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New York
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2834
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13-1840497
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(State or other jurisdiction of incorporation
or organization) |
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(Primary Standard Industrial
Classification Code Number) |
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(I.R.S. Employer Identification No.)
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Joshua N. Korff, Esq.
Christopher Kitchen, Esq. Kirkland & Ellis LLP 601 Lexington Avenue New York, New York 10022 (212) 446-4800 |
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Robert W. Downes, Esq.
Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004-2498 (212) 558-4000 |
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
(Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Title of Each Class of Securities to be Registered
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Proposed Maximum
Aggregate Offering Price (1) (2) |
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Amount of
Registration Fee |
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---|---|---|---|---|---|---|---|---|---|---|---|---|
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Class A common
s
tock, $
0.0001
par value per share
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$
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230,000,000
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$
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29,624
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Per Share
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Total
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---|---|---|---|---|---|---|---|---|---|---|---|---|
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Price to public
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$
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$
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Underwriting discounts
(1)
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$
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$
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Proceeds, before expenses, to us
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$
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$
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Proceeds, before expenses to the selling stockholder
|
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$
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$
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BofA Merrill Lynch
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Morgan Stanley
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Barclays
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Page
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Six months ended
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Fiscal year ended
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|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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(in thousands, except per share amounts)
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December 31,
2013 |
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|
December 31,
2012 |
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June 30,
2013 |
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June 30,
2012 |
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June 30,
2011 |
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Results of operations data
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Net sales
|
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$
|
334,970
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|
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$
|
326,265
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$
|
653,151
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$
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654,101
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$
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618,333
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Cost of goods sold
|
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234,302
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|
|
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|
241,213
|
|
|
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474,187
|
|
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|
489,962
|
|
|
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|
471,668
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|
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Gross profit
|
|
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|
100,668
|
|
|
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|
85,052
|
|
|
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178,964
|
|
|
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|
164,139
|
|
|
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|
146,665
|
|
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Selling, general and administrative expenses
|
|
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|
67,253
|
|
|
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|
57,687
|
|
|
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|
122,233
|
|
|
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|
114,814
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|
|
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|
105,429
|
|
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Operating income
|
|
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|
33,415
|
|
|
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|
27,365
|
|
|
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|
56,731
|
|
|
|
|
49,325
|
|
|
|
|
41,236
|
|
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|
Interest expense
(1)
|
|
|
|
17,566
|
|
|
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|
17,862
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|
|
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|
35,771
|
|
|
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|
35,700
|
|
|
|
|
34,595
|
|
|
|
Interest (income)
|
|
|
|
(112
|
)
|
|
|
|
(82
|
)
|
|
|
|
(142
|
)
|
|
|
|
(281
|
)
|
|
|
|
(307
|
)
|
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|
Foreign currency (gains) losses,
net |
|
|
|
1,813
|
|
|
|
|
294
|
|
|
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|
3,103
|
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|
1,192
|
|
|
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|
(5,758
|
)
|
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Other (income) expense, net
(2)
|
|
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|
—
|
|
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|
|
46
|
|
|
|
|
151
|
|
|
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|
(400
|
)
|
|
|
|
593
|
|
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|
Loss on extinguishment of debt
|
|
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|
—
|
|
|
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—
|
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|
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—
|
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—
|
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|
20,002
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|
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|
Income (loss) before income taxes
|
|
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|
14,148
|
|
|
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|
9,245
|
|
|
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|
17,848
|
|
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|
13,114
|
|
|
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|
(7,889
|
)
|
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Provision (benefit) for income taxes
|
|
|
|
6,003
|
|
|
|
|
(5,487
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)
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|
(7,043
|
)
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6,138
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|
|
|
|
5,033
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Net income (loss)
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$
|
8,145
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$
|
14,732
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$
|
24,891
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$
|
6,976
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$
|
(12,922
|
)
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Net income (loss) per share
–
basic
and diluted
|
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|
$
|
0.12
|
|
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$
|
0.21
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$
|
0.36
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$
|
0.10
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$
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(0.19
|
)
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Weighted average number of shares
–
basic and diluted
|
|
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|
68,910
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|
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68,910
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|
68,910
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|
|
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|
68,910
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|
|
|
68,910
|
|
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Other financial data
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|
|
|
|
|
|
|
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|
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EBITDA
(3)
|
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|
$
|
42,095
|
|
|
|
$
|
36,343
|
|
|
|
$
|
72,500
|
|
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$
|
66,060
|
|
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$
|
43,095
|
|
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Adjusted EBITDA
(3)
|
|
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|
43,908
|
|
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|
36,683
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75,754
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|
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66,852
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|
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57,932
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|
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Cash provided (used) by operating activities
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|
16,397
|
|
|
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|
(2,002
|
)
|
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|
415
|
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31,882
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|
|
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(4,680
|
)
|
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Capital expenditures
|
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|
9,765
|
|
|
|
|
9,640
|
|
|
|
|
19,947
|
|
|
|
|
14,824
|
|
|
|
|
21,635
|
|
|
|
|
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|
As of
December 31, 2013 |
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As of
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|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
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June 30,
2013 |
|
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June 30,
2012 |
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|||||||||
|
Balance sheet data
|
|
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|
|
|
|
|
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|
|
|
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Cash and cash equivalents
|
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|
$
|
30,474
|
|
|
|
$
|
27,369
|
|
|
|
$
|
53,900
|
|
|
|
Working capital
(5)
|
|
|
|
159,421
|
|
|
|
|
153,677
|
|
|
|
|
127,472
|
|
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|
Total assets
|
|
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|
480,828
|
|
|
|
|
474,142
|
|
|
|
|
440,908
|
|
|
|
Total debt
(6)
|
|
|
|
363,821
|
|
|
|
|
365,604
|
|
|
|
|
350,121
|
|
|
|
Long-term debt and other liabilities
|
|
|
|
421,726
|
|
|
|
|
427,676
|
|
|
|
|
403,271
|
|
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|
Total shareholders’ deficit
|
|
|
|
(63,528
|
)
|
|
|
|
(68,938
|
)
|
|
|
|
(88,228
|
)
|
|
|
|
|
|
Six months ended
|
|
|
Fiscal year ended
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|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
December 31,
2013 |
|
|
December 31,
2012 |
|
|
June 30,
2013 |
|
|
June 30,
2012 |
|
|
June 30,
2011 |
|
||||||||||
|
Net income (loss)
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of derivative instruments
|
|
|
|
137
|
|
|
|
|
418
|
|
|
|
|
(222
|
)
|
|
|
|
(841
|
)
|
|
|
|
58
|
|
|
|
Foreign currency translation adjustment
|
|
|
|
(3,135
|
)
|
|
|
|
(468
|
)
|
|
|
|
(5,968
|
)
|
|
|
|
(15,077
|
)
|
|
|
|
2,940
|
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
429
|
|
|
|
|
619
|
|
|
|
|
5,390
|
|
|
|
|
(10,413
|
)
|
|
|
|
1,014
|
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
(221
|
)
|
|
|
|
(394
|
)
|
|
|
|
(2,016
|
)
|
|
|
|
—
|
|
|
|
|
(358
|
)
|
|
|
Comprehensive income (loss)
|
|
|
$
|
5,355
|
|
|
|
$
|
14,907
|
|
|
|
$
|
22,075
|
|
|
|
$
|
(19,355
|
)
|
|
|
$
|
(9,268
|
)
|
|
|
|
|
|
Six months ended
|
|
|
Fiscal year ended
|
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
December 31,
2013 |
|
|
December 31,
2012 |
|
|
June 30,
2013 |
|
|
June 30,
2012 |
|
|
June 30,
2011 |
|
||||||||||
|
Net income (loss)
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
17,566
|
|
|
|
|
17,862
|
|
|
|
|
35,771
|
|
|
|
|
35,700
|
|
|
|
|
34,595
|
|
|
|
Interest (income)
|
|
|
|
(112
|
)
|
|
|
|
(82
|
)
|
|
|
|
(142
|
)
|
|
|
|
(281
|
)
|
|
|
|
(307
|
)
|
|
|
Provision (benefit) for income taxes
|
|
|
|
6,003
|
|
|
|
|
(5,487
|
)
|
|
|
|
(7,043
|
)
|
|
|
|
6,138
|
|
|
|
|
5,033
|
|
|
|
Depreciation and amortization
|
|
|
|
10,493
|
|
|
|
|
9,318
|
|
|
|
|
19,023
|
|
|
|
|
17,527
|
|
|
|
|
16,696
|
|
|
|
EBITDA
|
|
|
$
|
42,095
|
|
|
|
$
|
36,343
|
|
|
|
$
|
72,500
|
|
|
|
$
|
66,060
|
|
|
|
$
|
43,095
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency (gains) losses, net
|
|
|
|
1,813
|
|
|
|
|
294
|
|
|
|
|
3,103
|
|
|
|
|
1,192
|
|
|
|
|
(5,758
|
)
|
|
|
Other (income) expense, net
|
|
|
|
—
|
|
|
|
|
46
|
|
|
|
|
151
|
|
|
|
|
(400
|
)
|
|
|
|
593
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
20,002
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
43,908
|
|
|
|
$
|
36,683
|
|
|
|
$
|
75,754
|
|
|
|
$
|
66,852
|
|
|
|
$
|
57,932
|
|
|
|
Sources
|
|
|
Amount
|
|
||
---|---|---|---|---|---|---|---|
|
|
|
|
(in millions)
|
|
||
|
New Credit Facilities
|
|
|
$
|
|
|
|
|
Class A common stock offered hereby
|
|
|
|
|
|
|
|
Total Sources
|
|
|
$
|
|
|
|
|
Uses
|
|
|
Amount
|
|
||
---|---|---|---|---|---|---|---|
|
|
|
|
(in millions)
|
|
||
|
Repay 9.25% senior notes due July 1, 2018
|
|
|
$
|
300
|
|
|
|
Repay term loan payable to Mayflower due December 31, 2016
|
|
|
|
24
|
|
|
|
Repay term loan payable to BFI due August 1, 2014
|
|
|
|
10
|
|
|
|
Repay Domestic Senior Credit Facility
|
|
|
|
32
|
|
|
|
Cash on Balance Sheet
|
|
|
|
|
|
|
|
Fees and expenses
|
|
|
|
|
|
|
|
Total Uses
|
|
|
$
|
|
|
|
|
|
|
|
As of December 31, 2013
|
|
|||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
Actual
|
|
|
Adjusted
(1)
|
|
||||
|
|
|
|
(in thousands, except par value)
|
|
|||||||
|
Cash and cash equivalents
|
|
|
$
|
30,474
|
|
|
|
$
|
|
|
|
|
Debt:
|
|
||||||||||
|
Domestic senior credit facility
|
|
|
$
|
32,000
|
|
|
|
$
|
|
|
|
|
9.25% senior notes
|
|
|
|
297,796
|
|
|
|
|
|
|
|
|
Mayflower term loan
|
|
|
|
24,000
|
|
|
|
|
|
|
|
|
BFI term loan
|
|
|
|
9,932
|
|
|
|
|
|
|
|
|
New Credit Facilities
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Capital leases
|
|
|
|
93
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
$
|
363,821
|
|
|
|
$
|
|
|
|
|
Stockholders’ Equity:
|
|
||||||||||
|
Common stock, par value $ , shares authorized; shares issued and outstanding, on an as adjusted basis
|
|
|
|
7
|
|
|
|
|
—
|
|
|
|
Class A common stock, par value $ , shares authorized; shares issued and outstanding, on an as adjusted basis
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Class B common stock, par value $ , shares authorized; shares issued and outstanding, on an as adjusted basis
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Additional paid-in-capital
|
|
|
|
43,003
|
|
|
|
|
|
|
|
|
Accumulated deficit
|
|
|
|
(85,976
|
)
|
|
|
|
|
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(20,562
|
)
|
|
|||||
|
Total stockholders’ deficit
|
|
|
|
(63,528
|
)
|
|
|
|
|
|
|
|
Total capitalization
|
|
|
$
|
300,293
|
|
|
|
$
|
|
|
|
|
Assumed initial public offering price per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net tangible book value (deficit) per share
as of |
|
|
|
|
|
|
|
|
|
|
|
|
Increase per share attributable to new investors
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net tangible book value per share after this offering
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution per share to new investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Purchased
|
|
|
Total Consideration
|
|
|
Average
Price Per Share |
|
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
Number
|
|
|
Percent
|
|
|
Amount
|
|
|
Percent
|
|
|||||||||||||
|
Existing stockholders
|
|
|
|
|
|
|
|
|
|
%
|
|
|
$
|
|
|
|
|
|
|
%
|
|
|
$
|
|
|
|
|
New investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
Six months ended December 31,
|
|
|
Fiscal year ended June 30,
|
|
|||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands, except per share amounts)
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
||||||||||||||
|
Results of operations data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
334,970
|
|
|
|
$
|
326,265
|
|
|
|
$
|
653,151
|
|
|
|
$
|
654,101
|
|
|
|
$
|
618,333
|
|
|
|
$
|
594,209
|
|
|
|
$
|
537,133
|
|
|
|
Cost of goods sold
|
|
|
|
234,302
|
|
|
|
|
241,213
|
|
|
|
|
474,187
|
|
|
|
|
489,962
|
|
|
|
|
471,668
|
|
|
|
|
439,476
|
|
|
|
|
407,473
|
|
|
|
Gross profit
|
|
|
|
100,668
|
|
|
|
|
85,052
|
|
|
|
|
178,964
|
|
|
|
|
164,139
|
|
|
|
|
146,665
|
|
|
|
|
154,733
|
|
|
|
|
129,660
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
67,253
|
|
|
|
|
57,687
|
|
|
|
|
122,233
|
|
|
|
|
114,814
|
|
|
|
|
105,429
|
|
|
|
|
101,925
|
|
|
|
|
84,645
|
|
|
|
Impairment of long-lived assets
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
3,628
|
|
|
|
Operating income
|
|
|
|
33,415
|
|
|
|
|
27,365
|
|
|
|
|
56,731
|
|
|
|
|
49,325
|
|
|
|
|
41,236
|
|
|
|
|
52,808
|
|
|
|
|
41,387
|
|
|
|
Interest expense
(1)
|
|
|
|
17,566
|
|
|
|
|
17,862
|
|
|
|
|
35,771
|
|
|
|
|
35,700
|
|
|
|
|
34,595
|
|
|
|
|
34,496
|
|
|
|
|
31,512
|
|
|
|
Interest (income)
|
|
|
|
(112
|
)
|
|
|
|
(82
|
)
|
|
|
|
(142
|
)
|
|
|
|
(281
|
)
|
|
|
|
(307
|
)
|
|
|
|
(119
|
)
|
|
|
|
(166
|
)
|
|
|
Foreign currency gains (losses), net
|
|
|
|
1,813
|
|
|
|
|
294
|
|
|
|
|
3,103
|
|
|
|
|
1,192
|
|
|
|
|
(5,758
|
)
|
|
|
|
(1,275
|
)
|
|
|
|
12,098
|
|
|
|
Other income (expense), net
(2)
|
|
|
|
—
|
|
|
|
|
46
|
|
|
|
|
151
|
|
|
|
|
(400
|
)
|
|
|
|
593
|
|
|
|
|
108
|
|
|
|
|
67
|
|
|
|
(Loss) on extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
20,002
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
|
14,148
|
|
|
|
|
9,245
|
|
|
|
|
17,848
|
|
|
|
|
13,114
|
|
|
|
|
(7,889
|
)
|
|
|
|
19,598
|
|
|
|
|
(2,124
|
)
|
|
|
Provision (benefit) for income taxes
|
|
|
|
6,003
|
|
|
|
|
(5,487
|
)
|
|
|
|
(7,043
|
)
|
|
|
|
6,138
|
|
|
|
|
5,033
|
|
|
|
|
3,792
|
|
|
|
|
3,412
|
|
|
|
Income (loss) from continuing operations
|
|
|
|
8,145
|
|
|
|
|
14,732
|
|
|
|
|
24,891
|
|
|
|
|
6,976
|
|
|
|
|
(12,922
|
)
|
|
|
|
15,806
|
|
|
|
|
(5,536
|
)
|
|
|
(Loss) from discontinued operations, net of income taxes
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(3,358
|
)
|
|
|
|
(2,761
|
)
|
|
|
Gain on disposal of discontinued operations, net of income taxes
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
29,603
|
|
|
|
|
—
|
|
|
|
Net income (loss)
(3)
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
$
|
42,051
|
|
|
|
$
|
(8,297
|
)
|
|
|
Income (loss) per share from continuing operations – basic and diluted
|
|
|
$
|
0.12
|
|
|
|
$
|
0.21
|
|
|
|
$
|
0.36
|
|
|
|
$
|
0.10
|
|
|
|
$
|
(0.19
|
)
|
|
|
$
|
0.23
|
|
|
|
$
|
(0.08
|
)
|
|
|
Income (loss) per share from discontinued operations – basic and diluted
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
0.38
|
|
|
|
|
(0.04
|
)
|
|
|
Net income (loss) per share – basic and diluted
|
|
|
$
|
0.12
|
|
|
|
$
|
0.21
|
|
|
|
$
|
0.36
|
|
|
|
$
|
0.10
|
|
|
|
$
|
(0.19
|
)
|
|
|
$
|
0.61
|
|
|
|
$
|
(0.12
|
)
|
|
|
Weighted average number of shares – basic and diluted
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
Other financial data
|
|
|||||||||||||||||||||||||||||||||||
|
EBITDA
(4)
|
|
|
$
|
42,095
|
|
|
|
$
|
36,343
|
|
|
|
$
|
72,500
|
|
|
|
$
|
66,060
|
|
|
|
$
|
43,095
|
|
|
|
$
|
95,442
|
|
|
|
$
|
37,707
|
|
|
|
Adjusted EBITDA
(4)
|
|
|
|
43,908
|
|
|
|
|
36,683
|
|
|
|
|
75,754
|
|
|
|
|
66,852
|
|
|
|
|
57,932
|
|
|
|
|
68,313
|
|
|
|
|
58,426
|
|
|
|
Cash provided (used) by operating activities
|
|
|
|
16,397
|
|
|
|
|
(2,002
|
)
|
|
|
|
415
|
|
|
|
|
31,882
|
|
|
|
|
(4,680
|
)
|
|
|
|
29,762
|
|
|
|
|
40,821
|
|
|
|
Capital expenditures
(5)
|
|
|
|
9,765
|
|
|
|
|
9,640
|
|
|
|
|
19,947
|
|
|
|
|
14,824
|
|
|
|
|
21,635
|
|
|
|
|
15,971
|
|
|
|
|
17,484
|
|
|
|
|
|
|
As of
December 31, 2013 |
|
|
As of June 30, 2013
|
|
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|||||||||||||||
|
Balance sheet data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
30,474
|
|
|
|
$
|
27,369
|
|
|
|
$
|
53,900
|
|
|
|
$
|
48,598
|
|
|
|
$
|
62,705
|
|
|
|
$
|
13,518
|
|
|
|
Working capital
(6)
|
|
|
|
159,421
|
|
|
|
|
153,677
|
|
|
|
|
127,472
|
|
|
|
|
136,384
|
|
|
|
|
121,303
|
|
|
|
|
129,587
|
|
|
|
Total assets
|
|
|
|
480,828
|
|
|
|
|
474,142
|
|
|
|
|
440,908
|
|
|
|
|
435,694
|
|
|
|
|
425,287
|
|
|
|
|
362,280
|
|
|
|
Total debt
(7)
|
|
|
|
363,821
|
|
|
|
|
365,604
|
|
|
|
|
350,121
|
|
|
|
|
357,996
|
|
|
|
|
289,258
|
|
|
|
|
294,534
|
|
|
|
Long-term debt and other liabilities
|
|
|
|
421,726
|
|
|
|
|
427,676
|
|
|
|
|
403,271
|
|
|
|
|
389,317
|
|
|
|
|
319,452
|
|
|
|
|
320,047
|
|
|
|
Total shareholders’ (deficit)
|
|
|
|
(63,528
|
)
|
|
|
|
(68,938
|
)
|
|
|
|
(88,228
|
)
|
|
|
|
(69,068
|
)
|
|
|
|
(10,204
|
)
|
|
|
|
(52,027
|
)
|
|
|
|
|
|
Six months ended
December 31, |
|
|
Fiscal year ended June 30,
|
|
|||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
||||||||||||||
|
Net income (loss)
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
$
|
42,051
|
|
|
|
$
|
(8,297
|
)
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of derivative instruments
|
|
|
|
137
|
|
|
|
|
418
|
|
|
|
|
(222
|
)
|
|
|
|
(841
|
)
|
|
|
|
58
|
|
|
|
|
(1,238
|
)
|
|
|
|
1,242
|
|
|
|
Foreign currency translation adjustment
|
|
|
|
(3,315
|
)
|
|
|
|
(468
|
)
|
|
|
|
(5,968
|
)
|
|
|
|
(15,077
|
)
|
|
|
|
2,940
|
|
|
|
|
4,294
|
|
|
|
|
(2,138
|
)
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
429
|
|
|
|
|
619
|
|
|
|
|
5,390
|
|
|
|
|
(10,413
|
)
|
|
|
|
1,014
|
|
|
|
|
(3,221
|
)
|
|
|
|
(5,340
|
)
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
(221
|
)
|
|
|
|
(394
|
)
|
|
|
|
(2,016
|
)
|
|
|
|
|
|
|
|
|
(358
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Comprehensive income (loss)
|
|
|
$
|
5,355
|
|
|
|
$
|
14,907
|
|
|
|
$
|
22,075
|
|
|
|
$
|
(19,355
|
)
|
|
|
$
|
(9,268
|
)
|
|
|
$
|
41,886
|
|
|
|
$
|
(14,533
|
)
|
|
|
|
|
|
Six months ended
December 31, |
|
|
Fiscal year ended June 30,
|
|
|||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
||||||||||||||
|
Net income (loss)
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
$
|
42,051
|
|
|
|
$
|
(8,297
|
)
|
|
|
Plus:
|
|
|||||||||||||||||||||||||||||||||||
|
Interest expense
|
|
|
|
17,566
|
|
|
|
|
17,862
|
|
|
|
|
35,771
|
|
|
|
|
35,700
|
|
|
|
|
34,595
|
|
|
|
|
34,496
|
|
|
|
|
31,512
|
|
|
|
Interest (income)
|
|
|
|
(112
|
)
|
|
|
|
(82
|
)
|
|
|
|
(142
|
)
|
|
|
|
(281
|
)
|
|
|
|
(307
|
)
|
|
|
|
(119
|
)
|
|
|
|
(166
|
)
|
|
|
Provision (benefit) for income taxes
|
|
|
|
6,003
|
|
|
|
|
(5,487
|
)
|
|
|
|
(7,043
|
)
|
|
|
|
6,138
|
|
|
|
|
5,033
|
|
|
|
|
3,792
|
|
|
|
|
3,412
|
|
|
|
Depreciation and amortization
|
|
|
|
10,493
|
|
|
|
|
9,318
|
|
|
|
|
19,023
|
|
|
|
|
17,527
|
|
|
|
|
16,696
|
|
|
|
|
15,222
|
|
|
|
|
11,246
|
|
|
|
EBITDA
|
|
|
$
|
42,095
|
|
|
|
$
|
36,343
|
|
|
|
$
|
72,500
|
|
|
|
$
|
66,060
|
|
|
|
$
|
43,095
|
|
|
|
$
|
95,442
|
|
|
|
$
|
37,707
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency (gains) losses, net
|
|
|
|
1,813
|
|
|
|
|
294
|
|
|
|
|
3,103
|
|
|
|
|
1,192
|
|
|
|
|
(5,758
|
)
|
|
|
|
(1,275
|
)
|
|
|
|
12,098
|
|
|
|
Other (income) expense, net
(a)
|
|
|
|
—
|
|
|
|
|
46
|
|
|
|
|
151
|
|
|
|
|
(400
|
)
|
|
|
|
593
|
|
|
|
|
108
|
|
|
|
|
67
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
20,002
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Loss from discontinued operations, net of income taxes
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
3,358
|
|
|
|
|
2,761
|
|
|
|
Gain on disposal of discontinued operations, net of income taxes
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(29,603
|
)
|
|
|
|
—
|
|
|
|
Plant consolidation costs
(b)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
283
|
|
|
|
|
783
|
|
|
|
Acquisition-related cost of goods sold
(c)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,122
|
|
|
|
Cost of acquired in-process R&D
(d)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
260
|
|
|
|
Impairment of long-lived assets
(e)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
3,628
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
43,908
|
|
|
|
$
|
36,683
|
|
|
|
$
|
75,754
|
|
|
|
$
|
66,852
|
|
|
|
$
|
57,932
|
|
|
|
$
|
68,313
|
|
|
|
$
|
58,426
|
|
|
|
|
|
|
Three months ended
December 31, |
|
|
% Change
|
|
|
Six months ended
December 31, |
|
|
% Change
|
|
|
Year ended June 30,
|
|
|
% Change
|
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||||||
|
Net sales
|
|
|
$
|
172,742
|
|
|
|
$
|
164,159
|
|
|
|
|
5
|
%
|
|
|
$
|
334,970
|
|
|
|
$
|
326,265
|
|
|
|
|
3
|
%
|
|
|
$
|
653,151
|
|
|
|
$
|
654,101
|
|
|
|
$
|
618,333
|
|
|
|
|
(0
|
)%
|
|
|
|
6
|
%
|
|
|
Cost of goods sold
|
|
|
|
121,586
|
|
|
|
|
120,973
|
|
|
|
|
1
|
%
|
|
|
|
234,302
|
|
|
|
|
241,213
|
|
|
|
|
(3
|
)%
|
|
|
|
474,187
|
|
|
|
|
489,962
|
|
|
|
|
471,668
|
|
|
|
|
(3
|
)%
|
|
|
|
4
|
%
|
|
|
% of net sales
|
|
|
|
70.4
|
%
|
|
|
|
73.7
|
%
|
|
|
|
|
|
|
|
|
69.9
|
%
|
|
|
|
73.9
|
%
|
|
|
|
|
|
|
|
|
72.6
|
%
|
|
|
|
74.9
|
%
|
|
|
|
76.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
51,156
|
|
|
|
|
43,186
|
|
|
|
|
18
|
%
|
|
|
|
100,668
|
|
|
|
|
85,052
|
|
|
|
|
18
|
%
|
|
|
|
178,964
|
|
|
|
|
164,139
|
|
|
|
|
146,665
|
|
|
|
|
9
|
%
|
|
|
|
12
|
%
|
|
|
% of net sales
|
|
|
|
29.6
|
%
|
|
|
|
26.3
|
%
|
|
|
|
|
|
|
|
|
30.1
|
%
|
|
|
|
26.1
|
%
|
|
|
|
|
|
|
|
|
27.4
|
%
|
|
|
|
25.1
|
%
|
|
|
|
23.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
34,138
|
|
|
|
|
29,030
|
|
|
|
|
18
|
%
|
|
|
|
67,253
|
|
|
|
|
57,687
|
|
|
|
|
17
|
%
|
|
|
|
122,233
|
|
|
|
|
114,814
|
|
|
|
|
105,429
|
|
|
|
|
6
|
%
|
|
|
|
9
|
%
|
|
|
% of net sales
|
|
|
|
19.8
|
%
|
|
|
|
17.7
|
%
|
|
|
|
|
|
|
|
|
20.1
|
%
|
|
|
|
17.7
|
%
|
|
|
|
|
|
|
|
|
18.7
|
%
|
|
|
|
17.6
|
%
|
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
17,018
|
|
|
|
|
14,156
|
|
|
|
|
20
|
%
|
|
|
|
33,415
|
|
|
|
|
27,365
|
|
|
|
|
22
|
%
|
|
|
|
56,731
|
|
|
|
|
49,325
|
|
|
|
|
41,236
|
|
|
|
|
15
|
%
|
|
|
|
20
|
%
|
|
|
% of net sales
|
|
|
|
9.9
|
%
|
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
10.0
|
%
|
|
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
8.7
|
%
|
|
|
|
7.5
|
%
|
|
|
|
6.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
8,719
|
|
|
|
|
8,955
|
|
|
|
|
(3
|
)%
|
|
|
|
17,454
|
|
|
|
|
17,780
|
|
|
|
|
(2
|
)%
|
|
|
|
35,629
|
|
|
|
|
35,419
|
|
|
|
|
34,288
|
|
|
|
|
1
|
%
|
|
|
|
3
|
%
|
|
|
Foreign currency (gains) losses, net
|
|
|
|
1,165
|
|
|
|
|
126
|
|
|
|
|
825
|
%
|
|
|
|
1,813
|
|
|
|
|
294
|
|
|
|
|
517
|
%
|
|
|
|
3,103
|
|
|
|
|
1,192
|
|
|
|
|
(5,758
|
)
|
|
|
|
160
|
%
|
|
|
|
*
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
*
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
20,002
|
|
|
|
|
*
|
|
|
|
|
*
|
|
|
|
Other (income) expense, net
|
|
|
|
—
|
|
|
|
|
58
|
|
|
|
|
*
|
|
|
|
|
—
|
|
|
|
|
46
|
|
|
|
|
*
|
|
|
|
|
151
|
|
|
|
|
(400
|
)
|
|
|
|
593
|
|
|
|
|
*
|
|
|
|
|
*
|
|
|
|
Income (loss) before provision (benefit) for income taxes
|
|
|
|
7,134
|
|
|
|
|
5,017
|
|
|
|
|
42
|
%
|
|
|
|
14,148
|
|
|
|
|
9,245
|
|
|
|
|
53
|
%
|
|
|
|
17,848
|
|
|
|
|
13,114
|
|
|
|
|
(7,889
|
)
|
|
|
|
36
|
%
|
|
|
|
*
|
|
|
|
% of net sales
|
|
|
|
4.1
|
%
|
|
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
4.2
|
%
|
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
2.7
|
%
|
|
|
|
2.0
|
%
|
|
|
|
(1.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes
|
|
|
|
4,832
|
|
|
|
|
(7,056
|
)
|
|
|
|
*
|
|
|
|
|
6,003
|
|
|
|
|
(5,487
|
)
|
|
|
|
*
|
|
|
|
|
(7,043
|
)
|
|
|
|
6,138
|
|
|
|
|
5,033
|
|
|
|
|
*
|
|
|
|
|
22
|
%
|
|
|
Effective tax rate
|
|
|
|
67.7
|
%
|
|
|
|
(140.6
|
)%
|
|
|
|
|
|
|
|
|
42.4
|
%
|
|
|
|
(59.4
|
)%
|
|
|
|
|
|
|
|
|
(39.5
|
)%
|
|
|
|
46.8
|
%
|
|
|
|
63.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
2,302
|
|
|
|
|
12,073
|
|
|
|
|
(81
|
)%
|
|
|
|
8,145
|
|
|
|
|
14,732
|
|
|
|
|
(45
|
)%
|
|
|
|
24,891
|
|
|
|
|
6,976
|
|
|
|
|
(12,922
|
)
|
|
|
|
257
|
%
|
|
|
|
*
|
|
|
|
% of net sales
|
|
|
|
1.3
|
%
|
|
|
|
7.4
|
%
|
|
|
|
|
|
|
|
|
2.4
|
%
|
|
|
|
4.5
|
%
|
|
|
|
|
|
|
|
|
3.8
|
%
|
|
|
|
1.1
|
%
|
|
|
|
(2.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
Three months ended
December 31, |
|
|
% Change
|
|
|
Six months ended
December 31, |
|
|
% Change
|
|
|
Year ended June 30,
|
|
|
% Change
|
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||||||
|
MFAs and other
|
|
|
$
|
80,049
|
|
|
|
$
|
76,002
|
|
|
|
|
5
|
%
|
|
|
$
|
158,014
|
|
|
|
$
|
153,049
|
|
|
|
|
3
|
%
|
|
|
$
|
303,743
|
|
|
|
$
|
290,535
|
|
|
|
$
|
273,259
|
|
|
|
|
5
|
%
|
|
|
|
6
|
%
|
|
|
Nutritional Specialties
|
|
|
|
16,431
|
|
|
|
|
12,791
|
|
|
|
|
28
|
%
|
|
|
|
30,563
|
|
|
|
|
24,259
|
|
|
|
|
26
|
%
|
|
|
|
52,337
|
|
|
|
|
47,686
|
|
|
|
|
43,061
|
|
|
|
|
10
|
%
|
|
|
|
11
|
%
|
|
|
Vaccines
|
|
|
|
11,486
|
|
|
|
|
5,443
|
|
|
|
|
111
|
%
|
|
|
|
20,560
|
|
|
|
|
13,056
|
|
|
|
|
57
|
%
|
|
|
|
28,861
|
|
|
|
|
36,946
|
|
|
|
|
28,842
|
|
|
|
|
(22
|
)%
|
|
|
|
28
|
%
|
|
|
Animal Health
|
|
|
$
|
107,966
|
|
|
|
$
|
94,236
|
|
|
|
|
15
|
%
|
|
|
$
|
209,137
|
|
|
|
$
|
190,364
|
|
|
|
|
10
|
%
|
|
|
$
|
384,941
|
|
|
|
$
|
375,167
|
|
|
|
$
|
345,162
|
|
|
|
|
3
|
%
|
|
|
|
9
|
%
|
|
|
Mineral Nutrition
|
|
|
|
50,633
|
|
|
|
|
52,892
|
|
|
|
|
(4
|
)%
|
|
|
|
96,819
|
|
|
|
|
102,684
|
|
|
|
|
(6
|
)%
|
|
|
|
203,169
|
|
|
|
|
210,091
|
|
|
|
|
209,302
|
|
|
|
|
(3
|
)%
|
|
|
|
0
|
%
|
|
|
Performance Products
|
|
|
|
14,143
|
|
|
|
|
17,031
|
|
|
|
|
(17
|
)%
|
|
|
|
29,014
|
|
|
|
|
33,217
|
|
|
|
|
(13
|
)%
|
|
|
|
65,041
|
|
|
|
|
68,843
|
|
|
|
|
63,869
|
|
|
|
|
(6
|
)%
|
|
|
|
8
|
%
|
|
|
Total
|
|
|
$
|
172,742
|
|
|
|
$
|
164,159
|
|
|
|
|
5
|
%
|
|
|
$
|
334,970
|
|
|
|
$
|
326,265
|
|
|
|
|
3
|
%
|
|
|
$
|
653,151
|
|
|
|
$
|
654,101
|
|
|
|
$
|
618,333
|
|
|
|
|
(0
|
)%
|
|
|
|
6
|
%
|
|
|
Operating Income
|
|
|
Three months ended
December 31, |
|
|
% Change
|
|
|
Six months ended
December 31, |
|
|
% Change
|
|
|
Year ended June 30,
|
|
|
% Change
|
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||||||
|
Animal Health
|
|
|
$
|
20,872
|
|
|
|
$
|
16,185
|
|
|
|
|
29
|
%
|
|
|
$
|
41,236
|
|
|
|
$
|
32,798
|
|
|
|
|
26
|
%
|
|
|
$
|
69,090
|
|
|
|
$
|
57,447
|
|
|
|
$
|
47,034
|
|
|
|
|
20
|
%
|
|
|
|
22
|
%
|
|
|
% of segment net sales
|
|
|
|
19.3
|
%
|
|
|
|
17.2
|
%
|
|
|
|
|
|
|
|
|
19.7
|
%
|
|
|
|
17.2
|
%
|
|
|
|
|
|
|
|
|
17.9
|
%
|
|
|
|
15.3
|
%
|
|
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral Nutrition
|
|
|
|
2,265
|
|
|
|
|
2,605
|
|
|
|
|
(13
|
)%
|
|
|
|
4,113
|
|
|
|
|
4,725
|
|
|
|
|
(13
|
)%
|
|
|
|
9,794
|
|
|
|
|
10,790
|
|
|
|
|
11,323
|
|
|
|
|
(9
|
)%
|
|
|
|
(5
|
)%
|
|
|
% of segment net sales
|
|
|
|
4.5
|
%
|
|
|
|
4.9
|
%
|
|
|
|
|
|
|
|
|
4.2
|
%
|
|
|
|
4.6
|
%
|
|
|
|
|
|
|
|
|
4.8
|
%
|
|
|
|
5.1
|
%
|
|
|
|
5.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Products
|
|
|
|
1,013
|
|
|
|
|
1,763
|
|
|
|
|
(43
|
)%
|
|
|
|
2,019
|
|
|
|
|
2,845
|
|
|
|
|
(29
|
)%
|
|
|
|
2,685
|
|
|
|
|
5,058
|
|
|
|
|
2,932
|
|
|
|
|
(47
|
)%
|
|
|
|
73
|
%
|
|
|
% of segment net sales
|
|
|
|
7.2
|
%
|
|
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
7.0
|
%
|
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
4.1
|
%
|
|
|
|
7.3
|
%
|
|
|
|
4.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
(7,132
|
)
|
|
|
|
(6,397
|
)
|
|
|
|
*
|
|
|
|
|
(13,953
|
)
|
|
|
|
(13,003
|
)
|
|
|
|
*
|
|
|
|
|
(24,838
|
)
|
|
|
|
(23,970
|
)
|
|
|
|
(20,053
|
)
|
|
|
|
*
|
|
|
|
|
*
|
|
|
|
% of total net sales
|
|
|
|
(4.1
|
%)
|
|
|
|
(3.9
|
%)
|
|
|
|
|
|
|
|
|
(4.2
|
)%
|
|
|
|
(4.0
|
)%
|
|
|
|
|
|
|
|
|
(3.8
|
)%
|
|
|
|
(3.7
|
)%
|
|
|
|
(3.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
17,018
|
|
|
|
$
|
14,156
|
|
|
|
|
20
|
%
|
|
|
$
|
33,415
|
|
|
|
$
|
27,365
|
|
|
|
|
22
|
%
|
|
|
$
|
56,731
|
|
|
|
$
|
49,325
|
|
|
|
$
|
41,236
|
|
|
|
|
15
|
%
|
|
|
|
20
|
%
|
|
|
% of total net sales
|
|
|
|
9.9
|
%
|
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
10.0
|
%
|
|
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
8.7
|
%
|
|
|
|
7.5
|
%
|
|
|
|
6.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, |
|
|
$ Change
|
|
|
Six months ended
December 31, |
|
|
$ Change
|
|
|
Year ended June 30,
|
|
|
$ Change
|
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||||||
|
Domestic senior credit facility
|
|
|
$
|
395
|
|
|
|
$
|
254
|
|
|
|
$
|
141
|
|
|
|
$
|
811
|
|
|
|
$
|
497
|
|
|
|
$
|
314
|
|
|
|
$
|
1,250
|
|
|
|
$
|
977
|
|
|
|
$
|
793
|
|
|
|
$
|
273
|
|
|
|
$
|
184
|
|
|
|
Senior notes and senior subordinated notes
|
|
|
|
7,036
|
|
|
|
|
7,027
|
|
|
|
|
9
|
|
|
|
|
14,073
|
|
|
|
|
14,152
|
|
|
|
|
(79
|
)
|
|
|
|
27,750
|
|
|
|
|
27,750
|
|
|
|
|
26,482
|
|
|
|
|
—
|
|
|
|
|
1,268
|
|
|
|
Mayflower L.P., BFI Co., LLC and Teva Pharmaceutical Industries Ltd. term
loans |
|
|
|
989
|
|
|
|
|
1,172
|
|
|
|
|
(183
|
)
|
|
|
|
1,978
|
|
|
|
|
2,342
|
|
|
|
|
(364
|
)
|
|
|
|
4,132
|
|
|
|
|
4,605
|
|
|
|
|
5,036
|
|
|
|
|
(473
|
)
|
|
|
|
(431
|
)
|
|
|
Amortization of deferred financing fees
|
|
|
|
267
|
|
|
|
|
354
|
|
|
|
|
(87
|
)
|
|
|
|
530
|
|
|
|
|
705
|
|
|
|
|
(175
|
)
|
|
|
|
1,366
|
|
|
|
|
1,418
|
|
|
|
|
1,405
|
|
|
|
|
(52
|
)
|
|
|
|
13
|
|
|
|
Amortization of debt discount and other
|
|
|
|
100
|
|
|
|
|
162
|
|
|
|
|
(62
|
)
|
|
|
|
174
|
|
|
|
|
166
|
|
|
|
|
8
|
|
|
|
|
1,273
|
|
|
|
|
950
|
|
|
|
|
879
|
|
|
|
|
323
|
|
|
|
|
71
|
|
|
|
Interest Income
|
|
|
|
(68
|
)
|
|
|
|
(14
|
)
|
|
|
|
(54
|
)
|
|
|
|
(112
|
)
|
|
|
|
(82
|
)
|
|
|
|
(30
|
)
|
|
|
|
(142
|
)
|
|
|
|
(281
|
)
|
|
|
|
(307
|
)
|
|
|
|
139
|
|
|
|
|
26
|
|
|
|
Interest expense, net
|
|
|
$
|
8,179
|
|
|
|
$
|
8,955
|
|
|
|
$
|
(236
|
)
|
|
|
$
|
17,454
|
|
|
|
$
|
17,780
|
|
|
|
$
|
(326
|
)
|
|
|
$
|
35,629
|
|
|
|
$
|
35,419
|
|
|
|
$
|
34,288
|
|
|
|
$
|
210
|
|
|
|
$
|
1,131
|
|
|
|
|
|
|
Three months ended
December 31, |
|
|
% Change
|
|
|
Six months ended
December 31, |
|
|
% Change
|
|
|
Year ended June 30,
|
|
|
% Change
|
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||||||
|
Net income (loss)
|
|
|
$
|
2,302
|
|
|
|
$
|
12,073
|
|
|
|
|
(81
|
)%
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
|
(45
|
)%
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
|
257
|
%
|
|
|
|
*
|
|
|
|
Fair value of derivative instruments
|
|
|
|
(235
|
)
|
|
|
|
182
|
|
|
|
|
*
|
|
|
|
|
137
|
|
|
|
|
418
|
|
|
|
|
(67
|
)%
|
|
|
|
(222
|
)
|
|
|
|
(841
|
)
|
|
|
|
58
|
|
|
|
|
*
|
|
|
|
|
*
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
(3,003
|
)
|
|
|
|
(366
|
)
|
|
|
|
*
|
|
|
|
|
(3,135
|
)
|
|
|
|
(468
|
)
|
|
|
|
*
|
|
|
|
|
(5,968
|
)
|
|
|
|
(15,077
|
)
|
|
|
|
2,940
|
|
|
|
|
*
|
|
|
|
|
*
|
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
226
|
|
|
|
|
309
|
|
|
|
|
(27
|
)%
|
|
|
|
429
|
|
|
|
|
619
|
|
|
|
|
(31
|
)%
|
|
|
|
5,390
|
|
|
|
|
(10,413
|
)
|
|
|
|
1,014
|
|
|
|
|
*
|
|
|
|
|
*
|
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
3
|
|
|
|
|
(187
|
)
|
|
|
|
*
|
|
|
|
|
(221
|
)
|
|
|
|
(394
|
)
|
|
|
|
*
|
|
|
|
|
(2,016
|
)
|
|
|
|
—
|
|
|
|
|
(358
|
)
|
|
|
|
*
|
|
|
|
|
*
|
|
|
|
Comprehensive income (loss)
|
|
|
$
|
(707
|
)
|
|
|
$
|
12,011
|
|
|
|
|
*
|
|
|
|
$
|
5,355
|
|
|
|
$
|
14,907
|
|
|
|
|
(64
|
)%
|
|
|
$
|
22,075
|
|
|
|
$
|
(19,355
|
)
|
|
|
$
|
(9,268
|
)
|
|
|
|
*
|
|
|
|
|
*
|
|
|
|
|
|
|
Three months ended
December 31, |
|
|
$ Change
|
|
|
Six months ended
December 31, |
|
|
$ Change
|
|
|
Year ended June 30,
|
|
|
$ Change
|
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||||||
|
Net income (loss)
|
|
|
$
|
2,302
|
|
|
|
$
|
12,073
|
|
|
|
$
|
(9,771
|
)
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
$
|
(6,587
|
)
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
$
|
17,915
|
|
|
|
$
|
19,898
|
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
8,719
|
|
|
|
|
8,955
|
|
|
|
|
(236
|
)
|
|
|
|
17,454
|
|
|
|
|
17,780
|
|
|
|
|
(326
|
)
|
|
|
|
35,629
|
|
|
|
|
35,419
|
|
|
|
|
34,288
|
|
|
|
|
210
|
|
|
|
|
1,131
|
|
|
|
Provision (benefit) for income taxes
|
|
|
|
4,832
|
|
|
|
|
(7,056
|
)
|
|
|
|
11,888
|
|
|
|
|
6,003
|
|
|
|
|
(5,487
|
)
|
|
|
|
11,490
|
|
|
|
|
(7,043
|
)
|
|
|
|
6,138
|
|
|
|
|
5,033
|
|
|
|
|
(13,181
|
)
|
|
|
|
1,105
|
|
|
|
Depreciation and amortization
|
|
|
|
5,292
|
|
|
|
|
4,622
|
|
|
|
|
670
|
|
|
|
|
10,493
|
|
|
|
|
9,318
|
|
|
|
|
1,175
|
|
|
|
|
19,023
|
|
|
|
|
17,527
|
|
|
|
|
16,696
|
|
|
|
|
1,496
|
|
|
|
|
831
|
|
|
|
EBITDA
|
|
|
|
21,145
|
|
|
|
|
18,594
|
|
|
|
|
2,551
|
|
|
|
|
42,095
|
|
|
|
|
36,343
|
|
|
|
|
5,752
|
|
|
|
|
72,500
|
|
|
|
|
66,060
|
|
|
|
|
43,095
|
|
|
|
|
6,440
|
|
|
|
|
22,965
|
|
|
|
Other (income) expense, net
|
|
|
|
—
|
|
|
|
|
58
|
|
|
|
|
(58
|
)
|
|
|
|
—
|
|
|
|
|
46
|
|
|
|
|
(46
|
)
|
|
|
|
151
|
|
|
|
|
(400
|
)
|
|
|
|
593
|
|
|
|
|
551
|
|
|
|
|
(993
|
)
|
|
|
Foreign currency (gains) losses, net
|
|
|
|
1,165
|
|
|
|
|
126
|
|
|
|
|
1,039
|
|
|
|
|
1,813
|
|
|
|
|
294
|
|
|
|
|
1,519
|
|
|
|
|
3,103
|
|
|
|
|
1,192
|
|
|
|
|
(5,758
|
)
|
|
|
|
1,911
|
|
|
|
|
6,950
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
20,002
|
|
|
|
|
—
|
|
|
|
|
(20,002
|
)
|
|
|
Adjusted EBITDA
|
|
|
$
|
22,310
|
|
|
|
$
|
18,778
|
|
|
|
$
|
3,532
|
|
|
|
$
|
43,908
|
|
|
|
$
|
36,683
|
|
|
|
$
|
7,225
|
|
|
|
$
|
75,754
|
|
|
|
$
|
66,852
|
|
|
|
$
|
57,932
|
|
|
|
$
|
8,902
|
|
|
|
$
|
8,920
|
|
|
|
|
|
|
Three months ended
December 31, |
|
|
$ Change
|
|
|
Six months ended
December 31, |
|
|
$ Change
|
|
|
Year ended June 30,
|
|
|
$ Change
|
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||||||
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MFAs and
other |
|
|
$
|
80,049
|
|
|
|
$
|
76,002
|
|
|
|
$
|
4,047
|
|
|
|
$
|
158,014
|
|
|
|
$
|
153,049
|
|
|
|
$
|
4,965
|
|
|
|
$
|
303,743
|
|
|
|
$
|
290,535
|
|
|
|
$
|
273,259
|
|
|
|
$
|
13,208
|
|
|
|
$
|
17,276
|
|
|
|
Nutritional Specialties
|
|
|
|
16,431
|
|
|
|
|
12,791
|
|
|
|
|
3,640
|
|
|
|
|
30,563
|
|
|
|
|
24,259
|
|
|
|
|
6,304
|
|
|
|
|
52,337
|
|
|
|
|
47,686
|
|
|
|
|
43,061
|
|
|
|
|
4,651
|
|
|
|
|
4,625
|
|
|
|
Vaccines
|
|
|
|
11,486
|
|
|
|
|
5,443
|
|
|
|
|
6,043
|
|
|
|
|
20,560
|
|
|
|
|
13,056
|
|
|
|
|
7,504
|
|
|
|
|
28,861
|
|
|
|
|
36,946
|
|
|
|
|
28,842
|
|
|
|
|
(8,085
|
)
|
|
|
|
8,104
|
|
|
|
Animal Health
|
|
|
$
|
107,966
|
|
|
|
$
|
94,236
|
|
|
|
$
|
13,730
|
|
|
|
$
|
209,137
|
|
|
|
$
|
190,364
|
|
|
|
$
|
18,773
|
|
|
|
$
|
384,941
|
|
|
|
$
|
375,167
|
|
|
|
$
|
345,162
|
|
|
|
$
|
9,774
|
|
|
|
$
|
30,005
|
|
|
|
Mineral Nutrition
|
|
|
|
50,633
|
|
|
|
|
52,892
|
|
|
|
|
(2,259
|
)
|
|
|
|
96,819
|
|
|
|
|
102,684
|
|
|
|
|
(5,865
|
)
|
|
|
|
203,169
|
|
|
|
|
210,091
|
|
|
|
|
209,302
|
|
|
|
|
(6,922
|
)
|
|
|
|
789
|
|
|
|
Performance Products
|
|
|
|
14,143
|
|
|
|
|
17,031
|
|
|
|
|
(2,888
|
)
|
|
|
|
29,014
|
|
|
|
|
33,217
|
|
|
|
|
(4,203
|
)
|
|
|
|
65,041
|
|
|
|
|
68,843
|
|
|
|
|
63,869
|
|
|
|
|
(3,802
|
)
|
|
|
|
4,974
|
|
|
|
Total
|
|
|
$
|
172,742
|
|
|
|
$
|
164,159
|
|
|
|
$
|
8,583
|
|
|
|
$
|
334,970
|
|
|
|
$
|
326,265
|
|
|
|
$
|
8,705
|
|
|
|
$
|
653,151
|
|
|
|
$
|
654,101
|
|
|
|
$
|
618,333
|
|
|
|
$
|
(950
|
)
|
|
|
$
|
35,768
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal Health
|
|
|
$
|
24,522
|
|
|
|
$
|
19,516
|
|
|
|
$
|
5,006
|
|
|
|
$
|
48,629
|
|
|
|
$
|
39,619
|
|
|
|
$
|
9,010
|
|
|
|
$
|
82,997
|
|
|
|
$
|
70,456
|
|
|
|
$
|
60,112
|
|
|
|
$
|
12,541
|
|
|
|
$
|
10,344
|
|
|
|
% of segment net sales
|
|
|
|
22.7
|
%
|
|
|
|
20.7
|
%
|
|
|
|
|
|
|
|
|
23.3
|
%
|
|
|
|
20.8
|
%
|
|
|
|
|
|
|
|
|
21.6
|
%
|
|
|
|
18.8
|
%
|
|
|
|
17.4
|
%
|
|
||||||||||
|
Mineral Nutrition
|
|
|
|
2,878
|
|
|
|
|
3,175
|
|
|
|
|
(297
|
)
|
|
|
|
5,338
|
|
|
|
|
5,865
|
|
|
|
|
(527
|
)
|
|
|
|
12,069
|
|
|
|
|
13,007
|
|
|
|
|
13,333
|
|
|
|
|
(938
|
)
|
|
|
|
(326
|
)
|
|
|
% of segment net sales
|
|
|
|
5.7
|
%
|
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
5.5
|
%
|
|
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
5.9
|
%
|
|
|
|
6.2
|
%
|
|
|
|
6.4
|
%
|
|
||||||||||
|
Performance Products
|
|
|
|
1,103
|
|
|
|
|
1,826
|
|
|
|
|
(723
|
)
|
|
|
|
2,199
|
|
|
|
|
2,971
|
|
|
|
|
(772
|
)
|
|
|
|
2,927
|
|
|
|
|
5,132
|
|
|
|
|
2,963
|
|
|
|
|
(2,205
|
)
|
|
|
|
2,169
|
|
|
|
% of segment net sales
|
|
|
|
7.8
|
%
|
|
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
7.6
|
%
|
|
|
|
8.9
|
%
|
|
|
|
|
|
|
|
|
4.5
|
%
|
|
|
|
7.5
|
%
|
|
|
|
4.6
|
%
|
|
||||||||||
|
Corporate
|
|
|
|
(6,193
|
)
|
|
|
|
(5,739
|
)
|
|
|
|
(454
|
)
|
|
|
|
(12,258
|
)
|
|
|
|
(11,772
|
)
|
|
|
|
(486
|
)
|
|
|
|
(22,239
|
)
|
|
|
|
(21,743
|
)
|
|
|
|
(18,476
|
)
|
|
|
|
(496
|
)
|
|
|
|
(3,267
|
)
|
|
|
% of total net sales
|
|
|
|
(3.6
|
)%
|
|
|
|
(3.5
|
)%
|
|
|
|
|
|
|
|
|
(3.7
|
)%
|
|
|
|
(3.6
|
)%
|
|
|
|
|
|
|
|
|
(3.4
|
)%
|
|
|
|
(3.3
|
)%
|
|
|
|
(3.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
22,310
|
|
|
|
$
|
18,778
|
|
|
|
$
|
3,532
|
|
|
|
$
|
43,908
|
|
|
|
$
|
36,683
|
|
|
|
$
|
7,225
|
|
|
|
$
|
75,754
|
|
|
|
$
|
66,852
|
|
|
|
$
|
57,932
|
|
|
|
$
|
8,902
|
|
|
|
$
|
8,920
|
|
|
|
% of total net
sales |
|
|
|
12.9
|
%
|
|
|
|
11.4
|
%
|
|
|
|
|
|
|
|
|
13.1
|
%
|
|
|
|
11.2
|
%
|
|
|
|
|
|
|
|
|
11.6
|
%
|
|
|
|
10.2
|
%
|
|
|
|
9.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, |
|
|
$ Change
|
|
|
Six months ended
December 31, |
|
|
$ Change
|
|
|
Year ended June 30,
|
|
|
$ Change
|
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||||||
|
Reconciliation of operating income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Animal Health:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
20,872
|
|
|
|
$
|
16,185
|
|
|
|
$
|
4,687
|
|
|
|
$
|
41,236
|
|
|
|
$
|
32,798
|
|
|
|
$
|
8,438
|
|
|
|
$
|
69,090
|
|
|
|
$
|
57,447
|
|
|
|
$
|
47,034
|
|
|
|
$
|
11,643
|
|
|
|
$
|
10,413
|
|
|
|
Depreciation and amortization
|
|
|
|
3,650
|
|
|
|
|
3,331
|
|
|
|
|
319
|
|
|
|
|
7,393
|
|
|
|
|
6,821
|
|
|
|
|
572
|
|
|
|
|
13,907
|
|
|
|
|
13,009
|
|
|
|
|
13,078
|
|
|
|
|
898
|
|
|
|
|
(69
|
)
|
|
|
Adjusted
EBITDA |
|
|
|
24,522
|
|
|
|
|
19,516
|
|
|
|
|
5,006
|
|
|
|
|
48,629
|
|
|
|
|
39,619
|
|
|
|
|
9,010
|
|
|
|
|
82,997
|
|
|
|
|
70,456
|
|
|
|
|
60,112
|
|
|
|
|
12,541
|
|
|
|
|
10,344
|
|
|
|
Mineral Nutrition:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
2,265
|
|
|
|
|
2,605
|
|
|
|
|
(340
|
)
|
|
|
|
4,113
|
|
|
|
|
4,725
|
|
|
|
|
(612
|
)
|
|
|
|
9,794
|
|
|
|
|
10,790
|
|
|
|
|
11,323
|
|
|
|
|
(996
|
)
|
|
|
|
(533
|
)
|
|
|
Depreciation and amortization
|
|
|
|
613
|
|
|
|
|
570
|
|
|
|
|
43
|
|
|
|
|
1,225
|
|
|
|
|
1,140
|
|
|
|
|
85
|
|
|
|
|
2,275
|
|
|
|
|
2,217
|
|
|
|
|
2,010
|
|
|
|
|
58
|
|
|
|
|
207
|
|
|
|
Adjusted
EBITDA |
|
|
|
2,878
|
|
|
|
|
3,175
|
|
|
|
|
(297
|
)
|
|
|
|
5,338
|
|
|
|
|
5,865
|
|
|
|
|
(527
|
)
|
|
|
|
12,069
|
|
|
|
|
13,007
|
|
|
|
|
13,333
|
|
|
|
|
(938
|
)
|
|
|
|
(326
|
)
|
|
|
Performance Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
1,013
|
|
|
|
|
1,763
|
|
|
|
|
(750
|
)
|
|
|
|
2,019
|
|
|
|
|
2,845
|
|
|
|
|
(826
|
)
|
|
|
|
2,685
|
|
|
|
|
5,058
|
|
|
|
|
2,932
|
|
|
|
|
(2,373
|
)
|
|
|
|
2,126
|
|
|
|
Depreciation and amortization
|
|
|
|
90
|
|
|
|
|
63
|
|
|
|
|
27
|
|
|
|
|
180
|
|
|
|
|
126
|
|
|
|
|
54
|
|
|
|
|
242
|
|
|
|
|
74
|
|
|
|
|
31
|
|
|
|
|
168
|
|
|
|
|
43
|
|
|
|
Adjusted
EBITDA |
|
|
|
1,103
|
|
|
|
|
1,826
|
|
|
|
|
(723
|
)
|
|
|
|
2,199
|
|
|
|
|
2,971
|
|
|
|
|
(772
|
)
|
|
|
|
2,927
|
|
|
|
|
5,132
|
|
|
|
|
2,963
|
|
|
|
|
(2,205
|
)
|
|
|
|
2,169
|
|
|
|
Corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
(7,132
|
)
|
|
|
|
(6,397
|
)
|
|
|
|
(735
|
)
|
|
|
|
(13,953
|
)
|
|
|
|
(13,003
|
)
|
|
|
|
(950
|
)
|
|
|
|
(24,838
|
)
|
|
|
|
(23,970
|
)
|
|
|
|
(20,053
|
)
|
|
|
|
(868
|
)
|
|
|
|
(3,917
|
)
|
|
|
Depreciation and amortization
|
|
|
|
939
|
|
|
|
|
658
|
|
|
|
|
281
|
|
|
|
|
1,695
|
|
|
|
|
1,231
|
|
|
|
|
464
|
|
|
|
|
2,599
|
|
|
|
|
2,227
|
|
|
|
|
1,577
|
|
|
|
|
372
|
|
|
|
|
650
|
|
|
|
Adjusted
EBITDA |
|
|
|
(6,193
|
)
|
|
|
|
(5,739
|
)
|
|
|
|
(454
|
)
|
|
|
|
(12,258
|
)
|
|
|
|
(11,772
|
)
|
|
|
|
(486
|
)
|
|
|
|
(22,239
|
)
|
|
|
|
(21,743
|
)
|
|
|
|
(18,476
|
)
|
|
|
|
(496
|
)
|
|
|
|
(3,267
|
)
|
|
|
|
|
|
Three months ended
December 31, |
|
|
$ Change
|
|
|
Six months ended
December 31, |
|
|
$ Change
|
|
|
Year ended June 30,
|
|
|
$ Change
|
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||||||
|
Net income (loss)
|
|
|
$
|
2,302
|
|
|
|
$
|
12,073
|
|
|
|
$
|
(9,771
|
)
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
$
|
(6,587
|
)
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
$
|
17,915
|
|
|
|
$
|
19,898
|
|
|
|
Plus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense, net
|
|
|
|
—
|
|
|
|
|
58
|
|
|
|
|
(58
|
)
|
|
|
|
—
|
|
|
|
|
46
|
|
|
|
|
(46
|
)
|
|
|
|
151
|
|
|
|
|
(400
|
)
|
|
|
|
593
|
|
|
|
|
551
|
|
|
|
|
(993
|
)
|
|
|
Foreign currency (gains) losses,
net
|
|
|
|
1,165
|
|
|
|
|
126
|
|
|
|
|
1,039
|
|
|
|
|
1,813
|
|
|
|
|
294
|
|
|
|
|
1,519
|
|
|
|
|
3,103
|
|
|
|
|
1,192
|
|
|
|
|
(5,758
|
)
|
|
|
|
1,911
|
|
|
|
|
6,950
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
20,002
|
|
|
|
|
—
|
|
|
|
|
(20,002
|
)
|
|
|
Acquisition intangible
amortization
|
|
|
|
1,186
|
|
|
|
|
977
|
|
|
|
|
209
|
|
|
|
|
2,535
|
|
|
|
|
1,818
|
|
|
|
|
717
|
|
|
|
|
4,106
|
|
|
|
|
3,048
|
|
|
|
|
3,805
|
|
|
|
|
1,058
|
|
|
|
|
(757
|
)
|
|
|
Share based compensation
|
|
|
|
27
|
|
|
|
|
33
|
|
|
|
|
(6
|
)
|
|
|
|
55
|
|
|
|
|
66
|
|
|
|
|
(11
|
)
|
|
|
|
215
|
|
|
|
|
195
|
|
|
|
|
404
|
|
|
|
|
20
|
|
|
|
|
(209
|
)
|
|
|
Non-recurring income tax items
|
|
|
|
2,127
|
|
|
|
|
(7,995
|
)
|
|
|
|
10,122
|
|
|
|
|
2,127
|
|
|
|
|
(7,995
|
)
|
|
|
|
10,122
|
|
|
|
|
(9,053
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(9,053
|
)
|
|
|
|
—
|
|
|
|
Tax effect on adjustments
|
|
|
|
(131
|
)
|
|
|
|
(108
|
)
|
|
|
|
(23
|
)
|
|
|
|
(240
|
)
|
|
|
|
(221
|
)
|
|
|
|
(19
|
)
|
|
|
|
(955
|
)
|
|
|
|
(465
|
)
|
|
|
|
522
|
|
|
|
|
(490
|
)
|
|
|
|
(987
|
)
|
|
|
Adjusted net income
|
|
|
$
|
6,676
|
|
|
|
$
|
5,164
|
|
|
|
$
|
1,512
|
|
|
|
$
|
14,435
|
|
|
|
$
|
8,740
|
|
|
|
$
|
5,695
|
|
|
|
$
|
22,458
|
|
|
|
$
|
10,546
|
|
|
|
$
|
6,646
|
|
|
|
$
|
11,912
|
|
|
|
$
|
3,900
|
|
|
|
|
|
|
Six months ended
December 31, |
|
|
$ Change
|
|
|
Year ended June 30,
|
|
|
$ Change
|
|
||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||
|
Cash provided by/(used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
$
|
16,397
|
|
|
|
$
|
(2,002
|
)
|
|
|
$
|
18,399
|
|
|
|
$
|
415
|
|
|
|
$
|
31,882
|
|
|
|
$
|
(4,680
|
)
|
|
|
$
|
(31,467
|
)
|
|
|
$
|
36,562
|
|
|
|
Investing activities
|
|
|
|
(9,757
|
)
|
|
|
|
(27,857
|
)
|
|
|
|
18,100
|
|
|
|
|
(37,336
|
)
|
|
|
|
(17,637
|
)
|
|
|
|
(19,463
|
)
|
|
|
|
(19,699
|
)
|
|
|
|
1,826
|
|
|
|
Financing activities
|
|
|
|
(3,178
|
)
|
|
|
|
2,902
|
|
|
|
|
(6,080
|
)
|
|
|
|
10,875
|
|
|
|
|
(8,218
|
)
|
|
|
|
10,163
|
|
|
|
|
19,093
|
|
|
|
|
(18,381
|
)
|
|
|
Effect of exchange-rate changes on cash and cash equivalents
|
|
|
|
(357
|
)
|
|
|
|
80
|
|
|
|
|
(437
|
)
|
|
|
|
(485
|
)
|
|
|
|
(725
|
)
|
|
|
|
(127
|
)
|
|
|
|
240
|
|
|
|
|
(598
|
)
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
$
|
3,105
|
|
|
|
$
|
(26,877
|
)
|
|
|
$
|
29,982
|
|
|
|
$
|
(26,531
|
)
|
|
|
$
|
5,302
|
|
|
|
$
|
(14,107
|
)
|
|
|
$
|
(31,833
|
)
|
|
|
$
|
19,409
|
|
|
|
|
|
|
Six months ended
December 31, |
|
|
$ Change
|
|
|
Year ended June 30,
|
|
|
$ Change
|
|
||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013/
|
|
|
2013/
|
|
|
2012/
|
|
|||||||||||||||||||||||||||||||
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||
|
Adjusted EBITDA
|
|
|
$
|
43,908
|
|
|
|
$
|
36,683
|
|
|
|
$
|
7,225
|
|
|
|
$
|
75,754
|
|
|
|
$
|
66,852
|
|
|
|
$
|
57,932
|
|
|
|
$
|
8,902
|
|
|
|
$
|
8,920
|
|
|
|
Interest paid
|
|
|
|
(16,760
|
)
|
|
|
|
(16,578
|
)
|
|
|
|
(182
|
)
|
|
|
|
(33,824
|
)
|
|
|
|
(34,059
|
)
|
|
|
|
(30,079
|
)
|
|
|
|
235
|
|
|
|
|
(3,980
|
)
|
|
|
Income taxes paid
|
|
|
|
(3,835
|
)
|
|
|
|
(4,832
|
)
|
|
|
|
997
|
|
|
|
|
(7,061
|
)
|
|
|
|
(7,217
|
)
|
|
|
|
(3,799
|
)
|
|
|
|
156
|
|
|
|
|
(3,418
|
)
|
|
|
Payment of premiums and costs on extinguished debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(15,574
|
)
|
|
|
|
—
|
|
|
|
|
15,574
|
|
|
|
Changes in operating assets and liabilities and other items
|
|
|
|
(6,916
|
)
|
|
|
|
(17,275
|
)
|
|
|
|
10,359
|
|
|
|
|
(34,454
|
)
|
|
|
|
6,306
|
|
|
|
|
(13,160
|
)
|
|
|
|
(40,760
|
)
|
|
|
|
19,466
|
|
|
|
Net cash provided (used) by operating activities
|
|
|
$
|
16,397
|
|
|
|
$
|
(2,002
|
)
|
|
|
$
|
18,399
|
|
|
|
$
|
415
|
|
|
|
$
|
31,882
|
|
|
|
$
|
(4,680
|
)
|
|
|
$
|
(31,467
|
)
|
|
|
$
|
36,562
|
|
|
|
|
|
|
As of
December 31, 2013 |
|
|
As of June 30,
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|||||||||
|
Cash and cash equivalents
|
|
|
$
|
30,474
|
|
|
|
$
|
27,369
|
|
|
|
$
|
53,900
|
|
|
|
Working capital
|
|
|
|
159,421
|
|
|
|
|
153,677
|
|
|
|
|
127,472
|
|
|
|
Ratio of current assets to current liabilities
|
|
|
|
2.42:1
|
|
|
|
|
2.33:1
|
|
|
|
|
2.06:1
|
|
|
|
(in thousands)
|
|
|
As of December 31,
2013 |
|
|
As of June 30,
|
|
|
% Change
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2013/
|
|
||||||||||||||||||||
|
2013
|
|
|
2012
|
|
|
2012
|
|
||||||||||||||
|
Accounts receivable
–
trade
|
|
|
$
|
103,253
|
|
|
|
$
|
99,137
|
|
|
|
$
|
99,140
|
|
|
|
|
(0
|
)%
|
|
|
DSO
|
|
|
|
54
|
|
|
|
|
54
|
|
|
|
|
53
|
|
|
|
|
2
|
%
|
|
|
(in thousands)
|
|
|
As of December 31,
2013 |
|
|
As of June 30,
|
|
|
% Change
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2013/
|
|
||||||||||||||||||||
|
2013
|
|
|
2012
|
|
|
2012
|
|
||||||||||||||
|
Inventories
|
|
|
$
|
140,445
|
|
|
|
$
|
140,032
|
|
|
|
$
|
120,123
|
|
|
|
|
17
|
%
|
|
|
|
|
|
Years
|
|
|
|
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
Within 1
|
|
|
Over 1 to 3
|
|
|
Over 3 to 5
|
|
|
Over 5
|
|
|
Total
|
|
||||||||||
|
|
|
|
(in thousands)
|
|
||||||||||||||||||||||
|
Long-term debt (including current portion)
|
|
|
$
|
64
|
|
|
|
$
|
10,068
|
|
|
|
$
|
24,000
|
|
|
|
$
|
300,000
|
|
|
|
$
|
334,132
|
|
|
|
Domestic senior credit facility
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
34,000
|
|
|
|
|
—
|
|
|
|
|
34,000
|
|
|
|
Interest payments
|
|
|
|
32,984
|
|
|
|
|
63,668
|
|
|
|
|
59,376
|
|
|
|
|
—
|
|
|
|
|
156,028
|
|
|
|
Lease commitments
|
|
|
|
2,930
|
|
|
|
|
4,028
|
|
|
|
|
3,317
|
|
|
|
|
5,046
|
|
|
|
|
15,321
|
|
|
|
Deferred consideration on acquisition
|
|
|
|
1,400
|
|
|
|
|
2,856
|
|
|
|
|
1,490
|
|
|
|
|
670
|
|
|
|
|
6,416
|
|
|
|
Total contractual obligations
|
|
|
$
|
37,378
|
|
|
|
$
|
80,620
|
|
|
|
$
|
122,183
|
|
|
|
$
|
305,716
|
|
|
|
$
|
545,897
|
|
|
|
Year
|
|
|
Event(s)
|
|
---|---|---|---|---|---|
|
1946
|
|
|
Philipp Brothers Chemicals, Inc. (“PBC”) was spun off from its parent company Philipp Brothers Incorporated.
|
|
|
1974
|
|
|
PBC acquired an Israeli vitamin mixer.
|
|
|
1980
|
|
|
PBC acquired Prince Agri Products mineral nutrition business.
|
|
|
1980
|
|
|
PBC began manufacturing nicarbazin in Israel.
|
|
|
1994
|
|
|
PBC began manufacturing amprolium in Israel.
|
|
|
2000
|
|
|
PBC acquired Pfizer’s medicated feed additive business.
|
|
|
2003
|
|
|
PBC changed its name to Phibro Animal Health Corporation (“PAHC”).
|
|
|
2009
|
|
|
PAHC acquired Abic vaccines and pharma business.
|
|
|
2009
|
|
|
PAHC acquired the Baltzell mineral nutrition business.
|
|
|
2011
|
|
|
PAHC acquired rights to Animate
®
nutritional specialty product.
|
|
|
2012
|
|
|
PAHC acquired U.S. ANADA applications/registrations for lincomycin, sulfadimethoxine, tiamulin and amprolium water soluble powders.
|
|
|
2012
|
|
|
PAHC entered into a co-exclusive long-term license agreement for our proprietary vaccine delivery technology with a major global animal health company.
|
|
|
2012
|
|
|
PAHC acquired OGR including OmniGen patents, related intellectual property, R&D facilities and organization.
|
|
|
2013
|
|
|
PAHC entered into an agreement with Epitopix for the exclusive distribution of its autogenous vaccines for chickens which contain their proprietary SRP technology.
|
|
|
2014
|
|
|
PAHC acquired the aquaculture business of AquaVet, a leading aquaculture veterinary consulting and contract research firm based in Israel.
|
|
|
Brand
|
|
|
Active Ingredient
|
|
|
Market Entry of
Active Ingredient |
|
|
Description
|
|
---|---|---|---|---|---|---|---|---|---|---|---|
|
Terramycin
®
/ TM-50
®
/
TM-100
™
|
|
|
oxytetracycline
|
|
|
1951
|
|
|
Antibacterial with multiple applications for a wide number of species.
|
|
|
Neo-Terramycin
®
/
Neo-TM
™
|
|
|
oxytetracycline + neomycin
|
|
|
1999
|
|
|
Antibacterial with multiple applications for a wide number of species.
|
|
|
Nicarb
®
|
|
|
nicarbazin
|
|
|
1954
|
|
|
Anticoccidial for poultry
|
|
|
Amprolium
|
|
|
amprolium
|
|
|
1960
|
|
|
Anticoccidial for poultry and cattle
|
|
|
Bloat Guard
®
|
|
|
poloxalene
|
|
|
1967
|
|
|
Anti-bloat treatment for cattle
|
|
|
Banminth
®
|
|
|
pyrantel tartrate
|
|
|
1972
|
|
|
Anthelmintic for livestock
|
|
|
Mecadox
®
|
|
|
carbadox
|
|
|
1972
|
|
|
Antibacterial for swine to control salmonellosis and dysentery
|
|
|
Stafac
®
/Eskalin
™
/
V-Max
®
|
|
|
virginiamycin
|
|
|
1975
|
|
|
Antibacterial used to prevent and control diseases in poultry, swine and cattle
|
|
|
Coxistac
™
/Posistac
™
|
|
|
salinomycin
|
|
|
1979
|
|
|
Anticoccidial for poultry and cattle; disease preventative in swine
|
|
|
Rumatel
®
|
|
|
morantel tartrate
|
|
|
1981
|
|
|
Anthelmintic for livestock
|
|
|
Cerditac
™
/Cerdimix
™
|
|
|
oxibendazole
|
|
|
1982
|
|
|
Anthelmintic for livestock
|
|
|
Aviax
®
/ Aviax II
™
|
|
|
semduramicin,
|
|
|
1995
|
|
|
Anticoccidial for poultry
|
|
|
Aviax Plus
™
|
|
|
semduramicin + nicarbazin
|
|
|
2010
|
|
|
Anticoccidial for poultry
|
|
|
Brand
|
|
|
Market Entry
|
|
|
Description
|
|
---|---|---|---|---|---|---|---|---|
|
AB20
®
|
|
|
1989
|
|
|
Natural flow agent that improves overall feed quality and effectiveness
|
|
|
Chromax
®
|
|
|
1992
|
|
|
Source of organic chromium used to optimize swine production through reproductive efficiency
|
|
|
Biosaf
®
|
|
|
1997
|
|
|
Heat stable live-cell yeast that optimize production efficiency
|
|
|
Procreatin 7
®
|
|
|
1997
|
|
|
Live-cell yeast product for ruminant nutrition
|
|
|
Animate
®
|
|
|
1999
|
|
|
Maintains proper blood calcium levels in dairy cows during critical parturition period
|
|
|
Safmannan
®
|
|
|
2000
|
|
|
Yeast cell wall components that optimize
|
|
|
Brand
|
|
|
Market Entry
|
|
|
Description
|
|
---|---|---|---|---|---|---|---|---|
|
|
|
|
|
|
|
production efficiency
|
|
|
OmniGen-AF
®
|
|
|
2004
|
|
|
Optimizes immune status in dairy cows
|
|
|
Reap
®
|
|
|
2004
|
|
|
Feed enzyme that aids in nutrient availability for poultry and swine
|
|
|
NutrafitoPlus
™
|
|
|
2011
|
|
|
Proprietary blend that enhances absorption and utilization of nutrients for poultry, swine, ruminant and aquatic feeds
|
|
|
Provia 6086
™
|
|
|
2013
|
|
|
Direct fed microbial for all classes of livestock
|
|
|
Business Segment(s)
|
|
|
Location
|
|
|
Owned/Leased
|
|
|
Purpose(s)
|
|
---|---|---|---|---|---|---|---|---|---|---|---|
|
Animal Health
|
|
|
Beit Shemesh, Israel
|
|
|
Land lease
|
|
|
Manufacturing and Research
|
|
|
Animal Health
|
|
|
Braganca Paulista, Brazil
|
|
|
Owned
|
|
|
Manufacturing and Administrative
|
|
|
Animal Health
|
|
|
Corvallis, Oregon
|
|
|
Owned
|
|
|
Research
|
|
|
Animal Health
|
|
|
Guarulhos, Brazil
|
|
|
Owned
|
|
|
Manufacturing, Sales, Premixing, Research and Administrative
|
|
|
Animal Health
|
|
|
Hannibal, Missouri
|
|
|
Land lease
|
|
|
Manufacturing
|
|
|
Animal Health
|
|
|
Manhattan, Kansas
|
|
|
Leased
|
|
|
Research
|
|
|
Animal Health
|
|
|
Naot Hovav, Israel
|
|
|
Land lease
|
|
|
Manufacturing and Research
|
|
|
Mineral Nutrition
|
|
|
Omaha, Nebraska
|
|
|
Owned
|
|
|
Manufacturing and Premixing
|
|
|
Animal Health
|
|
|
Petach Tikva, Israel
|
|
|
Owned
|
|
|
Manufacturing and Premixing
|
|
|
Animal Health and Mineral Nutrition
|
|
|
Quincy, Illinois
|
|
|
Owned
|
|
|
Manufacturing, Sales, Premixing, Research and Administrative
|
|
|
Performance Products
|
|
|
Santa Fe Springs, California
|
|
|
Owned
|
|
|
Manufacturing
|
|
|
Animal Health
|
|
|
St. Paul, Minnesota
|
|
|
Leased
|
|
|
Research
|
|
|
Corporate
|
|
|
Teaneck, New Jersey
|
|
|
Leased
|
|
|
Corporate and Administrative
|
|
|
Name
|
|
|
Age
|
|
|
Position
|
|
---|---|---|---|---|---|---|---|---|
|
Jack C. Bendheim
|
|
|
67
|
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
|
|
Gerald K. Carlson
|
|
|
70
|
|
|
Director and Chief Operating Officer
|
|
|
Richard G. Johnson
|
|
|
64
|
|
|
Chief Financial Officer
|
|
|
Daniel M. Bendheim
|
|
|
42
|
|
|
Director and Executive Vice President, Corporate Strategy
|
|
|
Thomas G. Dagger
|
|
|
55
|
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
|
|
Larry L. Miller
|
|
|
50
|
|
|
President, Animal Health
|
|
|
David C. Storbeck
|
|
|
59
|
|
|
Vice President Finance and Treasurer
|
|
|
Dean J. Warras
|
|
|
44
|
|
|
President, Prince Agri Products
|
|
|
Daniel A. Welch
|
|
|
63
|
|
|
Senior Vice President, Human Resources
|
|
|
E. Thomas Corcoran
|
|
|
66
|
|
|
Director
|
|
|
Sam Gejdenson
|
|
|
65
|
|
|
Director
|
|
|
Ken Hanau
|
|
|
48
|
|
|
Director
|
|
|
Mary Lou Malanoski
|
|
|
57
|
|
|
Director
|
|
|
Carol A. Wrenn
|
|
|
53
|
|
|
Director
|
|
|
Name and principal position
(1)
|
|
|
Year
|
|
|
Salary
(2)
|
|
|
Bonus
Program |
|
|
Option
Awards (3) |
|
|
Change in
pension value and Nonqualified Deferred Compensation Earnings |
|
|
All Other
Compensation (4) |
|
|
Total
|
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jack C. Bendheim
Chairman of the Board; President |
|
|
|
2013
|
|
|
|
$
|
1,854,000
|
|
|
|
$
|
630,900
|
|
|
|
$
|
—
|
|
|
|
$
|
34,141
|
|
|
|
$
|
182,108
|
|
|
|
$
|
2,701,149
|
|
|
|
|
2012
|
|
|
|
|
1,800,000
|
|
|
|
|
622,500
|
|
|
|
|
—
|
|
|
|
|
277,528
|
|
|
|
|
210,272
|
|
|
|
|
2,910,300
|
|
|
|||
|
Gerald K. Carlson
Chief Executive Officer |
|
|
|
2013
|
|
|
|
|
566,500
|
|
|
|
|
347,000
|
|
|
|
|
82,091
|
|
|
|
|
26,135
|
|
|
|
|
40,093
|
|
|
|
|
1,061,819
|
|
|
|
|
2012
|
|
|
|
|
550,000
|
|
|
|
|
342,400
|
|
|
|
|
—
|
|
|
|
|
99,468
|
|
|
|
|
37,909
|
|
|
|
|
1,029,777
|
|
|
|||
|
Larry L. Miller
President, Animal Health |
|
|
|
2013
|
|
|
|
|
425,000
|
|
|
|
|
260,900
|
|
|
|
|
62,083
|
|
|
|
|
16,450
|
|
|
|
|
18,986
|
|
|
|
|
783,419
|
|
|
|
|
2012
|
|
|
|
|
400,000
|
|
|
|
|
285,900
|
|
|
|
|
140,903
|
|
|
|
|
36,397
|
|
|
|
|
18,205
|
|
|
|
|
881,405
|
|
|
|
Name
|
|
|
Year
|
|
|
Commuting
(1)
|
|
|
Housing
Allowance (2) |
|
|
401(k) Plan
Company Match (3) |
|
|
Other
(4)
|
|
|
Total
|
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jack C. Bendheim
|
|
|
|
2013
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
182,108
|
|
|
|
$
|
182,108
|
|
|
|
|
|
|
|
2012
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
210,272
|
|
|
|
|
210,272
|
|
|
|
Gerald K. Carlson
|
|
|
|
2013
|
|
|
|
|
—
|
|
|
|
|
24,000
|
|
|
|
|
9,100
|
|
|
|
|
6,993
|
|
|
|
|
40,093
|
|
|
|
|
|
|
|
2012
|
|
|
|
|
—
|
|
|
|
|
24,000
|
|
|
|
|
8,575
|
|
|
|
|
5,334
|
|
|
|
|
37,909
|
|
|
|
Larry L. Miller
|
|
|
|
2013
|
|
|
|
|
9,000
|
|
|
|
|
—
|
|
|
|
|
9,188
|
|
|
|
|
798
|
|
|
|
|
18,986
|
|
|
|
|
|
|
|
2012
|
|
|
|
|
9,000
|
|
|
|
|
—
|
|
|
|
|
8,575
|
|
|
|
|
630
|
|
|
|
|
18,205
|
|
|
|
Name
|
|
|
Number of
Securities Underlying Unexercised options (exerciseable) |
|
|
Number of
Securities Underlying Unexercised options (unexerciseable) |
|
|
Option
Exercise Price |
|
|
Option
Expiration Date |
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jack Bendheim
(1)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Gerald Carlson
|
|
|
|
525,000
|
|
|
|
|
175,000
|
|
|
|
$
|
5.23
|
|
|
|
February 28, 2019
|
|
|
Larry Miller
(2)
|
|
|
|
937,500
|
|
|
|
|
312,500
|
|
|
|
$
|
5.23
|
|
|
|
February 28, 2019
|
|
|
Name
|
|
|
Executive
Contributions in FY 2013 |
|
|
Company
Contributions in FY 2013 |
|
|
Aggregate
Earnings in FY 2013 |
|
|
Balance at
June 30, 2013 |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jack C. Bendheim
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
26,596
|
|
|
|
$
|
708,673
|
|
|
|
|
|
|
Common stock owned
before the offering |
|
|
Percentage
of voting power prior to this offering |
|
|
Common stock owned
after the offering (no option exercise) |
|
|
Percentage
of voting power after this offering (6) |
|
|
Common stock owned
after the offering (full option exercise) |
|
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Name and Address of Beneficial Owner
(1)
|
|
|
Number
|
|
|
Percentage
|
|
|
Number
|
|
|
Percentage
|
|
|
Number
|
|
|
Percentage
|
|
||||||||||||||||||||||
|
Principal and Selling Stockholders:
|
|
||||||||||||||||||||||||||||||||||||||||
|
BFI
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Mayflower
(3)
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Executive Officers and Directors:
|
|
||||||||||||||||||||||||||||||||||||||||
|
Jack C. Bendheim
(2)
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Gerald K. Carlson
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Richard G. Johnson
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Daniel M. Bendheim
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Thomas G. Dagger
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Larry L. Miller
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
David Storbeck
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Dean Warras
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Daniel A. Welch
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
E. Thomas Corcoran
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Sam Gejdenson
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Ken Hanau
(3)
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Mary Lou Malanoski
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Carol A. Wrenn
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
%
|
|
|
Executive Officers and Directors as a Group (14 persons)
(4)
(5)
|
|
|
|
|
|
|
|
|
100.0
|
%
|
|
|
|
|
|
As of
December 31, 2013 |
|
|
As of June 30,
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
2013
|
|
|
2012
|
|
|||||||||
|
Senior Notes due July 1, 2018
|
|
|
$
|
300,000
|
|
|
|
$
|
300,000
|
|
|
|
$
|
300,000
|
|
|
|
Term loan payable to Mayflower due December 31, 2016
|
|
|
|
24,000
|
|
|
|
|
24,000
|
|
|
|
|
24,000
|
|
|
|
Term loan payable to BFI due August 1, 2014
|
|
|
|
10,000
|
|
|
|
|
10,000
|
|
|
|
|
10,000
|
|
|
|
Term note payable to Teva due annually through January 29, 2013
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
5,500
|
|
|
|
Capitalized lease obligations
|
|
|
|
93
|
|
|
|
|
132
|
|
|
|
|
209
|
|
|
|
|
|
|
|
334,093
|
|
|
|
|
334,132
|
|
|
|
|
339,709
|
|
|
|
Unamortized imputed interest and debt discount
|
|
|
|
(2,272
|
)
|
|
|
|
(2,528
|
)
|
|
|
|
(3,588
|
)
|
|
|
|
|
|
|
331,821
|
|
|
|
|
331,604
|
|
|
|
|
336,121
|
|
|
|
Less: current maturities
|
|
|
|
(9,994
|
)
|
|
|
|
(64
|
)
|
|
|
|
(5,350
|
)
|
|
|
|
|
|
$
|
321,827
|
|
|
|
$
|
331,540
|
|
|
|
$
|
330,771
|
|
|
|
(in thousands)
|
|
|
|
|
||
---|---|---|---|---|---|---|---|
|
For the Years Ended June 30,
|
|
|
|
|
||
|
2014
|
|
|
$
|
64
|
|
|
|
2015
|
|
|
|
10,058
|
|
|
|
2016
|
|
|
|
10
|
|
|
|
2017
|
|
|
|
24,000
|
|
|
|
Thereafter
|
|
|
|
300,000
|
|
|
|
Total
|
|
|
$
|
334,132
|
|
|
|
Underwriter
|
|
|
Number
of Shares |
|
||
---|---|---|---|---|---|---|---|
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated |
|
|
|
|
|
|
|
Morgan Stanley & Co. LLC
|
|
|
|
|
|
|
|
Barclays Capital Inc.
