basis prior to disclosure by or on behalf of such Credit Party or any Subsidiary.

 

Notwithstanding the foregoing, (A) each of the Administrative Agent, the Lenders and any Affiliate thereof is hereby expressly permitted by the Credit Parties to refer to any Credit Party and any of their respective Subsidiaries in connection with any promotion or marketing undertaken by the Administrative Agent, Lender or Affiliate and, for such purpose, the Administrative Agent, Lender or Affiliate may utilize any trade name, trademark, logo or other distinctive symbol associated with such Credit Party or such Subsidiary or any of their businesses and (B) any information that is or becomes generally available to the public (other than as a result of prohibited disclosure by the Administrative Agent or Lender) shall not be subject to the provisions of this Section 12.17.

 

EACH LENDER ACKNOWLEDGES THAT CONFIDENTIAL INFORMATION (AS DEFINED IN THIS SECTION 12.17) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

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ALL INFORMATION, INCLUDING WAIVERS AND AMENDMENTS, FURNISHED BY THE CREDIT PARTIES OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE CREDIT PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE CREDIT PARTIES AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

 

Section 12.18         Press Releases, etc. Each Credit Party will not, and will not permit any of its respective Subsidiaries, directly or indirectly, to publish any press release or other similar public disclosure or announcements (including any marketing materials) regarding this Agreement, the other Credit Documents, the Transaction Documents, or any of the Transactions, without the consent of the Administrative Agent, which consent shall not be unreasonably withheld.

 

Section 12.19         Releases of Guarantees and Liens. (a) Notwithstanding anything to the contrary contained herein or in any other Credit Document, the Administrative Agent is hereby irrevocably authorized by each Secured Party (without requirement of notice to or consent of any Secured Party except as expressly required by Section 12.01) to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Credit Document or that has been consented to in accordance with Section 12.01, (ii) upon request by Borrower, to release any Guarantor that has become an Excluded Subsidiary, provided, no Event of Default has occurred and is continuing or (iii) under the circumstances described in paragraph (b) below.

 

(a)          At such time as (i) the Loans and the other Obligations (other than Unasserted Contingent Obligations) shall have been paid in full and (ii) the Commitments have been terminated, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all pledges and obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Credit Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person.

 

(b)          Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release its interest in particular types or items of property, or to release any guarantee obligations pursuant to this Section 12.19. In each case as specified in this Section 12.19, the Administrative Agent will (and each Lender irrevocably authorizes the Administrative Agent to), at the Borrower’s request and expense, (i) execute and deliver any termination statements, lien releases, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, the Administrative Agent’s Liens and all notices of security interests and liens previously filed by the Administrative Agent and (ii) deliver all possessory collateral in the Administrative Agent’s possession, custody or control to the Borrower (or the Borrower’s designee), and (iii) execute and deliver to the applicable Credit Party such other documents as such Credit Party may reasonably request to evidence the release of such item of Collateral or obligation from the assignment, lien or security interest granted under the Security Documents, in each case in accordance with the terms of the Credit Documents and this Section 12.19.

 

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Section 12.20         USA Patriot Act. Each Lender hereby notifies each Credit Party that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Credit Parties, which information includes the name and address of each Credit Party and other information that will allow such Lender to identify each Credit Party in accordance with the Patriot Act. Each Credit Party agrees to provide all such information to the Lenders upon request by the Administrative Agent at any time, whether with respect to any Person who is a Credit Party on the Closing Date or who becomes a Credit Party thereafter.

 

Section 12.21         No Fiduciary Duty. Each Credit Party, on behalf of itself and its Subsidiaries, agrees that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, the Credit Parties, their respective Subsidiaries and Affiliates, on the one hand, and the Administrative Agent, the Lenders and their respective Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the Administrative Agent, the Lenders or their respective Affiliates, and no such duty will be deemed to have arisen in connection with any such transactions or communications.

 

Section 12.22         Authorized Officers. The execution of any certificate requirement hereunder by an Authorized Officer shall be considered to have been done solely in such Authorized Officer’s capacity as an officer of the applicable Credit Party (and not individually). Notwithstanding anything to the contrary set forth herein, the Secured Parties shall be entitled to rely and act on any certificate, notice or other document delivered by or on behalf of any Person purporting to be an Authorized Officer of a Credit Party and shall have no duty to inquire as to the actual incumbency or authority of such Person.

 

Section 12.23         Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Credit Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by: (a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution, and (b) the effects of any Bail-in Action on any such liability, including, if applicable: (i) a reduction in full or in part or cancellation of any such liability, (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document, or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

 

BORROWER: TELIGENT, INC.,
  a Delaware corporation
   
  By: /s/ Jason Grenfell-Gardner
    Name: Jason Grenfell-Gardner
    Title: Chief Executive Officer

 

OTHER GUARANTORS: IGEN, INC.,
  a Delaware corporation
   
  By: /s/ Jason Grenfell-Gardner
    Name: Jason Grenfell-Gardner
    Title: Chief Executive Officer

 

  TELIGENT PHARMA, INC.,
  a Delaware corporation
     
  By: /s/ Jason Grenfell-Gardner
    Name: Jason Grenfell-Gardner
    Title: Chief Executive Officer

 

Signature Page to Credit Agreement

 

 

 

 

ADMINISTRATIVE AGENT AND A LENDER: ACF FINCO I LP,
  a Delaware limited partnership
   
  By: /s/ Oleh Szczupak
    Name: Oleh Szczupak
    Title: Authorized Signatory

 

LENDER: ARES CAPITAL CORPORATION,
  a Maryland corporation
     
  By: /s/ Scott Lem
    Name: Scott Lem
    Title: Authorized Signatory

 

  CION ARES DIVERSIFIED CREDIT FUND
   
  By: /s/ Scott Lem
    Name: Scott Lem
    Title: Authorized Signatory

 

  ARES CENTRE STREET PARTNERSHIP, L.P.,
  By: Ares Centre Street GP, Inc., as general partner
     
  By: /s/ Scott Lem
    Name: Scott Lem
    Title: Authorized Signatory

 

Signature Page to Credit Agreement

 

 

 

  ARES CREDIT STRATEGIES INSURANCE DEDICATED FUND SERIES INTERESTS OF THE SALI MULTI-SERIES FUND, L.P.
   
  By: /s/ Scott Lem
    Name: Scott Lem
    Title: Authorized Signatory

 

  ARES COMMERCIAL FINANCE,
  By: Ares Commercial Finance GP LP, its general partner
  By: ACF GP LLC, its general partner
     
  By: /s/ Fred Bubeck
     Name: Fred Bubeck
     Title: Vice President

 

Signature Page to Credit Agreement

 

 

 

 

 

 

 

 

Exhibit 10.2

 

EXECUTION VERSION

 

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE ADMINISTRATIVE AGENT PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ADMINISTRATIVE AGENT HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT, DATED AS OF DECEMBER 13, 2018 (AS AMENDED, RESTATED, AMENDED AND RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), AMONG TELIGENT, INC., ACF FINCO I LP, AS FIRST LIEN AGENT AND ARES CAPITAL CORPORATION AS SECOND LIEN AGENT, AND CERTAIN OTHER PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.

 

SECOND LIEN CREDIT AGREEMENT

 

by and among

 

TELIGENT, INC.,
as Borrower,

 

Certain Subsidiaries thereof, as Guarantors,

 

The Lenders
from Time to Time Party Hereto,

 

and

 

ARES CAPITAL CORPORATION,
as Administrative Agent,

 

Dated as of December 13, 2018


 

 

 

 

 

Article I              Definitions 1
     
Section 1.01 Defined Terms 1
Section 1.02 Other Interpretive Provisions 33
Section 1.03 Accounting Terms and Determination 34
Section 1.04 Rounding 34
Section 1.05 References to Agreements, Laws, etc. 34
Section 1.06 Times of Day 35
Section 1.07 Timing of Payment of Performance 35
Section 1.08 Corporate Terminology 35
Section 1.09 UCC Definitions 35
Section 1.10 Collateral 35
     
Article II              Amount and Terms of Credit Facilities 36
     
Section 2.01 Loans 36
Section 2.02 Minimum Amount of Each Borrowing; Maximum Number of Borrowings 38
Section 2.03 Notice of Borrowing 39
Section 2.04 Disbursement of Funds 39
Section 2.05 Payment of Loans; Evidence of Debt 40
Section 2.06 Conversions and Continuations 41
Section 2.07 Pro Rata Borrowings 42
Section 2.08 Interest 42
Section 2.09 Interest Periods 43
Section 2.10 Increased Costs, Illegality, etc. 44
Section 2.11 Compensation 46
Section 2.12 Change of Lending Office 46
Section 2.13 Notice of Certain Costs 46
Section 2.14 [Reserved] 47
Section 2.15 Defaulting Lenders 47
     