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
Per Share
|
|
|
Without Option
|
|
|
With Option
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Public offering price
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
Underwriting discount
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
Proceeds, before expenses, to us
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
Proceeds, before expenses, to the selling stockholder
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
(in thousands, except per share)
|
|
||||||||||||
|
Net sales
|
|
|
$
|
653,151
|
|
|
|
$
|
654,101
|
|
|
|
$
|
618,333
|
|
|
|
Cost of goods sold
|
|
|
|
474,187
|
|
|
|
|
489,962
|
|
|
|
|
471,668
|
|
|
|
Gross profit
|
|
|
|
178,964
|
|
|
|
|
164,139
|
|
|
|
|
146,665
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
122,233
|
|
|
|
|
114,814
|
|
|
|
|
105,429
|
|
|
|
Operating income
|
|
|
|
56,731
|
|
|
|
|
49,325
|
|
|
|
|
41,236
|
|
|
|
Interest expense
|
|
|
|
31,383
|
|
|
|
|
31,436
|
|
|
|
|
30,369
|
|
|
|
Interest expense, shareholders
|
|
|
|
4,388
|
|
|
|
|
4,264
|
|
|
|
|
4,226
|
|
|
|
Interest (income)
|
|
|
|
(142
|
)
|
|
|
|
(281
|
)
|
|
|
|
(307
|
)
|
|
|
Foreign currency (gains) losses, net
|
|
|
|
3,103
|
|
|
|
|
1,192
|
|
|
|
|
(5,758
|
)
|
|
|
Other (income) expense, net
|
|
|
|
151
|
|
|
|
|
(400
|
)
|
|
|
|
593
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
20,002
|
|
|
|
Income (loss) before income taxes
|
|
|
|
17,848
|
|
|
|
|
13,114
|
|
|
|
|
(7,889
|
)
|
|
|
Provision (benefit) for income taxes
|
|
|
|
(7,043
|
)
|
|
|
|
6,138
|
|
|
|
|
5,033
|
|
|
|
Net income (loss)
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
Other comprehensive income (loss):
|
|
|||||||||||||||
|
Fair value of derivative instruments
|
|
|
$
|
(222
|
)
|
|
|
$
|
(841
|
)
|
|
|
$
|
58
|
|
|
|
Foreign currency translation adjustment
|
|
|
|
(5,968
|
)
|
|
|
|
(15,077
|
)
|
|
|
|
2,940
|
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
5,390
|
|
|
|
|
(10,413
|
)
|
|
|
|
1,014
|
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
(2,016
|
)
|
|
|
|
—
|
|
|
|
|
(358
|
)
|
|
|
Other comprehensive income (loss)
|
|
|
$
|
(2,816
|
)
|
|
|
$
|
(26,331
|
)
|
|
|
$
|
3,654
|
|
|
|
Comprehensive income (loss)
|
|
|
$
|
22,075
|
|
|
|
$
|
(19,355
|
)
|
|
|
$
|
(9,268
|
)
|
|
|
Net income (loss) per share—basic and diluted
|
|
|
$
|
0.36
|
|
|
|
$
|
0.10
|
|
|
|
$
|
(0.19
|
)
|
|
|
Weighted average number of shares—basic and diluted
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
(in thousands)
|
|
|||||||
|
ASSETS
|
|
||||||||||
|
Cash and cash equivalents
|
|
|
$
|
27,369
|
|
|
|
$
|
53,900
|
|
|
|
Accounts receivable, net
|
|
|
|
99,137
|
|
|
|
|
99,140
|
|
|
|
Inventories
|
|
|
|
140,032
|
|
|
|
|
120,123
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
29,848
|
|
|
|
|
28,724
|
|
|
|
Total current assets
|
|
|
|
296,386
|
|
|
|
|
301,887
|
|
|
|
Property, plant and equipment, net
|
|
|
|
104,422
|
|
|
|
|
101,661
|
|
|
|
Intangibles, net
|
|
|
|
35,155
|
|
|
|
|
15,049
|
|
|
|
Other assets
|
|
|
|
38,179
|
|
|
|
|
22,311
|
|
|
|
Total assets
|
|
|
$
|
474,142
|
|
|
|
$
|
440,908
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
|
||||||||||
|
Current portion of long-term debt
|
|
|
$
|
64
|
|
|
|
$
|
5,350
|
|
|
|
Accounts payable
|
|
|
|
57,902
|
|
|
|
|
67,932
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
57,438
|
|
|
|
|
52,583
|
|
|
|
Total current liabilities
|
|
|
|
115,404
|
|
|
|
|
125,865
|
|
|
|
Domestic senior credit facility
|
|
|
|
34,000
|
|
|
|
|
14,000
|
|
|
|
Long-term debt
|
|
|
|
297,666
|
|
|
|
|
297,305
|
|
|
|
Long-term debt, shareholders
|
|
|
|
33,874
|
|
|
|
|
33,466
|
|
|
|
Other liabilities
|
|
|
|
62,136
|
|
|
|
|
58,500
|
|
|
|
Total liabilities
|
|
|
|
543,080
|
|
|
|
|
529,136
|
|
|
|
Commitments and contingencies
|
|
||||||||||
|
Common shares
|
|
|
|
7
|
|
|
|
|
7
|
|
|
|
Paid-in capital
|
|
|
|
42,948
|
|
|
|
|
42,733
|
|
|
|
Accumulated deficit
|
|
|
|
(94,121
|
)
|
|
|
|
(116,012
|
)
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(17,772
|
)
|
|
|
|
(14,956
|
)
|
|
|
Total shareholders’ deficit
|
|
|
|
(68,938
|
)
|
|
|
|
(88,228
|
)
|
|
|
Total liabilities and shareholders’ deficit
|
|
|
$
|
474,142
|
|
|
|
$
|
440,908
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
(in thousands)
|
|
||||||||||||
|
OPERATING ACTIVITIES
|
|
|||||||||||||||
|
Net income (loss)
|
|
|
$
|
24,891
|
|
|
|
$
|
6,976
|
|
|
|
$
|
(12,922
|
)
|
|
|
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
|
|
|||||||||||||||
|
Depreciation and amortization
|
|
|
|
19,023
|
|
|
|
|
17,527
|
|
|
|
|
16,696
|
|
|
|
Amortization of deferred financing costs
|
|
|
|
1,366
|
|
|
|
|
1,418
|
|
|
|
|
1,405
|
|
|
|
Amortization of imputed interest and debt discount
|
|
|
|
560
|
|
|
|
|
327
|
|
|
|
|
428
|
|
|
|
Deferred income taxes
|
|
|
|
(12,035
|
)
|
|
|
|
(2,392
|
)
|
|
|
|
653
|
|
|
|
Foreign currency (gains) losses, net
|
|
|
|
2,887
|
|
|
|
|
3,414
|
|
|
|
|
(7,568
|
)
|
|
|
Other
|
|
|
|
(1,438
|
)
|
|
|
|
(482
|
)
|
|
|
|
1,168
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
20,002
|
|
|
|
Payments of premiums and costs on extinguished debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(15,574
|
)
|
|
|
Changes in operating assets and liabilities:
|
|
|||||||||||||||
|
Accounts receivable
|
|
|
|
(729
|
)
|
|
|
|
(3,775
|
)
|
|
|
|
(4,586
|
)
|
|
|
Inventories
|
|
|
|
(25,106
|
)
|
|
|
|
(745
|
)
|
|
|
|
(8,677
|
)
|
|
|
Prepaid expenses and other current assets
|
|
|
|
(7,548
|
)
|
|
|
|
(3,407
|
)
|
|
|
|
4,727
|
|
|
|
Other assets
|
|
|
|
(363
|
)
|
|
|
|
(5,792
|
)
|
|
|
|
496
|
|
|
|
Accounts payable
|
|
|
|
(6,601
|
)
|
|
|
|
6,410
|
|
|
|
|
1,147
|
|
|
|
Accrued expenses and other liabilities
|
|
|
|
5,508
|
|
|
|
|
12,403
|
|
|
|
|
(2,075
|
)
|
|
|
Net cash provided (used) by operating activities
|
|
|
|
415
|
|
|
|
|
31,882
|
|
|
|
|
(4,680
|
)
|
|
|
INVESTING ACTIVITIES
|
|
|||||||||||||||
|
Capital expenditures
|
|
|
|
(19,947
|
)
|
|
|
|
(14,824
|
)
|
|
|
|
(21,635
|
)
|
|
|
Business acquisitions
|
|
|
|
(18,692
|
)
|
|
|
|
(3,384
|
)
|
|
|
|
—
|
|
|
|
Sales of assets
|
|
|
|
1,303
|
|
|
|
|
571
|
|
|
|
|
2,172
|
|
|
|
Net cash provided (used) by investing activities
|
|
|
|
(37,336
|
)
|
|
|
|
(17,637
|
)
|
|
|
|
(19,463
|
)
|
|
|
FINANCING ACTIVITIES
|
|
|||||||||||||||
|
Borrowings under the domestic senior credit facility
|
|
|
|
75,000
|
|
|
|
|
1,000
|
|
|
|
|
64,362
|
|
|
|
Repayments of the domestic senior credit facility
|
|
|
|
(55,000
|
)
|
|
|
|
(4,500
|
)
|
|
|
|
(46,862
|
)
|
|
|
Proceeds from long-term debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
296,795
|
|
|
|
Payments of long-term debt and capital leases
|
|
|
|
(5,201
|
)
|
|
|
|
(4,718
|
)
|
|
|
|
(245,971
|
)
|
|
|
Debt issuance costs
|
|
|
|
(924
|
)
|
|
|
|
—
|
|
|
|
|
(8,161
|
)
|
|
|
Dividends paid to common shareholders
|
|
|
|
(3,000
|
)
|
|
|
|
—
|
|
|
|
|
(50,000
|
)
|
|
|
Net cash provided (used) by financing activities
|
|
|
|
10,875
|
|
|
|
|
(8,218
|
)
|
|
|
|
10,163
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
(485
|
)
|
|
|
|
(725
|
)
|
|
|
|
(127
|
)
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
(26,531
|
)
|
|
|
|
5,302
|
|
|
|
|
(14,107
|
)
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
53,900
|
|
|
|
|
48,598
|
|
|
|
|
62,705
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
27,369
|
|
|
|
$
|
53,900
|
|
|
|
$
|
48,598
|
|
|
|
Supplemental cash flow information
|
|
|||||||||||||||
|
Interest paid
|
|
|
$
|
33,824
|
|
|
|
$
|
34,059
|
|
|
|
$
|
30,079
|
|
|
|
Income taxes paid
|
|
|
|
7,061
|
|
|
|
|
7,217
|
|
|
|
|
3,799
|
|
|
|
Non-cash investing and financing activities
|
|
|||||||||||||||
|
Business acquisitions
|
|
|
$
|
4,550
|
|
|
|
$
|
3,000
|
|
|
|
$
|
—
|
|
|
|
Leasehold improvements
|
|
|
|
—
|
|
|
|
|
1,569
|
|
|
|
|
—
|
|
|
|
Capital lease additions
|
|
|
|
103
|
|
|
|
|
120
|
|
|
|
|
102
|
|
|
|
|
|
|
Common
Shares |
|
|
Paid-in
Capital |
|
|
Accumulated
Deficit |
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
|
Total
|
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
(in thousands)
|
|
||||||||||||||||||||||
|
As of June 30, 2010
|
|
|
$
|
7
|
|
|
|
$
|
42,134
|
|
|
|
$
|
(60,066
|
)
|
|
|
$
|
7,721
|
|
|
|
$
|
(10,204
|
)
|
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,922
|
)
|
|
|
|
|
|
|
|
|
(12,922
|
)
|
|
|
Other comprehensive income (loss):
|
|
|||||||||||||||||||||||||
|
Fair value of derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58
|
|
|
|
|
58
|
|
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,940
|
|
|
|
|
2,940
|
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,014
|
|
|
|
|
1,014
|
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(358
|
)
|
|
|
|
(358
|
)
|
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,268
|
)
|
|
|
Dividend to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(50,000
|
)
|
|
|
|
|
|
|
|
|
(50,000
|
)
|
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
404
|
|
|
|
As of June 30, 2011
|
|
|
$
|
7
|
|
|
|
$
|
42,538
|
|
|
|
$
|
(122,988
|
)
|
|
|
$
|
11,375
|
|
|
|
$
|
(69,068
|
)
|
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,976
|
|
|
|
|
|
|
|
|
|
6,976
|
|
|
|
Other comprehensive income (loss):
|
|
|||||||||||||||||||||||||
|
Fair value of derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(841
|
)
|
|
|
|
(841
|
)
|
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15,077
|
)
|
|
|
|
(15,077
|
)
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,413
|
)
|
|
|
|
(10,413
|
)
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(19,355
|
)
|
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
195
|
|
|
|
As of June 30, 2012
|
|
|
$
|
7
|
|
|
|
$
|
42,733
|
|
|
|
$
|
(116,012
|
)
|
|
|
$
|
(14,956
|
)
|
|
|
$
|
(88,228
|
)
|
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,891
|
|
|
|
|
|
|
|
|
|
24,891
|
|
|
|
Other comprehensive income (loss):
|
|
|||||||||||||||||||||||||
|
Fair value of derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(222
|
)
|
|
|
|
(222
|
)
|
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,968
|
)
|
|
|
|
(5,968
|
)
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,390
|
|
|
|
|
5,390
|
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,016
|
)
|
|
|
|
(2,016
|
)
|
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,075
|
|
|
|
Dividend to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,000
|
)
|
|
|
|
|
|
|
|
|
(3,000
|
)
|
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
215
|
|
|
|
As of June 30, 2013
|
|
|
$
|
7
|
|
|
|
$
|
42,948
|
|
|
|
$
|
(94,121
|
)
|
|
|
$
|
(17,772
|
)
|
|
|
$
|
(68,938
|
)
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Interest expense
|
|
|||||||||||||||
|
Domestic senior credit facility
|
|
|
$
|
1,250
|
|
|
|
$
|
977
|
|
|
|
$
|
793
|
|
|
|
Senior notes and senior subordinated notes
|
|
|
|
27,750
|
|
|
|
|
27,750
|
|
|
|
|
26,482
|
|
|
|
Mayflower, Teva and BFI term loans
|
|
|
|
4,132
|
|
|
|
|
4,605
|
|
|
|
|
5,036
|
|
|
|
Amortization of deferred financing fees
|
|
|
|
1,366
|
|
|
|
|
1,418
|
|
|
|
|
1,405
|
|
|
|
Amortization of debt discount and other
|
|
|
|
1,273
|
|
|
|
|
950
|
|
|
|
|
879
|
|
|
|
|
|
|
$
|
35,771
|
|
|
|
$
|
35,700
|
|
|
|
$
|
34,595
|
|
|
|
Depreciation and amortization
|
|
|||||||||||||||
|
Depreciation of property, plant and equipment
|
|
|
$
|
14,917
|
|
|
|
$
|
14,425
|
|
|
|
$
|
12,163
|
|
|
|
Amortization of intangible assets
|
|
|
|
4,106
|
|
|
|
|
3,048
|
|
|
|
|
3,805
|
|
|
|
Amortization of other assets
|
|
|
|
—
|
|
|
|
|
54
|
|
|
|
|
728
|
|
|
|
Depreciation and amortization
|
|
|
$
|
19,023
|
|
|
|
$
|
17,527
|
|
|
|
$
|
16,696
|
|
|
|
Research and development expenditures
|
|
|
$
|
6,638
|
|
|
|
$
|
7,189
|
|
|
|
$
|
6,807
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Accounts receivable, net
|
|
||||||||||
|
Trade accounts receivable
|
|
|
$
|
99,795
|
|
|
|
$
|
100,181
|
|
|
|
Allowance for doubtful accounts
|
|
|
|
(658
|
)
|
|
|
|
(1,041
|
)
|
|
|
Trade accounts receivable, net
|
|
|
$
|
99,137
|
|
|
|
$
|
99,140
|
|
|
|
Allowance for doubtful accounts
|
|
||||||||||
|
Balance at beginning of period
|
|
|
$
|
1,041
|
|
|
|
$
|
1,029
|
|
|
|
Provision for bad debts
|
|
|
|
(124
|
)
|
|
|
|
(115
|
)
|
|
|
Effect of changes in exchange rates
|
|
|
|
(265
|
)
|
|
|
|
127
|
|
|
|
Bad debt write-offs (recovery)
|
|
|
|
6
|
|
|
|
|
—
|
|
|
|
Balance at end of period
|
|
|
$
|
658
|
|
|
|
$
|
1,041
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Inventories
|
|
||||||||||
|
Raw materials
|
|
|
$
|
35,702
|
|
|
|
$
|
35,285
|
|
|
|
Work-in-process
|
|
|
|
7,541
|
|
|
|
|
5,728
|
|
|
|
Finished goods
|
|
|
|
96,789
|
|
|
|
|
79,110
|
|
|
|
|
|
|
$
|
140,032
|
|
|
|
$
|
120,123
|
|
|
|
Property, plant and equipment, net
|
|
||||||||||
|
Land
|
|
|
$
|
9,746
|
|
|
|
$
|
9,065
|
|
|
|
Buildings and improvements
|
|
|
|
46,960
|
|
|
|
|
46,414
|
|
|
|
Machinery and equipment
|
|
|
|
156,247
|
|
|
|
|
144,712
|
|
|
|
|
|
|
|
212,953
|
|
|
|
|
200,191
|
|
|
|
Accumulated depreciation
|
|
|
|
(108,531
|
)
|
|
|
|
(98,530
|
)
|
|
|
|
|
|
$
|
104,422
|
|
|
|
$
|
101,661
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Intangibles, net
|
|
||||||||||
|
Cost
|
|
||||||||||
|
Medicated feed additive product registrations
|
|
|
$
|
12,115
|
|
|
|
$
|
12,125
|
|
|
|
Rights to sell in international markets
|
|
|
|
4,292
|
|
|
|
|
4,292
|
|
|
|
Customer relationships
|
|
|
|
10,691
|
|
|
|
|
10,728
|
|
|
|
Technology
|
|
|
|
28,259
|
|
|
|
|
4,480
|
|
|
|
Distribution agreements
|
|
|
|
3,493
|
|
|
|
|
2,970
|
|
|
|
Trade names, trademarks and other
|
|
|
|
2,740
|
|
|
|
|
2,740
|
|
|
|
|
|
|
|
61,590
|
|
|
|
|
37,335
|
|
|
|
Accumulated amortization
|
|
||||||||||
|
Medicated feed additive product registrations
|
|
|
|
(10,778
|
)
|
|
|
|
(10,638
|
)
|
|
|
Rights to sell in international markets
|
|
|
|
(3,861
|
)
|
|
|
|
(3,431
|
)
|
|
|
Customer relationships
|
|
|
|
(3,203
|
)
|
|
|
|
(2,137
|
)
|
|
|
Technology
|
|
|
|
(3,729
|
)
|
|
|
|
(2,187
|
)
|
|
|
Distribution agreements
|
|
|
|
(3,179
|
)
|
|
|
|
(2,538
|
)
|
|
|
Trade names, trademarks and other
|
|
|
|
(1,685
|
)
|
|
|
|
(1,355
|
)
|
|
|
|
|
|
|
(26,435
|
)
|
|
|
|
(22,286
|
)
|
|
|
|
|
|
$
|
35,155
|
|
|
|
$
|
15,049
|
|
|
|
Other assets
|
|
||||||||||
|
Goodwill
|
|
|
$
|
12,613
|
|
|
|
$
|
1,717
|
|
|
|
Insurance claim receivable
|
|
|
|
5,350
|
|
|
|
|
5,350
|
|
|
|
Deferred financing fees
|
|
|
|
5,212
|
|
|
|
|
5,654
|
|
|
|
Deferred taxes
|
|
|
|
4,755
|
|
|
|
|
112
|
|
|
|
Other
|
|
|
|
10,249
|
|
|
|
|
9,478
|
|
|
|
|
|
|
$
|
38,179
|
|
|
|
$
|
22,311
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Goodwill roll-forward
|
|
||||||||||
|
Balance at beginning of period
|
|
|
$
|
1,717
|
|
|
|
$
|
1,717
|
|
|
|
OGR acquisition
|
|
|
|
10,896
|
|
|
|
|
—
|
|
|
|
Balance at end of period
|
|
|
$
|
12,613
|
|
|
|
$
|
1,717
|
|
|
|
Accrued expenses and other current liabilities
|
|
||||||||||
|
Employee related accruals
|
|
|
$
|
17,823
|
|
|
|
$
|
17,630
|
|
|
|
Interest and income tax accruals
|
|
|
|
15,686
|
|
|
|
|
14,442
|
|
|
|
Commissions and rebates
|
|
|
|
3,196
|
|
|
|
|
2,932
|
|
|
|
Insurance premiums and casualty claims
|
|
|
|
1,286
|
|
|
|
|
1,295
|
|
|
|
Professional fees
|
|
|
|
4,064
|
|
|
|
|
3,527
|
|
|
|
Other accrued liabilities
|
|
|
|
15,383
|
|
|
|
|
12,757
|
|
|
|
|
|
|
$
|
57,438
|
|
|
|
$
|
52,583
|
|
|
|
Other liabilities
|
|
||||||||||
|
Pension and other retirement benefits
|
|
|
$
|
26,021
|
|
|
|
$
|
28,995
|
|
|
|
Long term and deferred taxes
|
|
|
|
17,580
|
|
|
|
|
13,861
|
|
|
|
Deferred consideration on acquisitions
|
|
|
|
5,009
|
|
|
|
|
2,239
|
|
|
|
Product liability claims
|
|
|
|
5,600
|
|
|
|
|
5,600
|
|
|
|
Other long term liabilities
|
|
|
|
7,926
|
|
|
|
|
7,805
|
|
|
|
|
|
|
$
|
62,136
|
|
|
|
$
|
58,500
|
|
|
|
Accumulated other comprehensive income (loss)
|
|
||||||||||
|
Derivative instruments
|
|
|
$
|
(639
|
)
|
|
|
$
|
(417
|
)
|
|
|
Foreign currency translation adjustment
|
|
|
|
(2,519
|
)
|
|
|
|
3,449
|
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
(12,240
|
)
|
|
|
|
(17,630
|
)
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
(2,374
|
)
|
|
|
|
(358
|
)
|
|
|
|
|
|
$
|
(17,772
|
)
|
|
|
$
|
(14,956
|
)
|
|
|
Assets
|
|
|||||
|
Property, plant and equipment
|
|
|
$
|
1,202
|
|
|
|
Intangibles
|
|
|
|
23,781
|
|
|
|
Goodwill
|
|
|
|
10,896
|
|
|
|
Total assets
|
|
|
$
|
35,879
|
|
|
|
Liabilities
|
|
|||||
|
Other current and long-term liabilities
|
|
|
$
|
13,129
|
|
|
|
Total liabilities
|
|
|
|
13,129
|
|
|
|
Net assets acquired
|
|
|
$
|
22,750
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Net sales
|
|
|
$
|
653,151
|
|
|
|
$
|
654,101
|
|
|
|
Operating income (loss)
|
|
|
|
57,854
|
|
|
|
|
51,569
|
|
|
|
Net income (loss)
|
|
|
|
25,989
|
|
|
|
|
9,170
|
|
|
|
Net income (loss) per share—basic and diluted
|
|
|
|
0.38
|
|
|
|
|
0.13
|
|
|
|
Depreciation and amortization
|
|
|
|
19,877
|
|
|
|
|
19,235
|
|
|
|
Tender, consent and redemption premiums
|
|
|
$
|
14,172
|
|
|
|
Other costs
|
|
|
|
1,402
|
|
|
|
Write-off of deferred financing costs related to retired notes and cancelled domestic senior credit facility
|
|
|
|
4,428
|
|
|
|
|
|
|
$
|
20,002
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Senior notes due July 1, 2018
|
|
|
$
|
300,000
|
|
|
|
$
|
300,000
|
|
|
|
Term loan payable to Mayflower due December 31, 2016
|
|
|
|
24,000
|
|
|
|
|
24,000
|
|
|
|
Term loan payable to BFI due August 1, 2014
|
|
|
|
10,000
|
|
|
|
|
10,000
|
|
|
|
Term note payable to Teva due annually through January 29, 2013
|
|
|
|
—
|
|
|
|
|
5,500
|
|
|
|
Capitalized lease obligations
|
|
|
|
132
|
|
|
|
|
209
|
|
|
|
|
|
|
|
334,132
|
|
|
|
|
339,709
|
|
|
|
Unamortized imputed interest and debt discount
|
|
|
|
(2,528
|
)
|
|
|
|
(3,588
|
)
|
|
|
|
|
|
|
331,604
|
|
|
|
|
336,121
|
|
|
|
Less: current maturities
|
|
|
|
(64
|
)
|
|
|
|
(5,350
|
)
|
|
|
|
|
|
$
|
331,540
|
|
|
|
$
|
330,771
|
|
|
|
For the Years Ended June 30
|
|
|||||
---|---|---|---|---|---|---|---|
|
2014
|
|
|
$
|
64
|
|
|
|
2015
|
|
|
|
10,058
|
|
|
|
2016
|
|
|
|
10
|
|
|
|
2017
|
|
|
|
24,000
|
|
|
|
Thereafter
|
|
|
|
300,000
|
|
|
|
Total
|
|
|
$
|
334,132
|
|
|
|
As of June 30
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
Authorized shares
|
|
|
Par value
|
|
|
Issued and outstanding shares
|
|
|||||||||||
|
Preferred shares
|
|
|
|
1,000,000
|
|
|
|
$
|
1.00
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Common shares
|
|
|
|
200,000,000
|
|
|
|
$
|
0.0001
|
|
|
|
|
68,910,000
|
|
|
|
|
68,910,000
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Outstanding option shares
|
|
|
|
3,390,000
|
|
|
|
|
2,690,000
|
|
|
|
Vested and exercisable option shares
|
|
|
|
2,542,500
|
|
|
|
|
1,345,000
|
|
|
|
Fair value of options vested
|
|
|
$
|
1,102
|
|
|
|
$
|
712
|
|
|
|
Unrecognized compensation expense
|
|
|
$
|
73
|
|
|
|
$
|
184
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Forfeited option shares
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
380,000
|
|
|
|
Compensation expense
|
|
|
$
|
215
|
|
|
|
$
|
195
|
|
|
|
$
|
404
|
|
|
|
Risk-free rate of return
|
|
|
2.70%
|
|
|
Expected life
|
|
|
3.0 to 7.5 years
|
|
|
Expected volatility
|
|
|
35%
–
50%
|
|
|
Expected dividend yield
|
|
|
0.0%
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Change in benefit obligation
|
|
||||||||||
|
Benefit obligation at beginning of year
|
|
|
$
|
46,811
|
|
|
|
$
|
36,655
|
|
|
|
Service cost
|
|
|
|
2,729
|
|
|
|
|
2,093
|
|
|
|
Interest cost
|
|
|
|
2,058
|
|
|
|
|
1,957
|
|
|
|
Benefits paid
|
|
|
|
(796
|
)
|
|
|
|
(627
|
)
|
|
|
Actuarial (gain) loss
|
|
|
|
(4,233
|
)
|
|
|
|
6,733
|
|
|
|
Benefit obligation at end of year
|
|
|
$
|
46,569
|
|
|
|
$
|
46,811
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Change in plan assets
|
|
||||||||||
|
Fair value of plan assets at beginning of year
|
|
|
$
|
27,856
|
|
|
|
$
|
26,247
|
|
|
|
Actual return on plan assets
|
|
|
|
1,888
|
|
|
|
|
(1,895
|
)
|
|
|
Employer contributions
|
|
|
|
2,553
|
|
|
|
|
4,131
|
|
|
|
Benefits paid
|
|
|
|
(796
|
)
|
|
|
|
(627
|
)
|
|
|
Fair value of plan assets at end of year
|
|
|
$
|
31,501
|
|
|
|
$
|
27,856
|
|
|
|
Funded status at end of year
|
|
|
$
|
(15,068
|
)
|
|
|
$
|
(18,955
|
)
|
|
|
As of June 30, 2013
|
|
|||||
---|---|---|---|---|---|---|---|
|
Unrecognized net actuarial (gain) loss and prior service cost
|
|
|
$
|
12,240
|
|
|
|
Change in Accumulated Other Comprehensive (Income) Loss
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Balance at beginning of period
|
|
|
$
|
17,630
|
|
|
|
$
|
7,217
|
|
|
|
Amortization of net actuarial loss (gain) and prior service cost
|
|
|
|
(1,405
|
)
|
|
|
|
(255
|
)
|
|
|
Current period net actuarial loss (gain)
|
|
|
|
(3,985
|
)
|
|
|
|
10,668
|
|
|
|
Net change
|
|
|
|
(5,390
|
)
|
|
|
|
10,413
|
|
|
|
Balance at end of period
|
|
|
$
|
12,240
|
|
|
|
$
|
17,630
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Service cost—benefits earned during the year
|
|
|
$
|
2,729
|
|
|
|
$
|
2,093
|
|
|
|
$
|
1,948
|
|
|
|
Interest cost on benefit obligation
|
|
|
|
2,058
|
|
|
|
|
1,957
|
|
|
|
|
1,721
|
|
|
|
Expected return on plan assets
|
|
|
|
(2,136
|
)
|
|
|
|
(2,040
|
)
|
|
|
|
(1,626
|
)
|
|
|
Amortization of net actuarial (gain) loss and prior service costs
|
|
|
|
1,405
|
|
|
|
|
255
|
|
|
|
|
463
|
|
|
|
Net periodic pension expense
|
|
|
$
|
4,056
|
|
|
|
$
|
2,265
|
|
|
|
$
|
2,506
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
---|---|---|---|---|---|---|---|---|---|---|---|
|
Discount rate for service and interest
|
|
|
4.4%
|
|
|
5.5%
|
|
|
5.4%
|
|
|
Expected rate of return on plan assets
|
|
|
7.5%
|
|
|
7.5%
|
|
|
7.5%
|
|
|
Rate of compensation increase
|
|
|
3.0%
–
3.75%
|
|
|
3.0%
–
4.5%
|
|
|
3.0%
–
4.5%
|
|
|
Discount rate for year-end benefit obligation
|
|
|
5.0%
|
|
|
4.4%
|
|
|
5.5%
|
|
|
2014
|
|
|
$
|
1,264
|
|
|
|
2015
|
|
|
|
1,398
|
|
|
|
2016
|
|
|
|
1,636
|
|
|
|
2017
|
|
|
|
1,813
|
|
|
|
2018
|
|
|
|
1,968
|
|
|
|
2019
–
2023
|
|
|
|
13,905
|
|
|
|
|
|
|
Target Allocation
|
|
|
Percentage of Plan Assets
|
|
|||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
For the Years Ended June 30
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
||||
|
Debt securities
|
|
|
20%
–
40%
|
|
|
|
25
|
%
|
|
|
|
30
|
%
|
|
|
Equity securities
|
|
|
50%
–
80%
|
|
|
|
70
|
%
|
|
|
|
57
|
%
|
|
|
Other
|
|
|
6%
–
12%
|
|
|
|
5
|
%
|
|
|
|
13
|
%
|
|
|
|
|
|
Fair Value Measurements Using
|
|
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
As of June 30, 2013
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||||||
|
Cash and cash equivalents
|
|
|
$
|
581
|
|
|
|
$
|
404
|
|
|
|
$
|
—
|
|
|
|
$
|
985
|
|
|
|
Common-collective funds
|
|
||||||||||||||||||||
|
Global large cap equities
|
|
|
|
6,555
|
|
|
|
|
4,743
|
|
|
|
|
—
|
|
|
|
|
11,298
|
|
|
|
Fixed income securities
|
|
|
|
—
|
|
|
|
|
6,730
|
|
|
|
|
—
|
|
|
|
|
6,730
|
|
|
|
Mutual funds
|
|
||||||||||||||||||||
|
Global small and mid-cap equities
|
|
|
|
10,887
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
10,887
|
|
|
|
Real estate
|
|
|
|
1,320
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,320
|
|
|
|
Other
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
280
|
|
|
|
|
280
|
|
|
|
|
|
|
$
|
19,343
|
|
|
|
$
|
11,877
|
|
|
|
$
|
280
|
|
|
|
$
|
31,500
|
|
|
|
|
|
|
Fair Value Measurements Using
|
|
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
As of June 30, 2012
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||||||
|
Cash and cash equivalents
|
|
|
$
|
524
|
|
|
|
$
|
1,473
|
|
|
|
$
|
—
|
|
|
|
$
|
1,997
|
|
|
|
Common-collective funds
|
|
||||||||||||||||||||
|
Global large cap equities
|
|
|
|
3,241
|
|
|
|
|
3,546
|
|
|
|
|
—
|
|
|
|
|
6,787
|
|
|
|
Fixed income securities
|
|
|
|
—
|
|
|
|
|
6,220
|
|
|
|
|
—
|
|
|
|
|
6,220
|
|
|
|
Mutual funds
|
|
||||||||||||||||||||
|
Global small and mid-cap equities
|
|
|
|
8,971
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
8,971
|
|
|
|
Real estate
|
|
|
|
2,163
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2,163
|
|
|
|
Foreign currency deposits
|
|
|
|
—
|
|
|
|
|
1,268
|
|
|
|
|
—
|
|
|
|
|
1,268
|
|
|
|
Other
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
450
|
|
|
|
|
450
|
|
|
|
|
|
|
$
|
14,899
|
|
|
|
$
|
12,507
|
|
|
|
$
|
450
|
|
|
|
$
|
27,856
|
|
|
|
Change in Fair Value of Level 3 Assets
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Balance at beginning of period
|
|
|
$
|
450
|
|
|
|
$
|
466
|
|
|
|
Redemptions
|
|
|
|
—
|
|
|
|
|
(122
|
)
|
|
|
Purchases
|
|
|
|
51
|
|
|
|
|
68
|
|
|
|
Change in fair value
|
|
|
|
(221
|
)
|
|
|
|
38
|
|
|
|
Balance at end of period
|
|
|
$
|
280
|
|
|
|
$
|
450
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Domestic
|
|
|
$
|
(6,581
|
)
|
|
|
$
|
(10,002
|
)
|
|
|
$
|
(6,077
|
)
|
|
|
Foreign
|
|
|
|
24,429
|
|
|
|
|
23,116
|
|
|
|
|
(1,812
|
)
|
|
|
Income (loss) before income taxes
|
|
|
$
|
17,848
|
|
|
|
$
|
13,114
|
|
|
|
$
|
(7,889
|
)
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Current tax provision (benefit):
|
|
|||||||||||||||
|
Federal
|
|
|
$
|
—
|
|
|
|
$
|
66
|
|
|
|
$
|
(994
|
)
|
|
|
State and local
|
|
|
|
391
|
|
|
|
|
219
|
|
|
|
|
271
|
|
|
|
Foreign
|
|
|
|
4,487
|
|
|
|
|
7,555
|
|
|
|
|
5,461
|
|
|
|
Total current tax provision
|
|
|
|
4,878
|
|
|
|
|
7,840
|
|
|
|
|
4,738
|
|
|
|
Deferred tax provision (benefit):
|
|
|||||||||||||||
|
Federal
|
|
|
|
(12,160
|
)
|
|
|
|
(6,282
|
)
|
|
|
|
(6,652
|
)
|
|
|
State and local
|
|
|
|
(616
|
)
|
|
|
|
(1,275
|
)
|
|
|
|
(652
|
)
|
|
|
Foreign
|
|
|
|
(1,204
|
)
|
|
|
|
(290
|
)
|
|
|
|
534
|
|
|
|
Change in valuation allowance—domestic
|
|
|
|
1,704
|
|
|
|
|
7,557
|
|
|
|
|
6,946
|
|
|
|
Change in valuation allowance—foreign
|
|
|
|
355
|
|
|
|
|
(1,412
|
)
|
|
|
|
119
|
|
|
|
Total deferred tax provision
|
|
|
|
(11,921
|
)
|
|
|
|
(1,702
|
)
|
|
|
|
295
|
|
|
|
Provision (benefit) for income taxes
|
|
|
$
|
(7,043
|
)
|
|
|
$
|
6,138
|
|
|
|
$
|
5,033
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Federal income tax rate
|
|
|
|
35.0
|
%
|
|
|
|
35.0
|
%
|
|
|
|
(35.0
|
)%
|
|
|
State and local taxes, net of federal income tax effect
|
|
|
|
1.4
|
|
|
|
|
1.1
|
|
|
|
|
2.2
|
|
|
|
Foreign tax rate differential, foreign withholding and change in foreign valuation allowance
|
|
|
|
(24.6
|
)
|
|
|
|
(22.7
|
)
|
|
|
|
86.7
|
|
|
|
Change in federal valuation allowance
|
|
|
|
7.8
|
|
|
|
|
47.9
|
|
|
|
|
84.3
|
|
|
|
OGR acquisition adjustment
|
|
|
|
(50.7
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Taxable income not recorded on books
|
|
|
|
0.6
|
|
|
|
|
2.4
|
|
|
|
|
3.7
|
|
|
|
Permanent items
|
|
|
|
(7.9
|
)
|
|
|
|
(16.1
|
)
|
|
|
|
(76.4
|
)
|
|
|
Other
|
|
|
|
(1.1
|
)
|
|
|
|
(0.8
|
)
|
|
|
|
(1.7
|
)
|
|
|
Effective tax rate
|
|
|
|
(39.5
|
)%
|
|
|
|
46.8
|
%
|
|
|
|
63.8
|
%
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Deferred tax assets:
|
|
||||||||||
|
Employee related accruals
|
|
|
$
|
10,709
|
|
|
|
$
|
12,150
|
|
|
|
Environmental remediation
|
|
|
|
2,348
|
|
|
|
|
2,228
|
|
|
|
Net operating loss carry forwards—domestic
|
|
|
|
18,790
|
|
|
|
|
18,228
|
|
|
|
Net operating loss carry forwards—foreign
|
|
|
|
9,860
|
|
|
|
|
11,128
|
|
|
|
Other
|
|
|
|
8,413
|
|
|
|
|
2,831
|
|
|
|
|
|
|
|
50,120
|
|
|
|
|
46,565
|
|
|
|
Valuation allowance
|
|
|
|
(27,753
|
)
|
|
|
|
(36,763
|
)
|
|
|
|
|
|
|
22,367
|
|
|
|
|
9,802
|
|
|
|
Deferred tax liabilities:
|
|
||||||||||
|
Property, plant and equipment and intangible assets
|
|
|
|
(14,645
|
)
|
|
|
|
(5,529
|
)
|
|
|
Unrealized foreign exchange gains
|
|
|
|
(4,827
|
)
|
|
|
|
(4,248
|
)
|
|
|
Other
|
|
|
|
(573
|
)
|
|
|
|
(60
|
)
|
|
|
|
|
|
|
(20,045
|
)
|
|
|
|
(9,837
|
)
|
|
|
Net deferred tax asset (liability)
|
|
|
$
|
2,322
|
|
|
|
$
|
(35
|
)
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Prepaid expenses and other current assets
|
|
|
$
|
2,294
|
|
|
|
$
|
7,029
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
(1,732
|
)
|
|
|
|
(2
|
)
|
|
|
Other assets
|
|
|
|
4,755
|
|
|
|
|
112
|
|
|
|
Other liabilities
|
|
|
|
(2,995
|
)
|
|
|
|
(7,174
|
)
|
|
|
|
|
|
$
|
2,322
|
|
|
|
$
|
(35
|
)
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Balance at beginning of period
|
|
|
$
|
36,763
|
|
|
|
$
|
30,618
|
|
|
|
Change in valuation allowance
|
|
|
|
2,059
|
|
|
|
|
6,145
|
|
|
|
Permanent adjustment for Other Comprehensive Income
|
|
|
|
(2,016
|
)
|
|
|
|
—
|
|
|
|
OGR acquisition adjustments
|
|
|
|
(9,053
|
)
|
|
|
|
—
|
|
|
|
Balance at end of period
|
|
|
$
|
27,753
|
|
|
|
$
|
36,763
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Unrecognized tax benefits at beginning of period
|
|
|
$
|
6,565
|
|
|
|
$
|
6,180
|
|
|
|
$
|
5,112
|
|
|
|
Additions based on tax positions related to prior periods
|
|
|
|
4,996
|
|
|
|
|
216
|
|
|
|
|
144
|
|
|
|
Additions based on tax positions related to the current period
|
|
|
|
404
|
|
|
|
|
646
|
|
|
|
|
804
|
|
|
|
Exchange impact
|
|
|
|
296
|
|
|
|
|
(477
|
)
|
|
|
|
120
|
|
|
|
Unrecognized tax benefits at end of period
|
|
|
$
|
12,261
|
|
|
|
$
|
6,565
|
|
|
|
$
|
6,180
|
|
|
|
For the Years Ended June 30
|
|
|
Capital leases
|
|
|
Non-cancellable operating leases
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2014
|
|
|
$
|
79
|
|
|
|
$
|
2,930
|
|
|
|
2015
|
|
|
|
63
|
|
|
|
|
2,180
|
|
|
|
2016
|
|
|
|
11
|
|
|
|
|
1,848
|
|
|
|
2017
|
|
|
|
—
|
|
|
|
|
1,653
|
|
|
|
2018
|
|
|
|
—
|
|
|
|
|
1,664
|
|
|
|
Thereafter
|
|
|
|
—
|
|
|
|
|
5,046
|
|
|
|
Total minimum lease payments
|
|
|
$
|
153
|
|
|
|
$
|
15,321
|
|
|
|
Amounts representing interest
|
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
Present value of minimum lease payments
|
|
|
$
|
132
|
|
|
|
|
|
|
|
|
Instrument
|
|
|
Hedge
|
|
|
Notional
amount at June 30, 2013 |
|
|
Fair value as of June 30,
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2013
|
|
|
2012
|
|
|||||||||||||||
|
Options
|
|
|
Brazilian Real calls
|
|
|
R$
|
111,000
|
|
|
|
$
|
365
|
|
|
|
$
|
327
|
|
|
|
Options
|
|
|
Brazilian Real puts
|
|
|
(R$
|
111,000
|
)
|
|
|
|
(1,004
|
)
|
|
|
|
(728
|
)
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Carrying values
|
|
||||||||||
|
Senior Notes due July 1, 2018
|
|
|
$
|
300,000
|
|
|
|
$
|
300,000
|
|
|
|
Less unamortized original issue discount
|
|
|
|
(2,402
|
)
|
|
|
|
(2,762
|
)
|
|
|
|
|
|
|
297,598
|
|
|
|
|
297,238
|
|
|
|
Term loan payable to Mayflower due December 31, 2016
|
|
|
|
24,000
|
|
|
|
|
24,000
|
|
|
|
Less unamortized discount
|
|
|
|
—
|
|
|
|
|
(307
|
)
|
|
|
|
|
|
|
24,000
|
|
|
|
|
23,693
|
|
|
|
Term loan payable to BFI due August 1, 2014
|
|
|
|
10,000
|
|
|
|
|
10,000
|
|
|
|
Less unamortized discount
|
|
|
|
(126
|
)
|
|
|
|
(227
|
)
|
|
|
|
|
|
|
9,874
|
|
|
|
|
9,773
|
|
|
|
Term note payable to Teva due annually through January 29, 2013
|
|
|
|
—
|
|
|
|
|
5,500
|
|
|
|
Less unamortized imputed interest
|
|
|
|
—
|
|
|
|
|
(292
|
)
|
|
|
|
|
|
|
—
|
|
|
|
|
5,208
|
|
|
|
Fair values
|
|
||||||||||
|
Senior Notes due July 1, 2018
|
|
|
$
|
322,500
|
|
|
|
$
|
294,750
|
|
|
|
Term loan payable to Mayflower due December 31, 2016
|
|
|
|
26,968
|
|
|
|
|
24,257
|
|
|
|
Term loan payable to BFI due August 1, 2014
|
|
|
|
10,644
|
|
|
|
|
10,450
|
|
|
|
Term note payable to Teva due annually through January 29, 2013
|
|
|
|
—
|
|
|
|
|
5,334
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Net sales
|
|
|||||||||||||||
|
Animal Health
|
|
|
$
|
384,941
|
|
|
|
$
|
375,167
|
|
|
|
$
|
345,162
|
|
|
|
Mineral Nutrition
|
|
|
|
203,169
|
|
|
|
|
210,091
|
|
|
|
|
209,302
|
|
|
|
Performance Products
|
|
|
|
65,041
|
|
|
|
|
68,843
|
|
|
|
|
63,869
|
|
|
|
|
|
|
$
|
653,151
|
|
|
|
$
|
654,101
|
|
|
|
$
|
618,333
|
|
|
|
Operating income
|
|
|||||||||||||||
|
Animal Health
|
|
|
$
|
69,090
|
|
|
|
$
|
57,447
|
|
|
|
$
|
47,034
|
|
|
|
Mineral Nutrition
|
|
|
|
9,794
|
|
|
|
|
10,790
|
|
|
|
|
11,323
|
|
|
|
Performance Products
|
|
|
|
2,685
|
|
|
|
|
5,058
|
|
|
|
|
2,932
|
|
|
|
Corporate
|
|
|
|
(24,838
|
)
|
|
|
|
(23,970
|
)
|
|
|
|
(20,053
|
)
|
|
|
|
|
|
$
|
56,731
|
|
|
|
$
|
49,325
|
|
|
|
$
|
41,236
|
|
|
|
Depreciation and amortization
|
|
|||||||||||||||
|
Animal Health
|
|
|
$
|
13,907
|
|
|
|
$
|
13,009
|
|
|
|
$
|
13,078
|
|
|
|
Mineral Nutrition
|
|
|
|
2,275
|
|
|
|
|
2,217
|
|
|
|
|
2,010
|
|
|
|
Performance Products
|
|
|
|
242
|
|
|
|
|
74
|
|
|
|
|
31
|
|
|
|
Corporate
|
|
|
|
2,599
|
|
|
|
|
2,227
|
|
|
|
|
1,577
|
|
|
|
|
|
|
$
|
19,023
|
|
|
|
$
|
17,527
|
|
|
|
$
|
16,696
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Capital expenditures
|
|
|||||||||||||||
|
Animal Health
|
|
|
$
|
15,207
|
|
|
|
$
|
9,637
|
|
|
|
$
|
13,092
|
|
|
|
Mineral Nutrition
|
|
|
|
1,632
|
|
|
|
|
717
|
|
|
|
|
3,986
|
|
|
|
Performance Products
|
|
|
|
1,053
|
|
|
|
|
887
|
|
|
|
|
343
|
|
|
|
Corporate
|
|
|
|
2,055
|
|
|
|
|
3,583
|
|
|
|
|
4,214
|
|
|
|
|
|
|
$
|
19,947
|
|
|
|
$
|
14,824
|
|
|
|
$
|
21,635
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Identifiable assets
|
|
||||||||||
|
Animal Health
|
|
|
$
|
354,422
|
|
|
|
$
|
287,070
|
|
|
|
Mineral Nutrition
|
|
|
|
62,933
|
|
|
|
|
63,423
|
|
|
|
Performance Products
|
|
|
|
21,710
|
|
|
|
|
24,304
|
|
|
|
Corporate
|
|
|
|
35,077
|
|
|
|
|
66,111
|
|
|
|
|
|
|
$
|
474,142
|
|
|
|
$
|
440,908
|
|
|
|
For the Years Ended June 30
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Net sales
|
|
|||||||||||||||
|
United States
|
|
|
$
|
414,768
|
|
|
|
$
|
424,373
|
|
|
|
$
|
404,156
|
|
|
|
Israel
|
|
|
|
93,248
|
|
|
|
|
101,301
|
|
|
|
|
91,341
|
|
|
|
Latin America and Canada
|
|
|
|
68,575
|
|
|
|
|
61,407
|
|
|
|
|
50,701
|
|
|
|
Europe and Africa
|
|
|
|
32,501
|
|
|
|
|
30,087
|
|
|
|
|
26,394
|
|
|
|
Asia Pacific
|
|
|
|
44,059
|
|
|
|
|
36,933
|
|
|
|
|
45,741
|
|
|
|
|
|
|
$
|
653,151
|
|
|
|
$
|
654,101
|
|
|
|
$
|
618,333
|
|
|
|
As of June 30
|
|
|
2013
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Property, plant and equipment, net
|
|
||||||||||
|
United States
|
|
|
$
|
40,601
|
|
|
|
$
|
38,826
|
|
|
|
Israel
|
|
|
|
30,837
|
|
|
|
|
28,212
|
|
|
|
Brazil
|
|
|
|
30,988
|
|
|
|
|
32,479
|
|
|
|
Other
|
|
|
|
1,996
|
|
|
|
|
2,144
|
|
|
|
|
|
|
$
|
104,422
|
|
|
|
$
|
101,661
|
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
For the Periods Ended December 31
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||||||
|
|
|
|
(unaudited)
(in thousands) |
|
|||||||||||||||||
|
Net sales
|
|
|
$
|
172,742
|
|
|
|
$
|
164,159
|
|
|
|
$
|
334,970
|
|
|
|
$
|
326,265
|
|
|
|
Cost of goods sold
|
|
|
|
121,586
|
|
|
|
|
120,973
|
|
|
|
|
234,302
|
|
|
|
|
241,213
|
|
|
|
Gross profit
|
|
|
|
51,156
|
|
|
|
|
43,186
|
|
|
|
|
100,668
|
|
|
|
|
85,052
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
34,138
|
|
|
|
|
29,030
|
|
|
|
|
67,253
|
|
|
|
|
57,687
|
|
|
|
Operating income
|
|
|
|
17,018
|
|
|
|
|
14,156
|
|
|
|
|
33,415
|
|
|
|
|
27,365
|
|
|
|
Interest expense
|
|
|
|
7,783
|
|
|
|
|
7,894
|
|
|
|
|
15,557
|
|
|
|
|
15,715
|
|
|
|
Interest expense, shareholders
|
|
|
|
1,004
|
|
|
|
|
1,075
|
|
|
|
|
2,009
|
|
|
|
|
2,147
|
|
|
|
Interest (income)
|
|
|
|
(68
|
)
|
|
|
|
(14
|
)
|
|
|
|
(112
|
)
|
|
|
|
(82
|
)
|
|
|
Foreign currency (gains) losses, net
|
|
|
|
1,165
|
|
|
|
|
126
|
|
|
|
|
1,813
|
|
|
|
|
294
|
|
|
|
Other (income) expense, net
|
|
|
|
—
|
|
|
|
|
58
|
|
|
|
|
—
|
|
|
|
|
46
|
|
|
|
Income before income taxes
|
|
|
|
7,134
|
|
|
|
|
5,017
|
|
|
|
|
14,148
|
|
|
|
|
9,245
|
|
|
|
Provision (benefit) for income taxes
|
|
|
|
4,832
|
|
|
|
|
(7,056
|
)
|
|
|
|
6,003
|
|
|
|
|
(5,487
|
)
|
|
|
Net income
|
|
|
$
|
2,302
|
|
|
|
$
|
12,073
|
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of derivative instruments
|
|
|
$
|
(235
|
)
|
|
|
$
|
182
|
|
|
|
$
|
137
|
|
|
|
$
|
418
|
|
|
|
Foreign currency translation adjustment
|
|
|
|
(3,003
|
)
|
|
|
|
(366
|
)
|
|
|
|
(3,135
|
)
|
|
|
|
(468
|
)
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
226
|
|
|
|
|
309
|
|
|
|
|
429
|
|
|
|
|
619
|
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
3
|
|
|
|
|
(187
|
)
|
|
|
|
(221
|
)
|
|
|
|
(394
|
)
|
|
|
Other comprehensive income (loss)
|
|
|
$
|
(3,009
|
)
|
|
|
$
|
(62
|
)
|
|
|
$
|
(2,790
|
)
|
|
|
$
|
175
|
|
|
|
Comprehensive income (loss)
|
|
|
$
|
(707
|
)
|
|
|
$
|
12,011
|
|
|
|
$
|
5,355
|
|
|
|
$
|
14,907
|
|
|
|
Net income per share—basic and diluted
|
|
|
$
|
0.03
|
|
|
|
$
|
0.18
|
|
|
|
$
|
0.12
|
|
|
|
$
|
0.21
|
|
|
|
Weighted average number of shares—basic and diluted
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
|
68,910
|
|
|
|
As of
|
|
|
December 31,
2013 |
|
|
June 30,
2013 |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
(unaudited)
(in thousands) |
|
|||||||
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
30,474
|
|
|
|
$
|
27,369
|
|
|
|
Accounts receivable, net
|
|
|
|
103,253
|
|
|
|
|
99,137
|
|
|
|
Inventories
|
|
|
|
140,445
|
|
|
|
|
140,032
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
28,359
|
|
|
|
|
29,848
|
|
|
|
Total current assets
|
|
|
|
302,531
|
|
|
|
|
296,386
|
|
|
|
Property, plant and equipment, net
|
|
|
|
105,693
|
|
|
|
|
104,422
|
|
|
|
Intangibles, net
|
|
|
|
32,587
|
|
|
|
|
35,155
|
|
|
|
Other assets
|
|
|
|
40,017
|
|
|
|
|
38,179
|
|
|
|
Total assets
|
|
|
$
|
480,828
|
|
|
|
$
|
474,142
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
|
$
|
62
|
|
|
|
$
|
64
|
|
|
|
Current portion of long-term debt, shareholders
|
|
|
|
9,932
|
|
|
|
|
—
|
|
|
|
Accounts payable
|
|
|
|
60,109
|
|
|
|
|
57,902
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
52,527
|
|
|
|
|
57,438
|
|
|
|
Total current liabilities
|
|
|
|
122,630
|
|
|
|
|
115,404
|
|
|
|
Domestic senior credit facility
|
|
|
|
32,000
|
|
|
|
|
34,000
|
|
|
|
Long-term debt
|
|
|
|
297,827
|
|
|
|
|
297,666
|
|
|
|
Long-term debt, shareholders
|
|
|
|
24,000
|
|
|
|
|
33,874
|
|
|
|
Other liabilities
|
|
|
|
67,899
|
|
|
|
|
62,136
|
|
|
|
Total liabilities
|
|
|
|
544,356
|
|
|
|
|
543,080
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
|
|
|
|
7
|
|
|
|
|
7
|
|
|
|
Paid-in capital
|
|
|
|
43,003
|
|
|
|
|
42,948
|
|
|
|
Accumulated deficit
|
|
|
|
(85,976
|
)
|
|
|
|
(94,121
|
)
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(20,562
|
)
|
|
|
|
(17,772
|
)
|
|
|
Total shareholders’ deficit
|
|
|
|
(63,528
|
)
|
|
|
|
(68,938
|
)
|
|
|
Total liabilities and shareholders’ deficit
|
|
|
$
|
480,828
|
|
|
|
$
|
474,142
|
|
|
|
|
|
|
Six Months
|
|
|||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
For the Periods Ended December 31
|
|
|
2013
|
|
|
2012
|
|
||||
|
|
|
|
(unaudited)
(in thousands) |
|
|||||||
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|||||
|
Net income
|
|
|
$
|
8,145
|
|
|
|
$
|
14,732
|
|
|
|
Adjustments to reconcile net income to net cash provided (used) by operating activities:
|
|
|
|
|
|
|
|||||
|
Depreciation and amortization
|
|
|
|
10,493
|
|
|
|
|
9,318
|
|
|
|
Amortization of deferred financing costs
|
|
|
|
530
|
|
|
|
|
705
|
|
|
|
Amortization of imputed interest and debt discount
|
|
|
|
256
|
|
|
|
|
602
|
|
|
|
Deferred income taxes
|
|
|
|
(108
|
)
|
|
|
|
(8,461
|
)
|
|
|
Foreign currency (gains) losses, net
|
|
|
|
1,266
|
|
|
|
|
(282
|
)
|
|
|
Other
|
|
|
|
(191
|
)
|
|
|
|
(391
|
)
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||||
|
Accounts receivable
|
|
|
|
(4,380
|
)
|
|
|
|
3,365
|
|
|
|
Inventories
|
|
|
|
(2,471
|
)
|
|
|
|
(10,562
|
)
|
|
|
Prepaid expenses and other current assets
|
|
|
|
1,070
|
|
|
|
|
(1,070
|
)
|
|
|
Other assets
|
|
|
|
(1,650
|
)
|
|
|
|
(456
|
)
|
|
|
Accounts payable
|
|
|
|
2,459
|
|
|
|
|
(5,266
|
)
|
|
|
Accrued expenses and other liabilities
|
|
|
|
978
|
|
|
|
|
(4,236
|
)
|
|
|
Net cash provided (used) by operating activities
|
|
|
|
16,397
|
|
|
|
|
(2,002
|
)
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|||||
|
Capital expenditures
|
|
|
|
(9,765
|
)
|
|
|
|
(9,640
|
)
|
|
|
Business acquisition
|
|
|
|
—
|
|
|
|
|
(18,500
|
)
|
|
|
Sales of assets
|
|
|
|
8
|
|
|
|
|
283
|
|
|
|
Net cash provided (used) by investing activities
|
|
|
|
(9,757
|
)
|
|
|
|
(27,857
|
)
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|||||
|
Borrowings under the domestic senior credit facility
|
|
|
|
75,500
|
|
|
|
|
7,000
|
|
|
|
Repayments of the domestic senior credit facility
|
|
|
|
(77,500
|
)
|
|
|
|
(1,000
|
)
|
|
|
Payments of long-term debt, capital leases and other
|
|
|
|
(1,178
|
)
|
|
|
|
(98
|
)
|
|
|
Dividend paid to common shareholders
|
|
|
|
—
|
|
|
|
|
(3,000
|
)
|
|
|
Net cash provided (used) by financing activities
|
|
|
|
(3,178
|
)
|
|
|
|
2,902
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
(357
|
)
|
|
|
|
80
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
3,105
|
|
|
|
|
(26,877
|
)
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
27,369
|
|
|
|
|
53,900
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
30,474
|
|
|
|
$
|
27,023
|
|
|
|
Supplemental cash flow information
|
|
||||||||||
|
Interest paid
|
|
|
$
|
16,760
|
|
|
|
$
|
16,578
|
|
|
|
Income taxes paid, net
|
|
|
|
3,835
|
|
|
|
|
4,832
|
|
|
|
Non-cash investing and financing activities
|
|
||||||||||
|
Capital expenditures
|
|
|
|
1,315
|
|
|
|
|
—
|
|
|
|
Business acquisition
|
|
|
|
—
|
|
|
|
|
4,250
|
|
|
|
Capital lease additions
|
|
|
|
—
|
|
|
|
|
69
|
|
|
|
|
|
|
Common
Shares |
|
|
Paid-in
Capital |
|
|
Accumulated
Deficit |
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
|
Total
|
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
(unaudited)
(in thousands) |
|
||||||||||||||||||||||
|
As of June 30, 2013
|
|
|
$
|
7
|
|
|
|
$
|
42,948
|
|
|
|
$
|
(94,121
|
)
|
|
|
$
|
(17,772
|
)
|
|
|
$
|
(68,938
|
)
|
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,145
|
|
|
|
|
|
|
|
|
|
8,145
|
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137
|
|
|
|
|
137
|
|
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,135
|
)
|
|
|
|
(3,135
|
)
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
429
|
|
|
|
|
429
|
|
|
|
Tax provision (benefit) on other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(221
|
)
|
|
|
|
(221
|
)
|
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,355
|
|
|
|
Compensation expense related to share-based compensation plans
|
|
|
|
|
|
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55
|
|
|
|
As of December 31, 2013
|
|
|
$
|
7
|
|
|
|
$
|
43,003
|
|
|
|
$
|
(85,976
|
)
|
|
|
$
|
(20,562
|
)
|
|
|
$
|
(63,528
|
)
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
For the Periods Ended December 31
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||||||
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic senior credit facility
|
|
|
$
|
395
|
|
|
|
$
|
254
|
|
|
|
$
|
811
|
|
|
|
$
|
497
|
|
|
|
9.25% senior notes
|
|
|
|
7,036
|
|
|
|
|
7,027
|
|
|
|
|
14,073
|
|
|
|
|
14,152
|
|
|
|
Mayflower L.P. (“Mayflower”), BFI Co., LLC (“BFI”) and Teva Pharmaceutical Industries Ltd. (“Teva”) term loans
|
|
|
|
989
|
|
|
|
|
1,172
|
|
|
|
|
1,978
|
|
|
|
|
2,342
|
|
|
|
Amortization of deferred financing fees
|
|
|
|
267
|
|
|
|
|
354
|
|
|
|
|
530
|
|
|
|
|
705
|
|
|
|
Other interest expense
|
|
|
|
100
|
|
|
|
|
162
|
|
|
|
|
174
|
|
|
|
|
166
|
|
|
|
|
|
|
$
|
8,787
|
|
|
|
$
|
8,969
|
|
|
|
$
|
17,566
|
|
|
|
$
|
17,862
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of property, plant and equipment
|
|
|
$
|
4,106
|
|
|
|
$
|
3,645
|
|
|
|
$
|
7,958
|
|
|
|
$
|
7,500
|
|
|
|
Amortization of intangible assets
|
|
|
|
1,186
|
|
|
|
|
977
|
|
|
|
|
2,535
|
|
|
|
|
1,818
|
|
|
|
|
|
|
$
|
5,292
|
|
|
|
$
|
4,622
|
|
|
|
$
|
10,493
|
|
|
|
$
|
9,318
|
|
|
|
As of
|
|
|
December 31,
2013 |
|
|
June 30,
2013 |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Accounts receivable, net
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts receivable
|
|
|
$
|
104,099
|
|
|
|
$
|
99,795
|
|
|
|
Allowance for doubtful accounts
|
|
|
|
(846
|
)
|
|
|
|
(658
|
)
|
|
|
|
|
|
$
|
103,253
|
|
|
|
$
|
99,137
|
|
|
|
Inventories
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials
|
|
|
$
|
35,413
|
|
|
|
$
|
35,702
|
|
|
|
Work-in-process
|
|
|
|
7,266
|
|
|
|
|
7,541
|
|
|
|
Finished goods
|
|
|
|
97,766
|
|
|
|
|
96,789
|
|
|
|
|
|
|
$
|
140,445
|
|
|
|
$
|
140,032
|
|
|
|
Property, plant and equipment, net
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
$
|
9,550
|
|
|
|
$
|
9,746
|
|
|
|
Buildings and improvements
|
|
|
|
47,464
|
|
|
|
|
46,960
|
|
|
|
Machinery and equipment
|
|
|
|
163,376
|
|
|
|
|
156,247
|
|
|
|
|
|
|
|
220,390
|
|
|
|
|
212,953
|
|
|
|
Accumulated depreciation
|
|
|
|
(114,697
|
)
|
|
|
|
(108,531
|
)
|
|
|
|
|
|
$
|
105,693
|
|
|
|
$
|
104,422
|
|
|
|
Intangibles, net
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicated feed additive product registrations
|
|
|
$
|
12,251
|
|
|
|
$
|
12,115
|
|
|
|
Amprolium international marketing rights
|
|
|
|
4,292
|
|
|
|
|
4,292
|
|
|
|
Customer relationships
|
|
|
|
10,679
|
|
|
|
|
10,691
|
|
|
|
Technology
|
|
|
|
28,259
|
|
|
|
|
28,259
|
|
|
|
Distribution agreements
|
|
|
|
3,447
|
|
|
|
|
3,493
|
|
|
|
Trade names, trademarks and other
|
|
|
|
2,740
|
|
|
|
|
2,740
|
|
|
|
|
|
|
|
61,668
|
|
|
|
|
61,590
|
|
|
|
As of
|
|
|
December 31,
2013 |
|
|
June 30,
2013 |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Accumulated amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicated feed additive product registrations
|
|
|
|
(10,989
|
)
|
|
|
|
(10,778
|
)
|
|
|
Amprolium international marketing rights
|
|
|
|
(4,076
|
)
|
|
|
|
(3,861
|
)
|
|
|
Customer relationships
|
|
|
|
(3,728
|
)
|
|
|
|
(3,203
|
)
|
|
|
Technology
|
|
|
|
(5,199
|
)
|
|
|
|
(3,729
|
)
|
|
|
Distribution agreements
|
|
|
|
(3,239
|
)
|
|
|
|
(3,179
|
)
|
|
|
Trade names, trademarks and other
|
|
|
|
(1,850
|
)
|
|
|
|
(1,685
|
)
|
|
|
|
|
|
|
(29,081
|
)
|
|
|
|
(26,435
|
)
|
|
|
|
|
|
$
|
32,587
|
|
|
|
$
|
35,155
|
|
|
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
$
|
12,613
|
|
|
|
$
|
12,613
|
|
|
|
Insurance claim receivable
|
|
|
|
5,350
|
|
|
|
|
5,350
|
|
|
|
Deferred financing fees
|
|
|
|
5,426
|
|
|
|
|
5,212
|
|
|
|
Deferred income taxes
|
|
|
|
4,441
|
|
|
|
|
4,755
|
|
|
|
Other
|
|
|
|
12,187
|
|
|
|
|
10,249
|
|
|
|
|
|
|
$
|
40,017
|
|
|
|
$
|
38,179
|
|
|
|
Goodwill roll-forward
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period
|
|
|
$
|
12,613
|
|
|
|
$
|
1,717
|
|
|
|
OGR acquisition
|
|
|
|
—
|
|
|
|
|
10,896
|
|
|
|
Balance at end of period
|
|
|
$
|
12,613
|
|
|
|
$
|
12,613
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee related
|
|
|
$
|
14,478
|
|
|
|
$
|
17,823
|
|
|
|
Interest and income taxes
|
|
|
|
14,750
|
|
|
|
|
15,686
|
|
|
|
Commissions and rebates
|
|
|
|
3,154
|
|
|
|
|
3,196
|
|
|
|
Insurance related
|
|
|
|
1,502
|
|
|
|
|
1,286
|
|
|
|
Professional fees
|
|
|
|
3,384
|
|
|
|
|
4,064
|
|
|
|
Other accrued liabilities
|
|
|
|
15,259
|
|
|
|
|
15,383
|
|
|
|
|
|
|
$
|
52,527
|
|
|
|
$
|
57,438
|
|
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension and other retirement benefits
|
|
|
$
|
25,878
|
|
|
|
$
|
26,021
|
|
|
|
Long term and deferred income taxes
|
|
|
|
21,417
|
|
|
|
|
17,580
|
|
|
|
Deferred consideration on acquisitions
|
|
|
|
3,985
|
|
|
|
|
5,009
|
|
|
|
Product liability claims
|
|
|
|
5,600
|
|
|
|
|
5,600
|
|
|
|
Other long term liabilities
|
|
|
|
11,019
|
|
|
|
|
7,926
|
|
|
|
|
|
|
$
|
67,899
|
|
|
|
$
|
62,136
|
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments
|
|
|
$
|
(502
|
)
|
|
|
$
|
(639
|
)
|
|
|
Currency translation adjustment
|
|
|
|
(5,654
|
)
|
|
|
|
(2,519
|
)
|
|
|
Unrecognized net pension gains (losses)
|
|
|
|
(11,811
|
)
|
|
|
|
(12,240
|
)
|
|
|
Tax (provision) benefit on other comprehensive income (loss)
|
|
|
|
(2,595
|
)
|
|
|
|
(2,374
|
)
|
|
|
|
|
|
$
|
(20,562
|
)
|
|
|
$
|
(17,772
|
)
|
|
|
For the Period Ended December 31, 2012
|
|
|
Three Months
|
|
|
Six Months
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Net sales
|
|
|
$
|
164,159
|
|
|
|
$
|
326,265
|
|
|
|
Operating income
|
|
|
|
14,793
|
|
|
|
|
28,488
|
|
|
|
Net income
|
|
|
|
12,698
|
|
|
|
|
15,830
|
|
|
|
Depreciation and amortization
|
|
|
|
5,049
|
|
|
|
|
10,172
|
|
|
|
As of
|
|
|
December 31,
2013 |
|
|
June 30,
2013 |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
9.25% senior notes due July 1, 2018
|
|
|
$
|
300,000
|
|
|
|
$
|
300,000
|
|
|
|
Term loan payable to Mayflower due December 31, 2016
|
|
|
|
24,000
|
|
|
|
|
24,000
|
|
|
|
Term loan payable to BFI due August 1, 2014
|
|
|
|
10,000
|
|
|
|
|
10,000
|
|
|
|
Term note payable to Teva due annually through January 29, 2013
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Capitalized lease obligations
|
|
|
|
93
|
|
|
|
|
132
|
|
|
|
|
|
|
|
334,093
|
|
|
|
|
334,132
|
|
|
|
Unamortized imputed interest and debt discount
|
|
|
|
(2,272
|
)
|
|
|
|
(2,528
|
)
|
|
|
|
|
|
|
331,821
|
|
|
|
|
331,604
|
|
|
|
Less: current maturities
|
|
|
|
(9,994
|
)
|
|
|
|
(64
|
)
|
|
|
|
|
|
$
|
321,827
|
|
|
|
$
|
331,540
|
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
For the Periods Ended December 31
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||||||
|
Service cost
–
benefits earned during the period
|
|
|
$
|
604
|
|
|
|
|
639
|
|
|
|
$
|
1,308
|
|
|
|
$
|
1,278
|
|
|
|
Interest cost on benefit obligation
|
|
|
|
577
|
|
|
|
|
503
|
|
|
|
|
1,218
|
|
|
|
|
1,006
|
|
|
|
Expected return on plan assets
|
|
|
|
(577
|
)
|
|
|
|
(552
|
)
|
|
|
|
(1,275
|
)
|
|
|
|
(1,103
|
)
|
|
|
Amortization of net actuarial (gain) loss and prior service costs
|
|
|
|
226
|
|
|
|
|
310
|
|
|
|
|
429
|
|
|
|
|
619
|
|
|
|
Net periodic pension expense
|
|
|
$
|
830
|
|
|
|
$
|
900
|
|
|
|
$
|
1,680
|
|
|
|
$
|
1,800
|
|
|
|
|
|
|
Hedge
|
|
|
Notional
Amount at December 31, 2013 |
|
|
Fair value as of
|
|
|||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Instrument
|
|
|
December 31,
2013 |
|
|
June 30,
2013 |
|
||||||||||
|
Options
|
|
|
Brazilian Real calls
|
|
|
R$94,500
|
|
|
$
|
159
|
|
|
|
$
|
365
|
|
|
|
Options
|
|
|
Brazilian Real puts
|
|
|
(R$94,500)
|
|
|
$
|
(661
|
)
|
|
|
$
|
(1,004
|
)
|
|
|
As of
|
|
|
December 31,
2013 |
|
|
June 30,
2013 |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Carrying values
|
|
|
|
|
|
|
|
|
|
|
|
|
9.25% senior notes due July 1, 2018
|
|
|
$
|
300,000
|
|
|
|
$
|
300,000
|
|
|
|
Less unamortized original issue discount
|
|
|
|
(2,204
|
)
|
|
|
|
(2,402
|
)
|
|
|
|
|
|
|
297,796
|
|
|
|
|
297,598
|
|
|
|
Term loan payable to Mayflower due December 31, 2016
|
|
|
|
24,000
|
|
|
|
|
24,000
|
|
|
|
Less unamortized discount
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
24,000
|
|
|
|
|
24,000
|
|
|
|
Term loan payable to BFI due August 1, 2014
|
|
|
|
10,000
|
|
|
|
|
10,000
|
|
|
|
Less unamortized discount
|
|
|
|
(68
|
)
|
|
|
|
(126
|
)
|
|
|
|
|
|
|
9,932
|
|
|
|
|
9,874
|
|
|
|
Term note payable to Teva due annually through January 29, 2013
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Less unamortized imputed interest
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Fair values
|
|
|
|
|
|
|
|
|
|
|
|
|
9.25% senior notes due July 1, 2018
|
|
|
$
|
320,250
|
|
|
|
$
|
322,500
|
|
|
|
Term loan payable to Mayflower due December 31, 2016
|
|
|
|
27,302
|
|
|
|
|
26,968
|
|
|
|
Term loan payable to BFI due August 1, 2014
|
|
|
|
10,430
|
|
|
|
|
10,644
|
|
|
|
Term note payable to Teva due annually through January 29, 2013
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
For the Periods Ended December 31
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||||||
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal Health
|
|
|
$
|
107,966
|
|
|
|
$
|
94,236
|
|
|
|
$
|
209,137
|
|
|
|
$
|
190,364
|
|
|
|
Mineral Nutrition
|
|
|
|
50,633
|
|
|
|
|
52,892
|
|
|
|
|
96,819
|
|
|
|
|
102,684
|
|
|
|
Performance Products
|
|
|
|
14,143
|
|
|
|
|
17,031
|
|
|
|
|
29,014
|
|
|
|
|
33,217
|
|
|
|
|
|
|
$
|
172,742
|
|
|
|
$
|
164,159
|
|
|
|
$
|
334,970
|
|
|
|
$
|
326,265
|
|
|
|
Operating income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal Health
|
|
|
$
|
20,872
|
|
|
|
$
|
16,185
|
|
|
|
$
|
41,236
|
|
|
|
$
|
32,798
|
|
|
|
Mineral Nutrition
|
|
|
|
2,265
|
|
|
|
|
2,605
|
|
|
|
|
4,113
|
|
|
|
|
4,725
|
|
|
|
Performance Products
|
|
|
|
1,013
|
|
|
|
|
1,763
|
|
|
|
|
2,019
|
|
|
|
|
2,845
|
|
|
|
Corporate
|
|
|
|
(7,132
|
)
|
|
|
|
(6,397
|
)
|
|
|
|
(13,953
|
)
|
|
|
|
(13,003
|
)
|
|
|
|
|
|
$
|
17,018
|
|
|
|
$
|
14,156
|
|
|
|
$
|
33,415
|
|
|
|
$
|
27,365
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal Health
|
|
|
$
|
3,650
|
|
|
|
$
|
3,331
|
|
|
|
$
|
7,393
|
|
|
|
$
|
6,821
|
|
|
|
Mineral Nutrition
|
|
|
|
613
|
|
|
|
|
570
|
|
|
|
|
1,225
|
|
|
|
|
1,140
|
|
|
|
Performance Products
|
|
|
|
90
|
|
|
|
|
63
|
|
|
|
|
180
|
|
|
|
|
126
|
|
|
|
Corporate
|
|
|
|
939
|
|
|
|
|
658
|
|
|
|
|
1,695
|
|
|
|
|
1,231
|
|
|
|
|
|
|
$
|
5,292
|
|
|
|
$
|
4,622
|
|
|
|
$
|
10,493
|
|
|
|
$
|
9,318
|
|
|
|
As of
|
|
|
December 31,
2013 |
|
|
June 30,
2013 |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Identifiable assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal Health
|
|
|
$
|
366,096
|
|
|
|
$
|
354,422
|
|
|
|
Mineral Nutrition
|
|
|
|
63,012
|
|
|
|
|
62,933
|
|
|
|
Performance Products
|
|
|
|
21,595
|
|
|
|
|
21,710
|
|
|
|
Corporate
|
|
|
|
30,125
|
|
|
|
|
35,077
|
|
|
|
|
|
|
$
|
480,828
|
|
|
|
$
|
474,142
|
|
|
|
|
|
|
Amount
|
|
||
---|---|---|---|---|---|---|---|
|
SEC registration fee
|
|
|
$
|
*
|
|
|
|
FINRA filing fee
|
|
|
|
*
|
|
|
|
Listing fee
|
|
|
|
*
|
|
|
|
Printing expenses
|
|
|
|
*
|
|
|
|
Accounting fees and expenses
|
|
|
|
*
|
|
|
|
Legal fees and expenses
|
|
|
|
*
|
|
|
|
Blue Sky fees and expenses
|
|
|
|
*
|
|
|
|
Transfer Agent and Registrar fees and expenses
|
|
|
|
*
|
|
|
|
Miscellaneous expenses
|
|
|
|
*
|
|
|
|
Total
|
|
|
$
|
*
|
|
|
|
Name
|
|
|
Title
|
|
|
Date
|
|
---|---|---|---|---|---|---|---|---|
|
/s/ Jack C. Bendheim |
|
|
(principal executive officer) |
|
|
March 10, 2014
|
|
|
/s/ Richard G. Johnson |
|
|
(principal financial and accounting officer) |
|
|
March 10, 2014
|
|
|
/s/ Gerald K. Carlson |
|
|
Director
|
|
|
March 10, 2014
|
|
|
/s/ Daniel M. Bendheim |
|
|
Director
|
|
|
March 10, 2014
|
|
|
/s/ E. Thomas Corcoran |
|
|
Director
|
|
|
March 10, 2014
|
|
|
/s/ Sam Gejdenson |
|
|
Director
|
|
|
March 10, 2014
|
|
|
/s/ Ken Hanau |
|
|
Director
|
|
|
March 10, 2014
|
|
|
/s/ Mary Lou Malanoski |
|
|
Director
|
|
|
March 10, 2014
|
|
|
/s/ Carol A. Wrenn |
|
|
Director
|
|
|
March 10, 2014
|
|
|
Exhibit No.
|
|
|
Description
|
|
---|---|---|---|---|---|
|
1.1*
|
|
|
Form of Underwriting Agreement.
|
|
|
3.1*
|
|
|
Form of Amended and Restated Certificate of Incorporation of Phibro Animal Health Corporation.
|
|
|
3.2*
|
|
|
Form of Amended and Restated Bylaws of Phibro Animal Health Corporation.
|
|
|
4.1*
|
|
|
Specimen
Class A
Common Stock Certificate.
|
|
|
4.2
|
|
|
Indenture, dated July 9, 2010, as amended and supplemented, by and among Phibro Animal Health Corporation, the guarantors named therein and HSBC Bank USA, National Association, as Trustee.
|
|
|
4.3
|
|
|
First Supplemental Indenture, dated as of January 25, 2011, by and among Phibro Animal Health Corporation, the Guarantors named therein and HSBC Bank USA, National Association.
|
|
|
4.4
|
|
|
Second Supplemental Indenture, dated as of January 31, 2011, by and among Phibro Animal Health Corporation, the Guarantors named therein and HSBC Bank USA, National Association.
|
|
|
4.5
|
|
|
Third Supplemental Indenture, dated as of March 6, 2013, by and among Phibro Animal Health Corporation, the Guarantors named therein and HSBC Bank USA, National Association.
|
|
|
4.6
|
|
|
Stockholders Agreement, dated as of March 12, 2008, as amended, by and among Phibro Animal Health Corporation, BFI Co., LLC and 3i Quoted Private Equity Limited.
|
|
|
4.7
|
|
|
Addendum to Stockholders Agreement, dated April 28, 2009, by and between Phibro Animal Health Corporation and 3i Group plc.
|
|
|
4.8
|
|
|
Addendum to Stockholders Agreement, dated June 16, 2009, by and between Phibro Animal Health Corporation and Mayflower L.P.
|
|
|
4.9*
|
|
|
Form of Registration Rights Agreement between Phibro Animal Health Corporation and Mayflower L.P., dated as of
.
|
|
|
4.10*
|
|
|
Form of Registration Rights Agreement between Phibro Animal Health Corporation and BFI Co., LLC, dated as of
.
|
|
|
4.1
1
*
|
|
|
Form of
Termination of Stockholders Agreement
.
|
|
|
5.1*
|
|
|
Opinion of Kirkland & Ellis LLP.
|
|
|
10.1
|
|
|
Credit Agreement, dated as of August 31, 2010, by and among Phibro Animal Health Corporation, Bank of America, N.A. and the other lenders party thereto.
|
|
|
10.2
|
|
|
Amendment No. 1 to the Credit Agreement, dated as of December 23, 2010, among Phibro Animal Health Corporation, Bank of America, N.A. and the other lenders party thereto.
|
|
|
10.3
|
|
|
Waiver and Amendment
No. 2 to the Credit Agreement, dated as of August 11, 2011, by and
among Phibro Animal Health Corporation, Bank of America, N.A. and the other lenders party thereto.
|
|
|
10.4
|
|
|
Amendment No. 3 to the Credit Agreement, dated as of April 19, 2013, by and among Phibro Animal Health Corporation, Bank of America, N.A. and the other lenders party thereto.
|
|
|
10.5*
|
|
|
Amendment No. 4 to the Credit Agreement, dated as of February 28, 2014, by and among Phibro Animal Health Corporation, Bank of America, N.A. and the other lenders party thereto.
|
|
|
10.
6
|
|
|
Amended and Restated Term Loan Agreement, dated as of June 24, 2010, by and among Phibro Animal Health Corporation, the Guarantors named therein and BFI Co., LLC.
|
|
|
10.
7
|
|
|
Supplement to Amended and Restated Term Loan Agreement, dated as of February 4, 2013, by and among BFI Co., LLC, Phibro Animal Health Corporation and the other parties listed therein.
|
|
|
10.
8
|
|
|
Common Stock Purchase Warrant, dated as of January 29, 2009.
|
|
|
10.9
|
|
|
Amended and Restated Term Loan Agreement, dated as of June 24, 2010, by and among Phibro Animal Health Corporation, the Guarantors named therein and Mayflower L.P.
|
|
|
10.10
|
|
|
Amendment to Amended and Restated Term Loan Agreement, dated as of January 18, 2011, by and among Mayflower L.P., Phibro Animal Health Corporation and the other parties listed therein.
|
|
|
Exhibit No.
|
|
|
Description
|
|
---|---|---|---|---|---|
|
10.11
|
|
|
Supplement to Amended and Restated Term Loan Agreement, dated as of January 29, 2013, by and among Mayflower L.P., Phibro Animal Health Corporation and the other parties listed therein.
|
|
|
10.12
|
|
|
Second Amendment to Amended and Restated Term Loan Agreement, dated as of February 11, 2013, by and among Mayflower L.P., Phibro Animal Health Corporation and the other parties listed therein.
|
|
|
10.13
|
|
|
Credit Limit Agreement in Foreign Currency Current Loan Account, dated as of January 14, 2014, between Mizrahi-Tefahot Bank Ltd. and Koffolk (1949) Ltd.
(translated from Hebrew)
.
|
|
|
10.14
|
|
|
Letter of Undertaking, dated as of June 7, 2010, between Mizrahi-Tefahot Bank Ltd. and Koffolk (1949) Ltd. Company No. 510057607
(translated from Hebrew)
.
|
|
|
10.15
|
|
|
Credit Limit Letter, dated as of December 24, 2013, between Union Bank of Israel Ltd. and Koffolk (1949) Ltd.
(translated from Hebrew)
.
|
|
|
10.16
|
|
|
Letter of Undertaking, dated as of January 27, 2009, between Union Bank of Israel Ltd. and Koffolk (1949) Ltd.
(translated from Hebrew)
.
|
|
|
10.17
|
|
|
Unprotected Lease Agreement, dated January 26, 2011, by and between Samaria Carpets Ltd.
and ABIC Biological Laboratories Ltd. (translated from Hebrew).
|
|
|
10.18*
|
|
|
Employment Agreement, dated
, 2014, by and between Jack C. Bendheim and Phibro
Animal Health Corporation.
|
|
|
10.19*
|
|
|
Employment Agreement, dated
, 2014, as amended, between Gerald K. Carlson and
Phibro Animal Health Corporation.
|
|
|
10.20
|
|
|
Employment Offer Letter, dated May 2, 2008, by and between Larry L. Miller and Phibro Animal
Health Corporation
, including confidentiality and nondisclosure, employee invention, and
noncompetion and nonsolicitation agreements dated as of May 2, 2008
.
|
|
|
10.21
|
|
|
Clarifying Amendment to Employment Offer Letter, dated December 21, 2009, by and between Larry L. Miller and Phibro Animal Health Corporation.
|
|
|
10.22
|
|
|
Amendment to Employment Offer Letter, dated December 15, 2011, by and between Larry L. Miller and Phibro Animal Health Corporation.
|
|
|
10.2
3
|
|
|
Phibro Animal Health Corporation 2008
Incentive Plan.
|
|
|
10.24
*
|
|
|
Form of Phibro Animal Health Corporation
Management
Incentive Plan.
|
|
|
10.
2
5
|
|
|
Phibro Animal Health Corporation Retirement Income and Deferred Compensation Plan, as amended and restated as of April 15, 2009.
|
|
|
10.
26
|
|
|
Phibro Animal Health Corporation Executive Income Deferred Compensation Agreement, dated as of March 1, 1990.
|
|
|
10.
27
*
|
|
|
Form of
Agreement and Plan of Merger
.
|
|
|
10.
28
*
|
|
|
Form of 2009 Stock Option Grant Agreement.
|
|
|
10.
29
*
|
|
|
Form of 2013 Stock Option Grant Agreement.
|
|
|
21.1*
|
|
|
List of Subsidiaries of Phibro Animal Health Corporation.
|
|
|
23.1
|
|
|
Consent of PricewaterhouseCoopers LLP.
|
|
|
23.2*
|
|
|
Consent of Kirkland & Ellis LLP (included in Exhibit 5.1).
|
|
|
24.1
|
|
|
Power of Attorney (included on the signature page of this Registration Statement).
|
|
Exhibit 4.2
Execution Version
PHIBRO ANIMAL HEALTH CORPORATION,
THE GUARANTORS
named herein
and
HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee
_________________________
INDENTURE
Dated as of July 9, 2010
_________________________
9¼% Senior Notes due 2018
CROSS-REFERENCE TABLE
TIA | Indenture | |
Section | Section | |
310 (a)(1) | 7.10 | |
(a)(2) | 7.10 | |
(a)(3) | N.A. | |
(a)(4) | N.A. | |
(a)(5) | N.A. | |
(b) | 7.08; 7.10; 11.02 | |
(b)(1) | 7.10 | |
(c) | N.A. | |
311 (a) | 7.11 | |
(b) | 7.11 | |
(c) | N.A. | |
312 (a) | 2.06 | |
(b) | 11.03 | |
(c) | 11.03 | |
313 (a) | 7.06 | |
(b)(1) | N.A. | |
(b)(2) | 7.06 | |
(c) | 7.06; 11.02 | |
(d) | 7.06 | |
314 (a) | 4.02; 4.04; 11.02 | |
(b) | N.A. | |
(c)(1) | 11.04 | |
(c)(2) | 11.04 | |
(c)(3) | N.A. | |
(d) | N.A. | |
(e) | 11.05 | |
(f) | N.A. | |
315 (a) | 7.01(b) | |
(b) | 7.05; 11.02 | |
(c) | 7.01(a) | |
(d) | 7.01(c) | |
(e) | 6.12 | |
316 (a) (last sentence) | 2.10 | |
(a)(1)(A) | 6.05 | |
(a)(1)(B) | 6.04 | |
(a)(2) | N.A. | |
(b) | 6.08 | |
(c) | 8.04 | |
317 (a)(1) | 6.09 | |
(a)(2) | 6.10 | |
(b) | 2.05; 7.12 | |
318 (a) | 11.01 |
_______________________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture
- i - |
- ii - |
- iii - |
- iv - |
INDENTURE, dated as of July 9, 2010, among PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation, as issuer (the “ Issuer ”), the Guarantors (as hereinafter defined) and HSBC BANK USA, NATIONAL ASSOCIATION, as trustee (the “ Trustee ”).
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders.
DEFINITIONS AND INCORPORATION BY REFERENCE
“ Acquired Indebtedness ” means (1) with respect to any Person that becomes a Restricted Subsidiary after the Issue Date, Indebtedness of such Person and its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary that was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary and (2) with respect to the Issuer or any Restricted Subsidiary, any Indebtedness of a Person (other than the Issuer or a Restricted Subsidiary) existing at the time such Person is merged with or into the Issuer or a Restricted Subsidiary, or Indebtedness expressly assumed by the Issuer or any Restricted Subsidiary in connection with the acquisition of an asset or assets from another Person, which Indebtedness was not, in any case, incurred by such other Person in connection with, or in contemplation of, such merger or acquisition; provided, however, that Indebtedness of such acquired Person which is redeemed or otherwise repaid at the time of or substantially contemporaneously with the consummation of the transactions by which such acquired Person merges with or into or becomes a Restricted Subsidiary of such specified Person shall not be Acquired Indebtedness.
“ Additional Notes ” shall mean an unlimited principal amount of Notes having identical terms and conditions to the Notes issued pursuant to Article Two and in compliance with Section 4.06.
“ Adjusted Net Assets ” of a Guarantor at any date shall mean the lesser of the amount by which (x) the fair value of the property of such Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities), but excluding liabilities under the Guarantee, of such Guarantor at such date and (y) the present fair salable value of the assets of such Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Guarantor on its debts and all other fixed and contingent liabilities (after giving effect to all other fixed and contingent liabilities and after giving effect to any collection from any Subsidiary of such Guarantor in respect of the obligations of such Guarantor under the Guarantee), excluding Indebtedness in respect of the Guarantee, as they become absolute and matured.
“ Affiliate ” of any Person means any other Person which directly or indirectly controls or is controlled by, or is under direct or indirect common control with, the referent Person. For purposes of Section 4.10, Affiliates shall be deemed to include, with respect to any Person, any other Person (1) which beneficially owns or holds, directly or indirectly, 10% or more of any class of the Voting Stock of the referenced Person, (2) of which 10% or more of the Voting Stock is beneficially owned or held, directly or indirectly, by the referenced Person or (3) with respect to an individual, any immediate family
Table of Contents | - 2 - |
member of such Person. For purposes of this definition, “ control ” of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
“ Agent ” means any Registrar, Paying Agent or agent for service or notices and demands.
“ amend ” means to amend, supplement, restate, amend and restate or otherwise modify, including successively, and “ amendment ” shall have a correlative meaning.
“ Applicable Premium ” means, with respect to any Note on any Redemption Date, the
greater of:
(1) 1.0% of the principal amount of the Note; or
(2) the excess of:
(a) the present value at such Redemption Date of (i) the redemption price of the Note at July 1, 2014 (such redemption price being set forth in the table appearing in paragraph 6 of the Notes), plus (ii) all required interest payments due on the Note through July 1, 2014 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over
(b) the principal amount of the Note.
“ asset ” means any asset or property.
“ Asset Acquisition ” means:
(1) an Investment by the Issuer or any Restricted Subsidiary in or for the purchase of any other Person if, as a result of such Investment, such Person shall become a Restricted Subsidiary, or shall be merged with or into the Issuer or any Restricted Subsidiary, or
(2) the acquisition by the Issuer or any Restricted Subsidiary of all or substantially all of the assets of any other Person or any division, business unit or line of business of any other Person (including any assets of an Affiliate of a Person being acquired and used or held for use by the Person (or division, business unit or line of business) being acquired).
“ Asset Sale ” means any sale, issuance, conveyance, transfer, lease, assignment or other disposition by the Issuer or any Restricted Subsidiary to any Person other than the Issuer or any Guarantor (including by means of a Sale and Leaseback Transaction or a merger or consolidation) (collectively, for purposes of this definition, a “ transfer ”), in one transaction or a series of related transactions, of any assets of the Issuer or any of its Restricted Subsidiaries other than in the ordinary course of business. For purposes of this definition, the term “Asset Sale” shall not include:
Table of Contents | - 3 - |
(1) transfers of cash or Cash Equivalents;
(2) transfers of assets (including Equity Interests) that are governed by and made in accordance with Section 5.01;
(3) Permitted Investments and Restricted Payments permitted under Section 4.08;
(4) the creation of or realization on any Permitted Lien;
(5) transfers of damaged, worn-out or obsolete equipment or assets that, in the Issuer’s reasonable judgment, are no longer used or useful in the business of the Issuer or its Restricted Subsidiaries;
(6) sales or grants of licenses or sublicenses to use the patents, trade secrets, know-how and other intellectual property, and licenses, leases or subleases of other assets, of the Issuer or any Restricted Subsidiary to the extent not materially interfering with the business of Issuer and the Restricted Subsidiaries;
(7) transfers by a Foreign Subsidiary to any other Foreign Subsidiary;
(8) any transfer or series of related transfers that, but for this clause, would be Asset Sales, if after giving effect to such transfers, the aggregate Fair Market Value of the assets transferred in such transaction or any such series of related transactions does not exceed $5.0 million; and
(9) the issuance or sale of Equity Interests of the Issuer.
“ Attributable Indebtedness ”, when used with respect to any Sale and Leaseback Transaction, means, as at the time of determination, the present value (discounted at a rate borne by the Notes, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.
“ Bank Product Obligations ” means Indebtedness incurred in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards, ACH transactions, and cash management transactions.
“ Bankruptcy Law ” means Title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors.
“ Board of Directors ” means, with respect to any Person, (i) in the case of any corporation, the Board of Directors of such Person, (ii) in the case of any limited liability company, the board of managers of such Person, (iii) in the case of any partnership, the board of directors of the general partner of such Person and (iv) in any other case, the functional equivalent of the foregoing or, in each case, other than for purposes of the definition of “Change of Control,” any duly authorized committee of such body.
“ Board Resolution ” means a copy of a resolution certified pursuant to an Officers’ Certificate to have been duly adopted by the Board of Directors of the Issuer and to be in full force and effect, and delivered to the Trustee.
Table of Contents | - 4 - |
“ Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions in New York are authorized or required by law to close.
“ Capitalized Lease ” means a lease required to be capitalized for financial reporting purposes in accordance with GAAP.
“ Capitalized Lease Obligations ” of any Person means the Obligations of such Person to pay rent or other amounts under a Capitalized Lease, and the amount of such Obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“ Cash Equivalents ” means:
(1) marketable direct obligations issued or fully guaranteed or insured by the United States of America or any agency or instrumentality thereof ( provided that the full faith and credit of the United States of America is pledged in support thereof), maturing within 360 days of the date of acquisition thereof;
(2) demand and time deposits and certificates of deposit or acceptances, maturing within 360 days of the date of acquisition thereof, of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500 million and is assigned at least a “B” rating by Thomson Financial BankWatch;
(3) commercial paper maturing no more than 360 days from the date of creation thereof issued by a corporation that is not the Issuer or an Affiliate of the Issuer, and is organized under the laws of any State of the United States of America or the District of Columbia and rated at least A-1 by S&P or at least P-1 by Moody’s;
(4) repurchase obligations with a term of not more than ten days for underlying securities of the types described in clause (1) above entered into with any commercial bank meeting the specifications of clause (2) above;
(5) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within 360 days from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s;
(6) in the case of any Foreign Subsidiary: (a) direct obligations of the sovereign nation (or any agency or instrumentality thereof) in which such Foreign Subsidiary is organized or is conducting business or obligations fully and unconditionally guaranteed by such sovereign nation (or any agency or instrumentality thereof), (b) of the type and maturity described in clauses (1) through (5) above of foreign obligors, which obligations or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies or (c) of the type and maturity described in clauses (1) through (5) above of foreign obligors (or the parents of such obligors), which obligations or obligors (or the parents of such obligors) are not rated as provided in such clauses or in clause (6)(b) but which are, in the reasonable judgment of the Issuer, comparable in investment quality to such obligations and obligors (or the parents of such obligors); and
Table of Contents | - 5 - |
(7) money market or other mutual funds substantially all of whose assets comprise securities of the types described in clauses (1) through (6) above.
“ Change of Control ” means the occurrence of any of the following events:
(1) prior to a Public Equity Offering after the Issue Date, the Permitted Holders cease to own, or to have the power to vote or direct the voting of, Voting Stock representing more than 50% of the voting power of the total outstanding Voting Stock of the Issuer;
(2) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause that person or group shall be deemed to have “beneficial ownership” of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock representing 50% or more of the voting power of the total outstanding Voting Stock of the Issuer;
(3) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (together with or as replaced by any new directors whose election to such Board of Directors or whose nomination for election by the stockholders of the Issuer was approved by (i) the majority in interest of the Permitted Holders or (ii) a vote of the majority of the directors of the Issuer then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Issuer;
(4) (a) all or substantially all of the assets of the Issuer and the Restricted Subsidiaries are sold or otherwise transferred to any Person other than a Wholly-Owned Restricted Subsidiary or one or more Permitted Holders or (b) the Issuer consolidates or merges with or into another Person or any Person consolidates or merges with or into the Issuer, in either case under this clause (4), in one transaction or a series of related transactions in which immediately after the consummation thereof Persons beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of the Issuer immediately prior to such consummation do not beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing a majority of the total voting power of the Voting Stock of the Issuer or the surviving or transferee Person; or
(5) the Issuer shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the stockholders of the Issuer.
For purposes of this definition, a Person shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement.
“ Consolidated Amortization Expense ” for any period means the amortization expense of the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
Table of Contents | - 6 - |
“ Consolidated Cash Flow ” for any period means, without duplication, the sum of the amounts for such period of:
(1) Consolidated Net Income; plus
(2) in each case only to the extent (and in the same proportion) deducted in determining Consolidated Net Income and with respect to the portion of Consolidated Net Income attributable to any Restricted Subsidiary only if a corresponding amount would be permitted at the date of determination to be distributed to the Issuer by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders,
(a) Consolidated Income Tax Expense;
(b) Consolidated Amortization Expense (but only to the extent not included in Consolidated Interest Expense);
(c) Consolidated Depreciation Expense;
(d) Consolidated Interest Expense;
(e) any non-recurring fees, charges or other expenses made or incurred by the Issuer in connection with the Transactions or in connection with any transaction permitted by clause (18) of the definition of “Permitted Investments”;
(f) all other non-cash items reducing Consolidated Net Income (excluding any non-cash charge that results in an accrual of a reserve for cash charges in any future period) for such period; and
(g) expenses incurred under the Shareholders Agreement related to payments made or required to be made to the shareholders party thereto;
in each case determined on a consolidated basis in accordance with GAAP, minus
(3) the aggregate amount of all non-cash items, determined on a consolidated basis, to the extent such items increased Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business.
“ Consolidated Depreciation Expense ” for any period means the depreciation expense of the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“ Consolidated Income Tax Expense ” for any period means the provision for taxes of the Issuer and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP.
“ Consolidated Interest Coverage Ratio ” means the ratio of Consolidated Cash Flow during the most recent four consecutive full fiscal quarters for which financial statements are available (the
Table of Contents | - 7 - |
“ Four-Quarter Period ”) ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio (the “ Transaction Date ”) to Consolidated Interest Expense for the Four-Quarter Period. For purposes of this definition, Consolidated Cash Flow and Consolidated Interest Expense shall be calculated after giving effect on a pro forma basis for the period of such calculation to:
(1) the incurrence of any Indebtedness or the issuance of any Preferred Stock of the Issuer or any Restricted Subsidiary (and the application of the proceeds thereof) and any repayment of other Indebtedness or redemption of other Preferred Stock (and the application of the proceeds therefrom) (other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to any revolving credit arrangement) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such incurrence, repayment, issuance or redemption, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four-Quarter Period; and
(2) any Asset Sale or Asset Acquisition (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of the Issuer or any Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary as a result of such Asset Acquisition) incurring Acquired Indebtedness and also including any Consolidated Cash Flow (including, without duplication, any pro forma effect as provided in the immediately succeeding paragraph) associated with any such Asset Acquisition) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence of, or assumption or liability for, any such Indebtedness or Acquired Indebtedness) occurred on the first day of the Four-Quarter Period.
For purposes of this definition, whenever pro forma effect is to be given to an Asset Sale or Asset Acquisition and the amount of Consolidated Cash Flow relating thereto, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Issuer and shall comply with the requirements of Rule 11-02 of Regulation S-X promulgated by the Commission, except that any such pro forma calculations may include the annualized amount of operating expense reductions for such period resulting from such Asset Sale or Asset Acquisition that (A) have been realized or (B) for which the steps necessary for realization have been taken (or are taken concurrently with such transaction) or (C) for which the steps necessary for realization are reasonably expected to be taken within the six month period following such transaction and which operating expense reductions are reasonably expected to be realized within the twelve month period following such transaction and, in each case, including, but not limited to, (a) reduction in personnel expenses, (b) reduction of costs related to administrative functions, (c) reduction of costs related to leased or owned properties and (d) reductions from the consolidation of operations and streamlining of corporate overhead, provided that, in each case, such adjustments are set forth in an Officers’ Certificate signed by the Issuer’s Chief Financial Officer and another Officer of the Issuer which states (i) the amount of such adjustment or adjustments, (ii) in the case of items (B) or (C) above, that such adjustment or adjustments are based on the reasonable good faith beliefs of the Officers executing such Officers’ Certificate at the time of such execution and (iii) that any related incurrence of Indebtedness is permitted pursuant to this Indenture.
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In calculating Consolidated Interest Expense for purposes of determining the denominator (but not the numerator) of this Consolidated Interest Coverage Ratio:
(1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date;
(2) if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four-Quarter Period; and
(3) notwithstanding clause (1) or (2) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of these agreements.
“ Consolidated Interest Expense ” for any period means the sum, without duplication, of the total interest expense of the Issuer and the Restricted Subsidiaries for such period, net of interest earned on cash and Cash Equivalents (other than payment-in-kind interest), determined on a consolidated basis in accordance with GAAP and including, without duplication:
(1) imputed interest on Capitalized Lease Obligations and Attributable Indebtedness,
(2) commissions, discounts and other fees and charges owed with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings,
(3) the net costs associated with Hedging Obligations related to interest rates,
(4) amortization of debt discount or premium,
(5) the interest portion of any deferred payment obligations,
(6) capitalized interest,
(7) the product of (a) all dividend payments on any series of Disqualified Equity Interests of the Issuer or any Preferred Stock of any Restricted Subsidiary (other than any such Disqualified Equity Interests or any Preferred Stock held by the Issuer or a Wholly-Owned Restricted Subsidiary or to the extent paid in Qualified Equity Interests), multiplied by (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of the Issuer and the Restricted Subsidiaries, expressed as a decimal,
(8) all interest payable with respect to discontinued operations, and
(9) all interest on any Indebtedness described in clause (7) or (8) of the definition of Indebtedness.
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“ Consolidated Net Income ” for any period means the net income (or loss) of the Issuer and the Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:
(1) the net income (or loss) of any Person that is not a Restricted Subsidiary, except to the extent that cash in an amount equal to any such income has actually been received by the Issuer or, subject to clause (3) below, any Restricted Subsidiary during such period;
(2) except to the extent includible in the consolidated net income of the Issuer pursuant to the foregoing clause (1), the net income (or loss) of any Person that accrued prior to the date that (a) such Person becomes a Restricted Subsidiary or is merged into or consolidated with the Issuer or any Restricted Subsidiary or (b) the assets of such Person are acquired by the Issuer or any Restricted Subsidiary;
(3) the net income of any Restricted Subsidiary during such period to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of that income is not permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary during such period, except that the Issuer’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining Consolidated Net Income;
(4) for the purposes of calculating the Restricted Payments Basket only, in the case of a successor to the Issuer by consolidation, merger or transfer of its assets, any income (or loss) of the successor prior to such merger, consolidation or transfer of assets;
(5) other than for purposes of calculating the Restricted Payments Basket, any gain (or loss), together with any related provisions for taxes on any such gain (or the tax effect of any such loss), realized during such period by the Issuer or any Restricted Subsidiary upon (a) the acquisition of any securities, or the extinguishment of any Indebtedness, of the Issuer or any Restricted Subsidiary or (b) any Asset Sale by the Issuer or any Restricted Subsidiary;
(6) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP;
(7) unrealized gains and losses with respect to Hedging Obligations;
(8) the cumulative effect of any change in accounting principles; and
(9) other than for purposes of calculating the Restricted Payments Basket, any extraordinary or non-recurring gain (or extraordinary or non-recurring loss), together with any related provision for taxes on any such extraordinary or non-recurring gain (or the tax effect of any such extraordinary or non-recurring loss), realized by the Issuer or any Restricted Subsidiary during such period.
In addition, any return of capital with respect to an Investment that increased the Restricted Payments Basket pursuant to clause (3)(d) of the first paragraph of Section 4.08 or decreased the
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amount of Investments outstanding pursuant to clause (12) of the definition of “Permitted Investments” shall be excluded from Consolidated Net Income for purposes of calculating the Restricted Payments Basket.
For purposes of this definition of “Consolidated Net Income,” “non-recurring” means any gain or loss as of any date that is not reasonably likely to recur within the two years following such date; provided that if there was a gain or loss similar to such gain or loss within the two years preceding such date, such gain or loss shall not be deemed nonrecurring.
“ Consolidated Tangible Assets ” means, as of any date, the total amount of assets of the Issuer and the Restricted Subsidiaries on a consolidated basis at the end of the fiscal quarter immediately preceding such date, as determined in accordance with GAAP, less Intangible Assets.
“ Corporate Trust Office ” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution is located at HSBC Bank USA, National Association, 452 Fifth Avenue, New York, New York 10018.
“ Coverage Ratio Exception ” has the meaning set forth in the proviso in the first paragraph of Section 4.06.
“ Credit Agreement ” means the Amended and Restated Loan Agreement dated as of August 1, 2006, as amended to the Issue Date, by and among the Issuer and certain of its Subsidiaries, as borrowers, Wells Fargo Bank, N.A., as administrative agent, Wells Fargo Capital Finance, Inc. (formerly known as Wells Fargo Foothill, Inc.), as collateral agent, and the lenders from time to time party thereto, including any notes, letters of credit, guarantees, collateral and security documents, instruments and other agreements executed, issued or arranged in connection therewith (including Hedging Obligations and Bank Product Obligations incurred in connection therewith), and in each case as amended, refunded, replaced or refinanced from time to time.
“ Credit Facilities ” means one or more debt facilities (which may be outstanding at the same time and including, without limitation, the Credit Agreement) providing for revolving credit loans, term loans or letters of credit and, in each case, as such agreements may be amended, refinanced, refunded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders), including (i) any related notes, letters of credit, guarantees, collateral documents, instruments and other agreements executed, issued or arranged in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time, and (ii) any notes, guarantees, collateral documents, instruments and other agreements executed in connection with any such amendment, modification, renewal, refunding, replacement or refinancing.
“ Custodian ” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
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“ Default ” means (1) any Event of Default or (2) any event, act or condition that, after notice or the passage of time or both, would be an Event of Default.
“ Depository ” means, with respect to the Notes issued in the form of one or more Global Notes, The Depository Trust Company or another Person designated as Depository by the Issuer, which Person must be a clearing agency registered under the Exchange Act.
“ Designation ” has the meaning given to this term in Section 4.15.
“ Designation Amount ” has the meaning given to this term in Section 4.15.
“ Disqualified Equity Interests ” of any Person means any class of Equity Interests of such Person that, by its terms, or by the terms of any related agreement or of any security into which it is convertible, puttable or exchangeable, is, or upon the happening of any event or the passage of time would be, required to be redeemed by such Person, whether or not at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to the date which is 91 days after the final maturity date of the Notes; provided, however, that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided, further, however, that any Equity Interests that would not constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require the Issuer to redeem such Equity Interests upon the occurrence of a change in control or an asset sale occurring prior to the 91st day after the final maturity date of the Notes shall not constitute Disqualified Equity Interests if the change of control or asset sale provisions applicable to such Equity Interests are no more favorable to such holders than the provisions of Sections 4.21 and 4.09, respectively, and such Equity Interests specifically provide that the Issuer will not redeem any such Equity Interests pursuant to such provisions prior to the Issuer’s purchase of the Notes as required pursuant to the provisions of Sections 4.21 and 4.09 respectively.
“ Equity Interests ” of any Person means (1) any and all shares or other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such Person.
“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended.
“ Fair Market Value ” means, with respect to any asset, the price (after taking into account any liabilities relating to such asset) that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction. Fair Market Value (other than of any asset with a public trading market) in excess of $5.0 million shall be determined by the Board of Directors of the Issuer acting reasonably and in good faith
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and shall be evidenced by a board resolution delivered to the Trustee. Fair Market Value (other than of any asset with a public trading market) in excess of $10.0 million shall be determined by an Independent Financial Advisor, which determination shall be evidenced by an opinion addressed to the Board of Directors of the Issuer and delivered to the Trustee.
“ Foreign Subsidiary ” means any Restricted Subsidiary of the Issuer which (i) is not organized under the laws of (x) the United States or any state thereof or (y) the District of Columbia and (ii) conducts substantially all of its business operations outside the United States of America.
“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect on the Issue Date.
“ guarantee ” means a direct or indirect guarantee by any Person of any Indebtedness of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); “ guarantee ,” when used as a verb, and “ guaranteed ” have correlative meanings.
“ Guarantors ” means each Restricted Subsidiary, other than a Foreign Subsidiary, on the Issue Date, and each other Person that is required to, or at the election of the Issuer does, become a Guarantor by the terms of this Indenture after the Issue Date, in each case, until such Person is released from its Note Guarantee in accordance with the terms of this Indenture.
“ Hedging Obligations ” of any Person means the obligations of such Person under swap, cap, collar, forward purchase, option or similar agreements or arrangements dealing with interest rates, currency exchange rates, commodities or commodity prices, either generally or under specific contingencies.
“ Holder ” means any registered holder, from time to time, of the Notes.
“ incur ” means, with respect to any Indebtedness or Obligation, incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to such Indebtedness or Obligation; provided that (1) the Indebtedness of a Person existing at the time such Person became a Restricted Subsidiary shall be deemed to have been incurred by such Restricted Subsidiary and (2) neither the accrual of interest nor the accretion of original issue discount or the accretion or accumulation of dividends on any Equity Interests shall be deemed to be an incurrence of Indebtedness.
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“ Indebtedness ” of any Person at any date means, without duplication:
(1) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof);
(2) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(3) all reimbursement obligations of such Person in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions;
(4) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery or title thereto;
(5) the maximum fixed redemption or repurchase price of all Disqualified Equity Interests of such Person;
(6) all Capitalized Lease Obligations of such Person;
(7) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person;
(8) all Indebtedness of others guaranteed by such Person to the extent of such guarantee; provided that Indebtedness of the Issuer or its Subsidiaries that is guaranteed by the Issuer or the Issuer’s Subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of the Issuer and its Subsidiaries on a consolidated basis;
(9) all Attributable Indebtedness;
(10) to the extent not otherwise included in this definition, Hedging Obligations of such Person; and
(11) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person.
The amount of any Indebtedness which is incurred at a discount to the principal amount at maturity thereof as of any date shall be deemed to have been incurred at the accreted value thereof as of such date. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (7), the lesser of (a) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of others on the date that the Lien attaches and (b) the amount of the Indebtedness secured. For purposes of clause (5), the “maximum fixed redemption or repurchase price” of any Disqualified Equity Interests that do not have a fixed redemption or repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Dis-
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qualified Equity Interests were redeemed or repurchased on any date on which an amount of Indebtedness outstanding shall be required to be determined pursuant to this Indenture.
Notwithstanding the foregoing, Indebtedness shall not include a government grant and any guaranty of the Issuer or a Restricted Subsidiary required by such grant which obligates the Issuer or a Restricted Subsidiary to repay such grant at the discretion of such government or upon the failure of the conditions of such grant specified therein to be fulfilled, but which is forgiven solely by reason of the passage of time or the fulfillment of such grant conditions (other than repayments); provided that if the conditions for forgiveness of such government grant lapse for whatever reason and the Issuer or a Restricted Subsidiary becomes obligated to repay such grant, the grant shall be deemed Indebtedness which is incurred 30 days after the time such obligation to repay is triggered.
“ Indenture ” means this Indenture as amended, restated or supplemented from time to time.
“ Independent Director ” means a director of the Issuer who
(1) is independent with respect to the transaction at issue; and
(2) does not have any material financial interest in the Issuer or any of its Affiliates (other than as a result of holding securities of the Issuer).
“ Independent Financial Advisor ” means an accounting, appraisal or investment banking firm of nationally recognized standing that is, in the reasonable judgment of the Issuer’s Board of Directors, qualified to perform the task for which it has been engaged and disinterested and independent with respect to the Issuer and its Affiliates.
“ Institutional Accredited Investor ” means an institution that is an “accredited investor” as that term is defined in Rule 501(a)(1), (2), (3) or (7) promulgated under the Securities Act.
“ Intangible Assets ” means, with respect to any Person, all unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copy-rights, write-ups of assets over their carrying value (other than write-ups which occurred prior to the Issue Date and other than, in connection with the acquisition of an asset, the write-up of the value of such asset to its fair market value in accordance with GAAP on the date of acquisition) and all other items which would be treated as intangibles on the consolidated balance sheet of such Person prepared in accordance with GAAP.
“ interest ” means, with respect to the Notes, interest on the Notes.
“ Interest Payment Dates ” means each January 1 and July 1, commencing January 1, 2011.
“ IntraLinks ” means the IntraLinks digital workspace or any successor digital workspace or interactive document platform.
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“ Investments ” of any Person means:
(1) all direct or indirect investments by such Person in any other Person in the form of loans, advances or capital contributions or other credit extensions constituting Indebtedness of such other Person, and any guarantee of Indebtedness of any other Person;
(2) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Equity Interests or other securities of any other Person (other than any such purchase that constitutes a Restricted Payment of the type described in clause (2) of the definition thereof);
(3) all other items that would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP (including, if required by GAAP, purchases of assets outside the ordinary course of business); and
(4) the Designation of any Subsidiary as an Unrestricted Subsidiary.
Except as otherwise expressly specified in this definition, the amount of any Investment (other than an Investment made in cash) shall be the Fair Market Value thereof on the date such Investment is made. The amount of Investment pursuant to clause (4) shall be the Designation Amount determined in accordance with Section 4.15. If the Issuer or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of any Restricted Subsidiary, or any Restricted Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary, the Issuer shall be deemed to have made an Investment on the date of any such sale or other disposition equal to the Fair Market Value of the Equity Interests of and all other Investments in such Restricted Subsidiary retained. Notwithstanding the foregoing, purchases or redemptions of Equity Interests of the Issuer shall be deemed not to be Investments.
“ Issue Date ” means July 9, 2010, the date on which the Notes are originally issued.
“ Issuer ” means the party named as such in the first paragraph of this Indenture until a successor replaces such party pursuant to Article Five and thereafter means the successor.
“ Issuer Request ” means any written request signed in the name of the Issuer by the Chairman of the Board of Directors, any Vice Chairman, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer or the Treasurer of the Issuer and attested to by the Secretary or any Assistant Secretary of the Issuer.
“ Lien ” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or other), pledge, lease, easement, restriction, covenant, charge, security interest or other encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement.
“ Moody’s ” means Moody’s Investors Service, Inc., and its successors.
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“ Net Available Proceeds ” means, with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash Equivalents, net of
(1) brokerage commissions and other fees and expenses (including fees, discounts and expenses of legal counsel, accountants and investment banks, consultants and placement agents) of such Asset Sale;
(2) provisions for taxes payable as a result of such Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements);
(3) amounts required to be paid to any Person (other than the Issuer or any Restricted Subsidiary and other than under a Credit Facility) owning a beneficial interest in the assets subject to the Asset Sale or having a Lien thereon;
(4) payments of unassumed liabilities (not constituting Indebtedness) relating to the assets sold at the time of, or within 30 days after the date of, such Asset Sale; and
(5) appropriate amounts to be provided by the Issuer or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any adjustment in the sale price of such asset or assets or liabilities associated with such Asset Sale and retained by the Issuer or any Restricted Subsidiary, as the case may be, after such Asset Sale, including pensions and other postemployment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as reflected in an Officers’ Certificate delivered to the Trustee; provided, however, that any amounts remaining after adjustments, revaluations or liquidations of such reserves shall constitute Net Available Proceeds.
“ Non-Recourse Debt ” means Indebtedness of an Unrestricted Subsidiary:
(1) as to which neither the Issuer nor any Restricted Subsidiary (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Credit Agreement or Notes) of the Issuer or any Restricted Subsidiary to declare a default on the other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will not have any recourse to the Equity Interests or assets of the Issuer or any Restricted Subsidiary.
“ Non-U.S. Person ” means a Person who is not a U.S. person, as defined in Regulation S.
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“ Notes ” means the 9¼% Senior Notes due 2018 issued by the Issuer, treated as a single class of securities, as amended from time to time in accordance with the terms hereof, that are issued pursuant to this Indenture.
“ Obligation ” means any principal, interest, penalties, fees, indemnification, reimbursements, costs, expenses, damages and other liabilities payable under the documentation governing any Indebtedness.
“ Offer ” has the meaning set forth in the definition of “Offer to Purchase.”
“ Offer Expiration Date ” has the meaning set forth in the definition of “Offer to Purchase.”
“ Offer to Purchase ” means a written offer (the “ Offer ”) sent by or on behalf of the Issuer by first-class mail, postage prepaid, to each Holder at its address appearing in the register for the Notes on the date of the Offer offering to purchase up to the principal amount of Notes specified in such Offer at the purchase price specified in such Offer (as determined pursuant to this Indenture). Unless otherwise required by applicable law, the Offer shall specify an expiration date (the “ Offer Expiration Date ”) of the Offer to Purchase, which shall be not less than 30 Business Days nor more than 60 days after the date of such Offer, and a settlement date (the “ Purchase Date ”) for purchase of Notes to occur no later than three Business Days after the Offer Expiration Date. The Offer shall contain all the information required by applicable law to be included therein. The Offer shall also contain information concerning the business of the Issuer and its Subsidiaries which the Issuer in good faith believes will enable such Holders to make an informed decision with respect to the Offer to Purchase. Such information shall include, at a minimum, (i) the most recent annual and quarterly financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the documents required to be delivered to Holders pursuant to Section 4.02 (which requirements may be satisfied by delivery of such documents together with the Offer), (ii) a description of material developments in the Issuer’s business subsequent to the date of the latest of such financial statements referred to in clause (i) (including a description of the events requiring the Issuer to make the Offer to Purchase), (iii) if applicable, appropriate pro forma financial information concerning the Offer to Purchase and the events requiring the Issuer to make the Offer to Purchase and (iv) any other information required by applicable law to be included therein. The Offer shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer to Purchase is being made;
(2) the Offer Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding Notes offered to be purchased by the Issuer pursuant to the Offer to Purchase (including, if less than 100%, the manner by which such amount has been determined pursuant to the Section of this Indenture requiring the Offer to Purchase) (the “ Purchase Amount ”);
(4) the purchase price to be paid by the Issuer for each $1,000 aggregate principal amount of Notes accepted for payment (the “ Purchase Price ”);
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(5) that the Holder may tender all or any portion of the Notes registered in the name of such Holder and that any portion of a Note tendered must be tendered in an integral multiple of $1,000 principal amount;
(6) the place or places where Notes are to be surrendered for tender pursuant to the Offer to Purchase;
(7) that interest on any Note not tendered or tendered but not purchased by the Issuer pursuant to the Offer to Purchase will continue to accrue;
(8) that on the Purchase Date the Purchase Price will become due and payable upon each Note being accepted for payment pursuant to the Offer to Purchase and that interest thereon shall cease to accrue on and after the Purchase Date;
(9) that each Holder electing to tender all or any portion of a Note pursuant to the Offer to Purchase will be required to surrender such Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, at the place or places specified in the Offer prior to the close of business on the Offer Expiration Date (such Note being, if the Issuer so requires, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer duly executed by, the Holder thereof or its attorney duly authorized in writing);
(10) that Holders will be entitled to withdraw all or any portion of Notes tendered if the Issuer receives, not later than the close of business on the fifth Business Day preceding the Offer Expiration Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder tendered, the certificate number of the Note the holder tendered and a statement that such Holder is withdrawing all or a portion of its tender;
(11) that (a) if Notes in an aggregate principal amount less than or equal to the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Issuer shall purchase all such Notes and (b) if Notes in an aggregate principal amount in excess of the Purchase Amount are tendered and not withdrawn pursuant to the Offer to Purchase, the Issuer shall purchase Notes having an aggregate principal amount equal to the Purchase Amount on a pro rata basis (with such adjustments as may be deemed appropriate so that only Notes in with an aggregate principal amount of $2,000 or greater and integral multiples of $1,000 shall be purchased); and
(12) that in the case of any Holder whose Note is purchased only in part, the Issuer shall execute and deliver to the Holder of such Note without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unpurchased portion of the Note so tendered.
An Offer to Purchase shall be governed by and effected in accordance with the provisions above pertaining to any Offer.
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On or before the Purchase Date, the Issuer shall (i) accept for payment Notes or portions thereof tendered and not withdrawn pursuant to the Offer, (ii) deposit with the Trustee U.S. Dollars sufficient to pay the Purchase Price, plus accrued interest, if any, of all Notes to be purchased and (iii) deliver to the Trustee Notes so accepted together with an Officers’ Certificate stating the Notes or portions thereof being purchased by the Issuer. The Trustee shall promptly mail to the Holders so accepted payment in an amount equal to the Purchase Price, plus accrued interest, if any, thereon.
“ Offering Memorandum ” means the offering memorandum, dated as of June 28, 2010, relating to the offering of the Notes.
“ Officer ” means any of the following of the Issuer or any Guarantor: the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary.
“ Officers’ Certificate ” means a certificate signed on behalf of a Person by two Officers of such Person.
“ Opinion of Counsel ” means a written opinion reasonably satisfactory in form and substance to the Trustee from legal counsel, which counsel is reasonably acceptable to the Trustee, stating the matters required by Section 11.05 and delivered to the Trustee.
“ Pari Passu Indebtedness ” means any Indebtedness of the Issuer or any Guarantor that ranks pari passu in right of payment with the Notes or the Note Guarantees, as applicable.
“ Permitted Business ” means the businesses engaged in by the Issuer and its Subsidiaries on the Issue Date as described in the Offering Memorandum and businesses that are reasonably related thereto or reasonable extensions thereof.
“ Permitted Holder ” means each of: (1) Jack Bendheim; (2) each of Jack Bendheim’s spouse, siblings, ancestors, descendants (whether by blood, marriage or adoption, and including stepchildren) and the spouses, siblings, ancestors and descendants thereof (whether by blood, marriage or adoption, and including stepchildren) of such natural persons, the beneficiaries, estates and legal representatives of any of the foregoing, the trustee of any bona fide trust of which any of the foregoing, individually or in the aggregate, are the majority in interest beneficiaries or grantors, and any corporation, partnership, limited liability company or other Person in which any of the foregoing, individually or in the aggregate, own or control a majority in interest; (3) each of Mayflower L.P. and 3i Group plc and (i) each of their direct or indirect subsidiaries, any direct or indirect parent of 3i Group plc or Mayflower L.P. and any direct or indirect subsidiary of such a parent, in each case other than any portfolio companies of any of the foregoing (together, the “3i Parties”) and (ii) any fund, partnership, investment vehicle or other entity (whether corporate or otherwise), in each case other than any portfolio companies of any of the foregoing, established in any jurisdiction and which is either (a) managed or advised by an entity in the 3i Parties or (b) utilized for the purpose of allowing 3i Parties employees (including former employees) to participate directly or indirectly in the growth in value of the Issuer ((a) and (b) together being referred to as “3i Funds”); and (4) all Affiliates controlled by the entities and individuals identified in clauses (1) through (3) above in each case other than any portfolio companies of any of the foregoing.
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“ Permitted Investment ” means (each of which shall be given independent effect in whole or in part):
(1) (i) Investments by the Issuer or any Restricted Subsidiary (a) in any Guarantor or (b) in or for the purchase of any Person that will become immediately after such Investment a Guarantor or that will merge or consolidate into or is liquidated into, the Issuer or any Guarantor and (ii) Investments by any Restricted Subsidiary that is not a Guarantor in or for the purchase of any other Restricted Subsidiary;
(2) Investments in the Issuer by any Restricted Subsidiary;
(3) loans and advances to directors, employees and officers of the Issuer and the Restricted Subsidiaries for bona fide business purposes and to purchase Equity Interests of the Issuer not in excess of $5.0 million at any one time outstanding;
(4) Hedging Obligations entered into for bona fide hedging purposes of the Issuer or any Restricted Subsidiary not for the purpose of speculation;
(5) cash and Cash Equivalents;
(6) accounts and notes receivables owing to the Issuer or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Issuer or any such Restricted Subsidiary deems reasonable under the circumstances;
(7) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or any exchange of such investment with the issuer thereof or taken in settlement of or other resolution of claims or disputes;
(8) (a) Investments received in connection with an Asset Sale that was made in compliance with Section 4.09 and (b) Investments in securities or other assets not constituting Cash Equivalents received in connection with any other disposition of assets not constituting an Asset Sale; provided that in the case of this clause (b), the total consideration received in connection with any such disposition of assets shall be at least equal to the Fair Market Value of the assets being disposed;
(9) lease, utility and other similar deposits in the ordinary course of business;
(10) (i) Asset Acquisitions consummated by the Issuer or any Restricted Subsidiary; or (ii) Asset Acquisitions constituting or effected through Investments by the Issuer or any Restricted Subsidiary in or for the purchase of any Foreign Subsidiary or any Person or assets that will, at the time of or immediately after such Investment, become a Foreign Subsidiary or be owned by a Foreign Subsidiary; provided that, in the case of this clause (ii), after giving effect to such Investment (and any incurrence or repayment of Indebtedness in connection therewith), the Issuer would be able to incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception;
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(11) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Issuer or any Restricted Subsidiary or in satisfaction of judgments;
(12) Investments made after the Issue Date in any Foreign Subsidiary by the Issuer or any Guarantor to the extent the aggregate amount of all such Investments made pursuant to this clause (12) at any one time outstanding does not, after giving effect to the Investment, exceed 10% of Consolidated Tangible Assets at such time (with each Investment being valued as of the date made and without regard to subsequent changes in value);
(13) other Investments made after the Issue Date in an aggregate amount not to exceed $15.0 million at any one time outstanding (with each Investment being valued as of the date made and without regard to subsequent changes in value); provided that no Investment made in reliance on this clause (13) shall be made in any Person that is the direct or indirect holder of a majority of the outstanding Equity Interests of the Issuer;
(14) Investments of the Issuer and the Restricted Subsidiaries to the extent outstanding on the Issue Date;
(15) Investments in any Person formed for the purpose of funding, conducting and managing investigation and remedial responses and funding and managing other amounts in connection with the remediation of the properties owned or formerly owned on the Issue Date by the Issuer or a Restricted Subsidiary or property adjacent thereto; provided that each such initial Investment with respect to each property and each Investment with respect to each property aggregating on a cumulative basis since the Issue Date $1.0 million or an integral multiple thereof is set forth in an Officers’ Certificate signed by the Issuer’s Chief Financial Officer and another Officer which states (i) the cumulative amount of each such Investment after the Issue Date, and (ii) that such amounts otherwise would be payable by the Issuer or a Restricted Subsidiary and would be permitted to be incurred directly, based on the reasonable good faith beliefs of the Officers executing such Officers’ Certificate at the time of such execution;
(16) Investments made after the Issue Date consisting of purchases or other acquisitions or the contribution of inventory, supplies, material or equipment or the licensing of intellectual property pursuant to joint marketing, manufacturing or development arrangements with other Persons in an aggregate amount not to exceed $10.0 million at any one time outstanding (with each Investment being valued as of the date made and without regard to subsequent changes in value);
(17) the conversion or contribution of Indebtedness or other obligations from Restricted Subsidiaries, existing as of the Issue Date, to an Equity Interest in the obligor; and
(18) non-cash Investments made in connection with the reorganization of any or all of the Issuer’s Israeli Subsidiaries, which may include without limitation the transfer of ownership of one or more of the Issuer’s existing Israeli Restricted Subsidiaries or all or substantially all of such entity’s assets to one or more of the Issuer’s other Restricted Subsidiaries, by way of merger, consolidation or reorganization or by way of sale, lease, transfer, conveyance, disposition, assignment, or otherwise in one transaction or a series of related transactions.
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The amount of Investments outstanding at any time pursuant to clause (12), (13) or (16) above shall be deemed to be reduced:
(a) upon the disposition or repayment of or return on any Investment made pursuant to clause (12), (13) or (16) above, as applicable, by an amount equal to the return of capital with respect to such Investment to the Issuer or any Restricted Subsidiary (to the extent not included in the computation of Consolidated Net Income);
(b) upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, by an amount equal to the lesser of (x) the Fair Market Value of the Issuer’s proportionate interest in such Subsidiary immediately following such Redesignation, and (y) the aggregate amount of Investments in such Subsidiary that increased (and did not previously decrease) the amount of Investments outstanding pursuant to clause (12), (13) or (16) above, as applicable; and
(c) the amount of any Net Proceeds Excess.
“ Permitted Liens ” means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Issuer or the Restricted Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;
(2) Liens of landlords, carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof and rights to offset and set-off;
(3) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory or regulatory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);
(4) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(5) judgment Liens not giving rise to an Event of Default so long as such Liens are adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which the proceedings may be initiated has not expired;
(6) easements, rights-of-way, zoning restrictions, title irregularities and other similar charges, restrictions or encumbrances in respect of real property which do not, in the aggregate,
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impair in any material respect the ordinary conduct of the business of the Issuer and the Restricted Subsidiaries taken as a whole;
(7) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other assets relating to such letters of credit and products and proceeds thereof;
(8) Liens encumbering deposits made to secure obligations arising from contractual or warranty requirements of the Issuer or any Restricted Subsidiary, including rights of offset and set-off;
(9) lenders’ Liens, rights of set-off and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more of accounts maintained by the Issuer or any Restricted Subsidiary, in each case granted in the ordinary course of business in favor of the lender or lenders with which such accounts are maintained, securing amounts owing to such lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;
(10) leases or subleases, and licenses or sublicenses, granted to others that do not materially interfere with the ordinary course of business of the Issuer or any Restricted Subsidiary;
(11) Liens arising from filing Uniform Commercial Code financing statements regarding leases;
(12) Liens securing all of the Notes and Liens securing any Note Guarantee;
(13) Liens securing Hedging Obligations entered into for bona fide hedging purposes of the Issuer or any Restricted Subsidiary not for the purpose of speculation;
(14) Liens existing on the Issue Date securing Indebtedness outstanding on the Issue Date;
(15) Liens in favor of the Issuer or a Guarantor;
(16) Liens securing Indebtedness under the Credit Facilities incurred pursuant to clause (1) of Section 4.06;
(17) Liens securing Purchase Money Indebtedness and Capitalized Lease Obligations; provided that such Liens shall not extend to any asset other than the specified asset being financed and additions and improvements thereon;
(18) Liens securing Acquired Indebtedness permitted to be incurred under this Indenture; provided that the Liens do not extend to assets not subject to such Lien at the time of acquisition (other than improvements thereon and substitutions and replacements thereto) and are no more favorable to the lienholders than those securing such Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Issuer or a Restricted Subsidiary;
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(19) Liens on assets of a Person existing at the time such Person is acquired or merged with or into or consolidated with the Issuer or any such Restricted Subsidiary (and not created in anticipation or contemplation thereof);
(20) Liens on assets of Foreign Subsidiaries securing Indebtedness of Foreign Subsidiaries;
(21) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (12), (14), (16), (17), (18) and (19); provided that in the case of Liens securing Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (14), (17), (18) and (19), such Liens do not extend to any additional assets (other than improvements thereon and replacements thereof);
(22) 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;
(23) Liens securing Indebtedness incurred pursuant to clause (13) of Section 4.06; and
(24) Liens arising in connection with the placement by the Issuer or any Restricted Subsidiary of a reasonable amount of cash (as determined in good faith by the Issuer’s Board of Directors) in escrow against any obligations permitted pursuant to clause (11) of Section 4.06 (other than with respect to obligations incurred or assumed in connection with the acquisition, disposition, issuance or redemption of Equity Interests of the Issuer).
“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.
“ Physical Notes ” means certificated Notes in registered form in substantially the form set forth in Exhibit A .
“ Plan of Liquidation ” with respect to any Person, means a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety; and (2) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the remaining assets of such Person to holders of Equity Interests of such Person.
“ Preferred Stock ” means, with respect to any Person, any and all preferred or preference stock or other equity interests (however designated) of such Person whether now outstanding or issued after the Issue Date.
“ principal ” means, with respect to the Notes, the principal of, and premium, if any, on the Notes.
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“ Private Placement Legend ” means the legend initially set forth on the Rule 144A Notes and Other Notes that are Restricted Notes in the form set forth in Exhibit B .
“ Public Equity Offering ” means an underwritten public offering of Qualified Equity Interests of the Issuer generating gross proceeds of at least $50.0 million in the aggregate since the Issue Date, pursuant to an effective registration statement filed under the Securities Act or pursuant to a listing on or admission to a recognized exchange or market outside the United States.
“ Purchase Amount ” has the meaning set forth in the definition of “Offer to Purchase.”
“ Purchase Date ” has the meaning set forth in the definition of “Offer to Purchase.”
“ Purchase Money Indebtedness ” means Indebtedness, including Capitalized Lease Obligations, of the Issuer or any Restricted Subsidiary incurred for the purpose of financing all or any part of the purchase price of property, plant or equipment purchased, constructed or improved at any time after the Issue Date and used in the business of the Issuer or any Restricted Subsidiary or the cost of installation, construction or improvement thereof and fees and other obligations incurred in connection therewith, as amended or otherwise restructured (other than pursuant to a refinancing); provided, however, that (1) the amount of such Indebtedness shall not exceed such purchase price or cost and (2) such Indebtedness shall be incurred within 90 days after such acquisition of such asset by the Issuer or such Restricted Subsidiary or such installation, construction or improvement.
“ Purchase Price ” has the meaning set forth in the definition of “Offer to Purchase.”
“ Qualified Equity Interests ” of any Person means Equity Interests of such Person other than Disqualified Equity Interests; provided that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed, directly or indirectly, using funds (1) borrowed from such Person or any Subsidiary of such Person until and to the extent such borrowing is repaid or (2) contributed, extended, guaranteed or advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect of any employee stock ownership or benefit plan). Unless otherwise specified, Qualified Equity Interests refer to Qualified Equity Interests of the Issuer.
“ Qualified Equity Offering ” means the issuance and sale of Qualified Equity Interests of the Issuer to Persons other than (x) any Permitted Holder or (y) any other Person who is, prior to such issuance and sale, an Affiliate of the Issuer.
“ Qualified Institutional Buyer ” or “ QIB ” shall have the meaning specified in Rule 144A promulgated under the Securities Act.
“ redeem ” means to redeem, repurchase, purchase, defease (including a covenant defeasance), retire, discharge or otherwise acquire or retire for value; and “ redemption ” shall have a correlative meaning; provided that this definition shall not apply for purposes of Section 3.01.
“ Redemption Date ” when used with respect to any Note to be redeemed means the date fixed for such redemption pursuant to the terms of the Notes.
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“ refinance ” means to refinance, repay, prepay, replace, renew or refund.
“ Refinancing Indebtedness ” means Indebtedness of the Issuer or a Restricted Subsidiary incurred in exchange for, or the proceeds of which are used to redeem or refinance in whole or in part, any Indebtedness of the Issuer or any Restricted Subsidiary (the “ Refinanced Indebtedness ”); provided that:
(1) the principal amount (and accreted value, in the case of Indebtedness issued at a discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted value, as the case may be) of the Refinanced Indebtedness plus the amount of accrued and unpaid interest on the Refinanced Indebtedness, any reasonable premium paid to the holders of the Refinanced Indebtedness and reasonable expenses incurred or to be paid in connection with the incurrence of the Refinancing Indebtedness;
(2) the obligor of Refinancing Indebtedness does not include any Person (other than the Issuer or any Guarantor) that is not an obligor of the Refinanced Indebtedness;
(3) if the Refinanced Indebtedness was subordinated in right of payment to the Notes or the Note Guarantees, as the case may be, then such Refinancing Indebtedness, by its terms, is subordinate in right of payment to the Notes or the Note Guarantees, as the case may be, at least to the same extent as the Refinanced Indebtedness;
(4) the Refinancing Indebtedness has a final stated maturity either (a) no earlier than the Refinanced Indebtedness being repaid or amended or (b) 181 days after the maturity date of the Notes;
(5) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the maturity date of the Notes has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is scheduled to mature on or prior to the maturity date of the Notes; and
(6) the proceeds of the Refinancing Indebtedness shall be used substantially concurrently with the incurrence thereof to redeem or refinance the Refinanced Indebtedness, unless the Refinanced Indebtedness is not then due and is not redeemable or prepayable at the option of the obligor thereof or is redeemable or prepayable only with notice, in which case such proceeds shall be held in a segregated account of the obligor of the Refinanced Indebtedness until the Refinanced Indebtedness becomes due or redeemable or prepayable or such notice period lapses and then shall be used to redeem or refinance the Refinanced Indebtedness; provided that in any event the Refinanced Indebtedness shall be redeemed or refinanced within one year of the incurrence of the Refinancing Indebtedness.
“ Regulation S ” means Regulation S promulgated under the Securities Act.
“ Responsible Officer ” when used with respect to the Trustee, means an officer or assistant officer assigned to the corporate trust department of the Trustee (or any successor group of the Trustee) with direct responsibility for the administration of this Indenture and also means, with respect to a
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particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.
“ Restricted Note ” has the same meaning as “Restricted Security” set forth in Rule 144(a)(3) promulgated under the Securities Act; provided that the Trustee shall be entitled to request and conclusively rely upon an Opinion of Counsel with respect to whether any Note is a Restricted Note.
“ Restricted Payment ” means any of the following:
(1) the declaration or payment of any dividend or any other distribution on Equity Interests of the Issuer or any Restricted Subsidiary or any payment made to the direct or indirect holders (in their capacities as such) of Equity Interests of the Issuer or any Restricted Subsidiary, including, without limitation, any payment in connection with any merger or consolidation involving the Issuer but excluding (a) dividends or distributions payable solely in Qualified Equity Interests or through accretion or accumulation of such dividends on such Equity Interests and (b) in the case of Restricted Subsidiaries, dividends or distributions payable to the Issuer or to a Restricted Subsidiary and pro rata dividends or distributions payable to minority stockholders of any Restricted Subsidiary;
(2) the redemption of any Equity Interests of the Issuer or any Restricted Subsidiary, including, without limitation, any payment in connection with any merger or consolidation involving the Issuer but excluding any such Equity Interests held by the Issuer or any Restricted Subsidiary;
(3) any Investment other than a Permitted Investment; or
(4) any payment or redemption prior to the scheduled maturity or prior to any scheduled repayment of principal or sinking fund payment, as the case may be, in respect of Subordinated Indebtedness (other than any Subordinated Indebtedness owed to and held by the Issuer or any Restricted Subsidiary).
“ Restricted Subsidiary ” means any Subsidiary of the Issuer other than an Unrestricted Subsidiary.
“ Rule 144 ” means Rule 144 promulgated under the Securities Act.
“ Rule 144A ” means Rule 144A promulgated under the Securities Act.
“ S&P ” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc., and its successors.
“ Sale and Leaseback Transactions ” means, with respect to any Person, an arrangement with any bank, insurance company or other lender or investor or to which such lender or investor is a party, providing for the leasing by such Person of any asset of such Person which has been or is being sold or transferred by such Person to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the security of such asset.
“ SEC ” means the U.S. Securities and Exchange Commission.
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“ Secretary’s Certificate ” means a certificate signed by the Secretary of the Issuer.
“ Securities Act ” means the U.S. Securities Act of 1933, as amended.
“ Shareholders Agreement ” means the Stockholders Agreement dated March 12, 2008 by and between Jack C. Bendheim, BFI Co., LLC, Mayflower L.P. (as successor to 3i Quoted Private Equity plc) and the Issuer, as amended and in effect on the Issue Date, and as thereafter amended, except for any amendment subsequent to the Issue Date which causes the terms of such agreement to be less favorable to the Issuer.
“ Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Regulation S-X promulgated pursuant to the Securities Act as such Regulation is in effect on the Issue Date.
“ Subordinated Indebtedness ” means Indebtedness of the Issuer or any Restricted Subsidiary that is expressly subordinated in right of payment to the Notes or the Note Guarantees, respectively.
“ Subsidiary ” means, with respect to any Person:
(1) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).
Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Issuer.
“ Transactions ” means (i) the issuance and sale of the Notes, (ii) the redemption or repayment, by tender offer or otherwise, of all of the Issuer’s outstanding Senior Notes due 2013 and all of the Issuer’s outstanding Senior Subordinated Notes due 2014, (iii) the declaration and payment of a dividend on the Issuer’s common shares of up to $50.0 million; provided that such declaration and payment is made after the Issuer enters into a Credit Facility that extends, replaces or refinances the Credit Agreement in existence on the Issue Date, which Credit Facility (x) matures no earlier than July 31, 2013, (y) provides for loans and/or commitments to the Issuer in an aggregate principal amount of not less than $50 million and (z) is entered into by the Issuer no later than July 31, 2011, (iv) the repayment of $1.4 million in respect of a loan from an Affiliate of BFI Co., LLC, and (v) the payment of fees and expenses related to the foregoing.
“ Treasury Rate ” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption
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date to July 1, 2014; provided, however, that if the period from the redemption date to July 1, 2014, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
“ Trust Indenture Act ” or “ TIA ” means the Trust Indenture Act of 1939, as amended.
“ Trustee ” means the party named as such in this Indenture until a successor replaces it pursuant to this Indenture and thereafter means the successor.
“ Unrestricted Subsidiary ” means (1) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Issuer in accordance with Section 4.15 and (2) any Subsidiary of an Unrestricted Subsidiary.
“ U.S. Government Obligations ” means direct non-callable obligations of, or guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.
“ Voting Stock ” with respect to any Person, means securities of any class of Equity Interests of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock or other relevant equity interest has voting power by reason of any contingency) to vote in the election of members of the Board of Directors of such Person.
“ Weighted Average Life to Maturity ” when applied to any Indebtedness at any date, means the number of years obtained by dividing (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (2) the then outstanding principal amount of such Indebtedness.
“ Wholly-Owned Restricted Subsidiary ” means a Restricted Subsidiary of which 100% of the Equity Interests (except for directors’ qualifying shares or certain minority interests owned by other Persons solely due to local law requirements that there be more than one stockholder, but which interest is not in excess of what is required for such purpose) are owned directly by the Issuer or through one or more Wholly-Owned Restricted Subsidiaries.
SECTION 1.02. Other Definitions .
The definitions of the following terms may be found in the sections indicated as follows:
Term | Defined in Section | |
“Affiliate Transaction” | 4.10 | |
“Agent Members” | 2.16(a) | |
“Change of Control Offer” | 4.21 | |
“Change of Control Purchase Price” | 4.21 | |
“Covenant Defeasance” | 9.03 | |
“Designated Non-cash Consideration” | 4.09 |
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Term | Defined in Section | |
“Event of Default” | 6.01 | |
“Excess Proceeds” | 4.09 | |
“Global Notes” | 2.16(a) | |
“Legal Defeasance” | 9.02 | |
“Legal Holiday” | 11.07 | |
“Net Proceeds Excess” | 4.09 | |
“Net Proceeds Offer” | 4.09 | |
“Note Guarantee” | 10.01 | |
“Offered Price” | 4.09 | |
“Other Notes” | 2.02 | |
“Pari Passu Indebtedness Price” | 4.09 | |
“Payment Amount” | 4.09 | |
“Permitted Indebtedness” | 4.06 | |
“Note Guarantee” | 10.01 | |
“Paying Agent” | 2.04 | |
“Redesignation” | 4.15 | |
“Registrar” | 2.04 | |
“Regulation S Global Notes” | 2.16(a) | |
“Regulation S Notes” | 2.02 | |
“Restricted Global Note” | 2.16(a) | |
“Restricted Payments Basket” | 4.08 | |
“Restricted Period” | 2.16(f) | |
“Rule 144A Notes” | 2.02 | |
“Successor” | 5.01 |
SECTION 1.03. Incorporation by Reference of Trust Indenture Act .
Whenever this Indenture refers to a provision of the TIA, the portion of such provision required to be incorporated herein in order for this Indenture to be qualified under the TIA is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:
“ indenture securities ” means the Notes.
“ indenture securityholder ” means a Holder or Noteholder.
“ indenture to be qualified ” means this Indenture.
“ indenture trustee ” or “ institutional trustee ” means the Trustee.
“ obligor on the indenture securities ” means the Issuer, the Guarantors or any other obligor on the Notes.
All other terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings therein assigned to them.
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SECTION 1.04. Rules of Construction .
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein, whether defined expressly or by reference;
(2) “or” is not exclusive;
(3) words in the singular include the plural, and in the plural include the singular;
(4) words used herein implying any gender shall apply to both genders;
(5) “herein”, “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other Subsection;
(6) unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP as in effect from time to time, applied on a basis consistent with the most recent audited consolidated financial statements of the Issuer; and
(7) “$,” “U.S. Dollars” and “United States Dollars” each refer to United States dollars, or such other money of the United States that at the time of payment is legal tender for payment of public and private debts.
SECTION 2.01. Amount of Notes .
The Trustee shall authenticate (i) Notes for original issue on the Issue Date in the aggregate principal amount not to exceed $275,000,000 and (ii) subject to Section 4.06, Additional Notes in an unlimited principal amount, upon a written order of the Issuer in the form of an Officers’ Certificate of the Issuer. The Officers’ Certificate shall specify the amount of Notes to be authenticated, the date on which the Notes are to be authenticated, and the names and delivery instructions for each Holder of the Notes.
Upon receipt of a written order of the Issuer in the form of an Officers’ Certificate, the Trustee shall authenticate Notes in substitution for Notes originally issued to reflect any name change of the Issuer. Any Additional Notes shall be part of the same issue as the Notes being issued on the date hereof and will vote on all matters as one class with the Notes being issued on the date hereof, including, without limitation, waivers, amendments, redemptions and Offers to Purchase. For the purposes of this Indenture, except for Section 4.06, references to the Notes include Additional Notes, if any.
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SECTION 2.02. Form and Dating .
The Notes and the Trustee’s certificate of authentication with respect thereto shall be substantially in the form set forth in Exhibit A , which is incorporated in and forms a part of this Indenture. The Notes may have notations, legends or endorsements required by law, rule or usage to which the Issuer is subject. Without limiting the generality of the foregoing, Notes offered and sold to Qualified Institutional Buyers in reliance on Rule 144A (“ Rule 144A Notes ”) shall bear the legend and include the form of assignment set forth in Exhibit B , Notes offered and sold in offshore transactions in reliance on Regulation S (“ Regulation S Notes ”) shall bear the legend and include the form of assignment set forth in Exhibit C , and Notes offered and sold to Institutional Accredited Investors in transactions exempt from registration under the Securities Act not made in reliance on Rule 144A or Regulation S (“ Other Notes ”) may be represented by a Restricted Global Note or, if such an investor may not hold an interest in the Restricted Global Note, a Physical Note, in each case, bearing the Private Placement Legend. Each Note shall be dated the date of its authentication.
The terms and provisions contained in the Notes shall constitute, and are expressly made, a part of this Indenture and, to the extent applicable, the Issuer, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and agree to be bound thereby.
The Notes may be presented for registration of transfer and exchange at the offices of the Registrar.
SECTION 2.03. Execution and Authentication .
Two Officers shall sign, or one Officer shall sign and one Officer (each of whom shall, in each case, have been duly authorized by all requisite corporate actions) shall attest to, the Notes for the Issuer by manual or facsimile signature.
If an Officer whose signature is on a Note was an Officer at the time of such execution but no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.
No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature of an authorized officer, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Note shall have been authenticated and delivered hereunder but never issued and sold by the Issuer, and the Issuer shall deliver such Note to the Trustee for cancellation as provided in Section 2.12, for all purposes of this Indenture such Note shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate the Notes. Unless otherwise provided in the appointment, an authenticating agent may authenticate the Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an
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Agent to deal with the Issuer and Affiliates of the Issuer. Each Paying Agent is designated as an authenticating agent for purposes of this Indenture.
The Notes shall be issuable only in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000.
SECTION 2.04. Registrar and Paying Agent .
The Issuer shall maintain an office or agency (which shall be located in the Borough of Manhattan in The City of New York, State of New York) where Notes may be presented for registration of transfer or for exchange (the “ Registrar ”), and an office or agency where Notes may be presented for payment (the “ Paying Agent ”) and an office or agency where notices and demands to or upon the Issuer, if any, in respect of the Notes and this Indenture may be served. The Registrar shall keep a register of the Notes and of their transfer and exchange. If and for so long as the Trustee is not the Registrar, the Trustee shall have the right to inspect the register of the Notes during regular business hours. The Issuer may have one or more additional Paying Agents. The term “Paying Agent” includes any additional Paying Agent. Neither the Issuer nor any Affiliate thereof may act as Paying Agent.
The Issuer shall enter into an appropriate agency agreement, which shall incorporate the provisions of the TIA, with any Agent that is not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Issuer shall notify the Trustee of the name and address of any such Agent. If the Issuer fails to maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such and shall be entitled to appropriate compensation in accordance with Section 7.07. The Issuer or any wholly owned Subsidiary may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Issuer initially appoints the Trustee as Registrar, Paying Agent and Agent for service of notices and demands in connection with the Notes and this Indenture.
SECTION 2.05. Paying Agent To Hold Money in Trust .
Prior to each due date of the principal or interest on any Notes, the Issuer shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. Each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of or premium or interest on the Notes (whether such money has been paid to it by the Issuer or any other obligor on the Notes or the Guarantors), and the Issuer and the Paying Agent shall notify the Trustee in writing of any default by the Issuer (or any other obligor on the Notes) in making any such payment. If the Issuer or a Subsidiary of the Issuer serves as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. Money held in trust by the Paying Agent need not be segregated except as required by law and in no event shall the Paying Agent be liable for any interest on any money received by it hereunder. The Issuer at any time may require the Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed and the Trustee may at any time during the continuance of any Event of Default specified in Section 6.01(1) or (2), upon written request to the Paying Agent, require such Paying Agent to pay forthwith all money so held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon making such payment, the Paying Agent shall have no further liability for the money delivered to the Trustee.
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The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of the Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least five Business Days before each Interest Payment Date, and at such other times as the Trustee may reasonably request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders.
SECTION 2.07. Transfer and Exchange .
Subject to Sections 2.16 and 2.17, when Notes are presented to the Registrar with a request from the Holder of such Notes to register a transfer or to exchange them for an equal principal amount of Notes of other authorized denominations, the Registrar shall register the transfer as requested if the requirements of this Indenture are met. Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or his attorneys duly authorized in writing. To permit registrations of transfers and exchanges, the Issuer shall issue and execute and the Trustee shall authenticate new Notes (and the Guarantors shall execute the guarantee thereon) evidencing such transfer or exchange at the Registrar’s request. No service charge shall be made to the Holder for any registration of transfer or exchange. The Issuer may require from the Holder payment of a sum sufficient to cover any transfer taxes or other governmental charge that may be imposed in relation to a transfer or exchange, but this provision shall not apply to any exchange pursuant to Section 2.11, 3.06, 4.09, 4.21 or 8.05 (in which events the Issuer shall be responsible for the payment of such taxes). The Registrar shall not be required to exchange or register a transfer of any Note for a period of 15 days immediately preceding the mailing of notice of redemption of Notes to be redeemed or of any Note selected, called or being called for redemption except the unredeemed portion of any Note being redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global Note, agree that transfers of the beneficial interests in such Global Note may be effected only through a book entry system maintained by the Holder of such Global Note (or its agent), and that ownership of a beneficial interest in the Global Note shall be required to be reflected in a book entry.
Each Holder of a Note agrees to indemnify the Issuer and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder’s Note in violation of any provision of this Indenture and/or applicable U.S. Federal or state securities law.
Except as expressly provided herein, neither the Trustee nor the Registrar shall have any duty to monitor the Issuer’s compliance with or have any responsibility with respect to the Issuer’s compliance with any Federal or state securities laws.
SECTION 2.08. Replacement Notes .
If a mutilated Note is surrendered to the Registrar or the Trustee, or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note (and the Guarantors shall execute the guarantee thereon) if the Holder of such Note furnishes to the Issuer and the Trustee evidence reasonably acceptable to them of the ownership and the destruction, loss or theft of such Note and if the requirements of Section 8-405 of the
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New York Uniform Commercial Code as in effect on the date of this Indenture are met. If required by the Trustee or the Issuer, an indemnity bond shall be posted by such Holder, sufficient in the judgment of both to protect the Issuer, the Guarantors, the Trustee or any Paying Agent from any loss that any of them may suffer if such Note is replaced. The Issuer and the Trustee may charge such Holder for their reasonable out-of-pocket expenses in replacing such Note (including, without limitation, attorneys’ fees and disbursements) in replacing such Note. Every replacement Note shall constitute a contractual obligation of the Issuer.
SECTION 2.09. Outstanding Notes .
The Notes outstanding at any time are all Notes that have been authenticated by the Trustee except for (a) those cancelled by it, (b) those delivered to it for cancellation, (c) to the extent set forth in Sections 9.01 and 9.02, on or after the date on which the conditions set forth in Section 9.01 or 9.02 have been satisfied, those Notes theretofore authenticated and delivered by the Trustee hereunder and (d) those described in this Section 2.09 as not outstanding. Subject to Section 2.10, a Note does not cease to be outstanding because the Issuer or one of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.08, it ceases to be outstanding unless the Trustee and the Issuer receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser in whose hands such Note is a legal, valid and binding obligation of the Issuer.
If the Paying Agent segregates and holds in trust, in its capacity as such, on any redemption date or maturity date, money sufficient to pay all accrued interest and principal with respect to the Notes payable on that date and is not prohibited from paying such money to the Holders thereof pursuant to the terms of this Indenture, then on and after that date such Notes cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10. Treasury Notes .
In determining whether the Holders of the required principal amount of Notes have concurred in any declaration of acceleration or notice of default or direction, waiver or consent or any amendment, modification or other change to this Indenture, Notes owned by the Issuer or any other Affiliate of the Issuer shall be disregarded as though they were not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent or any amendment, modification or other change to this Indenture, only Notes as to which a Responsible Officer of the Trustee has received an Officers’ Certificate stating that such Notes are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee established to the satisfaction of the Trustee the pledgee’s right so to act with respect to the Notes and that the pledgee is not the Issuer, a Guarantor, any other obligor on the Notes or any of their respective Affiliates.
SECTION 2.11. Temporary Notes .
Until definitive Notes are prepared and ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange
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for temporary Notes. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as definitive Notes.
The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall (subject to the record-retention requirements of the Exchange Act) destroy cancelled Notes. The Trustee shall deliver a certificate of such destruction to the Issuer. The Issuer may not reissue or resell, or issue new Notes to replace, Notes that the Issuer has redeemed or paid, or that have been delivered to the Trustee for cancellation.
SECTION 2.13. Defaulted Interest .
If the Issuer defaults on a payment of interest on the Notes, it shall pay the defaulted interest, plus (to the extent permitted by law) any interest payable on the defaulted interest, in accordance with the terms hereof, to the Persons who are Holders on a subsequent special record date, which date shall be at least five Business Days prior to the payment date. The Issuer shall fix such special record date and payment date in a manner satisfactory to the Trustee. The Issuer shall promptly mail to each Holder a notice that states the special record date, the payment date and the amount of defaulted interest, and interest payable on defaulted interest, if any, to be paid. The Issuer may make payment of any defaulted interest in any other lawful manner not inconsistent with the requirements (if applicable) of any securities exchange on which the Notes may be listed and, upon such notice as may be required by such exchange, if, after written notice given by the Issuer to the Trustee of the proposed payment pursuant to this sentence, such manner of payment shall be deemed practicable by the Trustee.
The Issuer in issuing the Notes may use a “CUSIP” number, ISIN and “Common Code” number (in each case if then generally in use), and if so, such CUSIP number, ISIN and Common Code number shall be included in notices of redemption or exchange as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of such number either as printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes. The Issuer shall promptly notify, and in any event within 10 Business Days, the Trustee of any such CUSIP number, ISIN and Common Code number used by the Issuer in connection with the issuance of the Notes and of any change in the CUSIP number, ISIN and Common Code number.
SECTION 2.15. Deposit of Moneys .
Prior to 10:00 a.m., New York City time, on each Interest Payment Date and maturity date, the Issuer shall have deposited with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such Interest Payment Date or maturity date, as the case may be, in a timely manner which permits the Trustee to remit payment to the Holders on such Interest Payment Date or maturity date, as the case may be. The principal and interest on Global Notes shall be payable to the Depository or its nominee, as the case may be, as the sole registered owner and the sole holder
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of the Global Notes represented thereby. The principal and interest on Physical Notes shall be payable, either in person or by mail, at the office of the Paying Agent.
SECTION 2.16. Book-Entry Provisions for Global Notes .
(a) Rule 144A Notes initially shall be represented by one or more notes in registered, global form without interest coupons (collectively, the “ Restricted Global Note ”). Regulation S Notes initially shall be represented by one or more notes in registered, global form without interest coupons (collectively, the “ Regulation S Global Note ,” and, together with the Restricted Global Note and any other global notes representing Notes, the “ Global Notes ”). The Global Notes shall bear legends as set forth in Exhibit D . The Global Notes initially shall (i) be registered in the name of the Depository or the nominee of such Depository, in each case for credit to an account of an Agent Member, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear legends as set forth in Exhibit B with respect to Restricted Global Notes and Exhibit C with respect to Regulation S Global Notes.
Members of, or direct or indirect participants in, the Depository (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Notes, and the Depository may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfer in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Physical Notes in accordance with the rules and procedures of the Depository and the provisions of Section 2.17. In addition, a Global Note shall be exchangeable for Physical Notes if (i) the Depository (x) notifies the Issuer that it is unwilling or unable to continue as depository for such Global Note and the Issuer thereupon fails to appoint a successor depository within 90 days thereof or (y) has ceased to be a clearing agency registered under the Exchange Act and the Issuer thereupon fails to appoint a successor depository within 90 days thereof or (ii) there shall have occurred and be continuing an Event of Default with respect to the Notes. In all cases, Physical Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depository (in accordance with its customary procedures).
(c) In connection with any transfer or exchange of a portion of the beneficial interest in any Global Note to beneficial owners pursuant to paragraph (b), the Registrar shall (if one or more Physical Notes are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and the Issuer shall execute, and the Trustee shall upon receipt of a written order from the Issuer authenticate and make available for delivery, one or more Physical Notes of like tenor and amount.
(d) In connection with the transfer of Global Notes as an entirety to beneficial own-ers pursuant to paragraph (b), the Global Notes shall be deemed to be surrendered to the Trustee for cancellation,
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and the Issuer shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in the Global Notes, an equal aggregate principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Note delivered in exchange for an interest in a Global Note pursuant to paragraph (b), (c) or (d) shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section 2.17, bear the Private Placement Legend or, in the case of the Regulation S Global Note, the legend set forth in Exhibit C , in each case, unless the Issuer determines otherwise in compliance with applicable law.
(f) On or prior to the 40th day after the later of the commencement of the offering of the Notes represented by the Regulation S Global Note and the issue date of such Notes (such period through and including such 40th day, the “ Restricted Period ”), a beneficial interest in a Regulation S Global Note may be transferred to a Person who takes delivery in the form of an interest in the corresponding Restricted Global Note only upon receipt by the Trustee of a written certification from the transferor to the effect that such transfer is being made (i)(a) to a Person whom the transferor reasonably believes is a Qualified Institutional Buyer in a transaction meeting the requirements of Rule 144A or (b) pursuant to another exemption from the registration requirements under the Securities Act which is accompanied by an Opinion of Counsel regarding the availability of such exemption and (ii) in accordance with all applicable securities laws of any state of the United States or any other jurisdiction.
(g) Beneficial interests in the Restricted Global Note may be transferred to a Person who takes delivery in the form of an interest in the Regulation S Global Note, whether before or after the expiration of the Restricted Period, only if the transferor first delivers to the Trustee a written certificate to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available).
(h) Any beneficial interest in one of the Global Notes that is transferred to a Person who takes delivery in the form of an interest in another Global Note shall, upon transfer, cease to be an interest in such Global Note and become an interest in such other Global Note and, accordingly, shall thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.
(i) The Holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.
(j) None of the Issuer or the Trustee nor any agent of the Issuer or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
SECTION 2.17. Special Transfer Provisions .
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S. Persons . The following provisions shall apply with respect to the registration of any proposed transfer of a Note
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constituting a Restricted Note to any Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note constituting a Restricted Note, whether or not such Note bears the Private Placement Legend, if (x) the requested transfer is after the second anniversary of the date such Note is issued or such other date as such Note shall be freely transferable under Rule 144 as certified in an Officers’ Certificate or (y) (1) in the case of a transfer to an Institutional Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the proposed transferee has delivered to the Registrar a certificate substantially in the form of Exhibit E hereto or (2) in the case of a transfer to a Non-U.S. Person (including a QIB), the proposed transferor has delivered to the Registrar a certificate substantially in the form of Exhibit F hereto; provided that in the case of any transfer of a Note bearing the Private Placement Legend for a Note not bearing the Private Placement Legend, the Registrar has received an Officers’ Certificate authorizing such transfer; and
(ii) if the proposed transferor is an Agent Member holding a beneficial interest in a Global Note, upon receipt by the Registrar of (x) the certificate, if any, required by paragraph (i) above and (y) instructions given in accordance with the Depository’s and the Registrar’s procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and (if the transfer does not involve a transfer of outstanding Physical Notes) a decrease in the principal amount of a Global Note in an amount equal to the principal amount of the beneficial interest in a Global Note to be transferred, and (b) the Registrar shall reflect on its books and records the date and an increase in the principal amount of a Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note transferred or the Issuer shall execute and the Trustee shall authenticate and make available for delivery one or more Physical Notes of like tenor and amount.
(b) Transfers to QIBs . The following provisions shall apply with respect to the registration or any proposed registration of transfer of a Note constituting a Restricted Note to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on such Holder’s Note stating, or has otherwise advised the Issuer and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on such Holder’s Note stating, or has otherwise advised the Issuer and the Registrar in writing, that it is purchasing the Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to be transferred consist of Physical Notes which after transfer are to be evidenced by an interest in the Global
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Note, upon receipt by the Registrar of instructions given in accordance with the Depository’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note in an amount equal to the principal amount of the Physical Notes to be transferred, and the Trustee shall cancel the Physical Notes so transferred.
(c) Private Placement Legend . Upon the registration of transfer, exchange or replacement of Notes not bearing the Private Placement Legend, the Registrar shall deliver Notes that do not bear the Private Placement Legend. Upon the registration of transfer, exchange or replacement of Notes bearing the Private Placement Legend, the Registrar shall deliver only Notes that bear the Private Placement Legend unless (i) it has received the Officers’ Certificate required by paragraph (a)(i)(y) of this Section 2.17, (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Issuer and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act or (iii) such Note has been sold pursuant to an effective registration statement under the Securities Act and the Registrar has received an Officers’ Certificate from the Issuer to such effect.
(d) General . By its acceptance of any Note bearing the Private Placement Legend, each Holder of such Note acknowledges the restrictions on transfer of such Note set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain for a period of two years copies of all letters, notices and other written communications received pursuant to Section 2.16 or this Section 2.17. The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable notice to the Registrar.
SECTION 2.18. Computation of Interest .
Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.01. Election To Redeem; Notices to Trustee .
If the Issuer elects to redeem Notes pursuant to paragraph 6 of the Notes, at least 45 days prior to the Redemption Date (unless a shorter notice shall be agreed to in writing by the Trustee) before the Redemption Date, the Issuer shall notify the Trustee in writing of the Redemption Date, the principal amount of Notes to be redeemed and the redemption price, and deliver to the Trustee an Officers’ Certificate stating that such redemption will comply with the conditions contained in paragraph 6 of the Notes. Notice given to the Trustee pursuant to this Section 3.01 may not be revoked after the time that notice is given to Holders pursuant to Section 3.03.
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SECTION 3.02. Selection by Trustee of Notes To Be Redeemed .
In the event that less than all of the Notes are to be redeemed pursuant to a redemption made pursuant to paragraph 6 of the Notes, selection of the Notes for redemption shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not then listed on a national security exchange, on a pro rata basis, by lot; provided, however, that no Notes of a principal amount of $2,000 or less shall be redeemed in part. If a partial redemption is made pursuant to the second paragraph of paragraph 6 of the Notes, selection of the Notes or portions thereof for redemption shall be made by the Trustee only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to the procedures of the Depository), unless that method is otherwise prohibited. The Trustee shall promptly notify the Issuer of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed. The Trustee may select for redemption portions of the principal of the Notes that have denominations larger than $2,000. For all purposes of this Indenture unless the context otherwise requires, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Issuer may acquire Notes by means other than redemption, whether pursuant to an Issuer tender offer, open market purchase or otherwise, provided such acquisition does not otherwise violate the other terms of this Indenture.
SECTION 3.03. Notice of Redemption .
At least 30 days, and no more than 60 days, before a Redemption Date, the Issuer shall mail, or cause to be mailed, a notice of redemption by first-class mail to each Holder to be redeemed at his or her last address as the same appears on the registry books maintained by the Registrar pursuant to Section 2.04, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a satisfaction and discharge of this Indenture. If the Issuer mails such notice to Holders, it shall mail a copy of such notice to the Trustee at the same time.
The notice shall identify the Notes to be redeemed (including the CUSIP numbers ISIN and Common Code numbers, if any thereof) and shall state:
(1) the Redemption Date;
(2) the redemption price and the amount of premium (or the manner of calculation the redemption price and/or premium) and accrued interest to be paid;
(3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date and upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(6) that unless the Issuer defaults in making the redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;
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(7) the provision of paragraph 6 of the Notes, as the case may be, pursuant to which the Notes called for redemption are being redeemed; and
(8) the aggregate principal amount of Notes that are being redeemed.
At the Issuer’s written request made at least five Business Days prior to the date on which notice is to be given, the Trustee shall give the notice of redemption prepared by the Issuer, in the Issuer’s name and at the Issuer’s sole expense. In such event, the Issuer shall provide the Trustee with the information required by this Section 3.03.
SECTION 3.04. Effect of Notice of Redemption .
Once the notice of redemption described in Section 3.03 is mailed, Notes called for redemption become due and payable on the Redemption Date and at the redemption price, including any premium, plus interest accrued to the Redemption Date. Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price, including any premium, plus interest accrued to the Redemption Date, provided that if the Redemption Date is after a regular record date and on or prior to the Interest Payment Date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date, and provided, further, that if a Redemption Date is a Legal Holiday, payment shall be made on the next succeeding Business Day and no interest shall accrue for the period from such Redemption Date to such succeeding Business Day. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price .
On or prior to 10:00 A.M., New York City time, on each Redemption Date, the Issuer shall deposit with the Paying Agent in immediately available funds money sufficient to pay the redemption price of, including premium, if any, and accrued interest on all Notes to be redeemed on that date other than Notes or portions thereof called for redemption on that date which have been delivered by the Issuer to the Trustee for cancellation. Promptly after the calculation of the Redemption Price, the Issuer will give the Trustee and any Paying Agent written notice thereof.
On and after any Redemption Date, if money sufficient to pay the redemption price of, including premium, if any, and accrued interest on Notes called for redemption shall have been made available in accordance with the preceding paragraph, the Notes called for redemption will cease to accrue interest and the only right of the Holders of such Notes will be to receive payment of the redemption price of and, subject to the first proviso in Section 3.04, accrued and unpaid interest on such Notes to the Redemption Date. If any Note surrendered for redemption shall not be so paid, interest will be paid, from the Redemption Date until such redemption payment is made, on the unpaid principal of the Note and any interest not paid on such unpaid principal, in each case, at the rate and in the manner provided in the Notes.
SECTION 3.06. Notes Redeemed in Part .
Upon surrender of a Note that is redeemed in part, the Issuer shall execute and the Trustee shall authenticate for the Holder thereof a new Note equal in principal amount to the unredeemed portion of the Note surrendered.
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SECTION 4.01. Payment of Notes .
The Issuer shall pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. An installment of principal or interest shall be considered paid on the date it is due if the Trustee or Paying Agent holds on that date money designated for and sufficient to pay such installment.
The Issuer shall pay interest on overdue principal (including post-petition interest in a proceeding under any Bankruptcy Law), and overdue interest, to the extent lawful, at the rate specified in the Notes.
SECTION 4.02. Reports to Holders .
(a) Whether or not the Issuer is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as any Notes are outstanding, the Issuer shall have its annual consolidated financial statements audited by a nationally recognized firm of independent registered accountants and its interim consolidated financial statements reviewed by a nationally recognized firm of independent registered accountants in accordance with Statement on Auditing Standards 100 issued by the American Institute of Certified Public Accountants (or any similar replacement standard). In addition, so long as any Notes are outstanding, the Issuer shall furnish to the Holders:
(1) (x) all annual and quarterly financial information that would be required to be contained in a filing with the SEC on Forms 10-K and 10-Q if the Issuer were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; (y) with respect to the annual and quarterly information, a presentation of EBITDA and Adjusted EBITDA of the Issuer substantially consistent with the presentation thereof in the Offering Memorandum and derived from such financial information; and (z) with respect to the annual information only, a report on the annual financial statements by the Issuer’s independent registered public accounting firm; and
(2) all information that would be required to be contained in filings with the SEC on Form 8-K if the Issuer were required to file such reports.
All such annual reports shall be furnished within 90 days after the end of the fiscal year to which they relate, and all such quarterly reports shall be furnished within 45 days after the end of the fiscal quarter to which they relate. All such current reports shall be furnished within the time periods specified in the SEC’s rules and regulations for reporting companies under the Exchange Act.
(b) The Issuer shall make available such information and such reports (as well as the details regarding the conference call described below) to the Trustee under this Indenture to any Holder of the Notes and to any beneficial owner of the Notes, in each case by posting such information on IntraLinks or any comparable password protected online data system which will require a confidentiality
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acknowledgement, and shall make such information readily available to any prospective investor, any securities analyst or any market maker in the Notes who (i) agrees to treat such information as confidential or (ii) accesses such information on IntraLinks or any comparable password-protected online data system which will require a confidentiality acknowledgment; provided that the Issuer shall post such information thereon and make readily available any password or other login information to any such prospective investor, securities analyst or market maker. The Issuer shall hold a quarterly conference call for all Holders and securities analysts to discuss such financial information no later than fifteen ( 15) business days after distribution of such financial information.
(c) The Issuer shall provide S&P and Moody’s (and their respective successors) with information on a periodic basis as S&P or Moody’s, as the case may be, shall reasonably require in order to maintain public ratings of the Notes. In addition, the Issuer shall make available all of the information and reports referred to in the preceding paragraphs and make such information available to securities analysts and prospective investors upon request. The Issuer shall also furnish to Holders, securities analysts and prospective investors upon request the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes are not freely transferable under the Securities Act.
(d) If the Issuer has Designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, would constitute a Significant Subsidiary of the Issuer, then the annual and quarterly information required by Section 4.02(a)(1) shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries of the Issuer.
SECTION 4.03. Waiver of Stay, Extension or Usury Laws .
Each of the Issuer and the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, or plead (as a defense or otherwise) or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law which would prohibit or forgive any of the Issuer and the Guarantors from paying all or any portion of the principal of, premium, if any, and/or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that they may lawfully do so) each of the Issuer and the Guarantors hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
SECTION 4.04. Compliance Certificate; Notice of Default .
(a) The Issuer shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Issuer and its Subsidiaries during such fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuer and the Guarantors have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge, the Issuer and the Guarantors have kept, observed, performed and fulfilled
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each and every covenant contained in this Indenture and are not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action they are taking or propose to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Issuer and the Guarantors is taking or propose to take with respect thereto.
(b) The Issuer and the Guarantors shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default, an Officers’ Certificate specifying such Default and what action the Issuer and the Guarantors are taking or propose to take with respect thereto.
(c) The Issuer’s fiscal year currently ends on June 30. The Issuer shall provide written notice to the Trustee of any change in its fiscal year.
The Issuer and the Guarantors shall, and shall cause each of their Subsidiaries to, pay prior to delinquency all material taxes, assessments, and governmental levies except as contested in good faith and by appropriate proceedings.
SECTION 4.06. Limitations on Additional Indebtedness .
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, incur any Indebtedness; provided that the Issuer or any Restricted Subsidiary may incur additional Indebtedness if, after giving effect thereto, the Consolidated Interest Coverage Ratio would be at least 2.00 to 1.00 (the “ Coverage Ratio Exception ”).
Notwithstanding the above, each of the following, which shall be given independent effect in whole or in part, shall be permitted (the “ Permitted Indebtedness ”):
(1) Indebtedness of the Issuer and any Restricted Subsidiary under the Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $100.0 million less , to the extent a permanent repayment and/or commitment reduction is required under a Credit Facility as a result of such application, the aggregate amount of Net Available Proceeds applied to repayments under the Credit Facilities in accordance with Section 4.09 and (y) the sum of (i) 85% of the book value of the accounts receivable of the Issuer and the Restricted Subsidiaries plus (ii) 65% of the book value of inventory of the Issuer and the Restricted Subsidiaries, in each case, calculated on a consolidated basis and in accordance with GAAP;
(2) the Notes issued on the Issue Date and the Note Guarantees in respect thereof;
(3) Indebtedness of the Issuer and the Restricted Subsidiaries to the extent outstanding on the Issue Date after giving effect to the intended use of proceeds of the Notes (other than Indebtedness referred to in clause (1), (2) or (5));
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(4) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of the Issuer or any Restricted Subsidiary not for the purpose of speculation; provided that in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be incurred by this Section 4.06, and (b) the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Obligations relate;
(5) Indebtedness of the Issuer owed to a Restricted Subsidiary and Indebtedness of any Restricted Subsidiary owed to the Issuer or any other Restricted Subsidiary; provided, however, that upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or such Indebtedness being owed to any Person other than the Issuer or a Restricted Subsidiary, the Issuer or such Restricted Subsidiary, as applicable, shall be deemed to have incurred Indebtedness not permitted by this clause (5);
(6) (a) Indebtedness in respect of bid, performance, completion, guarantee, surety and similar bonds and assurances issued for the account of the Issuer or any Restricted Subsidiary in the ordinary course of business, including guarantees or obligations of the Issuer or any Restricted Subsidiary with respect to letters of credit supporting such bid, performance, completion, guarantee or surety obligations (in each case other than for an obligation for money borrowed); and (b) Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business in respect of (i) workers’ compensation claims or self-insurance, (ii) other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance or (iii) for regulatory or insurance purposes;
(7) Purchase Money Indebtedness incurred by the Issuer or any Restricted Subsidiary, Refinancing Indebtedness thereof and any subsequent Refinancing Indebtedness thereof, in an aggregate amount not to exceed at any time outstanding $10.0 million;
(8) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of the Issuer or a Restricted Subsidiary, as the case may be, being notified of such overdraft;
(9) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(10) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to the Coverage Ratio Exception or clause (2) or (3) above or this clause (10);
(11) indemnification, adjustment of purchase price, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets of the Issuer or any Restricted Subsidiary or the acquisition, disposition, issuance or redemption of Equity Interests of the Issuer or a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing or in contemplation of any such acquisition; provided that (a) any amount of such obligations included (or that would be required to be included) on the face
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of the balance sheet of the Issuer or any Restricted Subsidiary at the time of closing of such acquisition, disposition, issuance or redemption shall not be permitted under this clause (11) and (b) in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this clause (11) shall at no time exceed the gross proceeds or value of the consideration actually received by the Issuer and the Restricted Subsidiaries in connection with such disposition;
(12) Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed $20.0 million at any time outstanding;
(13) Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate amount not to exceed $15.0 million at any time outstanding; and
(14) Bank Products Obligations incurred in the ordinary course of business.
For purposes of determining compliance with this Section 4.06, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (14) above or is entitled to be incurred pursuant to the Coverage Ratio Exception, the Issuer shall, in its sole discretion, classify such item of Indebtedness and may divide and classify such Indebtedness in more than one of the types of Indebtedness described, except that Indebtedness incurred under the Credit Facilities on the Issue Date shall be deemed to have been incurred under clause (1) above, and may later reclassify any item of Indebtedness described in clauses (1) through (14) above ( provided that at the time of reclassification it meets the criteria in such category or categories). In addition, for purposes of determining any particular amount of Indebtedness under this Section 4.06, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included so long as incurred by a Person that could have incurred such Indebtedness.
SECTION 4.07. Limitations on Layering Indebtedness .
The Issuer shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness of the Issuer or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate in right of payment to the Notes or the Note Guarantee of such Guarantor, to the same extent and in the same manner as such Indebtedness is subordinated in right of payment to such other Indebtedness of the Issuer or such Guarantor, as the case may be.
For purposes of the foregoing, no Indebtedness shall be deemed to be subordinated in right of payment to any other Indebtedness of the Issuer or any Guarantor solely by virtue of being unsecured or secured by a junior priority lien or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in the collateral held by them.
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SECTION 4.08. Limitations on Restricted Payments .
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment if at the time of such Restricted Payment:
(1) a Default shall have occurred and be continuing or shall occur as a consequence thereof;
(2) the Issuer cannot incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception; or
(3) the amount of such Restricted Payment, when added to the aggregate amount of all other Restricted Payments made after the Issue Date (other than Restricted Payments made pursuant to clauses (2), (3), (4), (5), (6), (7), (8) or (10) of the next paragraph), exceeds the sum (the “ Restricted Payments Basket ”) of (without duplication):
(a) 50% of Consolidated Net Income for the period (taken as one accounting period) commencing on the first day of the fiscal quarter that includes the Issue Date to and including the last day of the fiscal quarter ended immediately prior to the date of such calculation for which consolidated financial statements are available (or, if such Consolidated Net Income shall be a deficit, minus 100% of such aggregate deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Issuer either (x) as contributions to the common equity of the Issuer after the Issue Date or (y) from the issuance and sale of Qualified Equity Interests after the Issue Date, other than (A) any such proceeds which are used to redeem Notes in accordance with Section 6(c) of the Notes or (B) any such proceeds or assets received from a Subsidiary, plus
(c) the aggregate amount by which Indebtedness incurred by the Issuer or any Restricted Subsidiary subsequent to the Issue Date is reduced on the Issuer’s balance sheet upon the conversion or exchange into Qualified Equity Interests of the Issuer (less the amount of any cash, or the fair value of assets, distributed by the Issuer or any Restricted Subsidiary to a Person other then the Issuer or a Restricted Subsidiary upon such conversion or exchange), plus
(d) in the case of the disposition or repayment of or liquidated return on any Investment that was treated as a Restricted Payment made after the Issue Date, an amount (to the extent not included in the computation of Consolidated Net Income) equal to the lesser of (i) 100% of the aggregate amount received by the Issuer or any Restricted Subsidiary in cash or other property (valued at the Fair Market Value thereof) as the return of capital with respect to such Investment and (ii) the amount of such Investment that was treated as a Restricted Payment, in either case, less the cost of the disposition of such Investment and net of taxes, plus
(e) upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the lesser of (i) the Fair Market Value of the Issuer’s proportionate interest in such Subsidiary immediately following such Redesignation, and (ii) the aggregate
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amount of the Issuer’s Investments in such Subsidiary to the extent such Investments prior to such Redesignation had reduced the Restricted Payments Basket and were not previously repaid or otherwise reduced.
The foregoing provisions, which shall be given independent effect in whole or in part, shall not prohibit:
(1) the payment by the Issuer or any Restricted Subsidiary of any dividend within 60 days after the date of declaration thereof, if on the date of declaration the payment would have complied with the provisions of this Indenture;
(2) the redemption or repurchase of any Equity Interests of the Issuer or any Restricted Subsidiary in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests;
(3) the redemption or repurchase of Subordinated Indebtedness of the Issuer or any Restricted Subsidiary (a) in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests, (b) in exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted to be incurred under Section 4.06 and the other terms of this Indenture or (c) upon a Change of Control or in connection with an Asset Sale to the extent required by the agreement governing such Subordinated Indebtedness, but only if the Issuer shall have complied with Section 4.09 and Section 4.21 and purchased all Notes validly tendered pursuant to the relevant offer prior to redeeming such Subordinated Indebtedness;
(4) repurchases of Equity Interests deemed to occur upon the exercise of stock options, warrants and other similar rights to acquire Equity Interests if the Equity Interests represents a portion of the exercise price thereof;
(5) the repurchase of Equity Interests of the Issuer (including options, warrants or other rights to acquire such Equity Interests) in an aggregate amount paid that shall not exceed $10.0 million since the Issue Date plus the aggregate cash proceeds from any payments on insurance policies in which the Issuer or any of its Subsidiaries is the beneficiary with respect to any directors, officers or employees of the Issuer and its Subsidiaries which proceeds are used to purchase the Equity Interests of the Issuer;
(6) Restricted Payments in an amount such that the sum of the aggregate amount of Restricted Payments made pursuant to this clause (6) after the Issue Date does not exceed $15.0 million at any one time outstanding;
(7) payments pursuant to any of the Transactions or made in a manner consistent with the information under the caption “Use of Proceeds” (other than general corporate purposes) in the Offering Memorandum;
(8) any Investment to the extent the consideration for which consists of, or is made with the proceeds of the substantially concurrent sale of, or equity contribution with respect to, Qualified Equity Interests;
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(9) any payment or redemption prior to the scheduled maturity or prior to any scheduled repayment of principal in respect of that certain $10 million loan to the Issuer from BFI Co., LLC made pursuant to that certain Term Loan Agreement dated as of January 29, 2009 by and among the Issuer, the guarantors thereto and BFI Co., LLC;
(10) the declaration and payment of dividends to holders of any class or series of Disqualified Equity Interests of the Issuer issued in accordance with Section 4.06 to the extent such dividends are included in the definition of “Consolidated Interest Expense”; or
(11) repurchases by the Issuer or any Restricted Subsidiary of (x) Qualified Equity Interests deemed to occur upon the exercise of stock options or warrants if such Qualified Equity Interests represent a portion of the exercise price thereof or (y) Qualified Equity Interests deemed to occur upon the withholding of a portion of the Qualified Equity Interests granted or awarded to an employee to pay for the taxes payable by such employee upon such grant or award;
provided that (a) in the case of any Restricted Payment pursuant to clause (3), (5), (6), (9), (10) or (11) above, no Default shall have occurred and be continuing or occur as a consequence thereof and (b) no issuance and sale of Qualified Equity Interests used to make a payment pursuant to clauses (2), (3)(a) or (8) above shall increase the Restricted Payments Basket.
SECTION 4.09. Limitations on Asset Sales .
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(1) the Issuer or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale after giving effect to any indemnification, adjustment of purchase price, earn-out or similar adjustment; and
(2) at least 75% of the total consideration in such Asset Sale consists of cash or Cash Equivalents.
For purposes of clause (2), the following shall be deemed to be cash:
(a) the amount (without duplication) of any Indebtedness (other than Subordinated Indebtedness), accounts payable and accrued expenses of the Issuer or such Restricted Subsidiary that is expressly assumed by the transferee in such Asset Sale pursuant to a customary written novation or assumption agreement that releases the Issuer or such Restricted Subsidiary from further liability;
(b) the amount of any obligations received from such transferee that are due and payable or reasonably expected to be converted by the Issuer or such Restricted Subsidiary to cash or Cash Equivalents within 180 days following the closing of such Asset Sale;
(c) any Designated Non-cash Consideration received by the Issuer or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together
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with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (i) $20.0 million and (ii) 3.0% of Consolidated Tangible Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value, shall be deemed to be Cash Equivalents for purposes of this provision and for no other purpose; and
(d) the Fair Market Value of (i) any assets (other than securities) received by the Issuer or any Restricted Subsidiary to be used by it in a Permitted Business, (ii) Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the acquisition of such Person by the Issuer or (iii) a combination of (i) and (ii).
As used in clause (c) above, the term “ Designated Non-cash Consideration ” means the fair market value of non-cash consideration received by the Issuer or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, executed by the Issuer’s Chief Financial Officer and another Officer, less the amount of Cash Equivalents received in connection with a subsequent sale, redemption or repurchase of or collection or payment on such Designated Non-cash Consideration.
If at any time any non-cash consideration received by the Issuer or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is repaid or converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then the date of such repayment, conversion or disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be applied in accordance with this Section 4.09.
If the Issuer or any Restricted Subsidiary engages in an Asset Sale, the Issuer or such Restricted Subsidiary shall, no later than 365 days following the consummation thereof, apply all or any of the Net Available Proceeds therefrom to:
(1) satisfy all mandatory repayment obligations under the Credit Agreement arising by reason of such Asset Sale, and in the case of any such repayment under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(2) repay any Indebtedness which was secured by the assets sold in such Asset Sale;
(3) (A) invest all or any part of the Net Available Proceeds thereof in assets (other than securities) to be used by the Issuer or any Restricted Subsidiary in the Permitted Business, (B) acquire Qualified Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the consummation of such acquisition or (C) a combination of (A) and (B);
(4) make a Net Proceeds Offer (and redeem Pari Passu Indebtedness) in accordance with the procedures described below and in this Indenture; and/or
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(5) In the case where the assets that were the subject of such Asset Sale are the assets of a Foreign Subsidiary, to repay Indebtedness of any Foreign Subsidiary.
The amount of Net Available Proceeds not applied or invested as provided in this paragraph will constitute “ Excess Proceeds .”
When the aggregate amount of Excess Proceeds equals or exceeds $10.0 million, the Issuer shall be required to make an Offer to Purchase from all Holders and, if applicable, redeem (or make an offer to do so) any Pari Passu Indebtedness of the Issuer the provisions of which require the Issuer to redeem such Indebtedness with the proceeds from any Asset Sales (or offer to do so), in an aggregate principal amount of Notes and such Pari Passu Indebtedness equal to the amount of such Excess Proceeds as follows:
(1) the Issuer shall (a) make an Offer to Purchase (a “ Net Proceeds Offer ”) to all Holders in accordance with the procedures set forth in this Indenture, and (b) redeem (or make an offer to do so) any such other Pari Passu Indebtedness, pro rata in proportion to the respective principal amounts of the Notes and such other Indebtedness required to be redeemed, the maximum principal amount of Notes and Pari Passu Indebtedness that may be redeemed out of the amount (the “ Payment Amount ”) of such Excess Proceeds;
(2) the offer price for the Notes shall be payable in cash in an amount equal to 100% of the principal amount of the Notes tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid interest thereon, if any, to the date such Net Proceeds Offer is consummated (the “ Offered Price ”), in accordance with the procedures set forth in this Indenture and the redemption price for such Pari Passu Indebtedness (the “ Pari Passu Indebtedness Price ”) shall be as set forth in the related documentation governing such Indebtedness;
(3) if the aggregate Offered Price of Notes validly tendered and not withdrawn by Holders thereof exceeds the pro rata portion of the Payment Amount allocable to the Notes, Notes to be purchased shall be selected on a pro rata basis; and
(4) upon completion of such Net Proceeds Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer was made shall be deemed to be zero.
To the extent that the sum of the aggregate Offered Price of Notes tendered pursuant to a Net Proceeds Offer and the aggregate Pari Passu Indebtedness Price paid to the holders of such Pari Passu Indebtedness is less than the Payment Amount relating thereto (such shortfall constituting a “ Net Proceeds Excess ”), the Issuer may use the Net Proceeds Excess, or a portion thereof, for general corporate purposes, subject to the provisions of this Indenture.
The Issuer shall comply with applicable tender offer rules, including the requirements of Rule 14e-1 under the Exchange Act and any other applicable laws and regulations in connection with the purchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.09, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.09 by virtue of this compliance.
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SECTION 4.10. Limitations on Transactions with Affiliates .
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, in one transaction or a series of related transactions, sell, lease, transfer or otherwise dispose of any of its assets to, or purchase any assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (an “ Affiliate Transaction ”), unless:
(1) such Affiliate Transaction is on terms that are no less favorable to the Issuer or the relevant Restricted Subsidiary than those that would reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis by the Issuer or that Restricted Subsidiary from a Person that is not an Affiliate of the Issuer or that Restricted Subsidiary; and
(2) the Issuer delivers to the Trustee:
(a) with respect to any Affiliate Transaction involving aggregate value in excess of $2.5 million, an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) above and a Secretary’s Certificate which sets forth and authenticates a resolution that has been adopted by a majority of the Independent Directors approving such Affiliate Transaction; and
(b) with respect to any Affiliate Transaction involving aggregate value of $10.0 million or more, the certificates described in the preceding clause (a) and a written opinion as to the fairness of such Affiliate Transaction to the Issuer or such Restricted Subsidiary from a financial point of view issued by an Independent Financial Advisor to the Board of Directors of the Issuer.
The foregoing restrictions shall not apply to:
(1) transactions between or among (a) the Issuer and one or more Restricted Subsidiaries or (b) Restricted Subsidiaries; provided , in each case, that no Affiliate of the Issuer (other than another Restricted Subsidiary) owns Equity Interests of any such Restricted Subsidiary;
(2) director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans and reimbursement or advancement of out-of-pocket expenses, and director’s and officer’s liability insurance) and indemnification arrangements, in each case approved by a majority of the Independent Directors;
(3) the entering into of a tax sharing agreement, or payments pursuant thereto, between the Issuer and/or one or more Subsidiaries, on the one hand, and any other Person with which the Issuer or such Subsidiaries are required or permitted to file a consolidated tax return or with which the Issuer or such Subsidiaries are part of a consolidated group for tax purposes to be used by such Person to pay taxes, and which payments by the Issuer and the Restricted Subsidiaries are not in excess of the tax liabilities that would have been payable by them on a stand-alone basis;
(4) loans and advances permitted by clause (3) of the definition of “Permitted Investments”;
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(5) Restricted Payments of the type described in clause (1), (2) or (4) of the definition of “Restricted Payment” and which are made in accordance with Section 4.08;
(6) (x) any agreement in effect on the Issue Date and disclosed in the Offering Memorandum, as in effect on the Issue Date or as thereafter amended or replaced in any manner, that, taken as a whole, is not more disadvantageous to the Holders or the Issuer in any material respect than such agreement as it was in effect on the Issue Date or (y) any transaction pursuant to any agreement referred to in the immediately preceding clause (x);
(7) any transaction with a joint venture or similar entity which would constitute an Affiliate Transaction solely because the Issuer or a Restricted Subsidiary owns an equity interest in or otherwise controls such joint venture or similar entity; provided that no Affiliate of the Issuer or any of its Subsidiaries other than the Issuer or a Restricted Subsidiary shall have a beneficial interest in such joint venture or similar entity; and
(8) (a) any transaction with an Affiliate where the only consideration paid by the Issuer or any Restricted Subsidiary is Qualified Equity Interests or (b) the issuance or sale of any Qualified Equity Interests.
SECTION 4.11. Limitations on Liens .
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer to exist any Lien (other than Permitted Liens) of any nature whatsoever against any assets of the Issuer or any Restricted Subsidiary (including Equity Interests of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, which Lien secures Indebtedness or trade payables, unless contemporaneously therewith:
(1) in the case of any Lien securing an obligation that ranks pari passu with the Notes or a Note Guarantee, effective provision is made to secure the Notes or such Note Guarantee, as the case may be, at least equally and ratably with or prior to such obligation with a Lien on the same collateral; and
(2) in the case of any Lien securing an obligation that is subordinated in right of payment to the Notes or a Note Guarantee, effective provision is made to secure the Notes or such Note Guarantee, as the case may be, with a Lien on the same collateral that is prior to the Lien securing such subordinated obligation,
in each case, for so long as such obligation is secured by such Lien.
SECTION 4.12. Conduct of Business .
The Issuer shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than the Permitted Business.
SECTION 4.13. Additional Note Guarantees .
If, after the Issue Date, (a) the Issuer or any Restricted Subsidiary shall acquire or create another Subsidiary (other than a Foreign Subsidiary or a Subsidiary that has been designated an Unrestricted
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Subsidiary) or desires to cause a Foreign Subsidiary to be a Guarantor or (b) any Unrestricted Subsidiary is Redesignated a Restricted Subsidiary (other than a Foreign Subsidiary), then, in each such case, the Issuer shall cause such Restricted Subsidiary to:
(1) execute and deliver to the Trustee (a) a supplemental indenture in form and substance satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Issuer’s obligations under the Notes and this Indenture and (b) a notation of guarantee in respect of its Note Guarantee; and
(2) deliver to the Trustee one or more Opinions of Counsel that such supplemental indenture (a) has been duly authorized, executed and delivered by such Restricted Subsidiary and (b) constitutes a valid and legally binding obligation of such Restricted Subsidiary in accordance with its terms.
SECTION 4.14. Limitations on Dividend and Other Restrictions Affecting Restricted Subsidiaries .
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(a) pay dividends or make any other distributions on or in respect of its Equity Interests;
(b) make loans or advances or pay any Indebtedness or other obligation owed to the Issuer or any other Restricted Subsidiary; or
(c) transfer any of its assets to the Issuer or any other Restricted Subsidiary;
except for:
(1) encumbrances or restrictions existing under or by reason of applicable law, regulation or order;
(2) encumbrances or restrictions existing under this Indenture, the Notes and the Note Guarantees;
(3) non-assignment or subletting provisions of any contract or any lease entered into in the ordinary course of business;
(4) encumbrances or restrictions existing under agreements existing on the Issue Date (including, without limitation, the Credit Facilities) as in effect on that date;
(5) restrictions relating to any Lien permitted under this Indenture imposed by the holder of such Lien;
(6) restrictions imposed under any agreement to sell assets (including capital stock) permitted under this Indenture to any Person pending the closing of such sale;
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(7) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired;
(8) any other agreement governing Indebtedness entered into after the Issue Date that contains encumbrances and restrictions that are not, in the good faith judgment of the Issuer’s Board of Directors, materially more restrictive with respect to any Restricted Subsidiary than those in effect on the Issue Date with respect to that Restricted Subsidiary pursuant to agreements in effect on the Issue Date;
(9) customary provisions in partnership agreements, shareholder agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements entered into in the ordinary course of business that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person;
(10) Purchase Money Indebtedness incurred in compliance with Section 4.06 that impose restrictions of the nature described in clause (c) above on the assets acquired;
(11) restrictions on cash or other deposits or net worth imposed by suppliers or landlords under contracts entered into in the ordinary course of business;
(12) encumbrances or restrictions contained in Indebtedness of Foreign Subsidiaries permitted to be incurred under this Indenture; provided that any such encumbrances or restrictions are ordinary and customary with respect to the type of Indebtedness being incurred under the relevant circumstances and do not, in the good faith judgment of the Board of Directors of the Issuer, materially impair the Issuer’s ability to make payment on the Notes when due; and
(13) any encumbrances or restrictions imposed by any amendments, restatements, renewals, replacements, refundings or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) above or any amendments, restatements, renewals, replacements, refundings or refinancings thereof; provided that such amendments, restatements, renewals, replacements, refundings or refinancings are, in the good faith judgment of the Issuer’s Board of Directors, no more materially restrictive with respect to such encumbrances and restrictions than those prior to such amendment, restatement, renewal, replacement, refunding or refinancing.
SECTION 4.15. Limitations on Designation of Unrestricted Subsidiaries .
The Issuer may designate any Subsidiary (including any newly formed or newly acquired Subsidiary) of the Issuer as an “Unrestricted Subsidiary” under this Indenture (a “ Designation ”) only if:
(1) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation; and
(2) the Issuer would be permitted to make, at the time of such Designation, (a) a Permitted Investment or (b) an Investment pursuant to the first paragraph of Section 4.08, in either case, in an amount (the “ Designation Amount ”) equal to the Fair Market Value of the Issuer’s proportionate interest in such Subsidiary on such date.
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No Subsidiary shall be Designated as an “Unrestricted Subsidiary” unless such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or understanding with the Issuer or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement or understanding are no less favorable to the Issuer or the Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates;
(3) is a Person with respect to which neither the Issuer nor any Restricted Subsidiary has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve the Person’s financial condition or to cause the Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Issuer or any Restricted Subsidiary, except for any guarantee given solely to support the pledge by the Issuer or any Restricted Subsidiary of the Equity Interests of such Unrestricted Subsidiary, which guarantee is not recourse to the Issuer or any Restricted Subsidiary.
If, at any time, any Unrestricted Subsidiary fails to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary at such time and, if the Indebtedness is not permitted to be incurred under Section 4.06 or the Lien is not permitted under Section 4.11, the Issuer shall be in default of the applicable covenant.
The Issuer may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a “ Redesignation ”) only if:
(1) no Default shall have occurred and be continuing at the time of and after giving effect to such Redesignation; and
(2) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such Redesignation would, if incurred or made at such time, have been permitted to be incurred or made for all purposes of this Indenture.
All Designations and Redesignations must be evidenced by resolutions of the Board of Directors of the Issuer, delivered to the Trustee certifying compliance with the foregoing provisions.
SECTION 4.16. Limitations on Sale and Leaseback Transactions .
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale and Leaseback Transaction; provided that the Issuer or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:
(1) the Issuer or such Restricted Subsidiary could have (a) incurred the Indebtedness attributable to such Sale and Leaseback Transaction pursuant to Section 4.06 and (b) incurred a
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Lien to secure such Indebtedness without equally and ratably securing the Notes pursuant to Section 4.11;
(2) the gross cash proceeds of such Sale and Leaseback Transaction are at least equal to the Fair Market Value of the asset that is the subject of such Sale and Leaseback Transaction; and
(3) the transfer of assets in such Sale and Leaseback Transaction is permitted by, and the Issuer or the applicable Restricted Subsidiary applies the proceeds of such transaction in accordance with, Section 4.09.
SECTION 4.17. Maintenance of Properties; Insurance; Compliance with Law .
(a) The Issuer shall, and shall cause each of its Restricted Subsidiaries to, at all times cause all properties used or useful in the conduct of their business to be maintained and kept in good condition, repair and working order (reasonable wear and tear excepted) and supplied with all necessary equipment, and shall cause to be made all necessary repairs, renewals, replacements, necessary betterments and necessary improvements thereto.
(b) The Issuer shall maintain, and shall cause to be maintained for each of its Restricted Subsidiaries, insurance covering such risks as are usually and customarily insured against by corporations similarly situated in the markets where the Issuer and the Restricted Subsidiaries conduct homebuilding operations, in such amounts as shall be customary for corporations similarly situated and with such deductibles and by such methods as shall be customary and reasonably consistent with past practice.
(c) The Issuer shall, and shall cause each of its Subsidiaries to, comply with all statutes, laws, ordinances or government rules and regulations to which they are subject, non-compliance with which would materially adversely affect the business, earnings, properties, assets or financial condition of the Issuer and its Subsidiaries taken as a whole.
SECTION 4.18. Payments for Consent .
The Issuer shall not, and shall not cause or permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid or agreed to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.
SECTION 4.19. Legal Existence .
Subject to Article Five, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence, and the corporate, partnership or other existence of each Restricted Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of each Restricted Subsidiary and the rights (charter and statutory), licenses and franchises of the Issuer and its Restricted Subsidiaries; provided that the Issuer shall not be
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required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries if the Board of Directors of the Issuer shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders.
SECTION 4.20. Limitations on the Issuance or Sale of Equity Interests of Restricted Subsidiaries
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, sell or issue any shares of Equity Interests of any Restricted Subsidiary except (1) to the Issuer, a Restricted Subsidiary or the minority stockholders of any Restricted Subsidiary, on a pro rata basis, or to the Issuer or a Guarantor (or, in the case of a Foreign Subsidiary that issues Equity Interests, to any Restricted Subsidiary), (2) to the extent such shares represent directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Issuer or a Wholly-Owned Restricted Subsidiary, or (3) if immediately after giving effect to such sale or issuance, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary, including sales of all of the Equity Interests of a Restricted Subsidiary, in each case in compliance with the provisions of Section 4.09.
SECTION 4.21. Change of Control Offer .
Upon the occurrence of any Change of Control, unless the Issuer shall have given a notice of redemption for 100% of the aggregate principal amount of Notes outstanding, each Holder shall have the right to require that the Issuer purchase that Holder’s Notes for a cash price (the “ Change of Control Purchase Price ”) equal to 101% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase.
Within 30 days following any Change of Control, the Issuer shall mail, or caused to be mailed, to the Holders a notice:
(1) describing the transaction or transactions that constitute the Change of Control;
(2) offering to purchase, pursuant to the procedures required by this Indenture and described in the notice (a “ Change of Control Offer ”), on a date specified in the notice (which shall be a Business Day not earlier than 30 days nor later than 60 days from the date the notice is mailed) and for the Change of Control Purchase Price, all Notes properly tendered by such Holder pursuant to such Change of Control Offer; and
(3) describing the procedures that Holders must follow to accept the Change of Control Offer. The Change of Control Offer is required to remain open for at least 20 Business Days or for such longer period as is required by law.
The Issuer shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the date of purchase.
Any amounts remaining after the purchase of Notes pursuant to a Change of Control Offer shall be returned by the Trustee to the Issuer.
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The Issuer’s obligation to make a Change of Control Offer shall be satisfied if a third party makes the Change of Control Offer in the manner and at the times and otherwise in compliance with the requirements applicable to a Change of Control Offer made by the Issuer and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer.
The Issuer shall comply with applicable tender offer rules, including the requirements of Rule 14e-l under the Exchange Act and any other applicable laws and regulations in connection with the purchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions under this Section 4.21, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.21 by virtue of this compliance.
SECTION 5.01. Limitations on Mergers, Consolidations, etc .
The Issuer shall not, directly or indirectly, in a single transaction or a series of related transactions, (a) consolidate or merge with or into another Person, or sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of the assets of the Issuer or the Issuer and the Restricted Subsidiaries (taken as a whole) or (b) adopt a Plan of Liquidation unless, in either case:
(1) either:
(a) the Issuer will be the surviving or continuing Person; or
(b) the Person formed by or surviving such consolidation or merger or to which such sale, lease, conveyance or other disposition shall be made (or, in the case of a Plan of Liquidation, any Person to which assets are transferred) (collectively, the “ Successor ”) is a corporation, limited liability company or limited partnership organized and existing under the laws of any State of the United States of America or the District of Columbia, and the Successor expressly assumes, by agreements in form and substance reasonably satisfactory to the Trustee, all of the obligations of the Issuer under the Notes and this Indenture;
(2) immediately prior to and immediately after giving effect to such transaction and the assumption of the obligations as set forth in clause (1)(b) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, no Default shall have occurred and be continuing; and
(3) immediately after and giving effect to such transaction and the assumption of the obligations set forth in clause (1)(b) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, the Issuer
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or the Successor, as the case may be, could incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception.
For purposes of this Section 5.01, any Indebtedness of the Successor which was not Indebtedness of the Issuer immediately prior to the transaction shall be deemed to have been incurred in connection with such transaction.
Except as provided in Section 10.04, no Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, unless:
(1) either:
(a) such Guarantor will be the surviving or continuing Person; or
(b) the Person formed by or surviving any such consolidation or merger is another Guarantor or assumes, by agreements in form and substance reasonably satisfactory to the Trustee, all of the obligations of such Guarantor under the Note Guarantee of such Guarantor and this Indenture; and
(2) immediately after giving effect to such transaction, no Default shall have occurred and be continuing.
For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or substantially all of the properties and assets of the Issuer, will be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer.
Notwithstanding the foregoing, any Restricted Subsidiary may consolidate with, merge with or into or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to the Issuer or another Restricted Subsidiary.
SECTION 5.02. Successor Person Substituted .
Upon any consolidation, combination or merger of the Issuer or a Guarantor, or any transfer of all or substantially all of the assets of the Issuer in accordance with Section 5.01 , in which the Issuer or such Guarantor is not the continuing obligor under the Notes or its Note Guarantee, the surviving entity formed by such consolidation or into which the Issuer or such Guarantor is merged or the Person to which the conveyance, lease or transfer is made will succeed to, and be substituted for, and may exercise every right and power of, the Issuer or such Guarantor under this Indenture, the Notes and the Note Guarantees with the same effect as if such surviving entity had been named therein as the Issuer or such Guarantor and, except in the case of a lease, the Issuer or such Guarantor, as the case may be, will be released from the obligation to pay the principal of and interest on the Notes or in respect of its Note Guarantee, as the case may be, and all of the Issuer’s or such Guarantor’s other obligations and covenants under the Notes, this Indenture and its Note Guarantee, if applicable.
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SECTION 6.01. Events of Default .
Each of the following shall be an “ Event of Default ”:
(1) failure by the Issuer to pay interest on any of the Notes when it becomes due and payable and the continuance of any such failure for 30 days;
(2) failure by the Issuer to pay the principal on any of the Notes when it becomes due and payable, whether at stated maturity, upon redemption, upon purchase, upon acceleration or otherwise;
(3) failure by the Issuer to comply with Section 5.01 or in respect of its obligations to make a Change of Control Offer;
(4) failure by the Issuer to comply with any other agreement or covenant in this Indenture and continuance of this failure for 60 days after notice of the failure has been given to the Issuer by the Trustee or by the Holders of at least 25% of the aggregate principal amount of the Notes then outstanding;
(5) default under any mortgage, indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced Indebtedness of the Issuer or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the Issue Date, which default:
(a) is caused by a failure to pay at final maturity principal on such Indebtedness within the applicable express grace period and any extensions thereof,
(b) results in the acceleration of such Indebtedness prior to its express final maturity, or
(c) results in the commencement of judicial proceedings to foreclose upon, or to exercise remedies under applicable law or applicable security documents to take ownership of, the assets securing such Indebtedness, and
in each case, the principal amount of such Indebtedness, together with any other Indebtedness with respect to which an event described in clause (a), (b) or (c) has occurred and is continuing, aggregates $10.0 million or more;
(6) one or more judgments or orders that exceed $10.0 million in the aggregate (net of amounts covered by insurance or bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against the Issuer or any Restricted Subsidiary and such judgment or judgments have not been satisfied, discharged, bonded (by providing insurance, letters of
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credit or other financial assurance), stayed or stayed pending appeal, annulled or rescinded within 60 days of being entered;
(7) the Issuer or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an involuntary case,
(c) consents to the appointment of a Custodian of it or for all or substantially all of its assets, or
(d) makes a general assignment for the benefit of its creditors;
(8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(a) is for relief against the Issuer or any Significant Subsidiary as debtor in an involuntary case,
(b) appoints a Custodian of the Issuer or any Significant Subsidiary or a Custodian for all or substantially all of the assets of the Issuer or any Significant Subsidiary, or
(c) orders the liquidation of the Issuer or any Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; or
(9) any Note Guarantee of any Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee and this Indenture) or is declared null and void and unenforceable or found to be invalid or any Guarantor denies its liability under its Note Guarantee (other than by reason of release of a Guarantor from its Note Guarantee in accordance with the terms of this Indenture and the Note Guarantee).
If an Event of Default (other than an Event of Default specified in clause (7) or (8) of Section 6.01 with respect to the Issuer), shall have occurred and be continuing, the Trustee, by written notice to the Issuer, or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding by written notice to the Issuer and the Trustee, may declare all amounts owing under the Notes to be due and payable immediately. Upon such declaration of acceleration, the aggregate principal of and accrued and unpaid interest on the outstanding Notes shall immediately become due and payable; provided, however, that after such acceleration, but before a judgment or decree based on acceleration, the Holders of a majority in aggregate principal amount of such outstanding Notes may rescind and annul such acceleration if all Events of Default, other than the nonpayment of accelerated principal and interest, have been cured or waived as provided in this Indenture. If an Event of Default specified in clause (7) or
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(8) of Section 6.01 with respect to the Issuer occurs, all outstanding Notes shall become due and payable without any further action or notice.
SECTION 6.03. Other Remedies .
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, or premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture and may take any necessary action requested of it as Trustee to settle, compromise, adjust or otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Any costs associated with actions taken by the Trustee under this Section 6.03 shall be reimbursed to the Trustee by the Issuer.
SECTION 6.04. Waiver of Past Defaults and Events of Default .
Subject to Sections 6.02, 6.08 and 8.02, the Holders of a majority in aggregate principal amount of the notes then outstanding have the right to waive any existing Default or compliance with any provision of this Indenture or the Notes. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.
SECTION 6.05. Control by Majority .
The Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee by this Indenture. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines may be unduly prejudicial to the rights of another Holder not taking part in such direction, and the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, determines that the action so directed may not lawfully be taken or if the Trustee in good faith shall, by a Responsible Officer, determine that the proceedings so directed may result in costs and expenses of the Trustee for which it has no source of payment or recovery or involve it in personal liability; provided that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
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SECTION 6.06. Limitation on Suits .
No Holder shall have any right to institute any proceeding with respect to this Indenture or for any remedy thereunder, unless the Trustee:
(1) has failed to act for a period of 60 days after receiving written notice of a continuing Event of Default by such Holder and a request to act by Holders of at least 25% in aggregate principal amount of Notes outstanding;
(2) has been offered indemnity satisfactory to it in its reasonable judgment; and
(3) has not received from the Holders of a majority in aggregate principal amount of the outstanding Notes a direction inconsistent with such request.
However, such limitations do not apply to a suit instituted by a Holder of any Note for enforcement of payment of the principal of or interest on such Note on or after the due date therefor (after giving effect to the grace period specified in clause (1) of Section 6.01).
SECTION 6.07. No Personal Liability of Directors, Officers, Employees and Stockholders .
No director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor shall have any liability for any obligations of the Issuer under the Notes or this Indenture or of any Guarantor under its Note Guarantee or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Note Guarantees.
SECTION 6.08. Rights of Holders To Receive Payment .
Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of, or premium, if any, and interest of the Note on or after the respective due dates expressed in the Note, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder.
SECTION 6.09. Collection Suit by Trustee .
If an Event of Default in payment of principal, premium or interest specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any Guarantor (or any other obligor on the Notes) for the whole amount of unpaid principal and accrued interest remaining unpaid, together with interest on overdue principal and, to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case at the rate set forth in the Notes.
SECTION 6.10. Trustee May File Proofs of Claim .
The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings
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relative to the Issuer or any Guarantor (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same after deduction of its charges and expenses to the extent that any such charges and expenses are not paid out of the estate in any such proceedings and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan or reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceedings.
If the Trustee collects any money pursuant to this Article Six, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest as to each, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes; and
THIRD: to the Issuer or, to the extent the Trustee collects any amount from any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.11.
SECTION 6.12. Undertaking for Costs .
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.12 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.08 or a suit by Holders of more than 10% in principal amount of the Notes then outstanding.
SECTION 6.13. Restoration of Rights and Remedies .
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every case, subject to any determination
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in such proceeding, the Issuer, the Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
SECTION 7.01. Duties of Trustee .
(a) If an Event of Default actually known to a Responsible Officer of the Trustee has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the same circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform on their face to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in good faith, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to the terms hereof.
(4) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its rights, powers or duties if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, paragraphs (a), (b), (c) and (e) of this Section 7.01 shall govern every provision of this Indenture that in any way relates to the Trustee.
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(e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it in its sole discretion against any loss, liability, expense or fee.
(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer or any Guarantor. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by the law.
(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and to the provision of the TIA.
SECTION 7.02. Rights of Trustee .
Subject to Section 7.01:
(1) The Trustee may rely on any document reasonably believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel, or both, which shall conform to the provisions of Section 11.05. The Trustee shall be protected and shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.
(3) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed by it with due care.
(4) The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers; provided that the Trustee’s conduct does not constitute negligence or willful misconduct.
(5) The Trustee may consult with counsel of its selection, and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(6) The Trustee shall not be deemed to have knowledge of any Default or Event of Default except (i) any Event of Default occurring pursuant to Section 6.01(1) or 6.01(2) or (ii) any Event of Default of which the Trustee shall have received written notification or otherwise obtained actual knowledge. In the absence of such notice, the Trustee may conclusively assume there is no Default except as aforesaid
(7) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture, and may refuse to perform any duty or exercise any such rights or powers, unless it shall have been offered reasonable security or indemnity satisfactory to it against the cost, expenses and liabilities which may be incurred by it in connection with such exercise of its rights or powers.
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(8) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate (including any Officers’ Certificate), statement, instrument, opinion (including any Opinion of Counsel), notice, request, direction, consent, order, bond, debenture, note, other evidence of Indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable notice to the Issuer, to examine the books, records, and premises of the Issuer, personally or by agent or attorney at the sole cost of the investigation. Except with respect to Sections 4.01, 4.02 (subject to paragraph 12 below) and 4.04, the Trustee shall have no duty to inquire as to the performance of the Issuer’s and the Guarantors’ covenants set forth herein.
(9) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.
(10) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as duties hereunder.
(11) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder.
(12) Delivery of reports, information and documents to the Trustee under Section 4.02 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as which the Trustee is entitled to rely exclusively on the Officers’ Certificate).
SECTION 7.03. Individual Rights of Trustee .
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may make loans to, accept deposits from, perform services for or otherwise deal with the either of the Issuer or any Guarantor, or any Affiliates thereof, with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, shall be subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee’s Disclaimer .
The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes or any Guarantee, it shall not be accountable for the Issuer’s or any Guarantor’s use of the proceeds from the sale of Notes or any money paid to the Issuer or any Guarantor pursuant to the terms of this Indenture and it shall not be responsible for the use or application of money received by any Paying Agent other than the Trustee. The Trustee shall not be responsible for any statement in the Notes, Note Guarantee, this Indenture or any other document in connection with the sale of the Notes other than its certificate of authentication.
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SECTION 7.05. Notice of Defaults .
The Trustee shall, within 30 days after the occurrence of any Default with respect to the Notes, give the Holders notice of all uncured Defaults thereunder known to it; provided, however, that, except in the case of an Event of Default in payment with respect to the Notes or a Default in complying with Section 5.01, the Trustee shall be protected in withholding such notice if and so long as a committee of its Responsible Officers in good faith determines that the withholding of such notice is not opposed to the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders .
If required by TIA § 313(a), within 60 days after March 15 of any year, commencing March 15, 2007, the Trustee shall mail to each Holder a brief report dated as of such March 15 that complies with TIA § 313(a). The Trustee also shall comply with TIA § 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA § 313(c) and TIA § 313(d).
Reports pursuant to this Section 7.06 shall be transmitted by mail:
(1) to all Holders, as the names and addresses of such Holders appear on the Registrar’s books; and
(2) to such Holders as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose.
A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange on which the Notes are listed. The Issuer shall promptly notify the Trustee, and in any event within 10 Business Days, when the Notes are listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity .
The Issuer and the Guarantors shall pay to the Trustee and Agents from time to time reasonable compensation for its services hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust). The Issuer and the Guarantors shall reimburse the Trustee and Agents upon request for all reasonable out-of-pocket disbursements, expenses and advances incurred or made by it in connection with its duties under this Indenture, including the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.
The Issuer and the Guarantors shall indemnify each of the Trustee and any predecessor Trustee for, and hold each of them harmless against, any and all loss, damage, claim, liability or expense, including without limitation taxes (other than taxes based on the income of the Trustee or such Agent) and reasonable attorneys’ fees and expenses incurred by each of them in connection with the acceptance or performance of its duties under this Indenture including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder (including, without limitation, settlement costs). The Trustee or Agent shall notify the Issuer and the Guarantors in writing promptly of any claim asserted against the Trustee or Agent for which it may seek indemnity. However, the failure by the Trustee or Agent to so notify the Issuer and the
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Guarantors shall not relieve the Issuer and Guarantors of their obligations hereunder except to the extent the Issuer and the Guarantors are prejudiced thereby.
Notwithstanding the foregoing, the Issuer and the Guarantors need not reimburse the Trustee for any expense or indemnify it against any loss or liability incurred by the Trustee through its negligence, bad faith or willful misconduct. To secure the payment obligations of the Issuer and the Guarantors in this Section 7.07, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee except such money or property held in trust to pay principal of and inter-est on particular Notes. The obligations of the Issuer and the Guarantors under this Section 7.07 to compensate and indemnify the Trustee, Agents and each predecessor Trustee and to pay or reimburse the Trustee, Agents and each predecessor Trustee for expenses, disbursements and advances shall survive the resignation or removal of the Trustee and the satisfaction, discharge or other termination of this Indenture, including any termination or rejection hereof under any Bankruptcy Law.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(7) or (8) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.
For purposes of this Section 7.07, the term “Trustee” shall include any trustee appointed pursuant to this Article Seven.
SECTION 7.08. Replacement of Trustee .
The Trustee may resign by so notifying the Issuer and the Guarantors in writing. The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by notifying the Issuer and the removed Trustee in writing and may appoint a successor Trustee with the Issuer’s written consent, which consent shall not be unreasonably withheld. The Issuer may remove the Trustee at its election if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. If a Trustee is removed with or without cause, all fees and expenses (including the reasonable fees and expenses of counsel) of the Trustee in-curred in the administration of the trust or in performing the duties hereunder shall be paid to the Trustee.
If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the Holders of a majority in principal amount of the outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
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If the Trustee fails to comply with Section 7.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Immediately following such delivery, the retiring Trustee shall, subject to its rights under Section 7.07, transfer all property held by it as Trustee to the successor Trustee, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Consolidation, Merger, etc .
If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets to, another entity, subject to Section 7.10, the successor entity without any further act shall be the successor Trustee; provided such entity shall be otherwise qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification .
This Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1) and (2) in every respect. The Trustee (together with its corporate parent) shall have a combined capital and surplus of at least $50,000,000 as set forth in the most recent applicable published annual report of condition. The Trustee shall comply with TIA § 310(b), including the provision in § 310(b)(1).
SECTION 7.11. Preferential Collection of Claims Against Issuer .
The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311 (b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.
The Issuer shall cause each Paying Agent other than the Trustee to execute and deliver to it and the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 7.12:
(A) that it will hold all sums held by it as agent for the payment of principal of, or premium, if any, or interest on, the Notes (whether such sums have been paid to it by the Issuer or by any obligor on the Notes) in trust for the benefit of Holders or the Trustee;
(B) that it will at any time during the continuance of any Event of Default, upon written request from the Trustee, deliver to the Trustee all sums so held in trust by it together with a full accounting thereof; and
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(C) that it will give the Trustee written notice within three (3) Business Days of any failure of the Issuer (or by any obligor on the Notes) in the payment of any installment of the principal of, premium, if any, or interest on, the Notes when the same shall be due and payable.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.01. Without Consent of Holders .
The Issuer and the Trustee may amend, waive or supplement this Indenture, the Note Guarantees or the Notes without prior notice to or consent of any Holder:
(1) to provide for the assumption of the Issuer’s or a Guarantor’s obligations to the Holders pursuant to Section 5.01;
(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;
(3) to cure any ambiguity, defect or inconsistency;
(4) to add Note Guarantees with respect to the Notes, including any Subsidiary, or to secure the Notes;
(5) to release any Guarantor from any of its obligations under its Note Guarantee or this Indenture (to the extent permitted by this Indenture);
(6) to qualify or maintain the qualification of this Indenture under the TIA;
(7) to add to the covenants of the Issuer or a Guarantor for the benefit of the Holders of the Notes or to surrender any right or power herein conferred upon the Issuer or a Guarantor with respect to the Notes;
(8) to provide for the issuance of Additional Notes in accordance with the provisions set forth in this Indenture; or
(9) to make any other change that does not materially adversely affect the rights of any Holder hereunder.
The Trustee is hereby authorized to join with the Issuer and the Guarantors in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture which adversely affects its own rights, duties or immunities under this Indenture.
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SECTION 8.02. With Consent of Holders .
This Indenture or the Notes may be amended with the consent (which may include consents obtained in connection with a tender offer or exchange offer for Notes) of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and any existing Default under, or compliance with any provision of, this Indenture may be waived (other than any continuing Default in the payment of the principal or interest on the Notes) with the consent (which may include consents obtained in connection with a tender offer or exchange offer for Notes) of the Holders of a majority in aggregate principal amount of the Notes then outstanding; provided that, without the consent of each Holder affected, no amendment or waiver may:
(1) reduce, or change the maturity of, the principal of any Note;
(2) reduce the rate of or extend the time for payment of interest on any Note;
(3) reduce any premium payable upon optional redemption of the Notes or change the date on which any Notes are subject to redemption (other than provisions relating to the purchase of Notes described in Sections 4.09 and 4.21, except that if a Change of Control has occurred, no amendment or other modification of the obligation of the Issuer to make a Change of Control Offer relating to such Change of Control shall be made without the consent of each Holder of the Notes affected);
(4) make any Note payable in money or currency other than that stated in the Notes;
(5) modify or change any provision of this Indenture or the related definitions to affect the ranking of the Notes or any Note Guarantee in a manner that adversely affects the Holders;
(6) reduce the percentage of Holders necessary to consent to an amendment or waiver to this Indenture or the Notes;
(7) waive a default in the payment of principal of or premium or interest on any Notes (except a rescission of acceleration of the Notes by the Holders thereof as provided in this Indenture and a waiver of the payment default that resulted from such acceleration);
(8) impair the rights of Holders to receive payments of principal of or interest on the Notes on or after the due date therefor or to institute suit for the enforcement of any payment on the Notes;
(9) release any Guarantor that is a Significant Subsidiary from any of its obligations under its Note Guarantee or this Indenture, except as permitted by this Indenture; or
(10) make any change in this Section 8.02.
After an amendment, supplement or waiver under this Section 8.02 becomes effective, the Issuer shall mail to the Holders a notice briefly describing the amendment, supplement or waiver.
Upon the written request of the Issuer, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the receipt by the Trustee of evidence
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reasonably satisfactory to the Trustee of the consent of the Holders as aforesaid and upon receipt by the Trustee of the documents described in Section 8.06, the Trustee shall join with the Issuer and the Guarantors in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture, in which case the Trustee may, but shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.
SECTION 8.03. Compliance with Trust Indenture Act .
Every amendment or supplement to this Indenture or the Notes shall comply with the TIA as then in effect.
SECTION 8.04. Revocation and Effect of Consents .
Until an amendment, supplement, waiver or other action becomes effective, a consent to it by a Holder of a Note is a continuing consent conclusive and binding upon such Holder and every sub-sequent Holder of the same Note or portion thereof, and of any Note issued upon the transfer thereof or in exchange therefor or in place thereof, even if notation of the consent is not made on any such Note. Any such Holder or subsequent Holder, however, may revoke the consent as to his Note or portion of a Note, if the Trustee receives the written notice of revocation before the date the amendment, supplement, waiver or other action becomes effective.
The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.
After an amendment, supplement, waiver or other action becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (1) through (10) of Section 8.02(a). In that case the amendment, supplement, waiver or other action shall bind each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note.
SECTION 8.05. Notation on or Exchange of Notes .
If an amendment, supplement, or waiver changes the terms of a Note, the Trustee (in accordance with the specific written direction of the Issuer) shall request the Holder of the Note (in accordance with the specific written direction of the Issuer) to deliver it to the Trustee. In such case, the Trustee shall place an appropriate notation on the Note about the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Note shall issue, the Guarantors shall endorse, and the Trustee shall authenticate a new Note that reflects the changed
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terms. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.
SECTION 8.06. Trustee To Sign Amendments, etc .
The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article Eight if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment, supplement or waiver the Trustee shall be entitled to receive and, subject to Section 7.01, shall be fully protected in relying conclusively upon an Officers’ Certificate and an Opinion of Counsel stating, in addition to the matters required by Section 11.04, that such amendment, supplement or waiver is authorized or permitted by this Indenture and all conditions precedent required hereunder to such amendment, supplement or waiver have been satisfied.
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Discharge of Indenture .
The Issuer may terminate its obligations and the obligations of the Guarantors under the Notes, the Note Guarantees and this Indenture, except the obligations referred to in the last paragraph of this Section 9.01, if
(1) all the Notes that have been authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from this trust) have been delivered to the Trustee for cancellation, or
(2) (a) all Notes not delivered to the Trustee for cancellation otherwise (i) have become due and payable, (ii) will become due and payable, or may be called for redemption, within one year or (iii) have been called for redemption pursuant to paragraph 6 of the Notes, and, in any case, the Issuer has irrevocably deposited or caused to be deposited with the Trustee as trust funds, in trust solely for the benefit of the Holders, U.S. legal tender, U.S. Government Obligations or a combination thereof, in such amounts as will be sufficient (without consideration of any reinvestment of interest) to pay and discharge the entire Indebtedness (including all principal and accrued interest) on the Notes not theretofore delivered to the Trustee for cancellation,
(b) the Issuer has paid all sums payable by it under this Indenture, and
(c) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or on the date of redemption, as the case may be.
In addition, the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent to satisfaction and discharge have been complied with.
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After such delivery, the Trustee shall acknowledge in writing the discharge of the Issuer’s and the Guarantors’ obligations under the Notes, the Guarantees and this Indenture except for those surviving obligations specified below.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer in Sections 7.07, 9.05 and 9.06 shall survive.
SECTION 9.02. Legal Defeasance .
The Issuer may at its option, by Board Resolution of the Board of Directors of the Issuer, be discharged from its obligations with respect to the Notes and the Guarantors discharged from their obligations under the Note Guarantees on the date the conditions set forth in Section 9.04 are satisfied (hereinafter, “ Legal Defeasance ”). For this purpose, such Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire indebtedness represented by the Notes and to have satisfied all its other obligations under such Notes and this Indenture insofar as such Notes are concerned (and the Trustee, at the expense of the Issuer, shall, subject to Section 9.06, execute instruments in form and substance reasonably satisfactory to the Trustee and Issuer acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of outstanding Notes to receive payments in respect of the principal of and interest on such Notes when such payments are due solely from the trust funds described in Section 9.04 and as more fully set forth in such Section, (B) the Issuer’s obligations with respect to such Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.11 and 4.19, (C) the rights, powers, trusts, duties, and immunities of the Trustee hereunder (including claims of, or payments to, the Trustee under or pursuant to Section 7.07) and (D) this Article Nine. Subject to compliance with this Article Nine, the Issuer may exercise its option under this Section 9.02 with respect to the Notes notwithstanding the prior exercise of its option under Section 9.03 with respect to the Notes.
SECTION 9.03. Covenant Defeasance .
At the option of the Issuer, pursuant to a Board Resolution of the Board of Directors of the Issuer, (x) the Issuer and the Guarantors shall be released from their respective obligations under Sections 4.02 (except for obligations mandated by the TIA), 4.05 through 4.17, inclusive, 4.20 and 4.21 and clause (3) of the first paragraph of Section 5.01 and (y) Section 6.01(4), (5), (6) and (9) shall no longer apply with respect to the outstanding Notes on and after the date the conditions set forth in Section 9.04 are satisfied (hereinafter, “ Covenant Defeasance ”). For this purpose, such Covenant Defeasance means that the Issuer and the Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section or portion thereof, whether directly or indirectly by reason of any reference elsewhere herein to any such specified Section or portion thereof or by reason of any reference in any such specified Section or portion thereof to any other provision herein or in any other document, but the remainder of this Indenture and the Notes shall be unaffected thereby.
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SECTION 9.04. Conditions to Legal Defeasance or Covenant Defeasance .
The following shall be the conditions to application of Section 9.02 or Section 9.03 to the outstanding Notes:
(1) the Issuer must irrevocably deposit with the Trustee, as trust funds, in trust solely for the benefit of the Holders, U.S. legal tender, U.S. Government Obligations or a combination thereof, in such amounts as will be sufficient (without consideration of any reinvestment of interest) in the opinion of a nationally recognized firm of independent public accountants selected by the Issuer, to pay the principal of and interest on the Notes on the stated date for payment or on the redemption date of the principal or installment of principal of or interest on the Notes,
(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States confirming that:
(a) the Issuer has received from, or there has been published by the Internal Revenue Service, a ruling, or
(b) since the date hereof, there has been a change in the applicable U.S. federal income tax law,
in either case to the effect that, and based thereon this Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred,
(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Covenant Defeasance had not occurred,
(4) no Default shall have occurred and be continuing on the date of such deposit (other than a Default resulting from the borrowing of funds to be applied to (x) such deposit, (y) similar contemporaneous deposits to redeem or defease other Indebtedness and (z) costs related thereto),
(5) the Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute (a) a Default under this Indenture or (b) a default under any other material agreement or instrument to which the Issuer or any of its Subsidiaries is a party or by which the Issuer or any of its Subsidiaries is bound (other than any such Default or default resulting solely from the borrowing of funds to be applied to (x) such deposit, (y) similar contemporaneous deposits to redeem or defease other Indebtedness and (z) costs related thereto),
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(6) the Issuer shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by it with the intent of preferring the Holders over any other of its creditors or with the intent of defeating, hindering, delaying or defrauding any other of its creditors or others, and
(7) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the conditions provided for in, in the case of the Officers’ Certificate, clauses (1) through (6) and, in the case of the Opinion of Counsel, clauses (2) and/or (3) and (5)(a) of this paragraph have been complied with.
If the funds deposited with the Trustee to effect Covenant Defeasance are insufficient to pay the principal of and interest on the Notes when due, then the Issuer’s obligations and the obligations of Guarantors under this Indenture shall be revived and no such defeasance shall be deemed to have occurred.
SECTION 9.05. Deposited Money and U.S. Government Obligations To Be Held in Trust; Other Miscellaneous Provisions .
All money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 9.04 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent, to the Holders of such Notes, of all sums due and to become due thereon in respect of principal, premium, if any, and accrued interest, but such money need not be segregated from other funds except to the extent required by law.
The Issuer and the Guarantors shall (on a joint and several basis) pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 9.04 or the principal, premium, if any, and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Nine to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time any money or U.S. Government Obligations held by it as provided in Section 9.04 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 9.01, 9.02 or 9.03 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s and each Guarantor’s obligations under this Indenture, the Notes and the Note Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to this Article Nine until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 9.01; provided that if the Issuer or the Guarantors have
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made any payment of principal of, premium, if any, or accrued interest on any Notes because of the reinstatement of their obligations, the Issuer or the Guarantors, as the case may be, shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.
SECTION 9.07. Moneys Held by Paying Agent .
In connection with the satisfaction and discharge of this Indenture, all moneys then held by any Paying Agent under the provisions of this Indenture shall, upon written demand of the Issuer, be paid to the Trustee, or if sufficient moneys have been deposited pursuant to Section 9.04, to the Issuer (or, if such moneys had been deposited by the Guarantors, to such Guarantors), and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.
SECTION 9.08. Moneys Held by Trustee .
Subject to applicable law, any moneys deposited with the Trustee or any Paying Agent or then held by the Issuer or the Guarantors in trust for the payment of the principal of, or premium, if any, or interest on any Note that are not applied but remain unclaimed by the Holder of such Note for two years after the date upon which the principal of, or premium, if any, or interest on such Note shall have respectively become due and payable shall be repaid to the Issuer (or, if appropriate, the Guarantors), or if such moneys are then held by the Issuer or the Guarantors in trust, such moneys shall be released from such trust; and the Holder of such Note entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to the Issuer and the Guarantors for the payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided that the Trustee or any such Paying Agent, before being required to make any such repayment, may, at the expense of the Issuer and the Guarantors, either mail to each Holder affected, at the address shown in the register of the Notes maintained by the Registrar pursuant to Section 2.03, or cause to be published once a week for two successive weeks, in a newspaper published in the English language, customarily published each Business Day and of general circulation in the City of New York, New York, a notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing or publication, any unclaimed balance of such moneys then remaining will be repaid to the Issuer. After payment to the Issuer or the Guarantors or the release of any money held in trust by the Issuer or any Guarantors, as the case may be, Holders entitled to the money must look only to the Issuer and the Guarantors for payment as general creditors unless applicable abandoned property law designates another Person.
Subject to the provisions of this Article Ten, each Guarantor, by execution of this Indenture, jointly and severally, unconditionally guarantees (each a “ Note Guarantee ” and collectively the “ Note Guarantees ” to each Holder (i) the due and punctual payment of the principal of and interest on
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each Note, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal of and interest on the Notes, to the extent lawful, and the due and punctual payment of all other Obligations and due and punctual performance of all obligations of the Issuer to the Holders or the Trustee all in accordance with the terms of such Note, this Indenture, and (ii) in the case of any extension of time of payment or renewal of any Notes or any of such other Obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, at stated maturity, by acceleration or otherwise. Each Guarantor, by execution of this Indenture, agrees that its obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of any such Note or this Indenture, any failure to enforce the provisions of any such Note, this Indenture, any waiver, modification or indulgence granted to the Issuer with respect thereto by the Holder of such Note, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or such Guarantor.
Each Guarantor hereby waives diligence, presentment, demand for payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to any such Note or the Indebtedness evidenced thereby and all demands whatsoever, and covenants that this Note Guarantee will not be discharged as to any such Note except by payment in full of the principal thereof and interest thereon. Each Guarantor hereby agrees that, as between such Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article Six for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Obligations as provided in Article Six, such Obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of this Note Guarantee.
SECTION 10.02. Execution and Delivery of Guarantee .
To further evidence the Note Guarantee set forth in Section 10.01, each Guarantor hereby agrees that a notation of such Note Guarantee, substantially in the form included in Exhibit G hereto, shall be endorsed on each Note authenticated and delivered by the Trustee and such Note Guarantee shall be executed by either manual or facsimile signature of an Officer or an Officer of a general partner, as the case may be, of each Guarantor. The validity and enforceability of any Note Guarantee shall not be affected by the fact that it is not affixed to any particular Note.
Each of the Guarantors hereby agrees that its Note Guarantee set forth in Section 10.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.
If an officer of a Guarantor whose signature is on this Indenture or a Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which such Note Guarantee is endorsed or at any time thereafter, such Guarantor’s Note Guarantee of such Note shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Note Guarantee set forth in this Indenture on behalf of the Guarantor.
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SECTION 10.03. Limitation of Guarantee .
The obligations of each Guarantor are limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each Guarantor that makes a payment or distribution under a Guarantee shall be entitled to a contribution from each other Guarantor in a pro rata amount based on the Adjusted Net Assets of each Guarantor.
SECTION 10.04. Release of Guarantor .
A Guarantor shall be released from its obligations under its Note Guarantee and its obligations under this Indenture:
(1) in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Equity Interests of such Guarantor then held by the Issuer and the Restricted Subsidiaries, in each case in accordance with the terms of this Indenture; or
(2) if such Guarantor is designated as an Unrestricted Subsidiary or otherwise ceases to be a Restricted Subsidiary, in each case in accordance with the provisions of this Indenture, upon effectiveness of such designation or when it first ceases to be a Restricted Subsidiary, respectively; or
(3) upon satisfaction and discharge of this Indenture or payment in full of the principal of, premium, if any, accrued and unpaid interest on the Notes and all other Obligations that are then due and payable;
and in each such case, the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to such transactions have been complied with and that such release is authorized and permitted hereunder.
The Trustee shall execute any documents reasonably requested by the Issuer or a Guarantor in order to evidence the release of such Guarantor from its obligations under its Note Guarantee endorsed on the Notes and under this Article Ten.
SECTION 10.05. Waiver of Subrogation .
Each Guarantor hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against the Issuer that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under its Note Guarantee and this Indenture, including, without limitation, any right of subrogation, reimbursement, exoneration, indemnification, and any right to participate in any claim or remedy of any Holder against the Issuer, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Issuer, directly or indirectly, in cash or other property or by set-off or in any other manner, payment
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or Note on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Notes shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Holders, and shall forthwith be paid to the Trustee for the benefit of such Holders to be credited and applied upon the Notes, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 10.05 is knowingly made in contemplation of such benefits.
SECTION 11.01. Trust Indenture Act Controls .
If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. If any provision of this Indenture modifies any TIA provision that may be so modified, such TIA provision shall be deemed to apply to this Indenture as so modified. If any provision of this Indenture excludes any TIA provision that may be so excluded, such TIA provision shall be excluded from this Indenture.
The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the provisions automatically deemed included unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.
Except for notice or communications to Holders, any notice or communication shall be given in writing and delivered in person, sent by facsimile, delivered by commercial courier service or mailed by first-class mail, postage prepaid, addressed as follows:
If to the Issuer or any Guarantor:
PHIBRO ANIMAL HEALTH CORPORATION
65 Challenger Road
Ridgefield Park, New Jersey 07660
Attention: Chief Financial Officer
Fax Number: (201) 329-7300
with, in the case of any notice furnished pursuant to Article Six, a copy to:
GOLENBOCK EISEMAN ASSOR BELL & PESKOE LLP
437 Madison Avenue
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New York, New York 10022-7302
Attention: Lawrence Bell, Esq.
Fax Number: (212) 907-7300
If to the Trustee:
HSBC BANK USA, NATIONAL ASSOCIATION
452 Fifth Avenue
New York, New York 10018
Attention: Gloria Alli
Corporate Trust and Loan Agency
Fax Number: (212) 525-1300
Such notices or communications shall be effective when received and shall be sufficiently given if so given within the time prescribed in this Indenture.
The Issuer, the Guarantors or the Trustee by written notice to the others may designate additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to him by first-class mail, postage prepaid, at his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication to a Holder is mailed in the manner provided above, it shall be deemed duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice as required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 11.03. Communications by Holders with Other Holders .
Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent .
Upon any request or application by the Issuer or any Guarantor to the Trustee to take any action or refrain from taking any action under this Indenture, the Issuer or such Guarantor shall furnish to the Trustee:
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(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05) stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate and Opinion .
Each certificate and opinion with respect to compliance by or on behalf of the Issuer or any Guarantor with a condition or covenant provided for in this Indenture (other than the Officers’ Certificate required by Sections 3.01 or 4.04) shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture and shall include:
(1) a statement that the Person making such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, it or he has made such examination or investigation as is necessary to enable it or him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with; provided, however, that with respect to such matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or certificate of public officials, and provided, further, that an Opinion of Counsel may have customary qualifications for opinions of the type required.
SECTION 11.06. Rules by Trustee and Agents .
The Trustee may make reasonable rules for action by or meetings of Holders. The Registrar and Paying Agent may make reasonable rules for their functions.
SECTION 11.07. Legal Holidays .
A “ Legal Holiday ” is a Saturday, a Sunday or other day on which (i) commercial banks in the City of New York are authorized or required by law to close or (ii) the New York Stock Exchange is not open for trading. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.
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SECTION 11.08. Governing Law .
This Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York, as applied to contracts made and performed within the State of New York.
SECTION 11.09. No Adverse Interpretation of Other Agreements .
This Indenture may not be used to interpret another indenture, loan, security or debt agreement of the Issuer or any Subsidiary thereof. No such indenture, loan, security or debt agreement may be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others .
No recourse for the payment of the principal of or premium, if any, or interest, , on any of the Notes, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor in this Indenture or in any supplemental indenture, or in any of the Notes, or because of the creation of any Indebtedness represented thereby, shall be had against any stockholder, officer, director or employee, as such, past, present or future, of the Issuer or of any successor corporation or against the property or assets of any such stockholder, officer, employee or director, either directly or through the Issuer or any Guarantor, or any successor corporation thereof, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the Notes are solely obligations of the Issuer and the Guarantors, and that no such personal liability whatever shall attach to, or is or shall be incurred by, any stockholder, officer, employee or director of the Issuer or any Guarantor, or any successor corporation thereof, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or the Notes or implied there from, and that any and all such personal liability of, and any and all claims against every stockholder, officer, employee and director, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of the Notes. It is understood that this limitation on recourse is made expressly for the benefit of any such shareholder, employee, officer or director and may be enforced by any of them.
All agreements of the Issuer and the Guarantors in this Indenture and the Notes shall bind their respective successors. All agreements of the Trustee, any additional trustee and any Paying Agents in this Indenture shall bind its successor.
SECTION 11.12. Multiple Counterparts .
The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.
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SECTION 11.13. Table of Contents, Headings, etc .
The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
Each provision of this Indenture shall be considered separable and if for any reason any provision which is not essential to the effectuation of the basic purpose of this Indenture or the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed all as of the date and year first written above.
PHIBRO ANIMAL HEALTH CORPORATION | ||
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
Indenture
Guarantors: | |
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBRO CHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
FIRST DICE ROAD COMPANY, A CALIFORNIA | |
LIMITED PARTNERSHIP | |
By: WESTERN MAGNESIUM CORP., | |
Its General Partner |
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
Indenture
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee |
||
By: | /s/ Herawattee Alli | |
Name: Herawattee Alli | ||
Title: Vice President |
Indenture
CUSIP
PHIBRO ANIMAL HEALTH CORPORATION
No. | $ |
9¼% SENIOR NOTE DUE 2018
PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (the “Company”), for value received, promises to pay to CEDE & CO. or registered assigns the principal sum of $ on July 1, 2018.
Interest Payment Dates: January 1 and July 1.
Record Dates: December 15 and June 15.
Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.
A- 1 |
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers.
PHIBRO ANIMAL HEALTH CORPORATION | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Dated:
Certificate of Authentication
This is one of the 9¼% Senior Notes due 2018 referred to in the within-mentioned Indenture.
HSBC BANK USA, NATIONAL ASSOCIATION, as
Trustee |
||
By: |
Dated:
A- 2 |
[FORM OF REVERSE OF NOTE]
PHIBRO ANIMAL HEALTH CORPORATION
9¼% SENIOR NOTE DUE 2018
1. Interest . PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (the “Company”), promises to pay, until the principal hereof is paid or made available for payment, interest on the principal amount set forth on the face hereof at a rate of 9¼% per annum. Interest hereon will accrue from and including the most recent date to which interest has been paid or, if no interest has been paid, from and including [ insert applicable issue date ] to but excluding the date on which interest is paid. Interest shall be payable in arrears on each January 1 and July 1 commencing on January 1, 2011. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal and on overdue interest (to the full extent permitted by law) at a rate of 9¼% per annum.
2. Method of Payment . The Company shall pay interest hereon (except defaulted interest) to the Persons who are registered Holders at the close of business on December 15 or June 15 next preceding the interest payment date (whether or not a Business Day). Holders must surrender Notes to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Interest may be paid by check mailed to the Holder entitled thereto at the address indicated on the register maintained by the Registrar for the Notes, provided , however, that payments on a certificated Note shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar . Initially, HSBC Bank USA, National Association, a national banking association (the “Trustee”), shall act as a Paying Agent and Registrar. The Company may appoint and change any Paying Agent or Registrar or co-registrar without notice. The Company or any of its Affiliates may act as Paying Agent or Registrar.
4. Indenture . The Company issued the Notes under an Indenture dated as of July 9, 2010 (the “Indenture”) among the Company, the Guarantors (as defined in the Indenture) and the Trustee. This is one of an issue of Notes of the Company issued, or to be issued, under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb), as amended from time to time. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of them. Capitalized and certain other terms used herein and not otherwise defined have the meanings set forth in the Indenture.
5. [Intentionally Omitted]
6. Optional Redemption . (a) Except as set forth below, the Company, at its option, may redeem the Notes, in whole or in part, at any time or from time to time on or after July 1, 2014 upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount), set forth below, together, in each case, with accrued and unpaid interest thereon, if any, to the Redemption Date, if redeemed during the twelve month period beginning on July 1 of each year listed below:
A- 3 |
Year | Redemption Price | |||
2014 | 104.625 | % | ||
2015 | 102.313 | % | ||
2016 and thereafter | 100.000 | % |
(b) At any time prior to July 1, 2014, the Company may also redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each Holder’s registered address, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest thereon, to, but not including, the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date.
(c) Notwithstanding the foregoing, at any time or from time to time prior to July 1, 2013, the Company, at its option, may redeem up to 35% of the aggregate principal amount of the Notes with the net cash proceeds of one or more Qualified Equity Offerings at a redemption price equal to 109.250% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon, if any, to the Redemption Date; provided that (1) at least 65% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption and (2) the redemption occurs within 90 days of the date of the closing of any such Qualified Equity Offering.
(d) In the event of a redemption of fewer than all of the Notes, the Trustee shall select the Notes to be redeemed in compliance with the requirements of the principal national securities exchange, if any, while such Notes are listed, or if such Notes are not then listed on a national securities exchange, on a pro rata basis, by lot or in such other manner as the Trustee shall deem fair and equitable. The Notes shall be redeemable in whole or in part upon not less than 30 nor more than 60 days’ prior written notice, mailed by first class mail to a Holder’s last address as it shall appear on the register maintained by the Registrar of the Notes. On and after any Redemption Date, interest shall cease to accrue on the Notes or portions thereof called for redemption unless the Company shall fail to redeem any such Note.
7. Notice of Redemption . Notice of redemption shall be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder to be redeemed at his registered address, except that redemption notices may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with a satisfaction and discharge of the Indenture. On and after the Redemption Date, unless the Company defaults in making the redemption payment, interest ceases to accrue on Notes or portions thereof called for redemption.
8. Offers To Purchase . The Indenture provides that upon the occurrence of a Change of Control or an Asset Sale and subject to further limitations contained therein, the Company shall make an offer to purchase outstanding Notes in accordance with the procedures set forth in the Indenture.
9. Denominations, Transfer, Exchange . The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay to it any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes or portion of a Note selected for redemption, or register the transfer of or exchange any Notes for a period of 15 days before a mailing of notice of redemption.
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10. Persons Deemed Owners . The registered Holder of this Note may be treated as the owner of this Note for all purposes.
11. Unclaimed Money . If money for the payment of principal or interest remains unclaimed for two years, the Trustee shall pay the money back to the Company at its written request. After that, Holders entitled to the money must look to the Company for payment as general creditors unless an “abandoned property” law designates another Person.
12. Amendment, Supplement, Waiver, Etc . The Company, the Guarantors and the Trustee (if a party thereto) may, without the consent of the Holders of any outstanding Notes, amend, waive or supplement the Indenture or the Notes for certain specified purposes, including, among other things, curing ambiguities, defects or inconsistencies, maintaining the qualification of the Indenture under the Trust Indenture Act of 1939, as amended, and making any change that does not materially and adversely affect the rights of any Holder. Other amendments and modifications of the Indenture or the Notes may be made by the Company, the Guarantors and the Trustee with the consent of the Holders of not less than a majority of the aggregate principal amount of the outstanding Notes, subject to certain exceptions requiring the consent of the Holders of the particular Notes to be affected.
13. Successor Corporation . When a successor corporation assumes all the obligations of its predecessor under the Notes and the Indenture and the transaction complies with the terms of Article Five of the Indenture, the predecessor corporation will, except as provided in Article Five, be released from those obligations.
14. Defaults and Remedies . Events of Default are set forth in the Indenture. Subject to certain limitations in the Indenture, if an Event of Default (other than an Event of Default specified in Section 6.01(7) or (8) with respect to the Company) occurs and is continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the outstanding Notes may, by written notice to the Trustee and the Company, and the Trustee upon the request of the Holders of not less than 25% in aggregate principal amount of the outstanding Notes shall, declare all principal of and accrued interest on all Notes to be immediately due and payable and such amounts shall become immediately due and payable. If an Event of Default specified in Section 6.01(7) or (8) occurs with respect to the Company, the principal amount of and interest on, all Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing default (except a default in payment of principal, premium, if any, or interest on the Notes or a default in the observance or performance of any of the obligations of the Company under Article Five of the Indenture) if it determines that withholding notice is in their best interests.
15. Trustee Dealings with Company . The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee.
16. Discharge . The Company’s obligations pursuant to the Indenture shall be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all the Notes or upon the irrevocable deposit with the Trustee of United States dollars or U.S. Government Obligations sufficient to pay when due principal of and interest on the Notes to maturity or redemption, as the case may be.
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17. Guarantees . This Note shall be entitled to the benefits of certain Note Guarantees made for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.
18. Authentication . This Note shall not be valid until the Trustee signs the certificate of authentication on the other side of this Note.
19. Governing Law . This Note shall be governed by and construed in accordance with the laws of the State of New York, as applied to contracts made and performed within the State of New York. The Trustee, the Company, the Guarantor and the Holders agree to submit to the jurisdiction of the courts of the State of New York in any action or proceeding arising out of or relating to the Indenture or the Notes.
20. Abbreviations . Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:
PHIBRO ANIMAL HEALTH CORPORATION
65 Challenger Road
Ridgefield Park, New Jersey 07660
Attention: Chief Financial Officer
A- 6 |
ASSIGNMENT
I or we assign and transfer this Note to:
(Insert assignee’s social security or tax I.D. number)
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
Agent to transfer this Note on the books of the Company. The Agent may substitute another to act for him.
Date: | Your Signature: | ||
(Sign exactly as your name
appears on the other side of this Note) |
Signature Guarantee:_______________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by the Company pursuant to Section 4.09 or Section 4.21 of the Indenture, check the appropriate box:
¨ | Section 4.09 | ¨ | Section 4.21 |
If you want to have only part of the Note purchased by the Company pursuant to Section 4.09 or Section 4.21 of the Indenture, state the amount you elect to have purchased:
$ | ||
($2,000 or any integral multiple of $1,000) |
Date: |
Your Signature: | ||
(Sign exactly as your name appears on the face of this Note) |
Signature Guaranteed |
SIGNATURE GUARANTEE
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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[FORM OF LEGEND FOR 144A NOTES AND OTHER NOTES
THAT ARE RESTRICTED NOTES]
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF PHIBRO ANIMAL HEALTH CORPORATION THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION (1)(A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (D) TO AN ‘‘ACCREDITED INVESTOR’’ WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN ‘‘INSTITUTIONAL ACCREDITED INVESTOR’’) THAT IS PURCHASING AT LEAST $100,000 OF NOTES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR (AND BASED UPON AN OPINION OF COUNSEL IF PHIBRO ANIMAL HEALTH CORPORATION SO REQUESTS) OR (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED THAT IN THE CASE OF A TRANSFER UNDER CLAUSE (E) SUCH TRANSFER IS SUBJECT TO THE RECEIPT BY THE TRUSTEE (AND PHIBRO ANIMAL HEALTH CORPORATION, IF IT SO REQUESTS) OF A CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO PHIBRO ANIMAL HEALTH CORPORATION OR ANY OF ITS SUBSIDIARIES OR (3) UNDER AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND THE INDENTURE GOVERNING THE NOTES AND (B) THE HOLDER SHALL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. IF ANY RESALE OR OTHER TRANSFER OF ANY NOTE IS PROPOSED TO BE MADE UNDER CLAUSE (A)(1)(D) ABOVE WHILE THESE TRANSFER RESTRICTIONS ARE IN FORCE THEN THE TRANSFEROR SHALL DELIVER A LETTER FROM THE TRANSFEREE TO PHIBRO ANIMAL HEALTH CORPORATION AND THE TRUSTEE WHICH SHALL PROVIDE, AMONG OTHER THINGS, THAT THE TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR AND THAT IT IS ACQUIRING THE SECURITIES FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT.
B- 1 |
[FORM OF ASSIGNMENT FOR 144A NOTES AND OTHER NOTES
THAT ARE RESTRICTED NOTES]
I or we assign and transfer this Note to:
(Insert assignee’s social security or tax I.D. number)
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
Agent to transfer this Note on the books of the Company. The Agent may substitute another to act for him.
[Check One]
¨ (a) | this Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder. |
or | |
¨ (b) | this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture. |
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Sections 2.16 and 2.17 of the Indenture shall have been satisfied.
Date: | Your Signature: | |||
(Sign exactly as your name appears on the face
of this Note) |
Signature Guarantee: |
SIGNATURE GUARANTEE
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
B- 2 |
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: | |||
NOTICE: To be executed by an executive officer |
B- 3 |
[FORM OF LEGEND FOR REGULATION S NOTE]
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF PHIBRO ANIMAL HEALTH CORPORATION THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION (1)(A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (D) TO AN ‘‘ACCREDITED INVESTOR’’ WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN ‘‘INSTITUTIONAL ACCREDITED INVESTOR’’) THAT IS PURCHASING AT LEAST $100,000 OF NOTES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR (AND BASED UPON AN OPINION OF COUNSEL IF PHIBRO ANIMAL HEALTH CORPORATION SO REQUESTS) OR (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED THAT IN THE CASE OF A TRANSFER UNDER CLAUSE (E) SUCH TRANSFER IS SUBJECT TO THE RECEIPT BY THE TRUSTEE (AND PHIBRO ANIMAL HEALTH CORPORATION, IF IT SO REQUESTS) OF A CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO PHIBRO ANIMAL HEALTH CORPORATION OR ANY OF ITS SUBSIDIARIES OR (3) UNDER AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND THE INDENTURE GOVERNING THE NOTES AND (B) THE HOLDER SHALL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. IF ANY RESALE OR OTHER TRANSFER OF ANY NOTE IS PROPOSED TO BE MADE UNDER CLAUSE (A)(1)(D) ABOVE WHILE THESE TRANSFER RESTRICTIONS ARE IN FORCE THEN THE TRANSFEROR SHALL DELIVER A LETTER FROM THE TRANSFEREE TO PHIBRO ANIMAL HEALTH CORPORATION AND THE TRUSTEE WHICH SHALL PROVIDE, AMONG OTHER THINGS, THAT THE TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR AND THAT IT IS ACQUIRING THE SECURITIES FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT.
C- 1 |
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BECOME THE PERMANENT REGULATION S GLOBAL NOTE AFTER EXPIRATION OF THE RESTRICTED PERIOD
C- 2 |
[FORM OF ASSIGNMENT FOR REGULATION S NOTE]
I or we assign and transfer this Note to:
(Insert assignee’s social security or tax I.D. number)
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
Agent to transfer this Note on the books of the Company. The Agent may substitute another to act for him.
[Check One]
¨ (a) | this Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder. |
or | |
¨ (b) | this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture. |
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Sections 2.16 and 2.17 of the Indenture shall have been satisfied.
Date: | Your Signature: | |||
(Sign exactly as your name appears on the
face of this Note) |
Signature Guarantee: |
SIGNATURE GUARANTEE
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
C- 3 |
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: | |||
NOTICE: To be executed by an executive officer |
C- 4 |
[FORM OF LEGEND FOR GLOBAL NOTE]
Any Global Note authenticated and delivered hereunder shall bear a legend (which would be in addition to any other legends required in the case of a Restricted Note) in substantially the following form:
This Note is a Global Note within the meaning of the indenture hereinafter referred to and is registered in the name of a depository or a nominee of a depository. This Note is not exchangeable for Notes registered in the name of a person other than the depository or its nominee except in the limited circumstances described in the indenture, and no transfer of this Note (other than a transfer of this Note as a whole by the depository to a nominee of the depository or by a nominee of the depository to the depository or another nominee of the depository) may be registered except in the limited circumstances described in the Indenture.
Unless this certificate is presented by an authorized representative of the Depository Trust Company (a New York corporation) (“DTC”) to the issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of CEDE & CO. or in such other name as it requested by an authorized representative of DTC (and any payment is made to CEDE & CO. or such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any Person is wrongful inasmuch as the registered owner hereof, CEDE & CO., has an interest herein.
D- 1 |
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
HSBC Bank USA, National Association
Phibro Animal Health Corporation
c/o HSBC Bank USA, National Association
452 Fifth Avenue
New York, New York 10018
Attention: | Gloria Alli |
Corporate Trust and Loan Agency |
Ladies and Gentlemen:
In connection with our proposed purchase of 9¼% Senior Notes due 2018 (the “Notes”) of Phibro Animal Health Corporation, a New York corporation (the “Company”), we confirm that:
1. We understand that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth in the Indenture dated as of July 9, 2010 relating to the Notes and we agree to be bound by, and not to resell, pledge or otherwise transfer the Notes except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).
2. We understand that the Notes have not been registered under the Securities Act or any other applicable securities laws, have not been and will not be qualified for sale under the securities laws of any non-U.S. jurisdiction and that the Notes may not be offered, sold, pledged or otherwise transferred except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell any Notes, we will do so only (i) to the Company or any subsidiary thereof, (ii) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined in Rule 144A), (iii) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Notes, (iv) outside the United States to persons other than U.S. persons in offshore transactions meeting the requirements of Rule 904 of Regulation S under the Securities Act, (v) pursuant to the exemption form registration provided by Rule 144 under the Securities Act (if applicable) or (vi) pursuant to an effective registration statement, and we further agree to provide to any person purchasing any of the Notes from us a notice advising such purchaser that resales of the Notes are restricted as stated herein.
3. We understand that, on any proposed resale of any Notes, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.
E- 1 |
4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting each are able to bear the economic risk of our or their investment, as the case may be.
5. We are acquiring the Notes purchased by us for our account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.
6. We are not acquiring the Notes with a view toward the distribution thereof in a transaction that would violate the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction.
You are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours, | ||
[Name of Transferee] | ||
By: | ||
Name: | ||
Title: |
Date: _______________________
E- 2 |
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
HSBC Bank USA, National Association
Phibro Animal Health Corporation
c/o HSBC Bank USA, National Association
452 Fifth Avenue
New York, New York 10018
Attention: Corporate Trust Services
Re: | Phibro Animal Health Corporation, a New York corporation (the “Company”) 9¼% Senior Notes due 2018 (the “Notes”) |
Dear Sirs:
In connection with our proposed sale of $__________ aggregate principal amount of the Notes, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a U.S. person or to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States, or (b) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 904(a) of Regulation S;
(4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions applicable to the Notes.
F- 1 |
You are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours, | ||
[Name of Transferee] | ||
By: |
F- 2 |
NOTATION OF GUARANTEE
Each of the undersigned (the “Guarantors”) hereby jointly and severally unconditionally guarantees, to the extent set forth in the Indenture dated as of July 9, 2010 by and among Phibro Animal Health Corporation, as issuer, the Guarantors, as guarantors, and HSBC Bank USA, National Association, as Trustee (as amended, restated or supplemented from time to time, the “Indenture”), and subject to the provisions of the Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and interest on the Notes, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal of, and premium and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee, all in accordance with the terms set forth in Article Ten of the Indenture, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantors to the Holders and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article Ten of the Indenture, and reference is hereby made to the Indenture for the precise terms and limitations of this Guarantee. Each Holder of the Note to which this Guarantee is endorsed, by accepting such Note, agrees to and shall be bound by such provisions.
[Signatures on Following Pages]
G- 1 |
IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee to be signed by a duly authorized officer.
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBRO CHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
FIRST DICE ROAD COMPANY, A CALIFORNIA LIMITED | |
PARTNERSHIP | |
By: WESTERN MAGNESIUM CORP., | |
Its General Partner |
By: | ||
Name: | ||
Title: |
G- 2 |
Exhibit 4.3
Execution Copy
PHIBRO ANIMAL HEALTH CORPORATION,
THE GUARANTORS
named herein
and
HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee
_________________________
FIRST SUPPLEMENTAL INDENTURE
Dated as of January 25, 2011
_________________________
9¼% Senior Notes due 2018
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this “ First Supplemental Indenture ”), dated as of January 25, 2011, among Phibro Animal Health Corporation (the “ Issuer ”), each of the Guarantors named herein, as Guarantors, and HSBC Bank USA, National Association, as Trustee (the “ Trustee ”). All capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Indenture (as defined herein).
W I T N E S S E T H:
WHEREAS, pursuant to a certain Indenture, dated as of July 9, 2010 (as such may be amended and supplemented from time to time, the “ Indenture ”), among the Issuer, the Guarantors named therein and the Trustee, the Issuer issued its 9¼% Senior Notes due 2018 (the “ Notes ”) in the aggregate principal amount $275,000,000; and
WHEREAS, pursuant to Section 8.02 of the Indenture, the Issuer when authorized by resolution of its Board of Directors, and the Trustee, together, with the written consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (the “ Requisite Consents ”), are authorized to amend or supplement the Indenture as set forth in this First Supplemental Indenture; and
WHEREAS, the Issuer and the Trustee desire and have agreed to execute and deliver this First Supplemental Indenture as herein provided and all conditions and requirements necessary to make this First Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized by all necessary parties; and
WHEREAS, the Issuer has solicited consents of the holders of the Notes to certain amendments (the “ Proposed Amendments ”) to the Indenture which require the Requisite Consents in order to effect; and
WHEREAS, the Issuer has received the Requisite Consents to effect the Proposed Amendments under the Indenture; and
WHEREAS, the Issuer has been authorized by its Board of Directors to enter into this First Supplemental Indenture;
NOW, THEREFORE, in consideration of the premises contained herein, it is mutually covenanted and agreed for the benefit of all Holders as follows:
1. | The Indenture is hereby amended as set forth below in this Section 1: |
(a) The paragraph defining “Permitted Indebtedness” in Section 4.06 of the Indenture is hereby amended as indicated below:
(i) | Clause (1) is hereby amended by adding “and under clause (15) below” after the “Indebtedness of the Issuer and any Restricted Subsidiary under the Credit Facilities” so that clause (1) reads in its entirety as follows: |
“(1) | Indebtedness of the Issuer and any Restricted Subsidiary under the Credit Facilities and under clause (15) below in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $100.0 million less, to the extent a permanent repayment and/or commitment reduction is required under a Credit Facility as a result of such application, the aggregate amount of Net Available Proceeds applied to repayments under the Credit Facilities in accordance with Section 4.09 and (y) the sum of (i) 85% of the book value of the accounts receivable of the Issuer and the Restricted Subsidiaries plus (ii) 65% of the book value of inventory of the Issuer and the Restricted Subsidiaries, in each case, calculated on a consolidated basis and in accordance with GAAP;” |
(ii) | Clause (13) is amended to strike the word “and” from the end of such clause. |
(iii) | The following new clause (15) is hereby added after clause (14) and the period at the end of clause (14) is hereby changed to “; and”: |
“(15) | Additional Notes up to an aggregate principal amount of $25.0 million, and the Note Guarantees in respect thereof.” |
(iv) | Clause (10) is amended in its entirety to read as follows, to reflect the addition of such clause (15): |
“(10) | Refinancing Indebtedness with respect to Indebtedness incurred pursuant to the Coverage Ratio Exception or clause (2) or (3) above, or this clause (10) or clause (15) below;” |
(b) Both references to “clauses (1) through (14)” in the last paragraph of Section 4.06 are hereby changed to “clauses (1) through (15)”.
2. Notation of Notes . The Issuer and the Guarantors agree that the Trustee is permitted, and each of them hereby authorizes the Trustee, to place a notation about this First Supplemental Indenture on the Notes in accordance with the provisions of Section 8.05 of the Indenture.
3. Acceptance by Trustee . The Trustee accepts this First Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby supplemented, but only upon the terms and conditions set forth in the Indenture, including the terms and conditions defining and limiting the liabilities and responsibilities of the Trustee, which terms and conditions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust
2 |
4. Supplemental Indenture Part of Indenture; Ratification of Indenture . This First Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Indenture and, as provided in the Indenture, this First Supplemental Indenture forms a part thereof. Except as otherwise expressly provided for in this First Supplemental Indenture, all of the terms and conditions of the Indenture are hereby ratified and shall remain unchanged and continue in full force and effect.
5. Trustee Makes No Representation The recitals contained in this First Supplemental Indenture shall be taken as the statements made solely by the Issuer and the Guarantors and the Trustee shall have no liability or responsibility for their correctness, and, without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of (i) the validity or sufficiency of this First Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Issuers and the Guarantors by corporate action or otherwise, (iii) the due execution hereof by the Issuers and the Guarantors or (iv) the consequences (direct or indirect and whether deliberate or inadvertent) of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters.
6. Conflict with Trust Indenture Act . If any provision of this First Supplemental Indenture limits, qualifies or conflicts with any provision of the TIA that is required under the TIA to be part of and govern any provision of this First Supplemental Indenture, the provision of the TIA shall control. If any provision of this First Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture as so modified or to be excluded by this First Supplemental Indenture, as the case may be.
7. Successors . All agreements of the Issuer in this First Supplemental Indenture shall bind its successors. All agreements of the Trustee in this First Supplemental Indenture shall bind its successors. All agreements of each Guarantor in this First Supplemental Indenture shall bind its successors, except as otherwise provided in Section 11.11 of the Indenture.
8. Effective Date . This First Supplemental Indenture shall become effective upon the execution and delivery hereof by the Issuer, the Guarantors and the Trustee.
9. Governing Law . THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW YORK.
10. Counterparts . The parties hereto may sign multiple counterparts of this First Supplemental Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.
11. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed all as of the date and year first written above.
Issuer: | ||
PHIBRO ANIMAL HEALTH CORPORATION | ||
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President | ||
Guarantors: | ||
PRINCE AGRI PRODUCTS, INC. | ||
PHIBROCHEM, INC. | ||
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | ||
PHIBRO CHEMICALS, INC. | ||
WESTERN MAGNESIUM CORP. | ||
C.P. CHEMICALS, INC. | ||
PHILIPP BROTHERS CHEMICALS, INC. | ||
PHIBROWOOD, LLC | ||
PHIBRO-TECH, INC. | ||
FIRST DICE ROAD COMPANY, A CALIFORNIA LIMITED | ||
PARTNERSHIP | ||
By: WESTERN MAGNESIUM CORP., | ||
Its General Partner | ||
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
Signature Page to First Supplemental Indenture
S- 1 |
HSBC BANK USA, NATIONAL ASSOCIATION, | ||
as Trustee | ||
By: | /s/ Herawattee Alli | |
Name: Herawattee Alli | ||
Title: Vice President |
Signature Page to First Supplemental Indenture
S- 2 |
Exhibit 4.4
Execution Copy
PHIBRO ANIMAL HEALTH CORPORATION,
THE GUARANTORS
named herein
and
HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee
SECOND SUPPLEMENTAL INDENTURE
Dated as of January 31, 2011
9¼% Senior Notes due 2018
SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE (this “ Second Supplemental Indenture ”), dated as of January 31, 2011, among Phibro Animal Health Corporation (the “ Issuer ”), each of the Guarantors named herein, as Guarantors, and HSBC Bank USA, National Association, as Trustee (the “ Trustee ”). All capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Indenture (as defined herein).