Article III              [RESERVED] 48
     

Article IV              Fees and Commitment Terminations

48
     
Section 4.01 Fees 48
Section 4.02 Mandatory Termination of Commitments 49
     

Article V              Payments

49
     
Section 5.01 Voluntary Prepayments 49
Section 5.02 Mandatory Prepayments 50
Section 5.03 Payment of Obligations; Method and Place of Payment 53
Section 5.04 Net Payments 53
Section 5.05 Computations of Interest and Fees 56
     

Article VI              Conditions Precedent

56
     
Section 6.01 Conditions Precedent to Initial Credit Extension 56
Section 6.02 Conditions Precedent to all Credit Extensions 61

 

i 

 

  

Article VII              Representations, Warranties and Agreements

61
     
Section 7.01 Corporate Status 61
Section 7.02 Corporate Power and Authority 61
Section 7.03 No Violation 62
Section 7.04 Litigation, Labor Controversies, etc. 62
Section 7.05 Use of Proceeds; Regulations U and X 62
Section 7.06 Approvals, Consents, etc. 62
Section 7.07 Investment Company Act 63
Section 7.08 Full Disclosure 63
Section 7.09 Financial Condition; No Material Adverse Effect 63
Section 7.10 Tax Returns and Payments 64
Section 7.11 Compliance with ERISA 64
Section 7.12 Capitalization and Subsidiaries 65
Section 7.13 Intellectual Property; Licenses, etc. 65
Section 7.14 Environmental 66
Section 7.15 Ownership of Properties 66
Section 7.16 No Default 67
Section 7.17 Solvency 67
Section 7.18 [Intentionally Omitted] 67
Section 7.19 Compliance with Laws; Authorizations 67
Section 7.20 Contractual or Other Restrictions 67
Section 7.21 Transaction Documents 67
Section 7.22 Collective Bargaining Agreements 68
Section 7.23 Insurance 68
Section 7.24 Evidence of Other Indebtedness 68
Section 7.25 Deposit Accounts and Securities Accounts 68
Section 7.26 Foreign Assets Control Regulations; Anti-Money Laundering and Anti-Corruption Practices 68
Section 7.27 Patriot Act 69
Section 7.28 First Lien Loan Documents 69
Section 7.29 Flood Insurance 69
Section 7.30 Location of Collateral; Equipment List 69
Section 7.31 Regulatory Matters 70
     

Article VIII              Affirmative Covenants

73
     
Section 8.01 Financial Information, Reports, Notices and Information 73
Section 8.02 Books, Records and Inspections 77
Section 8.03 Maintenance of Insurance 78
Section 8.04 Payment of Taxes 78
Section 8.05 Maintenance of Existence; Compliance with Laws, etc. 78
Section 8.06 Environmental Compliance 79
Section 8.07 ERISA 81
Section 8.08 Maintenance of Property and Assets 81
Section 8.09 End of Fiscal Years; Fiscal Quarters 81
Section 8.10 Use of Proceeds 82
Section 8.11 Further Assurances; Additional Guarantors and Grantors 82
Section 8.12 Bank Accounts 84
Section 8.13 [Intentionally Omitted] 84

 

ii 

 

 

Section 8.14 2019 Convertible Notes Repurchase Blocked Account 84
Section 8.15 Post-Closing 85
     

Article IX              Negative Covenants

86
     
Section 9.01 Limitation on Indebtedness 87
Section 9.02 Limitation on Liens 88
Section 9.03 Consolidation, Merger, etc. 90
Section 9.04 Permitted Dispositions 90
Section 9.05 Investments 91
Section 9.06 Restricted Payments, etc. 92
Section 9.07 Modification of Certain Agreements 93
Section 9.08 Sale and Leaseback 93
Section 9.09 Transactions with Affiliates 94
Section 9.10 Restrictive Agreements, etc. 94
Section 9.11 Hedging Transactions 94
Section 9.12 Changes in Business 95
Section 9.13 Financial Performance Covenant 95
Section 9.14 Disqualified Capital Stock 96
Section 9.15 Removal of Collateral 96
Section 9.16 Voluntary Prepayments of Material Indebtedness 96
     

Article X              Events of Default

96
     
Section 10.01 Listing of Events of Default 96
Section 10.02 Remedies Upon Event of Default 100
     