W I T N E S S E T H:
WHEREAS, pursuant to a certain Indenture, dated as of July 9, 2010 (as such may be amended and supplemented from time to time, the “ Indenture ”), among the Issuer, the Guarantors named therein and the Trustee, the Issuer issued its 9¼% Senior Notes due 2018 (the “ Notes ”) in the aggregate principal amount of $275,000,000; and
WHEREAS, pursuant to Sections 8.01(8) of the Indenture, the Issuer and the Trustee may amend, waive or supplement the Indenture without prior notice to or consent of any Holder to provide for the issuance of Additional Notes in accordance with the provisions set forth in the Indenture; and
WHEREAS, this Second Supplemental Indenture supplements the Indenture to provide for the issuance of Additional Notes, and, accordingly satisfies the criteria of Section 8.01 of the Indenture; and
WHEREAS, the Issuer, each of the Guarantors and the Trustee desire and have agreed to execute and deliver this Second Supplemental Indenture as herein provided and all conditions and requirements necessary to make this Second Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized by all necessary parties;
NOW, THEREFORE, in consideration of the premises contained herein, it is mutually covenanted and agreed for the benefit of all Holders as follows:
1. Issuance of Additional Notes . The Indenture is hereby supplemented to provide for the issuance of Additional Notes in the aggregate principal amount of $25,000,000 having identical terms and conditions to the Notes issued pursuant to Article Two.
2. Acceptance by Trustee . The Trustee accepts this Second Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby supplemented, but only upon the terms and conditions set forth in the Indenture, including the terms and conditions defining and limiting the liabilities and responsibilities of the Trustee, which terms and conditions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture as hereby supplemented.
3. Supplemental Indenture Part of Indenture; Ratification of Indenture . This Second Supplemental Indenture is executed and shall be construed as an indenture supplemental to the
Indenture and, as provided in the Indenture, this Second Supplemental Indenture forms a part thereof. Except as otherwise expressly provided for in this Second Supplemental Indenture, all of the terms and conditions of the Indenture are hereby ratified and shall remain unchanged and continue in full force and effect.
4. Trustee Makes No Representation The recitals contained in this Second Supplemental Indenture shall be taken as the statements made solely by the Issuer and the Guarantors and the Trustee shall have no liability or responsibility for their correctness, and, without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of (i) the validity or sufficiency of this Second Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Issuers and the Guarantors by corporate action or otherwise, (iii) the due execution hereof by the Issuers and the Guarantors or (iv) the consequences (direct or indirect and whether deliberate or inadvertent) of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters.
5. Conflict with Trust Indenture Act . If any provision of this Second Supplemental Indenture limits, qualifies or conflicts with any provision of the TIA that is required under the TIA to be part of and govern any provision of this Second Supplemental Indenture, the provision of the TIA shall control. If any provision of this Second Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture as so modified or to be excluded by this Second Supplemental Indenture, as the case may be.
6. Successors . All agreements of the Issuer in this Second Supplemental Indenture shall bind its successors. All agreements of the Trustee in this Second Supplemental Indenture shall bind its successors. All agreements of each Guarantor in this Second Supplemental Indenture shall bind its successors, except as otherwise provided in Section 11.11 of the Indenture.
7. Effective Date . This Second Supplemental Indenture shall become effective upon the execution and delivery hereof by the Issuer, the Guarantors and the Trustee.
8. Governing Law . THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW YORK.
9. Counterparts . The parties hereto may sign multiple counterparts of this Second Supplemental Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.
10. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.
2 |
IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed all as of the date and year first written above.
Issuer: | |||
PHIBRO ANIMAL HEALTH CORPORATION | |||
By: | /s/ David C. Storbeck | ||
Name: | David C. Storbeck | ||
Title: | Vice President | ||
Guarantors: | |||
PRINCE AGRI PRODUCTS, INC. | |||
PHIBROCHEM, INC. | |||
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |||
PHIBRO CHEMICALS, INC. | |||
WESTERN MAGNESIUM CORP. | |||
C.P. CHEMICALS, INC. | |||
PHILIPP BROTHERS CHEMICALS, INC. | |||
PHIBROWOOD, LLC | |||
PHIBRO-TECH, INC. | |||
FIRST DICE ROAD COMPANY, A CALIFORNIA LIMITED | |||
PARTNERSHIP | |||
By: WESTERN MAGNESIUM CORP., | |||
Its General Partner | |||
By: | /s/ David C. Storbeck | ||
Name: | David C. Storbeck | ||
Title: | Vice President |
Signature Page to Second Supplemental Indenture
S- 1 |
HSBC BANK USA, NATIONAL ASSOCIATION, | |||
as Trustee | |||
By: | /s/ Herawattee Alli | ||
Name: | Herawattee Alli | ||
Title: | Vice President |
Signature Page to Second Supplemental Indenture
S- 2 |
Exhibit 4.5
PHIBRO ANIMAL HEALTH CORPORATION,
THE
GUARANTORS
named herein
and
HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee
THIRD SUPPLEMENTAL INDENTURE
Dated as of March 6, 2013
9¼% Senior Notes due 2018
THIRD SUPPLEMENTAL INDENTURE
THIRD SUPPLEMENTAL INDENTURE (this “ Third Supplemental Indenture ”), dated as of March 6, 2013, among Phibro Animal Health Corporation (the “ Issuer ”), each of the Guarantors named herein, as Guarantors, and HSBC Bank USA, National Association, as Trustee (the “ Trustee ”). All capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Indenture (as defined herein).
W I T N E S S E T H:
WHEREAS, pursuant to a certain Indenture, dated as of July 9, 2010 (as such may be amended and supplemented from time to time, the “ Indenture ”), among the Issuer, the Guarantors named therein and the Trustee, the Issuer issued its 9¼% Senior Notes due 2018 (the “ Notes ”) in the aggregate principal amount of $300,000,000; and
WHEREAS, the Indenture establishes certain conditions, as set forth in Section 4.13 thereof, under which Restricted Subsidiaries would be required to guarantee the obligations of the Issuer under the Indenture and the Notes, with Section 4.13 providing (among other things) that if, after the Issue Date, the Issuer or any Restricted Subsidiary shall acquire or create another Subsidiary (other than a Foreign Subsidiary or a Subsidiary that has been designated an Unrestricted Subsidiary), then the Issuer shall cause such Restricted Subsidiary to execute and deliver to the Trustee (i) a supplemental indenture in form and substance satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Issuer’s obligations under the Notes and the Indenture and (ii) a notation of guarantee in respect of its Note Guarantee; and
WHEREAS, on December 20, 2012, OmniGen Research, LLC, an Oregon limited liability company (“ OmniGen ”), became a Subsidiary of Prince Agri Products, Inc., a Delaware corporation and Restricted Subsidiary and, by virtue thereof, constitutes a Restricted Subsidiary that is not a Foreign Subsidiary; and
WHEREAS, the Issuer has determined that OminGen is required to comply with Section 4.13 of the Indenture and execute a supplemental indenture under which OminGen will be bound by the Guarantee contemplated thereby; and
WHEREAS, pursuant to Sections 8.01(4) and (9) of the Indenture, the Issuer and the Trustee may amend, waive or supplement the Indenture, the Note Guarantee or the Notes without prior notice to or consent of any Holder to (i) add Note Guarantees with respect to the Notes, including any Subsidiary, and (ii) make any change that does not materially adversely affect the rights of any Holder under the Indenture; and
WHEREAS, this Third Supplemental Indenture amends or supplements the Indenture and also the Notation of Guarantee in the form attached as Exhibit G thereto to add OminGen as an additional Guarantor under the Indenture and as additional signatory to the Notation of Guarantee, and, accordingly satisfies the criteria of Section 8.01 of the Indenture; and
WHEREAS, the Issuer, each of the Guarantors existing prior to the date hereof, OminGen and the Trustee desire and have agreed to execute and deliver this Third Supplemental Indenture as herein provided and all conditions and requirements necessary to make this Third Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized by all necessary parties;
NOW, THEREFORE, in consideration of the premises contained herein, it is mutually covenanted and agreed for the benefit of all Holders as follows:
1. Additional Guarantor .
(a) OminGen hereby agrees to be bound by the Indenture, as amended by this Third Supplemental Indenture and as hereafter amended in accordance with the terms of the Indenture, to the same extent as though the Indenture were incorporated and fully set forth in this Third Supplemental Indenture; and, by virtue thereof, hereby becomes a Guarantor for all purposes.
(b) Without limiting the generality of subsection (a) above, OminGen (with each other Guarantor), by execution of this Third Supplemental Indenture, jointly and severally, unconditionally joins in and becomes bound by the Note Guarantee as set forth in Section 10.01 of the Indenture.
2. Notation of Guarantee . The Issuer and the Guarantors, including OminGen, agree that the Trustee is permitted, and each of them hereby authorizes the Trustee, to place a notation about this Third Supplemental Indenture on the Notes in accordance with the provisions of Section 8.05 of the Indenture; provided that nothing herein shall limit the generality and applicability of Section 4.13 of the Indenture.
3. Acceptance by Trustee . The Trustee accepts this Third Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby supplemented, but only upon the terms and conditions set forth in the Indenture, including the terms and conditions defining and limiting the liabilities and responsibilities of the Trustee, which terms and conditions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture as hereby supplemented.
4. Supplemental Indenture Part of Indenture; Ratification of Indenture . This Third Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Indenture and, as provided in the Indenture, this Third Supplemental Indenture forms a part thereof. Except as otherwise expressly provided for in this Third Supplemental Indenture, all of the terms and conditions of the Indenture are hereby ratified and shall remain unchanged and continue in full force and effect.
5. Trustee Makes No Representation The recitals contained in this Third Supplemental Indenture shall be taken as the statements made solely by the Issuer and the Guarantors, including OminGen, and the Trustee shall have no liability or responsibility for their
2 |
correctness, and, without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of (i) the validity or sufficiency of this Third Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Issuer and the Guarantors (including OmniGen) by corporate action or otherwise, (iii) the due execution hereof by the Issuer and the Guarantors (including OmniGen) or (iv) the consequences (direct or indirect and whether deliberate or inadvertent) of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters.
6. Conflict with Trust Indenture Act . If any provision of this Third Supplemental Indenture limits, qualifies or conflicts with any provision of the TIA that is required under the TIA to be part of and govern any provision of this Third Supplemental Indenture, the provision of the TIA shall control. If any provision of this Third Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture as so modified or to be excluded by this Third Supplemental Indenture, as the case may be.
7. Successors . All agreements of the Issuer in this Third Supplemental Indenture shall bind its successors. All agreements of the Trustee in this Third Supplemental Indenture shall bind its successors. All agreements of each Guarantor in this Third Supplemental Indenture shall bind its successors, except as otherwise provided in Section 11.11 of the Indenture.
8. Effective Date . This Third Supplemental Indenture shall become effective upon the execution and delivery hereof by the Issuer, the Guarantors (including OmniGen) and the Trustee.
9. Governing Law . THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW YORK.
10. Counterparts . The parties hereto may sign multiple counterparts of this Third Supplemental Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.
11. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.
3 |
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed all as of the date and year first written above.
Issuer: | |||
PHIBRO ANIMAL HEALTH CORPORATION | |||
By: | /s/ David C. Storbeck | ||
Name: | David C. Storbeck | ||
Title: | Vice President | ||
Guarantors: | |||
PRINCE AGRI PRODUCTS, INC. | |||
PHIBROCHEM, INC. | |||
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |||
PHIBRO CHEMICALS, INC. | |||
WESTERN MAGNESIUM CORP. | |||
C.P. C HEMICALS, INC. | |||
PHILIPP BROTHERS CHEMICALS, INC. | |||
PHIBROWOOD, LLC | |||
PHIBRO-TECH, INC. | |||
OMNIGEN RESEARCH, LLC | |||
FIRST DICE ROAD COMPANY, A CALIFORNIA LIMITED | |||
PARTNERSHIP | |||
By: WESTERN MAGNESIUM CORP.,
Its General Partner |
|||
By: | /s/ David C. Storbeck | ||
Name: | David C. Storbeck | ||
Title: | Vice President |
Signature Page to Third Supplemental Indenture
S- 1 |
HSBC
BANK USA, NATIONAL ASSOCIATION,
as Trustee |
|||
By: | /s/ Herawattee Alli | ||
Name: | Herawattee Alli | ||
Title: | Vice President |
Signature Page to Third Supplemental Indenture
S- 2 |
Exhibit 4.6
EXECUTION COPY
PHIBRO ANIMAL HEALTH CORPORATION
STOCKHOLDERS AGREEMENT
March 12, 2008
- i - |
TABLE
OF CONTENTS
(continued)
Page | ||
9.3 | Governing Law | 17 |
9.4 | Successors and Assigns | 17 |
9.5 | Notices | 18 |
9.6 | No Inconsistent Agreements | 19 |
9.7 | Further Assurances | 19 |
9.8 | Effectiveness; Termination | 19 |
9.9 | Amendment | 19 |
9.10 | Headings | 20 |
9.11 | Nouns and Pronouns | 20 |
9.12 | Remedies | 20 |
9.13 | Entire Agreement | 20 |
9.14 | Counterparts | 20 |
9.15 | Aggregation of Stock | 20 |
9.16 | Delays or Omissions | 20 |
9.17 | Public Announcements | 20 |
9.18 | Stockholder Group Representative | 20 |
- ii - |
INDEX OF DEFINED TERMS
3i QPEL | Recitals | Open Sale Purchaser | 4.2(c) | |
3i QPEL Director | 6.1(a) | Other Business | 6.9(c) | |
3i QPEL Group | 6.9(a) | Other Company | 6.9(a) | |
Accepted Stock | 4.2(b) | Other Stockholders | 3 | |
Affiliate | 1 | Permitted Transfer | 2 | |
Agreement | Preamble | Permitted Transferee | 2 | |
AIM | 1 | Person | 3 | |
AIM Listing | 1 | Preferred Stock | 3 | |
AIM Rules | 2 | Pro Rata Share | 4 | |
Available Stock | 6.2(b) | Proportionate Percentage | 4 | |
Bendheim | Preamble | Proportionate Percentage of the Excess | 4 | |
BFI | Recitals | Purchase Agreement | Recitals | |
BFI Group | 2 | Related Party | 3 | |
Business Day | 2 | Reserved Shares | 4 | |
By-laws | 6.8 | Right | 3.1(a) | |
Certificate of Incorporation | 2 | Rights Offering | 4 | |
Common Stock Equivalents | 2 | Rights Assignee | 3.1(a) | |
Common Stock | Preamble | Rights Offering Unexercised Portion | 3.1(a) | |
Company | Preamble | Sell | 5 | |
Company Sale | 2 | Selling Stockholder | 5 | |
Control | 1 | Stock | 5 | |
Effective Date | Preamble | Stockholder Acceptance Period | 4.2(b) | |
Excluded Securities | 2 | Stockholder Group | 6 | |
Executive Committee | 6.4 | Stockholders | 6 | |
Group | 3 | Stockholder Majority | 6 | |
HSR | 3 | Stock Plans | 6 | |
Immediate Family Member | 1 | Subsidiary | 6 | |
Information | 6.9(b) | Tag Along Notice | 5.2 | |
Investors | Preamble | Tag Along Period | 5.2 | |
Majority Stockholder | 3 | Tag Along Right | 5.2 | |
Notice of Sale | 4.2(a) | Tag Along Stockholder | 5.1 | |
Open Sale Period | 4.2(c) |
- iii - |
PHIBRO ANIMAL HEALTH CORPORATION
STOCKHOLDERS AGREEMENT
This Stockholders Agreement (this “Agreement”), is entered into as of March 12, 2008 (the ‘‘Effective Date”), by and among Phibro Animal Health Corporation, a New York corporation (the “Company”), the holders of shares of the Common Stock, par value $0.0001 per share (the “Common Stock”), of the Company set forth on Schedule A hereto and each other stockholder of the Company who becomes a party hereto in accordance herewith (each, a “Stockholder” and collectively, the “Stockholders”), and Jack C. Bendheim (“Bendheim”) as to Section 9.18 only.
RECITALS
WHEREAS, 3i Quoted Private Equity Limited, a company incorporated in Jersey (registered no. 96272), whose registered office is at 22 Grenville Street, St Helier, Jersey, Channel Islands, JE4 8PX (“3i QPEL”), BFI Co., LLC, a Delaware limited liability company (“BFI”), Marvin S. Sussman, the Jewish Communal Fund, a New York not-for-profit company, and the Company have entered into a Stock Purchase Agreement (the “Purchase Agreement”) of even date herewith;
WHEREAS, as an inducement to consummate the transactions contemplated by the Purchase Agreement, the Company and the Stockholders have agreed to enter into this Agreement for the purpose of setting forth certain rights and obligations with respect to the Common Stock and certain agreements relating to other matters;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements set forth herein, the parties hereto hereby agree as follows:
1.1 Defined Terms . As used herein, the following terms shall have the following meanings:
“ 3i QPEL ” as defined in the Recitals.
“ 3i OPEL Director ” as defined in Section 6.1(a).
“ 3i QPEL Group ” means 3i QPEL, together with its Related Parties and other Affiliates, and including any Permitted Transferee to whom 3i QPEL or any other member of the 3i QPEL Group shall have transferred Stock in accordance with the terms hereof who shall have become a Stockholder hereunder.
“ Accepted Stock ” as defined in Section 4.2(b).
“ Affiliate ” means (i) with respect to any Person generally, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person, (ii) with respect to any Person that is an individual, his or her spouse, parent, grandparent, descendant or the spouse of such Person (including adopted persons) or a sibling thereof (each, an “ Immediate Family Member ”), or a trust (or other estate planning vehicle) or similar entity of which there are no principal beneficiaries other than any one or more of such individuals or any of the Immediate Family Members of such individuals, and (iii) in the case of any Person that is an entity, shall include any Related Party
thereof. Notwithstanding the foregoing, neither the Company nor any Person controlled by the Company shall be deemed to be an Affiliate of any Stockholder for purposes of this Agreement. For purposes of this definition, “ control ” of a Person means having 50% or more of the voting control of that Person or holding equity securities representing 50% or more of the economic interests in such Person.
“ Agreement ” as defined in the Preamble.
“ AIM ” means the AIM market operated by the London Stock Exchange plc.
“ AIM Listing ” means the admission of the Common Stock to AIM in accordance with the AIM Rules.
“ AIM Rules ” means the AIM rules for Companies published by the London Stock Exchange plc from time to time.
“ Available Stock ” as defined in Section 4.2(b).
“ Bendheim ” as defined in the Preamble.
“ BFI ” as defined in the Recitals.
“ BFI Group ” means Bendheim and BFI, together with BFI’s Related Parties and other Affiliates, and including any Permitted Transferee to whom any member of the BFI Group shall have transferred Stock in accordance with the terms hereof who shall have become a Stockholder hereunder.
“ Board of Directors ” means the board of directors of the Company.
“ Business Day ” means any day other than a Saturday, Sunday or other day on which banks located in New York, New York are authorized or obligated to close.
“ By-laws ” as defined in Section 6.8.
“ Certificate of Incorporation ” means the Company’s Certificate of Incorporation, as the same may be amended from time to time.
“ Common Stock Equivalents ” means securities convertible into, or exchangeable or exercisable for, shares of Common Stock, including, without limitation, any Preferred Stock.
“ Common Stock ” as defined in the Preamble.
“ Company ” as defined in the Preamble.
“ Company Sale ” means any sale or other disposition of all or a material portion of the Stock or assets of the Company or any Subsidiary, including by way of merger, consolidation, stock or asset sale or otherwise.
“ Effective Date ” as defined in the Preamble.
“ Excluded Securities ” means: (i) Common Stock issued by the Company in connection with the AIM Listing or pursuant to Section 2.6 of the Purchase Agreement; (ii) Reserved Shares and Common Stock Equivalents exercisable for Reserved Shares; (iii) Common Stock issued upon the conversion or exercise of Common Stock Equivalents outstanding as of the Effective Date; (iv) Stock or Common Stock
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Equivalents issued to the applicable holder(s) in connection with any stock split, stock dividend or other share distribution or recapitalization approved by the Board of Directors in which all holders of each class or series of stock of the Company participate on an equal pro rata basis; (v) Common Stock or Common Stock Equivalents issued to the applicable seller(s) or other transferor(s) in connection with an acquisition, merger, consolidation or other business combination, or for consideration other than cash, approved by the Board of Directors, (vi) Common Stock or Common Stock Equivalents issued to any commercial bank, lessor, vendor or licensor in connection with an agreement or arrangement with the Company or any of its Subsidiaries approved by the Board of Directors (including the issuance of the securities) and not as part of an offering of the Company’s securities and (vii) Stock issued under a plan of reorganization approved in a proceeding under any applicable act of Congress relating to reorganization of corporations.
“ Executive Committee ” as defined in Section 6.4.
“ HSR ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
“ Information ” as defined in Section 6.9(b).
“ Majority Stockholder ” means any Stockholder Group whose members, in the aggregate and including all members of such Stockholder Group, hold more than 50% of the Company’s outstanding Common Stock.
“ Notice of Sale ” as defined in Section 4.2(a).
“ Open Sale Period ” as defined in Section 4.2(c).
“ Open Sale Purchaser ” as defined in Section 4.2(c).
“ Other Business ” as defined in Section 6.9(c).
“ Other Company ” as defined in Section 6.9(a).
“ Other Stockholders ” means, with respect to any Selling Stockholder, (i) if the Selling Stockholder is a member of the BFI Group, the members of the 3i QPEL Group or (ii) if the Selling Stockholder is a member of the 3i QPEL Group, the members of the BFI Group.
“ Permitted Transfer ” means, (i) in the case of a Sale by 3i QPEL or any other member of the 3i QPEL Group, a Sale to a Related Party or other Affiliate, (ii) in the case of a Sale by BFI or any other member of the BFI Group, a Sale to a Related Party or other Affiliate of Bendheim or BFI, and (iii) in the case of any other Stockholder, a Sale to an Affiliate.
“ Permitted Transferee ” means a transferee of Stock in a Permitted Transfer.
“ Person ” means any individual, company, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“ Preferred Stock ” means the shares of any series of Preferred Stock, par value $1.00 per share, of the Company.
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“ Pro Rata Share ” means, with respect to each Stockholder Group, the quotient of (i) the amount of Common Stock and Common Stock Equivalents owned by the Stockholders of such Stockholder Group on the date of a Participation Offer divided by (ii) the total amount of Common Stock and Common Stock Equivalents issued and outstanding on the date of, and immediately prior to, the Participation Offer, in each case excluding any Reserved Shares or Common Stock Equivalents exercisable for Reserved Shares.
“ Proportionate Percentage ” means, with respect to each Other Stockholder, the quotient (expressed as a percentage) obtained by dividing (i) the amount of Common Stock and Common Stock Equivalents owned by such Other Stockholder on the first day of the Stockholder Acceptance Period by (ii) the aggregate amount of Common Stock and Common Stock Equivalents owned on the first day of the Stockholder Acceptance Period by all Other Stockholders who exercise their option to purchase Available Stock, in each case calculated in accordance with Section 9.1 but excluding any Reserved Shares or Common Stock Equivalents exercisable for Reserved Shares.
“ Proportionate Percentage of the Excess ” means, with respect to each Other Stockholder who exercises its option to purchase more than its Proportionate Percentage of Available Stock, the quotient (expressed as a percentage) obtained by dividing (i) the excess of the number of shares that the Other Stockholder desires to purchase over the number of shares equal to such Other Stockholder’s Proportionate Percentage of Available Stock by (ii) the excess of the aggregate number of shares that all Other Stockholders who exercise their option to purchase more than their Proportionate Percentage of Available Stock desire to purchase over the aggregate number of shares equal to their collective Proportionate Percentages of Available Stock, in each case calculated in accordance with Section 9.1 but excluding any Reserved Shares or Common Stock Equivalents exercisable for Reserved Shares.
“ Purchase Agreement ” as defined in the Recitals.
“ Related Party ” means (A) with respect to 3i QPEL, (i) 3i Group plc, 3i QPEL and their subsidiary undertakings, any parent undertaking of 3i Group plc or 3i QPEL and any subsidiary undertakings of such a parent undertaking (together “ 3i Group ”), (ii) any fund, partnership, investment vehicle or other entity (whether corporate or otherwise) established in any jurisdiction and which is either (a) managed or advised by an entity in the 3i Group or (b) utilized for the purpose of allowing 3i Group employees (including former employees) to participate directly or indirectly in the growth in value of the Company ((a) and (b) together being referred to as “ 3i Funds ”) and (iii) investors in 3i Funds, and (B) with respect to BFI, any members of BFI. For these purposes “subsidiary undertaking” and “parent undertaking” have the same meaning as in the UK Companies Act 1985.
“ Reserved Shares ” means the shares of Common Stock reserved for issuance under the Stock Plans.
“ Right ” as defined in Section 3.1(a).
“ Rights Offering ” means a preemptive or similar participation right granted by the Company to all holders of Common Stock on a pro rata basis, including 3i QPEL and BFI.
“ Rights Assignee ” as defined in Section 3.1(a).
“ Rights Offering Unexercised Portion ” as defined in Section 3.1(a).
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“ Sell ” means, as to any shares of Stock, to sell, issue, donate, or in any other way transfer, assign, distribute, pledge, encumber or otherwise dispose of, either voluntarily or involuntarily, any shares of Stock; and the terms “ Sale ” and “ Sold ” shall have meanings correlative to the foregoing.
“ Selling Stockholder ” means with respect to Articles IV or V, the Stockholder whose stock is offered for sale pursuant to Articles IV or V, as applicable.
“ Stock ” means (i) any shares of Common Stock, (ii) any Common Stock Equivalents or (iii) any other capital stock of the Company, in each case, (i) whether owned on the Effective Date or acquired thereafter and (ii) in the case of Articles IV and V, excluding any Reserved Shares.
“ Stockholder Acceptance Period ” as defined in Section 4.2(b).
“ Stockholder Group ” means either (i) the 3i QPEL Group or (ii) the BFI Group.
“ Stockholder Group Representative ” means, with respect to a Stockholder Group, the Person designated by the Stockholder Group to act as the Stockholder Group Representative, as such designation may be updated from time to time on written notice to the other parties to this Agreement. The initial Stockholder Group Representative for the BFI Group (the “BFI Stockholder Group Representative”) will be Bendheim. The initial Stockholder Group Representative for the 3i QPEL Group will be Alan MacKay.
“ Stockholders ” means the parties to this Agreement (other than the Company), and any other Person who executes an addendum to, and thereby agrees to be bound by the terms of, this Agreement in connection with a Permitted Transfer.
“ Stockholder Majority ” means the holders of at least a majority of the Stock then held by the Stockholders.
“ Stock Plans ” means any stock option or stock purchase plans or agreements or other equity incentive plan or arrangement approved by the Board of Directors for the benefit of employees, directors and consultants of the Company.
“ Subsidiary ” means, with respect to any Person, corporation, partnership or other entity (i) of which shares of stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or similar governing body of such corporation, partnership or other entity are at the time owned by such Person or (ii) the management of which is otherwise controlled, in either case directly or indirectly through one or more intermediaries, by such Person.
“ Tag Along Notice ” as defined in Section 5.2.
“ Tag Along Period ” as defined in Section 5.2.
“ Tag Along Right ” as defined in Section 5.2.
“ Tag Along Stockholder ” as defined in Section 5.1.
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2.1 Restrictions on Transfer by Stockholders .
(a) Each Stockholder agrees that between the date of effectiveness of the AIM Listing and the six month anniversary of the effectiveness of the AIM Listing it will not voluntarily or involuntarily Sell any Stock (or cause or permit to occur any Sale of Stock) except in a Permitted Transfer; provided, that (i) to the extent 3i QPEL purchases more than 5,500,000 shares of Common Stock pursuant to clause (i) of the first sentence of Section 2.6 of the Purchase Agreement, such excess shares of Common Stock shall not be subject to the restriction contained in this Section 2.1(a) or (ii) if 3i QPEL purchases shares pursuant to clause (ii) of the first sentence of Section 2.6 of the Purchase Agreement, the restriction contained in this Section 2.1(a) shall not apply to any Stockholder.
(b) Subject to applicable Law, any purported Sale of Stock in violation of this Agreement is null and void and of no force and effect and the Company shall not record any such purported Sale on its share register.
(c) To the extent permitted by applicable Law, from the date of any purported Sale of Stock in violation of this Agreement, (i) all rights attaching to such Stock, (ii) all rights attaching to any other Stock of the Stockholders involved with the purported Sale and (iii) all rights (but not obligations) of such Stockholder under this Agreement are suspended and are inoperative until the purported Sale is rescinded. During such time, such Stock may not be voted and no dividends or other distributions may be paid or made on such Stock. These rights are in addition to and not in lieu of any other remedies at Law or in equity or under this Agreement.
(d) Notwithstanding any provision of the Agreement to the contrary, BFI agrees that (i) from the Effective Date through the second anniversary of the Effective Date it shall not make any Permitted Transfer or (ii) distribution, dividend, purchase or redemption of equity or otherwise, liquidation or dissolution in whole or in part ((i) and (ii) being referred to as an “Asset Reduction”) in any such case as would result in BFI holding cash, cash equivalents, Common Stock and/or publicly traded securities with an aggregate value of less than twenty-five million U.S. Dollars (USD 25,000,000) and (ii) if on the second anniversary of the Effective Date any claim has been asserted and remains pending in respect of which a Purchaser Indemnified Party (as defined in the Purchase Agreement) has asserted against BFI any claim(s) for indemnification pursuant to Article VIII of the Purchase Agreement, 3i QPEL and BFI shall mutually determine the aggregate amount of such claim(s) likely to be payable by BFI and, until the resolution of such claim(s), BFI shall not make any Asset Reduction as would result in BFI holding cash, cash equivalents, Common Stock and/or publicly traded securities with an aggregate value of less than such mutually determined aggregate amount for any then unresolved claims; provided that the amount specified in clause (i) above shall be reduced by any amounts paid to Purchaser Indemnified Parties pursuant to Article VIII of the Purchase Agreement; and provided further that such restrictions shall not affect BFI’s ability to participate in any sale, merger, consolidation or other business combination approved by the Board of Directors or to exercise its Tag Along Rights. For purposes of this paragraph, publicly traded securities shall be valued at the average closing price of the applicable securities on the principal exchange or market on which such securities shall be traded during the 30-day period ended the day immediately prior to the proposed Permitted Transfer.
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(a) No provision of this Agreement other than Section 2.1(d) and Section 2.3 shall be deemed to in any way limit the right of any Stockholder to Sell all or any part of its Stock in a Permitted Transfer at any time.
(b) No proposed Sale to a Permitted Transferee shall be permitted or effective unless and until the Permitted Transferee complies with Section 2.3.
(c) Each certificate evidencing Stock Sold to a Permitted Transferee shall bear the restrictive legend set forth in Section 2.4.
2.3 Conditions on Permitted Transfers . Notwithstanding anything contained herein to the contrary, any Sale of Stock in a Permitted Transfer hereunder shall be subject to the conditions that the Permitted Transferee shall, upon consummation of such Sale, if the Permitted Transferee is not already a Stockholder, execute an addendum to this Agreement substantially in the form of Exhibit A attached hereto, thereby agreeing to be bound by the terms of this Agreement applicable to its transferor and shall thereafter be deemed a Stockholder, and a member of the same Stockholder Group as the Stockholder making the Permitted Transfer, for all purposes of this Agreement. The Company shall not issue any Stock (or certificates representing Stock) to any Person who is a Permitted Transferee unless and until each of the conditions to Sale set forth in the preceding sentence is satisfied by such Person.
2.4 Legends . Each certificate representing shares of Stock shall bear a legend substantially to the following effect:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS SET FORTH IN THE STOCKHOLDERS AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY, DATED MARCH 12, 2008 AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE IN THE OFFICE OF THE COMPANY.”
The requirement that the above legend be placed upon certificates evidencing any Stock shall cease and terminate upon any Sale (not in violation of this Agreement) to a Person that is not (i) a Stockholder or (ii) a Permitted Transferee, in compliance with all applicable provisions of Articles IV and V. The requirement that the above legend regarding this Agreement be placed upon certificates evidencing any such Stock also shall cease and terminate upon the termination of this Agreement. Upon the occurrence of any event requiring the removal of a legend hereunder, the Company, upon the surrender of certificates containing such legend, shall, at its own expense, deliver to the holder of any such Stock as to which the requirement for such legend shall have terminated, one or more new certificates evidencing such Stock not bearing such legend.
ARTICLE
III
PARTICIPATION RIGHTS
(a) Except for (i) Excluded Securities or (ii) any instance as to which (A) both 3i QPEL and BFI waive, prospectively or retroactively, compliance with this Article III, the Company shall not issue, sell or exchange, or agree to issue, sell or exchange (collectively, “Issue,” and any issuance, sale or
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exchange resulting therefrom, an “Issuance”), any Stock other than in a Rights Offering in which the Company shall have first given written notice to each stockholder of the Company which shall (a) state the Company’s intention to Issue Stock, the amount to be Issued, the proposed purchase price therefore and a summary of the other material terms of the proposed Issuance, (b) offer to Issue to each stockholder of the Company its pro rata share of such securities upon the terms and subject to the conditions set forth in such Notice (the “Right”) and (c) provide that such Rights shall be transferable to the extent necessary not to frustrate the provisions of this Article III, or provide such greater transferability as the Board of Directors shall determine.
(b) At any time that there is a Majority Stockholder, in the event that the Company Issues or proposes to Issue Stock pursuant to a Rights Offering, each Stockholder who is a member of the Stockholder Group that is the Majority Stockholder shall, as soon as practical but in any event no later than 10 days before the date on which notice of election or non-election of exercise of such Rights is given to the Company, notify either 3i QPEL (if the BFI Group is the Majority Stockholder) or BFI (if the 3i QPEL Group is the Majority Stockholder) (3i QPEL or BFI, as the case may be, the “Rights Assignee”) as to the portion, if any, of the Rights which such Stockholder is not electing to purchase (the “Rights Offering Unexercised Portion”). Rights may be exercisable by each Stockholder or by each Stockholder Group, and the Stockholders of each Stockholder Group shall be entitled to allocate and reallocate any Stock purchasable by such Stockholder Group in any manner the Stockholders of such Stockholder Group deems advisable to or among the Stockholders of such Stockholder Group and to any other Person who, at the time of the applicable Rights Offering, is a Permitted Transferee.
(c) Upon the giving of the notice described in subsection (a) above, the Stockholder giving such notice shall be deemed to have irrevocably assigned to the Rights Assignee, on behalf of the Stockholders of the Stockholder Group of which, such Rights Assignee is a member, the rights to purchase the Rights Offering Unexercised Portion, subject to the terms and conditions thereof.
(d) The assignment of Rights in any one instance shall not be deemed to operate as an assignment of Rights in any other instance.
ARTICLE
IV
RIGHT OF FIRST OFFER
4.1 Orderly Market . Any Sale of Common Stock by a Stockholder (other than a Permitted Transfer) as a sale on AIM or other on market sale must be effected through the Company’s broker at the relevant time and in accordance with such broker’s reasonable requests so as to ensure an orderly market for the Common Stock; provided that, where the terms of such Sale (which must be provided by such broker to the relevant Stockholder within two AIM trading days of such Stockholder’s placing a sale order) are less favorable in any respect (including but not limited to price, volume, commissions, fees, expenses and timing) than such Stockholder can obtain elsewhere, such Stockholder shall be entitled to dispose of the relevant Common Stock through another broker on such more favorable terms. A Stockholder making a Sale other than on AIM shall give notice of such Sale to the Company and either 3i QPEL (if such Stockholder is a member of the BFI Group) or BFI (if such Stockholder is a member of the 3i QPEL Group).
4.2 Right of First Offer . Any Sale of Stock or Common Stock Equivalents (other than a Permitted Transfer) by a Stockholder that, when taken together with all such Sales by such Stockholder and the other members of its Stockholder Group, would exceed either (i) 1% of the Company’s outstanding Common Stock within a 90 day period prior to such Sale or (ii) 4% of the Company’s outstanding Common Stock during a 365 day period prior to such Sale, in each case calculated in
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accordance with Section 9.1 and without regard to Permitted Transfers, (x) shall be solely for cash consideration and (y) shall be consummated only in accordance with the following procedures:
(a)
The
Selling Stockholder shall first deliver to the Company and the Other Stockholders a written notice (a
“Notice of Sale”)
which shall: (i) state the Selling Stockholder’s intention to sell Stock, the amount and type of Stock to be sold (the “Available
Stock”), the proposed Sale price and the other material terms of the proposed Sale and (ii) offer the Other Stockholders
the option to acquire all of such Stock upon the other terms and subject to the conditions of the proposed Sale as set forth in
the Notice of Sale. Any such offer shall remain open and irrevocable for the periods set forth below (and, to the extent such offer
is accepted during such periods and the accepting Other Stockholder fulfills the terms and conditions of purchase under the offer,
until the consummation of the Sale contemplated thereby).
(b) Following the delivery of the Notice of Sale, each Other Stockholder shall have the right and option, for a period of 30 days thereafter (the “Stockholder Acceptance Period”), to accept all or any part of the Available Stock at the purchase price and upon the other terms and subject to the other conditions stated in the Notice of Sale. Such acceptance shall be made by delivering a written notice to the Company and the Selling Stockholder within the Stockholder Acceptance Period specifying the maximum number of shares such Other Stockholder will purchase (the “Accepted Stock”). If, upon the expiration of the Stockholder Acceptance Period, the aggregate amount of Accepted Stock exceeds the amount of Available Stock, the Available Stock shall be allocated among the Other Stockholders as follows: (i) first, each Other Stockholder shall be entitled to purchase its Proportionate Percentage of any Available Stock, and (ii) second, if any Available Stock has not been allocated for purchase pursuant to clause (i) above, each Other Stockholder that had offered to purchase an amount of Available Stock in excess of its Proportionate Percentage of Available Stock shall be entitled to purchase any or all of its Proportionate Percentage of the Excess from such Selling Stockholder. Rights under this Article IV may be exercisable by each Stockholder or by each Stockholder Group, and the Stockholders of each Stockholder Group shall be entitled to allocate and re-allocate any Stock purchasable by such Stockholder Group in any manner the Stockholders of such Stockholder Group deems advisable to or among the Stockholders and such Stockholder Group and to any other Person who, at the time of acceptance under this Section 4.1(b), is a Permitted Transferee.
(c) If effective acceptance shall not have been received as to all of the Available Stock, then all acceptances by Other Stockholders shall automatically be null and void and, subject to Article V, the Selling Stockholder may Sell all, but not less than all, of the Stock offered for Sale pursuant to subsection (a) above, in a bona fide Sale to a third party that is not a Permitted Transferee of such Stockholder at a purchase price and on other terms no less favorable in the aggregate, to the Selling Stockholder than the proposed purchase price and other terms stated in the Notice of Sale, at any time within 120 days after the expiration of the Stockholder Acceptance Period, as extended by up to 30 days as may be required in order to obtain any necessary governmental approvals for such Sale and allow for a closing not later than the fifth day following receipt of such approvals (the “Open Sale Period”). To the extent the Selling Stockholder Sells the Stock so offered for sale during the Open Sale Period, the Selling Stockholder shall promptly notify the Company, and the Company shall promptly notify the Other Stockholders, as to (i) the amount of Stock, if any, that the Selling Stockholder then owns, (ii) the amount of Stock that the Selling Stockholder has Sold, (iii) the terms of such Sale and (iv) the name of the purchaser(s) of any Stock Sold (the “Open Sale Purchaser(s)”). Any Stock sold to an Open Sale Purchaser under this Section 4.2 shall be held by such Open Sale Purchaser free and clear of the rights and restrictions contained in this Agreement. In the event that all of the offered Stock is not Sold by the Selling Stockholder during the Open Sale Period, the right of the Selling Stockholder to Sell such Stock shall expire and the obligations set forth in this Article IV and Article V shall be reinstated and apply to any subsequent proposed Sale.
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4.3 Closing of Sales . All Sales of Stock to the Other Stockholders subject to a particular Notice of Sale shall be consummated contemporaneously at the offices of the Company on the later of (i) a mutually satisfactory Business Day as soon as practicable within 30 days after the expiration of the Stockholder Acceptance Period or (ii) the fifth Business Day following the receipt of all necessary governmental approvals applicable to such Sales, if any. The delivery of certificates or other instruments evidencing such Stock Sold, duly endorsed for transfer, shall be made on such date against payment of the purchase price for such Stock.
4.4 Compliance with Other Sections . Notwithstanding anything contained herein to the contrary, the Selling Stockholder shall, in addition to complying with the provisions of this Article IV in the event of a proposed Sale of Stock to which Article IV applies, comply with the applicable provisions of Article V hereof.
4.5 Inapplicability . The requirements of this Article IV shall not apply to (i) any Permitted Transfer, (ii) any Sale of Stock in connection with a sale of the Company, including by way of merger, consolidation or other business combination, approved by the Board of Directors in which all stockholders of the Company are given the opportunity to participate on a pro rata basis, or (iii) any Sale of Stock as to which compliance with this Article IV is waived, either prospectively or retroactively, in accordance with Section 9.9.
5.1 Tag Along Sale . Any Sale by a Stockholder to one or more Open Sale Purchasers under Section 4.2(c) above shall be subject to the additional conditions that (a) each Other Stockholder with respect to such Sale (a ‘‘Tag Along Stockholder”) shall have the right (but not an obligation) to elect to Sell to the same purchaser, subject to consummation of the proposed Sale, at the same price and on the same terms and conditions, an amount of Stock equal to the total number of shares of Stock proposed to be sold to such purchaser multiplied by the fraction (i) the numerator of which is the number of shares of Stock (calculated in accordance with Section 9.1) that such Tag Along Stockholder owns and (ii) the denominator of which is the number of shares of Stock (calculated in accordance with Section 9.1) that the Selling Stockholder and all Tag Along Stockholders electing to Sell pursuant to this Article V own, and (b) the Selling Stockholder complies with the other provisions of this Article V.
5.2 Procedures for Tag Along Sale . With respect to any Sale of Stock subject to Section 5.1, the Selling Stockholder shall first deliver to the Company and the Tag Along Stockholders a written notice (the “ Tag Along Notice ”), which shall specifically identify the proposed Open Sale Purchaser, the number and class of Stock being Sold, the purchase price therefor, and a summary of the other material terms and conditions of the proposed Sale, and shall offer the right (the “ Tag Along Right ”) to each of the Tag Along Stockholders, which shall be irrevocable for a period (such period, the “ Tag Along Period ”) of 14 days after the later of delivery of the Tag Along Notice and the expiration of the applicable Stockholder Acceptance Period under Section 4.2(b) above to Sell up to an amount of Stock equal to the amount that may be Sold by such Tag Along Stockholder pursuant to Section 5.1(a) at the purchase price and upon the other terms set forth in the Tag Along Notice. The Tag Along Right may be exercised in whole or in part at the option of each of the Tag Along Stockholders. Notice of a Tag Along Stockholder’s intention to exercise its Tag Along Right, in whole or in part, shall be evidenced by a writing signed by the Tag Along Stockholder and delivered to the Selling Stockholder and the Company prior to the end of the Tag Along Period, setting forth the amount (not to exceed the amount of Stock equal to the amount that may be Sold by such Tag Along Stockholder pursuant to Section 5.1(a)) and class of Stock that the Tag Along Stockholder elects to Sell pursuant to its Tag Along Rights. The Tag
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Along Right shall be apportioned among the Tag Along Stockholders electing to Sell Stock pursuant to this Article V pursuant to Section 5.1(a). In the event that the Tag Along Rights are not exercised by the Tag Along Stockholders with respect to all of the shares of Stock to be sold by the Selling Stockholder, the Selling Stockholder may sell the excess, but only at the purchase price and upon the other terms set forth in the Tag Along Notice. Any Stock sold to an Open Sale Purchaser under this Section 5.2 shall be held by such Open Sale Purchaser free and clear of the rights and restrictions contained in this Agreement.
5.3 Closing of Sales . All Sales of Stock to such Open Sale Purchaser shall be subject to consummation of the proposed Sale and consummated contemporaneously at the offices of the Company on a mutually satisfactory Business Day as soon as practicable within the Open Sale Period, or at such other time and place as the parties to such Sales may agree. The delivery of certificates or other instruments evidencing such Stock, duly endorsed for transfer, shall be made on such date against payment of the purchase price for such Stock.
5.4 Compliance with Other Sections . Notwithstanding anything contained herein to the contrary, any Selling Stockholder shall, in addition to complying with the provisions of this Article V, comply with the applicable provisions of Article IV.
(a) At each annual meeting of the Company’s Stockholders or at each special meeting of the Company’s Stockholders involving the election of directors, and at any other time at which the holders of capital stock in the Company have the right to or will vote for or render consent in writing regarding the election of directors of the Company, then and in each event, (i) the Company hereby covenants and agrees to cause to be nominated for election to the Board of Directors, and use best efforts to cause to be elected, and (ii) the Stockholders hereby covenant and agree to vote all shares of Stock that they are entitled to vote, as follows: to elect one individual designated for election to the Board of Directors by 3i QPEL (the “3i QPEL Director”) and to elect one individual designated for election to the Board of Directors by the BFI Group (the “BFI Director” and each of the 3i QPEL Director and the BFI Director a “Designated Director”), in each case in accordance with this Article VI. No Stockholder shall grant to any Person a proxy to vote such Stockholder’s shares of capital stock of the Company unless such Person signs a statement expressly agreeing to vote such shares in accordance with this Article VI. The identity of the 3i QPEL Director shall be determined by 3i QPEL in its sole discretion and the identity of the BFI Director shall be determined by BFI in its sole discretion; provided , that (i) Bendheim shall be the Designated Director of the BFI Group until his death, disability or retirement from his position as the BFI Director, (ii) no such Designated Director shall be disqualified from serving as a director under applicable law or the rules or guidelines of AIM or any exchange on which Stock shall be listed or market on which quoted, and (iii) no such Designated Director shall be the director of any business that competes or reasonably expects to compete with the business of the Company. If a Designated Director resigns or is removed, the resulting vacancy shall be filled by the election or appointment of a director nominated by the Stockholder that designated such Designated Director, and until the first to occur of the filling of such vacancy or the expiration of 15 days, or except to the extent the designating Stockholder shall grant a waiver, the Board of Directors will not transact any business or exercise any powers until such vacancy is filled except to elect or appoint the replacement Designated Director in accordance with the instructions received from 3i QPEL or BFI, as the case may be, and to preserve the business and assets of the Company in the ordinary course of business. No Stockholder shall vote any of its shares of capital stock
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of the Company to remove a Designated Director except to the extent instructed to do so by the Stockholder designating the Designated Director.
(b) 3i QPEL and BFI each shall also be entitled to designate for election one director for election to the board of directors of each subsidiary of the Company (other than any subsidiary for which by law or agreement with a third party the Company has only one designee on the Board or one non-local designee) in the manner contemplated by subsection (a) above; provided that such director designated for subsidiaries shall be required to be available to the Chairman of the Board on the same basis as directors designated by such of 3i QPEL and BFI as shall be the Majority Stockholder (except local directors of non-U.S. subsidiaries).
(c) The members of the Stockholder Group as shall own more of the outstanding Common Stock than the other Stockholder Group shall have the right, as between or among the Stockholder Groups, to designate the Chairman of the Board of Directors. Upon the death, disability or retirement of Bendheim from his position as the BFI Director, BFI shall designate a successor to serve in Bendheim’s place on the Board of Directors (who shall to the extent practicable be the individual that has effective control of BFI from time to time). Subject to Section 6.1, nominations for election to the Board of Directors shall be determined by the entire Board of Directors.
6.2 Notice by the Company . The Company shall provide with 10 days’ prior written notice of any intended mailing of notice to the Stockholders for a meeting at which directors are to be elected, and 3i QPEL and BFI shall notify the Company in writing, prior to such mailing, of the person(s) designated by it or them as its or their nominee(s) for election as director(s). If 3i QPEL or BFI fails to give notice to the Company as provided above, it shall be deemed that its designee then serving as director shall be its designee for reelection.
6.3 Compensation Committee . The Board of Directors shall maintain a Compensation Committee comprised of at least 3 directors. The BFI Director, the 3i QPEL Director and one other director that is not an officer or employee of the Company shall be members of such Committee.
6.4 Executive Committee; Other Committees . If the Board of Directors shall elect and maintain a committee of the Board of Directors that fundamentally represents, and has the power commonly associated with, an “executive committee,” such executive committee shall be comprised of the BFI Director, the 3i QPEL Director and at least one other director that is not an officer or employee of the Company. In addition, the 3i QPEL Director and the BFI Director shall be entitled to be a member of any other standing or ad hoc committee of the Board of Directors, other than a pricing or similar ad hoc committee formed in connection with the AIM Listing. Subject to the requirements of Sections 6.3 and 6.4, nothing contained herein shall prevent the Board of Directors from adding additional members to any committee.
6.5 Fees and Expenses . The Board of Directors may determine from time to time the remuneration and reimbursement of expenses, if any, to be provided to the members of the Board of Directors (including the remuneration and reimbursement of expenses, if any, to be provided to the members of the Board of Directors that are not executive officers or employees of the Company). Each of the Designated Directors shall be entitled to participate in such remuneration and reimbursement of expenses on the same basis as the other members of the Board of Directors that are not executive officers or employees of the Company. In addition, in the event that a Designated Director considers it advisable to consult with independent counsel or other professional advisors in the performance of its duties as a director of the Company (or any subsidiary of the Company), (i) the Designated Director shall be entitled to consult with such independent counsel or other professional advisors and, upon prior notice to the Chairman of the Board and the execution to the reasonable satisfaction of such Chairman of a customary
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confidentiality agreement, provide to such independent counsel or other professional advisors such information regarding the Company as may be necessary or appropriate in connection with such consultation and (ii) subject to such reasonable guidelines of the Company adopted with the approval of each of the Designated Directors, the Company shall pay upon request by a Designated Director, the reasonable fees and expenses of such independent counsel or other professional advisors.
6.6 D&O Insurance . The Company undertakes to procure and maintain directors and officers insurance providing for such coverage and in such amounts as are customarily carried by similarly situated companies whose shares are publicly listed. The terms and conditions of such insurance shall entitle the Designated Directors to the benefits of such insurance on the same basis as the other members of the Board of Directors and the board of directors of any applicable subsidiary of the Company.
6.7 Limitation of Liability; Indemnification . The Certificate of Incorporation of the Company will provide at all times for (i) a limitation on potential liabilities of directors to the Company or its stockholders and (ii) mandatory indemnification and advancement of expenses of directors, in each case to the fullest extent permitted by applicable law (the terms of which shall permit the Designated Director to participate on the same basis as the other members of the Board of Directors).
6.8 Certain Protective Provisions . In addition to any other approvals that may be required by the Certificate of Incorporation, the by-laws of the Company (the “By-laws”), and applicable law, approval of the following matters shall require the vote of at least a majority of the full Board of Directors of the Company, including each of the Designated Directors, as well as the written consent of each of 3i QPEL and BFI in its capacity as a Stockholder:
(a) any transactions between the Company and/or any subsidiary of the Company and any Stockholder or any Affiliate of a Stockholder other than compensation matters customarily within the authority of the Compensation Committee and transactions that are both (i) on arms’ length terms (as determined by a majority of the members of the Board of Directors that are disinterested in the applicable transaction) and (ii) if applicable, comply with the related party rules in effect from time to time as part of the AIM Rules as well as of any other stock exchange on which the Common Stock is listed for trading.
(b) taking any action, whether by way of the redemption or repurchase of any shares of Common Stock or any other capital stock of the Company or other reclassification of the Common Stock or other capital stock of the Company (or any other recapitalization transaction involving the Company), that would result in 3i QPEL, or from and after such time as the BFI Group shall not be the Majority Stockholder, BFI, and its Related Parties owning a majority of the issued and outstanding Common Stock.
(c) taking any action, including by way of any amendment to the Certificate of Incorporation or By-laws that would impair or reduce the rights, preferences and privileges of a Stockholder under this Agreement or the Certificate of Incorporation and By-laws in a manner that is disproportionately adverse to such Stockholder.
(d) taking any action, whether by way of distribution, issuance or sale of any shares of Common Stock or any other capital stock of the Company, in connection with any reclassification, dividend or distribution, stock split or other recapitalization transaction that would have the effect of reducing 3i QPEL’s or BFI’s percentage ownership of the Stock of the Company in a manner that is disproportionately adverse to one of such Stockholders (provided that nothing in this subsection (d) shall restrict the Company’s ability to issue additional Stock for cash pursuant to and in accordance with Article III).
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(e) the authorization of any series of Preferred Stock or the issuance or Sale by the Company of any shares of any series of Preferred Stock.
(f) the Issuance or Sale by the Company of any Stock (other than Excluded Securities or issuance or distribution of shares of Common Stock in connection with any reclassification, dividend or distribution, stock split, reclassification or other similar recapitalization transaction not prohibited under clause (d) above) other than in a Rights Offering pursuant to and in accordance with Section 3.1.
6.9 Other Information and Opportunities .
(a) The Company and each Stockholder agree and acknowledge that any Designated Director, 3i QPEL, BFI and their Related Parties may, in the past, present or future, carry out and engage in any and all activities associated with any business, including, without limitation, principal investments in any business that may compete with the business of the Company (each an “Other Company”).
(b) The Company and each Stockholder agree and acknowledge that any Designated Director or Stockholder may have or obtain information that may be of interest or value to the Company (the “Information’’) regarding various matters, including, without limitation, (i) any Other Company’s products, plans, services and technology, and plans and strategies relating thereto, (ii) current and future investments any Other Company has made, may make, may consider or may become aware of with respect to other companies and other products, services and technology, including without limitation, any other companies, and (iii) developments with respect to technologies, products and services, and plans and strategies of the companies in the industries in which the Company operates relating thereto, including, without, limitation, any Other Company, but not including any Information obtained from the Company or any Subsidiary of the Company. The Company and each Stockholder agree that neither a Designated Director nor any Stockholder shall have any duty to disclose any Information to the Company or permit the Company to participate in any investments or transactions based on any Information, or to otherwise take advantage of any opportunity that may be of interest to the Company if it were aware of such Information.
(c) Without limiting the foregoing, but subject to Section 6.1(a) and except as provided below, the Company and each Stockholder agree and acknowledge that the doctrine of corporate opportunity shall not apply with respect to the Company, and (i) neither a Designated Director nor any Stockholder shall have any obligation to refrain from (A) engaging in any business opportunity, idea, use of information, transaction or other matter that involves any aspect of the industries in which the Company operates or otherwise developing, marketing or using any products or services that compete, directly or indirectly, with those of the Company (whether presently existing or arising in the future) (an “Other Business”), (B) investing or owning any interest publicly or privately in, entering into any venture, agreement or arrangement with, or developing a business relationship or strategic relationship with, any entity engaged in any Other Business, (C) doing business with any client or customer of the Company or (D) employing or otherwise engaging a former officer or employee of the Company (provided that neither a Designated Director nor any Stockholder shall solicit, entice or induce any employee of the Company or any Subsidiary of the Company to become employed or engaged by any other Person); (ii) the Company shall not have any right in or to, or to be offered any opportunity to participate or invest in, any Other Business engaged or to be engaged in by a Designated Director or any Stockholder or any right in or to any income or profits therefrom; and (iii) neither a Designated Director nor any Stockholder shall have any duty to communicate or offer to the Company any opportunity to participate or invest in, or any income or profits derived from, any Other Business engaged in by such Designated Director or Stockholder.
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(d) The Company and each Stockholder expressly authorize and consent to the involvement of a Designated Director in any Other Business, so long as such Designated Director does not also serve as an officer or employee of the Company, and expressly waive, to the fullest extent permitted by applicable law, any right to assert any claim that any such involvement breaches any duty owed to the Company or to any stockholder of the Company or to assert that such involvement constitutes a conflict of interest by such Designated Director with respect to the Company or any of its subsidiaries or any stockholder.
(e) Notwithstanding the foregoing, (i) the provisions of this Section shall apply to a Designated Director in his capacity as a director of the Company, and not as an officer or employee, and (ii) each Designated Director shall (x) keep confidential and will not disclose, divulge or use for any purpose (other than in furtherance of the business of the Company) any confidential information obtained from the Company to the same extent as required of a Stockholder pursuant to Section 8.1 below, (y) disclose to the Company, with respect to such Designated Director, any investment or ownership of any interest, public or private, whether debt or equity or otherwise, in any Person engaged in any business that competes with the Company or a Subsidiary thereof, or any other conflict of interest, on the part of such Designated Director or any Stockholder (or Affiliate of such Stockholder pursuant to clauses (i) or (ii) of the definition of “Affiliate”) of the Stockholder Group that designated such Designated Director and (z) recuse himself from any discussion, vote, consent or other activities of the Board of Directors of the Company pertaining to any matter in which such Designated Director has a conflict of interest unless each of 3i QPEL and BFI consent. For the avoidance of doubt, no Designated Director shall be excused from complying with the confidentiality provisions of this Agreement, including this Section 6.9, by reason of his or her being involved with an Other Company.
6.10 No Actions Resulting in Mandatory Offers . The Company and each Stockholder covenant and agree not to enter into any agreement or arrangement (legally binding or not) or otherwise take any action or fail to take any action as a result of which 3i QPEL or BFI or any Related Party thereof may become obligated under any applicable law, rule or regulation or required by any authority or stock exchange to announce or make a mandatory offer for any class or series of Stock of the Company or of any entity in which the Company has a direct or indirect interest (legally binding or not) or which may impose any analogous obligation.
6.1 1 Inapplicability . The provisions of Sections 6.1(b), 6.2 and 6.5 shall not become effective unless and until 3i QPEL shall have consummated the purchase of the Additional Shares (as defined in the Purchase Agreement) pursuant to of Section 2.6 of the Purchase Agreement unless the Company breaches.
ARTICLE
VII
REPRESENTATIONS AND WARRANTIES
7.1 Representations . Each party hereto represents and warrants to the other parties hereto as follows:
(a) It has full power and authority to execute, deliver and perform its obligations under this Agreement.
(b) This Agreement has been duly and validly authorized, executed and delivered by it, and constitutes a valid and binding obligation of it, enforceable against it in accordance with its terms except
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to the extent that enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights generally.
(c) The execution, delivery and performance of this Agreement by it does not (i) violate, conflict with or constitute a breach of or default under its organizational documents, if any, or any material agreement to which it is a party or by which it is bound or (ii) violate any law, regulation, order, writ, judgment, injunction or decree applicable to it.
(d) No consent or approval of, or filing with, any governmental or regulatory body is required to be obtained or made by it in connection with the transactions contemplated hereby.
(e) It is not a party to any agreement that is inconsistent with the rights of any party hereunder or otherwise conflicts with the provisions hereof.
(f) Except for this Agreement and the documents contemplated hereby, such party is not a party to any contract or agreement, written or oral, with respect to the securities of the Company (including, without limitation, any voting agreement, voting trust, stockholder agreement or registration rights agreement).
(g) Schedule A attached hereto sets forth an accurate list of the number and type of all Stock owned by it.
ADDITIONAL COVENANTS OF THE COMPANY AND THE STOCKHOLDERS
8.1 Confidentiality . Each Stockholder agrees that such Stockholder will keep confidential and will not disclose, divulge or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement, unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 8.1 by such Stockholder), (b) is or has been independently developed or conceived by the Stockholder without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Stockholder by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided , however , that a Stockholder may disclose confidential information (i) to its attorneys, accountants, consultants and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company, or to any Affiliate, partner, member, Stockholder or wholly owned Subsidiary of such Stockholder (including any Related Party) in the ordinary course of such Stockholder’s business (such attorneys, accountants, consultants, other professionals, Affiliates, partners, members, Stockholders or wholly owned Subsidiaries collectively, “Representatives”), provided that such Stockholder informs such Representatives that such information is confidential, directs its Representatives to maintain the confidentiality of such information, and shall be responsible for its Representatives’ compliance with the confidentiality provisions of this Agreement, or (ii) as may otherwise be required by law, provided that the Stockholder promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure. For the avoidance of doubt this shall not prohibit 3i QPEL from providing any such confidential information to 3i Investments plc or any other member of the 3i QPEL Group to the extent permitted by the Consultancy Agreement to be entered into on or around the date of this Agreement between 3i Investments plc and the Company.
8.2 Discussions Regarding Possible Company Sale . The Company and each other Stockholder agrees to inform 3i QPEL and BFI promptly if the Company or any other Stockholder
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receives a bona fide offer regarding any proposal which would, if implemented, result in (a) a change of control over the management of the Company and/or (b) the disposal of all or a majority of the assets of the Company and its Subsidiaries taken as a whole, in each case other than in connection with the transactions contemplated hereby. 3i QPEL or BFI may terminate this provision, as applicable to 3i QPEL or BFI, by way of written notice to the Company and each other Stockholder (or suspend the application of such provision until further written notice to the Company and each other Stockholder).
9.1 Calculations . For purposes of this Agreement, the Sale of a Common Stock Equivalent shall be treated as the Sale of the shares of Common Stock into which such Common Stock Equivalent can be converted, exchanged or exercised. Except as otherwise provided in this Agreement, for purposes of all calculations under this Agreement (including, without limitation, calculations to determine the ownership of Common Stock of any Stockholder and the percentage of outstanding Common Stock owned by any Stockholder), all Common Stock Equivalents (other than Common Stock Equivalents relating to Reserved Shares) shall be treated as having been converted into or exchanged or exercised for Common Stock at the then-applicable conversion rate.
9.2 Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid, but if any provision of this Agreement is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not render invalid or unenforceable any other provision of this Agreement.
9. 3 Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD FOR THE CONFLICTS OF LAW PRINCIPLES THEREOF. EACH STOCKHOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OF FEDERAL COURT SITTING IN NEW YORK, NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND EACH STOCKHOLDER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED SOLELY IN SUCH STATE OR FEDERAL COURT. EACH STOCKHOLDER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
9.4 Successors and Assigns . Except as otherwise expressly provided herein, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of each of the other parties; provided , however , that this Agreement and the rights, interests and obligations of a Stockholder hereunder may be assigned by a Stockholder to any Related Party or other Affiliate in connection with a Permitted Transfer to such Related Party or Affiliate (which assignment shall not relieve such Stockholder of its obligations hereunder). Any assignment or delegation in contravention of this Agreement shall be void and shall not relieve the assigning or delegating party of any obligation hereunder. Subject to the foregoing provisions of this Section 9.4, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. No provision herein is intended to create, and there shall not be, any third party beneficiaries with respect to any or all of this Agreement.
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9.5 Notices . All notices, requests, consents and other communications required or authorized hereunder to any party shall be in writing and either delivered in person or sent by overnight courier, fax or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address or fax number set forth below or such other address or fax number as may hereafter be designated in writing by such party to the other parties:
(i) | If to Company: |
Phibro
Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
Attention: General Counsel
Facsimile: (201) 329-7041
With a copy (which shall not constitute notice) to:
Phibro
Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
Attention: Chief Executive Officer
Facsimile: (201) 329-7060
(ii) | If to BFI Co., LLC: |
65
Challenger Road
Ridgefield Park, NJ 07660
Facsimile: (201) 329-7066
Attention: Jack C. Bendheim
With a copy (which shall not constitute notice) to:
65
Challenger Road
Ridgefield Park, NJ 07660
Facsimile: (201) 329-7099
Attention: Daniel Bendheim
(iii) | If to 3i QPEL: |
c/o
Mourant International Finance
PO Box 87
22 Grenville Street
St Helier
Jersey JE4 8PX
Attention: The Company Secretary
Facsimile: +44(0) 1534 609 333
With a copy (which shall not constitute notice) to:
Clifford
Chance LLP
10
Upper Bank Street
London
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E14 5JJ
DX:
149120 Canary Wharf 3
UK
Attention: Patrick Sarch
Facsimile: +44 20 7006 5555
(v) If to any other Stockholder, to the address set forth in Schedule A hereto,
or, in each case, at such other address or fax number as may be specified in writing, but no such change shall be deemed to have been given until it is actually received by the parties sought to be charged with its contents. All notices and other communications given hereunder shall be deemed sufficient upon delivery, if delivered personally, by overnight courier or sent by fax or 4 Business Days after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid.
9.6 No Inconsistent Agreements . Neither the Company nor any Stockholder shall take any action or enter into any agreement that is inconsistent with the rights of any party hereunder or otherwise conflicts with the provisions hereof.
9.7 Further Assurances . At any time or from time to time after the Effective Date, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder.
9.8 Termination . This Agreement shall terminate in its entirety, (a) at such time as the members of either Stockholder Group, collectively, cease to own in the aggregate at least 5% of the outstanding Common Stock, (b) two Business Days following receipt by 3i QPEL of written notice from the Company of a breach by 3i QPEL of Section 2.6 of the Purchase Agreement (but only to the extent such breach remains uncured at the end of such two Business Day period), provided that such termination right shall not be available if the Company or BFI has failed to fulfill its obligations in all material respects (and any such failure shall not have been cured after written notice from 3i QPEL) under the Purchase Agreement (except to the extent that the failure by 3i QPEL shall be a significant cause of the Company or BFI not fulfilling such obligations), (c) at such time as the members of each Stockholder Group, collectively, cease to own in the aggregate at least 20% of the outstanding Common Stock, or (d) by the mutual written consent of 3i QPEL and BFI. Time is of the essence with respect to all periods of time set forth or used in the calculation of clause (b) above. Notwithstanding any termination of this Agreement, the rights of the applicable Stockholder Group (and the related obligations of the Company) under Article VI shall survive any such termination until such time as the members of such Stockholder Group, collectively, cease to own at least 20% of the outstanding Common Stock.
9.9 Amendment . The terms and provisions of this Agreement may be modified or amended, or any of the provisions hereof waived, temporarily or permanently, prospectively or retroactively, only with the written consent of (a) the Company, (b) a Stockholder Majority, (c) 3i QPEL and (d) BFI; provided , however , that no such modification, amendment or waiver shall be effective with respect to any Stockholder who is adversely affected by such action in its status as such in a manner substantially different from the manner in which all other Stockholders of such Stockholder’s class or series are affected and who withholds its written consent thereto; and, provided , further , notwithstanding the foregoing, Schedule A may be automatically amended by the Company in connection with any Permitted Transfer without any action by any other party hereto to reflect the addition of any other Stockholder who agrees to be bound by the terms and conditions of this Agreement to reflect the additional of such other Stockholder as a party hereto.
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9.10 Headings . The headings of the Articles and Sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.
9.1 1 Nouns and Pronouns . Whenever the context requires, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa.
9.12 Remedies . Without intending to limit the remedies available to any party hereto, each party (a) acknowledges that breach of this Agreement will result in irreparable harm for which there is no adequate remedy at law and (b) agrees that any party seeking to enforce this Agreement shall be entitled to injunctive relief or other equitable remedies upon any such breach.
9.13 Entire Agreement . This Agreement and the other documents contemplated by the Purchase Agreement contain the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings with respect thereto.
9.14 Counterparts . This Agreement may be executed in any number of counterparts and each such counterpart shall be deemed to be an original instrument, and all such counterparts together shall constitute one agreement.
9.15 Aggregation of Stock . All Stock held or acquired by members of the same Stockholder Group shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.
9.16 Delays or Omissions . No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
9.17 Public Announcements . Except as otherwise required by applicable law, no party to this Agreement nor any of its respective Affiliates, agents or representatives, shall issue any press release or public statement concerning this Agreement or the transactions contemplated hereby without obtaining the prior written consent of the Company and any other party named in such release or statement, which consent shall not be unreasonably withheld or delayed; provided, that if a press release or other public statements is required by applicable law, the party intending to make such release or statement shall give the Company and each other party named in such release or statement prior notice and shall use its best efforts to consult with the Company and such other party named in such release or statement with respect to the text therein.
9.18 BFI Stockholder Group Representative . Bendheim, as the BFI Stockholder Group Representative, undertakes to use his influence, subject to the exercise of his fiduciary duties to the BFI Group, to use reasonable efforts to cause the BFI Group to perform its obligations hereunder. The BFI Stockholder Group Representative shall act solely as the representative of the BFI Stockholder Group, and shall have no personal obligation or liability to any member of any other Stockholder Group for any reason or cause whatsoever, including judgment or error of judgment, or any action taken, suffered or omitted to be taken with or without intent.
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[Remainder of Page Intentionally Left Blank]
- 21 - |
IN WITNESS WHEREOF , the parties hereto have duly executed this agreement as of the date first above written.
THE COMPANY: | |||
PHIBRO ANI MAL HEALTH CORPORATION: | |||
By: | /s/ Jack B. Bendheim | ||
Name: | Jack B. Bendheim | ||
Title: | President | ||
THE STOCKHOLDERS: | |||
BFI CO., LLC | |||
By: | /s/ Jack C. Bendheim | ||
Name: | Jack C. Bendheim | ||
Title: | Manager | ||
JACK C. BENDHEIM , | |||
as to Section 9.18 only | |||
/s/ Jack C. Bendheim |
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT
3i QUOTED PRIVATE EQUITY LIMITED | ||
By: | /s/ Richard Harwood | |
Name: | Richard Harwood | |
Title: | Director |
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT
SCHEDULE A
Stockholders
Name | Type of Security | Number of Shares | ||
3i Quoted Private Equity Limited | Common Shares | 11,700,000 | ||
BFI Co., LLC | Common Shares | 48,300,000 |
Schedule A- 1 |
EXHIBIT
A
Form of Addendum to Stockholders Agreement
This Addendum to Stockholders Agreement is made as of the _____ day of _____________, _________ (this “ Addendum ”), by __________________________________, a _________________________________ corporation (the “ Purchaser ”) pursuant to Section 2.3 of the Stockholders Agreement (the “ Stockholders Agreement ”), dated as of March 12, 2008, by and among Phibro Animal Health Corporation, a New York corporation (the “ Company ”) and certain stockholders of the Company. Capitalized terms used herein without definition shall have the meanings given to them in the Stockholders Agreement.
In consideration of the Sale of Stock to the Purchaser and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchaser hereby agrees as follows:
1. The Purchaser hereby joins in and agrees to be bound by each and all of the provisions of the Stockholders Agreement as a Stockholder thereunder. The Purchaser further agrees to execute and deliver all other documents and instruments and take all other actions required under or pursuant to the Stockholder Agreement or as reasonably required by the Company in connection herewith.
2. The Purchaser hereby represents and warrants that (i) each representation and warranty contained in Article VII of the Stockholders Agreement is true and correct with respect to the Purchaser as of the date hereof, as if such representations and warranties were incorporated herein and (ii) it is purchasing the Stock for investment for its own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof.
IN WITNESS WHEREOF, the Purchaser has caused this Addendum to be executed and delivered to each of the Company and the Stockholders as of the date first above written.
[NAME OF PURCHASER] | ||
By: | ||
Name: | ||
Title: |
PHIBRO ANIMAL HEALTH CORPORATION | ||
By: | ||
Name: | ||
Title: |
Exhibit A-1 |
Exhibit 4.7
Addendum to Stockholders Agreement
This Addendum to Stockholders Agreement is made as of the 28th day of April 2009 (this “ Addendum ”), by 3i Group plc, a company incorporated in England and Wales (the “ Purchaser ”) pursuant to Section 2.3 of the Stockholders Agreement (the “ Stockholders Agreement ”), dated as of March 12, 2008, by and among Phibro Animal Health Corporation, a New York corporation (the “ Company ”) and certain stockholders of the Company. Capitalized terms used herein without definition shall have the meanings given to them in the Stockholders Agreement .
In consideration of the Sale of Stock to the Purchaser and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchaser hereby agrees as follows:
1. The Purchaser hereby joins in and agrees to be bound by each and all of the provisions of the Stockholders Agreement as a Stockholder thereunder. The Purchaser further agrees to execute and deliver all other documents and instruments and take all other actions required under or pursuant to the Stockholder Agreement or as reasonably required by the Company in connection herewith.
2. The Purchaser hereby represents and warrants that (i) each representation and warranty contained in Article VII of the Stockholders Agreement (other than the representation and warranty in Section 7.1(g)) is true and correct with respect to the Purchaser as of the date hereof, as if such representations and warranties were incorporated herein and (ii) it is purchasing the Stock for investment for its own account, not as a nominee or agent, and, except as set forth below, not with a view to the resale or distribution of any part thereof; and (iii) the Schedule to this Addendum sets forth an accurate list of the number and type of all Stock owned by it (or, in respect of the warrant to purchase Stock issued by the Company to 3i Quoted Private Equity plc on 3 March 2009, which warrant was assigned by 3i Quoted Private Equity plc to the Purchaser as of the date hereof (the “ Warrant ” ), to be owned by it following the execution and delivery by the Company of a new Warrant in the name of the Purchaser).
The Purchaser intends to transfer all of the Stock owned by it to Mayflower L.P. (an affiliated limited partnership established in Jersey) in due course provided that Mayflower L.P. shall execute and deliver to the Company an addendum to the Stockholders Agreement in connection with such transfer substantially in the form of Exhibit A of the Stockholders Agreement, which shall include a representation that it is acquiring the Stock for investment for its own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof.
IN WITNESS WHEREOF , the Purchaser has caused this Addendum to be executed and delivered to each of the Company and the Stockholders as of the date first above written.
3i Group plc | |||
By: | /s/ Jonathan Murphy | ||
Name: | Jonathan Murphy | ||
Title: | Deputy Company Secretary |
2 |
PHIBRO ANIMAL HEALTH CORPORATION | |||
By: | /s/ David C. Storbeck | ||
Name: | David C. Storbeck | ||
Title: | Vice President, Treasurer |
3 |
SCHEDULE
Type of Security | Number | |
Common Shares | 20,610,000 | |
Warrant | in respect of 2,134,021 Common Stock |
Exhibit 4.8
Addendum to Stockholders Agreement
This Addendum to Stockholders Agreement is made as of the 16 day of June 2009 (this “ Addendum ”), by Mayflower L.P., a limited partnership registered in Jersey (the “ Purchaser ”) pursuant to Section 2.3 of the Stockholders Agreement (the “ Stockholders Agreement ”), dated as of March 12, 2008, by and among Phibro Animal Health Corporation, a New York corporation (the “ Company ”) and certain stockholders of the Company. Capitalized terms used herein without definition shall have the meanings given to them in the Stockholders Agreement.
In consideration of the Sale of Stock to the Purchaser and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchaser hereby agrees as follows:
1. The Purchaser hereby joins in and agrees to be bound by each and all of the provisions of the Stockholders Agreement as a Stockholder thereunder. The Purchaser further agrees to execute and deliver all other documents and instruments and take all other actions required under or pursuant to the Stockholder Agreement or as reasonably required by the Company in connection herewith.
2. The Purchaser hereby represents and warrants that (i) each representation and warranty contained in Article VII of the Stockholders Agreement (other than the representation and warranty in Section 7.1(g)) is true and correct with respect to the Purchaser as of the date hereof, as if such representations and warranties were incorporated herein; (ii) it is purchasing the Stock for investment for its own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof; (iii) it is a partnership advised by 3i Investments plc (company number 03975789), an indirect subsidiary of 3i Group plc, and is therefore a Related Party for the purposes of the Stockholders Agreement; and (iv) the Schedule to this Addendum sets forth an accurate list of the number and type of all Stock owned by it (or, in respect of the warrant to purchase Stock issued by the Company to 3i Group plc dated 3 March 2009, which warrant was assigned by 3i Group plc to the Purchaser as of the date hereof (the “ Warrant ”), to be owned by it following the execution and delivery by the Company of a new Warrant in the name of the Purchaser).
IN WITNESS WHEREOF, the Purchaser has caused this Addendum to be executed and delivered to each of the Company and the Stockholders as of the date first above written.
Mayflower L.P.
(acting by its Manager, 3i
Investments plc) |
|||
By: | /s/ Alan Mackay | ||
Name: | Alan Mackay | ||
Title: | Authorised Signatory |
2 |
PHIBRO ANIMAL HEALTH CORPORATION | |||
By: | /s/ David C. Storbeck | ||
Name: | David C. Storbeck | ||
Title: | Vice President |
3 |
SCHEDULE
Type of Security | Number | |
Common Shares | 20,610,000 | |
Warrant | in respect of 2,134,021 Common Stock |
Phibro Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
For the attention of: General Counsel
BFI Co., LLC
65 Challenger Road
Ridgefield Park, NJ 07660
For the attention of: Jack C. Bendheim
16 June 2009
Dear Sirs,
Notice of Assignment of Stockholders Agreement
We refer to the stockholders agreement between 3i Quoted Private Equity plc (“3i QPE”), Phibro Animal Health Corporation (the “Company”), BFI Co., LLC and Jack C. Bendheim dated 12 March 2008 (the “Stockholders Agreement”).
The shares held by 3i QPE in Phibro was transferred to 3i Group plc on 28 April 2009 and 3i QPE assigned all its rights, title, interest and benefit in and to the Stockholders Agreement to 3i Group plc with effect from that date. 3i Group plc transferred these shares in Phibro to Mayflower L.P. on 16 June 2009. In accordance with Section 9.4 of the Stockholders Agreement, 3i Group plc assigned all its rights, title, interest and benefit in and to the Stockholders Agreement to Mayflower L.P with effect from that date.
In future, you should deal solely with Mayflower L.P. in respect of the Stockholders Agreement. The Stockholders Agreement shall continue on its existing terms in all other respects. Notice details for Mayflower L.P. are:
Address: |
16
Palace Street
London SW1E 5JD United Kingdom |
Fax: | +44 207 928 0058 |
Attention: | Alan Mackay |
Please sign and return the enclosed copy of this letter to acknowledge receipt of this notice.
Yours faithfully |
/s/ Alan Mackay |
for and on behalf of 3i Group plc |
2 |
Copies to:
Phibro Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
For the attention of: Chief Executive Officer
BFI Co., LLC
65 Challenger Road
Ridgefield Park, NJ 07660
For the attention of: Daniel Bendheim
3 |
We hereby acknowledge receipt of the notice of assignment in respect of the Stockholders Agreement
/s/ David C. Storbeck |
For and on behalf of Phibro Animal Health Corporation
Date: 6/16/09
Exhibit 10.1
EXECUTION VERSION
CREDIT AGREEMENT
Dated as of August 31, 2010
among
PHIBRO ANIMAL HEALTH CORPORATION,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent and L/C Issuer,
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
- i - |
- ii - |
- iii - |
- iv - |
SCHEDULES | ||
2.01 | Commitments and Applicable Percentages | |
5.02 | Contractual Obligation | |
5.06 | Litigation | |
5.08(c) | Mortgaged Property | |
5.09 | Environmental Matters | |
5.12(d) | Pension Plans | |
5.17 | Intellectual Property Matters | |
5.20 | Collective Bargaining Agreements, Multiemployer Plans | |
6.12 | Guarantors | |
6.19 | Post-Closing Undertaking | |
7.01 | Existing Liens | |
7.02 | Existing Indebtedness | |
11.02 | Administrative Agent’s Office, Certain Addresses for Notices |
EXHIBITS | ||
Form of | ||
A | Committed Loan Notice | |
B | Solvency Certificate | |
C | Form of Note | |
D | Compliance Certificate | |
E-1 | Assignment and Assumption | |
E-2 | Administrative Questionnaire | |
F | Guaranty | |
G | Security Agreement | |
H | Mortgage | |
I | Opinion of Counsel to Loan Parties | |
J-1 | Perfection Certificate | |
J-2 | Perfection Certificate Supplement | |
K | United States Tax Compliance Certificate |
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CREDIT AGREEMENT
This CREDIT AGREEMENT (“ Agreement ”) is entered into as of August 31, 2010, among PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (“ Borrower ”), each lender from time to time party hereto (collectively, the “ Lenders ” and individually, a “ Lender ”), and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer.
PRELIMINARY STATEMENTS :
The Borrower has requested that the Lenders provide a revolving credit facility, and the Lenders have indicated their willingness to lend and the L/C Issuer has indicated its willingness to issue letters of credit, in each case, on the terms and subject to the conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
DEFINITIONS AND ACCOUNTING TERMS
As used in this Agreement, the following terms shall have the meanings set forth below:
“ Acquired Indebtedness ” means (1) with respect to any Person that becomes a Subsidiary after the Closing Date, Indebtedness of such Person and its Subsidiaries existing at the time such Person becomes a Subsidiary that was not incurred in connection with, or in contemplation of, such Person becoming a Subsidiary and (2) with respect to the Borrower or any of its Subsidiaries, any Indebtedness of a Person (other than the Borrower or a Subsidiary) existing at the time such Person is merged with or into the Borrower or a Subsidiary, or Indebtedness expressly assumed by the Borrower or any of its Subsidiaries in connection with the acquisition of an asset or assets from another Person, which Indebtedness was not, in any case, incurred by such other Person in connection with, or in contemplation of, such merger or acquisition; provided , however , that Indebtedness of such acquired Person which is redeemed or otherwise repaid at the time of or substantially contemporaneously with the consummation of the transactions by which such acquired Person merges with or into or becomes a Subsidiary of such specified Person shall not be Acquired Indebtedness.
“ Acquisition Consideration ” means the purchase consideration for any Permitted Acquisition and all other payments by the Borrower or any of its Subsidiaries in exchange for, or as part of, or in connection with, any Permitted Acquisition, whether paid in cash or by exchange of Equity Interests or of properties or otherwise and whether payable at or prior to the consummation of such Permitted Acquisition or deferred for payment at any future time, whether or not any such future payment is subject to the occurrence of any contingency, and includes any and all payments representing the purchase price and any assumptions of Indebtedness, “earn-outs” and other agreements to make any payment the amount of which is, or the terms of payment of which are, in any respect subject to or contingent upon the revenues, income, cash flow or profits (or the like) of any person or business; provided that any such future payment that is subject to a contingency shall be considered Acquisition Consideration only to the extent of the reserve, if any, required under GAAP at the time of such sale to be established in respect thereof by the Borrower or any of its Subsidiaries.
“ Act ” has the meaning specified in Section 11.18 .
“ Administrative Agent ” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“ Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02 , or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.
“ Administrative Questionnaire ” means an Administrative Questionnaire in substantially the form of Exhibit E-2 or any other form approved by the Administrative Agent.
“ Adjustment Date ” means the last day of each Interest Period.
“ Affiliate ” of any Person means any other Person which directly or indirectly controls or is controlled by, or is under direct or indirect common control with, the referent Person. For purposes of Section 7.08 , Affiliates shall be deemed to include, with respect to any Person, any other Person (1) which beneficially owns or holds, directly or indirectly, 10% or more of any class of the Voting Stock of the referenced Person, (2) of which 10% or more of the Voting Stock is beneficially owned or held, directly or indirectly, by the referenced Person or (3) with respect to an individual, any immediate family member of such Person. For purposes of this definition, “ control ” of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
“ Aggregate Commitments ” means the Commitments of all the Lenders.
“ Agreement ” means this Credit Agreement.
“ amend ” means to amend, supplement, restate, amend and restate or otherwise modify, including successively, and “ amendment ” shall have a correlative meaning.
“ Anti-Money Laundering Laws ” means any and all laws, judgments, orders, executive orders, decrees, ordinances, rules, regulations, statutes, case law or treaties applicable to a Loan Party, its Subsidiaries or Affiliates, related to terrorism financing or money laundering including any applicable provision of Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) of 2001 (Title III of Pub. L. 107-56) and The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).
“ Applicable Fee Rate ” means, at any time, 0.50% per annum.
“ Applicable Percentage ” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Facility represented by such Lender’s Commitment at such time, subject to adjustment as provided in Section 2.15 . If the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 , or if the Commitments have expired, then the Applicable Percentage of each Lender in respect of the Facility shall be determined based on the Applicable Percentage of such Lender in respect of the Facility most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender in respect of each Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.
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“ Applicable Rate ” means (i) 3.00% per annum for LIBOR Daily Floating Rate Loans, (ii) 3.00% per annum for LIBOR Periodic Rate Loans, (iii) 2.00% per annum for Prime Rate Loans and (iv) 1.50% per annum for Letter of Credit Fees.
“ Appropriate Lender ” means, at any time, (a) with respect to the Facility, a Lender that has a Commitment with respect to the Facility or a Revolving Credit Loan, respectively, at such time and (b) with respect to the Letter of Credit Limit, (i) the L/C Issuer and (ii) if any Letters of Credit have been issued pursuant to Section 2.03(a) , the Lenders.
“ Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“ Arranger ” means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager.
“ asset ” means any asset or property.
“ Asset Acquisition ” means
(1) an Investment by the Borrower or any Subsidiary in or for the purchase of any other Person if, as a result of such Investment, such Person shall become a Subsidiary, or shall be merged with or into the Borrower or any Subsidiary, or
(2) the acquisition by the Borrower or any Subsidiary of all or substantially all of the assets of any other Person or any division, business unit or line of business of any other Person (including any assets of an Affiliate of a Person being acquired and used or held for use by the Person (or division, business unit or line of business) being acquired).
“ Asset Sale ” means any sale, issuance, conveyance, transfer, lease, assignment or other disposition by the Borrower or any Subsidiary to any Person other than the Borrower or any Guarantor (including by means of a Sale and Leaseback Transaction or a merger or consolidation) (collectively, for purposes of this definition, a “ transfer ”), in one transaction or a series of related transactions, of any assets of the Borrower or any of its Subsidiaries other than dispositions of inventory in the ordinary course of business. For purposes of this definition, the term “Asset Sale” shall not include:
(1) transfers of cash or Cash Equivalents;
(2) transfers of assets (including Equity Interests) that are governed by, and made in accordance with, Section 7.04 ;
(3) Permitted Investments and Restricted Payments permitted under Section 7.06 ;
(4) the creation of or realization on any Lien permitted under this Agreement;
(5) transfers of damaged, worn-out or obsolete equipment or assets that, in the Borrower’s reasonable judgment, are no longer used or useful in the business of the Borrower or its Subsidiaries;
(6) sales or grants of licenses or sublicenses to use the patents, trade secrets, knowhow and other intellectual property, and licenses, leases or subleases of other assets, of the Borrower
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or any of its Subsidiaries to the extent not materially interfering with the business of Borrower and the Subsidiaries;
(7) transfers by a Foreign Subsidiary to any other Foreign Subsidiary;
(8) any transfer or series of related transfers that, but for this clause, would be Asset Sales, if after giving effect to such transfers, the aggregate Fair Market Value of the assets transferred in such transaction or any such series of related transactions does not exceed $5.0 million;
(9) the issuance or sale of Equity Interests of the Borrower;
(10) sales, assignments, transfers or dispositions of delinquent accounts receivables in the ordinary course of business in connection with the collection, compromise or settlement thereof and not as part of a financing transaction;
(11) the sale of any Specified Property;
(12) sales of assets to any Person with power of eminent domain or condemnation in connection with the exercise of such power; or
(13) the sale in the ordinary course of business of trade letters of credit arising in the ordinary course of business.
“ Assignee Group ” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.
“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b) ), and accepted by the Administrative Agent, in substantially the form of Exhibit E-1 or any other form approved by the Administrative Agent.
“ Attributable Indebtedness ” when used with respect to any Sale and Leaseback Transaction, means, as at the time of determination, the present value (discounted at a rate borne by the Senior Notes, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.
“ Audited Financial Statements ” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended June 30, 2009 and the related consolidated statements of income or operations, changes in shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.
“ Availability Period ” means the period from and including the Closing Date to the earliest of (i) the Maturity Date, (ii) the date of termination of the Commitments pursuant to Section 2.06 , and (iii) the date of termination of the commitment of each Lender to make Revolving Credit Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02 .
“ Bank of America ” means Bank of America, N.A. and its successors.
“ Board of Directors ” means, with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any limited liability company, the board of managers of such Person, (iii) in the case of any partnership, the Board of Directors of the general partner of such
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Person and (iv) in any other case, the functional equivalent of the foregoing or, in each case, other than for purposes of the definition of “Change of Control,” any duly authorized committee of such body.
“ Borrower ” has the meaning specified in the introductory paragraph hereto.
“ Borrower Materials ” has the meaning specified in Section 6.02 .
“ Borrowing ” means a Revolving Credit Borrowing.
“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks in New York are authorized or required to close and, if such day relates to any LIBOR Daily Floating Rate Loan or LIBOR Periodic Rate Loan, means any such day that is also a London Banking Day.
“ Capital Expenditures ” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations).
“ Capitalized Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under a Capitalized Lease, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“ Capitalized Leases ” means all leases that are required to be capitalized for financial reporting purposes in accordance with GAAP.
“ Cash Collateral Account ” means a blocked, non-interest bearing deposit account of one or more of the Loan Parties at Bank of America (or another commercial bank selected in compliance with Section 6.18 ) in the name of the Administrative Agent and under the sole dominion and control of the Administrative Agent, and otherwise established in a manner reasonably satisfactory to the Administrative Agent.
“ Cash Collateralize ” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent or L/C Issuer (as applicable) and the Lenders, as collateral for L/C Obligations, or obligations of Lenders to fund participations in respect of either thereof (as the context may require), cash in Dollars or deposit account balances or, if the L/C Issuer benefiting from such collateral shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to (a) the Administrative Agent and (b) the L/C Issuer. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“ Cash Equivalents ” means:
(1) marketable direct obligations issued or fully guaranteed or insured by the United States of America or any agency or instrumentality thereof ( provided that the full faith and credit of the United States of America is pledged in support thereof), maturing within 360 days of the date of acquisition thereof;
(2) demand and time deposits and certificates of deposit or acceptances, maturing within 360 days of the date of acquisition thereof, of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500 million and is assigned at least a “B” rating by Thomson Financial BankWatch;
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(3) commercial paper maturing no more than 30 days from the date of acquisition thereof issued by a corporation that is not the Borrower or an Affiliate of the Borrower, and is organized under the laws of any State of the United States of America or District of Columbia and rated at least A-1 by S&P or at least P-1 by Moody’s;
(4) repurchase obligations with a term of not more than ten days for underlying securities of the types described in clause (1) above entered into with any commercial bank meeting the specifications of clause (2) above;
(5) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within 360 days from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s;
(6) in the case of any Foreign Subsidiary: (a) direct obligations of the sovereign nation (or any agency or instrumentality thereof) in which such Foreign Subsidiary is organized or is conducting business or obligations fully and unconditionally guaranteed by such sovereign nation (or any agency or instrumentality thereof), (b) of the type and maturity described in clauses (1) through (5) above of foreign obligors, which obligations or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies or (c) of the type and maturity described in clauses (1) through (5) above of foreign obligors (or the parents of such obligors), which obligations or obligors (or the parents of such obligors) are not rated as provided in such clauses or in clause (6)(b) but which are, in the reasonable judgment of the Borrower, comparable in investment quality to such obligations and obligors (or the parents of such obligors); and
(7) money market or other mutual funds substantially all of whose assets comprise securities of the types described in clauses (1) through (6) above.
“ Cash Management Agreement ” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.
“ Cash Management Bank ” means any Person that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Cash Management Agreement.
“ Casualty Event ” means, with respect to any property of any Person, (a) any loss of or damage to, or any condemnation or other taking by a Governmental Authority of, such property for which such Person or any of its Restricted Subsidiaries receives insurance proceeds, or proceeds of a condemnation award or other compensation or (b) any event which leads to a claim against a title insurance policy.
“ CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.
“ CERCLIS ” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.
“ Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental
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Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.
“ Change of Control ” means the occurrence of any of the following events:
(1) prior to a Public Equity Offering after the Closing Date, the Permitted Holders cease to own, or to have the power to vote or direct the voting of, Voting Stock representing more than 50% of the voting power of the total outstanding Voting Stock of the Borrower;
(2) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause that person or group shall be deemed to have “beneficial ownership” of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock representing 50% or more of the voting power of the total outstanding Voting Stock of the Borrower;
(3) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (together with or as replaced by any new directors whose election to such Board of Directors or whose nomination for election by the stockholders of the Borrower was approved by (i) the majority in interest of the Permitted Holders or (ii) a vote of the majority of the directors of the Borrower then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Borrower;
(4) (a) all or substantially all of the assets of the Borrower and its Subsidiaries are sold or otherwise transferred to any Person other than a Wholly Owned Subsidiary or one or more Permitted Holders or (b) the Borrower consolidates or merges with or into another Person or any Person consolidates or merges with or into the Borrower, in either case under this clause (4), in one transaction or a series of related transactions in which immediately after the consummation thereof Persons beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of the Borrower immediately prior to such consummation do not beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing a majority of the total voting power of the Voting Stock of the Borrower or the surviving or transferee Person; or
(5) the Borrower shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the stockholders of the Borrower.
For purposes of this definition, a Person shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement.
“ Closing Date ” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 11.01 , but not later than August 31, 2010.
“ Code ” means the Internal Revenue Code of 1986.
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“ Collateral ” means all of the “Collateral” and “Mortgaged Property” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties.
“ Collateral Documents ” means, collectively, the Security Agreement, the Intellectual Property Agreements, the Mortgages, each of the mortgages, collateral assignments, Security Agreement Supplements, security agreements, pledge agreements or other similar agreements delivered to the Administrative Agent pursuant to Section 6.12 , and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.
“ Commitment ” means, as to each Lender, its obligation to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.01 , and (b) purchase participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“ Committed Loan Notice ” means a notice of (a) a Revolving Credit Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of LIBOR Periodic Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.
“ Compliance Certificate ” means a certificate substantially in the form of Exhibit D.
“ Consolidated Amortization Expense ” for any period means the amortization expense of the Borrower and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“ Consolidated Depreciation Expense ” for any period means the depreciation expense of the Borrower and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“ Consolidated EBITDA ” for any period means, without duplication, the sum of the amounts for such period of:
(1) Consolidated Net Income; plus
(2) in each case only to the extent (and in the same proportion) deducted in determining Consolidated Net Income and with respect to the portion of Consolidated Net Income attributable to any Subsidiary only if a corresponding amount would be permitted at the date of determination to be distributed to the Borrower by such Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Subsidiary or its stockholders:
(a) Consolidated Income Tax Expense;
(b) Consolidated Amortization Expense (but only to the extent not included in Consolidated Interest Expense);
(c) Consolidated Depreciation Expense;
(d) Consolidated Interest Expense;
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(e) any non-recurring fees, charges or other expenses made or incurred by the Borrower in connection with the Transaction and the Senior Notes Transactions, or in connection with any transaction permitted by clause (18) of the definition of “Permitted Investments”; and
(f) all other non-cash items reducing Consolidated Net Income (excluding any non-cash charge that results in an accrual of a reserve for cash charges in any future period) for such period;
in each case determined on a consolidated basis in accordance with GAAP; minus
(3) the aggregate amount of all non-cash items, determined on a consolidated basis, to the extent such items increased Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business.
“ Consolidated Fixed Charge Coverage Ratio ” means, at any date of determination, the ratio of (a) (i) Consolidated EBITDA, plus (ii) rental payments under leases of real or personal, or mixed, property, less (iii) the aggregate amount of all Capital Expenditures made or incurred during such period to the extent not financed by Indebtedness to (b) the sum (without duplication) of (i) Consolidated Interest Expense, (ii) the aggregate principal amount of all regularly scheduled principal payments or redemptions or similar acquisitions for value of outstanding debt for borrowed money required to be made, but excluding (x) any such payments to the extent refinanced through the incurrence of additional Indebtedness otherwise expressly permitted under Section 7.02 , (y) the payment of the Mayflower Term Loan at final maturity to the extent permitted by clause (ii) of Section 7.14 and (z) payments made in connection with the Transaction and the Senior Notes Transactions, (iii) rental payments payable under leases of real or personal, or mixed, property, (iv) the aggregate amount of all Restricted Payments other than such Restricted Payments made pursuant to Section 7.06(7) and (v) the aggregate amount of Federal, state, local and foreign income taxes paid in cash, in each case, of or by the Borrower and its Subsidiaries for the most recently completed Measurement Period.
“ Consolidated Income Tax Expense ” for any period means the provision for taxes of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.
“ Consolidated Interest Expense ” for any period means the sum, without duplication, of the total interest expense of the Borrower and the Subsidiaries for such period, net of interest earned on cash and Cash Equivalents (other than payment-in-kind interest), determined on a consolidated basis in accordance with GAAP and including, without duplication:
(1) imputed interest on Capitalized Lease Obligations and Attributable Indebtedness;
(2) commissions, discounts and other fees and charges owed with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings;
(3) the net costs associated with Swap Contracts related to interest rates;
(4) amortization of debt discount or premium;
(5) the interest portion of any deferred payment obligations;
(6) capitalized interest;
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(7) the product of (a) all dividend payments on any series of Disqualified Equity Interests of the Borrower or any Preferred Stock of any Subsidiary (other than any such Disqualified Equity Interests or any Preferred Stock held by the Borrower or a Wholly-Owned Subsidiary or to the extent paid in Qualified Equity Interests), multiplied by (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of the Borrower and the Subsidiaries, expressed as a decimal;
(8) all interest payable with respect to discontinued operations; and
(9) all interest on any Indebtedness described in clause (7) or (8) of the definition of Indebtedness;
provided , that for purposes of the calculation of the denominator of the Consolidated Fixed Charge Coverage Ratio, the following items shall be excluded:
(a) the items referred to in clauses (4), (5) and (6) of this definition above; and
(b) the amortization of deferred financing costs.
“ Consolidated Net Income ” for any period means the net income (or loss) of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:
(1) the net income (or loss) of any Person that is not a Subsidiary, except to the extent that cash in an amount equal to any such income has actually been received by the Borrower or, subject to clause (3) below, any Subsidiary during such period;
(2) except to the extent includible in the consolidated net income of the Borrower pursuant to the foregoing clause (1), the net income (or loss) of any Person that accrued prior to the date that (a) such Person becomes a Subsidiary or is merged into or consolidated with the Borrower or any of its Subsidiaries or (b) the assets of such Person are acquired by the Borrower or any of its Subsidiaries;
(3) the net income of any Subsidiary during such period to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of that income is not permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary during such period, except that the Borrower’s equity in a net loss of any such Subsidiary for such period shall be included in determining Consolidated Net Income;
(4) any gain (or loss), together with any related provisions for taxes on any such gain (or the tax effect of any such loss), realized during such period by the Borrower or any of its Subsidiaries upon (a) the acquisition of any securities, or the extinguishment of any Indebtedness, of the Borrower or any of its Subsidiaries or (b) any Asset Sale by the Borrower or any of its Subsidiaries;
(5) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP;
(6) unrealized gains and losses with respect to Swap Contracts;
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(7) the cumulative effect of any change in accounting principles; and
(8) any extraordinary or nonrecurring gain (or extraordinary or nonrecurring loss), together with any related provision for taxes on any such extraordinary or nonrecurring gain (or the tax effect of any such extraordinary or nonrecurring loss), realized by the Borrower or any of its Subsidiaries during such period.
For purposes of this definition of “Consolidated Net Income,” “nonrecurring” means any gain or loss as of any date that is not reasonably likely to recur within the two years following such date; provided that if there was a gain or loss similar to such gain or loss within the two years preceding such date, such gain or loss shall not be deemed nonrecurring.
“ Consolidated Secured Funded Indebtedness ” means, as of any date of determination, the sum, without duplication, of all Indebtedness of the Borrower or any of its Subsidiaries (on a consolidated basis) secured by a Lien on any asset of the Borrower or any of its Subsidiaries.
“ Consolidated Tangible Assets ” means, as of any date, the total amount of assets of the Borrower and its Subsidiaries on a consolidated basis at the end of the fiscal quarter immediately preceding such date, as determined in accordance with GAAP, less Intangible Assets.
“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“ Control ” means 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. “ Controlling ” and “ Controlled ” have meanings correlative thereto.
“ Copyright Security Agreement ” has the meaning specified in the Security Agreement.
“ Credit Extension ” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.
“ Credit Facilities ” means one or more debt facilities (which may be outstanding at the same time and including, without limitation, this Agreement) providing for revolving credit loans, term loans or letters of credit and, in each case, as such agreements may be amended, refinanced, refunded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders), including (i) any related notes, letters of credit, guarantees, instruments and other agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time, and (ii) any notes, guarantees, instruments and other agreements executed in connection with any such amendment, modification, renewal, refunding, replacement or refinancing.
“ Debtor Relief Laws ” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership,
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insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“ Default ” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“ Default Rate ” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the LIBOR Daily Floating Rate plus (ii) the Applicable Rate, if any, applicable to LIBOR Daily Floating Rate Loans under the Facility plus (iii) 2% per annum; provided , however , that with respect to a LIBOR Periodic Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.
“ Defaulting Lender ” means, subject to Section 2.15(b) , any Lender that, as determined by the Administrative Agent, (a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans or participations in respect of Letters of Credit, within three Business Days of the date required to be funded by it hereunder, (b) has notified the Borrower or the Administrative Agent 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 its agreements generally in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; 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.
“ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith and including any transfer as the result of any Casualty Event.
“ Disqualified Equity Interests ” of any Person means any class of Equity Interests of such Person that, by its terms, or by the terms of any related agreement or of any security into which it is convertible, puttable or exchangeable, is, or upon the happening of any event or the passage of time would be, required to be redeemed by such Person, whether or not at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to the date which is 91 days after the Senior Notes Maturity Date; provided , however , that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided , further , however , that any Equity Interests that would not constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require the
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Borrower to redeem such Equity Interests upon the occurrence of a change in control or an asset sale occurring prior to the date which is 91 days after the Senior Notes Maturity Date shall not constitute Disqualified Equity Interests if the change of control or asset sale provisions applicable to such Equity Interests are no more favorable to such holders than the change of control or asset sale provisions in the Senior Notes Document and such Equity Interests provide that the issuer thereof will not redeem any such Equity Interests pursuant to such provisions prior to the repayment in full of the Obligations.
“ Dollar ” and “ $ ” mean lawful money of the United States.
“ Domestic Subsidiary ” means any direct or indirect Subsidiary of the Borrower other than a Foreign Subsidiary.
“ Economic Sanctions Laws ” means any and all laws, judgments, orders, executive orders, decrees, ordinances, rules, regulations, statutes, case law or treaties applicable to a Loan Party, its Subsidiaries or Affiliates relating to economic sanctions and terrorism financing, including any applicable provisions of the Trading with the Enemy Act (50 U.S.C. App. §§ 5(b) and 16, as amended), the International Emergency Economic Powers Act, (50 U.S.C. §§ 1701-1706, as amended) and Executive Order 13224 (effective September 24, 2001), as amended.
“ Eligible Assignee ” means any Person that meets the requirements to be an assignee under Section 11.06(b)(iii) , (v) and (vi) (subject to such consents, if any, as may be required under Section 11.06(b)(iii) ).
“ Embargoed Person ” means any party that (i) is publicly identified on the most current list of “Specially Designated Nationals and Blocked Persons” published by the U.S. Treasury Department’s Office of Foreign Assets Control (“ OFAC ”) or (ii) resides, is organized or chartered, or has a place of business in a country or territory that is the subject of OFAC sanctions programs.
“ Environment ” means ambient air, indoor air, surface water, groundwater, drinking water, soil, surface and subsurface strata, and natural resources such as wetlands, flora and fauna.
“ Environmental Laws ” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, agreements or governmental restrictions relating to pollution or the protection of the Environment or of human health (to the extent related to exposure to Hazardous Materials), including those relating to the manufacture, generation, handling, transport, storage, treatment, Release or threat of Release of Hazardous Materials.
“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ Environmental Permit ” means any permit, approval, identification number, license or other authorization required under any Environmental Law.
“ Equity Interests ” of any Person means (1) any and all shares or other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether or not currently exercisable), participations
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or other equivalents of or interests in (however designated) such shares or other interests in such Person.
“ ERISA ” means the Employee Retirement Income Security Act of 1974.
“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
“ ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate; or (i) a failure by the Borrower or any ERISA Affiliate to meet all applicable requirements under the Pension Funding Rules in respect of a Pension Plan, whether or not waived, or the failure by the Borrower or any ERISA Affiliate to make any required contribution to a Multiemployer Plan.
“ Event of Default ” has the meaning specified in Section 8.01 .
“ Exchange Act ” means the U.S. Securities Exchange Act of 1934.
“ Excluded Taxes ” means, with respect to any Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder or under any other Loan Documents, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by a jurisdiction (or any political subdivision thereof) as a result of such recipient being organized or having an office in such jurisdiction, or by otherwise engaging in business in such jurisdiction (other than a business deemed to arise as a result of the Loan Documents or any transactions contemplated thereunder), (b) any taxes in the nature of the branch profits tax within the meaning of Section 884 of the Code imposed by any jurisdiction described in clause (a), (c) other than an assignee pursuant to a request by the Borrower under Section 11.13 , any United States federal withholding tax that is imposed on amounts payable to such Person pursuant to any Laws in effect at the time such Person becomes a party hereto (or designates a new Lending Office), except to the extent that such Person (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from any Loan Party with respect to such withholding tax pursuant to Section 3.01(a)(ii) or (c) , (d) any withholding tax that is attributable to such Person’s failure to comply with Section 3.01(e) hereof and (e) any United States federal withholding tax that would not have been imposed but for a failure by a Lender (or any financial institution through which any payment is made to such Lender) to comply with the procedures, certifications, information reporting, disclosure, or other related requirements of newly enacted Sections 1471-1474 of the Code and any amended or successor version that is substantively comparable.
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“ Existing Credit Agreement ” means that certain Amended and Restated Loan Agreement dated as of August 1, 2006 among the Borrower, Wells Fargo Bank, N.A., as agent, and a syndicate of lenders.
“ Facility ” means, at any time, the aggregate amount of the Lenders’ Commitments at such time.
“ Fair Market Value ” means, with respect to any asset, the price (after taking into account any liabilities relating to such asset) that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction. Fair Market Value (other than of any asset with a public trading market) in excess of $5.0 million shall be determined by the Board of Directors of the Borrower acting reasonably and in good faith and shall be evidenced by a board resolution delivered to the Administrative Agent. Fair Market Value (other than of any asset with a public trading market) in excess of $10.0 million shall be determined by an Independent Financial Advisor, which determination shall be evidenced by an opinion addressed to the Board of Directors of the Borrower and delivered to the Administrative Agent.
“ FASB ASC ” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.
“ Flood Insurance Laws ” means, collectively, (i) the National Flood Insurance Act of 1968, (ii) the Flood Disaster Protection Act of 1973, (iii) the National Flood Insurance Reform Act of 1994 and (iv) the Flood Insurance Reform Act of 2004, or, in each case, any successor statute thereto.
“ Foreign Government Scheme or Arrangement ” has the meaning specified in Section 5.12(d) .
“ Foreign Plan ” has the meaning specified in Section 5.12(d) .
“ Foreign Subsidiary ” means any Subsidiary of the Borrower which (i) is not organized under the laws of (x) the United States or any state thereof or (y) the District of Columbia and (ii) conducts substantially all of its business operations outside the United States of America.
“ FRB ” means the Board of Governors of the Federal Reserve System of the United States.
“ Fronting Exposure ” means, at any time there is a Defaulting Lender, with respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.
“ Fund ” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
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“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession in the United States as in effect from time to time, subject to Section 1.03(b) .
“ Governmental Authority ” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“ guarantee ” means a direct or indirect guarantee by any Person of any monetary obligations of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person (1) to purchase or pay (or advance or supply funds for the purchase or payment of) monetary obligations of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for purposes of assuring in any other manner the obligee of such monetary obligations of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); “guarantee,” when used as a verb, and “guaranteed” have correlative meanings.
“ Guarantors ” means, collectively the Subsidiaries of Borrower listed on Schedule 6.12 and each other Subsidiary of Borrower that shall be required to, or at the election of the Borrower does, execute and deliver a guaranty or guaranty supplement pursuant to Section 6.12 .
“ Guaranty ” means the Guaranty made by the Guarantors in favor of the Secured Parties, substantially in the form of Exhibit F , together with each other guaranty and guaranty supplement delivered pursuant to Section 6.12 .
“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances or wastes, including petroleum or petroleum distillates, natural gas, natural gas liquids, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, toxic mold, infectious or medical wastes and all other substances, wastes, chemicals, pollutants, contaminants or compounds of any nature in any form regulated pursuant to any Environmental Law.
“ Hedge Bank ” means any Person that, at the time it enters into a Swap Contract permitted under Article VI or VII , is a Lender or an Affiliate of a Lender, in its capacity as a party to such Swap Contract.
“ incur ” means, with respect to any Indebtedness or obligation, incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to such Indebtedness or obligation; provided that (1) the Indebtedness of a Person existing at the time such Person became a Subsidiary shall be deemed to have been incurred by such Subsidiary and (2) neither the accrual of interest nor the accretion of original issue discount or the accretion or accumulation of dividends on any Equity Interests shall be deemed to be an incurrence of Indebtedness.
“ Indebtedness ” of any Person at any date means, without duplication:
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(1) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof);
(2) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(3) all reimbursement obligations of such Person in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions;
(4) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery or title thereto;
(5) the maximum fixed redemption or repurchase price of all Disqualified Equity Interests of such Person;
(6) all Capitalized Lease Obligations of such Person;
(7) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person;
(8) all Indebtedness of others guaranteed by such Person to the extent of such guarantee; provided that Indebtedness of the Borrower or its Subsidiaries that is guaranteed by the Borrower or the Borrower’s Subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of the Borrower and its Subsidiaries on a consolidated basis;
(9) all Attributable Indebtedness;
(10) to the extent not otherwise included in this definition, Swap Contracts of such Person; and
(11) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person.
The amount of any Indebtedness which is incurred at a discount to the principal amount at maturity thereof as of any date shall be deemed to have been incurred at the accreted value thereof as of such date. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (7), the lesser of (a) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of others on the date that the Lien attaches and (b) the amount of the Indebtedness secured. For purposes of clause (5), the “maximum fixed redemption or repurchase price” of any Disqualified Equity Interests that do not have a fixed redemption or repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were redeemed or repurchased on any date on which an amount of Indebtedness outstanding shall be required to be determined pursuant to this Agreement.
Notwithstanding the foregoing, Indebtedness shall not include a government grant and any guarantee of the Borrower or a Subsidiary required by such grant which obligates the Borrower or a Subsidiary
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to repay such grant at the discretion of such government or upon the failure of the conditions of such grant specified therein to be fulfilled, but which is forgiven solely by reason of the passage of time or the fulfillment of such grant conditions (other than repayments); provided that if the conditions for forgiveness of such government grant lapse for whatever reason and the Borrower or a Subsidiary becomes obligated to repay such grant, the grant shall be deemed Indebtedness which is incurred 30 days after the time such obligation to repay is triggered.
“ Indemnified Taxes ” means all Taxes other than Excluded Taxes.
“ Indemnitees ” has the meaning specified in Section 11.04(b).
“ Independent Director ” means a director of the Borrower who (1) is independent with respect to the transaction at issue; and (2) does not have any material financial interest in the Borrower or any of its Affiliates (other than as a result of holding securities of the Borrower).
“ Independent Financial Advisor ” means an accounting, appraisal or investment banking firm of nationally recognized standing that is, in the reasonable judgment of the Borrower’s Board of Directors, qualified to perform the task for which it has been engaged and is disinterested and independent with respect to the Borrower and its Affiliates.
“ Information ” has the meaning specified in Section 11.07 .
“ Intangible Assets ” means, with respect to any Person, all unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, write-ups of assets over their carrying value (other than write-ups which occurred prior to the Closing Date and other than, in connection with the acquisition of an asset, the write-up of the value of such asset to its fair market value in accordance with GAAP on the date of acquisition) and all other items which would be treated as intangibles on the consolidated balance sheet of such Person prepared in accordance with GAAP.
“ Intellectual Property Security Agreement ” has the meaning specified in Section 4.01(a)(v) .
“ Interest Payment Date ” means the last Business Day of each month and the Maturity Date.
“ Interest Period ” means, as to each LIBOR Periodic Rate Loan, the period commencing on the date such LIBOR Periodic Rate Loan is disbursed or converted to or continued as a LIBOR Periodic Rate Loan and ending on the date one, two or three months thereafter, as selected by the Borrower in its Committed Loan Notice; provided that:
(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Maturity Date of the Facility under which such Loan was made.
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“ Inventory ” has the meaning specified in the Security Agreement.
“ Investments ” of any Person means:
(1) all direct or indirect investments by such Person in any other Person in the form of loans, advances or capital contributions or other credit extensions to, or guarantee of monetary obligations of, such other Person;
(2) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Equity Interests or other securities of any other Person (other than any such purchase that constitutes a Restricted Payment of the type described in clause (2) of the definition thereof); and
(3) all other items that would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP.
Except as otherwise expressly specified in this definition, the amount of any Investment (other than an Investment made in cash) shall be the Fair Market Value thereof on the date such Investment is made. If the Borrower or any of its Subsidiaries sells or otherwise disposes of any Equity Interests of any Subsidiary, or any Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary, the Borrower shall be deemed to have made an Investment on the date of any such sale or other disposition equal to the Fair Market Value of the Equity Interests of and all other Investments in such Subsidiary retained. Notwithstanding the foregoing, purchases or redemptions of Equity Interests of the Borrower shall be deemed not to be Investments.
“ IP Rights ” has the meaning specified in Section 5.17 .
“ IP Security Agreement Supplement ” means the applicable supplement to intellectual property security agreement as described in Section 3.6 of the Security Agreement.
“ Israeli Subsidiaries ” means the Subsidiaries of the Borrower organized under the laws of Israel.
“ ISP ” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).
“ Issuer Documents ” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such Letter of Credit.
“ Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“ L/C Advance ” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Revolving Credit Percentage.
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“ L/C Borrowing ” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.
“ L/C Credit Extension ” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.
“ L/C Issuer ” means Bank of America in its capacity as an issuer of Letters of Credit hereunder and any other Lender designated by the L/C Issuer (with the consent of such Lender and the Administrative Agent) as an issuer of Letters of Credit hereunder.
“ L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“ Lender ” has the meaning specified in the introductory paragraph hereto.
“ Lending Office ” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.
“ Letter of Credit ” means any letter of credit issued hereunder. A Letter of Credit may be a commercial letter of credit or a standby letter of credit.
“ Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.
“ Letter of Credit Expiration Date ” means the day that is seven days prior to the Maturity Date (or, if such day is not a Business Day, the next preceding Business Day).
“ Letter of Credit Fee ” has the meaning specified in Section 2.03(i) .
“ Letter of Credit Limit ” means, at any time, an amount equal to the Aggregate Commitments at such time. The Letter of Credit Limit is part of, and not in addition to, the Facility.
“ LIBOR ” means the British Bankers Association LIBOR Rate, as published by Reuters (or other commercially available source providing quotations of LIBOR as selected by the Administrative Agent from time to time if the rate published by Reuters is not available) as determined for each banking day at approximately 11:00 a.m. London time two (2) Business Days prior to the date of determination.
“ LIBOR Daily Floating Rate ” means, for any day, the rate per annum equal to LIBOR for U.S. Dollar deposits with a one month term, as adjusted from time to time in the Administrative Agent’s sole discretion for any reserve, special deposit, compulsory loan, insurance charge or similar regulatory costs. If such rate is not available at such time for any reason, then the rate will be determined by such alternate method as reasonably selected by the Administrative Agent.
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“ LIBOR Daily Floating Rate Loan ” means a Revolving Credit Loan that bears interest based on the LIBOR Daily Floating Rate.
“ LIBOR Periodic Rate ” means, for each Interest Period, the rate per annum equal to LIBOR for U.S. Dollar deposits (for delivery on the first day of such Interest Period) for such Interest Period, as adjusted from time to time in the Administrative Agent’s sole discretion for any reserve, special deposit, compulsory loan, insurance charge or similar regulatory costs. If such rate is not available at such time for any reason, then the rate for that Interest Period will be determined by such alternate method as reasonably selected by the Administrative Agent. The LIBOR Periodic Rate will be adjusted on the Adjustment Date and remain fixed until the next Adjustment Date. If the Adjustment Date in any particular month would otherwise fall on a day that is not a Business Day then, at the Administrative Agent’s option, the Adjustment Date for that particular month will be the first Business Day immediately following thereafter.
“ LIBOR Periodic Rate Loan ” mean that portion, and collectively those portions, of the aggregate outstanding principal balance of the Loans that bear interest at the LIBOR Periodic Rate.
“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, easement, right of way or other encumbrance on title to real property, lien (statutory or other), charge or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing).
“ Liquidity ” means, at the time of determination, the sum of (i) the unrestricted cash and Cash Equivalents of the Borrower and its Subsidiaries at such time and (ii) the Aggregate Commitments less Total Outstandings.
“ Loan ” means an extension of credit by a Lender to the Borrower under Article II in the form of a Revolving Credit Loan.
“ Loan Documents ” means, collectively, (a) this Agreement, (b) the Notes, (c) any agreement creating or perfecting rights in cash collateral pursuant to the provisions of Section 2.14 of this Agreement, (d) the Guaranty, (e) the Collateral Documents, and (f) each Issuer Document.
“ Loan Parties ” means, collectively, the Borrower and the Guarantors.
“ London Banking Day ” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.
“ Material Adverse Effect ” means (a) a material adverse change in the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.
“ Material Contract ” means, with respect to any Loan Party, each contract to which such Loan Party is a party that is material to the business, condition (financial or otherwise), operations or performance of such Loan Party and as to which the breach, nonperformance, cancellation or failure to renew could reasonably be expected to give rise to a Material Adverse Effect.
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“ Maturity Date ” means October 1, 2014.
“ Mayflower Term Loan ” means the $24.0 million term loan due August 1, 2013 owed to Mayflower L.P. and outstanding on the date hereof.
“ Measurement Period ” means, at any date of determination, the most recently completed four fiscal quarters of the Borrower.
“ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.
“ Mortgage ” has the meaning specified in Section 4.01(a)(iv) .
“ Mortgage Policy ” has the meaning specified in Section 4.01(a)(iv)(B) .
“ Mortgaged Property ” means the real properties identified as “Mortgaged Property” on Schedule 7(a) of the Perfection Certificate, together with such real property acquired hereafter and required to be mortgaged pursuant to Section 6.15 .
“ Multiemployer Plan ” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“ Multiple Employer Plan ” means a Plan which has two or more contributing sponsors (including the Borrower or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.
“ Net Cash Proceeds ” means, with respect to any Disposition by the Borrower or any of its Subsidiaries, the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such transaction (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) amounts required to be paid to any Person (other than the Borrower or any Subsidiary and other than Indebtedness under the Loan Documents) owning a beneficial interest in the assets subject to the Disposition or having a Lien thereon, (B) brokerage commissions and other fees and expenses (including fees, discounts and expenses of legal counsel, accountants and investment banks, consultants and placement agents) incurred in connection with such Disposition, (C) provisions for taxes payable as a result of such Disposition (after taking into account any available tax credits or deductions and any tax sharing arrangements), (D) payments of unassumed liabilities (not constituting Indebtedness) relating to the assets sold at the time of, or within 30 days after the date of, such Disposition, and (E) appropriate amounts to be provided by the Borrower or such Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any adjustment in the sale price of such asset or assets or liabilities associated with such Disposition and retained by the Borrower or such Subsidiary, as the case may be, after such Disposition, including pensions and other postemployment benefit liabilities, environmental liabilities and liabilities under any indemnification obligations associated with such liabilities related to such Disposition, and all as, with respect to the Borrower and its Subsidiaries, reflected in a certificate of the Borrower delivered to the Administrative Agent; provided , however , that any amounts remaining after adjustments, revaluations, or liquidations, or any release of, such reserves shall constitute Net Cash Proceeds.
“ Note ” means a promissory note made by the Borrower in favor of a Lender evidencing Revolving Credit Loans made by such Lender, substantially in the form of Exhibit C .
“ NPL ” means the National Priorities List under CERCLA.
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“ Obligations ” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, Letter of Credit, Secured Cash Management Agreement or Secured Hedge Agreement, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“ Old Notes ” means the 10% senior secured notes due 2013 and the 13% senior subordinated notes due 2014 of the Borrower.
“ Organization Documents ” means (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 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 Taxes ” means any and all present or future stamp or documentary Taxes or any other excise or property or similar Taxes arising from any payment made hereunder or under any other Loan Document or from the execution, delivery, performance or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
“ Outstanding Amount ” means (a) with respect to Revolving Credit Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans occurring on such date; and (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts.
“ Participant ” has the meaning specified in Section 11.06(d) .
“ Patent Security Agreement ” has the meaning specified in the Security Agreement.
“ PBGC ” means the Pension Benefit Guaranty Corporation.
“ Pension Act ” means the Pension Protection Act of 2006.
“ Pension Funding Rules ” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“ Pension Plan ” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any ERISA Affiliate
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and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
“ Perfection Certificate ” means a certificate in the form of Exhibit J-1 or any other form approved by the Administrative Agent, as the same shall be supplemented from time to time by a Perfection Certificate Supplement or otherwise.
“ Perfection Certificate Supplement ” means a certificate supplement in the form of Exhibit J-2 or any other form approved by the Administrative Agent.
“ Permitted Acquisition ” means any transaction for the (a) acquisition of all or substantially all of the property of any other Person, or of any business unit, division or line of business of any other Person (including any assets of an Affiliate of a Person being acquired and used or held for use by the Person (or business unit, division or line of business) being acquired); (b) acquisition (including by merger or consolidation) of the Equity Interests of any Person that is or after giving effect to such transaction becomes a Subsidiary; or (c) acquisition of any other assets outside the ordinary course of business other than pursuant to clause (a) or (b) above; provided that each of the following conditions shall be met ( provided that for purposes of clause (c), clause (ix) below shall be applicable only if the Acquisition Consideration shall be more than $10.0 million):
(i) no Default shall otherwise exist or would result therefrom;
(ii) after giving effect to such transaction on a Pro Forma Basis, (A) the Borrower shall be in compliance with all covenants set forth in Sections 7.11 as of the most recent Measurement Period (assuming (x) for purposes of Section 7.11 , that such transaction, and all other Permitted Acquisitions consummated since the first day of the relevant Measurement Period for each of the financial covenants set forth in Section 7.11 ending on or prior to the date of such transaction, had occurred on the first day of such relevant Measurement Period and (y) if such transaction is to be consummated prior to the last day of the first Measurement Period for which the covenants in Sections 7.11 are required to be satisfied, the levels required for such first Measurement Period shall be deemed to apply in determining compliance with such covenants for purposes of this clause (A)), and (B) unless expressly approved by the Administrative Agent, the person or business to be acquired shall have generated positive Consolidated EBITDA (referring to the Person or business to be acquired rather than the Borrower in the definition thereof) for the Measurement Period most recently ended prior to the date of consummation of such acquisition;
(iii) Liquidity shall be at least $10.0 million after giving effect thereto;
(iv) neither the Borrower nor any Subsidiary shall, in connection with any such transaction, assume or remain liable with respect to any Indebtedness or other liability (including any material tax or ERISA liability) of the related seller or the business, person or properties acquired, except (A) to the extent permitted under Section 7.02 and (B) obligations not constituting Indebtedness incurred in the ordinary course of business and necessary or desirable to the continued operation of the underlying properties, and any other such liabilities or obligations not permitted to be assumed or otherwise supported by any Loan Party hereunder shall be paid in full or released as to the business, persons or properties being so acquired on or before the consummation of such acquisition;
(v) the person, business or assets to be acquired shall be, or shall be useful in or substantially engaged in, a business of the type that Borrower and the Subsidiaries are permitted to be engaged in under Section 7.07 and the property acquired in connection with any such transaction
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shall be made subject to the Lien of the Collateral Documents and shall be free and clear of any Liens, other than Permitted Encumbrances;
(vi) the Board of Directors of the person to be acquired shall not have indicated publicly, by press release or other widely distributed means, its opposition to the consummation of such acquisition (which opposition has not been publicly withdrawn);
(vii) all transactions in connection therewith shall be consummated in accordance with all applicable requirements of Law;
(viii) with respect to any transaction involving Acquisition Consideration of more than $25.0 million, unless the Administrative Agent shall otherwise agree, the Borrower shall have provided the Administrative Agent and the Lenders with (A) historical financial statements for the last three fiscal years (or, if less, the number of years since formation) of the person or business to be acquired (audited if available without undue cost or delay) and unaudited financial statements thereof for the most recent interim period which are available, (B) reasonably detailed projections for the succeeding five years pertaining to the person or business to be acquired and updated projections for the Borrower after giving effect to such transaction, (C) a reasonably detailed description of all material information relating thereto and copies of all material documentation pertaining to such transaction, and (D) all such other information and data relating to such transaction or the person or business to be acquired as may be reasonably requested by the Administrative Agent or the Required Lenders; and
(ix) at least 10 Business Days prior to the proposed date of consummation of the transaction, the Borrower shall have delivered to the Administrative Agent and the Lenders an officers’ certificate certifying that (A) such transaction complies with this definition (which shall have attached thereto reasonably detailed backup data and calculations showing such compliance) and (B) such transaction could not reasonably be expected to result in a Material Adverse Effect.
“ Permitted Business ” means the businesses engaged in by the Borrower and its Subsidiaries on the Closing Date and businesses that are reasonably related thereto or reasonable extensions thereof.
“ Permitted Encumbrances ” has the meaning specified in Section 7.01 .
“ Permitted Holder ” means each of: (1) Jack Bendheim; (2) each of Jack Bendheim’s spouse, siblings, ancestors, descendants (whether by blood, marriage or adoption, and including stepchildren) and the spouses, siblings, ancestors and descendants thereof (whether by blood, marriage or adoption, and including stepchildren) of such natural persons, the beneficiaries, estates and legal representatives of any of the foregoing, the trustee of any bona fide trust of which any of the foregoing, individually or in the aggregate, are the majority in interest beneficiaries or grantors, and any corporation, partnership, limited liability company or other Person in which any of the foregoing, individually or in the aggregate, own or control a majority in interest; (3) each of Mayflower L.P. and 3i Group plc and (i) each of their direct or indirect subsidiaries, any direct or indirect parent of 3i Group plc or Mayflower L.P. and any direct or indirect subsidiary of such a parent, in each case other than any portfolio companies of any of the foregoing (together, the “ 3i Parties ”) and (ii) any fund, partnership, investment vehicle or other entity (whether corporate or otherwise), in each case other than any portfolio companies of any of the foregoing, established in any jurisdiction and which is either (a) managed or advised by an entity in the 3i Parties or (b) utilized for the purpose of allowing 3i Parties employees (including former employees) to participate directly or indirectly in the growth in value of the Borrower ((a) and (b) together being referred to as “ 3i Funds ”); and (4) all Affiliates controlled by the entities and individuals identified in clauses (1) through (3) above in each case other than any portfolio companies of any of the foregoing.
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“ Permitted Investment ” means (each of which shall be given independent effect in whole or in part):
(1) (i) Investments by the Borrower or any of its Subsidiaries (a) in any Guarantor or (b) in or for the purchase of any Person that will become immediately after such Investment a Guarantor or that will merge or consolidate into or is liquidated into, the Borrower or any Guarantor and (ii) Investments by any Subsidiary that is not a Guarantor in or for the purchase of any other Subsidiary, provided that any Investment in a Specified Guarantor shall be limited to loans or advances in the ordinary course of business, and for the avoidance of doubt, equity contributions shall not be permitted;
(2) Investments in the Borrower by any Subsidiary;
(3) loans and advances to directors, employees and officers of the Borrower and its Subsidiaries for bona fide business purposes and to purchase Equity Interests of the Borrower not in excess of $5.0 million at any one time outstanding;
(4) Swap Contracts entered into for bona fide hedging purposes of the Borrower or any of its Subsidiaries not for the purpose of speculation;
(5) cash and Cash Equivalents;
(6) accounts and notes receivable owing to the Borrower or any of its Subsidiaries if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided , however , that such trade terms may include such concessionary trade terms as the Borrower or any such Subsidiary deems reasonable under the circumstances;
(7) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or any exchange of such investment with the issuer thereof or taken in settlement of or other resolution of claims or disputes;
(8) Investments in securities or other assets not constituting Cash Equivalents received in connection with any other disposition of assets not constituting an Asset Sale; provided that the total consideration received in connection with any such disposition of assets shall be at least equal to the Fair Market Value of the assets being disposed;
(9) lease, utility and other similar deposits in the ordinary course of business;
(10) Permitted Acquisitions;
(11) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Borrower or any of its Subsidiaries or in satisfaction of judgments;
(12) Investments made after the Closing Date in any Foreign Subsidiary by the Borrower or any Guarantor to the extent the aggregate amount of all such Investments made pursuant to this clause (12) at any one time outstanding does not, after giving effect to the Investment, exceed 10% of Consolidated Tangible Assets at such time (with each Investment being valued as of the date made and without regard to subsequent changes in value);
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(13) other Investments made after the Closing Date in an aggregate amount not to exceed $15.0 million at any one time outstanding (with each Investment being valued as of the date made and without regard to subsequent changes in value); provided that no Investment made in reliance on this clause (13) shall be made in any Person that is the direct or indirect holder of a majority of the outstanding Equity Interests of the Borrower;
(14) Investments of the Borrower and its Subsidiaries to the extent outstanding on the Closing Date and listed on Schedule 9(b) of the Perfection Certificate;
(15) Investments in any Person formed for the purpose of funding, conducting and managing investigation and remedial responses and funding and managing other amounts in connection with the remediation of the properties owned or formerly owned on the Closing Date by the Borrower or a Subsidiary or property adjacent thereto; provided that each such initial Investment with respect to each property and each Investment with respect to each property aggregating on a cumulative basis since the Closing Date $1.0 million or an integral multiple thereof is set forth in an officers’ certificate signed by the Borrower’s Chief Financial Officer and another Officer which states (i) the cumulative amount of each such Investment after the Closing Date, and (ii) that such amounts otherwise would be payable by the Borrower or a Subsidiary and would be permitted to be incurred directly, based on the reasonable good faith beliefs of the Responsible Officers executing such officers’ certificate at the time of such execution;
(16) Investments made after the Closing Date consisting of purchases or other acquisitions or the contribution of inventory, supplies, material or equipment or the licensing of intellectual property pursuant to joint marketing, manufacturing or development arrangements with other Persons in an aggregate amount not to exceed $10.0 million at any one time outstanding (with each Investment being valued as of the date made and without regard to subsequent changes in value);
(17) the conversion or contribution of Indebtedness or other obligations from Subsidiaries, existing as of the Closing Date, to an Equity Interest in the obligor; and
(18) non-cash Investments made in connection with the reorganization of any or all of the Borrower’s Israeli Subsidiaries, which may include without limitation the transfer of ownership of one or more of the Borrower’s existing Israeli Subsidiaries or all or substantially all of such entity’s assets to one or more of the Borrower’s other Subsidiaries, by way of merger, consolidation or reorganization or by way of sale, lease, transfer, conveyance, disposition, assignment, or otherwise in one transaction or a series of related transactions;
provided that, in the case of clause (12), (13) or (16), no Default shall have occurred and be continuing or occur as a consequence thereof.
The amount of Investments outstanding at any time pursuant to clause (12), (13) or (16) above shall be deemed to be reduced upon the disposition or repayment of or return on any Investment made pursuant to clause (12), (13) or (16) above, as applicable, by an amount equal to the return of capital with respect to such Investment to the Borrower or any of its Subsidiaries (to the extent not included in the computation of Consolidated Net Income).
“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.
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“ Plan ” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Borrower or any ERISA Affiliate or any such Plan to which the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.
“ Pledged Securities ” has the meaning specified in the Security Agreement.
“ Platform ” has the meaning specified in Section 6.02 .
“ Preferred Stock ” means, with respect to any Person, any and all preferred or preference stock or other equity interests (however designated) of such Person whether now outstanding or issued after the Closing Date.
“ Prime Rate ” means, on any day, the rate of interest per annum then most recently established by the Administrative Agent as its “prime rate,” it being understood and agreed that such rate is set by the Administrative Agent as a general reference rate of interest, taking into account such factors as the Administrative Agent may deem appropriate, that it is not necessarily the lowest or best rate actually charged to any customer or a favored rate, that it may not correspond with future increases or decreases in interest rates charged by other lenders or market rates in general, and that the Administrative Agent may make various business or other loans at rates of interest having no relationship to such rate. If the Administrative Agent (including any subsequent holder of such position) ceases to exist or to establish or publish a prime rate from which the Prime Rate is then determined, the applicable variable rate from which the Prime Rate is determined thereafter shall be instead the prime rate reported in The Wall Street Journal (or the average prime rate if a high and a low prime rate are therein reported), and the Prime Rate shall change without notice with each change in such prime rate as of the date such change is reported.
“ Prime Rate Loan ” means a Revolving Credit Loan that bears interest based on the Prime Rate plus the Applicable Rate.
“ Pro Forma Basis ” means, with respect to any calculation for the Measurement Period ending on or prior to the date of the transaction giving rise to the need for such calculation (the “ Transaction Date ”), giving pro forma effect to:
(1) the incurrence of any Indebtedness or the issuance of any preferred stock of the Borrower or any Subsidiary (and the application of the proceeds thereof) and any repayment of other Indebtedness or redemption of other preferred stock (and the application of the proceeds therefrom) (other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to any revolving credit arrangement) occurring during the Measurement Period or at any time subsequent to the last day of the Measurement Period and on or prior to the Transaction Date, as if such incurrence, repayment, issuance or redemption, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Measurement Period; and
(2) each Asset Sale or Asset Acquisition (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of the Borrower or any Subsidiary (including any Person who becomes a Subsidiary as a result of such Asset Acquisition) incurring Acquired Indebtedness and also including any Consolidated EBITDA (including, without duplication, any pro forma effect as provided in the immediately succeeding paragraph) associated with any such Asset Acquisition) occurring during the Measurement Period or at any time subsequent to the last day of the Measurement Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence of, or assumption or liability
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for, any such Indebtedness or Acquired Indebtedness) occurred on the first day of the Measurement Period.
Whenever pro forma effect is to be given to an Asset Sale or Asset Acquisition and the amount of Consolidated EBITDA relating thereto, the pro forma calculations shall be determined in good faith by a Responsible Officer of the Borrower and shall comply with the requirements of Rule 11-02 of Regulation S-X promulgated by the SEC, except that any such pro forma calculations may include the annualized amount of operating expense reductions for such period resulting from such Asset Sale or Asset Acquisition that (A) have been realized or (B) for which the steps necessary for realization have been taken (or are taken concurrently with such transaction) or (C) for which the steps necessary for realization are reasonably expected to be taken within the six month period following such transaction and which operating expense reductions are reasonably expected to be realized within the twelve month period following such transaction and, in each case, including, but not limited to, (a) reduction in personnel expenses, (b) reduction of costs related to administrative functions, (c) reduction of costs related to leased or owned properties and (d) reductions from the consolidation of operations and streamlining of corporate overhead, provided that, in each case, such adjustments are (x) approved by the Administrative Agent in its reasonable judgment, such approval not to be unreasonably withheld and (y) set forth in an officers’ certificate signed by the Borrower’s Chief Financial Officer and another Responsible Officer of the Borrower which states (i) the amount of such adjustment or adjustments, (ii) in the case of items (B) or (C) above, that such adjustment or adjustments are based on the reasonable good faith beliefs of the Responsible Officers executing such officers’ certificate at the time of such execution and (iii) that any related incurrence of Indebtedness is permitted pursuant to this Agreement.
“ Public Equity Offering ” means an underwritten public offering of Qualified Equity Interests of the Borrower generating gross proceeds of at least $50.0 million in the aggregate since the Closing Date, pursuant to an effective registration statement filed under the Securities Act or pursuant to a listing on or admission to a recognized exchange or market outside the United States.
“ Public Lender ” has the meaning specified in Section 6.02 .
“ Purchase Money Indebtedness ” means Indebtedness, including Capitalized Lease Obligations, of the Borrower or any of its Subsidiaries incurred for the purpose of financing all or any part of the purchase price of property, plant or equipment purchased, constructed or improved at any time after the Closing Date and used in the business of the Borrower or any of its Subsidiaries or the cost of installation, construction or improvement thereof and fees and other obligations incurred in connection therewith, as amended or otherwise restructured (other than pursuant to a refinancing); provided , however , that (1) the amount of such Indebtedness shall not exceed such purchase price or cost and (2) such Indebtedness shall be incurred within 90 days after such acquisition of such asset by the Borrower or such Subsidiary or such installation, construction or improvement.
“ Qualified Equity Interests ” of any Person means Equity Interests of such Person other than Disqualified Equity Interests; provided that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed, directly or indirectly, using funds (1) borrowed from such Person or any Subsidiary of such Person until and to the extent such borrowing is repaid or (2) contributed, extended, guaranteed or advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect of any employee stock ownership or benefit plan). Unless otherwise specified, Qualified Equity Interests refer to Qualified Equity Interests of the Borrower.
“ redeem ” means to redeem, repurchase, purchase, defease (including a covenant defeasance), retire, discharge or otherwise acquire or retire for value; and “ redemption ” shall have a correlative meaning.
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“ refinance ” means to refinance, repay, prepay, replace, renew or refund.
“ Refinancing Indebtedness ” means Indebtedness of the Borrower or a Subsidiary incurred in exchange for, or the proceeds of which are used to redeem or refinance in whole or in part, any Indebtedness of the Borrower or any of its Subsidiaries (the “ Refinanced Indebtedness ”); provided that:
(1) the principal amount (and accreted value, in the case of Indebtedness issued at a discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted value, as the case may be) of the Refinanced Indebtedness plus the amount of accrued and unpaid interest on the Refinanced Indebtedness, any reasonable premium paid to the holders of the Refinanced Indebtedness and reasonable expenses incurred or to be paid in connection with the incurrence of the Refinancing Indebtedness;
(2) the obligor of Refinancing Indebtedness does not include any Person (other than the Borrower or any Guarantor) that is not an obligor of the Refinanced Indebtedness;
(3) if the Refinanced Indebtedness was subordinated in right of payment to the Loans or the guarantees thereof, as the case may be, then such Refinancing Indebtedness, by its terms, is subordinate in right of payment to the Loans or the guarantees thereof, as the case may be, at least to the same extent as the Refinanced Indebtedness;
(4) the Refinancing Indebtedness has a final stated maturity either (a) no earlier than the Refinanced Indebtedness being repaid or amended or (b) 181 days after the Senior Notes Maturity Date;
(5) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the Senior Notes Maturity Date has a weighted average life to maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the weighted average life to maturity of the portion of the Refinanced Indebtedness being repaid that is scheduled to mature on or prior to the Senior Notes Maturity Date; and
(6) the proceeds of the Refinancing Indebtedness shall be used substantially concurrently with the incurrence thereof to redeem or refinance the Refinanced Indebtedness, unless the Refinanced Indebtedness is not then due and is not redeemable or prepayable at the option of the obligor thereof or is redeemable or prepayable only with notice, in which case such proceeds shall be held in a segregated account of the obligor of the Refinanced Indebtedness until the Refinanced Indebtedness becomes due or redeemable or prepayable or such notice period lapses and then shall be used to redeem or refinance the Refinanced Indebtedness; provided that in any event the Refinanced Indebtedness shall be redeemed or refinanced within one year of the incurrence of the Refinancing Indebtedness.
“ Register ” has the meaning specified in Section 11.06(c) .
“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.
“ Release ” means any release, spill, emission, discharge, deposit, disposal, leaking, pumping, pouring, dumping, emptying, injection or leaching into the Environment, or into, from or through any building, structure or facility.
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“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.
“ Request for Credit Extension ” means (a) with respect to a Borrowing, conversion or continuation of Revolving Credit Loans, a Committed Loan Notice, and (b) with respect to an L/C Credit Extension, a Letter of Credit Application.
“ Required Lenders ” means, as of any date of determination, Lenders holding 100% of the sum of the (a) Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Lender for purposes of this definition) and (b) aggregate unused Commitments; provided that the unused Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“ Responsible Officer ” means the chairman of the Board of Directors, chief executive officer, president, any vice president, chief financial officer, manager or managing member, treasurer, assistant treasurer, controller, secretary or assistant secretary of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
“ Restricted Payment ” means any of the following:
(1) the declaration or payment of any dividend or any other distribution on Equity Interests of the Borrower or any of its Subsidiaries or any payment made to the direct or indirect holders (in their capacities as such) of Equity Interests of the Borrower or any of its Subsidiaries, including, without limitation, any payment in connection with any merger or consolidation involving the Borrower but excluding (a) dividends or distributions payable solely in Qualified Equity Interests or through accretion or accumulation of such dividends on such Equity Interests and (b) in the case of Subsidiaries, dividends or distributions payable to the Borrower or to a Subsidiary and pro rata dividends or distributions payable to minority stockholders of any Subsidiary;
(2) the redemption of any Equity Interests of the Borrower or any of its Subsidiaries, including any payment in connection with any merger or consolidation involving the Borrower but excluding any such Equity Interests held by the Borrower or any of its Subsidiaries;
(3) any Investment other than a Permitted Investment; or
(4) any payment or redemption prior to the scheduled maturity or prior to any scheduled repayment of principal or sinking fund payment, as the case may be, in respect of any Indebtedness (other than (i) Purchase Money Indebtedness and (ii) Indebtedness owed to and held by the Borrower or any of its Subsidiaries).
“ Revolving Credit Borrowing ” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of LIBOR Periodic Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01 .
“ Revolving Credit Loan ” has the meaning specified in Section 2.01 .
“ Sale and Leaseback Transactions ” means with respect to any Person an arrangement with any bank, insurance company or other lender or investor or to which such lender or investor is a party, providing
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for the leasing by such Person of any asset of such Person which has been or is being sold or transferred by such Person to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the security of such asset.
“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.
“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“ Secured Cash Management Agreement ” means any Cash Management Agreement that is entered into by and between any Loan Party and any Cash Management Bank.
“ Secured Hedge Agreement ” means any interest rate Swap Contract permitted under Article VI or VII that is entered into by and between any Loan Party and any Hedge Bank.
“ Secured Parties ” means, collectively, the Administrative Agent, the Lenders, the L/C Issuer, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05 , and the other Persons the Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.
“ Securities Act ” means the U.S. Securities Act of 1933.
“ Security Agreement ” has the meaning specified in Section 4.01(a)(iii) .
“ Security Agreement Supplement ” means applicable supplement to security agreement as described in Section 3.6 of the Security Agreement.
“ Senior Notes ” means the 9¼% senior notes due 2018 in an aggregate principal amount of $275.0 million issued and sold by the Borrower on July 9, 2010 pursuant to the Senior Notes Document.
“ Senior Notes Transactions ” means (i) the issuance and sale of the Senior Notes, (ii) the redemption or repayment, by tender offer or otherwise, of all of the Old Notes, (iii) the Restricted Payment described in Section 7.06(7), (iv) the repayment of $1.4 million in respect of a loan from the Borrower’s chairman, and (v) the payment of fees and expenses related to the foregoing.
“ Senior Notes Document ” means that certain indenture dated as of July 9, 2010 among the Borrower, guarantors party thereto and HSBC Bank USA, National Association, as trustee.
“ Senior Notes Maturity Date ” means July 1, 2018.
“ Senior Secured Funded Debt to EBITDA Ratio ” means, for any date of determination, the ratio of (a) Consolidated Secured Funded Indebtedness as of such date to (b) Consolidated EBITDA for the Measurement Period.
“ Solvent ” and “ Solvency ” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the assets of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature,
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(d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“ Specified Guarantor ” means each of C.P. Chemicals, Inc. and Phibro-Tech, Inc.
“ Specified Property ” means any property listed under the heading “Unmortgaged Property” in Schedule 5.08(c) .
“ Spot Rate ” has the meaning specified in Section 1.07 .
“ Subordinated Indebtedness ” means Indebtedness of the Borrower or any Subsidiary that is expressly subordinated in right of payment to the Obligations.
“ Subsidiary ” means, with respect to any Person:
(1) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).
Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Borrower.
“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), 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.
“ Swap Termination Value ” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts 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 Swap Contracts, as
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determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“ Teva Term Loan ” means the $16.5 million term loan owed to Teva Pharmaceutical Industries Ltd. and outstanding on the date hereof.
“ Threshold Amount ” means $5.0 million.
“ Total Outstandings ” means the aggregate Outstanding Amount of all Loans and L/C Obligations.
“ Trademark Security Agreement ” has the meaning specified in the Security Agreement.
“ Transaction ” means, collectively, (a) the entering into by the Loan Parties and their applicable Subsidiaries of the Loan Documents, to which they are or are intended to be a party, (b) the refinancing of the Existing Credit Agreement and the termination of all commitments with respect thereto, (c) the declaration and payment of a dividend on the Borrower’s common shares of up to $50.0 million, and (d) the payment of the fees and expenses related to the foregoing.
“ Type ” means, with respect to a Loan, its character as a LIBOR Daily Floating Rate Loan, a LIBOR Periodic Rate Loan or Prime Rate Loan.
“ UCC ” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
“ United States ” and “ U.S. ” mean the United States of America.
“ Unreimbursed Amount ” has the meaning specified in Section 2.03(c)(i) .
“ U.S. Loan Party ” means any Loan Party that is organized under the laws of the United States, one of the states thereof, or the District of Columbia.
“ Voting Stock ” with respect to any Person, means securities of any class of Equity Interests of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock or other relevant equity interest has voting power by reason of any contingency) to vote in the election of members of the Board of Directors of such Person.
“ Wholly Owned Subsidiary ” means a Subsidiary of which 100% of the Equity Interests (except for the directors’ qualifying shares or certain minority interests owned by other Persons solely due to local law requirements that there be more than one stockholder, but which interest is not in excess of what is required for such purpose) are owned directly by the Borrower or through one or more Wholly Owned Subsidiaries.
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1.02. Other Interpretive Provisions .
With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “ asset ” and “ property ” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
(b) 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 .”
(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.
(a) Generally . 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 on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.
(b) Changes in GAAP . If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate
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in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
(c) Consolidation of Variable Interest Entities . All references herein to consolidated financial statements of the Borrower and its Subsidiaries or to the determination of any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Borrower is required to consolidate pursuant to FASB ASC 810 as if such variable interest entity were a Subsidiary as defined herein.
Any financial ratios required to be maintained by the Borrower pursuant to 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).
Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
1.06. Letter of Credit Amounts .
Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided , however , that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.
1.07. Currency Equivalents Generally .
Any amount specified in this Agreement (other than in Articles II , IX and X ) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this Section 1.07 , the “ Spot Rate ” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 12:00 noon on the date two Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.
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THE COMMITMENTS AND CREDIT EXTENSIONS
Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “ Revolving Credit Loan ”) to the Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided , however , that after giving effect to any Revolving Credit Borrowing, (i) the Total Outstandings shall not exceed the Facility, and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations shall not exceed such Lender’s Commitment. Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01 , prepay under Section 2.05 , and reborrow under this Section 2.01 . Revolving Credit Loans may be LIBOR Daily Floating Rate Loans or LIBOR Periodic Rate Loans, as further provided herein.
2.02. Borrowings, Conversions and Continuations of Loans .
(a) Each Revolving Credit Borrowing, each conversion of Revolving Credit Loans from one Type to the other, and each continuation of LIBOR Periodic Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of LIBOR Periodic Rate Loans or of any conversion of LIBOR Periodic Rate Loans to LIBOR Daily Floating Rate Loans or any conversion of LIBOR Daily Floating Rate Loans to LIBOR Periodic Rate Loans, and (ii) on the requested date of any Borrowing of LIBOR Daily Floating Rate Loans; provided , however , that if the Borrower wishes to request LIBOR Periodic Rate Loans having an Interest Period other than one, two, or three months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Appropriate Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. If the foregoing proviso is applicable, not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of LIBOR Periodic Rate Loans shall be in a principal amount of $2.0 million or a whole multiple of $500,000 in excess thereof. Except as provided in Section 2.03(c) , each Borrowing of or conversion to LIBOR Daily Floating Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Revolving Credit Borrowing, a conversion of Revolving Credit Loans from one Type to the other, or a continuation of LIBOR Periodic Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Revolving Credit Loans shall be made as, or
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converted to, LIBOR Daily Floating Rate Loans. Any such automatic conversion to LIBOR Daily Floating Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable LIBOR Periodic Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of LIBOR Periodic Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Revolving Credit Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to LIBOR Daily Floating Rate Loans described in Section 2.02(a) . In the case of a Revolving Credit Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01 ), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided , however , that if, on the date a Committed Loan Notice with respect to a Revolving Credit Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Revolving Credit Borrowing, first , shall be applied to the payment in full of any such L/C Borrowings, and second , shall be made available to the Borrower as provided above.
(c) Except as otherwise provided herein, a LIBOR Periodic Rate Loan may be continued or converted only on the last day of an Interest Period for such LIBOR Periodic Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as LIBOR Periodic Rate Loans without the consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to the LIBOR Daily Floating Rate Loan or any Interest Period for LIBOR Periodic Rate Loans upon determination of such interest rate.
(e) After giving effect to all Revolving Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all continuations of Revolving Credit Loans as the same Type, there shall not be more than five (5) Interest Periods in effect in respect of the Facility.
(a) The Letter of Credit Commitment .
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03 , (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b) , and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations shall not exceed such
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Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Limit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii) , the expiry date of the requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless (x) all the Lenders and the L/C Issuer have approved such expiry date or (y) the L/C Issuer has approved such expiry date and the Letter of Credit is cash collateralized on terms satisfactory to the L/C Issuer.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;
(B) the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, if after giving effect thereto, there would be more than three Letters of Credit each with face amounts of less than $15,000;
(D) the Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Lender to the extent necessary to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.15(a)(iv) ) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
(F) the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
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(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit does not accept the proposed amendment to the Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit .
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the L/C Issuer may require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each
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Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “ Auto-Extension Letter of Credit ”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “ Non-Extension Notice Date ”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided , however , that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise, but other than pursuant to clause (iii)(E)) or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations .
(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. Not later than 11:00 a.m. on the Business Day following any payment by the L/C Issuer under a Letter of Credit (each such date, an “ Honor Date ”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and the amount of such Lender’s Applicable Percentage thereof. In such event, the Borrower shall be deemed to have requested a Revolving Credit Borrowing of LIBOR Daily Floating Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of LIBOR Daily Floating Rate Loans, but subject to the amount of the unutilized portion of the Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the
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L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii) , each Lender that so makes funds available shall be deemed to have made a LIBOR Daily Floating Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of LIBOR Daily Floating Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03 .
(iv) Until each Lender funds its Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.
(v) Each Lender’s obligation to make Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c) , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Lender’s obligation to make Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrower of a Committed Loan Notice ). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii) , then, without limiting the other provisions of this Agreement, the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.
(d) Repayment of Participations .
(i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c) , if the Administrative Agent receives for the account of the L/C Issuer any payment in
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respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i ) is required to be returned under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
(e) Obligations Absolute . The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any of its Subsidiaries.
The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.
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(f) Role of L/C Issuer . Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e) ; provided , however , that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(g) Applicability of ISP and UCP . Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each commercial Letter of Credit.
(h) Letter of Credit Fees . The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage a Letter of Credit fee (the “ Letter of Credit Fee ”) for each Letter of Credit equal to the Applicable Rate times the daily amount available to be drawn under such Letter of Credit; provided , however , any Letter of Credit Fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit as to which such Defaulting Lender has not provided Cash Collateral satisfactory to the L/C Issuer pursuant to this Section 2.03 shall be payable, to the maximum extent permitted by applicable Law, to the other Lenders in accordance with the upward adjustments in their respective Applicable Percentages allocable to such Letter of Credit pursuant to Section 2.15(a)(iv) , with the balance of such fee, if any, payable to the L/C Issuer for its own account. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . Letter of Credit Fees shall be (i) due and payable on the last Business Day of each month and on the Maturity Date, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.
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(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer . The Borrower shall pay directly to the L/C Issuer for its own account a fronting fee with respect to each Letter of Credit, at the rate of 0.50% per annum, computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the last Business Day of each month, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.
(j) Conflict with Issuer Documents . In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.
(k) Letters of Credit Issued for Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.
(a) Optional . Subject to the last sentence of this Section 2.05(a) , the Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Credit Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Administrative Agent not later than 11:00 a.m. (1) two Business Days prior to any date of prepayment of LIBOR Periodic Rate Loans and (2) on the date of prepayment of LIBOR Daily Floating Rate Loans; (B) any prepayment of LIBOR Periodic Rate Loans shall be in a principal amount of $2.0 million or a whole multiple of $500,000 in excess thereof; and (C) any prepayment of LIBOR Daily Floating Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if LIBOR Periodic Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage in respect of the relevant Facility). If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a LIBOR Periodic Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05 . Each prepayment of the outstanding Revolving Credit Loans shall be paid to the Lenders in accordance with their respective Applicable Percentages.
(b) Mandatory .
(i) If for any reason the Total Outstandings at any time exceed the Facility at such time, the Borrower shall immediately prepay Revolving Credit Loans and L/C Borrowings and/or Cash Collateralize
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the L/C Obligations (other than the L/C Borrowings) in an aggregate amount equal to such excess without regard to minimum or multiple amounts with respect to prepayment requirements in Section 2.05(a) above. Upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from the Borrower or any other Loan Party) to reimburse the L/C Issuer or the Lenders, as applicable.
(ii) If the Borrower or any of its Subsidiaries Disposes of any Specified Property, the Borrower shall prepay Loans (without a reduction in Commitments and without regard to minimum or multiple amounts with respect to prepayment requirements in Section 2.05(a) above) in an amount equal to the lesser of (x) 100% of the Net Cash Proceeds of such Disposition and (y) the aggregate amount of Loans outstanding, immediately upon receipt thereof by the Borrower or any of its Subsidiaries.
2.06. Termination or Reduction of Commitments .
(a) Optional . The Borrower may, upon notice to the Administrative Agent, terminate the Facility, the Letter of Credit Limit, or from time to time permanently reduce the Facility or the Letter of Credit Limit; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5.0 million or any whole multiple of $500,000 in excess thereof and (iii) the Borrower shall not terminate or reduce (A) the Facility if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Facility, or (B) the Letter of Credit Limit if, after giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder would exceed the Letter of Credit Limit.
(b) Mandatory . The Commitments shall terminate in full on the Maturity Date.
(c) Application of Commitment Reductions; Payment of Fees . The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Commitments under this Section 2.06 . Upon any reduction of the Commitments, the Commitment of each Lender shall be reduced by such Lender’s Applicable Percentage of such reduction amount. All fees in respect of the Facility accrued until the effective date of any termination of the Facility shall be paid on the effective date of such termination.
The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Revolving Credit Loans outstanding on such date.
(a) Subject to the provisions of Section 2.08(b) , (i) each LIBOR Periodic Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the LIBOR Periodic Rate for such Interest Period plus the Applicable Rate; and (ii) each LIBOR Daily Floating Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the LIBOR Daily Floating Rate plus the Applicable Rate.
(b) Default Interest .
(i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter
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bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) While any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(v) Notwithstanding the foregoing, the Default Rate as set forth in this Section 2.08(b) may not be calculated retroactively beyond 30 days prior to the date the Borrower has received written notice from the Administrative Agent of the implementation of the Default Rate other than in the cases of Defaults described under Section 8.01(a) and (f).
(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
In addition to certain fees described in Sections 2.03(i) and (j) :
(a) Commitment Fee . The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage, a commitment fee equal to the Applicable Fee Rate times the actual daily amount by which the Facility exceeds the sum of (i) the Outstanding Amount of Revolving Credit Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in Section 2.15 . The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable monthly in arrears on the last Business Day of each month, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. The commitment fee shall be calculated quarterly in arrears.
(b) Other Fees . The Borrower shall pay to the Lenders, the Arranger and the Administrative Agent such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
2.10. Computation of Interest and Fees .
All computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not
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accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a) , bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in Section 2.11(a) , each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.
2.12. Payments Generally; Administrative Agent’s Clawback .
(a) General . All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected on computing interest or fees, as the case may be. Any payment made to the Administrative Agent shall be deemed made for the benefit of the Lenders without further liability of the Borrower if not forwarded or not applied by the Administrative Agent to the respective Lenders in accordance with the foregoing.
(b) (i) Funding by Lenders; Presumption by Administrative Agent . Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of LIBOR Periodic Rate Loans (or, in the case of any Borrowing of LIBOR Daily Floating Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a
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Borrowing of LIBOR Daily Floating Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02 ) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to LIBOR Daily Floating Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative Agent . Unless the Administrative Agent shall have received notice from the Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Appropriate Lenders or the L/C Issuer, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Appropriate Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
(c) Failure to Satisfy Conditions Precedent . If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II , and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.
(d) Obligations of Lenders Several . The obligations of the Lenders hereunder to make Revolving Credit Loans, to fund participations in Letters of Credit and to make payments pursuant to Section 11.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 11.04(c) .
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(e) Funding Source . Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
(f) Insufficient Funds . If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i) first , toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second , toward payment of principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties.
2.13. Sharing of Payments by Lenders .
If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:
(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section shall not be construed to apply to (x) 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), (y) the application of Cash Collateral provided for in Section 2.14 , or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or to any assignee or participant, other than an assignment to the Borrower or any Affiliate thereof (as to which the provisions of this Section shall apply).
Each Loan 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 Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.
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(a) Certain Credit Support Events . Upon the request of the Administrative Agent or the L/C Issuer (i) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Borrower shall, in each case, promptly (and, in any event, within one Business Day) Cash Collateralize the then Outstanding Amount of all L/C Obligations. At any time that there shall exist a Defaulting Lender, immediately upon the request of the Administrative Agent or the L/C Issuer, the Borrower shall deliver to the Administrative Agent Cash Collateral in an amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.15(a)(iv) and any Cash Collateral provided by the Defaulting Lender). If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate Outstanding Amount over (y) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Laws, to reimburse the L/C Issuer.
(b) Grant of Security Interest . All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.14(c) . If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure, the Borrower or the relevant Defaulting Lender will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.
(c) Application . Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.14 or Section 2.03 , 2.05 , 2.06 , 2.15 or 8.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.
(d) Release . Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 11.06(b)(vi)) ) or (ii) the Administrative Agent’s good faith determination that there exists excess Cash Collateral; provided , however , (x) that Cash Collateral furnished by or on behalf of a Loan Party shall not be released during the continuance of a Default or Event of Default (and following application as provided in this Section 2.14 may be otherwise applied in accordance with Section 8.03 ), and (y) the Person
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providing Cash Collateral and the L/C Issuer, may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.
(a) Adjustments . Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:
(i) Waivers and Amendments . That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 11.01 .
(ii) Reallocation of Payments . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 11.08 ), shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second , to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to the L/C Issuer hereunder; third , if so determined by the Administrative Agent or requested by the L/C Issuer, to be held as Cash Collateral for future funding obligations of that Defaulting Lender of any participation in any Letter of Credit; fourth , as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth , if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Loans under this Agreement; sixth , to the payment of any amounts owing to the Lenders or the L/C Issuer as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the L/C Issuer against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; seventh , so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and eighth , to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans or L/C Borrowings were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Borrowings owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Borrowings owed to, that Defaulting Lender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.15(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain Fees . That Defaulting Lender (x) shall not be entitled to receive any commitment fee pursuant to Section 2.10(a) for any period during which that Lender is a Defaulting Lender (and the Borrower shall (A) be required to pay to the L/C Issuer, the amount of such fee allocable to its Fronting Exposure arising from that Defaulting Lender and (B) not be required
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to pay the remaining amount of such fee that otherwise would have been required to have been paid to that Defaulting Lender) and (y) shall be limited in its right to receive Letter of Credit Fees as provided in Section 2.03(h) .
(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure . During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit pursuant to Section 2.03 , the “Applicable Percentage” of each non-Defaulting Lender shall be computed without giving effect to the Commitment of that Defaulting Lender; provided that (i) each such reallocation shall be given effect only if, at the date the applicable Lender becomes a Defaulting Lender, no Default or Event of Default exists; and (ii) the aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit shall not exceed the positive difference, if any, of (1) the Commitment of that non-Defaulting Lender minus (2) the aggregate Outstanding Amount of the Committed Loans of that Lender.
(b) Defaulting Lender Cure . If the Borrower, the Administrative Agent and the L/C Issuer agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Committed Loans and funded and unfunded participations in Letters of Credit to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.15(a)(iv) ), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
TAXES, YIELD PROTECTION AND ILLEGALITY
(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes .
(i) Any and all payments by or on account of any obligation of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes. If, however, applicable Laws require the applicable withholding agent to withhold or deduct any Indemnified Taxes (including Other Taxes), such Tax shall be withheld or deducted in accordance with such Laws (as determined in good faith by the applicable withholding agent).
(ii) If the applicable withholding agent shall be required by applicable Laws to withhold or deduct any Indemnified Taxes or Other Taxes from any payment, then (A) the applicable withholding agent shall withhold or make such deductions, (B) the applicable withholding agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with applicable Laws and (C) the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or all required deductions (including deductions applicable to additional sums
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payable under this Section) have been made, each Lender or L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(b) Payment of Other Taxes by the Loan Parties . Without limiting the provisions of subsection (a) above, the relevant Loan Party shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Laws.
(c) Tax Indemnifications .
(i) Without limiting the provisions of subsection (a) or (b) above, the Borrower shall, and does hereby, indemnify each Agent and each Lender and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) payable by such Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The Borrower shall also, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required by clause (ii) of this subsection. A certificate as to the amount of any such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by an Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(ii) To the extent required by any applicable Law, the Administrative Agent may deduct or withhold from any payment to any Lender an amount equivalent to any applicable withholding tax. Without limiting the provisions of subsection (a) or (b) above, if any Governmental Authority asserts a claim that the Borrower or the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered, was not properly executed or because such Lender failed to notify the Borrower or the Administrative Agent of a change in circumstances that rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), then each such Lender shall, and does hereby, indemnify and hold harmless the Borrower and the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, fully for all amounts paid, directly or indirectly, by the Administrative Agent as Taxes or otherwise, and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Borrower or the Administrative Agent), whether or not such Tax was correctly or legally asserted. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii). The agreements in this clause (ii) shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all other Obligations.
(d) Evidence of Payments . As soon as practicable, after any payment of Indemnified Taxes or Other Taxes paid by a Loan Party to a Governmental Authority as provided in this Section 3.01 , such Loan Party shall deliver to the Administrative Agent, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
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(e) Status of Lenders . Each Lender shall, at such times as are reasonably requested by the Borrower or the Administrative Agent, provide the Borrower and the Administrative Agent with any documentation prescribed by Law, or reasonably requested by the Borrower or the Administrative Agent, certifying as to any entitlement of such Lender to an exemption from, or reduction in, any withholding Tax with respect to any payments to be made to such Lender under the Loan Documents. Each such Lender shall, whenever a lapse in time or change in circumstances renders such documentation expired, obsolete or inaccurate in any material respect, deliver promptly to the Borrower and the Administrative Agent updated or other appropriate documentation (including any new documentation reasonably requested by the applicable withholding agent) or promptly notify the Borrower and the Administrative Agent of its inability to do so. Unless the applicable withholding agent has received forms or other documents satisfactory to it indicating that payments under any Loan Document to or for a Lender are not subject to withholding tax or are subject to such Tax at a rate reduced by an applicable tax treaty, the Borrower, Administrative Agent or other applicable withholding agent shall withhold amounts required to be withheld by applicable Law from such payments at the applicable statutory rate.
Without limiting the generality of the foregoing:
(i) Each Lender that is a United States person (as defined in Section 7701(a)(30) of the Code) shall deliver to the Borrower and the Administrative Agent on or before the date on which it becomes a party to this Agreement two properly completed and duly signed original copies of Internal Revenue Service Form W-9 (or any successor form) certifying that such Lender is exempt from U.S. federal backup withholding.
(ii) Each Lender that is not a United States person (as defined in Section 7701(a)(30) of the Code) shall deliver to the Borrower and the Administrative Agent on or before the date on which it becomes a party to this Agreement (and from time to time thereafter when required by Law or upon the reasonable request of the Borrower or the Administrative Agent) whichever of the following is applicable:
(I) two duly completed copies of Internal Revenue Service Form W-8BEN (or any successor forms) claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,
(II) two duly completed copies of Internal Revenue Service Form W-8ECI (or any successor forms),
(III) in the case of a Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate, in substantially the form of Exhibit K (any such certificate a “ United States Tax Compliance Certificate ”), or any other form approved by the Administrative Agent, to the effect that such Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code, and that no payments in connection with the Loan Documents are effectively connected with such Lender’s conduct of a U.S. trade or business and (y) two duly completed copies of Internal Revenue Service Form W-8BEN (or any successor forms),
(IV) to the extent a Lender is not the beneficial owner (for example, where the Lender is a partnership, or is a Lender that has granted a participation), Internal Revenue Service Form W-8IMY (or any successor forms) of the Lender, accompanied by a Form W-8ECI, W-8BEN, United States Tax Compliance Certificate, Form W-9, Form W-8IMY
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(or other successor forms) or any other required information from each beneficial owner, as applicable ( provided that, if the Lender is a partnership (and not a participating Lender) and one or more beneficial owners are claiming the portfolio interest exemption, the United States Tax Compliance Certificate shall be provided by such Lender on behalf of such beneficial owner(s)), or
(V) any other form prescribed by applicable requirements of U.S. federal income tax Law as a basis for claiming exemption from or a reduction in U.S. federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable requirements of Law to permit the Borrower and the Administrative Agent to determine the withholding or deduction required to be made.
Each Lender shall, from time to time after the initial delivery by such Lender of the forms described above, whenever a lapse in time or change in such Lender’s circumstances renders such forms, certificates or other evidence so delivered expired, obsolete or inaccurate, promptly (1) deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) renewals, amendments or additional or successor forms, properly completed and duly executed by such Lender, together with any other certificate or statement of exemption required in order to confirm or establish such Lender’s status or that such Lender is entitled to an exemption from or reduction in U.S. federal withholding tax or (2) notify Administrative Agent and the Borrower of its inability to deliver any such forms, certificates or other evidence.
Notwithstanding any other provision of this clause (e), a Lender shall not be required to deliver any form that such Lender is not legally eligible to deliver.
(f) Payments Made by Administrative Agent . For the avoidance of doubt, any payments made by the Administrative Agent to any Lender shall be treated as payments made by the applicable Loan Party.
(g) Lender Treated as Partnership . If any Lender is treated as partnership for purposes of an applicable Indemnified Tax or Other Tax, any withholding made by such Lender shall be treated as if such withholding had been made by the Borrower or the Administrative Agent.
(h) L/C Issuer . For purposes of this Section 3.01 , the term “Lender” shall include any L/C Issuer.
(i) Treatment of Certain Refunds . Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or the L/C Issuer, as the case may be. If the Administrative Agent, any Lender or the L/C Issuer determines, in its reasonable discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent, such Lender or the L/C Issuer, as the case may be, 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, such Lender or the L/C Issuer, 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, such Lender or the L/C Issuer in the event the Administrative Agent, such
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Lender or the L/C Issuer is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent, any Lender or the L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.
If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to the LIBOR Periodic Rate, or to determine or charge interest rates based upon the LIBOR Periodic Rate or LIBOR Daily Floating Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue LIBOR Periodic Rate Loans or to convert LIBOR Daily Floating Rate Loans to LIBOR Periodic Rate Loans (or vice versa) shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all LIBOR Periodic Rate Loans or LIBOR Daily Floating Rate Loan, of such Lender to Prime Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Periodic Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Periodic Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
3.03. Inability to Determine Rates .
If the Required Lenders determine that for any reason in connection with any request for a LIBOR Periodic Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such LIBOR Periodic Rate Loan, (b) adequate and reasonable means do not exist for determining the LIBOR Periodic Rate for any requested Interest Period with respect to a proposed LIBOR Periodic Rate Loan or in connection with an existing or proposed LIBOR Daily Floating Rate Loan, or (c) the LIBOR Periodic Rate for any requested Interest Period with respect to a proposed LIBOR Periodic Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Periodic Rate Loans or LIBOR Daily Floating Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Periodic Rate Loans or LIBOR Daily Floating Rate Loans or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Prime Rate Loans in the amount specified therein.
(a) Increased Costs Generally . If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the LIBOR Periodic Rate) or the L/C Issuer;
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(ii) subject any Lender or the L/C Issuer to any Tax with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any LIBOR Periodic Rate Loan made by it, or change the basis of taxation of payments to such Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the L/C Issuer); or
(iii) impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Periodic Rate Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan the interest on which is determined by reference to the LIBOR Periodic Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the L/C Issuer, except to the extent that the LIBOR Daily Floating Rate or LIBOR Periodic Rate shall be adjusted in accordance with the definition thereof, the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered. The affected Lender shall give the Borrower and Administrative Agent prompt notice of such a determination and adjustment and the Administrative Agent promptly shall transmit the notice to each other Lender. In no event shall any Lender or the Administrative Agent be entitled to compensation under this Section 3.04 in respect of additional costs incurred more than ninety (90) days prior to the issuance of such notice unless such additional costs were imposed on a retroactive basis.
(b) Capital Requirements . If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction suffered.
(c) Certificates for Reimbursement . A certificate of a Lender or the L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests . Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided that the Borrower shall
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not be required to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
3.05. Compensation for Losses .
Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other than a LIBOR Daily Floating Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a LIBOR Daily Floating Rate Loan on the date or in the amount notified by the Borrower; or
(c) any assignment of a LIBOR Periodic Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 11.13 ;
including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05 , each Lender shall be deemed to have funded each LIBOR Periodic Rate Loan made by it at the LIBOR Periodic Rate used in determining the LIBOR Periodic Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Periodic Rate Loan was in fact so funded.
3.06. Mitigation Obligations; Replacement of Lenders .
(a) Designation of a Different Lending Office . If any Lender requests compensation under Section 3.04 , or the Borrower is required to pay any additional amount to any Lender, the L/C Issuer, or any Governmental Authority for the account of any Lender or the L/C Issuer pursuant to Section 3.01 , or if any Lender gives a notice pursuant to Section 3.02 , then such Lender or the L/C Issuer shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or the L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04 , as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02 , as applicable, and (ii) in each case, would not subject such Lender or the L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or the L/C Issuer, as the case may be. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender or the L/C Issuer in connection with any such designation or assignment.
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(b) Replacement of Lenders . If any Lender requests compensation under Section 3.04 , or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 , the Borrower may replace such Lender in accordance with Section 11.13 .
All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments, repayment of all other Obligations hereunder, and resignation of the Administrative Agent.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01. Conditions of Initial Credit Extension .
The obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent’s receipt of the following, each of which shall be originals, electronic mail transmissions, telecopies, pdfs or other electronic copies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance reasonably satisfactory to the Administrative Agent:
(i) executed counterparts of this Agreement and the Guaranty, sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each Lender requesting a Note;
(iii) a security agreement, in substantially the form of Exhibit G (the “ Security Agreement ”), duly executed by each Loan Party, together with:
(A) certificates and instruments representing the Pledged Securities referred to therein accompanied by undated stock powers or instruments of transfer executed in blank,
(B) proper Financing Statements in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that the Administrative Agent may reasonably deem necessary or desirable in order to perfect the Liens created under the Security Agreement, covering the Collateral described in the Security Agreement,
(C) copies of UCC, United States Patent and Trademark Office and United States Copyright Office, tax and judgment lien searches, or equivalent reports or searches, each of a recent date listing all effective financing statements, lien notices or comparable documents (together with copies of such financing statements and documents) that name any Loan Party as debtor and that are filed in those state and county jurisdictions in which any Loan Party is organized or
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maintains its principal place of business and such other searches that are required by the Perfection Certificate or that the Administrative Agent deems necessary or appropriate, none of which encumber the Collateral covered or intended to be covered by the Collateral Documents (other than Permitted Encumbrances),
(D) evidence that all other actions, recordings and filings that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Security Agreement has been taken;
(iv) deeds of trust, trust deeds, deeds to secure debt or mortgages, in substantially the form of Exhibit H with such changes as may be reasonably satisfactory to the Administrative Agent and its counsel to account for local law matters, specific circumstances of the property or agreements with existing or perspective third parties disclosed to the Administrative Agent as of the date hereof or otherwise reasonably acceptable to the Administrative Agent (together with each other mortgage delivered pursuant to Section 6.12, in each case as amended, restated, supplemented or otherwise modified from time to time, the “ Mortgages ”) and covering the properties identified to be mortgaged on Schedule 7(a) of the Perfection Certificate (collectively, the “ Mortgaged Properties ”), duly executed by the appropriate Loan Party, together with:
(A) evidence that counterparts of the Mortgages have been duly executed, acknowledged and delivered and are in form suitable for filing or recording in all filing or recording offices that the Administrative Agent may reasonably deem necessary or desirable in order to create a valid first and subsisting Lien on the property described therein in favor of the Administrative Agent for the benefit of the Secured Parties and evidence that all filing, documentary, stamp, intangible and recording taxes and other fees in connection therewith have been paid,
(B) fully paid American Land Title Association Lender’s Coverage (or local equivalent) title insurance policies (the “ Mortgage Policies ”), with such customary endorsements (to the extent available in the subject jurisdiction and including matters relating to usury, first-loss, contiguity, revolving credit, future advances under the Loan Documents, mechanics’ and materialmen’s Liens, doing business, separate tax lot, mortgage recording tax, tie-in, zoning (if available without opinion letter or municipal letter) and so-called comprehensive coverage over covenants and restrictions where each may be appropriate and available) and in amounts reasonably acceptable to the Administrative Agent, issued, co-insured and reinsured by nationally recognized title insurance companies acceptable to the Administrative Agent (such as Fidelity Title Insurance), insuring the Mortgages to be valid first and subsisting Liens on the Mortgaged Property described therein, free and clear of all Liens, excepting only Permitted Encumbrances, and providing for such other affirmative insurance as the Administrative Agent may deem necessary or desirable (where such affirmative insurance is appropriate and available),
(C) proper fixture filing statements under the Uniform Commercial Code on Form UCC-1 for filing under the Uniform Commercial Code (each, a “ UCC-1 Fixture Filing ”) in the appropriate jurisdiction in which the Mortgaged Properties are located, desirable to the extent required to perfect the security interests
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in fixtures purported to be created by the Mortgages in favor of the Administrative Agent for its benefit and the benefit of the Secured Parties and such UCC-1 Fixture Filing shall be suitable for recording or filing and evidence that all filing and recording taxes and fees related thereto have been paid or otherwise provided for in a manner reasonably acceptable to the Administrative Agent,
(D) a completed “Life-of-Loan” Federal Emergency Management Agency Standard Flood Hazard Determination with respect to each Mortgaged Property located in the United States (together with a notice about special flood hazard area status and flood disaster assistance) duly executed by the Borrower and each Loan Party relating thereto, except that no such insurance will be required as to vacant land (or, to the extent permitted by applicable law, land without a "Building" (as such term is defined in the Flood Insurance Laws) located thereon) which may be in a flood zone or as to land in which the Administrative Agent does not require flood insurance in its reasonable discretion, and
(E) evidence that all other action that the Administrative Agent may deem reasonably necessary or desirable in order to create valid first and subsisting Liens on each Mortgaged Property has been taken except that this requirement shall be deemed satisfied if Lender’s interest as mortgagee has been insured by the title company subject only to Permitted Liens;
(v) a Copyright Security Agreement, Patent Security Agreement and Trademark Security Agreement (to the extent applicable) (together with each other intellectual property security agreement delivered pursuant to Section 6.12 , in each case as amended, the “ Intellectual Property Security Agreement ”), duly executed by each Loan Party, together with evidence that all action that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Intellectual Property Security Agreement has been taken;
(vi) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party;
(vii) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each of the Borrower and its Domestic Subsidiaries is validly existing and in good standing in the jurisdiction in which incorporated or organized;
(viii) a favorable opinion of Golenbock Eiseman Assor Bell & Peskoe LLP, counsel to the Loan Parties, addressed to the Administrative Agent, the Arranger and each Lender, substantially in the form of Exhibit I ;
(ix) a certificate signed by a Responsible Officer of the Borrower on behalf of the Borrower certifying that the conditions specified in Sections 4.02(a) and (b) have been satisfied;
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(x) a certificate attesting to the Solvency of each Loan Party (other than a Specified Guarantor) before and after giving effect to the Transaction, substantially in the form of Exhibit B , from the chief financial officer of the Borrower on behalf of the Borrower;
(xi) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect, together with the certificates of insurance, naming the Administrative Agent, on behalf of the Secured Parties, as an additional insured or loss payee, as the case may be, under all insurance policies (including flood insurance policies) maintained with respect to the assets and properties of the Loan Parties that constitutes Collateral;
(xii) the Existing Credit Agreement shall have been repaid in full and all commitments thereunder terminated (with outstanding letters of credit to be collateralized by a Letter of Credit hereunder); the Administrative Agent shall have received a “payoff” letter in form and substance reasonably satisfactory to the Administrative Agent with respect to the Existing Credit Agreement; and the Administrative Agent shall have received from any Person holding any Lien securing any such debt, such UCC termination statements, mortgage releases, releases of assignments of leases and rents, releases of security interests in IP Rights and other instruments, in each case in proper form for recording, as the Administrative Agent shall have reasonably requested to release and terminate of record the Liens securing such debt; and
(xiii) such other customary closing documents as the Administrative Agent, the L/C Issuer or any Lender reasonably may require.
(b) (i) All fees required to be paid to the Administrative Agent and the Arranger on or before the Closing Date shall have been paid and (ii) all fees required to be paid to the Lenders on or before the Closing Date shall have been paid.
(c) The Borrower shall have paid all reasonable invoiced fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings ( provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).
(d) The Lenders and the Administrative Agent shall have received the information required under Section 11.18 not less than five (5) Business Days prior to the Closing Date.
Without limiting the generality of the provisions of the last paragraph of Section 9.03 , for purposes of determining compliance with the conditions specified in this Section 4.01 , each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
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4.02. Conditions to All Credit Extensions .
The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of LIBOR Periodic Rate Loans) is subject to the following conditions precedent:
(a) The representations and warranties of the Borrower and each other Loan Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 4.02 , the representations and warranties contained in Sections 5.05(a) and (b) shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b) , respectively.
(b) No Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof.
(c) The Administrative Agent and, if applicable, the L/C Issuer shall have received a Request for Credit Extension in accordance with the requirements hereof.
Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type or a continuation of LIBOR Periodic Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the Lenders that:
5.01. Existence, Qualification and Power .
Each Loan Party and each of its Subsidiaries (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite corporate or other organizational power and corporate or other organizational authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party and consummate the Transaction, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
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5.02. Authorization; No Contravention .
The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is or is to be a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien (other than a Permitted Encumbrance) under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries other than any Contractual Obligation listed on Schedule 5.02 or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law.
5.03. Governmental Authorization; Other Consents .
No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, or for the consummation of the Transaction, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof), other than the filing of financing statements, the recordation of the Mortgages, the filings required with the U.S. Patent & Trademark Office and U.S. Copyright Office, the entering into appropriate control agreements, and any consents, filings and notations required in foreign jurisdictions as a matter of applicable Law with respect to the stock pledge of the Equity Interests in any Foreign Subsidiary, in each case necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties or (d) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, other than consents or approvals that have been obtained and that are still in force and effect.
This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms.
5.05. Financial Statements; No Material Adverse Effect .
(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as of the date thereof and their consolidated results of operations, cash flows and changes in shareholders’ equity for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other material liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness required to be included in a balance sheet prepared in accordance with GAAP.
(b) The unaudited consolidated balance sheet of the Borrower and its Subsidiaries dated March 31, 2010, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for the nine months then ended (i) were prepared in accordance with GAAP consistently
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applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as of the date thereof and their consolidated results of operations, cash flows and changes in shareholders’ equity for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.
(c) Since the date of the balance sheet included in the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.
(d) The consolidated forecasted balance sheet, statements of income and cash flows of the Borrower and its Subsidiaries delivered to the Lenders prior to the Closing Date or pursuant to Section 6.01(c) were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, the Borrower’s best estimate of its future financial condition and performance.
There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement, any other Loan Document or the consummation of the Transaction, or (b) except as specifically disclosed in Schedule 5.06 , either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect. There has been no adverse change in the status, or financial effect on any Loan Party or any Subsidiary thereof, of the matters described in Schedule 5.06 that could reasonably be expected to have a Material Adverse Effect.
Neither any Loan Party nor any Subsidiary thereof is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.
5.08. Ownership of Property; Liens; Investments .
(a) One or more Loan Parties or one or more Domestic Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property (including the Mortgaged Property) material to their business, taken as a whole, used in the ordinary conduct of its business, except for Permitted Encumbrances and except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Schedule 4 of the Perfection Certificate sets forth a complete and accurate list as of the Closing Date of all Liens on the property or assets of each Loan Party and each of its Domestic Subsidiaries (except for Permitted Encumbrances on real property not otherwise listed on the title policy being delivered to Administrative Agent in connection herewith and relating to the applicable Mortgaged Property) showing, as of the Closing Date the lienholder thereof (except the lienholder need not be shown in respect of any Permitted Encumbrances on real property not otherwise listed on the title policy being delivered to Administrative Agent in connection herewith and relating to the applicable Mortgaged Property), the original principal amount of the obligations secured thereby (except for Permitted Encumbrances
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against the Mortgaged Property which may secure a contingent obligation but do not secure Indebtedness), and the address of the property or assets of such Loan Party or such Subsidiary subject thereto. The Mortgaged Property of each Loan Party and each of its Domestic Subsidiaries is subject to no Liens, other than Liens set forth on Schedule 4 of the Perfection Certificate, and as otherwise permitted by Section 7.01 .
(c) Real Property .
(i) Schedule 7(a) of the Perfection Certificate sets forth a complete and accurate list as of the Closing Date of all real property (including the Mortgaged Property) owned by each Loan Party and each of its Domestic Subsidiaries, showing as of the Closing Date the street address, county or other relevant jurisdiction, state and record owner and book value thereof. Each Loan Party and each of its Domestic Subsidiaries has good, marketable and insurable fee simple title to the real property owned by such Loan Party or such Domestic Subsidiary material to their business, taken as a whole, free and clear of all Liens, other than Permitted Encumbrances.
(ii) Schedule 7(a) of the Perfection Certificate sets forth a complete and accurate list as of the Closing Date of all leases of real property under which any Loan Party is the lessee, showing as of the Closing Date the street address, county or other relevant jurisdiction, state, lessor and lessee. Each such lease is the legal, valid and binding obligation of the applicable Loan Party, enforceable in accordance with its terms except for certain provisions that may be limited by local or federal law (e.g., those relating to creditors rights, bankruptcy, entry onto property and the like).
(iii) Schedule 7(b) of the Perfection Certificate sets forth a complete and accurate list of all leases of real property under which any Loan Party is the lessor, showing as of the Closing Date the street address, county or other relevant jurisdiction, state, original lessee, current expiration date and annual base rental payable thereunder. Each such lease is the legal, valid and binding obligation of the lessee thereof, enforceable in accordance with its terms except for certain provisions that may be limited by local or federal law (e.g., those relating to creditors rights, bankruptcy, entry onto property and the like).
(d) Schedule 9(b) of the Perfection Certificate sets forth a complete and accurate list of all Equity Investments held by any Loan Party for any Subsidiary of a Loan Party on the Closing Date, showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof.
5.09. Environmental Compliance .
(a) The Loan Parties and their respective Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that, except as specifically disclosed in Schedule 5.09 , such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Except as otherwise set forth in Schedule 5.09 and as could not reasonably be expected, individually or in the aggregate, to have any Material Adverse Effect: (i) none of the properties currently or to the knowledge of the Loan Parties, formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or formally proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list; (ii) there are no and to the knowledge of the Loan Parties and their Subsidiaries never have been any underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Loan Party or any of its Subsidiaries or, to the
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knowledge of the Loan Parties, on any property formerly owned or operated by any Loan Party or any of its Subsidiaries; (iii) there is no asbestos or asbestos-containing material on, at or in any property currently owned or operated by any Loan Party or any of its Subsidiaries; and (iv) Hazardous Materials have not been Released on, at, under or from any property currently or, to the knowledge of the Loan Parties, formerly owned or operated by any Loan Party or any of its Subsidiaries in a manner, form or amount which could, individually or in the aggregate, reasonably be expected to result in liability of any Loan Party or any Subsidiary.
(c) Except as otherwise set forth on Schedule 5.09 and as could not reasonably be expected, individually or in the aggregate, to have any Material Adverse Effect: (i) neither any Loan Party nor any of its Subsidiaries is undertaking, and has not completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened Release, discharge or disposal of Hazardous Materials at, on, under or from any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; and (ii) all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or, to the knowledge of the Loan Parties, formerly owned or operated by any Loan Party or any of its Subsidiaries have been disposed of in a manner which could not reasonably be expected to result in liability to any Loan Party or any of its Subsidiaries.
(d) Except as otherwise set forth on Schedule 5.09 and as could not reasonably be expected, individually or in the aggregate, to have any Material Adverse Effect: the Loan Parties and their respective Subsidiaries (i) are, and within the period of all applicable statutes of limitation have been, in compliance with all applicable Environmental Laws; (ii) hold all Environmental Permits (each of which is in full force and effect) required for any of their current or intended operations or for any property owned, leased, or otherwise operated by any of them; and (iii) are, and within the period of all applicable statutes of limitation have been, in compliance with all of their Environmental Permits.
The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates.
The Borrower and each of its Subsidiaries have timely filed all federal, state and other material tax returns and reports required to be filed, and have timely paid all federal, state and other material Taxes (whether or not shown on a tax return), including in its capacity as a withholding agent, levied or imposed upon it or its properties, income or assets otherwise due and payable, except those Taxes which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP, except where the failure to make such required filings or payments could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There is no proposed material tax assessment or other claim against, and no material tax audit with respect to, the Borrower or any Subsidiary. Neither any Loan Party nor any Subsidiary thereof is party to any tax sharing agreement. Except as could not be reasonably expected to, individually or in the aggregate, result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries has ever “participated” in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4.
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(a) Each Plan is in compliance with the applicable provisions of ERISA, the Code and other Federal or state laws, except where the lack of compliance could not, individually, or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the Internal Revenue Service. To the knowledge of the Borrower, nothing has occurred that would prevent or cause the loss of such tax-qualified status.
(b) There are no pending or, to the best knowledge of the Borrower, threatened claims in writing, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (i) No ERISA Event has occurred, and neither the Borrower nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan or Multiemployer Plan; (ii) as of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher and neither the Borrower nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date; (iii) neither the Borrower nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid; (iv) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA; and (v) no Pension Plan has been terminated by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan.
(d) Neither the Borrower nor any ERISA Affiliate maintains or contributes to, or has any unsatisfied obligation to contribute to, or liability under, any active or terminated Pension Plan other than (A) on the Closing Date, those listed on Schedule 5.12(d) hereto and (B) thereafter, Pension Plans not otherwise prohibited by this Agreement.
(e) With respect to each scheme or arrangement mandated by a government other than the United States (a “ Foreign Government Scheme or Arrangement ”) and with respect to each employee benefit plan maintained or contributed to by any Loan Party or any Subsidiary of any Loan Party that is not subject to United States law (a “ Foreign Plan ”), except as could not reasonably be expected to have a Material Adverse Effect:
(i) any employer and employee contributions required by law or by the terms of any Foreign Government Scheme or Arrangement or any Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices;
(ii) the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for
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the accrued benefit obligations, as of the date hereof, with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles; and
(iii) each Foreign Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities.
5.13. Subsidiaries; Equity Interests; Loan Parties .
As of the Closing Date, no Loan Party has any Subsidiaries other than those specifically disclosed in Schedule 9(a) of the Perfection Certificate, and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by a Loan Party in the amounts specified on Schedule 9(a) of the Perfection Certificate free and clear of all Liens except those created under the Collateral Documents. As of the Closing Date, no Loan Party has any equity investments in any other corporation or entity other than those specifically disclosed in Schedule 9(b) of the Perfection Certificate. As of the Closing Date, all of the outstanding Equity Interests in the Borrower have been validly issued, are fully paid and non-assessable and are, as of the Closing Date, owned by the Permitted Holders in the amounts specified on Schedule 9(b) of the Perfection Certificate. Set forth on Schedule 1(a) and Schedule 2 of the Perfection Certificate is a complete and accurate list of all Loan Parties, showing as of the Closing Date (as to each Loan Party) the jurisdiction of its incorporation or formation, the address of its chief executive office and its U.S. taxpayer identification number. The copy of the charter of each Loan Party and each amendment thereto provided pursuant to Section 4.01(a)(vii) is a true and correct copy of each such document as of the Closing Date, each of which is valid and in full force and effect.
5.14. Margin Regulations; Investment Company Act .
(a) The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.
The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished in writing by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document, when so furnished and taken as a whole, contained any material misstatement of fact or omitted to state any material fact necessary to make the statements therein taken as a whole, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
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Each Loan Party and each Subsidiary thereof is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
5.17. Intellectual Property; Licenses, Etc .
Each Loan Party and each of its Subsidiaries own, or possess the right to use, all of the material trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “ IP Rights ”) that are reasonably necessary for the operation of their respective businesses as currently conducted, without conflict with the rights of any other Person. Schedules 11(a) , 11(b) and 11(c) of the Perfection Certificate set forth a complete and accurate list of all IP Rights registered with the U.S. Copyright Office or U.S. Patent and Trademark Office and all other material IP Rights owned or used by each Loan Party and each of its Subsidiaries as of August 1, 2010. To the knowledge of the Borrower, no material slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party or any of its Subsidiaries infringes in any material manner upon any rights held by any other Person. Except as specifically disclosed in Schedule 5.17 , no claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrower, threatened in writing, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
Each Loan Party (other than a Specified Guarantor) is, individually and together with its Subsidiaries on a consolidated basis, Solvent.
(a) Neither the businesses nor the properties (including the Mortgaged Property) of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
(a) Neither the business nor the properties (including the Mortgaged Properties) of any Loan Party or any of its Subsidiaries are affected by any pending or contemplated condemnation or eminent domain proceeding or any sale or disposition thereof in lieu of condemnation or eminent domain that remains unresolved, that either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.
(b) None of the Loan Party and the Subsidiaries is obligated under any right of first refusal, option or other contractual right to sell, assign or otherwise dispose of any Mortgaged Property or any interest therein.
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Except as set forth on Schedule 5.20 , there are no collective bargaining agreements or Multiemployer Plans covering the employees of the Borrower or any of its Domestic Subsidiaries as of the Closing Date and neither the Borrower nor any Subsidiary has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five years, which in any case could reasonably be expected to have a Material Adverse Effect.
The Mortgages executed and delivered on the Closing Date are, and the Mortgages executed and delivered after the Closing Date will be, effective to create in favor of the Administrative Agent (for the benefit of the Secured Parties) a legal, valid and enforceable first priority Lien on all of the applicable Loan Parties’ right, title and interest in and to the Mortgaged Property thereunder and the proceeds thereof (subject to Permitted Encumbrances), and when such Mortgages are filed or recorded in the proper real estate filing or recording offices, and all relevant mortgage taxes and recording charges are duly paid, the Administrative Agent (for the benefit of the Secured Parties) shall have a perfected first priority Lien on, and security interest in, all right, title, and interest of the applicable Loan Parties in such Mortgaged Property and, to the extent applicable, subject to Section 9-315 of the Uniform Commercial Code, the proceeds thereof, in each case prior and superior in right to the Lien of any other person, except for Permitted Encumbrances.
5.22. Anti-Money Laundering and Economic Sanctions Laws .
(a) No Loan Party, none of its Subsidiaries and, to the knowledge of senior management of each Loan Party, none of its Affiliates and none of the respective officers, directors, brokers or agents of such Loan Party, such Subsidiary or Affiliate (i) has violated or is in violation in any material respect of any applicable Anti-Money Laundering Law or (ii) has engaged or engages in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of offenses designated in any applicable law, regulation or other binding measure implementing the “Forty Recommendations” and “Nine Special Recommendations” published by the Organisation for Economic Cooperation and Development’s Financial Action Task Force on Money Laundering.
(b) No Loan Party, none of its Subsidiaries and, to the knowledge of senior management of each Loan Party, none of its Affiliates and none of the respective officers, directors, brokers or agents of such Loan Party, such Subsidiary or such Affiliate that is acting or benefiting in any capacity in connection with the Loans is an Embargoed Person.
(c) Except as otherwise authorized by OFAC, no Loan Party, none of its Subsidiaries and, to the knowledge of senior management of each Loan Party, none of its Affiliates and none of the respective officers, directors, brokers or agents of such Loan Party, such Subsidiary or such Affiliate acting or benefiting in any capacity in connection with the Loans (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Embargoed Person, (ii) deals in, or otherwise engages in any transaction related to, any property or interests in property blocked pursuant to any applicable Economic Sanctions Laws or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the applicable prohibitions set forth in any Economic Sanctions Laws.
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AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01 , 6.02 , 6.03 and 6.11 ) cause each Subsidiary to:
Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:
(a) as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower (commencing with the fiscal year ended June 30, 2010), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, changes in shareholders’ equity, and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of PricewaterhouseCoopers LLP or other independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;
(b) as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (commencing with the fiscal quarter ending September 30, 2010), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, and the related consolidated statements of changes in shareholders’ equity and cash flows for the portion of the Borrower’s fiscal year then ended, in each case setting forth in comparative form, as applicable, the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower on behalf of the Borrower as fairly presenting in all material respects the consolidated financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes; and
(c) as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, an annual business plan and budget of the Borrower and its Subsidiaries on a consolidated basis, including forecasts prepared by management of the Borrower, in form reasonably satisfactory to the Administrative Agent, of consolidated balance sheets and statements of income or operations and cash flows of the Borrower and its Subsidiaries on a quarterly basis for the immediately following fiscal year.
As to any information contained in materials furnished pursuant to Section 6.02(d) , the Borrower shall not be separately required to furnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in Sections 6.01(a) and (b) above at the times specified therein.
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6.02. Certificates; Other Information .
Deliver to the Administrative Agent and each Lender, in form and detail reasonably satisfactory to the Administrative Agent:
(a) concurrently with the delivery of the financial statements referred to in Section 6.01(a) (commencing with the delivery of the financial statements for the fiscal year ended June 30, 2010), a certificate of its independent certified public accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default with respect to Section 7.11 or, if any such Default shall exist, stating the nature and status of such event;
(b) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b) (commencing with the delivery of the financial statements for the fiscal year ended June 30, 2010), a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Borrower on behalf of the Borrower (which delivery may, unless the Administrative Agent, or a Lender requests executed originals, be by electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes);
(c) promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of any Loan Party or any of its Subsidiaries, or any audit of any of them;
(d) promptly after the same are available, copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, or with any national securities exchange, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;
(e) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;
(f) promptly, and in any event within five Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof;
(g) not later than five Business Days after receipt thereof by any Loan Party or any Domestic Subsidiary thereof, copies of all notices, requests and other definitive documents (including amendments, waivers and other modifications) so received under or pursuant to any instrument, indenture, loan or credit or similar agreement and, from time to time upon request by the Administrative Agent, such information and reports regarding such instruments, indentures and loan and credit and similar agreements as the Administrative Agent may reasonably request;
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(h) promptly after the assertion or occurrence thereof, notice of any action or proceeding against or of any noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could (i) reasonably be expected to have a Material Adverse Effect or (ii) cause any property described in the Mortgages to be subject to any material restrictions on ownership, occupancy, use or transferability under any Environmental Law;
(i) as soon as available, but in any event within 30 days after the end of each fiscal year of the Borrower, (i) a report supplementing Schedule 7(a) of the Perfection Certificate, including an identification of all owned and leased real property disposed of by any Loan Party during such fiscal year, a list and description (including the street address, county or other relevant jurisdiction, state, record owner and, in the case of leases of property, lessor and lessee) of all real property acquired or leased during such fiscal year and a description of such other changes in the information included in such Schedules as may be necessary for such Schedules to be accurate and complete; (ii) a report supplementing Schedules 11(a) , 11(b) and 11(c) of the Perfection Certificate setting forth (A) a list of registration numbers for all patents, trademarks, service marks, trade names and copyrights registered with the U.S. Patent and Trademark Office or the U.S. Copyright Office acquired by any Loan Party or any Subsidiary thereof during such fiscal year, (B) a list of all other material patents, trademarks, service marks, trade names and copyrights acquired by any Loan Party or any Subsidiary thereof during such fiscal year, (C) a list of all patent applications, trademark applications, service mark applications, trade name applications and copyright applications submitted by any Loan Party or any Subsidiary thereof with the U.S. Patent and Trademark Office or the U.S. Copyright Office during such fiscal year and the status of each such application, (D) a list of all other material patent applications, trademark applications, service mark applications, trade name applications and copyright applications submitted by any Loan Party or any Subsidiary thereof during such fiscal year and the status of each such application, and (E) a report supplementing Schedule 9(b) of the Perfection Certificate containing a description of all changes in the information included in such Schedule as may be necessary for such Schedule to be accurate and complete in all material respects, each such report to be signed by a Responsible Officer of the Borrower on behalf of the Borrower and to be in a form reasonably satisfactory to the Administrative Agent; provided that the Borrower may supplement any of the lists described in clause (A), (B), (C) or (D) if the Borrower discovers that it has omitted any one or more immaterial items after having prepared such lists after due inquiry;
(j) concurrently with the delivery of financial statements pursuant to Section 6.01(a) , deliver to the Administrative Agent a Perfection Certificate Supplement and a certificate of a Responsible Officer and the chief legal officer of Borrower on behalf of the Borrower certifying that all UCC financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction necessary to protect and perfect the security interests and Liens under the Collateral Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed, and any filings, recordings or registrations required under foreign Laws to be made, within such period); and
(k) promptly, such additional information regarding the business, financial, legal or corporate affairs of any Loan Party or any Subsidiary thereof, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.
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Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC or posted on IntraLinks or another similar electronic system) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 11.02 ; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions ( i.e. , soft copies) or access to electronic versions of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “ Borrower Materials ”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “ Platform ”) on a confidential basis and (b) certain of the Lenders (each, a “ Public Lender ”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States Federal and state securities laws ( provided , however , that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.07 ); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information” and subject to confidentiality obligations.
Upon coming to the attention of a Responsible Officer promptly notify the Administrative Agent and each Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation,
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proceeding or suspension between the Borrower or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any action, litigation or proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws, or with respect to any Environmental Permit that could (x) reasonably be expected to have a Material Adverse Effect or (y) cause any property described in the Mortgages to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law;
(c) of the occurrence of any ERISA Event that could reasonably be expected to have a Material Adverse Effect;
(d) of any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary thereof; and
(e) of the occurrence of any Disposition of property or assets for which the Borrower is required to make a mandatory prepayment pursuant to Section 2.05(b)(ii).
Each notice pursuant to Section 6.03 (other than Section 6.03(e) or (f) ) shall be accompanied by a statement of a Responsible Officer of the Borrower on behalf of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.
6.04. Payment of Obligations .
(a) Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including (i) all Tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted (which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien) and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary; (ii) all lawful claims which, if unpaid, would by law become a Lien upon its property, unless the same are being contested in good faith by appropriate proceedings diligently conducted and provided that there is no material impairment of the priority of the Administrative Agent’s Liens; and (iii) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness; and
(b) Timely file all material tax returns required to be filed (taking into account valid extensions).
6.05. Preservation of Existence, Etc .
(a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05 ; (b) take commercially reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.
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6.06. Maintenance of Properties .
Except where the failure to do so could not reasonably be expected to have a Material Adverse Effect: (a) maintain and preserve all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and replacements thereof and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.
6.07. Maintenance of Insurance .
(a) Maintain with financially sound and reputable insurance companies not Affiliates of the Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons and all such insurance with respect to occurrences or assets in the United States shall (i) provide for not less than 30 days’ prior notice to the Administrative Agent of termination, lapse or cancellation of such insurance, (ii) name the Administrative Agent as mortgagee (in the case of property insurance covering perfected Collateral) or additional insured on behalf of the Secured Parties (in the case of liability insurance) or loss payee (in the case of other property insurance), as applicable, and (iii) be reasonably satisfactory in all other respects to the Administrative Agent.
(b) If any portion of any Mortgaged Property (except, to the extent permitted by applicable law, land without a Building located thereon) is at any time located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a Special Flood Hazard Area with respect to which flood insurance is required under the National Flood Insurance Act of 1968 (as now or hereafter in effect or successor act thereto), then the Borrower shall, or shall cause each Loan Party to (i) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws and (ii) deliver to the Administrative Agent evidence of such compliance in form and substance reasonably acceptable to the Administrative Agent.
(c) So long as no Event of Default has occurred and is continuing, the Loan Parties shall have the right to adjust any losses.
Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
(a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.
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Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided , however , that (subject to the next proviso) the Borrower shall not bear the cost of more than one visit per year for all Lenders together; provided further , however , that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.
Use the proceeds of the Credit Extensions for working capital and general corporate purposes not in contravention of any Law or of any Loan Document.
6.12. Covenant to Guarantee Obligations and Give Security .
(a) Upon the formation or acquisition (including pursuant to any Permitted Acquisition) of any new direct or indirect Domestic Subsidiary by any Loan Party, then the Borrower shall, at the Borrower’s expense:
(i) within 15 days after such formation or acquisition, cause such Subsidiary, and cause each direct and indirect parent of such Subsidiary (if it has not already done so), to duly execute and deliver to the Administrative Agent a guaranty or guaranty supplement, in form and substance reasonably satisfactory to the Administrative Agent, guaranteeing the other Loan Parties’ obligations under the Loan Documents,
(ii) within 15 days after such formation or acquisition, furnish to the Administrative Agent a description of the real and personal properties of such Subsidiary, in detail reasonably satisfactory to the Administrative Agent,
(iii) within 30 days after such formation or acquisition, cause such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to duly execute and deliver to the Administrative Agent deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement Supplements, Perfection Certificate, IP Security Agreements and other security and pledge agreements, as specified by and in form and substance reasonably satisfactory to the Administrative Agent (including delivery of all certificates, if any, owned by the Borrower or a Domestic Subsidiary representing the Equity Interests in and of such Subsidiary, and other instruments of the type specified in Sections 4.01(a)(iii) and 4.01(a)(iv)(F) ), securing payment of all the Obligations of such Subsidiary or such parent, as the case may be, under the Loan Documents and constituting Liens on all such real and personal properties,
(iv) within 30 days after such formation or acquisition, cause such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to take whatever action (including the recording of mortgages, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the reasonable opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the properties purported to be subject to the deeds of trust, trust deeds, deeds
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to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement Supplements, IP Security Agreements and security and pledge agreements delivered pursuant to this Section 6.12 , enforceable against all third parties in accordance with their terms,
(v) within 60 days after such formation or acquisition, deliver to the Administrative Agent, upon the request of the Administrative Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties reasonably acceptable to the Administrative Agent (Borrower’s present counsel being acceptable) as to the matters contained in clauses (i), (iii) and (iv) above, and as to such other matters as the Administrative Agent may reasonably request; and
(vi) as promptly as practicable after such formation or acquisition, deliver, upon the request of the Administrative Agent in its reasonable discretion, to the Administrative Agent with respect to each parcel of real property owned or held by the entity that is the subject of such formation or acquisition title reports, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance reasonably satisfactory to the Administrative Agent; provided , however , that to the extent that any Loan Party or any of its Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Administrative Agent.
(b) Upon the acquisition (including pursuant to any Permitted Acquisition) of any property by any Loan Party, if such property, in the judgment of the Administrative Agent, shall not already be subject to a perfected first priority security interest in favor of the Administrative Agent for the benefit of the Secured Parties, then the Borrower shall, at the Borrower’s expense:
(i) within 15 days after such acquisition, furnish to the Administrative Agent a description of the property so acquired in detail satisfactory to the Administrative Agent,
(ii) within 30 days after such acquisition, cause the applicable Loan Party to duly execute and deliver to the Administrative Agent deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement Supplements, IP Security Agreements and other security and pledge agreements (including delivery of instruments of the type specified in Section 4.01(a)(iv)(F) ), as specified by and in form and substance reasonably satisfactory to the Administrative Agent, securing payment of all the Obligations of the applicable Loan Party under the Loan Documents and constituting Liens on all such properties,
(iii) within 30 days after such acquisition, cause the applicable Loan Party to take whatever action (including the recording of mortgages, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the reasonable opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on such property, enforceable against all third parties in accordance with their terms,
(iv) within 60 days after such acquisition, deliver to the Administrative Agent, upon the reasonable request of the Administrative Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties reasonably acceptable to the Administrative Agent (Borrower’s present counsel being acceptable) as to the matters contained in clauses (ii) and (iii) above and as to such other matters as the Administrative Agent may reasonably request, and
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(v) as promptly as practicable after any acquisition of a real property, deliver, upon the request of the Administrative Agent in its reasonable discretion, to the Administrative Agent with respect to such real property title policies, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance reasonably satisfactory to the Administrative Agent, provided , however , that to the extent that any Loan Party or any of its Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Administrative Agent,
(c) Upon the request of the Administrative Agent following the occurrence and during the continuance of a Default, the Borrower shall, at the Borrower’s expense:
(i) within 15 days after such request, furnish to the Administrative Agent a description of the real and personal properties of the Loan Parties and their respective domestic Subsidiaries in detail reasonably satisfactory to the Administrative Agent,
(ii) within 30 days after such request, duly execute and deliver, and cause each Domestic Subsidiary of the Borrower (if it has not already done so) to duly execute and deliver, to the Administrative Agent Mortgages, Security Agreement Supplements, IP Security Agreements and other security and pledge agreements, as specified by and in form and substance reasonably satisfactory to the Administrative Agent (including delivery of all Pledged Securities in and of such Domestic Subsidiary, and other instruments of the type specified in Section 4.01(a)(iii) ), securing payment of all the Obligations of such Domestic Subsidiary under the Loan Documents and constituting Liens on all such properties,
(iii) within 30 days after such request, take, and cause each Domestic Subsidiary of the Borrower to take, whatever action (including the recording of mortgages, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the reasonable opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the properties purported to be subject to the deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement Supplements, IP Security Agreements and security and pledge agreements delivered pursuant to this Section 6.12 , enforceable against all third parties in accordance with their terms,
(iv) within 60 days after such request, deliver to the Administrative Agent, upon the reasonable request of the Administrative Agent in its reasonable discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties reasonably acceptable to the Administrative Agent (Borrower’s present counsel being acceptable) as to the matters contained in clauses (ii) and (iii) above, and as to such other matters as the Administrative Agent may reasonably request, and
(v) as promptly as practicable after such request, deliver, upon the request of the Administrative Agent in its sole discretion, to the Administrative Agent with respect to each parcel of real property owned or held by the Borrower and its Domestic Subsidiaries, title reports, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance reasonably satisfactory to the Administrative Agent, provided , however , that to the extent that any Loan Party or any of its Domestic Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Administrative Agent.
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(d) If an Event of Default exists for at least 30 days, then at the request of the Administrative Agent, within 90 days of such request, execute and deliver (1) Mortgages and related ancillary documents in favor of the Administrative Agent, for the benefit of the Secured Parties, with respect to any Specified Property, each duly executed and delivered by an authorized officer of each party thereto and in form suitable for filing and recording in all filing or recording offices that the Administrative Agent may deem necessary or desirable, together with evidence that the reasonable taxes, fees, costs and expenses have been paid in connection with the preparation, execution, filing and recordation of such Mortgages, including, without limitation, reasonable attorneys’ fees, title insurance premiums, filing and recording fees, title insurance company coordination fees, documentary stamp, mortgage and intangible taxes and title search charges and other charges incurred in connection with the recordation of such Mortgages and (2) such other documents and instruments with respect to such real property as otherwise required to be delivered in accordance with Section 4.01(a)(iv) in respect of the Mortgaged Properties.
(e) At any time upon request of the Administrative Agent, promptly execute and deliver any and all further instruments and documents and take all such other action as the Administrative Agent may deem necessary or desirable in obtaining the full benefits of, or (as applicable) in perfecting and preserving the Liens of, such guaranties, deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security Agreement Supplements, IP Security Agreement Supplements and other security and pledge agreements.
6.13. Compliance with Environmental Laws .
Comply, and cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits and maintain all Environmental Permits necessary for its operations and properties, including conducting any investigation, study, sampling and testing, and undertaking any cleanup, response or other corrective action required, to address all Hazardous Materials at, on, under or emanating from any of properties owned, leased or operated by it in accordance with the requirements of all Environmental Laws (other than those the failure of which to comply or maintain in accordance with this Section 6.13 could not reasonably be expect to have a Material Adverse Effect); provided , however , that neither the Borrower nor any of its Subsidiaries shall be required to undertake any cleanup, removal, remedial 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.
6.14. Preparation of Environmental Reports .
If an Event of Default occurs under Section 5.09 or Section 6.13, or if the Administrative Agent reasonably believes that a violation of Environmental Law or Environmental Liability exists or is likely to occur, then Borrower shall, at the request of the Required Lenders, provide to the Lenders within 60 days after such request, at the expense of the Borrower, an environmental site assessment report for any property described in the request that is or is to become a Mortgaged Property, prepared by an environmental consulting firm acceptable to the Administrative Agent, indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance, response or other corrective action to address any Hazardous Materials on, at, under or emanating from such properties; without limiting the generality of the foregoing, if the Administrative Agent determines at any time that a material risk exists that any such report will not be provided within the time referred to above, the Administrative Agent may retain an environmental consulting firm to prepare such report at the expense of the Borrower, and the Borrower hereby grants and agrees to cause any Domestic Subsidiary that owns or leases any property described in such request to grant at the time of such request to the Administrative Agent, the Lenders, such firm and any agents or representatives thereof an irrevocable non-exclusive license, in each case, subject to the
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rights of tenants or necessary consents of landlords for any leased property, to enter onto their respective properties to undertake such an assessment.
Promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by applicable Law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.
6.16. Compliance with Terms of Leaseholds .
Make all payments and otherwise perform all obligations in respect of all leases of real property to which the Borrower or any of its Subsidiaries is a party, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled, notify the Administrative Agent of any default by any party with respect to such leases and cooperate with the Administrative Agent in all respects to cure any such default, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.
Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time reasonably requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each such Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
6.18. Cash Collateral Accounts .
Maintain, and cause each of the other Loan Parties to maintain, all Cash Collateral Accounts with Bank of America or another commercial bank located in the United States, which has accepted the assignment of such accounts to the Administrative Agent for the benefit of the Secured Parties pursuant to the terms of the Security Agreement.
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6.19. Post-Closing Undertaking .
Take the actions specified in Schedule 6.19 within the time periods set forth in Schedule 6.19, in lieu of the time periods otherwise set forth in this Agreement, unless the Administrative Agent, in its absolute and sole discretion, has otherwise extended such time periods or waived or amended such obligations prior to the expiry of the applicable time period.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:
Create, incur, assume or suffer to exist any Lien of any nature whatsoever against any assets of the Borrower or any Subsidiary, whether owned at the Closing Date or thereafter acquired, other than the following (collectively, the “ Permitted Encumbrances ”):
(1) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Borrower or its Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;
(2) Liens of landlords, carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof and rights to offset and set-off;
(3) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory or regulatory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);
(4) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(5) judgment Liens not giving rise to an Event of Default so long as such Liens are adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which the proceedings may be initiated has not expired;
(6) easements, rights-of-way, zoning restrictions, title irregularities and other similar charges, restrictions or encumbrances in respect of real property which do not, in the aggregate, impair in any material respect the ordinary conduct of the business of the Borrower and its Subsidiaries taken as a whole;
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(7) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other assets relating to such letters of credit and products and proceeds thereof;
(8) Liens encumbering deposits made to secure obligations arising from contractual or warranty requirements of the Borrower or any of its Subsidiaries, including rights of offset and setoff;
(9) lenders’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more of accounts maintained by the Borrower or any of its Subsidiaries, in each case granted in the ordinary course of business in favor of the lender or lenders with which such accounts are maintained, securing amounts owing to such lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;
(10) leases or subleases, and licenses or sublicenses, granted to others that do not materially interfere with the ordinary course of business of the Borrower or any of its Subsidiaries;
(11) Liens arising from precautionary filings of Uniform Commercial Code financing statements regarding operating leases;
(12) [Reserved];
(13) Liens securing Swap Contracts entered into for bona fide hedging purposes of the Borrower or any of its Subsidiaries not for the purpose of speculation;
(14) Liens existing on the Closing Date and listed on Schedule 7.01 ;
(15) Liens in favor of the Borrower or a Loan Party;
(16) Liens pursuant to any Loan Document securing the Obligations;
(17) Liens securing Purchase Money Indebtedness and Capitalized Lease Obligations; provided that such Liens shall not extend to any asset other than the specified asset being financed and additions and improvements thereon;
(18) Liens securing Acquired Indebtedness permitted to be incurred under this Agreement; provided that the Liens do not extend to assets not subject to such Lien at the time of acquisition (other than improvements thereon and substitutions and replacements thereto) and are no more favorable to the lienholders than those securing such Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Borrower or a Subsidiary;
(19) Liens on assets of a Person existing at the time such Person is acquired or merged with or into or consolidated with the Borrower or any such Subsidiary (and not created in anticipation or contemplation thereof);
(20) Liens on assets of Foreign Subsidiaries securing Indebtedness of Foreign Subsidiaries;
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(21) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (14), (17), (18) and (19); provided that such Liens do not extend to any additional assets (other than improvements thereon and replacements thereof);
(22) Liens in favor of customs brokers and customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(23) Liens securing Indebtedness incurred pursuant to Section 7.02(13) ; and
(24) Liens arising in connection with the placement by the Borrower or any of its Subsidiaries of a reasonable amount of cash (as determined in good faith by the Borrower’s Board of Directors) in escrow against any obligations permitted pursuant to Section 7.02(11) (other than with respect to obligations incurred or assumed in connection with the acquisition, disposition, issuance or redemption of Equity Interests of the Borrower);
In addition, the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly create, incur, assume or suffer to exist any Lien of any nature whatsoever against any Specified Property other than those described in clauses (1), (2), (5), (6), (10), (11), (14), (16) and (to the extent relating to Liens permitted by clause (14)) (21) above.
Create, incur, assume or suffer to exist any Indebtedness, except:
(1) Indebtedness under the Loan Documents;
(2) Indebtedness evidenced by the Senior Notes outstanding on the date hereof;
(3) Indebtedness of the Borrower and its Subsidiaries to the extent outstanding on the Closing Date after giving effect to the intended use of proceeds of the Loans on the Closing Date and listed on Schedule 7.02 (other than Indebtedness referred to in clause (1), (2) or (5));
(4) Indebtedness under Swap Contracts entered into for bona fide hedging purposes of the Borrower or any of its Subsidiaries not for the purpose of speculation; provided that in the case of Swap Contracts relating to interest rates, (a) such Swap Contracts relate to payment obligations on Indebtedness otherwise permitted to be incurred by this covenant, and (b) the notional principal amount of such Swap Contracts at the time incurred does not exceed the principal amount of the Indebtedness to which such Swap Contracts relate;
(5) Indebtedness of the Borrower owed to a Subsidiary and Indebtedness of any Subsidiary owed to the Borrower or any other Subsidiary; provided that upon any such Subsidiary ceasing to be a Subsidiary or such Indebtedness being owed to any Person other than the Borrower or a Subsidiary, the Borrower or such Subsidiary, as applicable, shall be deemed to have incurred Indebtedness not permitted by this clause (5);
(6) (a) Indebtedness in respect of bid, performance, completion, guarantee, surety and similar bonds and assurances issued for the account of the Borrower or any of its Subsidiaries in the ordinary course of business, including guarantees or obligations of the Borrower or any of its Subsidiaries with respect to letters of credit supporting such bid, performance, completion, guarantee or surety obligations (in each case other than for an obligation for money borrowed); and (b) Indebtedness constituting reimbursement obligations with respect to letters of credit issued
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in the ordinary course of business in respect of (1) workers’ compensation claims or self-insurance, (2) other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance or (3) for regulatory or insurance purposes;
(7) Purchase Money Indebtedness incurred by the Borrower or any of its Subsidiaries, Refinancing Indebtedness thereof and any subsequent Refinancing Indebtedness thereof, in an aggregate amount not to exceed at any time outstanding $10.0 million;
(8) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided , however , that such Indebtedness is extinguished within five Business Days of the Borrower or a Subsidiary, as the case may be, being notified of such overdraft;
(9) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(10) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to clause (2) or (3) above or this clause (10);
(11) indemnification, adjustment of purchase price, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets of the Borrower or any of its Subsidiaries or the acquisition, disposition, issuance or redemption of Equity Interests of the Borrower or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing or in contemplation of any such acquisition; provided that (a) any amount of such obligations included (or that would be required to be included) on the face of the balance sheet of the Borrower or any of its Subsidiaries at the time of closing of such acquisition, disposition, issuance or redemption shall not be permitted under this clause (11) and (b) in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this clause (11) shall at no time exceed the gross proceeds or value of the consideration actually received by the Borrower and its Subsidiaries in connection with such disposition;
(12) Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed $20.0 million at any time outstanding;
(13) Indebtedness of the Borrower or any of its Subsidiaries in an aggregate amount not to exceed $15.0 million at any time outstanding;
(14) Indebtedness incurred under Cash Management Agreements in the ordinary course of business;
(15) unsecured Indebtedness of the Borrower or any of its Subsidiaries under Credit Facilities in an aggregate amount at any time outstanding not to exceed (I) the greater of (x) $100.0 million and (y) the sum of (a) 85% of the book value of the receivables of the Borrower and the Subsidiaries plus (b) 65% of the book value of inventory of the Borrower and the Subsidiaries, in each case, calculated on a consolidated basis and in accordance with GAAP minus (II) the Aggregate Commitments at such time.
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For purposes of determining compliance with this Section 7.02 , in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (15) above the Borrower shall, in its sole discretion, classify such item of Indebtedness and may divide and classify such Indebtedness in more than one of the types of Indebtedness described, and may later reclassify any item of Indebtedness described in clauses (1) through (15) above ( provided that at the time of reclassification it meets the criteria in such category or categories). In addition, for purposes of determining any particular amount of Indebtedness under this Section 7.02 , guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included so long as incurred by a Person that could have incurred such Indebtedness.
Acquire any other Person or a business unit or segment, line of business, product line of another Person other than in a Permitted Acquisition.
Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Borrower; provided that the Borrower shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries; provided that when any Loan Party is merging with another Subsidiary, such Loan Party shall be the continuing or surviving Person;
(b) any Loan Party may Dispose of any or all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another Loan Party;
(c) any Subsidiary that is not a Loan Party may Dispose of any or all or substantially all its assets (including any Disposition that is in the nature of a liquidation) to (i) another Subsidiary that is not a Loan Party or (ii) to a Loan Party;
(d) in connection with any acquisition permitted under Section 7.03 , any Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that (i) the Person surviving such merger shall be a wholly-owned Subsidiary of the Borrower and (ii) in the case of any such merger to which any Loan Party (other than the Borrower) is a party, such Loan Party is the surviving Person;
(e) so long as no Default has occurred and is continuing or would result therefrom, any Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided , however , that in each case, immediately after giving effect thereto (i) in the case of any such merger to which the Borrower is a party, the Borrower is the surviving corporation and (ii) in the case of any such merger to which any Loan Party (other than the Borrower) is a party, such Loan Party is the surviving corporation; and
(f) the reorganization of one or more of the Israeli Subsidiaries as contemplated by clause (18) of the definition of “Permitted Investments.”
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Make any Asset Sale.
Declare or make, any Restricted Payment, except the following:
(1) [Reserved];
(2) the redemption or repurchase of any Equity Interests of the Borrower or any of its Subsidiaries in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests;
(3) the redemption or repurchase of Subordinated Indebtedness of the Borrower or any of its Subsidiaries (a) in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests or (b) in exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted to be incurred under the Section 7.02 and the other terms of this Agreement;
(4) repurchases of Equity Interests deemed to occur upon the exercise of stock options, warrants and other similar rights to acquire Equity Interests if the Equity Interests represents a portion of the exercise price thereof;
(5) the repurchase of Equity Interests of the Borrower (including options, warrants or other rights to acquire such Equity Interests) in an aggregate amount paid that shall not exceed $10.0 million since the Closing Date plus the aggregate cash proceeds from any payments on insurance policies in which the Borrower or any of its Subsidiaries is the beneficiary with respect to any directors, officers or employees of the Borrower and its Subsidiaries which proceeds are used to purchase the Equity Interests of the Borrower;
(6) Restricted Payments in an amount such that the sum of the aggregate amount of Restricted Payments made pursuant to this clause (6) after the Closing Date does not exceed $15.0 million at any one time outstanding;
(7) Restricted Payments on or about the Closing Date in an aggregate amount not to exceed $50.0 million;
(8) any Investment to the extent the consideration for which consists of, or is made with the proceeds of the substantially concurrent sale of, or equity contribution with respect to, Qualified Equity Interests;
(9) [Reserved];
(10) the declaration and payment of dividends to holders of any class or series of Disqualified Equity Interests of the Borrower issued in accordance with Section 7.02 to the extent such dividends are included in the definition of “Consolidated Interest Expense”; or
(11) repurchases by the Borrower or any of its Subsidiaries of (x) Qualified Equity Interests deemed to occur upon the exercise of stock options or warrants if such Qualified Equity Interests represent a portion of the exercise price thereof or (y) Qualified Equity Interests deemed
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to occur upon the withholding of a portion of the Qualified Equity Interests granted or awarded to an employee to pay for the taxes payable by such employee upon such grant or award;
provided that in the case of any Restricted Payment pursuant to clause (3), (5), (6), (10) or (11) above, no Default shall have occurred and be continuing or occur as a consequence thereof.
The Borrower will not, and will not permit any Subsidiary to, engage in any business other than a Permitted Business.
7.08. Transactions with Affiliates .
(a) In one transaction or a series of related transactions, sell, lease, transfer or otherwise dispose of any of its assets to, or purchase any assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (an “ Affiliate Transaction ”), unless:
(1) such Affiliate Transaction is on terms that are no less favorable to the Borrower or the relevant Subsidiary than those that would reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis by the Borrower or that Subsidiary from a Person that is not an Affiliate of the Borrower or that Subsidiary; and
(2) the Borrower delivers to the Administrative Agent:
(a) with respect to any Affiliate Transaction involving aggregate value in excess of $2.5 million, an officers’ certificate certifying on behalf of the Borrower that such Affiliate Transaction complies with clause (1) above and a secretary’s certificate which sets forth and authenticates on behalf of the Borrower the resolution that has been adopted by a majority of the Independent Directors approving such Affiliate Transaction; and
(b) with respect to any Affiliate Transaction involving aggregate value of $10.0 million or more, the certificates described in the preceding clause (a) and a written opinion as to the fairness if such Affiliate Transaction to the Borrower or such Subsidiary from a financial point of view issued by an Independent Financial Advisor to the Board of Directors of the Borrower.
(b) Section 7.08(a) shall not apply to:
(1) transactions between or among (a) the Borrower and one or more Subsidiaries or (b) Subsidiaries; provided , in each case, that no Affiliate of the Borrower (other than another Subsidiary) owns Equity Interests of any such Subsidiary;
(2) director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans and reimbursement or advancement of out-of-pocket expenses, and director’s and officer’s liability insurance) and indemnification arrangements, in each case approved by a majority of the Independent Directors;
(3) loans and advances permitted by clause (3) of the definition of “Permitted Investments”;
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(4) Restricted Payments of the type described in clause (1), (2) or (4) of the definition of “Restricted Payment” and which are made in compliance with Section 7.06 ;
(5) (x) any agreement or arrangement in effect on the Closing Date and disclosed or referenced in footnote 16 to the Audited Financial Statements (for the fiscal year ended June 30, 2009), or as thereafter amended or replaced in any manner, that, taken as a whole, is not more disadvantageous to the Lenders or the Borrower in any material respect than such agreement as it was in effect on the Closing Date or (y) any transaction pursuant to any agreement referred to in the immediately preceding clause (x);
(6) any transaction with a joint venture or similar entity which would constitute an Affiliate Transaction solely because the Borrower or a Subsidiary owns an equity interest in or otherwise controls such joint venture or similar entity; provided that no Affiliate of the Borrower or any of its Subsidiaries other than the Borrower or a Subsidiary shall have a beneficial interest in such joint venture or similar entity; and
(7) (a) any transaction with an Affiliate where the only consideration paid by the Borrower or any of its Subsidiaries is Qualified Equity Interests or (b) the issuance or sale of any Qualified Equity Interests.
7.09. No Further Negative Pledge .
Enter into any agreement, instrument, deed or lease which prohibits or limits the ability of any Loan Party to create, incur, assume or suffer to exist any Lien upon any of their respective properties or revenues, whether now owned or hereafter acquired, or which requires the grant of any security for an obligation if security is granted for another obligation, except the following: (1) this Agreement and the other Loan Documents; (2) covenants in documents creating Liens permitted by Section 7.01 prohibiting further Liens on the properties encumbered thereby; (3) the Senior Note Document as in effect on the Closing Date; (4) any other agreement that does not restrict in any manner (directly or indirectly) Liens created pursuant to the Loan Documents on any Collateral securing the Obligations and does not require the direct or indirect granting of any Lien securing any Indebtedness or other obligation by virtue of the granting of Liens on or pledge of property of any Loan Party to secure the Obligations; and (5) any prohibition or limitation that (a) exists pursuant to applicable requirements of law, (b) consists of customary restrictions and conditions contained in any agreement relating to the sale of any property permitted under Section 7.05 pending the consummation of such sale, (c) restricts subletting or assignment of leasehold interests contained in any Lease governing a leasehold interest of Borrower or a Subsidiary, (d) exists in any agreement in effect at the time such Subsidiary becomes a Subsidiary of Borrower, so long as such agreement was not entered into in contemplation of such person becoming a Subsidiary or (e) is imposed by any amendments or refinancings that are otherwise permitted by the Loan Documents of the contracts, instruments or obligations referred to in clause (3) or (5)(d); provided that such amendments and refinancings are not materially more restrictive with respect to such prohibitions and limitations than those prior to such amendment or refinancing.
Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.
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(a) Consolidated Fixed Charge Coverage Ratio . Permit the Consolidated Fixed Charge Coverage Ratio for any Measurement Period to be less than 1.1:1.0.
(b) Senior Secured Funded Debt to EBITDA Ratio . Permit the Senior Secured Funded Debt to EBITDA Ratio for any Measurement Period to exceed 2.00:1.00.
(c) Minimum EBITDA . Permit Consolidated EBITDA to be less than $60.0 million for any Measurement Period.
7.12. Restrictions on Subsidiaries .
The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Subsidiary to:
(a) pay dividends or make any other distributions on or in respect of its Equity Interests;
(b) make loans or advances or pay any Indebtedness or other obligation owed to the Borrower or any other Subsidiary; or
(c) transfer any of its assets to the Borrower or any other Subsidiary;
except for:
(1) encumbrances or restrictions existing under or by reason of applicable law, regulation or order;
(2) encumbrances or restrictions existing under this Agreement or the Senior Notes Document;
(3) non-assignment or subletting provisions of any contract or any lease entered into in the ordinary course of business;
(4) encumbrances or restrictions existing under agreements existing on the Closing Date as in effect on that date;
(5) restrictions relating to any Lien permitted under this Agreement imposed by the holder of such Lien;
(6) restrictions imposed under any agreement to sell assets (including capital stock) permitted under this Agreement to any Person pending the closing of such sale;
(7) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired;
(8) any other agreement governing Indebtedness entered into after the Closing Date that contains encumbrances and restrictions that are not, in the good faith judgment
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of the Borrower’s Board of Directors, materially more restrictive with respect to any Subsidiary than those in effect on the Closing Date with respect to that Subsidiary pursuant to agreements in effect on the Closing Date;
(9) customary provisions in partnership agreements, shareholder agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements entered into in the ordinary course of business that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person;
(10) Purchase Money Indebtedness incurred in compliance with Section 7.02 that impose restrictions of the nature described in clause (c) above on the assets acquired;
(11) restrictions on cash or other deposits or net worth imposed by suppliers or landlords under contracts entered into in the ordinary course of business;
(12) encumbrances or restrictions contained in Indebtedness of Foreign Subsidiaries permitted to be incurred under this Agreement; provided that any such encumbrances or restrictions are ordinary and customary with respect to the type of Indebtedness being incurred under the relevant circumstances and do not, in the good faith judgment of the Board of Directors of the Borrower, materially impair the Borrower’s ability to make payment on the Loans when due; and
(13) any encumbrances or restrictions imposed by any amendments, restatements, renewals, replacements, refundings or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) above or any amendments, restatements, renewals, replacements, refundings or refinancings thereof; provided that such amendments, restatements, renewals, replacements, refundings or refinancings are, in the good faith judgment of the Borrower’s Board of Directors, no more materially restrictive with respect to such encumbrances and restrictions than those prior to such amendment, restatement, renewal, replacement, refunding or refinancing.
(a) The Borrower will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness of the Borrower or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate in right of payment to the Loans or the guarantee thereof by such Guarantor, to the same extent and in the same manner as such Indebtedness is subordinated in right of payment to such other Indebtedness of the Borrower or such Guarantor, as the case may be.
(b) For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Borrower or any Guarantor solely by virtue of being unsecured or secured by a junior priority lien or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in the collateral held by them.
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(a) Make any payments in respect of the Mayflower Term Loan or any Refinancing Indebtedness in respect thereof, other than (i) scheduled quarterly payments of interest at a rate not in excess of 11% per annum and (ii) the payment of principal at final maturity; provided that no such payment of principal shall be permitted unless (x) immediately prior to such payment, Liquidity is at least $34.0 million and (y) immediately after giving effect to such payment, Liquidity (without giving effect to clause (ii) of the definition thereof) will be at least $10.0 million.
(b) Make any payments in respect of the BFI Term Loan or any Refinancing Indebtedness in respect thereof other than (i) scheduled monthly payments of interest at a rate not in excess of 12% per annum and (ii) the payment of principal at final maturity; provided that no such payment of principal shall be permitted unless (x) immediately prior to such payment, Liquidity is at least $20.0 million and (y) immediately after giving effect to such payment, Liquidity (without giving effect to clause (ii) of the definition thereof) will be at least $10.0 million.
(c) Make any payments in respect of the Teva Term Loan or any Refinancing Indebtedness in respect thereof other than scheduled annual principal payments; provided that no such payment of principal shall be permitted unless (x) immediately prior to each such payment, Liquidity is at least $15.5 million and (y) immediately after giving effect to each such payment, Liquidity (without giving effect to clause (ii) of the definition thereof) will be at least $10.0 million.
7.15. Amendments of Organization Documents .
Terminate, amend or modify any of its Organization Documents (including (x) by the filing or modification of any certificate of designation and (y) any election to treat any Pledged Securities (as defined in the Security Agreement) as a “security” under Section 8-103 of the UCC other than concurrently with the delivery of certificates representing such Pledged Securities to the Collateral Agent) or any agreement to which it is a party with respect to its Equity Interests (including any stockholders’ agreement), or enter into any new agreement setting forth rights, privileges or limitations of any class of its Equity Interests, other than any such amendments or modifications or such new agreements which are not adverse in any material respect to the interests of the Lenders; provided that the Borrower or any Subsidiary may issue such Equity Interests, so long as such issuance is not prohibited by any other provision of this Agreement, and may amend or modify its Organization Documents to authorize any such Equity Interests.
Make any change in (a) accounting policies or reporting practices, except as required by GAAP, or (b) fiscal year.
7.17. Amendment, Etc. of Indebtedness .
Amend or modify, or permit the amendment or modification of, any provision of any documentation governing Indebtedness of the Borrower or any of its Domestic Subsidiaries in any manner that is adverse in any material respect to the interests of the Lenders.
If at any time the Total Outstandings exceed the sum of (i) 85% of the book value of accounts receivable of the Borrower and the Subsidiaries and (ii) 65% of the book value of inventory of the Borrower
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and the Subsidiaries, the Borrower shall prepay Revolving Credit Loans and/or Cash Collateralize Letters of Credit in the amount of such excess within 10 days of such excess existing.
EVENTS OF DEFAULT AND REMEDIES
Any of the following shall constitute an Event of Default:
(a) Non-Payment . The Borrower or any other Loan Party fails to (i) pay when and as required to be paid herein, any amount of principal of any Loan or any L/C Obligation or deposit any funds as Cash Collateral in respect of L/C Obligations, or (ii) pay within three Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) pay within five Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document; provided, however, that in the case of overadvances that are caused by the charging of interest, fees or Lender expenses to the Borrower, such event shall not constitute an Event of Default if within five Business Days of its receipt of notice of such overadvance, the Borrower eliminates such overadvance condition; or
(b) Specific Covenants . The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.03(a) , 6.05 (with respect to the Borrower), 6.11 or Article VII ; or
(c) Other Defaults . Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed (giving effect to any grace periods, cure periods, or required notices, if any, expressly provided for in such Loan Documents) and such failure continues for 30 days after the earlier of (i) the date a Responsible Officer of the Borrower or any Guarantor becomes aware of such failure and (ii) the date written notice of such default shall have been given by the Administrative Agent to the Borrower; or
(d) Representations and Warranties . Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or
(e) Cross-Default . (i) Any Loan Party or any Subsidiary thereof (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate outstanding principal amount (including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such guarantee of Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such guarantee to become payable or cash collateral in respect
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thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which a Loan Party or any Subsidiary thereof is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which a Loan Party or any Subsidiary thereof is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by such Loan Party or such Subsidiary as a result thereof is greater than the Threshold Amount; provided , in the case of clauses (i) or (ii), such default or termination is not waived or cured prior to the earliest of (A) 30 days of the initial occurrence thereof, (B) the acceleration of the subject Indebtedness, or (C) the expiration of the applicable grace or cure period provided in the subject documents; or
(f) Insolvency Proceedings, Etc . Any Loan Party (other than a Specified Guarantor) institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment . (i) Any Loan Party (other than a Specified Guarantor) becomes unable or admits in writing its inability to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or
(h) Judgments . There is entered against any Loan Party (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim and does not dispute coverage, or bonded), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect or (c) such judgments have not been satisfied, discharged, bonded (by providing insurance, letters of credit or other financial assurance), annulled or rescinded within 60 days of being entered; or
(i) ERISA . (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
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(j) Invalidity of Loan Documents . Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document; or
(k) Change of Control . There occurs any Change of Control; or
(l) Collateral Documents . Any Collateral Document after delivery thereof pursuant to Section 4.01 or 6.12 shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by Section 7.01 ) on the Collateral purported to be covered thereby.