Article XI              The Administrative Agent

100
     
Section 11.01 Appointment 100
Section 11.02 Delegation of Duties 100
Section 11.03 Exculpatory Provisions 101
Section 11.04 Reliance by Agents 101
Section 11.05 Notice of Default 101
Section 11.06 Non-Reliance on Agents and Other Lenders 102
Section 11.07 Indemnification 102
Section 11.08 Agent in Its Individual Capacity 102
Section 11.09 Successor Agents 103
Section 11.10 Agents Generally 103
Section 11.11 Restrictions on Actions by Lenders; Sharing of Payments 103
Section 11.12 Agency for Perfection 104
Section 11.13 Authorization to File Proof of Claim 104
Section 11.14 Credit Bids 105
Section 11.15 Binding Effect 105
     

Article XII              Miscellaneous

106
     
Section 12.01 Amendments and Waivers 106
Section 12.02 Notices and Other Communications; Facsimile Copies 107
Section 12.03 No Waiver; Cumulative Remedies 108
Section 12.04 Survival of Representations and Warranties 108

 

iii 

 

 

Section 12.05 Payment of Expenses; Indemnification 109
Section 12.06 Successors and Assigns; Participations and Assignments 110
Section 12.07 Replacements of Lenders Under Certain Circumstances 114
Section 12.08 Securitization 114
Section 12.09 Adjustments; Set-off 115
Section 12.10 Counterparts 116
Section 12.11 Severability 116
Section 12.12 Integration 116
Section 12.13 GOVERNING LAW 116
Section 12.14 Submission to Jurisdiction; Waivers 116
Section 12.15 Acknowledgments 117
Section 12.16 WAIVERS OF JURY TRIAL 117
Section 12.17 Confidentiality 118
Section 12.18 Press Releases, etc. 119
Section 12.19 Releases of Guarantees and Liens 119
Section 12.20 USA Patriot Act 120
Section 12.21 No Fiduciary Duty 120
Section 12.22 Authorized Officers 121
Section 12.23 Acknowledgement and Consent to Bail-In of EEA Financial Institutions 121

 

SCHEDULES

 

Schedule 1.01(a) Commitments
Schedule 1.01(b) Immaterial Subsidiaries
Schedule 1.01(c) Material Contracts
Schedule 7.04 Litigation
Schedule 7.12 Subsidiaries and Joint Ventures/Partnerships
Schedule 7.15 Real Property
Schedule 7.22 Collective Bargaining Agreements
Schedule 7.23 Insurance
Schedule 7.24 Evidence of Indebtedness
Schedule 7.25 Deposit Accounts and Securities Accounts
Schedule 7.30 Location of Collateral; Equipment List
Schedule 7.31 Regulatory Matters
Schedule 9.02 Liens
Schedule 12.02 Addresses for Notices

 

iv 

 

 

EXHIBITS  
   
Exhibit A-1 Form of Assignment and Acceptance
Exhibit D-1 Form of DDTL Note
Exhibit C-1 Form of Compliance Certificate
Exhibit N-1 Form of Notice of Borrowing
Exhibit N-2 Form of Notice of Conversion or Continuation
Exhibit T-1 Form of Term Loan Note
Exhibit P-1 Form of Perfection Certificate

   

v 

 

 

SECOND LIEN CREDIT AGREEMENT

 

THIS SECOND LIEN CREDIT AGREEMENT, dated as of December 13, 2018, is among TELIGENT, INC., a Delaware corporation (the “Borrower”), its Subsidiaries signatory hereto as guarantors or hereafter designated as Guarantors pursuant to Section 8.11, the lenders from time to time party hereto (each a “Lender” and, collectively, the “Lenders”), and ARES CAPITAL CORPORATION, a Maryland corporation (“Ares”), as administrative agent and collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”).

 

RECITALS

 

WHEREAS, the Borrower has requested that the Lenders extend credit to the Borrower in the form of (a) an initial term loan in the aggregate principal amount of $50,000,000 on the Closing Date (the “Initial Term Loan Facility”), (b) a delayed draw term loan facility (the “DDTL A Facility”) in the aggregate principal amount of up to $30,000,000 and (c) a delayed draw term loan facility (the “DDTL B Facility”, together with the DDTL A Facility, the “DDTL Facility”) in the aggregate principal amount of up to $15,000,000; and

 

WHEREAS, (a) the proceeds of the Initial Term Loan Facility will be used (i) to finance the 2019 Convertible Notes Repurchase (as defined herein) and the repayment of other Indebtedness outstanding as of the date hereof (other than the 2023 Convertible Notes) and (ii) to pay fees and expenses incurred in connection with the transactions contemplated hereby and such repurchase, redemption or repayment, in each case, to the extent not prohibited by this Agreement, (b) the proceeds of the DDTL A Facility will be used solely (i) to finance the 2019 Convertible Notes Repurchase and (ii) to pay fees and expenses incurred in connection with the transactions contemplated hereby and the 2019 Convertible Notes Repurchase and (c) the proceeds of the DDTL B Facility will be used for solely to finance the construction of the high speed injectable line (the “Line Project”) at the Borrower’s Buena, New Jersey facility.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