8.02. Remedies upon Event of Default .
If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies available to it, the Lenders and the L/C Issuer under the Loan Documents;
provided , however , that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.
After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02 ), any amounts received on account of the Obligations shall, subject to the provisions of Sections 2.14 and 2.15 , be applied by the Administrative Agent in the following order:
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First , to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III ) payable to the Administrative Agent in its capacity as such;
Second , to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer (including fees and time charges for attorneys who may be employees of any Lender or the L/C Issuer) arising under the Loan Documents and amounts payable under Article III , ratably among them in proportion to the respective amounts described in this clause Second payable to them;
Third , to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations arising under the Loan Documents, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;
Fourth , to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Borrowings and Obligations then owing under Secured Hedge Agreements and Secured Cash Management Agreements, ratably among the Lenders, the L/C Issuer, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them;
Fifth , to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Sections 2.03 and 2.14 ; and
Last , the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Sections 2.03(c) and 2.14 , amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.
Notwithstanding the foregoing, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX hereof for itself and its Affiliates as if a “Lender” party hereto.
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ADMINISTRATIVE AGENT
9.01. Appointment and Authority .
(a) Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.
(b) The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank and a potential Cash Management Bank) and the L/C Issuer hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article XI (including Section 11.04(c) , as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
9.03. Exculpatory Provisions .
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly
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provided for herein or in the other Loan Documents), provided that 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 Loan Document or applicable law;
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity;
(d) shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and 8.02 ) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender or the L/C Issuer; and
(e) shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
9.04. Reliance by Administrative Agent .
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the
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Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
9.06. Resignation of Administrative Agent .
The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the approval of the Borrower (such approval not to be unreasonably withheld or delayed; provided that no consent of the Borrower shall be required if any Event of Default has occurred and is continuing), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, (ii) the retiring L/C Issuer and shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.
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9.07. Non-Reliance on Administrative Agent and Other Lenders .
Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
Anything herein to the contrary notwithstanding, none of the Bookrunners or Arrangers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.
9.09. Administrative Agent May File Proofs of Claim .
In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.03(h) and (i) , 2.09 and 11.04 ) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 11.04 .
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or the L/C Issuer or in any such proceeding.
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9.10. Collateral and Guaranty Matters .
Each of the Lenders (including in its capacities as a potential Cash Management Bank and a potential Hedge Bank) and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion,
(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than (A) contingent indemnification obligations and (B) obligations and liabilities under Secured Cash Management Agreements and Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank of Hedge Bank shall have been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Administrative Agent and the L/C Issuer shall have been made), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document that is not a Loan Party, (iii) that constitutes “Excluded Property” (as such term is defined in the Security Agreement) or (iv) if approved, authorized or ratified in writing in accordance with Section 11.01 ;
(b) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder; and
(c) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.01(i) .
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10 . In each case as specified in this Section 9.10 , the Administrative Agent will, at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.10 .
9.11. Secured Cash Management Agreements and Secured Hedge Agreements .
No Cash Management Bank or Hedge Bank that obtains the benefits of Section 8.03 , the Guaranty or any Collateral by virtue of the provisions hereof or of the Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.
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[Reserved]
MISCELLANEOUS
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01 (other than Section 4.01(b)(i) or (c) ), or, in the case of the initial Credit Extension, Section 4.02 , without the written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02 ) without the written consent of such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment;
(d) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to such amount; provided , however , that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest or Letter of Credit Fees at the Default Rate;
(e) change Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender;
(f) change any provision of this Section 11.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder;
(g) release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender; or
(h) release all or substantially all of the value of the Guaranty, without the written consent of each Lender, except to the extent the release of any Subsidiary from the Guaranty is permitted pursuant to Section 9.10 (in which case such release may be made by the Administrative Agent acting alone);
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and provided , further , that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; and (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.
If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, the Borrower may replace such non-consenting Lender in accordance with Section 11.13 ; provided that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this paragraph).
11.02. Notices; Effectiveness; Electronic Communications .
(a) Notices Generally . Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by electronic mail or telecopier as follows, 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 Borrower, the Administrative Agent or the L/C Issuer, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 11.02 ; and
(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).
(b) Electronic Communications . Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that
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the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(c) The Platform . THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “ Agent Parties ”) have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided , however , that in no event shall any Agent Party have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
(d) Change of Address, Etc . Each of the Borrower, the Administrative Agent and the L/C Issuer may change its address, electronic mail address, telecopier or telephone number or electronic mail address for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, electronic mail address, telecopier or telephone number or electronic mail address for notices and other communications hereunder by notice to the Borrower, the Administrative Agent, and the L/C Issuer. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform
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and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.
(e) Reliance by Administrative Agent, L/C Issuer and Lenders . The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices) purportedly given by or on behalf of the Borrower 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. The Borrower shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
11.03. No Waiver; Cumulative Remedies; Enforcement .
No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document 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, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer; provided , however , that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.13 ), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided , further , that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13 , any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
11.04. Expenses; Indemnity; Damage Waiver .
(a) Costs and Expenses . The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable invoiced fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated)],
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(ii) all reasonable out-of-pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the reasonable invoiced fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C Issuer), and shall pay all reasonable invoiced fees and time charges for attorneys who may be employees of the Administrative Agent, any Lender or the L/C Issuer, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with Loans made or Letters of Credit issued hereunder, including all such reasonable invoiced out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) Indemnification by the Borrower . The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01 and provided that the indemnification set forth in Section 3.01(c)(i) shall be in lieu of any other indemnification under this Section 11.04(b) with respect to Indemnified Taxes and Other Taxes), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials at, on, under or emanating from any property owned, leased or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party or any of the Borrower’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.
(c) Reimbursement by Lenders . To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent)
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or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d) .
(d) Waiver of Consequential Damages, Etc . To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, 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 Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.
(e) Payments . All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.
(f) Survival . The agreements in this Section shall survive the resignation of the Administrative Agent, the L/C Issuer, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.
To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.
11.06. Successors and Assigns .
(a) Successors and Assigns Generally . 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 the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 11.06(b) , (ii) by way of participation in accordance with the provisions of Section 11.06(d) , or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.06(f) (and any other attempted assignment or transfer by any party hereto shall
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be null and void). 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 subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders . Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment(s) and the Loans (including for purposes of this Section 11.06(b) , participations in L/C Obligations) at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts .
(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Revolving Credit Loans at the time owing to it under such Facility or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Revolving Credit Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5.0 million, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided , however , that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;
(ii) Proportionate Amounts . 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 with respect to the Loans or the Commitment assigned;
(iii) Required Consents . No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that 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 consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Commitment if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and
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(C) the consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding).
(iv) Assignment and Assumption . The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500 (which fee shall not be charged to Borrower); provided , however , that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Certain Persons . No such assignment shall be made (A) to the Borrower or any of the Borrower’s Affiliates or Subsidiaries, or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) to a natural person.
(vi) Certain Additional Payments . 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 the 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 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 and participations in Letters of Credit in accordance with its Applicable Percentage. 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.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, 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 Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption 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 3.01 , 3.04 , 3.05 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 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 Section 11.06(d) .
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(c) Register . The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower (and such agency being solely for tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and related interest amounts) of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, 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 Registrar information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations . Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (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/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders and the L/C Issuer 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; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01 , 3.04 and 3.05 (subject to the requirements and limitations of such Sections) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.06(b) . To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender.
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 related interest amounts) of each participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”). 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.
(e) Limitations upon Participant Rights . A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.
(f) Certain Pledges . Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of
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such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g) Resignation as L/C Issuer after Assignment . Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Revolving Credit Loans pursuant to Section 11.06(b) , Bank of America may upon 30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer. In the event of any such resignation as L/C Issuer, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer hereunder; provided, however , that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer, as the case may be. If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make LIBOR Daily Floating Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c) ). Upon the appointment of a successor L/C Issuer, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.
11.07. Treatment of Certain Information; Confidentiality .
Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to use the Information (as defined below) solely in connection with the performance of this Agreement and to maintain the confidentiality of the Information, except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, trustees, advisors and representatives needing to know such Information in connection with the performance of this Agreement or a Secured Hedge Agreement (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto on a confidential basis, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower other than through a breach of a confidentiality obligation to the Borrower or its Affiliates known to such Person. For purposes of this Agreement, “ Information ” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses (including information provided to the Borrower or any Subsidiary by a third party on a confidential basis), other than any such information that is available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery
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as confidential or the confidentiality of such information is reasonably apparent based on the circumstances surrounding its disclosure. The Administrative Agent, the Lenders and the L/C Issuer understand that the Borrower is not a publicly held company and virtually all information provided by the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses is considered confidential by the Borrower. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.
If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or the L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness; provided , that in the event that any Defaulting Lender shall exercise any such right of set-off, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.15 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 (y) 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. The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
11.09. Interest Rate Limitation .
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “ Maximum Rate ”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any
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payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
11.10. Counterparts; Integration; Effectiveness .
This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01 , this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.
11.11. Survival of Representations and Warranties .
All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 11.12 , if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or the L/C Issuer, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.
11.13. Replacement of Lenders .
If any Lender requests compensation under Section 3.04 , or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 , or if any Lender is a Defaulting Lender or if any other circumstance exists hereunder that gives the Borrower the right to replace a Lender as a party hereto, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.06 ), all of its interests, rights and obligations under this Agreement and the
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related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 11.06(b) unless such assignment is to another Lender;
(b) such Lender shall have received payment of an amount equal to 100% of the outstanding principal of its Loans and L/C Advances and, other than in the case of a Defaulting Lender, any premium thereon (assuming for this purpose that the Loans of such Lender were being prepaid) from the assignee and any amounts payable by the Borrower pursuant to Section 3.01 , 3.04 or 3.05 from the Borrower (it being understood that the Assignment and Assumption relating to such assignment shall provide that any interest and fees that accrued prior to the effective date of the assignment shall be for the account of the replaced Lender and such amounts that accrue on and after the effective date of the assignment shall be for the account of the replacement Lender);
(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01 , such assignment will result in a reduction in such compensation or payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. Each Lender agrees that, if the Borrower elects to replace such Lender in accordance with this Section 11.13 , it shall promptly execute and deliver to the Administrative Agent an Assignment and Assumption to evidence the assignment and shall deliver to the Administrative Agent any Note (if Notes have been issued in respect of such Lender’s Loans) subject to such Assignment and Assumption; provided that the failure of any such Lender to execute an Assignment and Assumption shall not render such assignment invalid and such assignment shall be recorded in the Register.
11.14. Governing Law; Jurisdiction; Etc .
(a) GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION . THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF 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, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION 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. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
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ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE . THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS . EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02 . NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
11.16. No Advisory or Fiduciary Responsibility .
In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Arranger, are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent and the Arranger, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent and the Arranger each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent nor the Arranger has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and
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(iii) the Administrative Agent and the Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor the Arranger has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
11.17. Electronic Execution of Assignments and Certain Other Documents .
The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
Each Lender that is subject to the Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION | ||
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
[Signature Page to Credit Agreement]
BANK OF AMERICA, N.A., | ||
as Administrative Agent | ||
By: | /s/ George S. Carey | |
Name: George S. Carey | ||
Title: Assistant Vice President |
[Signature Page to Credit Agreement]
BANK OF AMERICA, N.A., | ||
as a Lender and L/C Issuer | ||
By: | /s/ Stacey Hamilton Sandler | |
Name: Stacey Hamilton Sandler | ||
Title: Senior Vice President |
[Signature Page to Credit Agreement]
COÖPERATIVE CENTRALE | ||
RAIFFEISEN-BOERENLEENBANK | ||
B.A., “RABOBANK NEDERLAND”, | ||
NEW YORK BRANCH, | ||
as a Lender | ||
By: | /s/ Michalene Donegan | |
Michalene Donegan: | ||
Title: Executive Director | ||
By: | /s/ Brett Delfino | |
Name: Brett Delfino | ||
Title: Executive Director |
[Signature Page to Credit Agreement]
Citizens Bank of Pennsylvania, | ||
as a Lender | ||
By: | /s/ Frank J Kelly | |
Name: Frank J Kelly | ||
Title: SVP |
If a second signature is necessary: | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Credit Agreement]
Exhibit 10.2
E xecution V ersion
AMENDMENT NO. 1 TO THE CREDIT AGREEMENT
AMENDMENT NO. 1, dated as of December 23, 2010 (this “ Amendment ”), among PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (the “ Borrower ”), BANK OF AMERICA, N.A., as Administrative Agent, and the Lenders listed on the signature pages hereto, to the CREDIT AGREEMENT, dated as of August 31, 2010, as amended, supplemented, amended and restated or otherwise modified from time to time (the “ Credit Agreement ”) among the Borrower, each lender from time to time party thereto (collectively, the “ Lenders ” and, individually, a “ Lender ”), BANK OF AMERICA, N.A., as Administrative Agent, L/C Issuer and Collateral Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
WHEREAS, Section 11.01 of the Credit Agreement permits the Credit Agreement to be amended from time to time;
NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
Section 1. Amendments .
As of the Amendment Effective Date (as defined below), the Credit Agreement shall be amended as follows:
(a) Section 7.02(2) is hereby replaced in its entirety with the following:
“(2) (A) Indebtedness evidenced by the Senior Notes outstanding on the date hereof, and (B) Additional Notes (as defined in the Senior Notes Document) up to an aggregate principal amount of $25.0 million, and the guarantees in respect thereof;”
(b) Section 7.02(15) is hereby amended by an insertion as indicated:
“(15) unsecured Indebtedness of the Borrower or any of its Subsidiaries under Credit Facilities and under clause (2)(B) above in an aggregate amount at any time outstanding not to exceed (I) the greater of (x) $100.0 million and (y) the sum of (a) 85% of the book value of the receivables of the Borrower and the Subsidiaries plus (b) 65% of the book value of inventory of the Borrower and the Subsidiaries, in each case, calculated on a consolidated basis and in accordance with GAAP minus (II) the Aggregate Commitments at such time.”
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Section 2. Representations and Warranties .
The Borrower represents and warrants to the Lenders as of the date hereof and the Amendment Effective Date (as defined below) that:
(a) Before and after giving effect to this Amendment, the representations and warranties of the Borrower and each other Loan Party contained in Article V of the Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material respects on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material aspects as of such earlier date, and except that the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements of the Borrower and its Subsidiaries furnished pursuant to Section 6.01(a) and Section 6.01(b) , respectively, of the Credit Agreement.
(b) At the time of and before and after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.
Section 3. Conditions to Effectiveness .
This Amendment shall become effective as of the date (the “ Amendment Effective Date ”) that the Administrative Agent (or its counsel) shall have received from the Borrower, the Administrative Agent and each Lender a counterpart of this Amendment signed on their behalf. The Administrative Agent shall notify the Borrower of the Amendment Effective Date promptly after such date.
Section 4. Counterparts .
This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.
Section 5. Applicable Law .
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 6. Headings .
The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.
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Section 7. Effect of Amendment .
Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the Agents under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. This Amendment, and the terms and provisions hereof, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes any and all prior or contemporaneous amendments relating to the subject matter hereof. Upon the effectiveness of this Amendment, (a) each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended by this Amendment and (b) each reference in the Loan Documents to the “Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended by this Amendment.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION |
By: | /s/ David C. Storbeck | ||
Name: | David C. Storbeck | ||
Title: | Vice President Finance & Treasurer |
[Credit Agreement Amendment No. 1]
BANK OF AMERICA, N.A
.
, as Administrative
Agent and Collateral Agent |
By: | /s/ George S. Carey | ||
Name: | George S. Carey | ||
Title: | Assistant Vice President |
BANK OF AMERICA, N.A., as a Lender
and L/C Issuer |
By: | /s/ Stacey A. Hamilton Sandler | ||
Name: | Stacey A. Hamilton Sandler | ||
Title: | Senior Vice President |
[Credit Agreement Amendment No. 1]
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., “RABOBANK NEDER- LAND”, NEW YORK BRANCH, as a Lender |
By: | /s / Stephen Gilbert | ||
Name: Stephen Gilbert | |||
Title: | Vice President | ||
By: | /s / Brett Delfino | ||
Name: | Brett Delfino | ||
Title: | Executive Director |
[Credit Agreement Amendment No. 1]
CITIZENS BANK OF PENNSYLVANIA, | |
as a Lender |
By: | /s / Frank J.Kelly | ||
Name: | Frank J. Kelly | ||
Title: | Senior Vice President |
[Credit Agreement Amendment No. 1]
Exhibit 10.3
Execution Version
WAIVER AND AMENDMENT NO. 2 TO THE CREDIT AGREEMENT
This WAIVER AND AMENDMENT NO. 2 (this “ Amendment ”), dated as of August 11, 2011, relating to the Credit Agreement (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), dated as of August 31, 2010, among PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (“ Borrower ”), each lender from time to time party thereto (collectively, the “ Lenders ”), BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer (the “ Administrative Agent ”), is by and among Borrower, the Lenders and Administrative Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
WHEREAS, pursuant to Section 7.11(c) of the Credit Agreement, Borrower agreed that it shall not permit Consolidated EBITDA to be less than $60.0 million for any Measurement Period (the “ Financial Maintenance Covenant ”);
WHEREAS, Borrower has requested that the Administrative Agent and the Lenders agree, subject to the terms and conditions of this Amendment, to (i) waive the Covered Covenant Default (as defined below) under the Credit Agreement and (ii) effect amendments to the Credit Agreement set forth herein;
WHEREAS, the Lenders party hereto (the “ Consenting Lenders ”) constitute all of the Lenders under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto hereby agree as follows:
SECTION 1. Waiver of Existing Default . In reliance upon the representations and warranties of Borrower set forth in Article 3 below and subject to the conditions precedent set forth in Article 4 of this Amendment, the Consenting Lenders hereby waive any Default and Events of Default consisting of the failure of Borrower to satisfy the Financial Maintenance Covenant as it relates to the Measurement Period ending on June 30, 2011 and the failure of Borrower to promptly notify the Admin-istrative Agent and each Lender of such Default (collectively, the “ Covered Covenant Default ”).
SECTION 2. Amendments to Credit Agreement . In reliance upon the representations and warranties of Borrower set forth in Article 3 below and subject to the conditions precedent set forth in Article 4 of this Amendment, Section 7.11(c) of the Credit Agreement is deleted in its entirety and replaced with the following:
(c) Permit Consolidated EBITDA to be less than $55.0 million for any Measurement Period.
SECTION 3. Representations and Warranties . Borrower hereby represents, warrants and acknowledges the following:
(a) Before and after giving effect to this Amendment, the representations and warranties of Borrower and each other Loan Party contained in Article V of the Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material respects on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material aspects as of such earlier date, and except that the representations and warranties
contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements of Borrower and its Subsidiaries furnished pursuant to Section 6.01(a) and Section 6.01(b) , respectively, of the Credit Agreement.
(b) After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.
(c) The Consolidated EBITDA for the Measurement Period ended June 30, 2011 was not less than $55.0 million.
SECTION 4. Conditions Precedent to Effectiveness. The effectiveness of this Amendment is subject to the prior satisfaction of the following conditions precedent:
(a) Borrower shall have paid all reasonable, documented out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment (and any previously contemplated amendments, waivers, forbearances or documents of similar import), including the reasonable fees and out-of-pocket expenses of Cahill Gordon & Reindel LLP, counsel for the Administrative Agent, with respect thereto.
(b) Borrower shall have delivered to the Administrative Agent (or its counsel) a copy of this Amendment executed by Borrower and the Administrative Agent (or its counsel) shall have received from each Lender and each of the other parties hereto a counterpart of this Amendment executed on behalf of such party (which may transmitted by facsimile or by email). Administrative Agent shall furnish a fully executed counterpart of this Amendment to Borrower and shall notify Borrower of the effective date of this Amendment promptly after such date.
SECTION 5. Effect of Amendment . Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. This Amendment, and the terms and provisions hereof, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes any and all prior or contemporaneous amendments relating to the subject matter hereof. Upon the effectiveness of this Amendment, (a) each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended by this Amendment and (b) each reference in the Loan Documents to the “Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended by this Amendment.
SECTION 6. Headings . The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or any provisions hereof.
SECTION 7. Execution in Counterparts . This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart by telecopier or email (in .pdf or .tif) shall be effective as delivery of a manually executed counterpart.
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SECTION 8. Governing Law . THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION |
By: | /s/ Richard G. Johnson | ||
Name: | Richard G. Johnson | ||
Title: | Chief Financial Officer |
[Credit Agreement Amendment No. 2]
BANK OF AMERICA, N.A . , as Administrative Agent |
By: | /s/ Kristine Thennes | ||
Name: | Kristine Thennes | ||
Title: | Vice President |
BANK OF AMERICA, N.A., as a Lender
and L/C Issuer |
By: | /s/ Stacey Hamilton Sandler | ||
Name: | Stacey Hamilton Sandler | ||
Title: | Senior Vice President |
[Credit Agreement Amendment No. 2]
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND”, NEW YORK BRANCH, | |
as a Lender |
By: | /s/ Stephen Gilbert | |||
Name: | Stephen Gilbert | |||
Title: | Vice President | |||
By: | /s/ Andrew Sherman | |||
Name: | Andrew Sherman | |||
Title: | Managing Director |
[Credit Agreement Amendment No. 2]
CITIZENS BANK OF PENNSYLVANIA,
as a Lender |
By: | /s/ Francis S. Kelly | ||
Name: | Francis S. Kelly | ||
Title: | Senior Vice President |
[Credit Agreement Amendment No. 2]
Exhibit 10.4
E xecution V ersion
AMENDMENT NO. 3 TO THE CREDIT AGREEMENT
AMENDMENT NO. 3 (this “ Amendment ”), dated as of April 19, 2013, relating to (i) the Credit Agreement (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), dated as of August 31, 2010, among PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (“ Borrower ”), each lender from time to time party thereto (collectively, the “ Lenders ”), BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer (the “ Administrative Agent ”) and (ii) the Guaranty (the “ Guaranty ”) dated as of August 31, 2010 among the Guarantors party thereto (the “ Guarantors ”), and the Administrative Agent, is by and among the Borrower, the Guarantors the Lenders and Administrative Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
WHEREAS, Section 11.01 of the Credit Agreement permits the Loan Documents to be amended from time to time;
WHEREAS, the Lenders party hereto constitute all of the Lenders under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto hereby agree as follows:
SECTION 1. Amendments . In reliance upon the representations and warranties of the Borrower set forth in Section 2 below and subject to the conditions precedent set forth in Section 3 of this Amendment, the Credit Agreement is amended as follows:
(a) Section 1.01 of the Credit Agreement is hereby amended by deleting the definition of “Economic Sanctions Laws.”
(b) The following definitions are hereby added to Section 1.01 of the Credit Agreement in the appropriate alphabetical location:
“ Amendment No. 3 ” means Amendment No. 3 to this Agreement dated as of April 19, 2013.
“ Amendment No. 3 Effective Date ” means April 19, 2013, the date on which all conditions precedent set forth in Section 3 of Amendment No. 3 are satisfied.
“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
“ Designated Jurisdiction ” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.
“ Excluded Swap Obligation ” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act (or the application or official interpretation thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 11.19, any other keepwell, support, or other agreement for the benefit of such Guarantor and any and all guarantees of such Guarantor’s Swap Obligations by other Loan
Parties) at the time the Guaranty of such Guarantor becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes illegal.
“ Sanction(s) ” means any international economic sanction administered or enforced by the United States government (including without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.
“ Specified Loan Party ” means any Loan Party that is not an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 11.19).
“ Swap Obligation ” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
(c) The definition of “Applicable Fee Rate” is deleted and replaced by the following:
“ Applicable Fee Rate ” means, at any time, the Applicable Fee Rate referenced in the definition of “Applicable Rate.”
(d) The definition of “Applicable Rate” is deleted and replaced by the following:
“Applicable Rate” means (i) from the Amendment No. 3 Effective Date until the first Business Day that immediately follows the date on which the Administrative Agent receives a Compliance Certificate pursuant to Section 6.02(b), 2.50% per annum for LIBOR Daily Floating Rate Loans and LIBOR Periodic Rate Loans, 1.50% per annum for Prime Rate Loans, 1.50% per annum for Letter of Credit Fees and 0.50% per annum for Applicable Fee Rate, and (ii) thereafter, the applicable percentage per annum set forth below determined by reference to the Senior Secured Funded Debt to EBITDA Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):
Applicable Rate | ||||||||||||||||||||
Senior | ||||||||||||||||||||
Secured Funded | LIBOR Daily | Letter of | ||||||||||||||||||
Pricing | Debt to | Floating/Periodic | Prime Rate | Credit | Applicable | |||||||||||||||
Level | EBITDA Ratio | Rate Loans | Loans | Fees | Fee Rate | |||||||||||||||
1 | < 1.25:1 | 2.50 | % | 1.50 | % | 1.50 | % | 0.50 | % | |||||||||||
2 | ≥ 1.25:1 | 2.75 | % | 1.75 | % | 1.50 | % | 0.50 | % |
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Any increase or decrease in the Applicable Rate resulting from a change in the Senior Secured Funded Debt to EBITDA Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that (i) if a Compliance Certificate is not delivered when due in accordance with such Section, then, upon the request of the Required Lenders, Pricing Level 2 shall apply in respect of the Facility as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and in each case shall remain in effect until the date on which such Compliance Certificate is delivered (and thereafter the pricing level otherwise determined in accordance with this definition shall apply) and (ii) if the Senior Secured Funded Debt to EBITDA Ratio as set forth in a Compliance Certificate delivered pursuant to Section 6.02(b) is determined to have been incorrect, then the Applicable Rate for the relevant period shall be adjusted retroactively to reflect the pricing which would have been applied in accordance with this definition for such period based on the corrected Senior Secured Funded Debt to EBITDA Ratio, and any additional interest or fees owing as a result of such readjustment shall be payable within ten (10) Business Days following demand therefor by the Administrative Agent.
(e) The definition of “Change in Law” is deleted and replaced by the following:
“ Change in Law ” means the occurrence, after the Amendment No. 3 Effective Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) 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 regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
(f) The definition of “Excluded Taxes” is deleted and replaced by the following:
“ Excluded Taxes ” means, with respect to any Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder or under any other Loan Documents, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by a jurisdiction (or any political subdivision thereof) as a result of such recipient being organized or having its principal office in such jurisdiction or, in the case of any Lender, in having its applicable Lending Office in such jurisdiction, (b) any taxes in the nature of the branch profits tax within the meaning of Section 884 of the Code imposed by any jurisdiction described in clause (a), (c) other than an assignee pursuant to a request by the Borrower under Section 11.13, any United States federal withholding tax that is imposed on amounts payable to such Person pursuant to any Laws in effect at the time such Person becomes a party hereto (or designates a new Lending Office), except to the extent that such Person (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from any Loan Party with respect to such withholding tax pursuant to Section 3.01(a)(ii) or (c), (d) any withholding tax that is attributable to such Person’s failure to comply with Section 3.01(e) hereto, and (e) any United States federal withholding tax that would not have
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been imposed but for a failure by a Lender (or any financial institution through which any payment is made to such Lender) to comply with the procedures, certifications, information reporting, disclosure, or other related requirements of newly enacted Sections 1471-1474 of the Code and any amended or successor version that is substantively comparable.
(g) The definition of “Guarantors is deleted and replaced by the following:
“ Guarantors ” means, collectively (a) the Subsidiaries of the Borrower listed on Schedule 6.12 and each other Subsidiary of the Borrower that shall be required to, or at the election of the Borrower does, execute and deliver a guaranty or guaranty supplement pursuant to Section 6.12 and (b) with respect to the payment and performance by each Specified Loan Party of its obligations under its Guaranty with respect to all Swap Obligations, the Borrower.
(h) The definition of “LIBOR” is deleted and replaced by the following:
“ LIBOR ” means the British Bankers Association LIBOR Rate or the successor thereto if the British Bankers Association is no longer making a LIBOR rate available, as published by Reuters (or other commercially available source providing quotations of LIBOR as selected by the Administrative Agent from time to time if the rate published by Reuters is not available) as determined for each banking day at approximately 11:00 a.m. London time two (2) Business Days prior to the date of determination.
(i) The definition of “Maturity Date” is deleted and replaced by the following:
“ Maturity Date ” means April 30, 2018.
(j) The definition of “Obligations” is hereby amended by inserting the parenthetical “(other than, with respect to any Guarantor that is a Specified Loan Party, Excluded Swap Obligations of such Guarantor)” immediately after the words “or Secured Hedge Agreement.”
(k) Section 1.03 of the Credit Agreement is hereby amended by adding the following clause (d):
(d) For purposes of calculating compliance with any covenant in Article VII that limits the maximum amount of any Investment, Restricted Payment or Indebtedness, all utilization of the “baskets” contained or referenced in, or contained or referenced in a definition directly or indirectly used in, Article VII from and after the Closing Date and prior to the Amendment No. 3 Effective Date shall be excluded in calculating the utilization of such “baskets.”
(l) Section 3.03 of the Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:
3.03. Inability to Determine Rates .
If in connection with any request for a LIBOR Periodic Rate Loan or a conversion to or continuation thereof that (a) the Administrative Agent determines that (i) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such LIBOR Periodic Rate Loan or (ii) adequate and reasonable means do not exist for determining the LIBOR Periodic Rate for
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any requested Interest Period with respect to a proposed LIBOR Periodic Rate Loan or in connection with an existing or proposed LIBOR Daily Floating Rate Loan, or (b) the Required Lenders determine that for any reason the LIBOR Periodic Rate for any requested Interest Period with respect to a proposed LIBOR Periodic Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Periodic Rate Loans or LIBOR Daily Floating Rate Loans shall be suspended (to the extent of the affected LIBOR Periodic Rate Loans, LIBOR Daily Floating Rate Loans or Interest Periods) until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Periodic Rate Loans or LIBOR Daily Floating Rate Loans or, failing that, will be deemed to have converted such request (to the extent of the affected LIBOR Periodic Rate Loans, LIBOR Daily Floating Rate Loans or Interest Periods) into a request for a Committed Borrowing of Prime Rate Loans in the amount specified therein.
(m) Section 5.22 of the Credit Agreement is hereby amended by replacing the title with “Anti-Money Laundering and Sanctions” and deleting clause (c) in its entirety and replacing it with the following:
(c) Except as otherwise authorized by OFAC, no Loan Party, none of its Subsidiaries and, to the knowledge of senior management of each Loan Party, none of its Affiliates and none of the respective officers, directors, brokers or agents of such Loan Party, such Subsidiary or such Affiliate acting or benefiting in any capacity in connection with the Loans (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Embargoed Person, (ii) deals in, or otherwise engages in any transaction related to, any property or interests in property blocked pursuant to any applicable Sanctions or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the applicable prohibitions set forth in any Sanctions. No Loan Party is located, organized or resident in a Designated Jurisdiction.
(n) Section 7.11 of the Credit Agreement is hereby amended by deleting clause (c) in its entirety and replacing it with the following:
(c) Minimum EBITDA . Permit Consolidated EBITDA for any four quarter period ending during any fiscal year set forth below to be less than the amount set forth opposite such fiscal year below:
Fiscal Year Beginning: | Consolidated EBITDA: | |||
July 1, 2012 | $ | 55,000,000 | ||
July 1, 2013 | $ | 58,000,000 | ||
July 1, 2014 | $ | 65,000,000 | ||
July 1, 2015 | $ | 66,000,000 | ||
July 1, 2016 | $ | 75,000,000 | ||
July 1, 2017 | $ | 78,000,000 |
(o) Article VII of the Credit Agreement is hereby amended by adding the following Section 7.19:
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7.19. Sanctions .
Directly or indirectly, use the proceeds of any Credit Extension, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual or entity, to fund any activities of or business with any individual or entity, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any individual or entity (including any individual or entity participating in the transaction, whether as Lender, Arranger, Administrative Agent, L/C Issuer or otherwise) of Sanctions.
(p) Section 8.03 of the Credit Agreement is hereby amended by adding the following at the end of the second paragraph:
Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation to Obligations otherwise set forth above in this Section.
(q) Section 9.06 of the Credit is hereby amended by deleting the second paragraph in its entirety and replacing it with the following:
Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer. Upon such resignation, Bank of America shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make LIBOR Daily Floating Rate Loans or fund risk participations in Un-reimbursed Amounts pursuant to Section 2.03(c)). Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and (ii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer.
(r) Article XI of the Credit Agreement is hereby amended by adding the following Section 11.19:
11.19. Keepwell .
The Borrower hereby absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under its Guaranty and the other Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering the Borrower’s obligations and undertakings under this Section voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount) and without limitation of the foregoing, the Borrower hereby absolutely, unconditionally and irrevocably
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guarantees the payment and performance by each Specified Loan Party of its obligations under its Guaranty with respect to all Swap Obligations. The obligations and undertakings of the Borrower under this Section shall remain in full force and effect until the monetary Obligations have been indefeasibly paid and performed in full. The Borrower intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of, each Specified Loan Party for all purposes of the Commodity Exchange Act.
(s) Schedule 2.01 to the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 2.01 attached hereto.
(t) Schedule 11.02 to the Credit Agreement is hereby amended by deleting the notice information with respect to Borrower and replacing it with the following:
PHIBRO ANIMAL HEALTH CORPORATION
Glenpointe Centre East, 3rd Floor
300 Frank W. Burr Blvd., Ste 21
Teaneck, NJ 07666-6712
Attention: David C. Storbeck
Telephone: (201) 329-7300
Telecopier: (201) 329-7399
Electronic Mail: David.Storbeck@pahc.com
Website Address: http://www.pahc.com
U.S. Taxpayer Identification Number: 13-1840497
(u) Exhibit D to the Credit Agreement is hereby amended by deleting Sections III. A. and III.B. in their entirety and replacing themwith the following:
A. | Consolidated EBITDA made during the four most recent fiscal quarters: $_______ |
B. | Minimum permitted Consolidated EBITDA for each four quarter period ending during any fiscal year set forth below: |
Fiscal Year Beginning | ||||
July 1, 2012 | $ | 55,000,000 | ||
July 1, 2013 | $ | 58,000,000 | ||
July 1, 2014 | $ | 65,000,000 | ||
July 1, 2015 | $ | 66,000,000 | ||
July 1, 2016 | $ | 75,000,000 | ||
July 1, 2017 | $ | 78,000,000 |
Excess (deficient) for covenant compliance
(Line III.A – III.B): | $______ |
(v) Section 1 of the Guaranty is hereby deleted in its entirety and replaced with the following:
1. Guaranty . The Guarantor hereby absolutely and unconditionally guarantees, as a guaranty of payment and performance and not merely as a guaranty of collection,
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prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all of the Obligations whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of the Borrower to the Secured Parties, and whether arising under the Credit Agreement or under any other Loan Document, or under any Secured Cash Management Agreement or any Secured Hedge Agreement (including all renewals, extensions, amendments, refinancings and other modifications thereof and all costs, attorneys’ fees and expenses incurred by the Secured Parties in connection with the collection or enforcement thereof), and whether recovery upon such indebtedness and liabilities may be or hereafter become unenforceable or shall be an allowed or disallowed claim under any proceeding or case commenced by or against the Guarantor or the Borrower under the Debtor Relief Laws, and including interest that accrues after the commencement by or against the Borrower of any proceeding under any Debtor Relief Laws (collectively, subject to the proviso in this sentence, the “ Guaranteed Obligations ”); provided that the Guaranteed Obligations shall exclude any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute (the “Commodity Exchange Act”) (the “Swap Obligations”) if, and to the extent that, all or a portion of this Guaranty, or the grant by the Guarantor of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of the Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 2 hereof and any and all guarantees of the Guarantor’s Swap Obligations by the Borrower and any other Guarantor) at the time this Guaranty, or a grant by the Guarantor of a security interest becomes effective with respect to such Swap Obligation; provided that if a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which this Guaranty or security interest becomes illegal (such excluded Swap Obligations, the “ Excluded Swap Obligations ”). The Administrative Agent’s books and records showing the amount of the Guaranteed Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon the Guarantor for the purpose of establishing the amount of the Guaranteed Obligations and conclusive absent manifest error. This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Guaranteed Obligations or any instrument or agreement evidencing any Guaranteed Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Guaranteed Obligations which might otherwise constitute a defense (other than a defense of payment in full of the Guaranteed Obligations) to the obligations of the Guarantor under this Guaranty, and the Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing.
(w) The following Section 2 is hereby added to the Guarantyand the subsequent paragraphs are renumbered accordingly:
2. Keepwell . Each Qualified ECP Guarantor (as defined below) at the time the guarantee under this Guaranty by any Specified Guarantor (as defined below), or the grant by such Guarantor of a security interest to secure such guarantee, becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely,
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unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Guarantor with respect to such Swap Obligation as may be needed by such Specified Guarantor from time to time to honor all of its obligations under this Guaranty and the other Transaction Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under this Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section shall remain in full force and effect until the monetary Secured Obligations have been indefeasibly paid and performed in full. Each Qualified ECP Guarantor intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of, each Specified Guarantor for all purposes of the Commodity Exchange Act. For purposes hereof (i) “Qualified ECP Guarantor” shall mean, at any time,each Guarantor with total assets exceeding $10,000,000 or that qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act and can cause another person to qualify as an “eligible contract participant” at such time under §1a(18)(A)(v)(II) of the Commodity Exchange Act and (ii) “Specified Guarantor” shall mean any Guarantor that is not an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to this Section 2).
SECTION 2. Representations and Warranties . The Borrower hereby represents, warrants and acknowledges the following:
(a) Before and after giving effect to this Amendment, the representations and warranties of the Borrower and each other Loan Party contained in Article V of the Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material respects on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material aspects as of such earlier date, and except that the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements of the Borrower and its Subsidiaries furnished pursuant to Section 6.01(a) and Section 6.01(b) , respectively, of the Credit Agreement.
(b) After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.
SECTION 3. Conditions Precedent to Effectiveness . This Amendment shall become effective as of the date when each of the following conditions precedent is satisfied:
(a) The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each, if applicable, properly executed by a Responsible Officer of the signing Loan Party, each dated the date hereof (or, in the case of certificates of governmental officials, a recent date before the date hereof) and each in form and substance reasonably satisfactory to the Administrative Agent and each of the Lenders:
(1) executed counterparts to this Amendment from the Borrower and each of the Lenders;
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(2) a Note executed by the Borrower in favor of each Lender that has requested a Note at least two Business Days prior to the date hereof;
(3) (A) a certificate as to the good standing of each Loan Party as of a recent date, from the Secretary of State of the state of its organization or a similar Governmental Authority and (B) a certificate of a Responsible Officer of each Loan Party dated the date hereof and certifying (I) to the effect that (w), other than with respect to Borrower and OmniGen Research, LLC (“OmniGen”), such Loan Party’s certificate or articles of incorporation or formation, by-laws or limited liability company agreement (or other equivalent organizational documents), as applicable, have not been amended since the Closing Date and are in full force and effect on the date hereof, (x), with respect to Borrower and OmniGen, attached thereto are true and complete copies of the certificate or articles of incorporation or formation (certified as of a recent date by the Secretary of State of the state of its organization and that such certificate or articles are in full force and effect), by-laws or limited liability company agreement, as applicable, of such Loan Party and that such certificate or articles of incorporation or formation, by-laws or limited liability company agreement are in full force and effect on the date hereof, and (y) attached thereto is a true and complete copy of resolutions duly adopted by the board of directors, board of managers or member, as the case may be, of each Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Loan Party is a party, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, and (II) as to the incumbency and specimen signature of each officer executing the Amendment or any other Loan Document in connection therewith on behalf of any Loan Party and signed by another officer as to the incumbency and specimen signature of the Responsible Officer executing the certificate pursuant to this clause (B);
(4) a certificate signed by the chief executive officer and the chief financial officer of the Borrower certifying (A) that the conditions specified in Section 4.02(a) and (b) of the Credit Agreement have been satisfied and (B) that there has been no event or circumstance since the date of the latest balance sheet furnished pursuant to Section 6.01 of the Credit Agreement that has had or would be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect;
(5) a favorable opinion of Golenbock Eiseman Assor Bell & Peskoe LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance reasonably satisfactory to the Administrative Agent;
(6) copies of UCC, United States Patent and Trademark Office and United States Copyright Office, tax and judgment lien searches, or equivalent reports or searches, each of a recent date listing all effective financing statements, lien notices or comparable documents (together with copies of such financing statements and documents) that name any Loan Party as debtor and that are filed in those state and county jurisdictions in which any Loan Party is organized or maintains its principal place of business and such other searches that are required by the Perfection Certificate or that the Administrative Agent deems necessary or appropriate, none of which encumber the Collateral covered or intended to be covered by the Collateral Documents (other than Permitted Encumbrances);
(7) a completed “Life-of-Loan” Federal Emergency Management Agency Standard Flood Hazard Determination for each real property encumbered by a Mortgage
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and if such real property is located in a special flood hazard area, (i) a notice about special flood hazard area status and flood disaster assistance duly executed by the Borrower and the applicable Loan Party and (ii) certificates of insurance evidencing the flood insurance required to be maintained under Section 6.07(b) of the Credit Agreement;
(8) with respect to each Mortgage, an amendment thereof (each a “Mortgage Amendment”) duly executed and acknowledged by the applicable Loan Party, and in form for recording in the recording office where each such Mortgage was recorded, together with such certificates, affidavits, questionnaires or returns as shall be required in connection with the recording or filing thereof under applicable law; and
(9) date down endorsements to the existing Mortgage Policies, or, to the extent such date down endorsement is not available in the particular jurisdiction, a new Mortgage Policy, which shall reasonably assure the Administrative Agent as of the date thereof that the Mortgage, as amended by the Mortgage Amendment, is a valid and enforceable first priority lien on such Mortgaged Property free and clear of all liens except for Permitted Encumbrances.
(b) All fees required to be paid to the Administrative Agent and the Arranger on or before the date hereof shall have been paid.
(c) The Borrower shall have paid to the Administrative Agent for the ratable account of each Lender, a payment equal to 0.40% of the aggregate amount of such Lender’s Commitments on or before the date hereof.
(d) The Borrower shall have paid all reasonable, documented out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment (and any previously contemplated amendments, waivers, forbearances or documents of similar import), including the reasonable fees and out-of-pocket expenses of Cahill Gordon & Reindel LLP, counsel for the Administrative Agent, with respect thereto.
(e) The maturity date of the Mayflower Term Loan shall have been extended to December 31, 2016 or a later date on terms and conditions satisfactory to the AdministrativeAgent.
SECTION 4. Effect of Amendment . Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. This Amendment, and the terms and provisions hereof, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes any and all prior or contemporaneous amendments relating to the subject matter hereof. Upon the effectiveness of this Amendment, (a) each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended by this Amendment and (b) each reference in the Loan Documents to the “Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended by this Amendment. Administrative Agent hereby agrees to furnish a fully executed counterpart of this Amendment to Borrower and shall notify Borrower of the effective date of this Amendment promptly after such date.
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SECTION 5. Reaffirmation . Each Loan Party hereby expressly acknowledges the terms of this Amendment and reaffirms, as of the date hereof, (i) the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Amendment and the transactions contemplated hereby and (ii) its guarantee of the Obligations under the Guaranty, as applicable, and its grant of Liens on the Collateral to secure the Obligations pursuant to the Collateral Documents.
SECTION 6. Headings . The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or any provisions hereof.
SECTION 7. Execution in Counterparts . This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart by telecopier or email (in .pdf or .tif) shall be effective as delivery of a manually executed counterpart.
SECTION 8. Governing Law . THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION |
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBRO CHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
OMNIGEN RESEARCH, LLC | |
FIRST DICE ROAD COMPANY, A CALIFORNIA LIMITED | |
PARTNERSHIP | |
By: WESTERN MAGNESIUM CORP., | |
Its General Partner |
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
[Credit Agreement Amendment No. 3]
BANK OF AMERICA, N.A . , as Administrative Agent |
By: | /s/ Charlene Wright-Jones | |
Name: Charlene Wright-Jones | ||
Title : Vice President |
BANK OF AMERICA, N.A., as a Lender | |
and L/C Issuer |
By: | /s/ Stacey Hamilton Sandler | |
Name: Stacey Hamilton Sandler | ||
Title: Senior Vice President |
[Credit Agreement Amendment No. 3]
COOPERATIEVE CENTRALE RAIFFEISEN- | |
BOERENLEENBANK B.A., “RABOBANK NEDER- | |
LAND”, NEW YORK BRANCH, | |
as a Lender |
By: | /s/ Michalene Donegan | ||
Name: | Michalene Donegan | ||
Title: | Executive Director | ||
By: | /s/ Betty Janelle | ||
Name: | Betty Janelle | ||
Title: | Managing Director |
[Credit Agreement Amendment No. 3]
CITIZENS BANK OF PENNSYLVANIA, | |
as a Lender |
By: | /s/ M. Kelly Goggin | ||
Name: | M. Kelly Goggin | ||
Title: | Senior Vice President |
[Credit Agreement Amendment No. 3]
Schedule 2.01
COMMITMENTS
AND APPLICABLE PERCENTAGES
Revolving Credit | Revolving Credit | |||||||
Lender | Commitment | Applicable Percentage | ||||||
Bank of America, N.A. | $ | 53,300,000 | 53.300000000 | % | ||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch | $ | 26,700,000 | 26.700000000 | % | ||||
Citizens Bank of Pennsylvania | $ | 20,000,000 | 20.000000000 | % | ||||
Total | $ | 100,000,000 | 100.000000000 | % |
Exhibit 10.6
EXECUTION VERSION
Anything herein to the contrary notwithstanding, the repayment of the Loan, the payment of the Guaranty and the exercise of any right or remedy with respect to the Loan or the Guaranty, and certain of the rights of Lender are subject to the provisions of the Intercreditor Agreement dated as of January 29, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Intercreditor Agreement ”), by and between Wells Fargo Foothill, Inc., as Senior Agent, and BFI Co., LLC, as Junior Lender. 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.
AMENDED AND RESTATED
TERM LOAN AGREEMENT
by and among
PHIBRO ANIMAL HEALTH CORPORATION
as Borrower,
THE GUARANTORS
named herein,
and
BFI CO., LLC
as Lender,
Dated as of June 24, 2010
TABLE OF CONTENTS
Page | |||
1. | Definitions and Construction | 1 | |
1.1 | Definitions | 1 | |
1.2 | Accounting Terms | 25 | |
1.3 | Construction | 26 | |
1.4 | Schedules and Exhibits | 26 | |
2. | Loan and Terms of Payment | 26 | |
2.1 | Loan | 26 | |
2.2 | Notation; Promissory Notes | 26 | |
2.3 | Payments | 27 | |
2.4 | Rates, Payments, and Calculations | 28 | |
2.5 | Crediting Payments | 28 | |
2.6 | [Intentionally Omitted] | 28 | |
2.7 | [Intentionally Omitted] | 29 | |
2.8 | Repayment of Loan | 29 | |
2.9 | Prepayment of Loan | 29 | |
2.10 | [Intentionally Omitted] | 29 | |
2.11 | Ranking | 29 | |
3. | Conditions | 29 | |
3.1 | Conditions | 29 | |
4. | Representations and Warranties of Borrower | 30 | |
4.1 | Corporate Organization and Authority of Borrower and its Subsidiaries; Non-Contravention; Approvals | 30 | |
5. | Covenants | 31 | |
5.1 | Reports to Lender | 31 | |
5.2 | Waiver of Stay, Extension or Usury Laws | 32 | |
5.3 | Compliance Certificate; Notice of Default | 32 | |
5.4 | Taxes | 32 | |
5.5 | Limitations on Asset Sales | 33 | |
5.6 | Conduct of Business | 35 | |
5.7 | Additional Guarantees | 35 | |
5.8 | Limitations on Designation of Unrestricted Subsidiaries | 35 |
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TABLE OF CONTENTS
(continued)
Page | |||
5.9 | Maintenance of Properties; Insurance; Compliance with Law | 36 | |
5.10 | Payments for Consent | 37 | |
5.11 | Legal Existence | 37 | |
5.12 | Change of Control Offer | 37 | |
5.13 | Limitations on Mergers, Consolidations, etc . | 38 | |
6. | Events of Default | 39 | |
7. | Lender’s Rights and Remedies | 41 | |
7.1 | Rights and Remedies | 41 | |
7.2 | Remedies Cumulative | 41 | |
7.3 | Acceleration | 41 | |
8. | Waivers; Indemnification | 41 | |
8.1 | Demand; Protest; etc . | 41 | |
8.2 | Indemnification | 42 | |
9. | Notices | 42 | |
10. | Choice of Law and Venue; Jury Trial Waiver | 43 | |
11. | Assignments and Participations; Successors | 44 | |
11.1 | Assignments and Participations | 44 | |
11.2 | Successors | 46 | |
12. | Amendments; Waivers | 46 | |
12.1 | Amendments and Waivers | 46 | |
12.2 | No Waivers; Cumulative Remedies | 46 | |
13. | Withholding Taxes | 46 | |
13.1 | Withholding Taxes | 46 | |
14. | Guaranty Provisions | 48 | |
14.1 | Guaranty | 48 | |
14.2 | Execution and Delivery of Guaranty | 48 | |
14.3 | Subordination of Guarantees | 49 | |
14.4 | Limitation of Guarantee | 49 | |
14.5 | Release of Guarantor | 49 | |
14.6 | Waiver of Subrogation | 50 |
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TABLE OF CONTENTS
(continued)
Page | |||
15. | Subordination of Notes | 50 | |
15.1 | Agreement to Subordinate | 50 | |
15.2 | Liquidation; Dissolution; Bankruptcy | 50 | |
15.3 | Default on Designated Senior Debt | 51 | |
15.4 | Acceleration of Securities | 52 | |
15.5 | When Distribution Must Be Paid Over | 52 | |
15.6 | Notice by Borrower | 52 | |
15.7 | Subrogation | 53 | |
15.8 | Relative Rights | 53 | |
15.9 | Subordination May Not Be Impaired by Borrower | 53 | |
15.10 | Distribution or Notice to Representative | 53 | |
15.11 | Rights of Lender | 53 | |
16. | General Provisions | 54 | |
16.1 | Effectiveness | 54 | |
16.2 | Section Headings | 54 | |
16.3 | Interpretation | 54 | |
16.4 | Severability of Provisions | 54 | |
16.5 | Amendments in Writing | 54 | |
16.6 | Counterparts; Execution by Electronic Transmission | 54 | |
16.7 | Revival and Reinstatement of Obligations | 54 | |
16.8 | Confidentiality | 54 | |
16.9 | Release of Certain Prior Guarantors | 55 | |
16.10 | Integration | 55 | |
16.11 | USA PATRIOT Act | 55 |
EXHIBITS AND SCHEDULES
Exhibit A | Form of Assignment and Acceptance |
Exhibit B | Form of Notation of Guaranty |
Schedule 1 | Lender’s Account |
Schedule 2 | Designated Account |
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TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT (this “ Agreement ”), is entered into as of June 24, 2010, by and among, BFI CO., LLC, a Delaware limited liability company (“ Lender ”), PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (“ Borrower” ), and the Guarantors (as hereinafter defined).
WHEREAS, pursuant to a certain Term Loan Agreement (the “Original Agreement”) dated January 29, 2009 among Borrower, the Original Guarantors and Lender, Lender provided term loan financing to Borrower;
WHEREAS, as an inducement for Lender to provide such term loan financing, each of the Original Guarantors provided a guarantee of certain obligations of Borrower as set forth in Section 14 of the Original Loan Agreement;
WHEREAS, in connection with various financing transactions contemplated to be entered into by Borrower, the parties hereto mutually desire to amend and restate the Original Agreement on the terms and conditions set forth herein; and
WHEREAS, in connection with such financing transactions contemplated to be entered into by Borrower, certain of the Original Guarantors are being released from their obligations with respect to the Original Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that, effective as of the Effective Date (as defined below), the Original Agreement is amended and restated in its entirety as follows:
1. Definitions and Construction .
1.1 Definitions . As used in this Agreement, the following terms shall have the following definitions:
“ 3i Group ” means each of 3i QPE and 3i Group plc and (1) each of their subsidiary undertakings, any parent undertaking of 3i QPE or 3i Group plc and any subsidiary undertakings of any such parent undertaking (together “ 3i Parties ”), (2) any fund, partnership, investment vehicle or other entity (whether corporate or otherwise) established in any jurisdiction and which is either (a) managed or advised by an entity in the 3i Parties or (b) utilized for the purpose of allowing 3i Parties employees (including former employees) to participate directly or indirectly in the growth in value of Borrower ((a) and (b) together being referred to as “ 3i Funds ”), (3) any subsidiary undertaking of a 3i Fund and (4) investors in 3i Funds. For these purposes “subsidiary undertaking” and “parent undertaking” have the same meaning as in the UK Companies Act 2006.
“ Acquired Indebtedness ” means (a) with respect to any Person that becomes a Restricted Subsidiary after the Effective Date, Indebtedness of such Person and its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary that was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary and (b) with respect to Borrower or any Restricted Subsidiary, any Indebtedness of a Person (other than Borrower or a Restricted Subsidiary) existing at the time such Person is merged with or into Borrower or a Restricted Subsidiary, or
Indebtedness expressly assumed by Borrower or any Restricted Subsidiary in connection with the acquisition of an asset or assets from another Person, which Indebtedness was not, in any case, incurred by such other Person in connection with, or in contemplation of, such merger or acquisition; provided , however , that Indebtedness of such acquired Person which is redeemed or otherwise repaid at the time of or substantially contemporaneously with the consummation of the transactions by which such acquired Person merges with or into or becomes a Restricted Subsidiary of such specified Person shall not be Acquired Indebtedness.
“ Adjusted Net Assets ” of a Guarantor at any date shall mean the lesser of the amount by which (x) the fair value of the property of such Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities), but excluding liabilities under the Guaranty, of such Guarantor at such date and (y) the present fair salable value of the assets of such Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Guarantor on its debts and all other fixed and contingent liabilities (after giving effect to all other fixed and contingent liabilities and after giving effect to any collection from any Subsidiary of such Guarantor in respect of the obligations of such Guarantor under the Guaranty), excluding Indebtedness in respect of the Guaranty, as they become absolute and matured.
“ Affiliate ” of any Person means any other Person which directly or indirectly controls or is controlled by, or is under direct or indirect common control with, the referent Person. For purposes of this definition, “ control ” of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the above, for purposes of this Agreement, none of Borrower or any Subsidiary of Borrower shall be considered to be an Affiliate of (a) Lender, and vice versa, and (b) any Member of the 3i Group, and vice versa.
“ Agreement ” has the meaning set forth in the preamble to this Agreement.
“ amend ” means to amend, supplement, restate, amend and restate or otherwise modify, including successively, and “ amendment ” shall have a correlative meaning.
“ Applicable Prepayment Premium ” means, in connection with any prepayment of the Loan, an amount, with respect to any prepayments made during the following periods, equal to the percentage specified below times the principal amount of the Loan so prepaid:
Period |
Percentage
of the principal
amount of the Loan so prepaid |
|||
from and after the Effective Date through and including July 31, 2010 | 4.0 | % | ||
from and after August 1, 2010 through and including July 31, 2011 | 3.0 | % | ||
from and after August 1, 2011 through and including July 31, 2012 | 2.0 | % | ||
from and after August 1, 2012 through and including July 31, 2013 | 1.0 | % | ||
after July 31, 2013 | 0 | % |
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; provided, however, that with respect to a Change of Control Prepayment made at any time in connection with any Change of Control occurring during the period from and after the Closing Date, 1.0% times the principal amount of the Loan so prepaid; and provided further, however, that with respect to any prepayment made after July 31, 2013, or any Net Proceeds Prepayment or Change in U.S. Tax Treaty Prepayment made at any time, 0%.
“ asset ” means any asset or property.
“ Asset Sale ” means any sale, issuance, conveyance, transfer, lease, assignment or other disposition by Borrower or any Restricted Subsidiary to any Person other than Borrower or any Guarantor (including by means of a Sale and Leaseback Transaction or a merger or consolidation) (collectively, for purposes of this definition, a “ transfer ”), in one transaction or a series of related transactions, of any assets of Borrower or any of its Restricted Subsidiaries other than in the ordinary course of business. For purposes of this definition, the term “Asset Sale” shall not include:
(a) transfers of cash or Cash Equivalents;
(b) transfers of assets (including Equity Interests) that are governed by and made in accordance with Section 5.13 ;
(c) Permitted Investments (as such term is defined in Indenture 2) and Restricted Payments (as such term is defined in Indenture 2) permitted under Section 4.08 of Indenture 2;
(d) the creation of or realization on any Permitted Lien;
(e) transfers of damaged, worn-out or obsolete equipment or assets that, in Borrower’s reasonable judgment, are no longer used or useful in the business of Borrower or its Restricted Subsidiaries;
(f) sales or grants of licenses or sublicenses to use the patents, trade secrets, know-how and other intellectual property, and licenses, leases or subleases of other assets, of Borrower or any Restricted Subsidiary to the extent not materially interfering with the business of Borrower and the Restricted Subsidiaries;
(g) transfers by a Foreign Subsidiary to any other Foreign Subsidiary;
(h) any transfer or series of related transfers that, but for this clause, would be Asset Sales, if after giving effect to such transfers, the aggregate Fair Market Value of the assets transferred in such transaction or any such series of related transactions does not exceed $5,000,000; and
(i) the issuance or sale of Equity Interests of Borrower.
“ Assignee ” has the meaning set forth in Section 11.1(a) .
“ Assignment and Acceptance ” means an Assignment and Acceptance Agreement substantially in the form of Exhibit A .
“ Attributable Indebtedness ”, when used with respect to any Sale and Leaseback Transaction, means, as at the time of determination, the present value (discounted at the Interest Rate, compounded on
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a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.
“ Authorized Person ” means any Officer of Borrower.
“ Bank Product Obligations ” means Indebtedness incurred in respect of credit cards, credit card processing services, debit card, stored value cards, purchase cards, ACH transactions, and cash management transactions.
“ Bankruptcy Laws ” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“ Board of Directors ” means, with respect to any Person, (a) in the case of any corporation, the board of directors of such Person, (b) in the case of any limited liability company, the board of managers of such Person, (c) in the case of any partnership, the board of directors of the general partner of such Person, and (d) in any other case, the functional equivalent of the foregoing or, in each case, other than for purposes of the definition of “Change of Control,” any duly authorized committee of such body.
“ Borrower ” has the meaning set forth in the preamble to this Agreement.
“ Borrowing ” means the borrowing of the Loan made on the Closing Date by Lender to Borrower.
“ Business ” means the business of manufacturing and marketing of animal health and nutrition products and specialty chemicals.
“ Business Day ” means any day that is not a Saturday, Sunday, or other day on which banks in Israel or in the State of New York are required to close.
“ Capitalized Lease ” means a lease required to be capitalized for financial reporting purposes in accordance with GAAP.
“ Capitalized Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under a Capitalized Lease, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“ Cash Equivalents ” means:
(a) marketable direct obligations issued or fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) maturing within 360 days of the date of acquisition thereof;
(b) demand and time deposits and certificates of deposit or acceptances, maturing within 360 days of the date of acquisition thereof, of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500,000,000 and is assigned at least a “B” rating by Thomson Financial BankWatch;
(c) commercial paper maturing no more than 360 days from the date of creation thereof issued by a corporation that is not Borrower or an Affiliate of Borrower, and is organized
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under the laws of any State of the United States of America or the District of Columbia and rated at least A-l by S&P or at least P-l by Moody’s;
(d) repurchase obligations with a term of not more than ten days for underlying securities of the types described in clause (a) above entered into with any commercial bank meeting the specifications of clause (b) above;
(e) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within 360 days from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s;
(f) in the case of any Foreign Subsidiary: (i) direct obligations of the sovereign nation (or any agency or instrumentality thereof) in which such Foreign Subsidiary is organized or is conducting business or obligations fully and unconditionally guaranteed by such sovereign nation (or any agency or instrumentality thereof), (ii) of the type and maturity described in clauses (a) through (e) above of foreign obligors, which obligations or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies or (iii) of the type and maturity described in clauses (a) through (e) above of foreign obligors (or the parents of such obligors), which obligations or obligors (or the parents of such obligors) are not rated as provided in such clauses or in clause (f)(ii) but which are, in the reasonable judgment of Borrower, comparable in investment quality to such obligations and obligors (or the parents of such obligors); and
(g) money market or other mutual funds substantially all of whose assets comprise securities of the types described in clauses (a) through (f) above.
“ Change in U.S. Tax Treaty ” means the enactment, promulgation, execution or ratification of, or any amendment to, any tax treaty to which the United States is a party, which, in each case, (a) occurs on or after the later of (i) January 29, 2009 or (ii) with respect to any assignment or granting of participating interests, the date of the applicable assignment or grant, and (b) has not been initially publicly announced or otherwise publicly indicated by a Governmental Authority to be negotiated or intended to be negotiated, and distributed or publicized on or through media generally or readily available to lenders, financial institutions, investment funds or their advisers, including by subscription or other charge, prior to the later of (i) January 29, 2009 or (ii) with respect to any assignment or granting of participating interests, the date of the applicable assignment or grant.
“ Change in U.S. Tax Treaty Prepayment ” has the meaning set forth in clause (g) of Section 13.1 .
“ Change of Control ” means the occurrence of any of the following events:
(a) prior to a Public Equity Offering after the Effective Date, the Permitted Holders cease to own, or to have the power to vote or direct the voting of, Voting Stock representing more than 50% of the voting power of the total outstanding Voting Stock of Borrower;
(b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause that person or group shall be deemed to have “beneficial ownership” of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately
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or only after the passage of time), directly or indirectly, of Voting Stock representing 50% or more of the voting power of the total outstanding Voting Stock of Borrower;
(c) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (together with or as replaced by any new directors whose election to such Board of Directors or whose nomination for election by the stockholders of Borrower was approved by (i) the majority in interest of the Permitted Holders or (ii) a vote of the majority of the directors of Borrower then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of Borrower;
(d) (i) all or substantially all of the assets of Borrower and the Restricted Subsidiaries are sold or otherwise transferred to any Person other than a Wholly-Owned Restricted Subsidiary or one or more Permitted Holders or (ii) Borrower consolidates or merges with or into another Person or any Person consolidates or merges with or into Borrower, in either case under this clause (d), in one transaction or a series of related transactions in which immediately after the consummation thereof Persons beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of Borrower immediately prior to such consummation do not beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing a majority of the total voting power of the Voting Stock of Borrower or the surviving or transferee Person;
(e) Borrower shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the stockholders of Borrower; or
(f) both (i) Lender shall not have the right to appoint or cause to be elected a director to Borrower’s Board of Directors other than having relinquished such right as the direct or indirect result (including without limitation the cumulative or contributory effect) of any sale, transfer or other disposition of beneficial interest of Voting Stock by Lender and (ii) (A) none of the Borrower’s directors shall have been elected or appointed by Lender (except if such situation exists as a result of voluntary resignation) and (B) Borrower shall have failed, following written request by Lender, to cause to be appointed or elected to Borrower’s Board of Directors an individual selected by Lender and meeting the conditions set forth in clauses (ii) and (iii) of the proviso to the third sentence of Section 6.1(a) of the Shareholders Agreement for a Designated Director (as defined in Section 6.1(a) of the Shareholders Agreement) within 30 days of the earliest practical date upon which Borrower or a Permitted Holder (excluding for this purpose clause (d) of the definition of Permitted Holder) has the ability, using diligent efforts and acting in good faith and with the vote or consent of, and to the extent reasonably requested, other cooperation of, Lender but subject to receipt of any necessary approval or consent of any Governmental Authority, securities exchange or similar body, to make or cause such appointment or election. For the avoidance of doubt, the foregoing provisions of this clause (f) shall not override, or otherwise vary, any provision of the Shareholders Agreement, and any director appointment or election made in satisfaction of any provision of this clause (f) shall not, unless made pursuant to the terms of the Shareholders Agreement, be deemed to be made thereunder or subject to the provisions thereof.
For purposes of this definition, a Person shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement.
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“ Change of Control Date ” has the meaning set forth in clause (b) of Section 5.12 .
“ Change of Control Offer ” has the meaning set forth in clause (a) of Section 5.12 .
“ Change of Control Payment Date ” has the meaning set forth in clause (a) of Section 5.12 .
“ Change of Control Prepayment ” has the meaning set forth in clause (a) of Section 5.12 .
“ Closing Date ” means January 29, 2009.
“ Code ” means the Internal Revenue Code of 1986.
“ Commitment ” means the obligation of Lender to make the Loan to Borrower on the Closing Date in a principal amount of Ten Million Dollars ($10,000,000).
“ Covered Taxes ” means any present or future taxes, levies, imposts, duties, deductions, withholdings, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments and all interest, penalties or similar liabilities with respect thereto, but excluding (a) any tax imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein (i) measured by or based on the net income or net profits of Lender or (ii) to the extent that such tax results from a (x) change in the circumstances of Lender, including a change in the residence, place of organization, or principal place of business of Lender, or a change in the branch or lending office of Lender, or (y) change in the identity of Lender resulting in the application, as considered on the date of such change, of a different or no tax treaty with the United States, (b) unless arising as a result of a Change in U.S. Tax Treaty, any United States federal withholding or other tax required after giving effect to any applicable tax treaty or other applicable exemption or reduction, and/or (c) any tax (i) arising as a result of Lender’s failure to comply with the applicable provisions of clauses (b), (c) and (e) of Section 13.1 or (ii) resulting from Lender’s own willful misconduct or gross negligence.
“ Credit Facilities ” means one or more debt facilities (which may be outstanding at the same time and including, without limitation, the Revolving Credit Facility and this Agreement) providing for revolving credit loans, term loans or letters of credit and, in each case, as such instruments may be amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders), including (a) any notes, letters of credit, guarantees, collateral and security documents, instruments and other agreements executed, issued or arranged in connection therewith, and in each case as amended, modified, renewed, re-funded, replaced or refinanced from time to time, and (b) any notes, letters of credit, guarantees, collateral and security documents, instruments and other agreements executed, issued or arranged in connection with any such amendment, modification, renewal, re-funding, replacement or refinancing.
“ Custodian ” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
“ Default ” means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.
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“ Designated Account ” means the account of Borrower identified on Schedule 2 .
“ Designated Senior Debt ” means (1) Senior Debt and Guarantor Senior Debt under or in respect of the Credit Facilities and (2) any other Indebtedness constituting Senior Debt or Guarantor Senior Debt which, at the time of determination, has an aggregate principal amount of at least $25.0 million and is specifically designated in the instrument evidencing such Senior Debt as “Designated Senior Debt.”
“ Designation ” has the meaning set forth in clause (a) of Section 5.8 .
“ Designation Amount ” has the meaning set forth subclause (a)(ii) of Section 5.8 .
“ Disqualified Equity Interests ” of any Person means any class of Equity Interests of such Person that, by its terms, or by the terms of any related agreement or of any security into which it is convertible, puttable or exchangeable, is, or upon the happening of any event or the passage of time would be, required to be redeemed by such Person, whether or not at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to the date which is 91 days after the final maturity date of the Notes; provided , however , that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided , further , however , that any Equity Interests that would not constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require Borrower to redeem such Equity Interests upon the occurrence of an asset sale or a change in control occurring prior to the 91st day after the final maturity date of the Notes shall not constitute Disqualified Equity Interests if the asset sale or change of control redemption provisions applicable to such Equity Interests are no more favorable to such holders than the provisions of Sections 5.5 and 5.12 , respectively, and such Equity Interests specifically provide that Borrower will not redeem any such Equity Interests pursuant to such provisions prior to Borrower’s prepayment of the Loan as required pursuant to the provisions of Sections 5.5 and 5.12 , respectively.
“ Dollars ” or “ $ ” means United States dollars.
“ Effective Date ” means the date on which the Notes are originally issued.
“ Eligible Transferee ” means any of (a) Jack Bendheim, (b) each of his spouse, siblings, ancestors, descendants (whether by blood, marriage or adoption, and including stepchildren) and the spouses, siblings, ancestors and descendants thereof (whether by blood, marriage or adoption, and including stepchildren) of such natural persons, the beneficiaries, estates and legal representatives of any of the foregoing, the trustee of any bona fide trust of which any of the foregoing, individually or in the aggregate, are the majority in interest beneficiaries or grantors, and any corporation, partnership, limited liability company or other Person in which any of the foregoing, individually or in the aggregate, own or control a majority in interest and (c) all Affiliates controlled by the individual named in clause (a) above.
“ Equity Interests ” of any Person means (a) any and all shares or other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such Person and (b) all rights to purchase, warrants or options (whether or not currently exercisable),
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participations or other equivalents of or interests in (however designated) such shares or other interests in such Person.
“ Event of Default ” has the meaning set forth in Section 6 .
“ Excess Proceeds ” has the meaning set forth in clause (c) of Section 5.5 .
“ Exchange Act ” means the United States Securities Exchange Act of 1934, as in effect from time to time.
“ Fair Market Value ” means, with respect to any asset, the price (after taking into account any liabilities relating to such asset) that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction. Fair Market Value (other than of any asset with a public trading market) in excess of $5,000,000 shall be determined by the Board of Directors of Borrower acting reasonably and in good faith and shall be evidenced by a board resolution delivered to Lender. Fair Market Value (other than of any asset with a public trading market) in excess of $10,000,000 shall be determined by an Independent Financial Advisor, which determination shall be evidenced by an opinion addressed to the Board of Directors of Borrower and delivered to Lender.
“ Foreign Subsidiary ” means any Restricted Subsidiary of Borrower that (a) is not organized under the laws of (i) the United States or any state thereof or (ii) the District of Columbia and (b) conducts substantially all of its business operations outside the United States.
“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect on the Effective Date.
“ Governmental Authority ” means any international, supranational, national, provincial, regional, federal, state, municipal or local government, any instrumentality, subdivision, court, administrative or regulatory agency or commission or other authority thereof, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority.
“ guarantee ” means a direct or indirect guarantee by any Person of any Indebtedness of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person: (a) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise); or (b) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); “ guarantee ,” when used as a verb, and “ guaranteed ” have correlative meanings.
“ Guarantor ” means (a) each Restricted Subsidiary, other than a Foreign Subsidiary, on the Effective Date, and (b) each other Person that is required to, or at the election of Borrower does, become a Guarantor under the terms of this Agreement and the other Loan Documents after the Effective Date, in each case, until such Person is released from the Guaranty in accordance with the terms of this Agreement.
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“ Original Guarantor ” means each Person within the definition of “Guarantor” as used in the Original Agreement.
“ Guarantor Senior Debt ” means, with respect to any Guarantor, the principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on any Indebtedness of such Guarantor, whether outstanding on the Effective Date or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Notes 2 or the Loan.
Without limiting the generality of the foregoing, “Guarantor Senior Debt” shall also include the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other amounts owing in respect of:
(1) all monetary obligations of every nature of such Guarantor under, or with respect to, the Credit Facilities, including, without limitation, obligations to pay principal and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities (and guarantees thereof) and Hedging Obligations in respect thereof; and
(2) all Obligations of such Guarantor under, or with respect to, the Senior Debt;
in each case whether outstanding on the Effective Date or thereafter incurred.
Notwithstanding the foregoing, “Guarantor Senior Debt” shall not include:
(1) any Indebtedness of such Guarantor to Borrower or any of its Subsidiaries;
(2) Indebtedness to, or guaranteed on behalf of, any director, officer or employee of Borrower or any of its other Subsidiaries (including, without limitation, amounts owed for compensation);
(3) obligations to trade creditors and other amounts incurred (but not under the Credit Facilities) in connection with obtaining goods, materials or services;
(4) Indebtedness represented by Disqualified Equity Interests;
(5) any liability for taxes owed or owing by such Guarantor;
(6) that portion of any Indebtedness incurred in violation of Section 4.06 of Indenture 2 (but, as to any such obligation, no such violation shall be deemed to exist for purposes of this clause (6) if the holder(s) of such obligation or their representative shall have received an officers’ certificate of such Guarantor to the effect that the incurrence of such Indebtedness does not (or, in the case of revolving credit indebtedness, that the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate such provisions of Indenture 2);
(7) Indebtedness which, when incurred and without respect to any election under Section 1111(b) of Title 11, United States Code, is without recourse to such Guarantor; and
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(8) any Indebtedness which is, by its express terms, subordinated in right of payment to any other Indebtedness of such Guarantor.
“ Guaranty ” means that certain general continuing guaranty given by each Guarantor in favor of Lender under Section 14.1 , together with any and all supplements or other guarantees executed and delivered by additional Guarantors in accordance with Section 5.7 , in each case as amended, modified, renewed, re-funded, replaced or refinanced from time to time.
“ Hedging Obligations ” of any Person means the obligations of such Person under swap, cap, collar, forward purchase, option or similar agreements or arrangements dealing with interest rates, currency exchange rates, commodities or commodity prices, either generally or under specific contingencies.
“ incur ” means, with respect to any Indebtedness or other obligation, incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to such Indebtedness or other obligation; provided that (1) the Indebtedness of a Person existing at the time such Person became a Restricted Subsidiary shall be deemed to have been incurred by such Restricted Subsidiary and (2) neither the accrual of interest nor the accretion of original issue discount or the accretion or accumulation of dividends on any Equity Interests shall be deemed to be an incurrence of Indebtedness.
“ Indebtedness ” of any Person at any date means, without duplication:
(a) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof);
(b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(c) all reimbursement obligations of such Person in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions;
(d) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery or title thereto;
(e) the maximum fixed redemption or repurchase price of all Disqualified Equity Interests of such Person;
(f) all Capitalized Lease Obligations of such Person;
(g) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person;
(h) all Indebtedness of others guaranteed by such Person to the extent of such guarantee; provided that Indebtedness of Borrower or its Subsidiaries that is guaranteed by Borrower or Borrower’s Subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of Borrower and its Subsidiaries on a consolidated basis;
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(i) all Attributable Indebtedness;
(j) to the extent not otherwise included in this definition, Hedging Obligations of such Person; and
(k) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person.
The amount of any Indebtedness which is incurred at a discount to the principal amount at maturity thereof as of any date shall be deemed to have been incurred at the accreted value thereof as of such date. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (g), the lesser of (i) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of others on the date that the Lien attaches and (ii) the amount of the Indebtedness secured. For purposes of clause (e), the “maximum fixed redemption or repurchase price” of any Disqualified Equity Interests that do not have a fixed redemption or repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were redeemed or repurchased on any date on which an amount of Indebtedness outstanding shall be required to be determined pursuant to this Agreement or any other Loan Document.
Notwithstanding the foregoing, Indebtedness shall not include a government grant and any guaranty of Borrower or a Restricted Subsidiary required by such grant which obligates Borrower or a Restricted Subsidiary to repay such grant at the discretion of such government or upon the failure of the conditions of such grant specified therein to be fulfilled, but which is forgiven solely by reason of the passage of time or the fulfillment of such grant conditions (other than repayments); provided that if the conditions for forgiveness of such government grant lapse for whatever reason and Borrower or a Restricted Subsidiary becomes obligated to repay such grant, the grant shall be deemed Indebtedness which is incurred 30 days after the time such obligation to repay is triggered.
“ Indemnified Liabilities ” has the meaning set forth in Section 8.2 .
“ Indemnified Person ” has the meaning set forth in Section 8.2 .
“ Indenture ” means the Indenture to be entered into among Borrower, Borrower’s Subsidiaries that are signatories thereto, and the Indenture Trustee on or about the date hereof, pursuant to which Borrower is issuing new senior notes due 2018 (such notes, as may be amended, modified, renewed, re-funded, replaced or refinanced from time to time, the “ Notes ”), as such indenture may be amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Indenture 1 ” means the Indenture dated as of August 1, 2006 among Borrower, Borrower’s Subsidiaries that are signatories thereto, and the Indenture Trustee 1, pursuant to which Borrower issued its 10% Senior Notes due August 1, 2013 (such notes, as may be amended, modified, renewed, re-funded, replaced or refinanced from time to time, the “ Notes 1 ”), as such indenture may be amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending
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the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Indenture 2 ” means the Indenture dated as of August 1, 2006 among Borrower, Borrower’s Subsidiaries that are signatories thereto, and the Indenture Trustee 2, pursuant to which Borrower issued its 13% Senior Subordinated Notes due August 1, 2014 (such notes, as may be amended, modified, renewed, re-funded, replaced or refinanced from time to time, the “ Notes 2 ”), as such indenture may be amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Indenture Trustee ” means HSBC Bank USA, National Association a New York banking corporation, in its capacity as indenture trustee under the Indenture.
“ Indenture Trustee 1 ” means HSBC Bank USA, National Association a New York banking corporation, in its capacity as indenture trustee under the Indenture 1.
“ Indenture Trustee 2 ” means HSBC Bank USA, National Association a New York banking corporation, in its capacity as indenture trustee under the Indenture 2.
“ Independent Financial Advisor ” means an accounting, appraisal or investment banking firm of nationally recognized standing that is, in the reasonable judgment of Borrower’s Board of Directors, qualified to perform the task for which it has been engaged and disinterested and independent with respect to Borrower and its Affiliates.
“ Insolvency Proceeding ” means any proceeding commenced by or against any Person under any provision of any Bankruptcy Law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
“ Interest Payment Date ” means the last day of each calendar month.
“ Interest Rate ” means 12.00% per annum.
“ Intralinks ” means the IntraLinks digital workspace or any successor digital workspace or interactive document platform.
“ Investments ” of any Person means:
(a) all direct or indirect investments by such Person in any other Person in the form of loans, advances or capital contributions or other credit extensions constituting Indebtedness of such other Person, and any guarantee of Indebtedness of any other Person;
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(b) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Equity Interests or other securities of any other Person (other than any such purchase that constitutes the redemption of any Equity Interests of Borrower or any Restricted Subsidiary, including, without limitation, any payment in connection with any merger or consolidation involving Borrower but excluding any such Equity Interests held by Borrower or any Restricted Subsidiary);
(c) all other items that would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP (including, if required by GAAP, purchases of assets outside the ordinary course of business); and
(d) the Designation of any Subsidiary as an Unrestricted Subsidiary.
Except as otherwise expressly specified in this definition, the amount of any Investment (other than an Investment made in cash) shall be the Fair Market Value thereof on the date such Investment is made. The amount of Investment pursuant to clause (d) shall be the Designation Amount determined in accordance with Section 5.8 . If Borrower or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of any Restricted Subsidiary, or any Restricted Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary, Borrower shall be deemed to have made an Investment on the date of any such sale or other disposition equal to the Fair Market Value of the Equity Interests of and all other Investments in such Restricted Subsidiary retained. Notwithstanding the foregoing, purchases or redemptions of Equity Interests of Borrower shall be deemed not to be Investments.
“ Lender ” has the meaning set forth in the preamble to this Agreement, and shall include any other Person made a party to this Agreement in accordance with the provisions of Section 11.1 .
“ Lender Expenses ” means all (a) costs or expenses (including taxes, and insurance premiums) required to be paid by Borrower or its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by Lender, (b) fees or charges paid or incurred by Lender in connection with its transactions with Borrower or its Subsidiaries, (c) costs and expenses incurred by Lender in the disbursement of funds to or for the account of Borrower (by wire transfer or otherwise), (d) charges paid or incurred by Lender resulting from the dishonor of checks, (e) reasonable costs and expenses paid or incurred by Lender to correct any default or enforce any provision of the Loan Documents, (f) audit fees and expenses of Lender to audit examinations of any applicable books to the extent of any fees or charges (and up to the amount of any limitation) contained in this Agreement, (g) reasonable costs and expenses of third party claims or any other suit paid or incurred by Lender in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents or Lender’s relationship with Borrower or any Subsidiary of Borrower, (h) Lender’s reasonable costs and expenses (including attorneys fees) incurred in advising, structuring, drafting, reviewing or amending the Loan Documents, and (i) Lender’s reasonable costs and expenses (including attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning Borrower or any Subsidiary of Borrower or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether suit is brought.
“ Lender-Related Person ” means Lender together with Lender’s Affiliates, officers, directors, employees, attorneys, and agents.
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“ Lender’s Account ” means the account of Lender identified on Schedule 1 , or such other account designated in writing by Lender to Borrower.
“ Lien ” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or other), pledge, lease, easement, restriction, covenant, charge, security interest or other encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement.
“ Loan ” means the loan made by Lender to Borrower pursuant to clause (a) of Section 2.1 of the Original Agreement, as amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Loan Documents ” means this Agreement, the Notation of Guaranty, the Warrant, any promissory note or notes executed by Borrower in connection with this Agreement and payable to Lender, and any other agreement entered into previously, now or in the future, by Borrower, any Guarantor and/or Lender in connection with this Agreement, in each case, as such instruments may be amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Loan Parties ” means Borrower and Guarantors.
“ Material Adverse Effect ” means any material adverse effect on (a) the business, assets, condition (financial or otherwise), or results of operations of Borrower and its Subsidiaries, taken as a whole, but excluding any change to the extent relating to or arising from any (i) changes in laws or changes in the enforcement thereof after the date hereof that do not disproportionally impact Borrower and its Subsidiaries relative to other participants in the Business, (ii) changes in general economic conditions that do not disproportionally impact Borrower and its Subsidiaries relative to other participants in the Business or (iii) changes generally affecting the industries in which the Business competes that do not disproportionally impact Borrower and its Subsidiaries relative to other participants in the Business, or (b) the ability of the Loan Parties to perform their respective obligations under this Agreement or any other Loan Document in a timely and complete manner or to consummate the transactions contemplated by this Agreement without material delay. In determining whether there has been a Material Adverse Effect, any event, circumstance, change or effect shall be considered both individually and together with all other events, circumstances, changes or effects, and any event, circumstance, change or effect that reasonably could be expected to result in a Material Adverse Effect (individually or together with one or more other events, circumstances, changes or effects) shall be considered a Material Adverse Effect.
“ Maturity Date ” means August 1, 2014.
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“ Member of the 3i Group ” means any Person included within the 3i Group, in its individual capacity.
“ Net Available Proceeds ” means, with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash Equivalents, net of:
(a) brokerage commissions and other fees and expenses (including fees, discounts and expenses of legal counsel, accountants and investment banks, consultants and placement agents) of such Asset Sale;
(b) provisions for taxes payable as a result of such Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements);
(c) amounts required to be paid to any Person (other than Borrower or any Restricted Subsidiary and other than under a Credit Facility) owning a beneficial interest in the assets subject to the Asset Sale or having a Lien thereon;
(d) payments of unassumed liabilities (not constituting Indebtedness) relating to the assets sold at the time of, or within 30 days after the date of, such Asset Sale; and
(e) appropriate amounts to be provided by Borrower or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any adjustment in the sale price of such asset or assets or liabilities associated with such Asset Sale and retained by Borrower or any Restricted Subsidiary, as the case may be, after such Asset Sale, including pensions and other postemployment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as reflected in an Officers’ Certificate delivered to Lender; provided , however , that any amounts remaining after adjustments, revaluations or liquidations of such reserves shall constitute Net Available Proceeds.
“ Net Proceeds Excess ” has the meaning set forth in clause (e) of Section 5.5 .
“ Net Proceeds Offer ” has the meaning set forth in subclause (d)(i)(A) of Section 5.5 .
“ Net Proceeds Prepayment ” has the meaning set forth in subclause (d)(i)(A) of Section 5.5 .
“ Non-Recourse Debt ” means Indebtedness of an Unrestricted Subsidiary:
(a) as to which neither Borrower nor any Restricted Subsidiary (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (ii) is directly or indirectly liable as a guarantor or otherwise, or (iii) constitutes the lender;
(b) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Revolving Credit Facility or Notes) of Borrower or any Restricted Subsidiary to declare a default on the other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and
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(c) as to which Lender has been notified in writing that it will not have any recourse to the Equity Interests or assets of Borrower or any Restricted Subsidiary.
“ Notation of Guaranty ” has the meaning set forth in clause (a) of Section 14.2 .
“ Notes ” has the meaning specified therefore in the definition of “Indenture.”
“ Notes 1 ” has the meaning specified therefor in the definition of “Indenture 1.”
“ Notes 2 ” has the meaning specified therefor in the definition of “Indenture 2.”
“ Offering Memorandum ” means the offering memorandum, dated on or about the date hereof, relating to the offering of the Notes.
“ Obligations ” means the Loan and all debts, principal, interest (including any interest that, but for the commencement of an Insolvency Proceeding, would have accrued), premiums, liabilities, obligations (including indemnification obligations), fees, charges, costs (including any fees or expenses that, but for the commencement of an Insolvency Proceeding, would have accrued), guaranties, covenants, and duties of any kind and description owing by Borrower to Lender pursuant to or evidenced by the Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all Lender Expenses that Borrower is required to pay or reimburse by the Loan Documents, by law, or otherwise. Any reference in this Agreement or in the Loan Documents to the Obligations shall include all extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.
“ Officer ” means any of the following of Borrower: the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary.
“ Officers’ Certificate ” means a certificate signed on behalf of a Person by two Officers of such Person.
“ Pari Passu Indebtedness ” means any Indebtedness of Borrower or any Guarantor that ranks pari passu in right of payment with the Loan or the Guaranty, as applicable.
“ Pari Passu Indebtedness Price ” has the meaning set forth in of Section 5.5(d)(iii) .
“ Participant ” has the meaning set forth in clause (e) of Section 11.1 .
“ Payment Amount ” has the meaning set forth in Section 5.5(d)(i) .
“ Patriot Act ” has the meaning set forth in Section 16.10 .
“ Payment Blockage Notice ” has the meaning set forth in Section 15.3(a)(2) .
“ Permitted Business ” means the business engaged in by Borrower and its Subsidiaries on the Effective Date and businesses that are reasonably related thereto or are reasonable extensions thereof.
“ Permitted Holder ” means each of: (a) Jack Bendheim; (b) each of his spouse, siblings, ancestors, descendants (whether by blood, marriage or adoption, and including stepchildren) and the spouses, siblings, ancestors and descendants thereof (whether by blood, marriage or adoption, and
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including stepchildren) of such natural persons, the beneficiaries, estates and legal representatives of any of the foregoing, the trustee of any bona fide trust of which any of the foregoing, individually or in the aggregate, are the majority in interest beneficiaries or grantors, and any corporation, partnership, limited liability company or other Person in which any of the foregoing, individually or in the aggregate, own or control a majority in interest; (c) all Affiliates controlled by the individual named in clause (a) above; (d) any Member of the 3i Group or direct or indirect transferee of Voting Stock held by any Member of the 3i Group; and (e) Lender or direct or indirect transferee of Voting Stock held by Lender.
“ Permitted Junior Securities ” means:
(a) Equity Interests in Borrower or any Guarantor; or
(b) debt securities issued pursuant to a confirmed plan of reorganization that are subordinated in right of payment to (i) all Senior Debt and Guarantor Senior Debt and (ii) any debt issued in exchange for Senior Debt to substantially the same extent as, or to a greater extent than, the Loan and the Guarantees are subordinated to Senior Debt and Guarantor Senior Debt under this Agreement.
“ Permitted Liens ” means the following types of Liens:
(a) Liens for taxes, assessments or governmental charges or claims either (i) not delinquent or (ii) contested in good faith by appropriate proceedings and as to which Borrower or the Restricted Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;
(b) Liens of landlords, carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof and rights to offset and set-off;
(c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory or regulatory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);
(d) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(e) judgment Liens not giving rise to an Event of Default so long as such Liens are adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which the proceedings may be initiated has not expired;
(f) easements, rights-of-way, zoning restrictions, title irregularities and other similar charges, restrictions or encumbrances in respect of real property which do not, in the aggregate, impair in any material respect the ordinary conduct of the business of Borrower and the Restricted Subsidiaries taken as a whole;
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(g) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other assets relating to such letters of credit and products and proceeds thereof;
(h) Liens encumbering deposits made to secure obligations arising from contractual or warranty requirements of Borrower or any Restricted Subsidiary, including rights of offset and set-off;
(i) lenders’ Liens, rights of set-off and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more of accounts maintained by Borrower or any Restricted Subsidiary, in each case granted in the ordinary course of business in favor of the lender or lenders with which such accounts are maintained, securing amounts owing to such lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;
(j) leases or subleases, and licenses or sublicenses, granted to others that do not materially interfere with the ordinary course of business of Borrower or any Restricted Subsidiary;
(k) Liens arising from filing Uniform Commercial Code financing statements regarding leases;
(1) Liens securing all of the Notes and Liens securing any guarantee given under or with respect to the Indenture;
(m) Liens securing Hedging Obligations entered into for bona fide hedging purposes of Borrower or any Restricted Subsidiary not for the purpose of speculation;
(n) Liens existing on the Effective Date securing Indebtedness outstanding on the Effective Date;
(o) Liens in favor of Borrower or a Guarantor;
(p) Liens securing Senior Debt or Guarantor Senior Debt;
(q) Liens securing Purchase Money Indebtedness and Capitalized Lease Obligations; provided that such Liens shall not extend to any asset other than the specified asset being financed and additions and improvements thereon;
(r) Liens securing Acquired Indebtedness permitted to be incurred under this Agreement; provided that the Liens do not extend to assets not subject to such Lien at the time of acquisition (other than improvements thereon and substitutions and replacements thereto) and are no more favorable to the lienholders than those securing such Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by Borrower or a Restricted Subsidiary;
(s) Liens on assets of a Person existing at the time such Person is acquired or merged with or into or consolidated with Borrower or any such Restricted Subsidiary (and not created in anticipation or contemplation thereof);
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(t) Liens on assets of Foreign Subsidiaries securing Indebtedness of Foreign Subsidiaries;
(u) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (1), (n), (p), (q), (r) and (s); provided that in the case of Liens securing Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (n), (q), (r) and (s), such Liens do not extend to any additional assets (other than improvements thereon and replacements thereof);
(v) 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;
(w) Liens securing Indebtedness of Borrower or any Restricted Subsidiary in an aggregate amount not to exceed $5,000,000 at any time outstanding; and
(x) Liens arising in connection with the placement by Borrower or any Restricted Subsidiary of a reasonable amount of cash (as determined in good faith by Borrower’s Board of Directors) in escrow against any indemnification, adjustment of purchase price, earn out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets of Borrower or any Restricted Subsidiary or the acquisition, disposition, issuance or redemption of Equity Interests of Borrower or a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing or in contemplation of any such acquisition; provided that (i) any amount of such obligations included (or that would be required to be included) on the face of the balance sheet of Borrower or any Restricted Subsidiary at the time of closing of such acquisition, disposition, issuance or redemption shall not be permitted under this clause (x) and (ii) in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this clause (x) shall at no time exceed the gross proceeds or value of the consideration actually received by Borrower and the Restricted Subsidiaries in connection with such disposition (other than with respect to obligations incurred or assumed in connection with the acquisition, disposition, issuance or redemption of Equity Interests of Borrower).
“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.
“ Plan of Liquidation ” with respect to any Person, means a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise): (a) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety; and (b) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the remaining assets of such Person to holders of Equity Interests of such Person.
“ Preferred Stock ” means, with respect to any Person, any and all preferred or preference stock or other similar equity interests (however designated) of such Person whether now outstanding or issued after the Effective Date.
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“ Property ” has the meaning set forth in Section 4.17 .
“ Public Equity Offering ” means an underwritten public offering of Qualified Equity Interests of Borrower generating gross proceeds of at least $50,000,000 in the aggregate since the Effective Date, pursuant to an effective registration statement filed under the Securities Act or pursuant to a listing on or admission to a recognized exchange or market outside the United States.
“ Purchase Money Indebtedness ” means Indebtedness, including Capitalized Lease Obligations, of Borrower or any Restricted Subsidiary incurred for the purpose of financing all or any part of the purchase price of property, plant or equipment purchased, constructed or improved at any time after the Effective Date and used in the business of Borrower or any Restricted Subsidiary or the cost of installation, construction or improvement thereof and fees and other obligations incurred in connection therewith, as amended or otherwise restructured (other than pursuant to a refinancing); provided , however , that (a) the amount of such Indebtedness shall not exceed such purchase price or cost and (b) such Indebtedness shall be incurred within 90 days after such acquisition of such asset by Borrower or such Restricted Subsidiary or such installation, construction or improvement.
“ Qualified Equity Interests ” of any Person means Equity Interests of such Person other than Disqualified Equity Interests; provided that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed, directly or indirectly, using funds (a) borrowed from such Person or any Subsidiary of such Person until and to the extent such borrowing is repaid or (b) contributed, extended, guaranteed or advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect of any employee stock ownership or benefit plan). Unless otherwise specified, Qualified Equity Interests refer to Qualified Equity Interests of Borrower.
“ redeem ” means to redeem, repurchase, purchase, defease (including a covenant defeasance), retire, discharge or otherwise acquire or retire for value; and “ redemption ” shall have a correlative meaning.
“ Record ” means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.
“ Redesignation ” has the meaning set forth in clause (c) of Section 5.8 .
“ Refinancing Indebtedness ” means Indebtedness of Borrower or a Restricted Subsidiary incurred in exchange for, or the proceeds of which are used to redeem or refinance in whole or in part, any Indebtedness of Borrower or any Restricted Subsidiary (the “ Refinanced Indebtedness ”); provided that:
(a) the principal amount (and accreted value, in the case of Indebtedness issued at a discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted value, as the case may be) of the Refinanced Indebtedness plus the amount of accrued and unpaid interest on the Refinanced Indebtedness, any reasonable premium paid to the holders of the Refinanced Indebtedness and reasonable expenses incurred or to be paid in connection with the incurrence of the Refinancing Indebtedness;
(b) the obligor of Refinancing Indebtedness does not include any Person (other than Borrower or any Guarantor) that is not an obligor of the Refinanced Indebtedness;
(c) if the Refinanced Indebtedness was subordinated in right of payment to the Loan or the Guaranty, as the case may be, then such Refinancing Indebtedness, by its terms, is
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subordinate in right of payment to the Loan or the Guaranty, as the case may be, at least to the same extent as the Refinanced Indebtedness, and if the Refinanced Indebtedness was pari passu with the Notes or the Note Guarantees, as the case may be, then the Refinancing Indebtedness ranks pari passu with, or is subordinated in right of payment to, the Notes 2 or the Note Guarantees (as defined in the Indenture 2), as the case may be;
(d) the Refinancing Indebtedness has a final stated maturity either (i) no earlier than the Refinanced Indebtedness being repaid or amended or (ii) 181 days after the maturity date of the Notes;
(e) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the maturity date of the Notes has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is scheduled to mature on or prior to the maturity date of the Notes; and
(f) the proceeds of the Refinancing Indebtedness shall be used substantially concurrently with the incurrence thereof to redeem or refinance the Refinanced Indebtedness, unless the Refinanced Indebtedness is not then due and is not redeemable or prepayable at the option of the obligor thereof or is redeemable or prepayable only with notice, in which case such proceeds shall be held in a segregated account of the obligor of the Refinanced Indebtedness until the Refinanced Indebtedness becomes due or redeemable or prepayable or such notice period lapses and then shall be used to redeem or refinance the Refinanced Indebtedness; provided that in any event the Refinanced Indebtedness shall be redeemed or refinanced within one year of the incurrence of the Refinancing Indebtedness.
“ Representative ” means any agent or representative in respect of any Designated Senior Debt; provided that if, and for so long as, any Designated Senior Debt lacks such representative, then the Representative for such Designated Senior Debt shall at all times constitute the holders of a majority in outstanding principal amount of such Designated Senior Debt.
“ Restricted Subsidiary ” means any Subsidiary of Borrower other than an Unrestricted Subsidiary.
“ Revolving Credit Facility ” means the Amended and Restated Loan Agreement, as amended, among Borrower, Borrower’s Subsidiaries that are signatories thereto, the lenders from time to time party thereto, and agents thereunder, together with any notes, letters of credit, guarantees, collateral and security documents, instruments and other agreements executed, issued or arranged in connection with such loan agreement (including Hedging Obligations and Bank Product Obligations incurred in connection therewith), in each case, as such instruments may be amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Sale and Leaseback Transactions ” means, with respect to any Person, an arrangement with any bank, insurance company or other lender or investor or to which such lender or investor is a party, providing for the leasing by such Person of any asset of such Person which has been or is being sold or
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transferred by such Person to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the security of such asset.
“ SEC ” means the United States Securities and Exchange Commission and any successor thereto.
“ Securities Act ” means the United States Securities Act of 1933, as in effect from time to time.
“ Senior Debt ” means the principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on any Indebtedness of Borrower, whether outstanding on the Effective Date or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Notes 2 or the Loan.
Without limiting the generality of the foregoing, “Senior Debt” shall include the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other amounts owing in respect of:
(1) all monetary obligations of every nature under, or with respect to, the Credit Facilities, including, without limitation, obligations to pay principal and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities (and guarantees thereof) and Hedging Obligations in respect thereof; and
(2) all Obligations under, or with respect to, the Senior Notes;
in each case whether outstanding on the Effective Date or thereafter incurred.
Notwithstanding the foregoing, “Senior Debt” shall not include:
(1) any Indebtedness of Borrower to any of its Subsidiaries;
(2) Indebtedness to, or guaranteed on behalf of, any director, officer or employee of Borrower or any of its Subsidiaries (including, without limitation, amounts owed for compensation);
(3) obligations to trade creditors and other amounts incurred (but not under the Credit Facilities) in connection with obtaining goods, materials or services;
(4) Indebtedness represented by Disqualified Equity Interests;
(5) any liability for taxes owed or owing by Borrower;
(6) that portion of any Indebtedness incurred in violation of Section 4.06 of Indenture 2 (but, as to any such obligation, no such violation shall be deemed to exist for purposes of this clause (6) if the holder(s) of such obligation or their representative shall have received an Officers’ Certificate of Borrower to the effect that the incurrence of such Indebtedness does not (or, in the case of revolving credit indebtedness, that the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate such provisions of Indenture 2);
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(7) Indebtedness which, when incurred and without respect to any election under Section 1111(b) of Title 11, United States Code, is without recourse to Borrower; and
(8) any Indebtedness which is, by its express terms, subordinated in right of payment to any other Indebtedness of Borrower.
“ Senior Notes ” means the Notes and the Notes 1.
“ Shareholders Agreement ” means the Stockholders Agreement dated March 12, 2008 by and between Jack C. Bendheim, BFI Co., LLC, Mayflower L.P. (as successor to 3i Quoted Private Equity plc) and Borrower, as amended and in effect on the Effective Date, and as thereafter amended.
“ Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Regulation S-X promulgated pursuant to the Securities Act as such Regulation is in effect on the Closing Date.
“ Solvent ” means, with respect to any Person on a particular date, that, at fair valuations, the sum of such Person’s assets is greater than all of such Person’s debts.
“ Subordinated Indebtedness ” means Indebtedness of Borrower or any Restricted Subsidiary that is expressly subordinated in right of payment to the Loan or the Guaranty, respectively.
“ Subsidiary ” means, with respect to any Person:
(a) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person (or a combination thereof); and
(b) any partnership (i) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (ii) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).
Unless otherwise specified, “Subsidiary” refers to a Subsidiary of Borrower.
“ Successor ” has the meaning set forth in Section 5.13(a)(y)(B) .
“ Tax ” means (i) any tax, governmental fee or other like assessment or charge of any kind whatsoever (including, but not limited to, withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any Governmental Authority responsible for the imposition of any such tax (domestic or foreign), and any liability for any of the foregoing as transferee or successor, (ii) in the case of Borrower or any of its Subsidiaries, liability for the payment of any amount of the type described in clause (i) as a result of being or having been before the Closing Date a member of an affiliated, consolidated, combined or unitary group, or a party to any agreement or arrangement, as a result of which the liability of Borrower or any of its Subsidiaries to a Governmental Authority is determined or taken into account with reference to the activities or assets of any other Person and (iii) liability of Borrower or any of its Subsidiaries for the payment of any amount as a result of being party to any Tax Sharing Agreement or with respect to the payment of any amount imposed on any person of the type described in (i) or (ii) as a result of any existing express or implied
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agreement or arrangement (including, but not limited to, a tax indemnification agreement or arrangement).
“ Tax Sharing Agreements ” means all existing agreements or arrangements (whether or not written) binding Borrower or any of its Subsidiaries that provide for the allocation, apportionment, sharing or assignment of any Tax liability or benefit, or the transfer or assignment of income, revenues, receipts, or gains for the purpose of determining any person’s Tax liability (other than limited liability operating and partnership agreements and any indemnification agreement or arrangement pertaining to the sale or lease of assets or subsidiaries).
“ Transactions ” means (i) the issuance and sale of the Notes, (ii) the redemption or repayment, by tender offer or otherwise, of all of Borrower’s outstanding Senior Notes due 2013 and all of Borrower’s outstanding Senior Subordinated Notes due 2014, (iii) the entering into the Revolving Credit Facility, (iv) the declaration and payment of a dividend on Borrower’s common shares of up to $50,000,000 on or reasonably promptly following the Effective Date, (v) the repayment of $1,400,000 in respect of a loan from an Affiliate of Lender, and (vi) the payment of fees and expenses related to the foregoing.
“ UCC ” means the New York Uniform Commercial Code, as in effect from time to time.
“ United States ” means the United States of America.
“ Unrestricted Subsidiary ” means (a) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Borrower in accordance with Section 6.7 and (b) any Subsidiary of an Unrestricted Subsidiary.
“ Voidable Transfer ” has the meaning set forth in Section 16.7 .
“ Voting Stock ” with respect to any Person, means securities of any class of Equity Interests of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock or other relevant equity interest has voting power by reason of any contingency) to vote in the election of members of the Board of Directors of such Person.
“ Warrant ” means the Warrant issued on the Closing Date by Borrower in favor of Lender.
“ Weighted Average Life to Maturity ” when applied to any Indebtedness at any date, means the number of years obtained by dividing (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (b) the then outstanding principal amount of such Indebtedness.
“ Wholly-Owned Restricted Subsidiary ” means a Restricted Subsidiary of which 100% of the Equity Interests (except for directors’ qualifying shares or certain minority interests owned by other Persons solely due to local law requirements that there be more than one stockholder, but which interest is not in excess of what is required for such purpose) are owned directly by Borrower or through one or more Wholly-Owned Restricted Subsidiaries.
1.2 Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with GAAP. When used herein, the term “financial statements” shall include the notes and schedules thereto.
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1.3 Construction . Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in the other Loan Documents to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions set forth in this Agreement). Any requirement of a writing contained herein or in the other Loan Documents shall be satisfied by the transmission of a Record and any Record transmitted shall constitute a representation and warranty as to the accuracy and completeness of the information contained therein.
1.4 Schedules and Exhibits . All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.
2. Loan and Terms of Payment .
2.1 Loan .
(a) [Intentionally Omitted]
(b) Amounts borrowed pursuant to this Section 2.1 and repaid or prepaid may not be reborrowed.
2.2 Notation; Promissory Notes .
(a) [Intentionally Omitted]
(b) [Intentionally Omitted]
(c) Notation . Lender shall record on its books the principal amount of the Loan owing to Lender from time to time, and such records shall, absent manifest error, conclusively be presumed to be correct and accurate. In addition, Lender is authorized, at Lender’s option, to note the date and amount of each payment or prepayment of principal of the Loan in its books and records, including computer records and/or notation on any grid or attachment to the promissory notes described in clause (d) of this Section.
(d) Promissory Notes . Lender may request that the Loan be evidenced by a promissory note in form and substance reasonably satisfactory to Lender. In such event, Borrower shall prepare, execute and deliver to Lender a promissory note payable to the order of Lender. Thereafter, unless Lender surrenders such note or notes and elects not to have the Loan evidenced thereby, the Loan and interest thereon shall at all times (including after assignment pursuant to Section 11.1) be represented by one or more promissory notes in such form payable to the order of the payee named therein.
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2.3 Payments .
(a) Payments by Borrower . Except as otherwise expressly provided herein, all payments by Borrower shall be made to Lender’s Account and shall be made in immediately available funds, no later than 3:00 p.m. (New York City time) on the date specified herein. Any payment received by Lender later than 3:00 p.m. (New York City time), shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.
(b) Application .
(i) All payments shall be remitted to Lender, and all such payments shall be applied as follows:
A. first , to pay any Lender Expenses then due to Lender under the Loan Documents, until paid in full,
B. second, to pay any fees then due to Lender under the Loan Documents, until paid in full,
C. third , to pay interest due in respect of the Loan, until paid in full,
D. fourth , to pay the principal of the Loan, until paid in full,
E. fifth , to pay any other Obligations and any other obligations owing under the Loan Documents then due and payable, until paid in full, and
F. sixth , to Borrower (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.
(ii) In each instance, so long as no Event of Default has occurred and is continuing, this Section 2.3(b) shall not be deemed to apply to any payment by Borrower specified by Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of the Loan Documents.
(iii) For purposes of the foregoing, “paid in full” means payment of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.
(iv) In the event of a direct conflict between the priority provisions of this Section 2.3 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that such priority provisions in such documents shall 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 2.3 shall control and govern.
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2.4 Rates, Payments, and Calculations .
(a) Interest Rates . Except as provided in clause (b) below, the Loan shall bear interest at the Interest Rate.
(b) Default Rate . Upon the occurrence and during the continuation of an Event of Default (and at the election of Lender), all outstanding Obligations shall bear interest at a per annum rate equal to (i) the Interest Rate plus (ii) the incremental rate, if any, applicable to the Notes upon the occurrence and during the continuation of an event of default thereunder (without regard to whether the holders of the Notes have waived (whether through any amendment, waiver or other written document or by their inaction) their rights to receive such incremental rate).
(c) Payment . Interest shall be due and payable, in arrears, on each Interest Payment Date; provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand or, in the absence of demand, in arrears on the last day of each calendar month, and (ii) in the event of any repayment or prepayment of the Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. All other amounts due and owing under the Loan Documents shall be payable on (x) the applicable date, or (y) if no date is specified (A) and no Default or Event of Default has occurred and is continuing at the time such payment is due and owing, within thirty (30) days after invoice, or if the last day of such 30-day period is not a Business Day the next following Business Day, or (B) and any Default or Event of Default has occurred and is continuing at any time such payment is due and owing (including during any 30-day period provided for in the prior sub-clause (A)), on demand.
(d) Computation . All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360-day year for the actual number of days elapsed.
(e) Intent to Limit Charges to Maximum Lawful Rate . 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. Borrower and Lender, 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 , however , that, anything contained herein to the contrary notwithstanding, if said 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 as 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.
2.5 Crediting Payments . The receipt of any payment item by Lender shall not be considered a payment on account unless such payment item is a wire transfer of immediately available federal funds made to the Lender’s Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then Borrower shall be deemed not to have made such payment and interest shall be calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Lender only if it is received into the Lender’s Account on a Business Day on or before 3:00 p.m. (New York City time). If any payment item is received into the Lender’s Account on a non-Business Day or after 3:00 p.m. (New York City time) on a Business Day, it shall be deemed to have been received by Lender as of the opening of business on the immediately following Business Day.
2.6 [Intentionally Omitted]
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2.7 [Intentionally Omitted]
2.8 Repayment of Loan . Borrower agrees to repay the outstanding principal amount of the Loan on the Maturity Date.
2.9 Prepayment of Loan.
(a) Voluntary Prepayments. Borrower may prepay the Loan in whole or in part together with payment of any Applicable Prepayment Premium, subject to the requirements of paragraph (b) of this Section.
(b) Provisions Applicable to all Prepayments. Borrower shall notify Lender by telephone (confirmed by facsimile or other electronic transmission) of any prepayment hereunder not later than 3:00 p.m. (New York City time) at least one Business Day prior thereto. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of the Loan to be prepaid and, in the case of a Net Proceeds Prepayment, a reasonably detailed calculation of the amount of such prepayment. Each prepayment of the Loan shall be in a minimum amount of $250,000 or a higher integral multiple of $50,000, except as necessary to apply fully the required amount of any Net Proceeds Prepayment, Change of Control Prepayment or Change in U.S. Tax Treaty Prepayment. Prepayments shall be accompanied by (i) any Applicable Prepayment Premium, (ii) accrued interest to the extent required by Section 2.4 and (iii) any costs, fees or other expenses then due and owing under the Loan Documents. Amounts prepaid may not be reborrowed.
2.10 [Intentionally Omitted]
2.11 Ranking . Borrower hereby confirms on its behalf and on behalf of each other Loan Party that:
(a) the Loan and the Guaranty at all times will rank at least pari passu with the claims of all other senior subordinated unsecured obligations of Borrower and each Guarantor, respectively, other than obligations mandatorily preferred pursuant to Bankruptcy Law; and
(b) the Loan and the Guaranty shall constitute “Pari Passu Indebtedness” for the purpose of, and as defined under, Indenture 2.
3. Conditions .
3.1 Conditions . The effectiveness of the amendments to the Original Agreement effected by this Agreement is subject to the fulfillment, to the reasonable satisfaction of Lender, of each of the conditions precedent set forth below:
(a) the Effective Date shall have occurred;
(b) immediately before, as of and immediately following the Effective Date and after giving effect to this Amendment and the Transactions contemplated to occur at or prior to the Effective Date, no Default or Event of Default shall have occurred and be continuing (or will result therefrom);
(c) Lender shall have received a copy, certified as true and correct by an Authorized Person, of an amendment and restatement of that certain Term Loan Agreement dated as of February 12, 2009 by and among Borrower, the guarantors thereto and Mayflower L.P., in form and substance reasonably satisfactory to Lender;
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(d) Lender shall have received a copy, certified as true and correct by an Authorized Person, of a consent given by Mayflower L.P. with respect to this Agreement, in form and substance reasonably satisfactory to Lender;
(e) the representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of the Effective Date (except to the extent that such representations and warranties relate solely to an earlier date);
(f) Borrower shall have paid all expenses incurred by Lender in connection with the execution and delivery of this Agreement, including the fees and expenses of counsel to Lender; and
(g) all other documents and legal matters in connection with the Transactions contemplated to occur at or prior to the Effective Date shall have been delivered, executed or recorded and shall be in form and substance reasonably satisfactory to Lender.
Borrower shall provide a certificate by an Authorized Person certifying that all conditions precedent set forth above have been fulfilled. Promptly following receipt of such certificate the Lender shall confirm in writing that, in reliance on such certification, all conditions precedent set forth above have been fulfilled to its satisfaction, unless it has reason not to so confirm, in which case Lender shall communicate to the Borrower the reason for its inability to confirm satisfaction of such conditions precedent..
4. Representations and Warranties of Borrower .
In order to induce Lender to enter into this Agreement, Borrower represents and warrants to Lender (provided that (a) each of the following representations and warranties shall survive the execution and delivery of this Agreement and (b) each of the following representations and warranties other than Section 5.1(e) shall have been qualified by the matters disclosed in the Offering Memorandum) that:
4.1 Corporate Organization and Authority of Borrower and its Subsidiaries; Non-Contravention; Approvals . (a) Borrower is a corporation validly existing and in good standing under the laws of the State of New York and has all necessary corporate power and authority to execute, deliver and perform each Loan Document to which it is a party and carry on its business as now being conducted and to own, use and lease its assets and properties. Each Guarantor and each of Borrower’s other Subsidiaries is a corporation, limited liability company, limited partnership or other business entity validly existing and in good standing under the laws of the jurisdiction of its formation, and has all necessary entity-level power and authority to execute, deliver and perform each Loan Document to which it is a party and carry on its business as now being conducted and to own, use and lease its assets and properties.
(b) The execution and delivery by each Loan Party of the Loan Documents to which it is party and the consummation of the transactions contemplated thereby do not (i) conflict with or result in a breach of any provision of the constituent documents of such Loan Party; (ii) result in a violation or breach of or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, or result in the termination, modification or cancellation of, or the loss of a benefit under or accelerate the performance required by, or result in the creation of any Lien, the requirement to make any payment or any right of termination, modification, cancellation or acceleration under the terms, conditions or provisions of any contract or other instrument of any kind to which Borrower is now a party or by which such Loan Party, the Business or any of its assets or properties may be bound, in each case, which has not been waived or consented to, with such waiver or consent being disclosed in writing to Lender, or (iii) violate any order, writ, injunction, decree, statute, treaty, rule or
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regulation applicable to such Loan Party, the Business or any of its assets or properties, other than in the case of clauses (ii) and (iii) above as would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(c) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority is required by or with respect to any Loan Party in connection with its execution, delivery and performance of the Loan Documents to which it is a party or the consummation of the transactions contemplated thereby. Borrower has (i) delivered to Lender complete and correct copies of the certificate of incorporation and by-laws of Borrower and the equivalent constituent documents of each other Loan Party, and (ii) given Lender the opportunity to review the corporate minute books and stock ledgers of Borrower, each as currently in effect.
(d) This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.
(e) This Agreement constitutes, and each other Loan Document when duly executed and delivered by each Loan Party party thereto will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms.
5. Covenants .
5.1 Reports to Lender . (a) Whether or not Borrower is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as the Loan remains outstanding, Borrower shall have its annual consolidated financial statements audited by a nationally recognized firm of independent registered accountants and its interim consolidated financial statements reviewed by a nationally recognized firm of independent registered accountants in accordance with Statement on Auditing Standards 100 issued by the American Institute of Certified Public Accountants (or any similar replacement standard). In addition, so long as the Loan is outstanding, Borrower shall furnish to Lender:
(i) (x) all annual and quarterly financial information that would be required to be contained in a filing with the SEC on Forms 10-K and 10-Q if Borrower were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; (y) with respect to the annual and quarterly information, a presentation of EBITDA and Adjusted EBITDA of Borrower substantially consistent with the presentation thereof in the Offering Memorandum and derived from such financial information; and (z) with respect to the annual information only, a report on the annual financial statements by Borrower’s independent registered public accounting firm; and
(ii) all information that would be required to be contained in filings with the SEC on Form 8-K if Borrower were required to file such reports.
All such annual reports shall be furnished within 90 days after the end of the fiscal year to which they relate, and all such quarterly reports shall be furnished within 45 days after the end of the fiscal quarter to which they relate. All such current reports shall be furnished within the time periods specified in the SEC’s rules and regulations for reporting companies under the Exchange Act.
(b) At Borrower’s option, Borrower shall either (i) distribute such information and such reports (as well as the details regarding the conference call described below) electronically to Lender, and/or (ii) make available such information to Lender by posting such information on Intralinks or any comparable password protected online data system which will require a confidentiality acknowledgement, and Borrower shall provide such password thereto to Lender and make such information readily available
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to Lender, who agrees to treat such information as confidential to the extent required by Section 16.8 . Borrower shall permit Lender to listen to and participate in all quarterly conference calls for holders of Notes and securities analysts to discuss such financial information.
(c) If Borrower has Designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, would constitute a Significant Subsidiary of Borrower, then the annual and quarterly information required by Section 5.1(a)(i) shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Borrower and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries of Borrower.
5.2 Waiver of Stay. Extension or Usury Laws . Borrower covenants (to the extent that it may lawfully do so) that it shall not, nor shall it permit any Guarantor to, at any time insist upon, or plead (as a defense or otherwise) or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law which would prohibit or forgive Borrower or any Guarantor from paying all or any portion of the principal of, premium, if any, and/or interest on the Loan as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Agreement or any other Loan Document; and (to the extent that it may lawfully do so) Borrower hereby expressly waives, on its own behalf and for each of the other Loan Parties, all benefit or advantage of such law, and covenants that it will not, nor will it permit any Guarantor to, hinder, delay or impede the execution of any power herein granted to Lender but will suffer and permit the execution of every such power as though no such law had been enacted.
5.3 Compliance Certificate; Notice of Default . (a) Borrower shall deliver to Lender, within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of Borrower and its Subsidiaries during such fiscal year has been made under the supervision of the signing Officers with a view to determining whether Borrower and the Guarantors have kept, observed, performed and fulfilled their obligations under the Loan Documents, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge, Borrower and the Guarantors have kept, observed, performed and fulfilled each and every covenant contained in the Loan Documents and are not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action Borrower or the relevant Guarantor is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest on the Loan is prohibited or if such event has occurred, a description of the event and what action Borrower and the Guarantors are taking or propose to take with respect thereto.
(b) Borrower shall, so long as the Loan remains outstanding, deliver to Lender, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action Borrower and the Guarantors are taking or propose to take with respect thereto.
(c) Borrower’s fiscal year currently ends on June 30. Borrower shall provide written notice to Lender of any change in its fiscal year.
5.4 Taxes . Borrower shall, and shall cause each of its Subsidiaries to, pay prior to delinquency all material taxes, assessments, and governmental levies except as contested in good faith and by appropriate proceedings.
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5.5 Limitations on Asset Sales . Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(a) Borrower or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale after giving effect to any indemnification, adjustment of purchase price, earn-out or similar adjustment; and
(b) at least 75% of the total consideration in such Asset Sale consists of cash or Cash Equivalents.
For purposes of clause (b), the following shall be deemed to be cash:
(i) the amount (without duplication) of any Indebtedness (other than Subordinated Indebtedness), accounts payable and accrued expenses of Borrower or such Restricted Subsidiary that is expressly assumed by the transferee in such Asset Sale pursuant to a customary written novation or assumption agreement that releases Borrower or such Restricted Subsidiary from further liability;
(ii) the amount of any obligations received from such transferee that are due and payable or reasonably expected to be converted by Borrower or such Restricted Subsidiary to cash or Cash Equivalents within 180 days following the closing of such Asset Sale;
(iii) any Designated Non-cash Consideration received by Borrower or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of (i) $20,000,000 and (ii) 3.0% of Consolidated Tangible Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value, shall be deemed to be Cash Equivalents for purposes of this provision and for no other purpose; and
(iv) the Fair Market Value of (x) any assets (other than securities) received by Borrower or any Restricted Subsidiary to be used by it in a Permitted Business, (y) Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the acquisition of such Person by Borrower or (z) a combination of (x) and (y).
As used in clause (iii) above, the term “Designated Non-cash Consideration” means the fair market value of non-cash consideration received by Borrower or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, executed by Borrower’s Chief Financial Officer and another Officer, less the amount of Cash Equivalents received in connection with a subsequent sale, redemption or repurchase of or collection or payment on such Designated Non-cash Consideration.
If at any time any non-cash consideration received by Borrower or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is repaid or converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then the date of such repayment, conversion or disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be applied in accordance with this Section 5.5 .
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(c) If Borrower or any Restricted Subsidiary engages in an Asset Sale, Borrower or such Restricted Subsidiary shall, no later than 365 days following the consummation thereof, if and to the extent permitted by agreements and instruments establishing, evidencing, securing or otherwise related to Senior Debt, apply all or any of the Net Available Proceeds therefrom to:
(i) repay (whether pursuant to a net proceeds offer or otherwise) Senior Debt or Senior Guarantor Debt, and in the case of any such repayment under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(ii) repay any Indebtedness which was secured by the assets sold in such Asset Sale;
(iii) (x) invest all or any part of the Net Available Proceeds thereof in assets (other than securities) to be used by Borrower or any Restricted Subsidiary in the Permitted Business, (y) acquire Qualified Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the consummation of such acquisition or (z) a combination of (x) and (y);
(iv) prepay the Loan (and redeem Pari Passu Indebtedness) in accordance with the procedures described in this Section 5.5 and otherwise in this Agreement; and/or
(v) in the case where the assets that were the subject of such Asset Sale are the assets of a Foreign Subsidiary, to repay Indebtedness of any Foreign Subsidiary.
The amount of Net Available Proceeds not applied or invested as provided in this paragraph will constitute “ Excess Proceeds .”
(d) When the aggregate amount of Excess Proceeds equals or exceeds $10,000,000, Borrower shall, if and to the extent permitted by agreements and instruments establishing, evidencing, securing or otherwise related to Senior Debt, make an offer to prepay the Loan and shall prepay or redeem, as the case may be (or make an offer to do so), any Pari Passu Indebtedness of Borrower the provisions of which require Borrower to prepay or redeem such Indebtedness with the proceeds from any Asset Sales (or offer to do so), in an aggregate principal amount of the Loan and such Pari Passu Indebtedness equal to the amount of such Excess Proceeds as follows:
(i) Borrower shall (A) make an offer (a “ Net Proceeds Offer ”) to prepay Lender (a “ Net Proceeds Prepayment ”) in accordance with the procedures set forth in this Agreement, and (B) prepay or redeem (or make an offer to do so) any such other Pari Passu Indebtedness, pro rata in proportion to the respective principal amounts of the then-outstanding Loan and such other Indebtedness required to be prepaid or redeemed, the maximum principal amount of the Loan and Pari Passu Indebtedness that may be prepaid or redeemed out of the amount (the “ Payment Amount ”) of such Excess Proceeds;
(ii) any such Net Proceeds Prepayment shall be made subject to the requirements of this clause (d) and paragraph (b) of Section 2.9 ;
(iii) the prepayment or redemption price for such Pari Passu Indebtedness (the “ Pari Passu Indebtedness Price ”) shall be as set forth in the related documentation governing such Indebtedness; and
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(iv) upon completion of such Net Proceeds Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer was made shall be deemed to be zero.
(e) To the extent that the sum of the amount of any Net Proceeds Prepayment paid to Lender and the aggregate Pari Passu Indebtedness Price paid to the holders of Pari Passu Indebtedness is less than the Payment Amount relating thereto (such shortfall constituting a “ Net Proceeds Excess ”), Borrower may use the Net Proceeds Excess, or a portion thereof, for general corporate purposes, subject to the provisions of the Loan Documents.
(f) Borrower shall conduct any Net Proceeds Offer substantially simultaneously with any similar offer required pursuant to Borrower’s debt securities and shall comply with applicable tender offer rules, including the requirements of Rule 14e-1 under the Exchange Act and any other applicable laws and regulations, in connection with any such offer relating to Borrower’s debt securities and/or any prepayments or redemptions of Pari Passu Indebtedness pursuant to such related prepayment or redemption offers. To the extent that the provisions of any securities laws or regulations conflict with Borrower’s obligations in this Section 5.5 or in respect of such related prepayment or redemption offers, Borrower shall comply with the applicable securities laws and regulations, shall continue to conduct any Net Proceeds Offer substantially simultaneously with such related prepayment or redemption offer and shall not be deemed to have breached its obligations under this Section 5.5 by virtue thereof.
5.6 Conduct of Business . Borrower shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than the Permitted Business.
5.7 Additional Guarantees . If, after the Effective Date, (a) Borrower or any Restricted Subsidiary shall acquire or create another Subsidiary (other than a Foreign Subsidiary or a Subsidiary that has been designated an Unrestricted Subsidiary) or desires to cause a Foreign Subsidiary to be a Guarantor, or (b) any Unrestricted Subsidiary is Redesignated a Restricted Subsidiary (other than a Foreign Subsidiary), then, in each such case, Borrower shall cause such Restricted Subsidiary to execute and deliver to Lender a supplement to the Guaranty or any other guarantee in form and substance satisfactory to Lender, pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Obligations (all such supplements or other guarantees shall be deemed to be part of the “Guaranty” for all purposes of this Agreement).
5.8 Limitations on Designation of Unrestricted Subsidiaries . (a) Borrower may designate any Subsidiary (including any newly formed or newly acquired Subsidiary) of Borrower as an “Unrestricted Subsidiary” under this Agreement and the other Loan Documents (a “ Designation ”) only if:
(i) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation; and
(ii) Borrower would be permitted to make, at the time of such Designation, (x) a Permitted Investment (as defined in the Indenture 2) or (y) an Investment pursuant to Section 4.08 of the Indenture 2, in either case, in an amount (the “ Designation Amount ”) equal to the Fair Market Value of Borrower’s proportionate interest in such Subsidiary on such date.
(b) No Subsidiary shall be Designated as an “Unrestricted Subsidiary” unless such Subsidiary:
(i) has no Indebtedness other than Non-Recourse Debt;
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(ii) is not party to any agreement, contract, arrangement or understanding with Borrower or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement or understanding are no less favorable to Borrower or the Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates;
(iii) is a Person with respect to which neither Borrower nor any Restricted Subsidiary has any direct or indirect obligation (x) to subscribe for additional Equity Interests or (y) to maintain or preserve the Person’s financial condition or to cause the Person to achieve any specified levels of operating results; and
(iv) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Borrower or any Restricted Subsidiary, except for any guarantee given solely to support the pledge by Borrower or any Restricted Subsidiary of the Equity Interests of such Unrestricted Subsidiary, which guarantee is not recourse to Borrower or any Restricted Subsidiary.
If, at any time, any Unrestricted Subsidiary fails to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement or any other Loan Document and any Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary at such time.
(c) Borrower may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a “ Redesignation ”) only if:
(i) no Default shall have occurred and be continuing at the time of and after giving effect to such Redesignation; and
(ii) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such Redesignation would, if incurred or made at such time, have been permitted to be incurred or made for all purposes of this Agreement or any other Loan Document.
(d) All Designations and Redesignations must be evidenced by resolutions of the Board of Directors of Borrower, delivered to Lender certifying compliance with the foregoing provisions.
5.9 Maintenance of Properties; Insurance; Compliance with Law .
(a) Borrower shall, and shall cause each of its Restricted Subsidiaries to, at all times cause all properties used or useful in the conduct of their business to be maintained and kept in good condition, repair and working order (reasonable wear and tear excepted) and supplied with all necessary equipment, and shall cause to be made all necessary repairs, renewals, replacements, necessary betterments and necessary improvements thereto.
(b) Borrower shall maintain, and shall cause to be maintained for each of its Restricted Subsidiaries, insurance covering such risks as are usually and customarily insured against by corporations similarly situated in the markets where Borrower and the Restricted Subsidiaries conduct operations, in such amounts as shall be customary for corporations similarly situated and with such deductibles and by such methods as shall be customary and reasonably consistent with past practice.
(c) Borrower shall, and shall cause each of its Subsidiaries to, comply with all statutes, laws, ordinances or government rules and regulations to which they are subject, non-compliance with which
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would materially adversely affect the business, earnings, properties, assets or financial condition of Borrower and its Subsidiaries taken as a whole.
5.10 Payments for Consent . Borrower shall not, and shall not cause or permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes at any time Borrower is seeking a substantially similar consent, waiver or amendment of any of the terms of this Agreement or any other Loan Document, unless consideration is offered to be paid or agreed to be paid to the Lender, in the same time frame set forth in the noteholder solicitation documents relating to such consent, waiver or agreement, in equal amounts per each whole $1,000 in outstanding principal amount under the Loan and such Notes, as applicable; provided, however, that the foregoing provisions of this Section 5.10 shall not prohibit, or require any payment of any consideration to Lender under this Section 5.10 in connection with, payments pursuant to any of the Transactions or made in a manner consistent with the information under the caption “Use of Proceeds” (other than general corporate purposes) in the Offering Memorandum.
5.11 Legal Existence . Subject to Section 5.13 , Borrower shall do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence, and the corporate, partnership or other existence of each Restricted Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of each Restricted Subsidiary and the rights (charter and statutory), licenses and franchises of Borrower and its Restricted Subsidiaries; provided that Borrower shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries if the Board of Directors of Borrower shall determine that the preservation thereof is no longer desirable in the conduct of the business of Borrower and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to Lender.
5.12 Change of Control Offer .
(a) If and to the extent permitted by agreements and instruments establishing, evidencing, securing or otherwise related to Senior Debt, upon the occurrence of a Change of Control, unless Borrower shall have given a notice of prepayment for 100% of the aggregate principal amount of the Loan outstanding, Borrower shall be obligated to make an offer (the “ Change of Control Offer ”) to prepay (a “ Change of Control Prepayment ”) the Loan in full, together with payment of any Applicable Prepayment Premium, subject to the requirements of this Section 5.12 and paragraph (b) of Section 2.9 . The Change of Control Offer shall remain open at least until (i) if Borrower is required under the Indenture to offer to redeem Notes upon the occurrence of such Change of Control, the last day on which any such offer remains open, or (ii) otherwise, for at least 20 Business Days and until the close of business on the Change of Control Payment Date. Any such Change of Control Prepayment shall be made on a Business Day (the “ Change of Control Payment Date ”) no later than (x) if Borrower is required under the Indenture to redeem Notes upon the occurrence of such Change of Control, the first day on which Borrower is so required to redeem Notes, or (y) otherwise, 63 days following the occurrence of the Change of Control.
(b) Within 30 days following the date upon which a Change of Control occurs (the “ Change of Control Date ”), Borrower shall send, by first class mail, a notice to Lender, which notice shall govern the terms of the Change of Control Offer. The notice to Lender shall contain all instructions and materials necessary to enable Lender to accept the Change of Control Offer.
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(c) Borrower’s obligation to make a Change of Control Offer shall be satisfied if a third party makes the Change of Control Offer in the manner and at the times and otherwise in compliance with the requirements applicable to a Change of Control Offer made by Borrower and makes any Change of Control Prepayment required with respect thereto.
(d) Borrower shall conduct any Change of Control Offer substantially simultaneously with any similar offer required pursuant to Borrower’s debt securities and shall comply with applicable tender offer rules, including the requirements of Rule 14e-l under the Exchange Act and any other applicable laws and regulations, in connection with any such offer relating to Borrower’s debt securities and/or any prepayments or redemptions of Notes pursuant to such related prepayment or redemption offers. To the extent that the provisions of any securities laws or regulations conflict with Borrower’s obligations under this Section 5.12 or in respect of such related prepayment or redemption offers, Borrower shall comply with the applicable securities laws and regulations, shall continue to conduct any Change of Control Offer substantially simultaneously with such related prepayment or redemption offer and shall not be deemed to have breached its obligations under this Section 5.12 by virtue thereof.
5.13 Limitations on Mergers. Consolidations, etc.. (a) Borrower shall not, directly or indirectly, in a single transaction or a series of related transactions, (i) consolidate or merge with or into another Person, or sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of the assets of Borrower or Borrower and the Restricted Subsidiaries (taken as a whole) or (ii) adopt a Plan of Liquidation unless, in either case:
(y) either:
(A) Borrower will be the surviving or continuing Person; or
(B) the Person formed by or surviving such consolidation or merger or to which such sale, lease, conveyance or other disposition shall be made (or, in the case of a Plan of Liquidation, any Person to which assets are transferred) (collectively, the “ Successor ”) is a corporation, limited liability company or limited partnership organized and existing under the laws of any State of the United States of America or the District of Columbia or the State of Israel, or is another guarantor of the Notes, and the Successor expressly assumes, by agreements in form and substance reasonably satisfactory to Lender, all of the obligations of Borrower under this Agreement and the other Loan Documents; and
(z) immediately prior to and immediately after giving effect to such transaction and the assumption of the obligations as set forth in clause (y)(B) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, no Default shall have occurred and be continuing.
(b) For purposes of this Section 5.13 , any Indebtedness of the Successor which was not Indebtedness of Borrower immediately prior to the transaction shall be deemed to have been incurred in connection with such transaction.
(c) Except as provided in the Guaranty, no Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, unless:
(i) either:
(x) such Guarantor will be the surviving or continuing Person; or
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(y) the Person formed by or surviving any such consolidation or merger is another Guarantor, Borrower, another guarantor of the Notes or assumes, by agreements in form and substance reasonably satisfactory to Lender, all of the obligations of such Guarantor under the Guaranty; and
(z) immediately after giving effect to such transaction, no Default shall have occurred and be continuing.
(d) For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or substantially all of the properties and assets of Borrower, will be deemed to be the transfer of all or substantially all of the properties and assets of Borrower.
(e) Upon any consolidation, combination or merger of Borrower or a Guarantor, or any transfer of all or substantially all of the assets of Borrower in accordance with the foregoing, in which Borrower or such Guarantor is not the continuing obligor under the applicable Loan Documents, the surviving entity formed by such consolidation or into which Borrower or such Guarantor is merged or the Person to which the conveyance, lease or transfer is made will succeed to, and be substituted for, and may exercise every right and power of, Borrower or such Guarantor under the applicable Loan Documents, with the same effect as if such surviving entity had been named therein as Borrower or such Guarantor, as the case may be, and, except in the case of a lease, Borrower or such Guarantor, as the case may be, will be released from the obligation to pay the principal of and interest on the Loan or in respect of the Guaranty, as the case may be, and all of Borrower’s or such Guarantor’s other obligations and covenants under this Agreement, the Guaranty and any other applicable Loan Document.
(f) Notwithstanding the foregoing, any Restricted Subsidiary may consolidate with, merge with or into or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to Borrower or another Restricted Subsidiary.
(g) Upon any consolidation or merger, or any transfer of all or substantially all of the assets of Borrower or any Restricted Subsidiary in accordance with the foregoing, the successor entity formed by such consolidation or into which Borrower is merged or to which such transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, Borrower or such Restricted Subsidiary under this Agreement with the same effect as if such successor entity had been named as Borrower or such Restricted Subsidiary herein, and thereafter the predecessor entity shall be relieved of all obligations and covenants under this Agreement.
6. Events of Default .
Any one or more of the following events shall constitute an event of default (each, an “ Event of Default ”) under this Agreement:
6.1 Failure by Borrower to pay interest on the Loan when it becomes due and payable and the continuance of any such failure for 30 days (whether or not such payment is prohibited by the subordination provisions of Indenture 2 or this Agreement);
6.2 Failure by Borrower to pay the principal on the Loan when it becomes due and payable, whether at stated maturity, upon acceleration, upon mandatory prepayment or otherwise (whether or not such payment is prohibited by the subordination provisions of Indenture 2 or this Agreement);
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6.3 Failure by Borrower to comply with Section 5.13 or in respect of its obligations to make a Change of Control Offer;
6.4 Failure by Borrower to comply with any other agreement or covenant in this Agreement and the continuance of any such failure for 60 days after notice of the failure has been given to Borrower by Lender;
6.5 A default under any mortgage, indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced Indebtedness of Borrower, or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the date hereof, which default:
(a) is caused by a failure to pay at final maturity principal on such Indebtedness within the applicable express grace period and any extensions thereof,
(b) results in the acceleration of such Indebtedness prior to its express final maturity, or
(c) results in the commencement of judicial proceedings to foreclose upon, or to exercise remedies under applicable law or applicable security documents to take ownership of, the assets securing such Indebtedness, and
in each case, the principal amount of such Indebtedness, together with any other Indebtedness with respect to which an event described in clause (a), (b) or (c) has occurred and is continuing, aggregates $10,000,000 or more;
6.6 One or more judgments or orders that exceed $10,000,000 in the aggregate (net of amounts covered by insurance or bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against Borrower or any Restricted Subsidiary and such judgment or judgments have not been satisfied, discharged, bonded (by providing insurance, letters of credit or other financial assurance), stayed or stayed pending appeal, annulled or rescinded within 60 days of being entered;
6.7 Borrower or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a Custodian of it or for all or substantially all of its assets, or (d) makes a general assignment for the benefit of its creditors;
6.8 A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against Borrower or any Significant Subsidiary as debtor in an involuntary case, (b) appoints a Custodian of Borrower or any Significant Subsidiary or a Custodian for all or substantially all of the assets of Borrower or any Significant Subsidiary, or (c) orders the liquidation of Borrower or any Significant Subsidiary, and, in any such case, the order or decree remains unstayed and in effect for 60 days; or
6.9 The Guaranty ceases to be in full force and effect (other than in accordance with the terms of the Guaranty and this Agreement) with respect to any Significant Subsidiary, or is declared null and void and unenforceable or found to be invalid with respect to any Significant Subsidiary, or any Guarantor denies its liability under the Guaranty (other than by reason of release of a Guarantor from the Guaranty in accordance with the terms of this Agreement and the Guaranty).
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7. Lender’s Rights and Remedies .
7.1 Rights and Remedies . Upon the occurrence, and during the continuation, of an Event of Default, Lender (at its election but without notice of its election and without demand) may do any one or more of the following, all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable;
(b) Terminate this Agreement and any of the other Loan Documents as to any liability or obligation of Lender, but without affecting the Obligations or the obligations of any Guarantor;
(c) Without notice to Borrower or any other Loan Party (such notice being expressly waived), and without constituting an acceptance of any collateral in full or partial satisfaction of an obligation (within the meaning of the UCC), set off and apply to the Obligations any and all Indebtedness at any time owing to or for the credit or the account of any Loan Party held by Lender; and/or
(d) all other rights and remedies available to Lender at law or in equity or pursuant to any other Loan Documents;
provided , however , that upon the occurrence of any Event of Default described in Section 6.7 or Section 6.8 , in addition to the remedies set forth above, without any notice to Borrower or any other Person or any act by Lender, the Obligations then outstanding, together with all accrued and unpaid interest thereon, and all fees and all other amounts due under this Agreement and the other Loan Documents, shall automatically and immediately become due and payable, without presentment, demand, protest, or notice of any kind, all of which are expressly waived by Borrower.
7.2 Remedies Cumulative . The rights and remedies of Lender under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. Lender shall have all other rights and remedies not inconsistent herewith as provided under the UCC, by law, or in equity. No exercise by Lender of one right or remedy shall be deemed an election, and no waiver by Lender of any Event of Default shall be deemed a continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence by it.
7.3 Acceleration . In the event of an acceleration declaration of the Loan because an Event of Default described in Section 6.5 has occurred and is continuing, the acceleration declaration shall be automatically annulled if the payment default or other default triggering such Event of Default pursuant to Section 6.5 shall be remedied or cured by Borrower or a Restricted Subsidiary or waived by the holders of the relevant Indebtedness within 60 days after the acceleration declaration with respect thereto and if (a) the annulment of the acceleration of the Loan would not conflict with any judgment or decree of a court of competent jurisdiction and (b) all existing Events of Default, except nonpayment of principal, premium or interest on the Loan that became due solely because of the acceleration of the Loan, have been cured or waived.
8. Waivers; Indemnification .
8.1 Demand; Protest; etc. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by Lender on which Borrower may in any way be liable.
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8.2 Indemnification. Borrower shall pay, indemnify, defend, and hold the Lender-Related Persons and each Participant (each, an “ Indemnified Person ”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, and damages, and all reasonable attorneys fees and disbursements and other costs and expenses actually incurred in connection therewith (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution, delivery, enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of the Loan Parties’ compliance with the terms of the Loan Documents, and (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the Loan (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto (all the foregoing, collectively, the “ Indemnified Liabilities ”). The foregoing to the contrary notwithstanding, Borrower shall have no obligation to any Indemnified Person under this Section 8.2 with respect to (w) any costs or expenses incurred to comply with any tax treaty or other law relating to or affecting payment of Taxes, (x) any withholding or other Taxes related to payment of any of the Obligations (but without limitation of Section 13 ), (y) any other costs, expenses, fees or charges to the extent (i) the same are expressly required to be paid by, or are otherwise expressly allocated as the responsibility of, Lender under any of the Loan Documents or (ii) the responsibility of Borrower to pay or assume any such other cost, expense, fee or charge is expressly limited under any of the Loan Documents, or (z) any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person. This provision shall survive the termination of this Agreement and the repayment of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borrower was required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrower with respect thereto WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
9. Notices .
Unless otherwise provided in this Agreement, all notices or demands by Borrower or any other Loan Party, on the one hand, or Lender, on the other hand, to the other relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as Borrower or Lender, as applicable, may designate to each other in accordance herewith), or facsimile to Borrower or Lender, at its address set forth below:
If to Borrower or any other Loan Party:
Phibro Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
U.S.A.
Attn: Richard G. Johnson
Fax No. +1-201-944-5937
Email Address: richard.johnson@pahc.com
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with copies to:
Phibro Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
U.S.A.
Attn: General Counsel
Fax No. +1-201-329-7041
Email Address: Thomas.Dagger@pahc.com
and:
Golenbock Eiseman Assor Bell & Peskoe LLP
437 Madison Avenue
New York, New York 10022
U.S.A.
Attn: Lawrence M. Bell, Esq.
Fax No. +1-212-754-0330
Email Address: LBell@golenbock.com
If to Lender:
BFI Co., LLC
c/o Phibro Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
U.S.A.
Attn: Dani Bendheim
Fax No. +1-201-944-5937
Email Address: dbendheim@pahc.com
with a copy to:
Golenbock Eiseman Assor Bell & Peskoe LLP
437 Madison Avenue
New York, New York 10022
U.S.A.
Attn: Lawrence M. Bell, Esq.
Fax No. +1-212-754-0330
Email Address: LBell@golenbock.com
Any party may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other parties. All notices or demands sent in accordance with this Section 9 shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail.
10. Choice of Law and Venue; Jury Trial Waiver.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE
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CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN, STATE OF NEW YORK; PROVIDED , HOWEVER , THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH PROPERTY MAY BE FOUND. EACH OF THE PARTIES HERETO WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11(b) .
(c) EACH OF THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF THE PARTIES HERETO REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
11. Assignments and Participations; Successors .
11.1 Assignments and Participations . (a) Lender may assign and delegate to one or more assignees (each an “ Assignee ”) that are Eligible Transferees all, or any ratable part of all, of the Obligations and the other rights and obligations of Lender hereunder and under the other Loan Documents; provided , however , that Borrower may continue to deal solely and directly with Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Borrower by Lender and the Assignee, and (ii) Lender and its Assignee have delivered to Borrower an Assignment and Acceptance.
(b) From and after the date that Borrower has received an executed Assignment and Acceptance, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto), and such assignment shall effect a novation between Borrower and the Assignee; provided , however , that nothing contained herein
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shall release Lender from obligations that survive the termination of this Agreement, including Lender’s obligations under Section 13 and Section 16.8 of this Agreement.
(c) By executing and delivering an Assignment and Acceptance, Lender and the Assignee thereunder confirm and agree as follows: (i) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, and (ii) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.
(d) Immediately upon Lender’s receipt of the fully executed Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Loan arising therefrom. The portion of the Loan allocated to the Assignee shall reduce the portion of the Loan allocated to the assigning Lender pro tanto.
(e) Lender may at any time sell to one or more Eligible Transferees (a “ Participant ”) participating interests in its Obligations and the other rights and interests of Lender hereunder and under the other Loan Documents; provided , however , that (i) Lender shall remain a “Lender” for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations and the other rights and interests of Lender hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and Lender’s obligations under this Agreement shall remain unchanged, (ii) Lender shall remain solely responsible for the performance of such obligations, (iii) Borrower shall continue to deal solely and directly with Lender in connection with Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) Lender shall not transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through Lender, or (E) change the amount or due dates of scheduled principal repayments or prepayments or premiums, and (v) all amounts payable by Borrower hereunder (including Covered Taxes) shall be determined as if Lender had not sold such participation; except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement. The rights of any Participant only shall be derivative through Lender and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to Borrower, any other Loan Party or any other Subsidiary of Borrower, or otherwise in respect of the Obligations. No Participant shall have the right to participate directly in the making of decisions by Lender.
(f) In connection with any such assignment or participation or proposed assignment or participation, a Lender may, subject to the provisions of Section 16.8 , disclose all documents and information which it now or hereafter may have relating to the Loan Parties and their respective businesses. For the avoidance of doubt, the preceding sentence shall not override, or otherwise vary, any confidentiality provision of any other instrument to which both Borrower and Lender are party.
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11.2 Successors . This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided , however , that Borrower may not assign this Agreement or any rights or duties hereunder without Lender’s prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent to assignment by Lender shall release Borrower from its Obligations. A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 11.1 hereof and, except as expressly required pursuant to Section 11.1 hereof, no consent or approval by Borrower is required in connection with any such assignment.
12. Amendments; Waivers .
12.1 Amendments and Waivers . No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by any Loan Party therefrom, shall be effective unless the same shall be in writing and signed by Lender, Borrower and each Guarantor and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
12.2 No Waivers; Cumulative Remedies . No failure by Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Lender in exercising the same, will operate as a waiver thereof. No waiver by Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by Lender on any occasion shall affect or diminish Lender’s rights thereafter to require strict performance by the Loan Parties of any provision of the Loan Documents. Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Lender may have.
13. Withholding Taxes .
13.1 Withholding Taxes . (a) If Borrower or any Guarantor in its reasonable discretion determines that it may be obligated to withhold Tax with respect to any payment made by it under this Agreement or any other Loan Document, Lender hereby agrees that the applicable payor may withhold from such payment the appropriate amount of Tax. Borrower agrees to timely pay, or cause to be paid, all amounts so withheld to the applicable Governmental Authority.
(b) If Lender is a “foreign person” within the meaning of the Code and such Lender claims exemption from, or a reduction of, U.S. withholding Tax under Sections 1441 or 1442 of the Code, Lender agrees with and in favor of Borrower, to deliver to Borrower:
(i) if Lender claims an exemption from withholding Tax pursuant to the portfolio interest exception, (A) a statement of Lender, signed under penalty of perjury, that it is neither a (I) a “bank” as described in Section 881(c)(3)(A) of the Code, (II) a 10% shareholder of Borrower (within the meaning of Section 871(h)(3)(B) of the Code), nor (III) a controlled foreign corporation related to Borrower within the meaning of Section 864(d)(4) of the Code, and (B) a properly completed and executed IRS Form W-8BEN, before the first payment of any interest under this Agreement and at any other time reasonably requested by Borrower;
(ii) if Lender claims an exemption from, or a reduction of, withholding Tax under a United States tax treaty, properly completed and executed IRS Form W-8BEN before the first payment of any interest under this Agreement and at any other time reasonably requested by Borrower;
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(iii) if Lender claims that interest paid under this Agreement is exempt from United States withholding Tax because it is effectively connected with a United States trade or business of Lender, two properly completed and executed copies of IRS Form W-8ECI before the first payment of any interest is due under this Agreement and at any other time reasonably requested by Borrower; and
(iv) such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding Tax.
Lender agrees promptly to notify Borrower of any change in circumstances which would modify or render invalid any claimed exemption or reduction.
(c) If Lender claims exemption from, or reduction of, withholding Tax under a United States tax treaty by providing IRS Form W-8BEN and Lender sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations, Lender agrees to notify Borrower without delay of the percentage amount in which it is no longer the beneficial owner. To the extent of such percentage amount, Borrower will treat Lender’s IRS Form W-8BEN as no longer valid.
(d) All payments made by Borrower or any other Loan Party hereunder or under any promissory note or other Loan Document will be made without setoff, counterclaim, or other defense except as required by applicable law. All such payments will be made free and clear of, and without deduction or withholding for, any Covered Taxes, except to the extent such deduction or withholding is required by applicable law. If any Covered Taxes are so levied or imposed, if and to the extent permitted by agreements and instruments establishing, evidencing, securing or otherwise related to Senior Debt, Borrower agrees to pay the full amount of such Covered Taxes, and any such additional amounts as may be necessary, so that every payment of all amounts due under this Agreement or under any promissory note, including any amount paid pursuant to this Section 13.1(d) after withholding or deduction for or on account of any Covered Taxes, will not be less than the amount provided for herein but for such levy or imposition of Covered Taxes; provided , however , that any such necessary additional amounts shall be limited by the exclusions set forth in clauses (a) through (c) of the definition of Covered Taxes. Borrower will furnish to Lender as promptly as possible after the date the payment of any Covered Taxes are due pursuant to applicable law certified copies of tax receipts evidencing such payment by Borrower.
(e) If Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 13.1(d) , then Lender shall use reasonable efforts to assign its rights and obligations hereunder to an Affiliate or otherwise negotiate in good faith to restructure the Loan if, in the judgment of Lender, such assignment or restructuring (i) would eliminate or reduce amounts payable pursuant to Section 13.1(d) in the future and (ii) would not subject Lender to any unreimbursed cost or expense and would not otherwise be materially disadvantageous to Lender. Borrower hereby agrees to pay all reasonable costs and expenses incurred by Lender in connection with any such assignment or restructuring.
(f) If, the provisions of clause (d) above notwithstanding, Borrower is required to pay any additional amount to Lender or any Governmental Authority for the account of Lender pursuant to Section 13.1(d) , then Borrower may prepay the Loan in accordance with Section 2.9(a) , without regard to whether the Loan could then otherwise be prepaid pursuant to that section and without payment of any Applicable Prepayment Premium.
(g) If, at any time following a Change in U.S. Tax Treaty, Borrower is or would be required to pay to Lender an additional amount in respect of a Covered Tax under Section 13.1(d) , Borrower shall provide Lender written notice thereof. During the thirty (30) days following receipt of such notice by
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Lender, representatives of Lender and Borrower shall explore such reasonable commercial efforts and other re-structuring alternatives. If after the expiration of such thirty (30) day period, Lender and Borrower shall not have agreed that such additional amount can be avoided, Borrower shall be entitled at any time thereafter to prepay (a “ Change in U.S. Tax Treaty Prepayment ”) the Loan in full, subject to the requirements of this Section 13.1(g) and paragraph (b) of Section 2.9 , without regard to whether the Loan could then otherwise be prepaid pursuant to that section and without payment of any Applicable Prepayment Premium.
(h) Borrower shall maintain a register with respect to the Loan so that it is considered to be “in registered form” as such phrase is used in Section 871(h)(2)(B)(i) of the Code.
14. Guaranty Provisions .
14.1 Guaranty .
(a) Subject to the provisions of this Section 14 , each Guarantor, by execution of this Agreement, jointly and severally, unconditionally guarantees (collectively, the “ Guaranty ”) to Lender (i) the due and punctual payment of the principal of and interest on the Loan, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal of and interest on the Loan, to the extent lawful, and the due and punctual payment of all other Obligations, all in accordance with the terms of the Loan Documents, and (ii) in the case of any extension of time of payment or renewal of the Loan or any of such other Obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, at stated maturity, by acceleration or otherwise. Each Guarantor, by execution of this Agreement, agrees that its obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of any Loan Document, any failure to enforce the provisions of any such Loan Document, any waiver, modification or indulgence granted to Borrower with respect thereto by Lender, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or such Guarantor.
(b) Each Guarantor hereby waives diligence, presentment, demand for payment, filing of claims with a court in the event of merger or bankruptcy of Borrower, any right to require a proceeding first against Borrower, protest or notice with respect to the Loan Documents or the Indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guaranty will not be discharged as to the Loan except by payment in full of the principal thereof and interest thereon. Each Guarantor hereby agrees that, as between such Guarantor, on the one hand, and Lender, on the other hand, (i) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Section 7 for the purposes of this Guaranty, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Obligations as provided in Section 7 , such Obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of this Guaranty.
14.2 Execution and Delivery of Guaranty.
(a) To further evidence the Guaranty set forth in Section 14.1 , each Guarantor hereby agrees that a notation of such Guaranty, substantially in the form included in Exhibit B (the “ Notation of Guaranty ”), shall be endorsed on any promissory note or notes delivered pursuant to clause (d) of Section 2.2 , and such Notation of Guaranty shall be executed by either manual or facsimile signature of an Officer or an Officer of a general partner, as the case may be, of each Guarantor. The validity and enforceability of the Guaranty shall not be affected by the fact that it is not affixed to any particular such promissory note.
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(b) Each of the Guarantors hereby agrees that the Guaranty set forth in Section 14.1 shall remain in full force and effect notwithstanding any failure to endorse on each such promissory note a notation of such Guaranty.
(c) If an officer of a Guarantor whose signature is on this Agreement or a Notation of Guaranty no longer holds that office at the time Borrower authenticates the promissory note on which such Guaranty is endorsed or at any time thereafter, such Guarantor’s Guaranty of such promissory note shall be valid nevertheless.
(d) The delivery of any promissory note by Lender, after the authentication thereof hereunder, shall constitute due delivery of the Guaranty set forth in this Agreement on behalf of the Guarantor.
14.3 Subordination of Guarantees . The obligations of each Guarantor under its Guaranty pursuant to this Section 14 shall be junior and subordinated to the prior payment in full of the Guarantor Senior Debt of such Guarantor in cash (including the termination or cash collateralization of all outstanding letters of credit and bank product obligations pursuant to the terms, if any, of the documents evidencing such Senior Debt) on the same basis as the Notes 2 are junior and subordinated to Senior Debt of Borrower. For the purposes of the foregoing sentence, Lender shall have the right to receive and/or retain payments by any of the Guarantors only at such times as Lender may receive and/or retain payments in respect of the Loan pursuant to this Agreement, including Section 15 . Anything herein to the contrary notwithstanding, the payment of the Guaranty and the exercise of any right or remedy with respect to the Guaranty, and certain of the rights of Lender are subject to the provisions of the Intercreditor Agreement dated as of January 29, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Intercreditor Agreement ”), by and between Wells Fargo Foothill, Inc., as Senior Agent, and BFI Co., LLC, as Junior Lender. 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.
14.4 Limitation of Guarantee . The obligations of each Guarantor are limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under the Guaranty or pursuant to its contribution obligations under this Agreement, result in the obligations of such Guarantor under the Guaranty not constituting a fraudulent conveyance or fraudulent transfer under Israeli, or United States federal or state law. Each Guarantor that makes a payment or distribution under the Guaranty shall be entitled to a contribution from each other Guarantor in a pro rata amount based on the Adjusted Net Assets of each Guarantor.
14.5 Release of Guarantor.
(a) A Guarantor shall be released from its obligations under the Guaranty and its obligations under this Agreement:
(i) in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Equity Interests of such Guarantor then held by Borrower and the Restricted Subsidiaries, in each case in accordance with the terms of this Agreement; or
(ii) if such Guarantor is designated as an Unrestricted Subsidiary or otherwise ceases to be a Restricted Subsidiary, in each case in accordance with the provisions of this Agreement,
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upon effectiveness of such designation or when it first ceases to be a Restricted Subsidiary, respectively; or
(iii) upon satisfaction and discharge of this Agreement or payment in full of the principal of, premium, if any, accrued and unpaid interest on the Loan and all other Obligations that are then due and payable;
and in each such case, Borrower has delivered to Lender an Officers’ Certificate stating that all conditions precedent herein provided for relating to such transactions have been complied with and that such release is authorized and permitted hereunder.
(b) Lender shall execute any documents reasonably requested by Borrower or a Guarantor in order to evidence the release of such Guarantor from its obligations under the Guaranty endorsed on any promissory note or notes delivered pursuant to clause (d) of Section 2.2 and under this Section 14 .
14.6 Waiver of Subrogation . Each Guarantor hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against Borrower that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under the Guaranty and this Agreement, including, without limitation, any right of subrogation, reimbursement, exoneration, indemnification, and any right to participate in any claim or remedy of Lender against Borrower, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from Borrower, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or promissory note on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Loan shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, Lender, and shall forthwith be paid to Lender to be credited and applied upon the Loan, whether matured or unmatured, in accordance with the terms of this Agreement. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Loan and that the waiver set forth in this Section 14.6 is knowingly made in contemplation of such benefits.
15. Subordination of Notes .
15.1 Agreement to Subordinate . The Borrower and Lender agree, that the Loan is subordinated in right of payment, to the extent and in the manner provided in this Section 15 , to the prior payment in full in cash of all Senior Debt (including the termination or cash collateralization of all outstanding letters of credit and bank product obligations pursuant to the terms, if any, of the documents evidencing such Senior Debt) (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of and enforceable by the holders of Senior Debt, including Senior Debt incurred after the date of this Agreement. Anything herein to the contrary notwithstanding, the repayment of the Loan and the exercise of any right or remedy with respect to the Loan, and certain of the rights of Lender are subject to the provisions of the Intercreditor Agreement dated as of January 29, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Intercredit or Agreement ”), by and between Wells Fargo Foothill, Inc., as Senior Agent, and BFI Co., LLC, as Junior Lender. 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.
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15.2 Liquidation; Dissolution; Bankruptcy .
(a) The holders of Senior Debt shall be entitled to receive payment in full in cash of all Obligations outstanding in respect of Senior Debt (including the termination or cash collateralization of all outstanding letters of credit and bank product obligations pursuant to the terms, if any, of the documents evidencing such Senior Debt) before the Lender will be entitled to receive any payment or distribution of any kind or character with respect to any Obligations on or relating to this Agreement (other than in Permitted Junior Securities) in the event of any distribution to creditors of Borrower:
(1) in a total or partial liquidation, dissolution or winding up of Borrower;
(2) in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Borrower or its assets;
(3) in an assignment for the benefit of creditors; or
(4) in any marshalling of Borrower’s assets and liabilities; and
(b) If a payment or distribution is made to the Lender that, due to the subordination provisions with respect to the Loan and the Guarantees, should not have been made to Lender, Lender is required to hold it in trust for the holders of the Senior Debt and pay the payment or distribution over to the holders of the Senior Debt, as their interests may appear.
A distribution may consist of cash, securities or other property, by set-off or otherwise.
15.3 Default on Designated Senior Debt .
(a) Borrower may not make any payment or distribution of any kind or character to Lender with respect to any Obligations on or relating to the Loan and may not acquire from Lender all or any portion of the Loan for cash or property (other than (i) Permitted Junior Securities and (ii) payments and other distributions made from any defeasance trust created pursuant to Section 9.01 or Section 9.04 of the Indenture 2, in each case in accordance with the terms of this Agreement including, without limitation, this Section 15) until all principal and other Obligations with respect to the Senior Debt have been paid in full if:
(1) a default (whether at stated maturity, upon acceleration or otherwise) in the payment of any principal or other Obligations with respect to Senior Debt occurs and is continuing; or
(2) any other default, other than a payment default, on any Designated Senior Debt occurs and is continuing that then permits holders of such Designated Senior Debt to accelerate its maturity and Lender receives a notice of the default (a “ Payment Blockage Notice ”) from the Representative of such Designated Senior Debt. If Lender receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice shall be effective for purposes of this Section unless and until at least 360 days shall have elapsed since the effectiveness of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to Lender shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days. Any subsequent action or any breach of any financial covenants for a period ending after the date of delivery of the initial Payment Blockage Notice that in either case would give rise to a default pursuant to any provisions under which a default previously existed or was continuing will constitute a new default for purposes of this clause (2).
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(b) Borrower may and shall resume payments on and distributions in respect of this Agreement and the Loan and may acquire all or any portion of the Loan upon the earlier of:
(i) in the case of a payment default (whether at stated maturity, upon acceleration or otherwise), the date upon which all payment defaults are cured or waived in accordance with the terms of the applicable Senior Debt, and
(ii) in the case of a default referred to in clause (2) of Section 15.3(a) , the earliest of (x) the date on which all such non-payment defaults are cured or waived (as evidenced by written notice to Lender from the Representative for such Designated Senior Debt), (y) 179 days after the date on which the applicable Payment Blockage Notice is received or (z) the date on which Lender receives notice from the Representative for such Designated Senior Debt rescinding the Payment Blockage Notice, unless, in the case of clause (x), (y) or (z), the maturity of any Designated Senior Debt has been accelerated.
In the event that the Designated Senior Debt is accelerated because of a default other than a payment default thereunder in accordance with the terms of such Designated Senior Debt, and such acceleration has not been rescinded, then the failure to make the payment required arising from such acceleration shall constitute a payment default.
15.4 Acceleration of Securities . If payment of the Loan is accelerated because of an Event of Default, Borrower shall promptly notify the Representative of the Designated Senior Debt of such acceleration.
15.5 When Distribution Must Be Paid Over .
(a) In the event that Lender receives any payment of any Obligations with respect to the Loan (other than Permitted Junior Securities or payments and other distributions made from the defeasance trust described under Article Nine of Indenture 2) when the payment is prohibited by Section 15.3 , such payment shall be held by Lender, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Representative under the Indenture 2 or other agreement (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt.
(b) With respect to the holders of Senior Debt, Lender undertakes to perform only such obligations on the part of Lender as are specifically set forth in this Section 15 , and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Agreement against Lender. Lender shall not be deemed to owe any fiduciary duty to the holders of Senior Debt, and shall not be liable to any such holders if Lender shall pay over or distribute to or on behalf of holders of Senior Debt or Borrower or any other Person money or assets to which any holders of Senior Debt shall be entitled by virtue of this Section 15 , except if such payment is made as a result of the willful misconduct or gross negligence of Lender.
15.6 Notice by Borrower . Borrower shall promptly notify Lender of any facts known to Borrower that would cause a payment of any Obligations with respect to the Loan hereunder to violate this Section 15 , but failure to give such notice shall not affect the subordination of the Loan hereunder to the Senior Debt as provided in this Section 15 .
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15.7 Subrogation . After all Senior Debt is paid in full and until the Loan is paid in full, Lender shall be subrogated (equally and ratably with all other Indebtedness pari passu with the Loan) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to Lender have been applied to the payment of Senior Debt. A distribution made under this Section 15 to holders of Senior Debt that otherwise would have been made to Lender is not, as between Borrower and Lender, a payment by Borrower on the Loan.
15.8 Relative Rights . This Section 15 defines the relative rights of Lender and holders of Senior Debt. Nothing in this Agreement shall:
(a) impair, as between Borrower and Lender, the obligation of Borrower, which is absolute and unconditional, to pay principal of and interest on the Loan in accordance with the terms hereof;
(b) affect the relative rights of Lender and creditors of Borrower other than their rights in relation to holders of Senior Debt; or
(c) prevent Lender from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to the Lender.
If Borrower fails because of this Section 15 to pay principal of or interest on the Loan on the due date, the failure is still a Default or Event of Default.
15.9 Subordination May Not Be Impaired by Borrower . No right of any holder of Senior Debt to enforce the subordination of the Indebtedness evidenced by this Agreement shall be impaired by any act or failure to act by Borrower or Lender or by the failure of Borrower or Lender to comply with this Indenture.
15.10 Distribution or Notice to Representative .
(a) Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Representative.
(b) Upon any payment or distribution of assets of Borrower referred to in this Section 15 , Lender shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution to Lender for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other Indebtedness of Borrower, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 15 .
15.11 Rights of Lender .
(a) Notwithstanding the provisions of this Section 15 or any other provision of this Agreement, Lender shall not be charged with knowledge of the existence of any facts that would prohibit the collecting of any payment or distribution to Lender, and Lender may continue to collect payments on the Loan, unless Lender shall have received at least five Business Days’ prior to the date of such payment written notice of facts that would cause the collection of any Obligations with respect to the Loan to violate this Section 15 . Only Borrower or a Representative may give the notice.
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(b) Lender may hold Senior Debt with the same rights it would have if it were not the Lender hereunder.
16. General Provisions .
16.1 Effectiveness . This Agreement shall be binding and deemed effective when executed and delivered by Borrower and Lender.
16.2 Section Headings . Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.
16.3 Interpretation . Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against Lender or Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.
16.4 Severability of Provisions . Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.
16.5 Amendments in Writing . This Agreement only can be amended by a writing in accordance with Section 12.1 .
16.6 Counterparts; Execution by Electronic Transmission . This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by electronic transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by electronic transmission also shall deliver an original executed counterpart of this Agreement, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.
16.7 Revival and Reinstatement of Obligations . If the incurrence or payment of the Obligations by any Loan Party or the transfer to Lender of any property should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of any Bankruptcy Law relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (collectively, a “ Voidable Transfer ”), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of Lender related thereto, the liability of the Loan Parties automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.
16.8 Confidentiality . Lender agrees that material, non-public information regarding the Loan Parties, their operations, assets, and existing and contemplated business plans shall be treated by Lender in a confidential manner, and shall not be disclosed by Lender to Persons other than the Loan Parties, except: (a) to attorneys for and other advisors, accountants, auditors, and consultants to Lender, (b) to Subsidiaries and Affiliates of Lender, provided that any such Subsidiary or Affiliate shall have agreed to
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receive such information hereunder subject to the terms of this Section 16.8 , (c) as may be required by statute, decision, or judicial or administrative order, rule, or regulation, (d) as may be agreed to in advance by Borrower or its Subsidiaries or as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, (e) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Lender), (f) in connection with any assignment, prospective assignment, sale, prospective sale, participation or prospective participations, or pledge or prospective pledge of Lender’s interest under this Agreement, provided that any such assignee, prospective assignee, purchaser, prospective purchaser, participant, prospective participant, pledgee, or prospective pledgee shall have agreed in writing to receive such information hereunder subject to the terms of this Section, and (g) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents. For the avoidance of doubt, the preceding sentence shall not override, or otherwise vary, any confidentiality provision of any other instrument to which both Borrower and Lender are party. The provisions of this Section 16.8 shall survive for 2 years after the payment in full of the Obligations. Anything contained herein or in any other Loan Document to the contrary notwithstanding, the obligations of confidentiality contained herein and therein, as they relate to the transactions contemplated hereby, shall not apply to the United States federal tax structure or United States federal tax treatment of such transactions, and each party hereto (and any employee, representative, or agent of any party hereto) may disclose to any and all Persons, without limitation of any kind, the United States federal tax structure and United States federal tax treatment of such transactions (including all written materials related to such tax structure and tax treatment). The preceding sentence is intended to cause the transactions contemplated hereby to not be treated as having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations promulgated under Section 6011 of the Code, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the tax structure of the transactions contemplated hereby or any tax matter or tax idea related thereto.
16.9 Release of Certain Prior Guarantors . Each party hereto, upon and subject to the satisfaction of the conditions precedent set forth in Section 3.1 above, hereby releases each of Abic Biological Laboratories Ltd., an Israeli corporation, and Abic Veterinary Products Ltd., an Israeli corporation, (a) from its guaranty of the “Obligations” as defined in the Original Agreement, without recourse, representation or warranty whatsoever, and (b) from any other obligation it may have as a guarantor or otherwise under or with respect to the Loan Documents or the Original Agreement (including without limitation with respect to the “Obligations” as defined in the Original Agreement), in each case whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.
16.10 Integration . This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof; provided, however, that nothing herein shall in any way prejudice Lender’s rights under the Original Agreement with respect to any breach of a representation or warranty contained in Section 5 of the Original Agreement, which representations and warranties shall be incorporated herein by reference as though set forth herein, it being understood that such representations and warranties were made as of the date of the Original Agreement or the Closing Date, as applicable, and shall not be deemed to be made or repeated as of the date hereof.
16.11 USA PATRIOT Act . Each Lender that is subject to the requirements of the USA Patriot Act (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (as amended from time to time, together with the rules and regulations promulgated thereunder, the “ Patriot Act ”) hereby notifies
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Borrower and each Guarantor that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies Borrower and such Guarantor, which information includes the name and address of Borrower and such Guarantor and other information that will allow Lender to identify Borrower and such Guarantor in accordance with the Patriot Act. Borrower and each Guarantor agrees to take such action and execute, acknowledge and deliver, and cause each of its Subsidiaries to take such action and execute, acknowledge and deliver, at its sole cost and expense, such instruments and documents as Lender may reasonably require from time to time in order to enable Lender to comply with the Patriot Act.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION, as Borrower |
||
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
GUARANTORS: | |
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBRO CHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
FIRST DICE ROAD COMPANY, A CALIFORNIA |
LIMITED PARTNERSHIP | ||
By: | WESTERN MAGNESIUM CORP., | |
its General Partner |
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
BFI CO., LLC, | ||
as Lender | ||
By: | /s/ Jack C. Bendheim | |
Name: Jack C. Bendheim | ||
Title: Class A Manager |
[SIGNATURE PAGE TO AMENDED AND RESTATED TERM LOAN AGREEMENT]
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered into as of , 20 , between (“Assignor”) and (“Assignee”). Reference is made to the Agreement described in Item 2 of Annex I annexed hereto (the “Loan Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Loan Agreement.
ARTICLE I.In accordance with the terms and conditions of Section 11 of the Loan Agreement, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Loan Documents as of the date hereof with respect to the Obligations owing to the Assignor as specified in Item 4 of Annex I . After giving effect to such sale and assignment, the Assignee’s amount of the Loan principal will be as set forth in Item 4 of Annex I . After giving effect to such sale and assignment, the Assignor’s amount of the Loan principal will be as set forth in Item 4 of Annex I .
ARTICLE II.The Assignor (a) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other instrument or document furnished pursuant thereto; and (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower or the performance or observance by Borrower of any of its obligations under the Loan Documents or any other instrument or document furnished pursuant thereto.
ARTICLE III.The Assignee (a) confirms that it has received copies of the Loan Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to. make its own credit analysis and decision to enter into this Assignment Agreement; (b) agrees that it will, independently and without reliance, as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents; (c) confirms that it is an Eligible Transferee; (d) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender; [and (e) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Loan Agreement or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty.]
ARTICLE IV.Following the execution of this Assignment Agreement by the Assignor and Assignee, it will be delivered by the Assignor to Borrower for recording by Borrower. The effective date of this Assignment (the “Settlement Date”) shall be the later of (a) the date of the execution hereof by the Assignor and the Assignee and receipt hereof by Borrower, and (b) the date specified in Item 5 of Annex I .
ARTICLE V.As of the Settlement Date (a) the Assignee shall be a party to the Loan Agreement and, to the extent of the interest assigned pursuant to this Assignment Agreement, have the
Exhibit A—Page 1 |
rights and obligations of a Lender thereunder and under the other Loan Documents, and (b) the Assignor shall, to the extent of the interest assigned pursuant to this Assignment Agreement, relinquish its rights and be released from any future obligations under the Loan Agreement and the other Loan Documents, provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 13 and Section 16.8 of the Loan Agreement.
ARTICLE VI.From and after the Settlement Date, Borrower shall make all payments under the Loan Agreement and the other Loan Documents in respect of the interest assigned hereby (including, without limitation, all payments of principal and interest with respect thereto) to the Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor the assigned amount (as set forth in Item 4.b of Annex I ) of the principal amount of any outstanding loans under the Loan Agreement and the other Loan Documents. The Assignor and Assignee shall make all appropriate adjustments in payments under the Loan Agreement and the other Loan Documents for periods prior to the Settlement Date directly between themselves on the Settlement Date.
ARTICLE VII.THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[Remainder of page left intentionally blank.]
Exhibit A—Page 2 |
IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and Annex I hereto to be executed by their respective officers thereunto duly authorized, as of the first date above written.
[NAME OF ASSIGNOR] | ||
as Assignor | ||
By: | ||
Name: | ||
Title: | ||
[NAME OF ASSIGNEE] | ||
as Assignor | ||
By: | ||
Name: | ||
Title: |
[If required under Section 11.1 of the Loan Agreement]
[ACCEPTED THIS DAY OF , 20
PHIBRO ANIMAL HEALTH CORPORATION, | ||
a New York corporation | ||
By: | ||
Name: | ||
Title:] |
Exhibit A—Page 3 |
ANNEX FOR ASSIGNMENT AND ACCEPTANCE
ANNEX I
1. | Borrower: Phibro Animal Health Corporation, a New York corporation | |||
2. | Name and Date of Loan Agreement: | |||
Amended and Restated Term Loan Agreement, dated as of June 24, 2010, by and among Borrower, BFI Co., LLC, and the guarantors named therein | ||||
3. | Date of Assignment Agreement: | |||
4. | Amounts: | |||
a. | Assigned amount of Loan principal | $ | ||
b. | Assignor’s resulting amount of Loan principal after giving effect to the sale and assignment to Assignee | $ | ||
c. | Assignee’s resulting amount of Loan principal after giving effect to the sale and assignment to Assignee | $ | ||
5. | Settlement Date: | |||
6. | Notice and Payment Instructions, etc. |
Assignee: | Assignor: | |||
Exhibit A—Page 4 |
EXHIBIT B
Form of Notation of Guaranty
NOTATION OF GUARANTY
Each of the undersigned (the “Guarantors”) hereby jointly and severally unconditionally guarantees, to the extent set forth in that certain Amended and Restated Term Loan Agreement, dated as of June 24, 2010, by and among Phibro Animal Health Corporation, as Borrower, the Guarantors, as guarantors, and BFI Co., LLC, a Delaware limited liability company, as Lender (as amended, restated or supplemented from time to time, the “Term Loan Agreement”; capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Term Loan Agreement), and subject to the provisions of the Term Loan Agreement, (a) the due and punctual payment of the principal of and interest on the Loan, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal of and interest on the Loan, to the extent lawful, and the due and punctual payment of all other Obligations, all in accordance with the terms of the Loan Documents, and (b) in the case of any extension of time of payment or renewal of the Loan or any of such other Obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, at stated maturity, by acceleration or otherwise.
The obligations of the Guarantors to Lender pursuant to this Guaranty and the Loan are expressly set forth in Section 12 of the Term Loan Agreement, and reference is hereby made to the Term Loan Agreement for the precise terms and limitations of this Guaranty. Each holder of the Note to which this Guaranty is endorsed, by accepting such Note, agrees to and shall be bound by such provisions.
Anything herein to the contrary notwithstanding, the payment of the Guaranty and the exercise of any right or remedy with respect to the Guaranty, and certain of the rights of Lender are subject to the provisions of the Intercreditor Agreement dated as of January 29, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Intercreditor Agreement ”), by and between Wells Fargo Foothill, Inc., as Senior Agent, and BFI Co., LLC, as Junior Lender. 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.
[Signatures on the Following Page]
Exhibit B—Page 1 |
IN WITNESS WHEREOF, each of the Guarantors has caused this Notation of Guaranty to be signed by a duly authorized officer.
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBROCHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
FIRST DICE ROAD COMPANY, A CALIFORNIA |
LIMITED PARTNERSHIP | ||
By: | WESTERN MAGNESIUM CORP., | |
its General Partner |
By: | ||
Name: David C. Storbeck | ||
Title: Vice President |
Exhibit B—Page 2 |
Schedule 1
Lender’s Account
BFI repayment information:
BANK NAME: CITIBANK N.A.
CITY: NEW YORK
SWIFT CODE: CITIUS33
ABA: 021000089
ACCOUNT NAME: GOLDMAN SACHS & CO.
A/C #: 3073-6756
CLIENT ACCOUNT NAME: BFI Co., LLC
CLIENT ACCOUNT NUMBER: 028- 17273-2
Schedule 2
Designated Account
PAHC payment information: | |
To Wachovia Bank | |
ABA: 031201467 | |
Acct# 2000012980624 | |
For Account of PAHC |
Exhibit 10.7
SUPPLEMENT TO
AMENDED AND RESTATED TERM LOAN AGREEMENT
THIS SUPPLEMENT TO AMENDED AND RESTATED TERM LOAN AGREEMENT (this “ Supplement ”), is entered into as of February 4, 2013, by and among BFI CO., LLC, a Delaware limited liability company(“ Lender ”), and, on the other hand, PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (“ Borrower ”), and the other parties listed on the signature page hereto (the “ Guarantors ”).
WHEREAS, reference is hereby made to that certain Amended and Restated Term Loan Agreement dated as of June 24, 2010 (as heretofore or hereafter amended, the “ Loan Agreement ”; capitalized terms used but not defined herein shall have the meanings ascribed to them in the Loan Agreement);
WHEREAS, the Loan Agreement establishes certain conditions, as set forth in Section 5.7 thereof, under which Restricted Subsidiaries would be required to guarantee the obligations of the Borrower under the Loan Agreement, with Section 5.7 providing (among other things) that if, after the Effective Date, the Borrower or any Restricted Subsidiary shall acquire or create another Subsidiary (other than a Foreign Subsidiary or a Subsidiary that has been designated an Unrestricted Subsidiary), then the Borrower shall cause such Restricted Subsidiary to execute and deliver to Lender a supplement to the Guaranty or any other guarantee in form and substance satisfactory to Lender pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of Obligations;
WHEREAS, on December 20, 2012, OmniGen Research, LLC, an Oregon limited liability company (“ OmniGen ”), became a Subsidiary of Prince Agri Products, Inc., a Delaware corporation and Restricted Subsidiary and, by virtue thereof, constitutes a Restricted Subsidiary that is not a Foreign Subsidiary; and
WHEREAS, this Supplement amends or supplements the Loan Agreement and the Guaranty set forth in Section 14.1 of the Loan Agreement to add OminGen as an additional Guarantor under the Loan Agreement, and, accordingly satisfies the criteria of Section 5.7 of the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that, effective as of the date hereof:
1. (a) OminGen hereby agrees to be bound by the Loan Agreement, as amended by this Supplement and as hereafter amended in accordance with the terms of the Loan Agreement, to the same extent as though the Loan Agreement were incorporated and fully set forth in this Supplement; and, by virtue thereof, hereby becomes a Guarantor for all purposes.
(b) Without limiting the generality of subsection (a) above, OminGen (with each other Guarantor), by execution of this Supplement, jointly and severally, unconditionally joins in and becomes bound by the Guaranty as set forth in Section 14.1 of the Loan Agreement.
2. Except as expressly provided herein, all terms and conditions of the Loan Agreement shall continue in full force and effect.
3. This Supplement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same Supplement. Delivery of an executed counterpart of this Supplement by electronic transmission shall be equally as effective as delivery of an original executed counterpart of this Supplement. Any party delivering an executed counterpart of this Supplement by electronic transmission also shall deliver an original executed counterpart of this Supplement, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Supplement.
4. This Supplement, together with the Loan Agreement and the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and thereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
[Signature page to follow.]
2 |
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to Amended and Restated Term Loan Agreement to be executed and delivered as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION, | |
as Borrower |
By: | /s/ David C. Storbeck |
Name: | David C. Storbeck | |
Title: | Vice President |
GUARANTORS: | |
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBRO CHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
OMNIGEN RESEARCH, LLC | |
By: PRINCE AGRI PRODUCTS, INC., | |
Its Sole Member | |
FIRST DICE ROAD COMPANY, A CALIFORNIA LIMITED | |
PARTNERSHIP | |
By: WESTERN MAGNESIUM CORP., | |
Its General Partner |
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
BFI CO., LLC, | |
as Lender |
By: | /s/ Jack C. Bendheim | |
Name: Jack C. Bendheim | ||
Title: Class A Manager |
[SIGNATURE PA GE TO SUPPLEMENT TO AMENDED AND RESTATED TERM LOAN AGREEMENT ]
Exhibit 10.8
Execution Copy
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THESE SECURITIES (OR ANY INTEREST THEREIN) NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
WARRANT NO. W-1 | January 29, 2009 |
VOID AFTER 12:00 A.M., EASTERN STANDARD TIME, ON AUGUST 1, 2014
PHIBRO ANIMAL HEALTH CORPORATION
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, BFI CO., LLC, a Delaware limited liability company (“ Original Holder ”), or its registered assigns (Original Holder or its registered assigns being referred to herein as “ Holder ”), is entitled to subscribe for and purchase from Phibro Animal Health Corporation, a New York corporation (the “ Company ”), at any time and from time to time prior to the Expiration Date (as hereinafter defined), 875,000 (eight hundred seventy-five thousand) duly authorized, fully paid, validly issued and non-assessable shares of common stock, par value $0.0001 per share (the “ Common Stock ”), of the Company at a price per share equal to $5.23 (the initial “ Warrant Purchase Price ”), subject, however, to the provisions and upon the terms and conditions hereinafter set forth. The initial Warrant Purchase Price and the number and character of such shares of Common Stock with respect to which this Warrant is exercisable, are subject to adjustment as hereinafter provided.
1. Sale or Exercise Without Registration . The Holder represents that it is acquiring this Warrant, and will acquire the shares of Common Stock (or Other Securities ((as defined below)) issuable upon any exercise of this Warrant by the Holder, by acceptance thereof, for investment purposes only and not with a view to the distribution thereof. The Company may require, as a condition of allowing any exercise, transfer or surrender for exchange of this Warrant or of Common Stock (or Other Securities) issued upon the exercise of this Warrant that the Holder of this Warrant or such Common Stock (or Other Securities), as the case may be, furnish to the Company the same representation prior to any such exercise, transfer or exchange. As used herein, the term “ Other Securities ” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the Holder at any time shall be entitled to receive, or shall have received, upon the exercise of this Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been
COMMON STOCK WARRANT |
issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 5 or otherwise.
2. Exercise of Warrant; Net Issue Election; Termination .
2.1. Exercise . Subject to the provisions hereof, this Warrant may be exercised by the Holder at any time prior to the Expiration Date, in whole or in part, by surrender of this Warrant, together with a subscription in the form of Exhibit A attached hereto (the “ Form of Subscription ”), duly completed, executed and delivered by such Holder, to the Company at its principal office at 65 Challenger Road, Ridgefield Park, New Jersey 07660, accompanied by payment, in cash, by wire transfer or by certified or bank check payable to the order of the Company (or by any combination of such payment methods) in the amount obtained by multiplying (i) the number of shares (as adjusted) of Common Stock designated in the Form of Subscription by (ii) the Warrant Purchase Price (as adjusted and in effect at that time), whereupon the Holder shall be entitled to receive such number of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock. Shares issuable upon exercise of this Warrant shall be deemed to have been issued to the Holder as the record owner of such shares immediately prior to the close of business on the date this Warrant shall have been surrendered and payment for such shares of Common Stock shall have been made as provided in this subsection 2.1.
2.2. Net Issue Election . In lieu of exercising this Warrant in accordance with Section 2.1 hereof, the Holder may elect to receive, without the payment by such Holder of any additional consideration, shares of Common Stock equal to the value of this Warrant or any portion hereof, as determined below, by the surrender of this Warrant or such portion to the Company, with the Form of Subscription duly completed and executed by the Holder, at the principal office of the Company. Thereupon, the Company shall issue to such Holder such number of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock as is computed using the following formula:
X = Y(A - B) | ||
A |
where:
X = the number of shares of Common Stock to be issued to such Holder pursuant to this subsection 2.2.
Y = the number of shares of Common Stock covered by this Warrant in respect of which the net issue election is made pursuant to this subsection 2.2.
A = the Fair Market Value (as defined below) of one share of Common Stock as at the time the net issue election is made pursuant to this subsection 2.2.
B = the Warrant Purchase Price in effect under this Warrant at the time the net issue election is made pursuant to this subsection 2.2.
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The Board of Directors of the Company shall promptly respond in writing to any inquiry by the Holder as to the Fair Market Value of one share of Common Stock.
The term “ Fair Market Value ” per share of Common Stock shall mean, where there exists a public market for the Company’s Common Stock at the time of such determination, the average over the thirty (30) trading day period (each such trading day, a “ Trading Day ”) ending on the Trading Day preceding the date of determination of (i) the last reported sales price per share of Common Stock on the Alternative Investment Market of the London Stock Exchange (“ AIM ”) or such primary national securities exchange on which the Common Stock may at the time be listed, or (ii) if there were no sales on AIM or such other exchange on any such Trading Day, the average of the highest bid and lowest asked prices on AIM or such other exchange at the closing on such Trading Day, or (iii) if on any such Trading Day the Common Stock is not so listed, the last reported sales price (or, if on any such Trading Day there are no sales, the average of the representative bid and asked prices) quoted on the NASDAQ System on such Trading Day, or (iv) if on any such Trading Day the Common Stock is not quoted on the NASDAQ System, the last reported sales price (or, if on any such Trading Day there are no sales, the average of the highest bid and lowest asked price) on such Trading Day in the Over-The-Counter Market Summary. If no public market for the Common Stock exists at the time of such exercise, the Company and a representative designated by Holders of the right to purchase a majority in interest of the shares into which this Warrant may be exercised (“ Majority Holders ”) shall negotiate in good faith in an effort to reach agreement upon the fair market value per share of Common Stock. If the Company and such representative are unable to reach agreement as to such fair market value within 10 business days, the fair market value of one share of Common Stock shall be determined by a firm of nationally reputable independent public accountants or an appraisal or investment banking firm of nationally recognized standing that is in the reasonable judgment of the Company’s Board of Directors qualified to perform the task for which it has been engaged and disinterested and independent with respect to the Company and its affiliates (“ Independent Financial Advisor ”) (the fees and expenses of any such firm to be paid one-half by the Company and one-half by the Holders).
2.3. Company to Reaffirm Obligations . The Company will, at the time of any exercise of this Warrant, upon the request of the Holder, acknowledge in writing its continuing obligation to afford to the Holder any rights to which the Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant.
2.4. Disposal Restrictions . The Holder hereby agrees that it will not sell, exercise or effect any other disposal of this Warrant where this would be prohibited by applicable law or a regulation of the AIM rules.
3. Delivery of Certificates on Exercise . As soon as practicable after the exercise of this Warrant in full or in part, and in any event within five (5) business days thereafter, the Company, at its expense, will cause to be issued in the name of and delivered to the Holder, or as the Holder may direct (provided delivery to any person other than the Holder is in compliance with the terms of this Warrant and applicable securities laws), a certificate or certificates representing the number of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities) to which the Holder shall be entitled
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upon such exercise, together with any other stock or other securities and property (including cash, where applicable) to which the Holder is entitled upon such exercise pursuant to Section 5 hereof or otherwise. If this Warrant is exercised only in part, the Company, at its expense, will also cause to be issued in the name of and delivered to the Holder, or as the Holder may direct to a permitted transferee (provided delivery to any person other than the Holder is in compliance with the terms of this Warrant and applicable securities laws), a new Warrant, identical to this Warrant in all respects (other than the number of shares into which such Warrant may be exercised), covering the number of shares of Common Stock (or Other Securities) equal to the number of such shares called for on the face of this Warrant minus the number of such shares designated by the Holder in the Form of Subscription, duly completed, executed and delivered by the Holder to the Company. The Company shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares on exercise of this Warrant; provided , however , that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance or delivery of shares in a name other than that of the Holder.
4. Fractional Shares . No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. In lieu of any fraction of a share to which the Holder would otherwise be entitled upon exercise of this Warrant, the Company shall pay to the Holder or its designee an amount in cash equal to such fraction multiplied by the Fair Market Value per share as of the date of exercise.
5. Adjustments . The above provisions are, however, subject to the following:
5.1. Warrant Purchase Price Defined . The initial Warrant Purchase Price set forth in the initial paragraph of this Warrant shall be subject to adjustment from time to time as hereinafter provided. The term “ Warrant Purchase Price ” shall mean, unless and until any such adjustment shall occur, the initial Warrant Purchase Price and after any such adjustment, the Warrant Purchase Price resulting from such adjustments.
5.2. Adjustment of Number of Shares . Upon each reduction of the Warrant Purchase Price, the Holder shall thereafter be entitled to purchase, at the Warrant Purchase Price resulting from such reduction, the number of shares of Common Stock obtained by multiplying the Warrant Purchase Price in effect immediately prior to such reduction by the number of shares purchasable pursuant hereto immediately prior to such reduction and dividing the product thereof by the Warrant Purchase Price resulting from such reduction.
5.3. Certain Definitions . For purposes of this Section 5:
(a) The term “ Additional Shares of Common Stock ” shall mean all shares of Common Stock issued by the Company, or deemed to be issued by the Company pursuant to subsection 5.10 below, after the Original Issue Date except: (A) shares of Common Stock issuable upon exercise of the Warrants; (B) shares of Common Stock, Options or Convertible Securities granted or to be granted, or issuable upon the exercise of options and other equity-based awards granted or to be granted, to officers, directors, employees, consultants, advisors or other independent contractors of the Company or any subsidiary or
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affiliate under stock option, stock purchase or other equity incentive plans heretofore or hereafter approved by the Board of Directors of the Company (each, a “ Plan ”); provided that if the Original Holder shall then have a nominee serving on the Company’s Board of Directors, any such Plan approved by the Company’s Board of Directors after the Original Issue Date shall have been approved by such nominee.
(b) The term “ Common Stock ” shall be deemed to mean the Common Stock, $0.0001 par value per share, and the stock of the Company of any class, or series within a class, whether now or hereafter authorized, the holders of which have the right to participate in the distribution of either earnings or assets of the Company without limit as to the amount;
(c) The term “ Convertible Securities ” shall mean any evidence of indebtedness, shares or other securities convertible into or exchangeable for Common Stock (but excluding Options);
(d) The term “ Options ” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities; and
(e) The term “ Original Issue Date ” shall mean the date of the initial issuance of this Warrant.
5.4. Capital Reorganization; Share Exchange; Reclassification . In the event of a capital reorganization of the Company, a share exchange in which the Common Stock is exchanged for other securities of the Company, or a reclassification of the Common Stock (other than a change in par value or a transaction described in subsection 5.5 or 5.6 below), the Holder shall have the right to purchase and receive at any time after such capital reorganization, share exchange or reclassification, upon the terms and conditions specified in this Warrant and in lieu of Common Stock purchasable upon the exercise of this Warrant prior to such capital reorganization, share exchange or reclassification, the kind and number of shares of stock or other securities of the Company which such Holder would have been entitled to receive upon such capital reorganization, share exchange or reclassification if the Holder had held the Common Stock purchasable and receivable upon exercise of this Warrant immediately prior to such capital reorganization, share exchange or reclassification.
5.5. Merger, Consolidation or Sale . Without limiting the provisions of subsection 5.4 above, if the Company consolidates with or merges into another entity or conveys all or substantially all of its assets to another entity, in such a way that holders of Common Stock shall be entitled to receive stock, other securities, cash and/or other property with respect to or in exchange for Common Stock, then, in each such case, the Holder shall have the right to purchase at any time after the consummation of such consolidation, merger or conveyance and prior to the Expiration Date, upon the terms and conditions specified in this Warrant and in lieu of Common Stock purchasable upon the exercise of this Warrant prior to the consummation of such consolidation, merger or conveyance, the kind and number of shares of stock and/or other securities, cash or other property which such Holder would have been entitled to receive upon the consummation of such consolidation, merger or conveyance if the Holder had held the Common Stock purchasable and receivable upon exercise of this Warrant immediately prior to
5 | COMMON STOCK WARRANT |
such consolidation, merger or conveyance, all subject to further adjustment as provided in this subsection 5.5. The Company will not effect any consolidation or merger in which the Company shall not be the surviving entity unless prior to the consummation thereof, the successor entity assumes by written instrument (a copy of which shall be delivered to the Holder) the Company’s obligations in the preceding sentence. The provisions of this subsection 5.5 shall also apply to successive consolidations, mergers or conveyances.
5.6. Subdivision or Combination of Shares . In case outstanding shares of Common Stock shall be subdivided (by any stock split, recapitalization, reorganization, or otherwise) into a greater number of shares, the Warrant Purchase Price in effect immediately prior to such subdivision shall be proportionately reduced as of the effective date of such subdivision or as of the date a record is taken of the holders of Common Stock for the purpose of so subdividing, whichever is earlier. In case outstanding shares of Common Stock shall be combined (by reverse stock split, recapitalization, reorganization, or otherwise) into a smaller number of shares, the Warrant Purchase Price in effect immediately prior to such combination shall be proportionately increased as of the effective date of such combination or as of the date a record is taken of the holders of Common Stock for the purpose of so combining, whichever is earlier.
5.7. Stock Dividend . In case shares of Common Stock are issued as a dividend or other distribution on the Common Stock (or such dividend is declared), then the Warrant Purchase Price shall be reduced, as of the date a record is taken of the holders of Common Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the earliest of the date of such declaration, payment or other distribution), to that price determined by multiplying the Warrant Purchase Price in effect immediately prior to such declaration, payment or other distribution by a fraction (a) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the declaration or payment of such dividend or other distribution, and (b) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after the declaration or payment of such dividend or other distribution. In the event that the Company shall declare or pay any dividend on the Common Stock payable in any right to acquire Common Stock for no consideration, then the Company shall be deemed to have made a dividend payable in Common Stock of an amount of shares equal to the maximum number of shares issuable upon exercise of such rights to acquire Common Stock.
5.8. Distribution of Assets . In case the Company shall declare or make any distribution of its cash or other assets (or rights to acquire its assets) to all holders of Common Stock as a partial liquidating dividend, stock repurchase, return of capital or otherwise (including any distribution to the Company’s stockholders of shares (or rights to acquire shares) of capital stock of a subsidiary), then, upon exercise of this Warrant for the purchase of any or all of the shares of Common Stock subject hereto, the Holder shall be entitled to receive its pro rata amount of such assets (or such rights) as would have been payable to the Holder had such Holder been the holder of such shares of Common Stock on the record date for the determination of stockholders entitled to such distribution.
5.9. Issuance of Additional Shares of Common Stock . If the Company shall issue any Additional Shares of Common Stock (including Additional Shares of Common
6 | COMMON STOCK WARRANT |
Stock deemed to be issued pursuant to subsection 5.10 below) after the Original Issue Date (other than provided in subsections 5.4 through 5.8 above, inclusive), for no consideration or for a consideration per share less than the Warrant Purchase Price in effect on the date of and immediately prior to such issue, then in such event, the Warrant Purchase Price shall be reduced, concurrently with such issue, to a Warrant Purchase Price equal to the quotient obtained by dividing:
(a) an amount equal to (1) the total number of shares of Common Stock outstanding immediately prior to such issuance or sale multiplied by the Warrant Purchase Price in effect immediately prior to such issuance or sale, plus (2) the consideration, if any, received or deemed to be received by the Company upon such issuance or sale, by
(b) the total number of shares of Common Stock outstanding immediately after such issuance or sale.
For purposes of the formula expressed in this subsection 5.9, all shares of Common Stock issuable upon the exercise of the Warrants or other outstanding Options (at the Warrant Purchase Price or applicable exercise price of other Options in effect immediately before such determinations) or issuable upon the conversion (at the conversion price in effect immediately before such determinations) of outstanding Convertible Securities (including Convertible Securities issued upon the exercise of outstanding Options) shall be deemed outstanding shares of Common Stock.
5.10. Deemed Issue of Additional Shares of Common Stock . In the event the Company at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities then entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock issuable upon the exercise of such Options, or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue of Options or Convertible Securities or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that in any such case in which Additional Shares of Common stock are deemed to be issued:
(a) no further adjustments in the Warrant Purchase Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or the issue of Common Stock upon the conversion or exchange of such Convertible Securities on the original terms therefor;
(b) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise (but excluding automatic adjustments pursuant to anti-dilution or similar provisions of such Option or Convertible Security), for any increase or decrease in the consideration payable to the Company, or any increase or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Warrant Purchase Price computed upon the original issuance of such Options or Convertible Securities (or upon the occurrence of a record date with respect thereto), and any subsequent
7 | COMMON STOCK WARRANT |
adjustments based thereon, upon any such decrease or increase becoming effective, shall be recomputed to reflect such decrease or increase (but any adjustment based upon such recomputation shall be limited to such an adjustment as would not cause an increase in the Warrant Purchase Price to an amount in excess of the Warrant Purchase Price which would be applicable but for the issuance of the applicable Options or Convertible Securities) ( provided , however , that no such adjustment of the Warrant Purchase Price shall affect Common Stock previously issued upon partial exercise of this Warrant); and
(c) upon the expiration or termination of an unexercised Option or an unconverted or unexchanged Convertible Security (or portion thereof) which resulted in a prior adjustment under this subsection 5.10, the Warrant Purchase Price shall be recomputed as if such Option or Convertible Security (or portion thereof) had never been issued.
5.11. Determination of Consideration . For purposes of this Section 5, the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows:
(a) Cash and Property . Such consideration shall: (i) insofar as it consists of cash, be the aggregate amount of cash received by the Company before deducting any underwriting discounts or sales commissions or other expenses paid or incurred by the Company to any underwriters or placement agents or otherwise in connection with the sale or issuance of Additional Shares of Common Stock; and (ii) insofar as it consists of property other than cash, be computed at the fair value thereof (irrespective of any accounting treatment) at the time of the issue, as determined by an Independent Financial Advisor other than the accounting firm then engaged as the Company’s independent auditors, selected by the Company. For purposes of determining the fair value, consideration in the nature of services shall be deemed of no value.
(b) Options and Convertible Securities . The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to subsection 5.10 above, relating to Options and Convertible Securities, shall be the consideration, if any, received by the Company upon the issuance of such Options or Convertible Securities plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities.
5.12. Other Provisions Applicable to Adjustment Under this Section . The following provisions will be applicable to the adjustments in Warrant Purchase Price as provided in this Section 5:
(a) Treasury Shares . The number of shares of Common Stock at any time outstanding shall not include any shares thereof then directly or indirectly owned or held by or for the account of the Company. For purposes of this Section 5, the sale or other disposition of any Common Stock of the Company theretofore held in its treasury shall, unless otherwise set forth herein, be deemed to be an issuance thereof.
8 | COMMON STOCK WARRANT |
(b) Other Action Affecting Common Stock . In case the Company shall take any action affecting the outstanding number of shares of Common Stock other than an action described in any of the above subsections 5.4 through 5.10, inclusive, which would have an inequitable or dilutive effect on the Holder, the Warrant Purchase Price and/or the number of shares into which this Warrant may be exercised shall be adjusted in such manner and at such time as the Board of Directors of the Company in good faith and on the advice of the Company’s independent public accountants may in good faith determine to be equitable in the circumstances in accordance with the essential intent and principles of subsections 5.4 through 5.10, inclusive, which are to place the Holder in a position as nearly equal as possible to the position such Holder would have occupied had such Holder purchased shares of Common Stock on the Original Issue Date.
5.13. Notices of Adjustments . Whenever the Warrant Purchase Price and/or the number of shares of Common Stock and/or Other Securities subject to this Warrant are adjusted as herein provided, an officer of the Company shall compute the adjusted Warrant Purchase Price and the adjusted number of subject shares in accordance with the foregoing provisions and shall prepare a written certificate setting forth such adjusted Warrant Purchase Price and number of subject shares and showing in detail the facts upon which such adjustment is based, and such written instrument shall promptly (but no later than seven (7) business days) be delivered to the Holder.
5.14. Other Notices . In the event:
(a) the Company declares a dividend (or any other distribution) on the Common Stock;
(b) the Company authorizes the issuance or grant to all holders of Common Stock, by reason of such status, of any shares of capital stock of any class, Options, Convertible Securities or any other securities or other rights (other than issuances or grants pursuant to a Plan);
(c) of any reorganization, share exchange or reclassification of the capital stock of the Company, or of any consolidation or merger to which the Company is party or of the sale, lease, exchange or conveyance of all of substantially all of the property of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall cause to be mailed to the Holder at the address of such Holder specified herein or as otherwise shown on the books of the Company, at least twenty (20) days prior to the applicable record date or date on which the Company’s books are to be closed, a notice stating (i) the date on which the books of the Company shall close or a record is to be taken for the purpose of determining the holders of Common Stock entitled to receive any such dividend, distribution or other rights (or, if a record is not to be taken, the date as of which the holder of record of Common Stock to be entitled to such dividend, distribution or other rights are to be determined), or for determining the holders of Common Stock entitled to
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vote in respect of any such reorganization, share exchange, reclassification, consolidation, merger, sale, lease, exchange, dissolution, liquidation or winding up, (ii) the date (or, if not then known, a reasonable estimate thereof by the Company) when such event shall take place, (iii) the date on which the holders of Common Stock shall receive such dividend, distribution, or other rights or to exchange their Common Stock for stock or other securities or property deliverable upon such reorganization, share exchange, reclassification, consolidation, merger, sale, lease, exchange, dissolution, liquidation or winding up, as the case may be, and (iv) such other information relating to such event as may be reasonably necessary for the Holder to make an informed decision whether to exercise its rights, to the extent exercisable, hereunder.
6. Further Assurances . The Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of stock upon the exercise of this Warrant from time to time outstanding.
7. Reservation of Stock, etc., Issuable on Exercise of Warrant .
(a) The Common Stock issuable upon exercise of this Warrant has been duly authorized by all required corporate action on the part of the Company, and when issued, sold and delivered, will be duly and validly issued, fully paid and non-assessable, and will be free and clear from any taxes, liens, charges or encumbrances other than those created by, or imposed upon, the Holder through no action of the Company and taxes in respect of any transfer occurring contemporaneously with such issue. The Company shall from time to time take all such action as may be requisite to assure that the par value per share of Common Stock is at all times equal to or less than the Warrant Purchase Price per share then in effect. Until the expiration of the period within which the rights represented by this Warrant may be exercised, the Company shall at all times have authorized, and reserved for the purpose of issuance or transfer upon exercise of the rights evidenced by this Warrant, and shall keep available (free of preemptive rights), a sufficient number of shares of Common Stock (or Other Securities) to provide for the exercise of the rights represented by this Warrant. The Company shall take all such action as may be necessary to assure that such Common Stock (or Other Securities) may be so issued without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange upon which the Common Stock of the Company may be listed. The Company shall not take any action that would result in any adjustment of the Warrant Purchase Price if the total number of shares of Common Stock issuable after such action upon exercise of all Warrants then outstanding would exceed the total number of then authorized but unissued shares of Common Stock (or Other Securities) reserved therefore.
(b) If the issuance of Common Stock (or Other Securities) required to be reserved for purposes of exercise of this Warrant requires registration with, or approval of, any governmental authority under any U.S. federal or state law (other than any registration under the Securities Act or state “blue sky” or securities law) or listing on any national securities exchange or NASDAQ, before such shares may be issued upon exercise of this Warrant, the Company will, at its expense, use its best efforts to cause such Common Stock to be duly registered or approved, or listed on the relevant national securities exchange or NASDAQ, as the case may be, at such time, so that such shares may be issued in accordance with the terms hereof. The Company will, at its expense, use its best efforts to obtain the grant
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of admission of the Common Stock (or Other Securities) to trading on AIM or such primary national securities exchange on which the Common Stock may at the time be listed (in accordance with the AIM Rules or other applicable exchange rules) (“ Admission ”) by no later than the close of business on the date the Common Stock (or Other Securities) is issued and to procure that Admission becomes effective (in accordance with the AIM Rules or other applicable exchange rules) as soon as possible thereafter.
8. Exchange of Warrant . Upon surrender for exchange of this Warrant, properly endorsed, to the Company, the Company at its own expense will issue and deliver to or upon the order of the Holder one or more new Warrants identical to this Warrant in all respects (other than the number of shares into which such Warrant may be exercised) in the name of such Holder or as the Holder (upon payment by such Holder of any applicable transfer taxes) may direct (provided such delivery to another person is in compliance with federal and state securities laws), representing in the aggregate on the face or faces thereof the number of shares of Common Stock represented on the face of the Warrant so surrendered.
9. Replacement of Warrant . Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, if requested by the Company, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like denomination and tenor as the lost, stolen, destroyed or mutilated Warrant. If any Warrant is lost, stolen, destroyed or mutilated, and the Holder desires to exercise the rights evidenced thereby, the Company may, in lieu of issuing a substitute Warrant, authorize the exercise thereof upon receipt of the above evidence and on such terms of indemnity as it may reasonably require.
10. Warrant Agent . The Company may, by written notice to the holder, appoint an agent having an office in the State of New York or New Jersey, or elsewhere, for the purpose of issuing Common Stock (or Other Securities) upon the exercise of this Warrant pursuant to Section 2 hereof, exchanging the Warrant pursuant to Section 8 hereof, and replacing the Warrant pursuant to Section 9 hereof, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.
11. Remedies . The Company stipulates that the remedies at law of the Holder in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise, without the necessity of proving damages or posting any bond in connection therewith.
12. Negotiability, etc .
12.1. Transfer . This Warrant is issued upon the following terms, to all of which each Holder hereof consents and agrees:
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(a) Subject to the provisions hereof, this Warrant may be transferred at any time, in whole or in part, by the Holder by executing and delivering to the Company the form of assignment attached as Exhibit B hereto and surrendering to the Company this Warrant (or any portion hereof) for cancellation. If the Warrant is to be transferred in whole, the Company shall execute and deliver a new Warrant or Warrants identical to this Warrant in all respects (other than the number of shares into which such Warrant may be exercised) in the name of the assignee or assignees in the denominations specified in the instrument of assignment. If the Warrant is to be transferred in part, the Company shall execute and deliver a new Warrant or Warrants identical to this Warrant in all respects (other than the number of shares into which such Warrant may be exercised) to and in the name of the assignee or assignees in the denominations specified in the instrument of assignment and a new Warrant to and in the name of the Holder in an amount equal to the number of shares evidenced by the surrendered Warrant that were not transferred.
(b) Subject to the foregoing, any person in possession of this Warrant properly endorsed is authorized to represent himself as absolute owner hereof and is empowered to transfer absolute title hereto by endorsement and delivery hereof to a bona fide purchaser hereof for value; each prior taker or owner waives and renounces all of his equities or rights in this Warrant in favor of each such bona fide purchaser and each such bona fide purchaser shall acquire absolute title hereto and to all rights represented hereby.
(c) Until this Warrant is transferred on the books of the Company, the Company may treat the registered Holder as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.
12.2. Restrictions on Transferability . In no event shall the Company be obligated to effect any transfer of this Warrant or the shares issuable upon exercise hereof unless a registration statement is in effect with respect thereto under the Securities Act, or an exemption from the requirement of registration is then applicable.
12.3. Restrictive Legend . Each certificate representing shares issuable upon exercise hereof or any other securities issued in respect thereof upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall be stamped or otherwise imprinted with a legend in substantially the following form, together with any other legends required by the laws of any other applicable jurisdiction, exchange or market, or under any Company agreement to which the Holder is a party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN
12 | COMMON STOCK WARRANT |
EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
13. No Voting Rights or Liabilities as a Stockholder . This Warrant does not confer upon the Holder the right to vote or to consent or to receive notice as a stockholder of the Company, in respect of meetings of stockholders for the election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company prior to the exercise hereof. No provision hereof, in the absence of affirmative action by the Holder to purchase shares, shall give rise to any liability of such Holder for the Warrant Purchase Price or as a stockholder of the Company, whether such liability is asserted by the Company or any other person.
14. Expiration of Warrant . Notwithstanding any other provision of this Warrant, this Warrant shall expire and shall no longer be exercisable at 12:00 a.m., Eastern Standard Time, on August 1, 2014 (the “ Expiration Date ”); provided , however , if such day is a day on which banking institutions in the State of New York are authorized to close, then on the next succeeding day which shall not be such a day. The Company shall provide notice of the Expiration Date of this Warrant to the Holder no later than 20 days prior to the Expiration Date. In the event that on the Expiration Date, the Fair Market Value of one share of Common Stock is greater than the Warrant Purchase Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to subsection 2.2 as to all Common Stock (or Other Securities) for which it shall not previously have been exercised, and the Company shall promptly deliver a certificate representing the Common Stock (or Other Securities) issued upon such exercise to such Holder.
15. No Impairment . The Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but it will at all times in good faith assist in the carrying out of all of the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the Holder against impairment.
16. Entire Agreement . This Warrant constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof.
17. Notices, etc. All notices and other communications required or permitted under this Warrant shall be in writing and shall be sufficiently given if (a) hand delivered, (b) sent by nationally recognized overnight courier, or (c) sent by first class registered or certified mail, postage prepaid, return receipt requested, addressed as follows (or to such other address as shall be furnished by the Company or any Holder in accordance with this Section 17):
if to the Company:
Phibro Animal Health Corporation
65 Challenger Road, Third Floor
13 | COMMON STOCK WARRANT |
Ridgefield Park, New Jersey 07660
Attn: Senior Vice President and General Counsel
With a copy to:
Golenbock Eiseman Assor Bell & Peskoe LLP
437 Madison Avenue
New York, New York 10022
Attn: Lawrence M. Bell, Esq.
if to the Original Holder:
BFI Co., LLC
c/o Phibro Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
Attn: Jack Bendheim
with a copy to:
Golenbock Eiseman Assor Bell & Peskoe LLP
437 Madison Avenue
New York, New York 10022
Attn: Lawrence M. Bell, Esq.
If to any Holder other than the Original Holder, at such address as such Holder shall have provided in writing to the Company, or at such other address as such Holder furnishes by notice to given in accordance with this Section 17. Any Notice shall be deemed given upon receipt.
18. Miscellaneous .
(a) This Warrant and any term hereof may be amended, supplemented or waived only by an instrument in writing signed by the Company and Majority Holders.
(b) THIS WARRANT IS BEING DELIVERED IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF SUCH STATE WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES.
(c) The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.
(d) If any term or other provision of this Warrant is invalid, illegal, or incapable of being enforced by any law or public policy, all other terms or provisions of this Warrant shall nevertheless remain in full force and effect and the parties hereto shall negotiate in good faith to modify this Warrant so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
14 | COMMON STOCK WARRANT |
(e) Subject to the restrictions on transfer set forth herein, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company. This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns, subject, in the case of the Company, to the provisions of subsection 5.5.
[signature page follows]
15 | COMMON STOCK WARRANT |
Dated as of January 29 , 2009. | ||
PHIBRO ANIMAL HEALTH CORPORATION | ||
By: | /s/ Jack Bendheim | |
Name: Jack Bendheim | ||
Title: President |
COMMON STOCK WARRANT |
EXHIBIT A
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: Phibro Animal Health Corporation
The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, [_______ * shares of Common Stock of Phibro Animal Health Corporation, and herewith makes payment of $________ therefor,] or [such number of shares as may be issuable pursuant to Section 2.2 without payment of any additional consideration by surrender of such portion of this Warrant as relates to the right to purchase ___________ * shares of Common Stock of Phibro Animal Health Corporation] and requests that the certificates for such shares be issued in the name of, and delivered to:
Name | ||
Address | ||
City, State, Zip Code | ||
Taxpayer Identification Number | ||
Date | ||
Signature | ||
(Signature must conform in all respects to name of | ||
holder as specified on the face of the Warrant) |
* Insert here the number of shares called for on the face of the Warrant or, in the case of a partial exercise, the portion thereof as to which the Warrant is being exercised.
COMMON STOCK WARRANT |
EXHIBIT B
FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers unto _____________________________ the right represented by the within Warrant to purchase shares of Common Stock of Phibro Animal Health Corporation to which the within Warrant relates, and _______________________________ appoints as attorney to transfer such right on the books of such corporation with full power of substitution in the premises.
Date: ________________
(Signature must conform in all respects to | |||
name of holder as specified on the face of | |||
the Warrant) | |||
Name | |||
Address | |||
City, State, Zip Code | |||
Signature guaranteed by a Bank, | |||
Trust Company or a Member | |||
Firm of the New York or | |||
American Stock Exchange |
Exhibit 10.9
EXECUTION VERSION
AMENDED AND RESTATED
TERM LOAN AGREEMENT
by and among
PHIBRO ANIMAL HEALTH CORPORATION
as Borrower,
THE GUARANTORS
named herein,
and
MAYFLOWER L.P.
as Lender,
Dated as of June 24, 2010
TABLE OF CONTENTS
Page | ||
1. | Definitions and Construction | 1 |
1.1 | Definitions | 1 |
1.2 | Accounting Terms | 29 |
1.3 | Construction | 29 |
1.4 | Schedules and Exhibits | 30 |
2. | Loan and Terms of Payment | 30 |
2.1 | Loan | 30 |
2.2 | Notation; Promissory Notes | 30 |
2.3 | Payments | 30 |
2.4 | Rates, Payments, and Calculations | 31 |
2.5 | Crediting Payments | 32 |
2.6 | [Intentionally Omitted] | 32 |
2.7 | [Intentionally Omitted] | 32 |
2.8 | [Intentionally Omitted] | 32 |
2.9 | Repayment of Loan | 32 |
2.10 | Prepayment of Loan | 32 |
2.11 | [Intentionally Omitted] | 33 |
2.12 | Ranking | 33 |
3. | Conditions | 33 |
3.1 | Conditions | 33 |
4. | [Intentionally Omitted] | 34 |
5. | Representations and Warranties of Borrower | 34 |
5.1 | Corporate Organization and Authority of Borrower and its Subsidiaries; Non-Contravention; Approvals | 34 |
6. | Covenants | 35 |
6.1 | Reports to Lender | 35 |
6.2 | Waiver of Stay, Extension or Usury Laws | 36 |
6.3 | Compliance Certificate; Notice of Default | 36 |
6.4 | Taxes | 36 |
6.5 | Limitations on Additional Indebtedness | 36 |
6.6 | Limitations on Layering Indebtedness | 38 |
6.7 | Limitations on Restricted Payments | 39 |
6.8 | Limitations on Asset Sales | 41 |
- i - |
TABLE OF CONTENTS
(continued)
Page | ||
6.9 | Limitations on Transactions with Affiliates | 43 |
6.10 | Limitations on Liens | 44 |
6.11 | Conduct of Business | 45 |
6.12 | Additional Guarantees | 45 |
6.13 | Limitations on Dividends and Other Restrictions Affecting Restricted Subsidiaries | 45 |
6.14 | Limitations on Designation of Unrestricted Subsidiaries | 46 |
6.15 | Limitations on Sale and Leaseback Transactions | 48 |
6.16 | Maintenance of Properties; Insurance; Compliance with Law | 48 |
6.17 | Payments for Consent | 48 |
6.18 | Legal Existence | 48 |
6.19 | Limitations on the Issuance or Sale of Equity Interests of Restricted Subsidiaries | 49 |
6.20 | Change of Control Offer | 49 |
6.21 | Limitations on Mergers, Consolidations, etc . | 50 |
7. | [Intentionally Omitted] | 51 |
8. | Events of Default | 51 |
9. | Lender’s Rights and Remedies | 52 |
9.1 | Rights and Remedies | 52 |
9.2 | Remedies Cumulative | 53 |
10. | [Intentionally Omitted] | 53 |
11. | Waivers; Indemnification | 53 |
11.1 | Demand; Protest; etc . | 53 |
11.2 | Indemnification | 53 |
12. | Notices | 54 |
13. | Choice of Law and Venue; Jury Trial Waiver | 55 |
14. | Assignments and Participations; Successors | 56 |
14.1 | Assignments and Participations | 56 |
14.2 | Successors | 57 |
15. | Amendments; Waivers | 58 |
15.1 | Amendments and Waivers | 58 |
15.2 | No Waivers; Cumulative Remedies | 58 |
16. | Withholding Taxes | 58 |
16.1 | Withholding Taxes | 58 |
- ii - |
TABLE OF CONTENTS
(continued)
Page | ||
17. | Guaranty Provisions | 60 |
17.1 | Guaranty | 60 |
17.2 | Limitation of Guarantee | 60 |
17.3 | Release of Guarantor | 60 |
17.4 | Waiver of Subrogation | 61 |
18. | General Provisions | 61 |
18.1 | Effectiveness | 61 |
18.2 | Section Headings | 61 |
18.3 | Interpretation | 61 |
18.4 | Severability of Provisions | 61 |
18.5 | Amendments in Writing | 62 |
18.6 | Counterparts; Execution by Electronic Transmission | 62 |
18.7 | Revival and Reinstatement of Obligations | 62 |
18.8 | Confidentiality | 62 |
18.9 | Integration | 63 |
18.10 | USA PATRIOT Act | 63 |
- iii - |
EXHIBITS AND SCHEDULES
Exhibit A | Form of Assignment and Acceptance |
Schedule 1 | Lender’s Account |
Schedule 2 | Designated Account |
- iv - |
AMENDED AND RESTATED
TERM LOAN AGREEMENT
THIS AMENDED AND RESTATED TERM LOAN AGREEMENT (this “ Agreement ”), is entered into as of June 24, 2010, by and among MAYFLOWER L.P., a limited partnership registered in Jersey, Channel Islands (registered no. LP282) (“ Lender ”), and, on the other hand, PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (“ Borrower ”) and the Guarantors (as hereinafter defined).
WHEREAS, pursuant to a certain Term Loan Agreement (the “ Original Agreement ”) dated February 12, 2009 among Borrower, the Original Guarantors, and 3i Quoted Private Equity plc, a Jersey, Channel Islands, incorporated public closed-ended investment company (“ 3i QPE ”), 3i QPE provided term loan financing to Borrower;
WHEREAS, as an inducement for Original Lender to provide such term loan financing, each of the Original Guarantors provided a guarantee of certain obligations of Borrower as set forth in Section 17 of the Original Agreement;
WHEREAS, all of the rights and obligations of Original Lender under the Original Agreement have been assigned to and assumed by Lender;
WHEREAS, in connection with various financing transactions contemplated to be entered into by Borrower, the parties hereto mutually desire to amend and restate the Original Agreement on the terms and conditions set forth herein; and
WHEREAS, in connection with such financing transactions contemplated to be entered into by Borrower, certain of the Original Guarantors are being released from their obligations with respect to the Original Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that, effective as of the Effective Date (as defined below), the Original Agreement is amended and restated in its entirety as follows:
1. Definitions and Construction .
1.1 Definitions . As used in this Agreement, the following terms shall have the following definitions:
“ 3i Group ” means each of 3i QPE and 3i Group plc and (1) each of their subsidiary undertakings, any parent undertaking of 3i QPE or 3i Group plc and any subsidiary undertakings of any such parent undertaking (together “ 3i Parties ”), (2) any fund, partnership, investment vehicle or other entity (whether corporate or otherwise) established in any jurisdiction and which is either (a) managed or advised by an entity in the 3i Parties or (b) utilized for the purpose of allowing 3i Parties employees (including former employees) to participate directly or indirectly in the growth in value of Borrower ((a) and (b) together being referred to as “ 3i Funds ”), (3) any subsidiary undertaking of a 3i Fund and (4) investors in 3i Funds. For these purposes “subsidiary undertaking” and “parent undertaking” have the same meaning as in the UK Companies Act 2006.
“ Acquired Indebtedness ” means (a) with respect to any Person that becomes a Restricted Subsidiary after the Effective Date, Indebtedness of such Person and its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary that was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary and (b) with respect to Borrower or any Restricted Subsidiary, any Indebtedness of a Person (other than Borrower or a Restricted Subsidiary) existing at the time such Person is merged with or into Borrower or a Restricted Subsidiary, or Indebtedness expressly assumed by Borrower or any Restricted Subsidiary in connection with the acquisition of an asset or assets from another Person, which Indebtedness was not, in any case, incurred by such other Person in connection with, or in contemplation of, such merger or acquisition; provided , however , that Indebtedness of such acquired Person which is redeemed or otherwise repaid at the time of or substantially contemporaneously with the consummation of the transactions by which such acquired Person merges with or into or becomes a Restricted Subsidiary of such specified Person shall not be Acquired Indebtedness.
“ Acquisition ” has the meaning set forth in the recitals hereto.
“ Adjusted Net Assets ” of a Guarantor at any date shall mean the lesser of the amount by which (x) the fair value of the property of such Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities), but excluding liabilities under the Guaranty, of such Guarantor at such date and (y) the present fair salable value of the assets of such Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Guarantor on its debts and all other fixed and contingent liabilities (after giving effect to all other fixed and contingent liabilities and after giving effect to any collection from any Subsidiary of such Guarantor in respect of the obligations of such Guarantor under the Guaranty), excluding Indebtedness in respect of the Guaranty, as they become absolute and matured.
“ Affiliate ” of any Person means any other Person which directly or indirectly controls or is controlled by, or is under direct or indirect common control with, the referent Person. For purposes of Section 6.9 , Affiliates shall be deemed to include, with respect to any Person, any other Person (a) which beneficially owns or holds, directly or indirectly, 10% or more of any class of the Voting Stock of the referenced Person, (b) of which 10% or more of the Voting Stock is beneficially owned or held, directly or indirectly, by the referenced Person or (c) with respect to an individual, any immediate family member of such Person. For purposes of this definition, “ control ” of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the above, for purposes of this Agreement, none of Borrower or any Subsidiary of Borrower shall be considered to be an Affiliate of any Member of the 3i Group, and vice versa.
“ Affiliate Transaction ” has the meaning set forth in Section 6.9 .
“ Agreement ” has the meaning set forth in the preamble to this Agreement.
“ amend ” means to amend, supplement, restate, amend and restate or otherwise modify, including successively, and “ amendment ” shall have a correlative meaning.
“ Applicable Prepayment Premium ” means, in connection with any prepayment of the Loan, an amount equal to (a) with respect to any prepayment made during the period from and after the Effective Date through and including December 31, 2011 other than a Change of Control Prepayment, Net Proceeds Prepayment or Change in U.S. Tax Treaty Prepayment, 2.2% times the principal amount of the Loan so prepaid, (b) with respect to a Change of Control Prepayment made at any time, 1.0% times the
2 |
principal amount of the Loan so prepaid, and (c) with respect to any prepayment made after December 31, 2011, or any Net Proceeds Prepayment or Change in U.S. Tax Treaty Prepayment made at any time, 0%.
“ asset ” means any asset or property.
“ Asset Acquisition ” means:
(1) an Investment by Borrower or any Restricted Subsidiary in or for the purchase of any other Person if, as a result of such Investment, such Person shall become a Restricted Subsidiary, or shall be merged with or into Borrower or any Restricted Subsidiary, or
(2) the acquisition by Borrower or any Restricted Subsidiary of all or substantially all of the assets of any other Person or any division, business unit or line of business of any other Person (including any assets of an Affiliate of a Person being acquired and used or held for use by the Person (or division, business unit or line of business) being acquired).
“ Asset Sale ” means any sale, issuance, conveyance, transfer, lease, assignment or other disposition by Borrower or any Restricted Subsidiary to any Person other than Borrower or any Guarantor (including by means of a Sale and Leaseback Transaction or a merger or consolidation) (collectively, for purposes of this definition, a “ transfer ”), in one transaction or a series of related transactions, of any assets of Borrower or any of its Restricted Subsidiaries other than in the ordinary course of business. For purposes of this definition, the term “Asset Sale” shall not include:
(a) transfers of cash or Cash Equivalents;
(b) transfers of assets (including Equity Interests) that are governed by and made in accordance with Section 6.21 ;
(c) Permitted Investments and Restricted Payments permitted under Section 6.7 ;
(d) the creation of or realization on any Permitted Lien;
(e) transfers of damaged, worn-out or obsolete equipment or assets that, in Borrower’s reasonable judgment, are no longer used or useful in the business of Borrower or its Restricted Subsidiaries;
(f) sales or grants of licenses or sublicenses to use the patents, trade secrets, know-how and other intellectual property, and licenses, leases or subleases of other assets, of Borrower or any Restricted Subsidiary to the extent not materially interfering with the business of Borrower and the Restricted Subsidiaries;
(g) transfers by a Foreign Subsidiary to any other Foreign Subsidiary;
(h) any transfer or series of related transfers that, but for this clause, would be Asset Sales, if after giving effect to such transfers, the aggregate Fair Market Value of the assets transferred in such transaction or any such series of related transactions does not exceed $5,000,000; and
(i) the issuance or sale of Equity Interests of Borrower.
“ Assignee ” has the meaning set forth in Section 14.1(a) .
3 |
“ Assignment and Acceptance ” means an Assignment and Acceptance Agreement substantially in the form of Exhibit A .
“ Attributable Indebtedness ”, when used with respect to any Sale and Leaseback Transaction, means, as at the time of determination, the present value (discounted at the Interest Rate, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.
“ Authorized Person ” means any Officer of Borrower.
“ Bank Product Obligations ” means Indebtedness incurred in respect of credit cards, credit card processing services, debit card, stored value cards, purchase cards, ACH transactions, and cash management transactions.
“ Bankruptcy Laws ” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“ Board of Directors ” means, with respect to any Person, (a) in the case of any corporation, the board of directors of such Person, (b) in the case of any limited liability company, the board of managers of such Person, (c) in the case of any partnership, the board of directors of the general partner of such Person, and (d) in any other case, the functional equivalent of the foregoing or, in each case, other than for purposes of the definition of “Change of Control,” any duly authorized committee of such body.
“ Borrower ” has the meaning set forth in the preamble to this Agreement.
“ Borrowing ” means the borrowing of the Loan made on the Closing Date by Lender to Borrower.
“ Business ” means the business of manufacturing and marketing of animal health and nutrition products and specialty chemicals.
“ Business Day ” means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in New York, New York, or London, United Kingdom.
“ Capitalized Lease ” means a lease required to be capitalized for financial reporting purposes in accordance with GAAP.
“ Capitalized Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under a Capitalized Lease, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“ Cash Equivalents ” means:
(a) marketable direct obligations issued or fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) maturing within 360 days of the date of acquisition thereof;
(b) demand and time deposits and certificates of deposit or acceptances, maturing within 360 days of the date of acquisition thereof, of any financial institution that is a member of
4 |
the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500,000,000 and is assigned at least a “B” rating by Thomson Financial BankWatch;
(c) commercial paper maturing no more than 360 days from the date of creation thereof issued by a corporation that is not Borrower or an Affiliate of Borrower, and is organized under the laws of any State of the United States of America or the District of Columbia and rated at least A-1 by S&P or at least P-1 by Moody’s;
(d) repurchase obligations with a term of not more than ten days for underlying securities of the types described in clause (a) above entered into with any commercial bank meeting the specifications of clause (b) above;
(e) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within 360 days from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s;
(f) in the case of any Foreign Subsidiary: (i) direct obligations of the sovereign nation (or any agency or instrumentality thereof) in which such Foreign Subsidiary is organized or is conducting business or obligations fully and unconditionally guaranteed by such sovereign nation (or any agency or instrumentality thereof), (ii) of the type and maturity described in clauses (a) through (e) above of foreign obligors, which obligations or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies or (iii) of the type and maturity described in clauses (a) through (e) above of foreign obligors (or the parents of such obligors), which obligations or obligors (or the parents of such obligors) are not rated as provided in such clauses or in clause (f)(ii) but which are, in the reasonable judgment of Borrower, comparable in investment quality to such obligations and obligors (or the parents of such obligors); and
(g) money market or other mutual funds substantially all of whose assets comprise securities of the types described in clauses (a) through (f) above.
“ Change in U.S. Tax Treaty ” means the enactment, promulgation, execution or ratification of, or any amendment to, any tax treaty to which the United States is a party, which, in each case, (a) occurs on or after the later of (i) February 12, 2009 or (ii) with respect to any assignment or granting of participating interests, the date of the applicable assignment or grant, and (b) has not been initially publicly announced or otherwise publicly indicated by a Governmental Authority to be negotiated or intended to be negotiated, and distributed or publicized on or through media generally or readily available to lenders, financial institutions, investment funds or their advisers, including by subscription or other charge, prior to the later of (i) February 12, 2009 or (ii) with respect to any assignment or granting of participating interests, the date of the applicable assignment or grant.
“ Change in U.S. Tax Treaty Prepayment ” has the meaning set forth in clause (g) of Section 16.1 .
“ Change of Control ” means the occurrence of any of the following events:
(a) prior to a Public Equity Offering after the Effective Date, the Permitted Holders cease to own, or to have the power to vote or direct the voting of, Voting Stock representing more than 50% of the voting power of the total outstanding Voting Stock of Borrower;
5 |
(b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause that person or group shall be deemed to have “beneficial ownership” of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock representing 50% or more of the voting power of the total outstanding Voting Stock of Borrower;
(c) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (together with or as replaced by any new directors whose election to such Board of Directors or whose nomination for election by the stockholders of Borrower was approved by (i) the majority in interest of the Permitted Holders or (ii) a vote of the majority of the directors of Borrower then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of Borrower;
(d) (i) all or substantially all of the assets of Borrower and the Restricted Subsidiaries are sold or otherwise transferred to any Person other than a Wholly-Owned Restricted Subsidiary or one or more Permitted Holders or (ii) Borrower consolidates or merges with or into another Person or any Person consolidates or merges with or into Borrower, in either case under this clause (d), in one transaction or a series of related transactions in which immediately after the consummation thereof Persons beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of Borrower immediately prior to such consummation do not beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing a majority of the total voting power of the Voting Stock of Borrower or the surviving or transferee Person;
(e) Borrower shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the stockholders of Borrower; or
(f) both (i) no Member of the 3i Group shall have the right to appoint or cause to be elected a director to Borrower’s Board of Directors other than having relinquished such right as the direct or indirect result (including without limitation the cumulative or contributory effect) of any sale, transfer or other disposition of beneficial interest of Voting Stock by one or more Members of the 3i Group and (ii) (A) none of the Borrower’s directors shall have been elected or appointed by a Member of the 3i Group (except if such situation exists as a result of voluntary resignation) and (B) Borrower shall have failed, following written request by a Member of the 3i Group, to cause to be appointed or elected to Borrower’s Board of Directors an individual selected by the 3i Group and meeting the conditions set forth in clauses (ii) and (iii) of the proviso to the third sentence of Section 6.1(a) of the Shareholders Agreement for a Designated Director (as defined in Section 6.1(a) of the Shareholders Agreement) within 30 days of the earliest practical date upon which Borrower or a Permitted Holder (excluding for this purpose clause (d) of the definition of Permitted Holder) has the ability, using diligent efforts and acting in good faith and with the vote or consent of, and to the extent reasonably requested, other cooperation of, the 3i Group but subject to receipt of any necessary approval or consent of any Governmental Authority, securities exchange or similar body, to make or cause such appointment or election. For the avoidance of doubt, the foregoing provisions of this clause (f) shall not override, or otherwise vary, any provision of the Shareholders Agreement, and any director appointment or election made in satisfaction of any provision of this clause (f) shall not, unless made pursuant to
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the terms of the Shareholders Agreement, be deemed to be made thereunder or subject to the provisions thereof.
For purposes of this definition, a Person shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement.
“ Change of Control Date ” has the meaning set forth in clause (b) of Section 6.20 .
“ Change of Control Prepayment ” has the meaning set forth in clause (a) of Section 6.20 .
“ Closing Date ” means March 3, 2009.
“ Code ” means the Internal Revenue Code of 1986.
“ Consolidated Amortization Expense ” for any period means the amortization expense of Borrower and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“ Consolidated Cash Flow ” for any period means, without duplication, the sum of the amounts for such period of:
(a) Consolidated Net Income; plus
(b) in each case only to the extent (and in the same proportion) deducted in determining Consolidated Net Income and with respect to the portion of Consolidated Net Income attributable to any Restricted Subsidiary only if a corresponding amount would be permitted at the date of determination to be distributed to Borrower by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders,
(i) | Consolidated Income Tax Expense; |
(ii) | Consolidated Amortization Expense (but only to the extent not included in Consolidated Interest Expense); |
(iii) | Consolidated Depreciation Expense; |
(iv) | Consolidated Interest Expense; |
(v) | any non-recurring fees, charges or other expenses made or incurred by Borrower in connection with the Transactions or in connection with any transaction permitted by clause (r) of the definition of “Permitted Investments”; |
(vi) | all other non-cash items reducing Consolidated Net Income (excluding any non-cash charge that results in an accrual of a reserve for cash charges in any future period) for such period; and |
(vii) | expenses incurred under the Shareholders Agreement related to payments made or required to be made to the shareholders party thereto. |
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in each case determined on a consolidated basis in accordance with GAAP, minus
(c) the aggregate amount of all non-cash items, determined on a consolidated basis, to the extent such items increased Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business.
“ Consolidated Depreciation Expense ” for any period means the depreciation expense of Borrower and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“ Consolidated Income Tax Expense ” for any period means the provision for taxes of Borrower and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP.
“ Consolidated Interest Coverage Ratio ” means the ratio of Consolidated Cash Flow during the most recent four consecutive full fiscal quarters for which financial statements are available (the “ Four-Quarter Period ”) ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio (the “ Transaction Date ”) to Consolidated Interest Expense for the Four-Quarter Period. For purposes of this definition, Consolidated Cash Flow and Consolidated Interest Expense shall be calculated after giving effect on a pro forma basis for the period of such calculation to:
(a) the incurrence of any Indebtedness or the issuance of any Preferred Stock of Borrower or any Restricted Subsidiary (and the application of the proceeds thereof) and any repayment of other Indebtedness or redemption of other Preferred Stock (and the application of the proceeds therefrom) (other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to any revolving credit arrangement) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such incurrence, repayment, issuance or redemption, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four-Quarter Period; and
(b) any Asset Sale or Asset Acquisition (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of Borrower or any Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary as a result of such Asset Acquisition) incurring Acquired Indebtedness and also including any Consolidated Cash Flow (including, without duplication, any pro forma effect as provided in the immediately succeeding paragraph) associated with any such Asset Acquisition) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence of, or assumption or liability for, any such Indebtedness or Acquired Indebtedness) occurred on the first day of the Four-Quarter Period.
For purposes of this definition, whenever pro forma effect is to be given to an Asset Sale or Asset Acquisition and the amount of Consolidated Cash Flow relating thereto, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of Borrower and shall comply with the requirements of Rule 11-02 of Regulation S-X promulgated by the SEC, except that any such pro forma calculations may include the annualized amount of operating expense reductions for such period resulting from such Asset Sale or Asset Acquisition that (A) have been realized or (B) for which the steps necessary for realization have been taken (or are taken concurrently with such transaction) or (C) for which the steps necessary for realization are reasonably expected to be taken within the six month period following such
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transaction and which operating expense reductions are reasonably expected to be realized within the twelve month period following such transaction and, in each case, including, but not limited to, (a) reduction in personnel expenses, (b) reduction of costs related to administrative functions, (c) reduction of costs related to leased or owned properties and (d) reductions from the consolidation of operations and streamlining of corporate overhead, provided that, in each case, such adjustments are set forth in an Officers’ Certificate signed by Borrower’s Chief Financial Officer and another Officer of Borrower which states (i) the amount of such adjustment or adjustments, (ii) in the case of items (B) or (C) above, that such adjustment or adjustments are based on the reasonable good faith beliefs of the Officers executing such Officers’ Certificate at the time of such execution and (iii) that any related incurrence of Indebtedness is permitted pursuant to this Agreement.
In calculating Consolidated Interest Expense for purposes of determining the denominator (but not the numerator) of this Consolidated Interest Coverage Ratio:
(i) | interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; |
(ii) | if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four-Quarter Period; and |
(iii) | notwithstanding clause (i) or (ii) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of these agreements. |
“ Consolidated Interest Expense ” for any period means the sum, without duplication, of the total interest expense of Borrower and the Restricted Subsidiaries for such period, determined net of interest earned on cash and Cash Equivalents (other than payment-in-kind interest), determined on a consolidated basis in accordance with GAAP and including, without duplication:
(a) imputed interest on Capitalized Lease Obligations and Attributable Indebtedness,
(b) commissions, discounts and other fees and charges owed with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings,
(c) the net costs associated with Hedging Obligations related to interest rates,
(d) amortization of debt discount or premium,
(e) the interest portion of any deferred payment obligations,
(f) capitalized interest,
(g) the product of (a) all dividend payments on any series of Disqualified Equity Interests of Borrower or any Preferred Stock of any Restricted Subsidiary (other than any such
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Disqualified Equity Interests or any Preferred Stock held by Borrower or a Wholly-Owned Restricted Subsidiary or to the extent paid in Qualified Equity Interests), multiplied by (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of Borrower and the Restricted Subsidiaries, expressed as a decimal,
(h) all interest payable with respect to discontinued operations, and
(i) all interest on any Indebtedness described in clause (g) or (h) of the definition of Indebtedness.