Article I

Definitions

 

Section 1.01         Defined Terms. As used herein, the following terms shall have the meanings specified in this Section 1.01 unless the context otherwise requires:

 

2019 Convertible Notes” shall mean the Borrower’s 3.75% senior notes due 2019.

 

2019 Convertible Notes Repurchase” shall mean the Borrower’s repurchase or redemption of all or any portion of the 2019 Convertible Notes, whether by tender offer, open-market purchases or otherwise.

 

 

 

 

  

2019 Convertible Notes Repurchase Blocked Account” shall mean a deposit account of Borrower maintained with Disbursement Bank that shall be subject to Administrative Agent’s and First Lien Agent’s sole dominion and control.

 

2023 Convertible Notes” shall mean the Borrower’s 4.75% senior notes due 2023.

 

ABR” shall mean, for any day, a fluctuating rate of interest per annum (rounded upward, if necessary, to the next highest 1/16 of 1%) equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus ½ of one percentage point (c) the Eurodollar Rate with a term of one month plus one percentage point, and (d) 2.00% per annum. Changes in the rate of interest on that portion of any Loans maintained as ABR Loans will take effect simultaneously with each change in the ABR.

 

ABR Loan” shall mean each Loan bearing interest at ABR, as provided in 2.08.

 

ACF” shall have the meaning set forth in the preamble to this Agreement.

 

Administrative Agent” shall have the meaning set forth in the preamble to this Agreement.

 

Administrative Questionnaire” shall mean a questionnaire completed by each Lender, in a form approved by the Administrative Agent, in which such Lender, among other things, (a) designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Credit Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with such Lender’s compliance procedures and Applicable Laws, including federal and state securities laws and (b) designates an address, facsimile number, electronic mail address and/or telephone number for notices and communications with such Lender.

 

Affiliate” shall mean, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided, that, no Secured Party shall be an Affiliate of any Credit Party solely by reason of the provisions of the Credit Documents. The term “Control” means either (a) the power to vote, or the beneficial ownership of, 10% or more of the voting Capital Stock of such Person or (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms “Controlling” and “Controlled” have meanings correlative thereto.

 

Agreement” shall mean this Credit Agreement, as the same may be amended, amended and restated, supplemented, or otherwise modified from time to time.

 

Anti-Corruption Laws” shall mean any and all laws, rules or regulations relating to corruption or bribery, including, but not limited to, the FCPA and the U.K. Bribery Act 2010.

 

Anti-Money Laundering Laws” shall mean any and all laws, rules or regulations relating to money laundering or terrorism financing, including (a) 18 U.S.C. §§ 1956 and 1957; and (b) the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq., as amended by the PATRIOT Act, and its implementing regulations.

 

 2

 

 

Anti-Terrorism Laws” shall mean any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, all as amended, supplemented or replaced from time to time.

 

Applicable Laws” shall mean, with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its Property or Products or to which such Person or any of its Property or Products is subject. For the avoidance of doubt, the term “Applicable Laws” shall include FATCA and any intergovernmental agreements with respect thereto between the United States and another jurisdiction.

 

Applicable Margin” shall mean a percentage per annum equal to, with respect to Loans, (i) that are Eurodollar Loans, 8.75 percentage points and (ii) that are ABR Loans, 7.75 percentage points.

 

Approved Fund” shall mean any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

 

Assignment and Acceptance” shall mean an assignment and acceptance substantially in the form of Exhibit A-1.

 

Attributable Indebtedness” shall mean, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.

 

Authorized Officer” shall mean, with respect to any Credit Party, the Chief Executive Officer, the Chief Financial Officer, or any other senior financial officer (to the extent that such senior financial officer is designated as such in writing to the Administrative Agent by such Credit Party) of such Credit Party.

 

Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

Bail-In Legislation” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

 3

 

 

Bankruptcy Code” shall mean the Federal Bankruptcy Reform Act of 1978.

 

Board” shall mean the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

Board of Directors” shall mean the board of directors (or other similar body) of Borrower.

 

Borrower” shall have the meaning set forth in the preamble to this Agreement.

 

Borrowing” shall mean and include the incurrence of one Type of Loan on a given date (or resulting from conversions on a given date) having, in the case of Eurodollar Loans, the same Interest Period.

 

Budget” shall have the meaning set forth in Section 8.01(f).

 

Business Day” shall mean (a) any day excluding Saturday, Sunday and any day that shall be in the City of New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close, and (b) any day that is also a day for trading by and between banks in Dollar deposits in the interbank Eurodollar market.

 

Capital Stock” shall mean any and all shares, interests, participations, units or other equivalents (however designated) of capital stock of a corporation, membership interests in a limited liability company, partnership interests of a limited partnership, any and all equivalent ownership interests in a Person and any and all warrants, rights or options to purchase any of the foregoing.

 

Capitalized Lease Obligations” shall mean, as applied to any Person, all obligations under Capitalized Leases of such Person or any of its Subsidiaries, in each case taken at the amount thereof accounted for as liabilities on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP.

 

Capitalized Leases” shall mean, as applied to any Person, all leases of property that have been or should be, in accordance with GAAP, recorded as capitalized leases on the balance sheet of such Person or any of its Subsidiaries, on a consolidated basis; provided, that for all purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP.

 

Cash Equivalents” shall mean:

 

(a)          any direct obligation of (or unconditional guarantee by) the United States (or any agency or political subdivision thereof, to the extent such obligations are supported by the full faith and credit of the United States) maturing not more than one year after the date of acquisition thereof;

 

 4

 

 

(b)          commercial paper maturing not more than one hundred eighty (180) days from the date of issue and issued by (i) a corporation (other than an Affiliate of any Credit Party) organized under the laws of any state of the United States or of the District of Columbia and, at the time of acquisition thereof, rated A-1 or higher by S&P or P-1 or higher by Moody’s, or (ii) any Lender (or its holding company);

 

(c)          any certificate of deposit, time deposit or bankers acceptance, maturing not more than one hundred eighty (180) days after its date of issuance, which is issued by either: (i) a bank organized under the laws of the United States (or any state thereof) which has, at the time of acquisition thereof, (A) a credit rating of P2 or higher from Moody’s or A or higher from S&P and (B) a combined capital and surplus greater than $500,000,000, or (ii) a Lender;

 

(d)          any repurchase agreement having a term of thirty (30) days or less entered into with any Lender or any commercial banking institution satisfying, at the time of acquisition thereof, the criteria set forth in clause (c)(i) which (i) is secured by a fully perfected security interest in any obligation of the type described in clause (a), and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such Lender or commercial banking institution thereunder;

 

(e)          money market and mutual funds investing primarily in assets described in clauses (a) through (d) of this definition.

 

Casualty Event” shall mean the damage, destruction or condemnation, as the case may be, of property of any Person or any of its Subsidiaries.

 

CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

Change of Control” shall mean an event or series of events by which: (a) any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder) shall acquire ownership, directly or indirectly, beneficially or of record, of Capital Stock of the Borrower representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Stock of the Borrower; (b) Borrower ceases to own one hundred percent (100%) of the issued and outstanding Capital Stock of Igen, Inc. (other than as a result of a transaction permitted by Section 9.03 or 9.04); (c) Igen, Inc. ceases to own one hundred percent (100%) of the issued and outstanding Capital Stock of Teligent Pharma, Inc. (other than as a result of a transaction permitted by Section 9.03 or 9.04), in each instance in clauses (b) and (c), free and clear of all Liens, rights, options, warrants or other similar agreements or understandings, other than Liens in favor of Administrative Agent), (d) during any period of 24 consecutive months commencing on or after the Closing Date, the occurrence of a change in the composition of the Board of Directors of Borrower such that a majority of the members of such Board of Directors are not Continuing Directors; or (e) a “change of control” (however so defined in the First Lien Credit Agreement) shall occur.

 

Claims” shall have the meaning set forth in the definition of “Environmental Claims”.

 

Closing Date” shall mean December 13, 2018.

 

Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of this Agreement, and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.

 

 5

 

 

Collateral” shall mean any assets of any Credit Party or other collateral upon which Administrative Agent has been granted a Lien in connection with this Agreement.

 

Collateral Documents” shall mean the Security Agreement, any Foreign Security Instrument and each other document or agreement that creates or perfects any security interests granted by any of the Credit Parties to the Administrative Agent on behalf of the Secured Parties.

 

Collateral Sale” shall have the meaning set forth in Section 11.14.

 

Collections” shall mean all cash, checks, credit card slips or receipts, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds) of the Credit Parties.