“ Consolidated Net Income ” for any period means the net income (or loss) of Borrower and the Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:
(a) the net income (or loss) of any Person that is not a Restricted Subsidiary, except to the extent that cash in an amount equal to any such income has actually been received by Borrower or, subject to clause (c) below, any Restricted Subsidiary during such period;
(b) except to the extent includible in the consolidated net income of Borrower pursuant to the foregoing clause (a), the net income (or loss) of any Person that accrued prior to the date that (i) such Person becomes a Restricted Subsidiary or is merged into or consolidated with Borrower or any Restricted Subsidiary or (ii) the assets of such Person are acquired by Borrower or any Restricted Subsidiary;
(c) the net income of any Restricted Subsidiary during such period to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of that income is not permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary during such period, except that Borrower’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining Consolidated Net Income;
(d) for the purposes of calculating the Restricted Payments Basket only, in the case of a successor to Borrower by consolidation, merger or transfer of its assets, any income (or loss) of the successor prior to such merger, consolidation or transfer of assets;
(e) other than for purposes of calculating the Restricted Payments Basket, any gain (or loss), together with any related provisions for taxes on any such gain (or the tax effect of any such loss), realized during such period by Borrower or any Restricted Subsidiary upon (i) the acquisition of any securities, or the extinguishment of any Indebtedness, of Borrower or any Restricted Subsidiary or (ii) any Asset Sale by Borrower or any Restricted Subsidiary;
(f) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP;
(g) unrealized gains and losses with respect to Hedging Obligations;
(h) the cumulative effect of any change in accounting principles; and
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(i) other than for purposes of calculating the Restricted Payments Basket, any extraordinary or non-recurring gain (or extraordinary or non-recurring loss), together with any related provision for taxes on any such extraordinary or non-recurring gain (or the tax effect of any such extraordinary or non-recurring loss), realized by Borrower or any Restricted Subsidiary during such period.
In addition, any return of capital with respect to an Investment that increased the Restricted Payments Basket pursuant to clause (c)(iv) of Section 6.7 or decreased the amount of Investments outstanding pursuant to clause (1) of the definition of “Permitted Investments” shall be excluded from Consolidated Net Income for purposes of calculating the Restricted Payments Basket.
For purposes of this definition of “ Consolidated Net Income. ” “ nonrecurring ” means any gain or loss as of any date that is not reasonably likely to recur within the two years following such date; provided that if there was a gain or loss similar to such gain or loss within the two years preceding such date, such gain or loss shall not be deemed nonrecurring.
“ Consolidated Tangible Assets ” means, as of any date, the total amount of assets of Borrower and the Restricted Subsidiaries on a consolidated basis at the end of the fiscal quarter immediately preceding such date, as determined in accordance with GAAP, less Intangible Assets.
“ Coverage Ratio Exception ” has the meaning set forth in the proviso in the first paragraph of Section 6.5 .
“ Covered Taxes ” means any present or future taxes, levies, imposts, duties, deductions, withholdings, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments and all interest, penalties or similar liabilities with respect thereto, but excluding (a) any tax imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein (i) measured by or based on the net income or net profits of Lender or (ii) to the extent that such tax results from a (x) change in the circumstances of Lender, including a change in the residence, place of organization, or principal place of business of Lender, or a change in the branch or lending office of Lender, or (y) change in the identity of Lender resulting in the application, as considered on the date of such change, of a different or no tax treaty with the United States, (b) unless arising as a result of a Change in U.S. Tax Treaty, any United States federal withholding or other tax required after giving effect to any applicable tax treaty or other applicable exemption or reduction, and/or (c) any tax (i) arising as a result of Lender’s failure to comply with the applicable provisions of clauses (b), (c) and (e) of Section 16.1 or (ii) resulting from Lender’s own willful misconduct or gross negligence.
“ Credit Facilities ” means one or more debt facilities (which may be outstanding at the same time and including, without limitation, the Revolving Credit Facility and this Agreement) providing for revolving credit loans, term loans or letters of credit and, in each case, as such instruments may be amended, refinanced, re funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders), including (a) any notes, letters of credit, guarantees, collateral and security documents, instruments and other agreements executed, issued or arranged in connection therewith, and in each case as amended, modified, renewed, re-funded, replaced or refinanced from time to time, and (b) any notes, letters of credit, guarantees,
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collateral and security documents, instruments and other agreements executed, issued or arranged in connection with any such amendment, modification, renewal, re-funding, replacement or refinancing.
“ Custodian ” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
“ Default ” means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.
“ Designated Account ” means the account of Borrower identified on Schedule 2 .
“ Designation ” has the meaning set forth in Section 6.14 .
“ Designation Amount ” has the meaning set forth in Section 6.14 .
“ Disqualified Equity Interests ” of any Person means any class of Equity Interests of such Person that, by its terms, or by the terms of any related agreement or of any security into which it is convertible, puttable or exchangeable, is, or upon the happening of any event or the passage of time would be, required to be redeemed by such Person, whether or not at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to the date which is 91 days after the final maturity date of the Notes; provided , however , that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided , further , however , that any Equity Interests that would not constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require Borrower to redeem such Equity Interests upon the occurrence of an asset sale or a change in control occurring prior to the 91st day after the final maturity date of the Notes shall not constitute Disqualified Equity Interests if the asset sale or change of control redemption provisions applicable to such Equity Interests are no more favorable to such holders than the provisions of Sections 6.8 and 6.20 , respectively, and such Equity Interests specifically provide that Borrower will not redeem any such Equity Interests pursuant to such provisions prior to Borrower’s prepayment of the Loan as required pursuant to the provisions of Sections 6.8 and 6.20 , respectively.
“ Dollars ” or “ $ ” means United States dollars.
“ Effective Date ” means the date on which the Notes are originally issued.
“ Eligible Transferee ” means any Member of the 3i Group.
“ Equity Interests ” of any Person means (a) any and all shares or other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such Person and (b) all rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such Person.
“ Event of Default ” has the meaning set forth in Section 8 .
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“ Excess Proceeds ” has the meaning set forth in clause (c) of Section 6.8 .
“ Exchange Act ” means the Securities Exchange Act of 1934, as in effect from time to time.
“ Fair Market Value ” means, with respect to any asset, the price (after taking into account any liabilities relating to such asset) that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction. Fair Market Value (other than of any asset with a public trading market) in excess of $5,000,000 shall be determined by the Board of Directors of Borrower acting reasonably and in good faith and shall be evidenced by a board resolution delivered to Lender. Fair Market Value (other than of any asset with a public trading market) in excess of $10,000,000 shall be determined by an Independent Financial Advisor, which determination shall be evidenced by an opinion addressed to the Board of Directors of Borrower and delivered to Lender.
“ Foreign Subsidiary ” means any Restricted Subsidiary of Borrower that (a) is not organized under the laws of (i) the United States or any state thereof or (ii) the District of Columbia and (b) conducts substantially all of its business operations outside the United States.
“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect on the Effective Date.
“ Governmental Authority ” means any international, supranational, national, provincial, regional, federal, state, municipal or local government, any instrumentality, subdivision, court, administrative or regulatory agency or commission or other authority thereof, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority.
“ guarantee ” means a direct or indirect guarantee by any Person of any Indebtedness of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person: (a) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise); or (b) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); “ guarantee , ” when used as a verb, and “ guaranteed ” have correlative meanings.
“ Guarantor ” means (a) each Restricted Subsidiary, other than a Foreign Subsidiary, on the Effective Date, and (b) each other Person that is required to, or at the election of Borrower does, become a Guarantor under the terms of this Agreement and the other Loan Documents after the Effective Date, in each case, until such Person is released from the Guaranty in accordance with the terms of this Agreement.
“ Original Guarantor ” means each Person within the definition of “Guarantor” as used in the Original Agreement.
“ Guaranty ” means that certain general continuing guaranty given by each Guarantor in favor of Lender under Section 17.1 , together with any and all supplements or other guarantees executed and
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delivered by additional Guarantors in accordance with Section 6.12 , in each case as amended, modified, renewed, re-funded, replaced or refinanced from time to time.
“ Hedging Obligations ” of any Person means the obligations of such Person under swap, cap, collar, forward purchase, option or similar agreements or arrangements dealing with interest rates, currency exchange rates, commodities or commodity prices, either generally or under specific contingencies.
“ incur ” means, with respect to any Indebtedness or other obligation, incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to such Indebtedness or other obligation; provided that (1) the Indebtedness of a Person existing at the time such Person became a Restricted Subsidiary shall be deemed to have been incurred by such Restricted Subsidiary and (2) neither the accrual of interest nor the accretion of original issue discount or the accretion or accumulation of dividends on any Equity Interests shall be deemed to be an incurrence of Indebtedness.
“ Indebtedness ” of any Person at any date means, without duplication:
(a) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof);
(b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(c) all reimbursement obligations of such Person in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions;
(d) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery or title thereto;
(e) the maximum fixed redemption or repurchase price of all Disqualified Equity Interests of such Person;
(f) all Capitalized Lease Obligations of such Person;
(g) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person;
(h) all Indebtedness of others guaranteed by such Person to the extent of such guarantee; provided that Indebtedness of Borrower or its Subsidiaries that is guaranteed by Borrower or Borrower’s Subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of Borrower and its Subsidiaries on a consolidated basis;
(i) all Attributable Indebtedness;
(j) to the extent not otherwise included in this definition, Hedging Obligations of such Person; and
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(k) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person.
The amount of any Indebtedness which is incurred at a discount to the principal amount at maturity thereof as of any date shall be deemed to have been incurred at the accreted value thereof as of such date. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (g), the lesser of (i) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of others on the date that the Lien attaches and (ii) the amount of the Indebtedness secured. For purposes of clause (e), the “maximum fixed redemption or repurchase price” of any Disqualified Equity Interests that do not have a fixed redemption or repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were redeemed or repurchased on any date on which an amount of Indebtedness outstanding shall be required to be determined pursuant to this Agreement or any other Loan Document.
Notwithstanding the foregoing, Indebtedness shall not include a government grant and any guaranty of Borrower or a Restricted Subsidiary required by such grant which obligates Borrower or a Restricted Subsidiary to repay such grant at the discretion of such government or upon the failure of the conditions of such grant specified therein to be fulfilled, but which is forgiven solely by reason of the passage of time or the fulfillment of such grant conditions (other than repayments); provided that if the conditions for forgiveness of such government grant lapse for whatever reason and Borrower or a Restricted Subsidiary becomes obligated to repay such grant, the grant shall be deemed Indebtedness which is incurred 30 days after the time such obligation to repay is triggered.
“ Indemnified Liabilities ” has the meaning set forth in Section 11.2 .
“ Indemnified Person ” has the meaning set forth in Section 11.2 .
“ Indenture ” means the Indenture to be entered into among Borrower, Borrower’s Subsidiaries that are signatories thereto, and the Indenture Trustee on or about the date hereof, pursuant to which Borrower is issuing new senior notes due 2018 (such notes, as may be amended, modified, renewed, re-funded, replaced or refinanced from time to time, the “ Notes ”), as such indenture may be amended, refinanced, refunded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Indenture Trustee ” means HSBC Bank USA, National Association a New York banking corporation, in its capacity as indenture trustee under the Indenture.
“ Independent Director ” means a director of Borrower who
(a) is independent with respect to the transaction at issue; and
(b) does not have any material financial interest in Borrower or any of its Affiliates (other than as a result of holding securities of Borrower).
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“ Independent Financial Advisor ” means an accounting, appraisal or investment banking firm of nationally recognized standing that is, in the reasonable judgment of Borrower’s Board of Directors, qualified to perform the task for which it has been engaged and disinterested and independent with respect to Borrower and its Affiliates.
“ Insolvency Proceeding ” means any proceeding commenced by or against any Person under any provision of any Bankruptcy Law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
“ Intangible Assets ” means, with respect to any Person, all unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, write-ups of assets over their carrying value (other than write-ups which occurred prior to the Effective Date and other than, in connection with the acquisition of an asset, the write-up of the value of such asset to its fair market value in accordance with GAAP on the date of acquisition) and all other items which would be treated as intangibles on the consolidated balance sheet of such Person prepared in accordance with GAAP.
“ Interest Payment Date ” means each March 31, June 30, September 30 and December 31.
“ Interest Rate ” means 11.00% per annum.
“ Intralinks ” means the Intralinks digital workspace or any successor digital workspace or interactive document platform.
“ Investments ” of any Person means:
(a) all direct or indirect investments by such Person in any other Person in the form of loans, advances or capital contributions or other credit extensions constituting Indebtedness of such other Person, and any guarantee of Indebtedness of any other Person;
(b) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Equity Interests or other securities of any other Person (other than any such purchase that constitutes a Restricted Payment of the type described in clause (b) of the definition thereof);
(c) all other items that would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP (including, if required by GAAP, purchases of assets outside the ordinary course of business); and
(d) the Designation of any Subsidiary as an Unrestricted Subsidiary.
Except as otherwise expressly specified in this definition, the amount of any Investment (other than an Investment made in cash) shall be the Fair Market Value thereof on the date such Investment is made. The amount of Investment pursuant to clause (d) shall be the Designation Amount determined in accordance with Section 6.14 . If Borrower or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of any Restricted Subsidiary, or any Restricted Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary, Borrower shall be deemed to have made an Investment on the date of any such sale or other disposition equal to the Fair Market Value of the Equity Interests of and all other Investments in such
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Restricted Subsidiary retained. Notwithstanding the foregoing, purchases or redemptions of Equity Interests of Borrower shall be deemed not to be Investments.
“ Lender ” has the meaning set forth in the preamble to this Agreement, and shall include any other Person made a party to this Agreement in accordance with the provisions of Section 14.1 .
“ Original Lender ” means 3iQPE and the other Persons made a party to the Original Agreement in accordance with the provisions of Section 14.1 of the Original Agreement.
“ Lender Expenses ” means all (a) costs or expenses (including taxes, and insurance premiums) required to be paid by Borrower or its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by Lender, (b) subject to clause (j) below, fees or charges paid or incurred by Lender in connection with its transactions with Borrower or its Subsidiaries, (c) costs and expenses incurred by Lender in the disbursement of funds to or for the account of Borrower (by wire transfer or otherwise), (d) charges paid or incurred by Lender resulting from the dishonor of checks, (e) reasonable costs and expenses paid or incurred by Lender to correct any default or enforce any provision of the Loan Documents, (f) audit fees and expenses of Lender to audit examinations of any applicable books to the extent of any fees or charges (and up to the amount of any limitation) contained in this Agreement, (g) reasonable costs and expenses of third party claims or any other suit paid or incurred by Lender in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents or Lender’s relationship with Borrower or any Subsidiary of Borrower, (h) subject to clause (j) below, Lender’s reasonable costs and expenses (including attorneys fees) incurred in advising, structuring, drafting, reviewing or amending the Loan Documents, (i) Lender’s reasonable costs and expenses (including attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning Borrower or any Subsidiary of Borrower or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether suit is brought; provided , however , that all costs and expenses incurred by Lender in favor of PricewaterhouseCoopers with respect to the structuring of the Loan shall be borne by Lender; provided , further , that Lender Expenses shall not include (x) any costs or expenses incurred to comply with any tax treaty or other law (except as expressly provided in clause (j) above), or any withholding or other Taxes related to any of the Obligations, or (y) any other costs, expenses, fees or charges to the extent the same are expressly required to be paid by Lender under any of the Loan Documents.
“ Lender-Related Person ” means Lender, together with Lender’s Affiliates, officers, directors, employees, attorneys, and agents.
“ Lender’s Account ” means the account of Lender identified on Schedule 1 , or such other account designated in writing by Lender to Borrower.
“ Lien ” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or other), pledge, lease, easement, restriction, covenant, charge, security interest or other encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement.
“ Loan Documents ” means this Agreement, the Warrant, any promissory note or notes executed by Borrower in connection with this Agreement and payable to Lender, and any other agreement entered into previously, now or in the future, by Borrower, any Guarantor and/or Lender in connection with this Agreement, in each case, as such instruments may be amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of,
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extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Loan Parties ” means Borrower and Guarantors.
“ Loan ” means the loan made by Lender to Borrower pursuant to clause (a) of Section 2.1 of the Original Agreement, as amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Material Adverse Effect ” means any material adverse effect on (a) the business, assets, condition (financial or otherwise), or results of operations of Borrower and its Subsidiaries, taken as a whole, but excluding any change to the extent relating to or arising from any (i) changes in laws or changes in the enforcement thereof after the date hereof that do not disproportionally impact Borrower and its Subsidiaries relative to other participants in the Business, (ii) changes in general economic conditions that do not disproportionally impact Borrower and its Subsidiaries relative to other participants in the Business or (iii) changes generally affecting the industries in which the Business competes that do not disproportionally impact Borrower and its Subsidiaries relative to other participants in the Business, or (b) the ability of the Loan Parties to perform their respective obligations under this Agreement or any other Loan Document in a timely and complete manner or to consummate the transactions contemplated by this Agreement without material delay. In determining whether there has been a Material Adverse Effect, any event, circumstance, change or effect shall be considered both individually and together with all other events, circumstances, changes or effects, and any event, circumstance, change or effect that reasonably could be expected to result in a Material Adverse Effect (individually or together with one or more other events, circumstances, changes or effects) shall be considered a Material Adverse Effect.
“ Maturity Date ” means August 1, 2013.
“ Member of the 3i Group ” means any Person included within the 3i Group, in its individual capacity.
“ Net Available Proceeds ” means, with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash Equivalents, net of:
(a) brokerage commissions and other fees and expenses (including fees, discounts and expenses of legal counsel, accountants and investment banks, consultants and placement agents) of such Asset Sale;
(b) provisions for taxes payable as a result of such Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements);
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(c) amounts required to be paid to any Person (other than Borrower or any Restricted Subsidiary and other than under a Credit Facility) owning a beneficial interest in the assets subject to the Asset Sale or having a Lien thereon;
(d) payments of unassumed liabilities (not constituting Indebtedness) relating to the assets sold at the time of, or within 30 days after the date of, such Asset Sale; and
(e) appropriate amounts to be provided by Borrower or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any adjustment in the sale price of such asset or assets or liabilities associated with such Asset Sale and retained by Borrower or any Restricted Subsidiary, as the case may be, after such Asset Sale, including pensions and other postemployment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as reflected in an Officers’ Certificate delivered to Lender; provided , however , that any amounts remaining after adjustments, revaluations or liquidations of such reserves shall constitute Net Available Proceeds.
“ Net Proceeds Excess ” has the meaning set forth in clause (e) of Section 6.8 .
“ Net Proceeds Offer ” has the meaning set forth in clause (d) of Section 6.8 .
“ Net Proceeds Prepayment ” has the meaning set forth in clause (d) of Section 6.8 .
“ Non-Recourse Debt ” means Indebtedness of an Unrestricted Subsidiary:
(a) as to which neither Borrower nor any Restricted Subsidiary (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (ii) is directly or indirectly liable as a guarantor or otherwise, or (iii) constitutes the lender;
(b) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Revolving Credit Facility or Notes) of Borrower or any Restricted Subsidiary to declare a default on the other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and
(c) as to which Lender has been notified in writing that it will not have any recourse to the Equity Interests or assets of Borrower or any Restricted Subsidiary.
“ Notes ” has the meaning specified therefor in the definition of “Indenture.”
“ Obligations ” means the Loan and all debts, principal, interest (including any interest that, but for the commencement of an Insolvency Proceeding, would have accrued), premiums, liabilities, obligations (including indemnification obligations), fees, charges, costs (including any fees or expenses that, but for the commencement of an Insolvency Proceeding, would have accrued), guaranties, covenants, and duties of any kind and description owing by Borrower to Lender pursuant to or evidenced by the Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all Lender Expenses that Borrower is required to pay or reimburse by the Loan Documents, by law, or otherwise. Any reference in this Agreement or in the Loan Documents to the Obligations shall
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include all extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.
“ Offering Memorandum ” means the offering memorandum, dated on or about the date hereof, relating to the offering of the Notes.
“ Officer ” means any of the following of Borrower: the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary.
“ Officers’ Certificate ” means a certificate signed on behalf of a Person by two Officers of such Person.
“ Opinion of Counsel ” means a written opinion reasonably satisfactory in form and substance to Lender from legal counsel, which counsel is reasonably acceptable to Lender, covering matters in relation to any event in connection with such opinion is required to be delivered under the Loan Documents.
“ Pari Passu Indebtedness ” means any Indebtedness of Borrower or any Guarantor that ranks pari passu in right of payment with the Loan or the Guaranty, as applicable.
“ Pari Passu Indebtedness Price ” has the meaning set forth in Section 6.8 .
“ Participant ” has the meaning set forth in clause (e) of Section 14.1 .
“ Payment Amount ” has the meaning set forth in Section 6.8 .
“ Permitted Business ” means the business engaged in by Borrower and its Subsidiaries on the Effective Date and businesses that are reasonably related thereto or are reasonable extensions thereof.
“ Permitted Holder ” means each of: (a) Jack Bendheim; (b) each of his spouse, siblings, ancestors, descendants (whether by blood, marriage or adoption, and including stepchildren) and the spouses, siblings, ancestors and descendants thereof (whether by blood, marriage or adoption, and including stepchildren) of such natural persons, the beneficiaries, estates and legal representatives of any of the foregoing, the trustee of any bona fide trust of which any of the foregoing, individually or in the aggregate, are the majority in interest beneficiaries or grantors, and any corporation, partnership, limited liability company or other Person in which any of the foregoing, individually or in the aggregate, own or control a majority in interest; (c) all Affiliates controlled by the individual named in clause (a) above; and (d) any Member of the 3i Group or direct or indirect transferee of Voting Stock held by any Member of the 3i Group.
“ Permitted Indebtedness ” has the meaning set forth in Section 6.5 .
“ Permitted Investment ” means (each of which shall be given independent effect in whole or in part):
(a) (i) Investments by Borrower or any Restricted Subsidiary (x) in any Guarantor or (y) in or for the purchase of any Person that will become immediately after such Investment a Guarantor or that will merge or consolidate into or is liquidated into, Borrower or any Guarantor and (ii) Investments by any Restricted Subsidiary that is not a Guarantor in or for the purchase of any other Restricted Subsidiary;
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(b) Investments in Borrower by any Restricted Subsidiary;
(c) loans and advances to directors, employees and officers of Borrower and the Restricted Subsidiaries for bona fide business purposes and to purchase Equity Interests of Borrower not in excess of $5,000,000 at any one time outstanding;
(d) Hedging Obligations entered into for bona fide hedging purposes of Borrower or any Restricted Subsidiary not for the purpose of speculation;
(e) cash and Cash Equivalents;
(f) accounts and notes receivables owing to Borrower or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided , however , that such trade terms may include such concessionary trade terms as Borrower or any such Restricted Subsidiary deems reasonable under the circumstances;
(g) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or any exchange of such investment with Borrower thereof or taken in settlement of or other resolution of claims or disputes;
(h) (i) Investments received in connection with an Asset Sale that was made in compliance with Section 6.8 and (ii) Investments in securities or other assets not constituting Cash Equivalents received in connection with any other disposition of assets not constituting an Asset Sale; provided that in the case of this clause (ii), the total consideration received in connection with any such disposition of assets shall be at least equal to the Fair Market Value of the assets being disposed;
(i) lease, utility and other similar deposits in the ordinary course of business;
(j) Asset Acquisitions (i) consummated by Borrower or any Restricted Subsidiary or (ii) constituting or effected through Investments by Borrower or any Restricted Subsidiary in or for the purchase of any Foreign Subsidiary or any Person or assets that will, at the time of or immediately after such Investment, become a Foreign Subsidiary or be owned by a Foreign Subsidiary; provided that, in the case of this clause (ii), after giving effect to such Investment (and any incurrence or repayment of Indebtedness in connection therewith), Borrower would be able to incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception;
(k) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to Borrower or any Restricted Subsidiary or in satisfaction of judgments;
(1) Investments made after the Effective Date in any Foreign Subsidiary by Borrower or any Guarantor to the extent the aggregate amount of all such Investments made pursuant to this clause (1) at any one time outstanding does not, after giving effect to the Investment, exceed 10% of Consolidated Tangible Assets at such time (with each Investment being valued as of the date made and without regard to subsequent changes in value);
(m) other Investments made after the Effective Date in an aggregate amount not to exceed $15,000,000 at any one time outstanding (with each Investment being valued as of the
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date made and without regard to subsequent changes in value); provided that no Investment made in reliance on this clause (m) shall be made in any Person that is the direct or indirect holder of a majority of the outstanding Equity Interests of Borrower;
(n) Investments of Borrower and the Restricted Subsidiaries to the extent outstanding on the Effective Date;
(o) Investments in any Person formed for the purpose of funding, conducting and managing investigation and remedial responses and funding and managing other amounts in connection with the remediation of the properties owned or formerly owned on the Effective Date by Borrower or a Restricted Subsidiary or property adjacent thereto; provided that each such initial Investment with respect to each property and each Investment with respect to each property aggregating on a cumulative basis since the Effective Date $1,000,000 or an integral multiple thereof is set forth in an Officers’ Certificate signed by Borrower’s Chief Financial Officer and another Officer which states (a) the cumulative amount of each such Investment after the Effective Date, and (b) that such amounts otherwise would be payable by Borrower or a Restricted Subsidiary and would be permitted to be incurred directly, based on the reasonable good faith beliefs of the Officers executing such Officers’ Certificate at the time of such execution;
(p) Investments made after the Effective Date consisting of purchases or other acquisitions or the contribution of inventory, supplies, material or equipment or the licensing of intellectual property pursuant to joint marketing, manufacturing or development arrangements with other Persons in an aggregate amount not to exceed $10,000,000 at any one time outstanding (with each Investment being valued as of the date made and without regard to subsequent changes in value);
(q) the conversion or contribution of Indebtedness or other obligations from Restricted Subsidiaries, existing as of the Effective Date, to an Equity Interest in the obligor; and
(r) non-cash Investments made in connection with the reorganization of any or all of Borrower’s Israeli Subsidiaries, which may include without limitation the transfer of ownership of one or more of Borrower’s existing Israeli Restricted Subsidiaries or all or substantially all of such entity’s assets to one or more of Borrower’s other Restricted Subsidiaries, by way of merger, consolidation or reorganization or by way of sale, lease, transfer, conveyance, disposition, assignment, or otherwise in one transaction or a series of related transactions.
The amount of Investments outstanding at any time pursuant to clause (1), (m) or (p) above shall be deemed to be reduced:
(i) | upon the disposition or repayment of or return on any Investment made pursuant to clause (l), (m) or (p) above, as applicable, by an amount equal to the return of capital with respect to such Investment to Borrower or any Restricted Subsidiary (to the extent not included in the computation of Consolidated Net Income); |
(ii) | upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, by an amount equal to the lesser of (x) the Fair Market Value of Borrower’s proportionate interest in such Subsidiary immediately following such Redesignation, and (y) the aggregate amount of Investments in such Subsidiary that increased (and did not previously decrease) the amount of Investments outstanding pursuant to clause (l), (m) or (p) above, as applicable; and |
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(iii) | the amount of any Net Proceeds Excess. |
“ Permitted Liens ” means the following types of Liens:
(a) Liens for taxes, assessments or governmental charges or claims either (i) not delinquent or (ii) contested in good faith by appropriate proceedings and as to which Borrower or the Restricted Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;
(b) Liens of landlords, carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof and rights to offset and set-off;
(c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory or regulatory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);
(d) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(e) judgment Liens not giving rise to an Event of Default so long as such Liens are adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which the proceedings may be initiated has not expired;
(f) easements, rights-of-way, zoning restrictions, title irregularities and other similar charges, restrictions or encumbrances in respect of real property which do not, in the aggregate, impair in any material respect the ordinary conduct of the business of Borrower and the Restricted Subsidiaries taken as a whole;
(g) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other assets relating to such letters of credit and products and proceeds thereof;
(h) Liens encumbering deposits made to secure obligations arising from contractual or warranty requirements of Borrower or any Restricted Subsidiary, including rights of offset and set-off;
(i) lenders’ Liens, rights of set-off and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more of accounts maintained by Borrower or any Restricted Subsidiary, in each case granted in the ordinary course of business in favor of the lender or lenders with which such accounts are maintained, securing amounts owing to such lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;
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(j) leases or subleases, and licenses or sublicenses, granted to others that do not materially interfere with the ordinary course of business of Borrower or any Restricted Subsidiary;
(k) Liens arising from filing Uniform Commercial Code financing statements regarding leases;
(l) Liens securing all of the Notes and Liens securing any guarantee given under or with respect to the Indenture;
(m) Liens securing Hedging Obligations entered into for bona fide hedging purposes of Borrower or any Restricted Subsidiary not for the purpose of speculation;
(n) Liens existing on the Effective Date securing Indebtedness outstanding on the Effective Date;
(o) Liens in favor of Borrower or a Guarantor;
(p) Liens securing Indebtedness under the Revolving Credit Facility incurred pursuant to clause (a) of Section 6.5 ;
(q) Liens securing Purchase Money Indebtedness and Capitalized Lease Obligations; provided that such Liens shall not extend to any asset other than the specified asset being financed and additions and improvements thereon;
(r) Liens securing Acquired Indebtedness permitted to be incurred under this Agreement; provided that the Liens do not extend to assets not subject to such Lien at the time of acquisition (other than improvements thereon and substitutions and replacements thereto) and are no more favorable to the lienholders than those securing such Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by Borrower or a Restricted Subsidiary;
(s) Liens on assets of a Person existing at the time such Person is acquired or merged with or into or consolidated with Borrower or any such Restricted Subsidiary (and not created in anticipation or contemplation thereof);
(t) Liens on assets of Foreign Subsidiaries securing Indebtedness of Foreign Subsidiaries;
(u) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (l), (n), (p), (q), (r) and (s); provided that in the case of Liens securing Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (n), (q), (r) and (s), such Liens do not extend to any additional assets (other than improvements thereon and replacements thereof);
(v) 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;
(w) Liens securing Indebtedness incurred pursuant to clause (m) of Section 6.5 ; and
(x) Liens arising in connection with the placement by Borrower or any Restricted Subsidiary of a reasonable amount of cash (as determined in good faith by Borrower’s Board of
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Directors) in escrow against any obligations permitted pursuant to clause (k) of Section 6.5 (other than with respect to obligations incurred or assumed in connection with the acquisition, disposition, issuance or redemption of Equity Interests of Borrower).
“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.
“ Plan of Liquidation ” with respect to any Person, means a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise): (a) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety; and (b) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the remaining assets of such Person to holders of Equity Interests of such Person.
“ Preferred Stock ” means, with respect to any Person, any and all preferred or preference stock or other similar equity interests (however designated) of such Person whether now outstanding or issued after the Effective Date.
“ Property ” has the meaning set forth in Section 5.17 .
“ Public Equity Offering ” means an underwritten public offering of Qualified Equity Interests of Borrower generating gross proceeds of at least $50,000,000 in the aggregate since the Effective Date, pursuant to an effective registration statement filed under the Securities Act or pursuant to a listing on or admission to a recognized exchange or market outside the United States.
“ Purchase Money Indebtedness ” means Indebtedness, including Capitalized Lease Obligations, of Borrower or any Restricted Subsidiary incurred for the purpose of financing all or any part of the purchase price of property, plant or equipment purchased, constructed or improved at any time after the Effective Date and used in the business of Borrower or any Restricted Subsidiary or the cost of installation, construction or improvement thereof and fees and other obligations incurred in connection therewith, as amended or otherwise restructured (other than pursuant to a refinancing); provided , however , that (a) the amount of such Indebtedness shall not exceed such purchase price or cost and (b) such Indebtedness shall be incurred within 90 days after such acquisition of such asset by Borrower or such Restricted Subsidiary or such installation, construction or improvement.
“ Qualified Equity Interests ” of any Person means Equity Interests of such Person other than Disqualified Equity Interests; provided that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed, directly or indirectly, using funds (a) borrowed from such Person or any Subsidiary of such Person until and to the extent such borrowing is repaid or (b) contributed, extended, guaranteed or advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect of any employee stock ownership or benefit plan). Unless otherwise specified, Qualified Equity Interests refer to Qualified Equity Interests of Borrower.
“ redeem ” means to redeem, repurchase, purchase, defease (including a covenant defeasance), retire, discharge or otherwise acquire or retire for value; and “ redemption ” shall have a correlative meaning.
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“ Record ” means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.
“ Refinancing Indebtedness ” means Indebtedness of Borrower or a Restricted Subsidiary incurred in exchange for, or the proceeds of which are used to redeem or refinance in whole or in part, any Indebtedness of Borrower or any Restricted Subsidiary (the “ Refinanced Indebtedness ”); provided that:
(a) the principal amount (and accreted value, in the case of Indebtedness issued at a discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted value, as the case may be) of the Refinanced Indebtedness plus the amount of accrued and unpaid interest on the Refinanced Indebtedness, any reasonable premium paid to the holders of the Refinanced Indebtedness and reasonable expenses incurred or to be paid in connection with the incurrence of the Refinancing Indebtedness;
(b) the obligor of Refinancing Indebtedness does not include any Person (other than Borrower or any Guarantor) that is not an obligor of the Refinanced Indebtedness;
(c) if the Refinanced Indebtedness was subordinated in right of payment to the Loan or the Guaranty, as the case may be, then such Refinancing Indebtedness, by its terms, is subordinate in right of payment to the Loan or the Guaranty, as the case may be, at least to the same extent as the Refinanced Indebtedness;
(d) the Refinancing Indebtedness has a final stated maturity either (i) no earlier than the Refinanced Indebtedness being repaid or amended or (ii) 181 days after the maturity date of the Notes;
(e) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the maturity date of the Notes has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is scheduled to mature on or prior to the maturity date of the Notes; and
(f) the proceeds of the Refinancing Indebtedness shall be used substantially concurrently with the incurrence thereof to redeem or refinance the Refinanced Indebtedness, unless the Refinanced Indebtedness is not then due and is not redeemable or prepayable at the option of the obligor thereof or is redeemable or prepayable only with notice, in which case such proceeds shall be held in a segregated account of the obligor of the Refinanced Indebtedness until the Refinanced Indebtedness becomes due or redeemable or prepayable or such notice period lapses and then shall be used to redeem or refinance the Refinanced Indebtedness; provided that in any event the Refinanced Indebtedness shall be redeemed or refinanced within one year of the incurrence of the Refinancing Indebtedness.
“ Release ” means that certain Release, dated as of the date hereof, among Lender, Borrower and the Original Guarantors.
“ Restricted Payment ” means any of the following:
(a) the declaration or payment of any dividend or any other distribution on Equity Interests of Borrower or any Restricted Subsidiary or any payment made to the direct or indirect holders (in their capacities as such) of Equity Interests of Borrower or any Restricted Subsidiary, including, without limitation, any payment in connection with any merger or consolidation
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involving Borrower but excluding (i) dividends or distributions payable solely in Qualified Equity Interests or through accretion or accumulation of such dividends on such Equity Interests and (ii) in the case of Restricted Subsidiaries, dividends or distributions payable to Borrower or to a Restricted Subsidiary and pro rata dividends or distributions payable to minority stockholders of any Restricted Subsidiary;
(b) the redemption of any Equity Interests of Borrower or any Restricted Subsidiary, including, without limitation, any payment in connection with any merger or consolidation involving Borrower but excluding any such Equity Interests held by Borrower or any Restricted Subsidiary;
(c) any Investment other than a Permitted Investment; or
(d) any payment or redemption prior to the scheduled maturity or prior to any scheduled repayment of principal or sinking fund payment, as the case may be, in respect of Subordinated Indebtedness (other than any Subordinated Indebtedness owed to and held by Borrower or any Restricted Subsidiary).
“ Restricted Payments Basket ” has the meaning set forth in clause (c) of Section 6.7 .
“ Restricted Subsidiary ” means any Subsidiary of Borrower other than an Unrestricted Subsidiary.
“ Revolving Credit Facility ” means the Amended and Restated Loan Agreement, as amended, among Borrower, Borrower’s Subsidiaries that are signatories thereto, the lenders from time to time party thereto, and agents thereunder, together with any notes, letters of credit, guarantees, collateral and security documents, instruments and other agreements executed, issued or arranged in connection with such loan agreement (including Hedging Obligations and Bank Product Obligations incurred in connection therewith), in each case, as such instruments may be amended, refinanced, re-funded, replaced or otherwise restructured, in whole or in part from time to time (including extending the maturity of, increasing the amount of available borrowings under, extending the purpose to include acquisition, working capital and other facilities of, changing the conditions and basis of borrowing of, combining the seniority of, changing the covenants and other provisions of, and adding Subsidiaries as additional borrowers or guarantors, or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether with the same or any other agent, lender or group of lenders).
“ Sale and Leaseback Transactions ” means, with respect to any Person, an arrangement with any bank, insurance company or other lender or investor or to which such lender or investor is a party, providing for the leasing by such Person of any asset of such Person which has been or is being sold or transferred by such Person to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the security of such asset.
“ SEC ” means the United States Securities and Exchange Commission and any successor thereto.
“ Secretary’s Certificate ” means a certificate signed by the Secretary of Borrower.
“ Securities Act ” means the U.S. Securities Act of 1933.
“ Shareholders Agreement ” means the Stockholders Agreement dated March 12, 2008 by and between Jack C. Bendheim, BFI Co., LLC, Mayflower L.P. (as successor to 3i Quoted Private Equity plc) and Borrower, as amended and in effect on the Effective Date, and as thereafter amended.
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“ Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Regulation S-X promulgated pursuant to the Securities Act as such Regulation is in effect on the Effective Date.
“ Solvent ” means, with respect to any Person on a particular date, that, at fair valuations, the sum of such Person’s assets is greater than all of such Person’s debts.
“ Subordinated Indebtedness ” means Indebtedness of Borrower or any Restricted Subsidiary that is expressly subordinated in right of payment to the Loan or the Guaranty, respectively.
“ Subsidiary ” means, with respect to any Person:
(a) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person (or a combination thereof); and
(b) any partnership (i) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (ii) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).
Unless otherwise specified, “Subsidiary” refers to a Subsidiary of Borrower.
“ Tax ” means (i) any tax, governmental fee or other like assessment or charge of any kind whatsoever (including, but not limited to, withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any Governmental Authority responsible for the imposition of any such tax (domestic or foreign), and any liability for any of the foregoing as transferee or successor, (ii) in the case of Borrower or any of its Subsidiaries, liability for the payment of any amount of the type described in clause (i) as a result of being or having been before the Closing Date a member of an affiliated, consolidated, combined or unitary group, or a party to any agreement or arrangement, as a result of which the liability of Borrower or any of its Subsidiaries to a Governmental Authority is determined or taken into account with reference to the activities or assets of any other Person and (iii) liability of Borrower or any of its Subsidiaries for the payment of any amount as a result of being party to any Tax Sharing Agreement or with respect to the payment of any amount imposed on any person of the type described in (i) or (ii) as a result of any existing express or implied agreement or arrangement (including, but not limited to, a tax indemnification agreement or arrangement).
“ Tax Sharing Agreements ” means all existing agreements or arrangements (whether or not written) binding Borrower or any of its Subsidiaries that provide for the allocation, apportionment, sharing or assignment of any Tax liability or benefit, or the transfer or assignment of income, revenues, receipts, or gains for the purpose of determining any person’s Tax liability (other than limited liability operating and partnership agreements and any indemnification agreement or arrangement pertaining to the sale or lease of assets or subsidiaries).
“ Transactions ” means (i) the issuance and sale of the Notes, (ii) the redemption or repayment, by tender offer or otherwise, of all of Borrower’s outstanding Senior Notes due 2013 and all of Borrower’s outstanding Senior Subordinated Notes due 2014, (iii) the entering into the Revolving Credit Facility, (iv) the declaration and payment of a dividend on Borrower’s common shares of up to $50,000,000 on or
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reasonably promptly following the Effective Date, (v) the repayment of $1,400,000 in respect of a loan from an Affiliate of BFI Co., LLC, and (vi) the payment of fees and expenses related to the foregoing.
“ UCC ” means the New York Uniform Commercial Code, as in effect from time to time.
“ United States ” means the United States of America.
“ Unrestricted Subsidiary ” means (a) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Borrower in accordance with Section 6.14 and (b) any Subsidiary of an Unrestricted Subsidiary.
“ Voidable Transfer ” has the meaning set forth in Section 18.7 .
“ Voting Stock ” with respect to any Person, means securities of any class of Equity Interests of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock or other relevant equity interest has voting power by reason of any contingency) to vote in the election of members of the Board of Directors of such Person.
“ Warrant ” means the Warrant issued on the Closing Date by Borrower in favor of 3i QPE.
“ Weighted Average Life to Maturity ” when applied to any Indebtedness at any date, means the number of years obtained by dividing (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (b) the then outstanding principal amount of such Indebtedness.
“ Wholly-Owned Restricted Subsidiary ” means a Restricted Subsidiary of which 100% of the Equity Interests (except for directors’ qualifying shares or certain minority interests owned by other Persons solely due to local law requirements that there be more than one stockholder, but which interest is not in excess of what is required for such purpose) are owned directly by Borrower or through one or more Wholly-Owned Restricted Subsidiaries.
1.2 Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with GAAP. When used herein, the term “financial statements” shall include the notes and schedules thereto.
1.3 Construction . Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in the other Loan Documents to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions set forth in this Agreement). Any
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requirement of a writing contained herein or in the other Loan Documents shall be satisfied by the transmission of a Record and any Record transmitted shall constitute a representation and warranty as to the accuracy and completeness of the information contained therein.
1.4 Schedules and Exhibits . All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.
2. Loan and Terms of Payment .
2.1 Loan .
(a) [Intentionally Omitted]
(b) Amounts borrowed pursuant to this Section 2.1 and repaid or prepaid may not be reborrowed.
2.2 Notation; Promissory Notes .
(a) [Intentionally Omitted]
(b) [Intentionally Omitted]
(c) Notation . Lender shall record on its books the principal amount of the Loan owing to Lender from time to time, and such records shall, absent manifest error, conclusively be presumed to be correct and accurate. In addition, Lender is authorized, at Lender’s option, to note the date and amount of each payment or prepayment of principal of the Loan in its books and records, including computer records and/or notation on any grid or attachment to the promissory notes described in clause (d) of this Section.
(d) Promissory Notes . Lender may request that the Loan be evidenced by a promissory note in form and substance reasonably satisfactory to Lender. In such event, Borrower shall prepare, execute and deliver to Lender a promissory note payable to the order of Lender. Thereafter, unless Lender surrenders such note or notes and elects not to have the Loan evidenced thereby, the Loan and interest thereon shall at all times (including after assignment pursuant to Section 14.1 ) be represented by one or more promissory notes in such form payable to the order of the payee named therein.
2.3 Payments .
(a) Payments by Borrower . Except as otherwise expressly provided herein, all payments by Borrower shall be made to Lender’s Account and shall be made in immediately available funds, no later than 3:00 p.m. (London time) on the date specified herein. Any payment received by Lender later than 3:00 p.m. (London time), shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.
(b) Application .
(i) All payments shall be remitted to Lender, and all such payments shall be applied as follows:
A. first , to pay any Lender Expenses then due to Lender under the Loan Documents, until paid in full,
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B. second , to pay any fees then due to Lender under the Loan Documents, until paid in full,
C. third , to pay interest due in respect of the Loan, until paid in full,
D. fourth , to pay the principal of the Loan, until paid in full,
E. fifth , to pay any other Obligations and any other obligations owing under the Loan Documents then due and payable, until paid in full, and
F. sixth , to Borrower (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.
(ii) In each instance, so long as no Event of Default has occurred and is continuing, this Section 2.3(b) shall not be deemed to apply to any payment by Borrower specified by Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of the Loan Documents.
(iii) For purposes of the foregoing, “paid in full” means payment of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.
(iv) In the event of a direct conflict between the priority provisions of this Section 2.3 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that such priority provisions in such documents shall 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 2.3 shall control and govern.
2.4 Rates, Payments, and Calculations .
(a) Interest Rates . Except as provided in clause (b) below, the Loan shall bear interest at the Interest Rate.
(b) Default Rate . Upon the occurrence and during the continuation of an Event of Default (and at the election of Lender), all outstanding Obligations shall bear interest at a per annum rate equal to (i) the Interest Rate plus (ii) the incremental rate, if any, applicable to the Notes upon the occurrence and during the continuation of an event of default thereunder (without regard to whether the holders of the Notes have waived (whether through any amendment, waiver or other written document or by their inaction) their rights to receive such incremental rate).
(c) Payment . Interest shall be due and payable, in arrears, on each Interest Payment Date; provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand or, in the absence of demand, in arrears on the last day of each calendar month, and (ii) in the event of any repayment or prepayment of the Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. All other amounts due and owing under the Loan Documents shall be payable on (x) applicable date, or (y) if no date is specified (A) and no Default or Event of Default has occurred and is continuing at the time such payment is due and owing, within thirty
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(30) days after invoice, or if the last day of such 30-day period is not a Business Day the next following Business Day, or (B) and any Default or Event of Default has occurred and is continuing at any time such payment is due and owing (including during any 30-day period provided for in the prior sub-clause (A)), on demand.
(d) Computation . All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 365 (or 366, for any leap year) day year for the actual number of days elapsed.
(e) Intent to Limit Charges to Maximum Lawful Rate . 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. Borrower and Lender, 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 , however , that, anything contained herein to the contrary notwithstanding, if said 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 as 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.
2.5 Crediting Payments . The receipt of any payment item by Lender shall not be considered a payment on account unless such payment item is a wire transfer of immediately available federal funds made to the Lender’s Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then Borrower shall be deemed not to have made such payment and interest shall be calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Lender only if it is received into the Lender’s Account on a Business Day on or before 3:00 p.m. (London time). If any payment item is received into the Lender’s Account on a non-Business Day or after 3:00 p.m. (London time) on a Business Day, it shall be deemed to have been received by Lender as of the opening of business on the immediately following Business Day.
2.6 [Intentionally Omitted] .
2.7 [Intentionally Omitted] .
2.8 [Intentionally Omitted] .
2.9 Repayment of Loan . Borrower agrees to repay the outstanding principal amount of the Loan on the Maturity Date.
2.10 Prepayment of Loan.
(a) Voluntary Prepayments. Borrower may prepay the Loan in whole or in part together with payment of any Applicable Prepayment Premium, subject to the requirements of paragraph (b) of this Section.
(b) Provisions Applicable to all Prepayments. Borrower shall notify Lender by telephone (confirmed by facsimile or other electronic transmission) of any prepayment hereunder not later than 3:00 p.m. (London time) at least one Business Day prior thereto. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of the Loan to be prepaid and, in the case of a Net Proceeds Prepayment, a reasonably detailed calculation of the amount of such prepayment. Each prepayment of the Loan shall be in a minimum amount of $250,000 or a higher integral multiple of
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$50,000, except as necessary to apply fully the required amount of any Net Proceeds Prepayment, Change of Control Prepayment or Change in U.S. Tax Treaty Prepayment. Prepayments shall be accompanied by (i) any Applicable Prepayment Premium, (ii) accrued interest to the extent required by Section 2.4 and (iii) any costs, fees or other expenses then due and owing under the Loan Documents. Amounts prepaid may not be reborrowed.
2.11 [Intentionally Omitted] .
2.12 Ranking . Borrower hereby confirms on its behalf and on behalf of each other Loan Party that:
(a) the Loan and the Guaranty at all times will rank at least pari passu with the claims of all other senior unsecured and unsubordinated obligations of Borrower and each Guarantor, respectively, other than obligations mandatorily preferred pursuant to Bankruptcy Law; and
(b) the Loan and the Guaranty shall constitute “Senior Debt” for the purpose of, and as defined under, the Indenture.
3. Conditions .
3.1 Conditions . The effectiveness of the amendments to the Original Agreement effected by this Agreement is subject to the fulfillment, to the reasonable satisfaction of Lender, of each of the conditions precedent set forth below:
(a) the Effective Date shall have occurred;
(b) immediately before, as of and immediately following the Effective Date and after giving effect to this Amendment and the Transactions contemplated to occur at or prior to the Effective Date, no Default or Event of Default shall have occurred and be continuing (or will result therefrom);
(c) Lender shall have received a copy, certified as true and correct by an Authorized Person, of an amendment and restatement of that certain Term Loan Agreement dated as of January 29, 2009 by and among Borrower, the guarantors thereto and BFI Co., LLC, in form and substance reasonably satisfactory to Lender;
(d) Lender shall have received a copy, certified as true and correct by an Authorized Person, of a consent given by BFI Co., LLC with respect to this Agreement, in form and substance reasonably satisfactory to Lender;
(e) the representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of the Effective Date (except to the extent that such representations and warranties relate solely to an earlier date);
(f) Borrower shall have paid all expenses incurred by Lender in connection with the execution and delivery of this Agreement, including the fees and expenses of counsel to Lender; and
(g) all other documents and legal matters in connection with the Transactions contemplated to occur at or prior to the Effective Date shall have been delivered, executed or recorded and shall be in form and substance reasonably satisfactory to Lender.
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Borrower shall provide a certificate by an Authorized Person certifying that all conditions precedent set forth above have been fulfilled. Promptly following receipt of such certificate the Lender shall confirm in writing that, in reliance on such certification, all conditions precedent set forth above have been fulfilled to its satisfaction, unless it has reason not to so confirm, in which case Lender shall communicate to the Borrower the reason for its inability to confirm satisfaction of such conditions precedent..
4. [Intentionally Omitted]
5. Representations and Warranties of Borrower .
In order to induce Lender to enter into this Agreement, Borrower represents and warrants to Lender (provided that (a) each of the following representations and warranties shall survive the execution and delivery of this Agreement and (b) each of the following representations and warranties other than Section 5.1(e) shall have been qualified by the matters disclosed in the Offering Memorandum) that:
5.1 Corporate Organization and Authority of Borrower and its Subsidiaries; Non-Contravention; Approvals . (a) Borrower is a corporation validly existing and in good standing under the laws of the State of New York and has all necessary corporate power and authority to execute, deliver and perform each Loan Document to which it is a party and carry on its business as now being conducted and to own, use and lease its assets and properties. Each Guarantor and each of Borrower’s other Subsidiaries is a corporation, limited liability company, limited partnership or other business entity validly existing and in good standing under the laws of the jurisdiction of its formation, and has all necessary entity-level power and authority to execute, deliver and perform each Loan Document to which it is a party and carry on its business as now being conducted and to own, use and lease its assets and properties.
(b) The execution and delivery by each Loan Party of the Loan Documents to which it is party and the consummation of the transactions contemplated thereby do not (i) conflict with or result in a breach of any provision of the constituent documents of such Loan Party; (ii) result in a violation or breach of or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, or result in the termination, modification or cancellation of, or the loss of a benefit under or accelerate the performance required by, or result in the creation of any Lien, the requirement to make any payment or any right of termination, modification, cancellation or acceleration under the terms, conditions or provisions of any contract or other instrument of any kind to which Borrower is now a party or by which such Loan Party, the Business or any of its assets or properties may be bound, in each case, which has not been waived or consented to, with such waiver or consent being disclosed in writing to Lender, or (iii) violate any order, writ, injunction, decree, statute, treaty, rule or regulation applicable to such Loan Party, the Business or any of its assets or properties, other than in the case of clauses (ii) and (iii) above as would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(c) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority is required by or with respect to any Loan Party in connection with its execution, delivery and performance of the Loan Documents to which it is a party or the consummation of the transactions contemplated thereby. Borrower has (i) delivered to Lender complete and correct copies of the certificate of incorporation and by-laws of Borrower and the equivalent constituent documents of each other Loan Party, and (ii) given Lender the opportunity to review the corporate minute books and stock ledgers of Borrower, each as currently in effect.
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(d) This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.
(e) This Agreement constitutes, and each other Loan Document when duly executed and delivered by each Loan Party party thereto will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms.
6. Covenants .
6.1 Reports to Lender. (a) Whether or not Borrower is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as the Loan remains outstanding, Borrower shall have its annual consolidated financial statements audited by a nationally recognized firm of independent registered accountants and its interim consolidated financial statements reviewed by a nationally recognized firm of independent registered accountants in accordance with Statement on Auditing Standards 100 issued by the American Institute of Certified Public Accountants (or any similar replacement standard). In addition, so long as the Loan is outstanding, Borrower shall furnish to Lender:
(i) (x) all annual and quarterly financial information that would be required to be contained in a filing with the SEC on Forms 10-K and 10-Q if Borrower were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; (y) with respect to the annual and quarterly information, a presentation of EBITDA and Adjusted EBITDA of Borrower substantially consistent with the presentation thereof in the Offering Memorandum and derived from such financial information; and (z) with respect to the annual information only, a report on the annual financial statements by Borrower’s independent registered public accounting firm; and
(ii) all information that would be required to be contained in filings with the SEC on Form 8-K if Borrower were required to file such reports.
All such annual reports shall be furnished within 90 days after the end of the fiscal year to which they relate, and all such quarterly reports shall be furnished within 45 days after the end of the fiscal quarter to which they relate. All such current reports shall be furnished within the time periods specified in the SEC’s rules and regulations for reporting companies under the Exchange Act.
(b) At Borrower’s option, Borrower shall either (i) distribute such information and such reports (as well as the details regarding the conference call described below) electronically to Lender, and/or (ii) make available such information to Lender by posting such information on Intralinks or any comparable password protected online data system which will require a confidentiality acknowledgement, and Borrower shall provide such password thereto to Lender and make such information readily available to Lender, who agrees to treat such information as confidential to the extent required by Section 18.8 . Borrower shall permit Lender to listen to (but, so long as (i) Lender is a Member of the 3i Group and (ii) a Member of the 3i Group or an Affiliate thereof is serving as a member of Borrower’s Board of Directors, not otherwise participate in) all quarterly conference calls for holders of the Notes and securities analysts to discuss such financial information.
(c) If Borrower has Designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, would constitute a Significant Subsidiary of Borrower, then the annual and quarterly information required by Section 6.1(a)(i) shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of
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operations of Borrower and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries of Borrower.
6.2 Waiver of Stay. Extension or Usury Laws . Borrower covenants (to the extent that it may lawfully do so) that it shall not, nor shall it permit any Guarantor to, at any time insist upon, or plead (as a defense or otherwise) or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law which would prohibit or forgive Borrower or any Guarantor from paying all or any portion of the principal of, premium, if any, and/or interest on the Loan as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Agreement or any other Loan Document; and (to the extent that it may lawfully do so) Borrower hereby expressly waives, on its own behalf and for each of the other Loan Parties, all benefit or advantage of such law, and covenants that it will not, nor will it permit any Guarantor to, hinder, delay or impede the execution of any power herein granted to Lender but will suffer and permit the execution of every such power as though no such law had been enacted.
6.3 Compliance Certificate; Notice of Default. (a) Borrower shall deliver to Lender, within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of Borrower and its Subsidiaries during such fiscal year has been made under the supervision of the signing Officers with a view to determining whether Borrower and the Guarantors have kept, observed, performed and fulfilled their obligations under the Loan Documents, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge, Borrower and the Guarantors have kept, observed, performed and fulfilled each and every covenant contained in the Loan Documents and are not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action Borrower or the relevant Guarantor is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest on the Loan is prohibited or if such event has occurred, a description of the event and what action Borrower and the Guarantors are taking or propose to take with respect thereto.
(b) Borrower shall, so long as the Loan remains outstanding, deliver to Lender, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action Borrower and the Guarantors are taking or propose to take with respect thereto.
(c) Borrower’s fiscal year currently ends on June 30. Borrower shall provide written notice to Lender of any change in its fiscal year.
6.4 Taxes . Borrower shall, and shall cause each of its Subsidiaries to, pay prior to delinquency all material taxes, assessments, and governmental levies except as contested in good faith and by appropriate proceedings.
6.5 Limitations on Additional Indebtedness . Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, incur any Indebtedness; provided that Borrower or any Restricted Subsidiary may incur additional Indebtedness if, after giving effect thereto, the Consolidated Interest Coverage Ratio would be at least 2.00 to 1.00 (the “ Coverage Ratio Exception ”).
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Notwithstanding the above, each of the following, which shall be given independent effect in whole or in part, shall be permitted (the “ Permitted Indebtedness ”):
(a) Indebtedness of Borrower and any Guarantor under this Agreement, the Revolving Credit Facility and any other Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $100,000,000, less, to the extent a permanent repayment and/or commitment reduction is required under a Credit Facility as a result of such application, the aggregate amount of Net Available Proceeds applied to repayments under the Credit Facilities in accordance with Section 6.8 and (y) the sum of (i) 85% of the book value of the accounts receivable of Borrower and the Restricted Subsidiaries plus (ii) 65% of the book value of inventory of Borrower and the Restricted Subsidiaries, in each case, calculated on a consolidated basis and in accordance with GAAP;
(b) the Notes and the guarantees in respect thereof;
(c) Indebtedness of Borrower and the Restricted Subsidiaries to the extent outstanding on the Effective Date, other than Indebtedness referred to in clause (a), (b), or (e));
(d) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of Borrower or any Restricted Subsidiary not for the purpose of speculation; provided that in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be incurred by this Section 6.5 , and (b) the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Obligations relate;
(e) Indebtedness of Borrower owed to a Restricted Subsidiary and Indebtedness of any Restricted Subsidiary owed to Borrower or any other Restricted Subsidiary; provided , however , that upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or such Indebtedness being owed to any Person other than Borrower or a Restricted Subsidiary, Borrower or such Restricted Subsidiary, as applicable, shall be deemed to have incurred Indebtedness not permitted by this clause (e);
(f) (i) Indebtedness in respect of bid, performance, completion, guarantee, surety and similar bonds and assurances issued for the account of Borrower or any Restricted Subsidiary in the ordinary course of business, including guarantees or obligations of Borrower or any Restricted Subsidiary with respect to letters of credit supporting such bid, performance, completion, guarantee or surety obligations (in each case other than for an obligation for money borrowed); and (ii) Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business in respect of (x) workers’ compensation claims or self-insurance, (y) other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance or (z) for regulatory or insurance purposes;
(g) Purchase Money Indebtedness incurred by Borrower or any Restricted Subsidiary, Refinancing Indebtedness thereof and any subsequent Refinancing Indebtedness thereof, in an aggregate amount not to exceed at any time outstanding $10,000,000;
(h) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided , however , that such Indebtedness is extinguished within five Business Days of Borrower or a Restricted Subsidiary, as the case may be, being notified of such overdraft;
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(i) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(j) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to the Coverage Ratio Exception or clause (b) or (c) above or this clause (j);
(k) indemnification, adjustment of purchase price, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets of Borrower or any Restricted Subsidiary or the acquisition, disposition, issuance or redemption of Equity Interests of Borrower or a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing or in contemplation of any such acquisition; provided that (i) any amount of such obligations included (or that would be required to be included) on the face of the balance sheet of Borrower or any Restricted Subsidiary at the time of closing of such acquisition, disposition, issuance or redemption shall not be permitted under this clause (k) and (ii) in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this clause (k) shall at no time exceed the gross proceeds or value of the consideration actually received by Borrower and the Restricted Subsidiaries in connection with such disposition;
(l) Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed $20,000,000 at any time outstanding;
(m) Indebtedness of Borrower or any Restricted Subsidiary in an aggregate amount not to exceed $15,000,000 at any time outstanding; and
(n) Bank Products Obligations incurred in the ordinary course of business.
For purposes of determining compliance with this Section 6.5 , in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (a) through (m) above or is entitled to be incurred pursuant to the Coverage Ratio Exception, Borrower shall, in its sole discretion, classify such item of Indebtedness and may divide and classify such Indebtedness in more than one of the types of Indebtedness described, except that Indebtedness incurred under the Credit Facilities on the Effective Date shall be deemed to have been incurred under clause (a) above, and may later reclassify any item of Indebtedness described in clauses (a) through (n) above (provided that at the time of reclassification it meets the criteria in such category or categories). In addition, for purposes of determining any particular amount of Indebtedness under this Section 6.5 , guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included so long as incurred by a Person that could have incurred such Indebtedness.
6.6 Limitations on Layering Indebtedness . Borrower shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness of Borrower or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate in right of payment to the Loan or the Guaranty, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated in right of payment to such other Indebtedness of Borrower or of such Guarantor, as the case may be.
For purposes of the foregoing, no Indebtedness shall be deemed to be subordinated in right of payment to any other Indebtedness of Borrower or any Guarantor solely by virtue of being unsecured or
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secured by a junior priority lien or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in the collateral held by them.
6.7 Limitations on Restricted Payments . Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment if at the time of such Restricted Payment:
(a) a Default shall have occurred and be continuing or shall occur as a consequence thereof;
(b) none of Borrower nor any Restricted Subsidiary can incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception; or
(c) the amount of such Restricted Payment, when added to the aggregate amount of all other Restricted Payments made after the Effective Date (other than Restricted Payments made pursuant to clauses (ii), (iii), (iv), (v), (vi), (vii), (viii) or (x) of paragraph (d) of this Section 6.7 ), exceeds the sum (the “ Restricted Payments Basket ”) of (without duplication):
(i) 50% of Consolidated Net Income for the period (taken as one accounting period) commencing on the first day of the fiscal quarter that includes the Effective Date to and including the last day of the fiscal quarter ended immediately prior to the date of such calculation for which consolidated financial statements are available (or, if such Consolidated Net Income shall be a deficit, minus 100% of such aggregate deficit), plus
(ii) 100% of the aggregate net cash proceeds received by Borrower either (x) as contributions to the common equity of Borrower after the Effective Date or (y) from the issuance and sale of Qualified Equity Interests after the Effective Date, other than (A) any such proceeds which are used to redeem Notes in accordance with the terms of the Indenture or (B) any such proceeds or assets received from a Subsidiary, plus
(iii) the aggregate amount by which Indebtedness incurred by Borrower or any Restricted Subsidiary subsequent to the Effective Date is reduced on Borrower’s balance sheet upon the conversion or exchange into Qualified Equity Interests of Borrower (less the amount of any cash, or the fair value of assets, distributed by Borrower or any Restricted Subsidiary to a Person other then Borrower or a Restricted Subsidiary upon such conversion or exchange), plus
(iv) in the case of the disposition or repayment of or liquidated return on any Investment that was treated as a Restricted Payment made after the Effective Date, an amount (to the extent not included in the computation of Consolidated Net Income) equal to the lesser of (x) 100% of the aggregate amount received by Borrower or any Restricted Subsidiary in cash or other property (valued at the Fair Market Value thereof) as the return of capital with respect to such Investment and (y) the amount of such Investment that was treated as a Restricted Payment, in either case, less the cost of the disposition of such Investment and net of taxes, plus
(v) upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the lesser of (x) the Fair Market Value of Borrower’s proportionate interest in such Subsidiary immediately following such Redesignation, and (y) the aggregate amount of Borrower’s Investments in such Subsidiary to the extent such Investments prior to such Redesignation had reduced the Restricted Payments Basket and were not previously repaid or otherwise reduced.
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(d) The foregoing provisions of this Section 6.7 , which shall be given independent effect in whole or in part, shall not prohibit:
(i) the payment by Borrower or any Restricted Subsidiary of any dividend within 60 days after the date of declaration thereof, if on the date of declaration the payment would have complied with the provisions of this Agreement and the other Loan Documents;
(ii) the redemption or repurchase of any Equity Interests of Borrower or any Restricted Subsidiary in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests;
(iii) the redemption or repurchase of Subordinated Indebtedness of Borrower or any Restricted Subsidiary (x) in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests, (y) in exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted to be incurred under Section 6.5 and the other terms the Loan Documents or (z) upon a Change of Control or in connection with an Asset Sale to the extent required by the agreement governing such Subordinated Indebtedness, but only if Borrower shall have complied with Sections 6.8 and 6.20 , and repaid the Loan in accordance therewith to the extent so required, prior to redeeming such Subordinated Indebtedness;
(iv) repurchases of Equity Interests deemed to occur upon the exercise of stock options, warrants and other similar rights to acquire Equity Interests if the Equity Interests represents a portion of the exercise price thereof;
(v) the repurchase of Equity Interests of Borrower (including options, warrants or other rights to acquire such Equity Interests) in an aggregate amount paid that shall not exceed $10,000,000 since the Effective Date plus the aggregate cash proceeds from any payments on insurance policies in which Borrower or any of its Subsidiaries is the beneficiary with respect to any directors, officers or employees of Borrower and its Subsidiaries which proceeds are used to purchase the Equity Interests of Borrower;
(vi) Restricted Payments in an amount such that the sum of the aggregate amount of Restricted Payments made pursuant to this clause (vi) after the Effective Date does not exceed $15,000,000 at any one time outstanding; or
(vii) payments pursuant to any of the Transactions or made in a manner consistent with the information under the caption “Use of Proceeds” (other than general corporate purposes) in the Offering Memorandum;
(viii) any Investment to the extent the consideration for which consists of, or is made with the proceeds of the substantially concurrent sale of, or equity contribution with respect to, Qualified Equity Interests;
(ix) the declaration and payment of dividends to holders of any class or series of Disqualified Equity Interests of Borrower issued in accordance with Section 6.5 to the extent such dividends are included in the definition of “Consolidated Interest Expense”; or
(x) repurchases by Borrower or any Restricted Subsidiary of (x) Qualified Equity Interests deemed to occur upon the exercise of stock options or warrants if such Qualified Equity Interests represent a portion of the exercise price thereof or (y) Qualified Equity Interests deemed
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to occur upon the withholding of a portion of the Qualified Equity Interests granted or awarded to an employee to pay for the taxes payable by such employee upon such grant or award;
provided that (A) in the case of any Restricted Payment pursuant to clause (iii), (v), (vi), (ix) or (x) of this paragraph (d), no Default shall have occurred and be continuing or occur as a consequence thereof and (B) no issuance and sale of Qualified Equity Interests used to make a payment pursuant to clauses (ii), (iii)(x) or (viii) of this paragraph (d) shall increase the Restricted Payments Basket.
6.8 Limitations on Asset Sales . Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(a) Borrower or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale after giving effect to any indemnification, adjustment of purchase price, earn-out or similar adjustment; and
(b) at least 75% of the total consideration in such Asset Sale consists of cash or Cash Equivalents.
For purposes of clause (b), the following shall be deemed to be cash:
(i) the amount (without duplication) of any Indebtedness (other than Subordinated Indebtedness), accounts payable and accrued expenses of Borrower or such Restricted Subsidiary that is expressly assumed by the transferee in such Asset Sale pursuant to a customary written novation or assumption agreement that releases Borrower or such Restricted Subsidiary from further liability;
(ii) the amount of any obligations received from such transferee that are due and payable or reasonably expected to be converted by Borrower or such Restricted Subsidiary to cash or Cash Equivalents within 180 days following the closing of such Asset Sale;
(iii) any Designated Non-cash Consideration received by Borrower or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of (i) $20,000,000 and (ii) 3.0% of Consolidated Tangible Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value, shall be deemed to be Cash Equivalents for purposes of this provision and for no other purpose; and
(iv) the Fair Market Value of (x) any assets (other than securities) received by Borrower or any Restricted Subsidiary to be used by it in a Permitted Business, (y) Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the acquisition of such Person by Borrower or (z) a combination of (x) and (y).
As used in clause (iii) above, the term “Designated Non-cash Consideration” means the fair market value of non-cash consideration received by Borrower or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, executed by Borrower’s Chief Financial Officer and another Officer, less the amount of Cash Equivalents received in connection with a subsequent sale, redemption or repurchase of or collection or payment on such Designated Non-cash Consideration.
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If at any time any non-cash consideration received by Borrower or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is repaid or converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then the date of such repayment, conversion or disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be applied in accordance with this Section 6.8 .
(c) If Borrower or any Restricted Subsidiary engages in an Asset Sale, Borrower or such Restricted Subsidiary shall, no later than 365 days following the consummation thereof, apply all or any of the Net Available Proceeds therefrom to:
(i) satisfy all mandatory repayment obligations under any other Credit Facility arising by reason of such Asset Sale, and in the case of any such repayment under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(ii) repay any Indebtedness which was secured by the assets sold in such Asset Sale;
(iii) (x) invest all or any part of the Net Available Proceeds thereof in assets (other than securities) to be used by Borrower or any Restricted Subsidiary in the Permitted Business, (y) acquire Qualified Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the consummation of such acquisition or (z) a combination of (x) and (y);
(iv) prepay the Loan (and redeem Pari Passu Indebtedness) in accordance with the procedures described in this Section 6.8 and otherwise in this Agreement; and/or
(v) in the case where the assets that were the subject of such Asset Sale are the assets of a Foreign Subsidiary, to repay Indebtedness of any Foreign Subsidiary.
The amount of Net Available Proceeds not applied or invested as provided in this paragraph will constitute “ Excess Proceeds .”
(d) When the aggregate amount of Excess Proceeds equals or exceeds $10,000,000, Borrower shall make an offer to prepay the Loan and shall prepay or redeem, as the case may be (or make an offer to do so), any Pari Passu Indebtedness of Borrower the provisions of which require Borrower to prepay or redeem such Indebtedness with the proceeds from any Asset Sales (or offer to do so), in an aggregate principal amount of the Loan and such Pari Passu Indebtedness equal to the amount of such Excess Proceeds as follows:
(i) Borrower shall (A) make an offer (a “ Net Proceeds Offer ”) to prepay Lender (a “ Net Proceeds Prepayment ”) in accordance with the procedures set forth in this Agreement, and (B) prepay or redeem (or make an offer to do so) any such other Pari Passu Indebtedness, pro rata in proportion to the respective principal amounts of the then-outstanding Loan and such other Indebtedness required to be prepaid or redeemed, the maximum principal amount of the Loan and Pari Passu Indebtedness that may be prepaid or redeemed out of the amount (the “ Payment Amount ”) of such Excess Proceeds;
(ii) any such Net Proceeds Prepayment shall be made subject to the requirements of this clause (d) and paragraph (b) of Section 2.10 ;
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(iii) the prepayment or redemption price for such Pari Passu Indebtedness (the “ Pari Passu Indebtedness Price ”) shall be as set forth in the related documentation governing such Indebtedness; and
(iv) upon completion of such Net Proceeds Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer was made shall be deemed to be zero.
(e) To the extent that the sum of the amount of any Net Proceeds Prepayment paid to Lender and the aggregate Pari Passu Indebtedness Price paid to the holders of Pari Passu Indebtedness is less than the Payment Amount relating thereto (such shortfall constituting a “ Net Proceeds Excess ”). Borrower may use the Net Proceeds Excess, or a portion thereof, for general corporate purposes, subject to the provisions of the Loan Documents.
(f) Borrower shall conduct any Net Proceeds Offer substantially simultaneously with any similar offer required pursuant to Borrower’s debt securities and shall comply with applicable tender offer rules, including the requirements of Rule 14e-1 under the Exchange Act and any other applicable laws and regulations, in connection with any such offer relating to Borrower’s debt securities and/or any prepayments or redemptions of Pari Passu Indebtedness pursuant to such related prepayment or redemption offers. To the extent that the provisions of any securities laws or regulations conflict with Borrower’s obligations in this Section 6.8 or in respect of such related prepayment or redemption offers, Borrower shall comply with the applicable securities laws and regulations, shall continue to conduct any Net Proceeds Offer substantially simultaneously with such related prepayment or redemption offer and shall not be deemed to have breached its obligations under this Section 6.8 by virtue thereof.
6.9 Limitations on Transactions with Affiliates . (a) Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, in one transaction or a series of related transactions, sell, lease, transfer or otherwise dispose of any of its assets to, or purchase any assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (an “ Affiliate Transaction ”), unless:
(i) such Affiliate Transaction is on terms that are no less favorable to Borrower or the relevant Restricted Subsidiary than those that would reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis by Borrower or that Restricted Subsidiary from a Person that is not an Affiliate of Borrower or that Restricted Subsidiary; and
(ii) Borrower delivers to Lender:
(x) with respect to any Affiliate Transaction involving aggregate value in excess of $2,500,000, an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (a)(i) above and a Secretary’s Certificate which sets forth and authenticates a resolution that has been adopted by a majority of the Independent Directors approving such Affiliate Transaction; and
(y) with respect to any Affiliate Transaction involving aggregate value of $10,000,000 or more, the certificates described in the preceding sub-clause (a)(ii)(x) and a written opinion as to the fairness of such Affiliate Transaction to Borrower or such Restricted Subsidiary from a financial point of view issued by an Independent Financial Advisor to the Board of Directors of Borrower.
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(b) The foregoing restrictions shall not apply to:
(i) transactions between or among (x) Borrower and one or more Restricted Subsidiaries or (y) Restricted Subsidiaries; provided, in each case, that no Affiliate of Borrower (other than another Restricted Subsidiary) owns Equity Interests of any such Restricted Subsidiary;
(ii) director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans and reimbursement or advancement of out-of-pocket expenses, and director’s and officer’s liability insurance) and indemnification arrangements, in each case approved by a majority of the Independent Directors;
(iii) the entering into of a tax sharing agreement, or payments pursuant thereto, between Borrower and/or one or more Subsidiaries, on the one hand, and any other Person with which Borrower or such Subsidiaries are required or permitted to file a consolidated tax return or with which Borrower or such Subsidiaries are part of a consolidated group for tax purposes to be used by such Person to pay taxes, and which payments by Borrower and the Restricted Subsidiaries are not in excess of the tax liabilities that would have been payable by them on a stand-alone basis;
(iv) loans and advances permitted by clause (c) of the definition of “ Permitted Investments ”;
(v) Restricted Payments of the type described in clause (a), (b) or (d) of the definition of “ Restricted Payment ” and which are made in accordance with Section 6.7 ;
(vi) (x) any agreement in effect on the Effective Date and disclosed in the Offering Memorandum, as in effect on the Effective Date or as thereafter amended or replaced in any manner, that, taken as a whole, is not more disadvantageous to Lender or Borrower in any material respect than such agreement as it was in effect on the Closing Date or (y) any transaction pursuant to any agreement referred to in the immediately preceding clause (x);
(vii) any transaction with a joint venture or similar entity which would constitute an Affiliate Transaction solely because Borrower or a Restricted Subsidiary owns an equity interest in or otherwise controls such joint venture or similar entity; provided that no Affiliate of Borrower or any of its Subsidiaries other than Borrower or a Restricted Subsidiary shall have a beneficial interest in such joint venture or similar entity; and
(viii) (x) any transaction with an Affiliate where the only consideration paid by Borrower or any Restricted Subsidiary is Qualified Equity Interests or (y) the issuance or sale of any Qualified Equity Interests.
6.10 Limitations on Liens . Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer to exist any Lien (other than Permitted Liens) of any nature whatsoever against any assets of Borrower or any Restricted Subsidiary (including Equity Interests of a Restricted Subsidiary), whether owned at the Effective Date or thereafter acquired, which Lien secures Indebtedness or trade payables, unless contemporaneously therewith:
(a) in the case of any Lien securing an obligation that ranks pari passu with the Loan or the Guaranty, effective provision is made to secure the Loan or the Guaranty, as the case may be, at least equally and ratably with or prior to such obligation with a Lien on the same collateral, and
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(b) in the case of any Lien securing an obligation that is subordinated in right of payment to the Loan or the Guaranty, effective provision is made to secure the Loan or the Guaranty, as the case may be, with a Lien on the same collateral that is prior to the Lien securing such subordinated obligation,
in each case, for so long as such obligation is secured by such Lien.
6.11 Conduct of Business . Borrower shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than the Permitted Business.
6.12 Additional Guarantees . If, after the Effective Date, (a) Borrower or any Restricted Subsidiary shall acquire or create another Subsidiary (other than a Foreign Subsidiary or a Subsidiary that has been designated an Unrestricted Subsidiary) or desires to cause a Foreign Subsidiary to be a Guarantor or (b) any Unrestricted Subsidiary is Redesignated a Restricted Subsidiary (other than a Foreign Subsidiary), then, in each such case, Borrower shall cause such Restricted Subsidiary to:
(i) execute and deliver to Lender a supplement to the Guaranty or any other guarantee in form and substance satisfactory to Lender, pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Obligations (all such supplements or other guarantees shall be deemed to be part of the “Guaranty” for all purposes of this Agreement); and
(ii) deliver to Lender one or more Opinions of Counsel that such supplement or other guarantee, as the case may be, (x) has been duly authorized, executed and delivered by such Restricted Subsidiary and (y) constitutes a valid and legally binding obligation of such Restricted Subsidiary in accordance with its terms.
6.13 Limitations on Dividends and Other Restrictions Affecting Restricted Subsidiaries . Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(a) pay dividends or make any other distributions on or in respect of its Equity Interests;
(b) make loans or advances or pay any Indebtedness or other obligation owed to Borrower or any other Restricted Subsidiary; or
(c) transfer any of its assets to Borrower or any other Restricted Subsidiary;
in each case, except for:
(i) encumbrances or restrictions existing under or by reason of applicable law, regulation or order;
(ii) encumbrances or restrictions existing under this Agreement or any other Loan Document;
(iii) non-assignment or subletting provisions of any contract or any lease entered into in the ordinary course of business;
(iv) encumbrances or restrictions existing under agreements existing on the Effective Date (including, without limitation, Credit Facilities and the Indenture) as in effect on that date;
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(v) restrictions relating to any Lien permitted under this Agreement or any other Loan Document imposed by the holder of such Lien;
(vi) restrictions imposed under any agreement to sell assets (including capital stock) permitted under this Agreement or any other Loan Document to any Person pending the closing of such sale;
(vii) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired;
(viii) any other agreement governing Indebtedness entered into after the Closing Date that contains encumbrances and restrictions that are not, in the good faith judgment of Borrower’s Board of Directors, materially more restrictive with respect to any Restricted Subsidiary than those in effect on the Closing Date with respect to that Restricted Subsidiary pursuant to agreements in effect on the Closing Date;
(ix) customary provisions in partnership agreements, shareholder agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements entered into in the ordinary course of business that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person;
(x) Purchase Money Indebtedness incurred in compliance with Section 6.5 that impose restrictions of the nature described in clause (c) above on the assets acquired;
(xi) restrictions on cash or other deposits or net worth imposed by suppliers or landlords under contracts entered into in the ordinary course of business;
(xii) encumbrances or restrictions contained in Indebtedness of Foreign Subsidiaries permitted to be incurred under this Agreement or any other Loan Document; provided that any such encumbrances or restrictions are ordinary and customary with respect to the type of Indebtedness being incurred under the relevant circumstances and do not, in the good faith judgment of the Board of Directors of Borrower, materially impair Borrower’s ability to make payment on the Loan when due; and
(xiii) any encumbrances or restrictions imposed by any amendments, restatements, renewals, replacements, re-fundings or refinancings of the contracts, instruments or obligations referred to in clauses (i) through (xii) above or any amendments, restatements, renewals, replacements, re-fundings or refinancings thereof; provided that such amendments, restatements, renewals, replacements, re-fundings or refinancings are, in the good faith judgment of Borrower’s Board of Directors, no more materially restrictive with respect to such encumbrances and restrictions than those prior to such amendment, restatement, renewal, replacement, re-funding or refinancing.
6.14 Limitations on Designation of Unrestricted Subsidiaries . (a) Borrower may designate any Subsidiary (including any newly formed or newly acquired Subsidiary) of Borrower as an “Unrestricted Subsidiary” under this Agreement and the other Loan Documents (a “ Designation ”) only if:
(i) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation; and
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(ii) Borrower would be permitted to make, at the time of such Designation, (x) a Permitted Investment or (y) an Investment pursuant to Section 6.7 , in either case, in an amount (the “ Designation Amount ”) equal to the Fair Market Value of Borrower’s proportionate interest in such Subsidiary on such date.
(b) No Subsidiary shall be Designated as an “ Unrestricted Subsidiary ” unless such Subsidiary:
(i) has no Indebtedness other than Non-Recourse Debt;
(ii) is not party to any agreement, contract, arrangement or understanding with Borrower or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement or understanding are no less favorable to Borrower or the Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates;
(iii) is a Person with respect to which neither Borrower nor any Restricted Subsidiary has any direct or indirect obligation (x) to subscribe for additional Equity Interests or (y) to maintain or preserve the Person’s financial condition or to cause the Person to achieve any specified levels of operating results; and
(iv) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Borrower or any Restricted Subsidiary, except for any guarantee given solely to support the pledge by Borrower or any Restricted Subsidiary of the Equity Interests of such Unrestricted Subsidiary, which guarantee is not recourse to Borrower or any Restricted Subsidiary.
If, at any time, any Unrestricted Subsidiary fails to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement or any other Loan Document and any Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary at such time and, if the Indebtedness is not permitted to be incurred under Section 6.5 or the Lien is not permitted under Section 6.10 , Borrower shall be in default of the applicable covenant.
(c) Borrower may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a “ Redesignation ”) only if:
(i) no Default shall have occurred and be continuing at the time of and after giving effect to such Redesignation; and
(ii) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such Redesignation would, if incurred or made at such time, have been permitted to be incurred or made for all purposes of this Agreement or any other Loan Document.
(d) All Designations and Redesignations must be evidenced by resolutions of the Board of Directors of Borrower, delivered to Lender certifying compliance with the foregoing provisions.
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6.15 Limitations on Sale and Leaseback Transactions . Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale and Leaseback Transaction; provided that Borrower or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:
(a) Borrower or such Restricted Subsidiary could have (i) incurred the Indebtedness attributable to such Sale and Leaseback Transaction pursuant to Section 6.5 and (ii) incurred a Lien to secure such Indebtedness without equally and ratably securing the Loan pursuant to Section 6.10 ;
(b) the gross cash proceeds of such Sale and Leaseback Transaction are at least equal to the Fair Market Value of the asset that is the subject of such Sale and Leaseback Transaction; and
(c) the transfer of assets in such Sale and Leaseback Transaction is permitted by, and Borrower or the applicable Restricted Subsidiary applies the proceeds of such transaction in accordance with, Section 6.8 .
6.16 Maintenance of Properties; Insurance; Compliance with Law .
(a) Borrower shall, and shall cause each of its Restricted Subsidiaries to, at all times cause all properties used or useful in the conduct of their business to be maintained and kept in good condition, repair and working order (reasonable wear and tear excepted) and supplied with all necessary equipment, and shall cause to be made all necessary repairs, renewals, replacements, necessary betterments and necessary improvements thereto.
(b) Borrower shall maintain, and shall cause to be maintained for each of its Restricted Subsidiaries, insurance covering such risks as are usually and customarily insured against by corporations similarly situated in the markets where Borrower and the Restricted Subsidiaries conduct homebuilding operations, in such amounts as shall be customary for corporations similarly situated and with such deductibles and by such methods as shall be customary and reasonably consistent with past practice.
(c) Borrower shall, and shall cause each of its Subsidiaries to, comply with all statutes, laws, ordinances or government rules and regulations to which they are subject, non-compliance with which would materially adversely affect the business, earnings, properties, assets or financial condition of Borrower and its Subsidiaries taken as a whole.
6.17 Payments for Consent . Borrower shall not, and shall not cause or permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes at any time Borrower is seeking a substantially similar consent, waiver or amendment of any of the terms of this Agreement or any other Loan Document, unless consideration is offered to be paid or agreed to be paid to the Lender, in the same time frame set forth in the noteholder solicitation documents relating to such consent, waiver or agreement, in equal amounts per each whole $1,000 in outstanding principal amount under the Loan and such Notes, as applicable; provided, however, that the foregoing provisions of this Section 6.17 shall not prohibit, or require any payment of any consideration to Lender under this Section 6.17 in connection with, payments pursuant to any of the Transactions or made in a manner consistent with the information under the caption “Use of Proceeds” (other than general corporate purposes) in the Offering Memorandum.
6.18 Legal Existence . Subject to Section 6.21 , Borrower shall do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence, and the corporate, partnership or other existence of each Restricted Subsidiary, in accordance with the respective
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organizational documents (as the same may be amended from time to time) of each Restricted Subsidiary and the rights (charter and statutory), licenses and franchises of Borrower and its Restricted Subsidiaries; provided that Borrower shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries if the Board of Directors of Borrower shall determine that the preservation thereof is no longer desirable in the conduct of the business of Borrower and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to Lender.
6.19 Limitations on the Issuance or Sale of Equity Interests of Restricted Subsidiaries . Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, sell or issue any shares of Equity Interests of any Restricted Subsidiary except (a) to Borrower, a Restricted Subsidiary or the minority stockholders of any Restricted Subsidiary, on a pro rata basis, or to Borrower or a Guarantor (or, in the case of a Foreign Subsidiary that issues Equity Interests, to any Restricted Subsidiary), (b) to the extent such shares represent directors’ qualifying shares or shares required by applicable law to be held by a Person other than Borrower or a Wholly-Owned Restricted Subsidiary, or (c) if immediately after giving effect to such sale or issuance, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary, including sales of all of the Equity Interests of a Restricted Subsidiary, in each case in compliance with the provisions of Section 6.8 .
6.20 Change of Control Offer .
(a) Upon the occurrence of a Change of Control, unless Borrower shall have given a notice of prepayment for 100% of the aggregate principal amount of the Loan outstanding, Borrower shall be obligated to make an offer (the “ Change of Control Offer ”) to prepay (a “ Change of Control Prepayment ”) the Loan in full, together with payment of any Applicable Prepayment Premium, subject to the requirements of this Section 6.20 and paragraph (b) of Section 2.10 . The Change of Control Offer shall remain open at least until (a) if Borrower is required under the Indenture to offer to redeem Notes upon the occurrence of such Change of Control, the last day on which any such offer remains open, or (b) otherwise, for at least 20 Business Days and until the close of business on the Change of Control Payment Date. Any such Change of Control Prepayment shall be made on a Business Day (the “ Change of Control Payment Date ”) no later than (a) if Borrower is required under the Indenture to redeem Notes upon the occurrence of such Change of Control, the first day on which Borrower is so required to redeem Notes, or (b) otherwise, 63 days following the occurrence of the Change of Control.
(b) Within 30 days following the date upon which a Change of Control occurs (the “ Change of Control Date ”). Borrower shall send, by first class mail, a notice to Lender, which notice shall govern the terms of the Change of Control Offer. The notice to Lender shall contain all instructions and materials necessary to enable Lender to accept the Change of Control Offer.
(c) Borrower’s obligation to make a Change of Control Offer shall be satisfied if a third party makes the Change of Control Offer in the manner and at the times and otherwise in compliance with the requirements applicable to a Change of Control Offer made by Borrower and makes any Change of Control Prepayment required with respect thereto.
(d) Borrower shall conduct any Change of Control Offer substantially simultaneously with any similar offer required pursuant to Borrower’s debt securities and shall comply with applicable tender offer rules, including the requirements of Rule 14e-1 under the Exchange Act and any other applicable laws and regulations, in connection with any such offer relating to Borrower’s debt securities and/or any prepayments or redemptions of Notes pursuant to such related prepayment or redemption offers. To the extent that the provisions of any securities laws or regulations conflict with Borrower’s obligations under this Section 6.20 or in respect of such related prepayment or redemption offers, Borrower shall comply
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with the applicable securities laws and regulations, shall continue to conduct any Change of Control Offer substantially simultaneously with such related prepayment or redemption offer and shall not be deemed to have breached its obligations under this Section 6.20 by virtue thereof.
6.21 Limitations on Mergers. Consolidations, etc. (a) Borrower shall not, directly or indirectly, in a single transaction or a series of related transactions, (i) consolidate or merge with or into another Person, or sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of the assets of Borrower or Borrower and the Restricted Subsidiaries (taken as a whole) or (ii) adopt a Plan of Liquidation unless, in either case:
(x) either:
(A) Borrower will be the surviving or continuing Person; or
(B) the Person formed by or surviving such consolidation or merger or to which such sale, lease, conveyance or other disposition shall be made (or, in the case of a Plan of Liquidation, any Person to which assets are transferred) (collectively, the “ Successor ”) is a corporation, limited liability company or limited partnership organized and existing under the laws of any State of the United States of America or the District of Columbia, and the Successor expressly assumes, by agreements in form and substance reasonably satisfactory to Lender, all of the obligations of Borrower under this Agreement and the other Loan Documents;
(y) immediately prior to and immediately after giving effect to such transaction and the assumption of the obligations as set forth in clause (x)(B) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, no Default shall have occurred and be continuing; and
(z) immediately after and giving effect to such transaction and the assumption of the obligations set forth in clause (x)(B) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, Borrower or the Successor, as the case may be, could incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception.
(b) For purposes of this Section 6.21 , any Indebtedness of the Successor which was not Indebtedness of Borrower immediately prior to the transaction shall be deemed to have been incurred in connection with such transaction.
(c) Except as provided in the Guaranty, no Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, unless:
(i) either:
(x) such Guarantor will be the surviving or continuing Person; or
(y) the Person formed by or surviving any such consolidation or merger is another Guarantor or assumes, by agreements in form and substance reasonably satisfactory to Lender, all of the obligations of such Guarantor under the Guaranty; and
(ii) immediately after giving effect to such transaction, no Default shall have occurred and be continuing.
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(d) For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or substantially all of the properties and assets of Borrower, will be deemed to be the transfer of all or substantially all of the properties and assets of Borrower.
(e) Upon any consolidation, combination or merger of Borrower or a Guarantor, or any transfer of all or substantially all of the assets of Borrower in accordance with the foregoing, in which Borrower or such Guarantor is not the continuing obligor under the applicable Loan Documents, the surviving entity formed by such consolidation or into which Borrower or such Guarantor is merged or the Person to which the conveyance, lease or transfer is made will succeed to, and be substituted for, and may exercise every right and power of, Borrower or such Guarantor under the applicable Loan Documents, with the same effect as if such surviving entity had been named therein as Borrower or such Guarantor, as the case may be, and, except in the case of a lease, Borrower or such Guarantor, as the case may be, will be released from the obligation to pay the principal of and interest on the Loan or in respect of the Guaranty, as the case may be, and all of Borrower’s or such Guarantor’s other obligations and covenants under this Agreement, the Guaranty and any other applicable Loan Document.
(f) Notwithstanding the foregoing, any Restricted Subsidiary may consolidate with, merge with or into or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to Borrower or another Restricted Subsidiary.
(g) Upon any consolidation or merger, or any transfer of all or substantially all of the assets of Borrower or any Restricted Subsidiary in accordance with the foregoing, the successor entity formed by such consolidation or into which Borrower is merged or to which such transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, Borrower or such Restricted Subsidiary under this Agreement with the same effect as if such successor entity had been named as Borrower or such Restricted Subsidiary herein, and thereafter the predecessor entity shall be relieved of all obligations and covenants under this Agreement.
7. [Intentionally Omitted]
8. Events of Default .
Any one or more of the following events shall constitute an event of default (each, an “ Event of Default ”) under this Agreement:
8.1 Failure by Borrower to pay interest on the Loan when it becomes due and payable and the continuance of any such failure for 30 days;
8.2 Failure by Borrower to pay the principal on the Loan when it becomes due and payable, whether at stated maturity, upon acceleration, upon mandatory prepayment or otherwise;
8.3 Failure by Borrower to comply with Section 6.21 or in respect of its obligation to make a Change of Control Offer;
8.4 Failure by Borrower to comply with any other agreement or covenant in this Agreement and the continuance of any such failure for 60 days after notice of the failure has been given to Borrower by Lender;
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8.5 A default under any mortgage, indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced Indebtedness of Borrower or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the date hereof, which default:
(a) is caused by a failure to pay at final maturity principal on such Indebtedness within the applicable express grace period and any extensions thereof,
(b) results in the acceleration of such Indebtedness prior to its express final maturity, or
(c) results in the commencement of judicial proceedings to foreclose upon, or to exercise remedies under applicable law or applicable security documents to take ownership of, the assets securing such Indebtedness, and
in each case, the principal amount of such Indebtedness, together with any other Indebtedness with respect to which an event described in clause (a), (b) or (c) has occurred and is continuing, aggregates $10,000,000 or more;
8.6 One or more judgments or orders that exceed $10,000,000 in the aggregate (net of amounts covered by insurance or bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against Borrower or any Restricted Subsidiary and such judgment or judgments have not been satisfied, discharged, bonded (by providing insurance, letters of credit or other financial assurance), stayed or stayed pending appeal, annulled or rescinded within 60 days of being entered;
8.7 Borrower or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a Custodian of it or for all or substantially all of its assets, or (d) makes a general assignment for the benefit of its creditors;
8.8 A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against Borrower or any Significant Subsidiary as debtor in an involuntary case, (b) appoints a Custodian of Borrower or any Significant Subsidiary or a Custodian for all or substantially all of the assets of Borrower or any Significant Subsidiary, or (c) orders the liquidation of Borrower or any Significant Subsidiary, and, in any such case, the order or decree remains unstayed and in effect for 60 days; or
8.9 the Guaranty ceases to be in full force and effect (other than in accordance with the terms of the Guaranty and this Agreement) with respect to any Significant Subsidiary, or is declared null and void and unenforceable or found to be invalid with respect to any Significant Subsidiary, or any Guarantor denies its liability under the Guaranty (other than by reason of release of a Guarantor from the Guaranty in accordance with the terms of this Agreement and the Guaranty).
9. Lender’s Rights and Remedies .
9.1 Rights and Remedies . Upon the occurrence, and during the continuation, of an Event of Default, Lender (at its election but without notice of its election and without demand) may do any one or more of the following, all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable;
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(b) Terminate this Agreement and any of the other Loan Documents as to any liability or obligation of Lender, but without affecting the Obligations or the obligations of any Guarantor;
(c) Without notice to Borrower or any other Loan Party (such notice being expressly waived), and without constituting an acceptance of any collateral in full or partial satisfaction of an obligation (within the meaning of the UCC), set off and apply to the Obligations any and all Indebtedness at any time owing to or for the credit or the account of any Loan Party held by Lender; and/or
(d) all other rights and remedies available to Lender at law or in equity or pursuant to any other Loan Documents;
provided , however , that upon the occurrence of any Event of Default described in Section 8.7 or Section 8.8 , in addition to the remedies set forth above, without any notice to Borrower or any other Person or any act by Lender, the Obligations then outstanding, together with all accrued and unpaid interest thereon, and all fees and all other amounts due under this Agreement and the other Loan Documents, shall automatically and immediately become due and payable, without presentment, demand, protest, or notice of any kind, all of which are expressly waived by Borrower.
9.2 Remedies Cumulative . The rights and remedies of Lender under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. Lender shall have all other rights and remedies not inconsistent herewith as provided under the UCC, by law, or in equity. No exercise by Lender of one right or remedy shall be deemed an election, and no waiver by Lender of any Event of Default shall be deemed a continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence by it.
10. [Intentionally Omitted]
11. Waivers; Indemnification .
11.1 Demand; Protest; etc. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by Lender on which Borrower may in any way be liable.
11.2 Indemnification . Borrower shall pay, indemnify, defend, and hold the Lender-Related Persons, and each Participant (each, an “ Indemnified Person ”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, and damages, and all reasonable attorneys fees and disbursements and other costs and expenses actually incurred in connection therewith (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution, delivery, enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of the Loan Parties’ compliance with the terms of the Loan Documents, and (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the Loan (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto (all the foregoing, collectively, the “ Indemnified Liabilities ”). The foregoing to the contrary notwithstanding, Borrower shall have no obligation to any Indemnified Person under this Section 11.2 with respect to (w) any costs or expenses incurred to comply with any tax treaty or other law relating to or affecting payment of Taxes, (x) any withholding or other Taxes related to payment of any of the Obligations (but without limitation of Section 16 ) , (y) any other costs, expenses, fees or charges to the
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extent (i) the same are expressly required to be paid by, or are otherwise expressly allocated as the responsibility of, Lender under any of the Loan Documents or (ii) the responsibility of Borrower to pay or assume any such other cost, expense, fee or charge is expressly limited under any of the Loan Documents, or (z) any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person. This provision shall survive the termination of this Agreement and the repayment of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borrower was required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrower with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
12. Notices .
Unless otherwise provided in this Agreement, all notices or demands by Borrower or any other Loan Party, on the one hand or Lender, on the other hand, to the other relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as Borrower or Lender, as applicable, may designate to each other in accordance herewith), or facsimile to Borrower or Lender, at its address set forth below:
If to Borrower or any other Loan Party:
Phibro Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
U.S.A.
Attn: Chief Financial Officer
Fax No. +1-201-944-5937
Email Address: Richard.Johnson@pahc.com
with copies to:
Phibro Animal Health Corporation
65 Challenger Road
Ridgefield Park, NJ 07660
U.S.A.
Attn: General Counsel
Fax No. +1-201-329-7041
Email Address: Thomas.Dagger@pahc.com
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and:
Golenbock Eiseman Assor Bell & Peskoe LLP
437 Madison Avenue
New York, New York 10022
U.S.A.
Attn: Lawrence M. Bell, Esq.
Fax No. +1-212-754-0330
Email Address: lbell@golenbock.com
If to Lender:
Mayflower L.P.
c/o 3i plc
16 Palace Street
London SW1E 5JD
U.K.
Attn: Simon Holland
Fax No. +44-207-928-0058
Email Address: Simon.Holland@3i.com
with copies to:
Clifford Chance US LLP
31 West 52nd Street
New York, NY 10019
U.S.A.
Attn: Jason Young, Esq.
Fax No. +1-212-878-8375
Email Address: jason.young@cliffordchance.com
Any party may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other parties. All notices or demands sent in accordance with this Section 12 shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail.
13. Choice of Law and Venue; Jury Trial Waiver.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN, STATE OF NEW YORK; PROVIDED , HOWEVER , THAT
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ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH PROPERTY MAY BE FOUND. BORROWER AND LENDER WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b) .
(c) BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
14. Assignments and Participations; Successors .
14.1 Assignments and Participations . (a) Lender may assign and delegate to one or more assignees (each an “ Assignee ”) that are Eligible Transferees all, or any ratable part of all, of the Obligations and the other rights and obligations of Lender hereunder and under the other Loan Documents; provided , however , that Borrower may continue to deal solely and directly with Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Borrower by Lender and the Assignee, and (ii) Lender and its Assignee have delivered to Borrower an Assignment and Acceptance.
(b) From and after the date that Borrower has received an executed Assignment and Acceptance, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto), and such assignment shall effect a novation between Borrower and the Assignee; provided , however , that nothing contained herein shall release Lender from obligations that survive the termination of this Agreement, including Lender’s obligations under Section 16 and Section 18.8 of this Agreement.
(c) By executing and delivering an Assignment and Acceptance, Lender and the Assignee thereunder confirm and agree as follows: (1) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, and (2) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.
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(d) Immediately upon Lender’s receipt of the fully executed Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Loan arising therefrom. The portion of the Loan allocated to the Assignee shall reduce the portion of the Loan allocated to the assigning Lender pro tanto.
(e) Lender may at any time sell to one or more Eligible Transferees (a “ Participant ”) participating interests in its Obligations and the other rights and interests of Lender hereunder and under the other Loan Documents; provided , however , that (i) Lender shall remain a “Lender” for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations and the other rights and interests of Lender hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and Lender’s obligations under this Agreement shall remain unchanged, (ii) Lender shall remain solely responsible for the performance of such obligations, (iii) Borrower shall continue to deal solely and directly with Lender in connection with Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) Lender shall not transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through Lender, or (E) change the amount or due dates of scheduled principal repayments or prepayments or premiums; and (v) all amounts payable by Borrower hereunder (including Covered Taxes) shall be determined as if Lender had not sold such participation; except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement. The rights of any Participant only shall be derivative through Lender and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to Borrower, any other Loan Party or any other Subsidiary of Borrower, or otherwise in respect of the Obligations. No Participant shall have the right to participate directly in the making of decisions by Lender.
(f) In connection with any such assignment or participation or proposed assignment or participation, a Lender may, subject to the provisions of Section 18.8 , disclose all documents and information which it now or hereafter may have relating to the Loan Parties and their respective businesses. For the avoidance of doubt, the preceding sentence shall not override, or otherwise vary, any confidentiality provision of any other instrument to which both Borrower and Lender (or any other Member of the 3i Group) are party.
14.2 Successors . This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided , however , that Borrower may not assign this Agreement or any rights or duties hereunder without Lender’s prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent to assignment by Lender shall release Borrower from its Obligations. A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 14.1 hereof and, except as expressly required pursuant to Section 14.1 hereof, no consent or approval by Borrower is required in connection with any such assignment.
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15. Amendments; Waivers .
15.1 Amendments and Waivers . No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by any Loan Party therefrom, shall be effective unless the same shall be in writing and signed by Lender, Borrower and each Guarantor, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
15.2 No Waivers; Cumulative Remedies . No failure by Lender to exercise any right, remedy, or option under this Agreement or, any other Loan Document, or delay by Lender in exercising the same, will operate as a waiver thereof. No waiver by Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by Lender on any occasion shall affect or diminish Lender’s rights thereafter to require strict performance by the Loan Parties of any provision of the Loan Documents. Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Lender may have.
16. Withholding Taxes .
16.1 Withholding Taxes . (a) If Borrower or any Guarantor in its reasonable discretion determines that it may be obligated to withhold Tax with respect to any payment made by it under this Agreement or any other Loan Document, Lender hereby agrees that the applicable payor may withhold from such payment the appropriate amount of Tax. Borrower agrees to timely pay, or cause to be paid, all amounts so withheld to the applicable Governmental Authority.
(b) If Lender is a “foreign person” within the meaning of the Code and such Lender claims exemption from, or a reduction of, U.S. withholding Tax under Sections 1441 or 1442 of the Code, Lender agrees with and in favor of Borrower, to deliver to Borrower:
(i) if Lender claims an exemption from withholding Tax pursuant to the portfolio interest exception, (A) a statement of Lender, signed under penalty of perjury, that it is neither a (I) a “bank” as described in Section 881(c)(3)(A) of the Code, (II) a 10% shareholder of Borrower (within the meaning of Section 871(h)(3)(B) of the Code), nor (III) a controlled foreign corporation related to Borrower within the meaning of Section 864(d)(4) of the Code, and (B) a properly completed and executed IRS Form W-8BEN, before the first payment of any interest under this Agreement and at any other time reasonably requested by Borrower;
(ii) if Lender claims an exemption from, or a reduction of, withholding Tax under a United States tax treaty, properly completed and executed IRS Form W-8BEN before the first payment of any interest under this Agreement and at any other time reasonably requested by Borrower;
(iii) if Lender claims that interest paid under this Agreement is exempt from United States withholding Tax because it is effectively connected with a United States trade or business of Lender, two properly completed and executed copies of IRS Form W-8ECI before the first payment of any interest is due under this Agreement and at any other time reasonably requested by Borrower; and
(iv) such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding Tax.
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Lender agrees promptly to notify Borrower of any change in circumstances which would modify or render invalid any claimed exemption or reduction.
(c) If Lender claims exemption from, or reduction of, withholding Tax under a United States tax treaty by providing IRS Form W-8BEN and Lender sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations, Lender agrees to notify Borrower without delay of the percentage amount in which it is no longer the beneficial owner. To the extent of such percentage amount, Borrower will treat Lender’s IRS Form W-8BEN as no longer valid.
(d) All payments made by Borrower or any other Loan Party hereunder or under any promissory note or other Loan Document will be made without setoff, counterclaim, or other defense except as required by applicable law. All such payments will be made free and clear of, and without deduction or withholding for, any Covered Taxes, except to the extent such deduction or withholding is required by applicable law. If any Covered Taxes are so levied or imposed, Borrower agrees to pay the full amount of such Covered Taxes, and any such additional amounts as may be necessary, so that every payment of all amounts due under this Agreement or under any promissory note, including any amount paid pursuant to this Section 16.1(d) after withholding or deduction for or on account of any Covered Taxes, will not be less than the amount provided for herein but for such levy or imposition of Covered Taxes; provided , however , that any such necessary additional amounts shall be limited by the exclusions set forth in clauses (a) through (c) of the definition of Covered Taxes. Borrower will furnish to Lender as promptly as possible after the date the payment of any Covered Taxes are due pursuant to applicable law certified copies of tax receipts evidencing such payment by Borrower.
(e) If Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 16.1(d) , then Lender shall use reasonable efforts to assign its rights and obligations hereunder to a Member of the 3i Group or otherwise negotiate in good faith to restructure the Loan if, in the judgment of Lender, such assignment or restructuring (i) would eliminate or reduce amounts payable pursuant to Section 16.1(d) in the future and (ii) would not subject Lender to any unreimbursed cost or expense and would not otherwise be materially disadvantageous to Lender. Borrower hereby agrees to pay all reasonable costs and expenses incurred by Lender in connection with any such assignment or restructuring.
(f) If, the provisions of clause (d) above notwithstanding, Borrower is required to pay any additional amount to Lender or any Governmental Authority for the account of Lender pursuant to Section 16.1(d) , then Borrower may prepay the Loan in accordance with Section 2.10(a) , without regard to whether the Loan could then otherwise be prepaid pursuant to that section and without payment of any Applicable Prepayment Premium.
(g) If, at any time following a Change in U.S. Tax Treaty, Borrower is or would be required to pay to Lender an additional amount in respect of a Covered Tax under Section 16.1(d) , Borrower shall provide Lender written notice thereof. During the thirty (30) days following receipt of such notice by Lender, representatives of Lender and Borrower shall explore such reasonable commercial efforts and other re-structuring alternatives. If after the expiration of such thirty (30) day period, Lender and Borrower shall not have agreed that such additional amount can be avoided, Borrower shall be entitled at any time thereafter to prepay (a “ Change in U.S. Tax Treaty Prepayment ”) the Loan in full, subject to the requirements of this Section 16.1(g) and paragraph (b) of Section 2.10 , without regard to whether the Loan could then otherwise be prepaid pursuant to that section and without payment of any Applicable Prepayment Premium.
(h) Borrower shall maintain a register with respect to the Loan so that it is considered to be “in registered form” as such phrase is used in Section 871(h)(2)(B)(i) of the Code.
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17. Guaranty Provisions .
17.1 Guaranty .
(a) Subject to the provisions of this Section 17 , each Guarantor, by execution of this Agreement, jointly and severally, unconditionally guarantees (collectively, the “ Guaranty ”) to Lender (i) the due and punctual payment of the principal of and interest on the Loan, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal of and interest on the Loan, to the extent lawful, and the due and punctual payment of all other Obligations, all in accordance with the terms of the Loan Documents, and (ii) in the case of any extension of time of payment or renewal of the Loan or any of such other Obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, at stated maturity, by acceleration or otherwise. Each Guarantor, by execution of this Agreement, agrees that its obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of any Loan Document, any failure to enforce the provisions of any such Loan Document, any waiver, modification or indulgence granted to Borrower with respect thereto by Lender, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or such Guarantor.
(b) Each Guarantor hereby waives diligence, presentment, demand for payment, filing of claims with a court in the event of merger or bankruptcy of Borrower, any right to require a proceeding first against Borrower, protest or notice with respect to the Loan Documents or the Indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guaranty will not be discharged as to any such Note except by payment in full of the principal thereof and interest thereon. Each Guarantor hereby agrees that, as between such Guarantor, on the one hand, and Lender, on the other hand, (i) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Section 9 for the purposes of this Guaranty, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Obligations as provided in Section 9 , such Obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of this Guaranty.
17.2 Limitation of Guarantee . The obligations of each Guarantor are limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under the Guaranty or pursuant to its contribution obligations under this Agreement, result in the obligations of such Guarantor under the Guaranty not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each Guarantor that makes a payment or distribution under the Guaranty shall be entitled to a contribution from each other Guarantor in a pro rata amount based on the Adjusted Net Assets of each Guarantor.
17.3 Release of Guarantor .
(a) A Guarantor shall be released from its obligations under the Guaranty and its obligations under this Agreement:
(i) in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Equity Interests of such Guarantor then held by Borrower and the Restricted Subsidiaries, in each case in accordance with the terms of this Agreement; or
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(ii) if such Guarantor is designated as an Unrestricted Subsidiary or otherwise ceases to be a Restricted Subsidiary, in each case in accordance with the provisions of this Agreement, upon effectiveness of such designation or when it first ceases to be a Restricted Subsidiary, respectively; or
(iii) upon satisfaction and discharge of this Agreement or payment in full of the principal of, premium, if any, accrued and unpaid interest on the Loan and all other Obligations that are then due and payable;
and in each such case, Borrower has delivered to Lender an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to such transactions have been complied with and that such release is authorized and permitted hereunder.
(b) Lender shall execute any documents reasonably requested by Borrower or a Guarantor in order to evidence the release of such Guarantor from its obligations under the Guaranty endorsed on any promissory note or notes delivered pursuant to clause (d) of Section 2.2 and under this Section 17 .
17.4 Waiver of Subrogation . Each Guarantor hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against Borrower that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under the Guaranty and this Agreement, including, without limitation, any right of subrogation, reimbursement, exoneration, indemnification, and any right to participate in any claim or remedy of Lender against Borrower, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from Borrower, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or promissory note on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Loan shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, Lender, and shall forthwith be paid to Lender to be credited and applied upon the Loan, whether matured or unmatured, in accordance with the terms of this Agreement. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Loan and that the waiver set forth in this Section 17.4 is knowingly made in contemplation of such benefits.
18. General Provisions .
18.1 Effectiveness . This Agreement shall be binding and deemed effective when executed and delivered by Borrower and Lender.
18.2 Section Headings . Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.
18.3 Interpretation . Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against Lender or Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.
18.4 Severability of Provisions . Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.
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18.5 Amendments in Writing . This Agreement only can be amended by a writing in accordance with Section 15.1 .
18.6 Counterparts; Execution by Electronic Transmission . This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by electronic transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by electronic transmission also shall deliver an original executed counterpart of this Agreement, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.
18.7 Revival and Reinstatement of Obligations . If the incurrence or payment of the Obligations by any Loan Party or the transfer to Lender of any property should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of any Bankruptcy Law relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (collectively, a “ Voidable Transfer ”), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of Lender related thereto, the liability of the Loan Parties automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.
18.8 Confidentiality . Lender agrees that material, non-public information regarding the Loan Parties, their operations, assets, and existing and contemplated business plans shall be treated by Lender in a confidential manner, and shall not be disclosed by Lender to Persons other than Loan Parties, except: (a) to attorneys for and other advisors, accountants, auditors, and consultants to Lender, (b) to Subsidiaries and Affiliates of Lender, provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 18.8 , (c) as may be required by statute, decision, or judicial or administrative order, rule, or regulation, (d) as may be agreed to in advance by Borrower or its Subsidiaries or as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, (e) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Lender), (f) in connection with any assignment, prospective assignment, sale, prospective sale, participation or prospective participations, or pledge or prospective pledge of Lender’s interest under this Agreement, provided that any such assignee, prospective assignee, purchaser, prospective purchaser, participant, prospective participant, pledgee, or prospective pledgee shall have agreed in writing to receive such information hereunder subject to the terms of this Section, and (g) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents. For the avoidance of doubt, the preceding sentence shall not override, or otherwise vary, any confidentiality provision of any other instrument to which both Borrower and Lender (or any other Member of the 3i Group) are party. The provisions of this Section 18.8 shall survive for 2 years after the payment in full of the Obligations. Anything contained herein or in any other Loan Document to the contrary notwithstanding, the obligations of confidentiality contained herein and therein, as they relate to the transactions contemplated hereby, shall not apply to the United States federal tax structure or United States federal tax treatment of such transactions, and each party hereto (and any employee, representative, or agent of any party hereto) may disclose to any and all Persons, without limitation of any kind, the United States federal tax structure and United States federal tax treatment of such transactions (including all written materials related to such tax structure and tax treatment). The preceding sentence is intended to cause the transactions
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contemplated hereby to not be treated as having been offered under conditions of confidentiality for purposes of Section 1.601l-4(b)(3) (or any successor provision) of the Treasury Regulations promulgated under Section 6011 of the Code, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the tax structure of the transactions contemplated hereby or any tax matter or tax idea related thereto.
18.9 Release of Certain Prior Guarantors . Each party hereto, upon and subject to the satisfaction of the conditions precedent set forth in Section 3.1 above, hereby releases each of Abic Biological Laboratories Ltd., an Israeli corporation, and Abic Veterinary Products Ltd., an Israeli corporation, (a) from its guaranty of the “Obligations” as defined in the Original Agreement, without recourse, representation or warranty whatsoever, and (b) from any other obligation it may have as a guarantor or otherwise under or with respect to the Loan Documents or the Original Agreement (including without limitation with respect to the “Obligations” as defined in the Original Agreement), in each case whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.
18.10 Integration . This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof; provided, however, that nothing herein shall in any way prejudice Lender’s rights under the Original Agreement with respect to any breach of a representation or warranty contained in Section 5 of the Original Agreement, which representations and warranties shall be incorporated herein by reference as though set forth herein, it being understood that such representations and warranties were made as of the date of the Original Agreement or the Closing Date, as applicable, and shall not be deemed to be made or repeated as of the date hereof.
18.11 USA PATRIOT Act . Each Lender that is subject to the requirements of the USA Patriot Act (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (as amended from time to time, together with the rules and regulations promulgated thereunder, the “ Patriot Act ”) hereby notifies Borrower and each Guarantor that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies Borrower and such Guarantor, which information includes the name and address of Borrower and such Guarantor and other information that will allow Lender to identify Borrower and such Guarantor in accordance with the Patriot Act. Borrower and each Guarantor agrees to take such action and execute, acknowledge and deliver, and cause each of its Subsidiaries to take such action and execute, acknowledge and deliver, at its sole cost and expense, such instruments and documents as Lender may reasonably require from time to time in order to enable Lender to comply with the Patriot Act.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION, | ||
as Borrower | ||
By: | /s/ David C. Storbeck | |
Name: | David C. Storbeck | |
Title: | Vice President |
GUARANTORS: | |
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBROCHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
FIRST DICE ROAD COMPANY, A CALIFORNIA |
LIMITED PARTNERSHIP | |||
By: | WESTERN MAGNESIUM CORP., | ||
its General Partner |
By: | /s/ David C. Storbeck | ||
Name: David C. Storbeck | |||
Title: Vice President |
[SIGNATURE PAGE TO AMENDED AND RESTATED TERM LOAN AGREEMENT]
MAYFLOWER L.P., | ||
as Lender acting by its manager, | ||
3i Investments plc | ||
By: | /s / Simon Holland | |
Name: Simon Holland | ||
Title: Senior Counsel, 3i plc | ||
Authorised Signatory | ||
3i Investments plc |
[SIGNATURE PAGE TO AMENDED AND RESTATED TERM LOAN AGREEMENT]
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered into as of ________, 20 ___, between __________________ (“Assignor”) and ________________ (“Assignee”). Reference is made to the Loan Agreement described in Item 2 of Annex I annexed hereto (the “Loan Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Loan Agreement.
1. In accordance with the terms and conditions of Section 14 of the Loan Agreement, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Loan Documents as of the date hereof with respect to the Obligations owing to the Assignor as specified in Item 4 of Annex I . After giving effect to such sale and assignment, the Assignee’s amount of the Loan principal will be as set forth in Item 4 of Annex I . After giving effect to such sale and assignment, the Assignor’s amount of the Loan principal will be as set forth in Item 4 of Annex I .
2. The Assignor (a) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other instrument or document furnished pursuant thereto; and (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower or the performance or observance by Borrower of any of its obligations under the Loan Documents or any other instrument or document furnished pursuant thereto.
3. The Assignee (a) confirms that it has received copies of the Loan Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (b) agrees that it will, independently and without reliance, as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents; (c) confirms that it is an Eligible Transferee; (d) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender; [and (e) attaches the forms required by Section 16.1 of the Loan Agreement.]
4. Following the execution of this Assignment Agreement by the Assignor and Assignee, it will be delivered by the Assignor to Borrower for recording by Borrower. The effective date of this Assignment (the “Settlement Date”) shall be the later of (a) the date of the execution hereof by the Assignor and the Assignee and receipt hereof by Borrower, and (b) the date specified in Item 5 of Annex I .
5. As of the Settlement Date (a) the Assignee shall be a party to the Loan Agreement and, to the extent of the interest assigned pursuant to this Assignment Agreement, have the rights and obligations of a Lender thereunder and under the other Loan Documents, and (b) the Assignor shall, to the extent of the interest assigned pursuant to this Assignment Agreement, relinquish its rights and be released from any future obligations under the Loan Agreement and the other Loan Documents, provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 16 and Section 18.8 of the Loan Agreement.
6. From and after the Settlement Date, Borrower shall make all payments under the Loan Agreement and the other Loan Documents in respect of the interest assigned hereby (including, without limitation, all payments of principal and interest with respect thereto) to the Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor the assigned amount (as set forth in Item 4.a of Annex I ) of the principal amount of any outstanding loans under the Loan Agreement and the other Loan Documents. The Assignor and Assignee shall make all appropriate adjustments in payments under the Loan Agreement and the other Loan Documents for periods prior to the Settlement Date directly between themselves on the Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[Remainder of page left intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and Annex I hereto to be executed by their respective officers thereunto duly authorized, as of the first date above written.
[NAME OF ASSIGNOR] | ||
as Assignor | ||
By: | ||
Name: | ||
Title: |
[NAME OF ASSIGNEE] | ||
as Assignee | ||
By: | ||
Name: | ||
Title: |
3 |
ANNEX FOR ASSIGNMENT AND ACCEPTANCE
ANNEX I
1. | Borrower: Phibro Animal Health Corporation, a New York corporation | |||
2. | Name and Date of Loan Agreement: | |||
Amended and Restated Term Loan Agreement, dated as of June 24, 2010, by and among Borrower, Mayflower L.P., and the guarantors named therein | ||||
3. | Date of Assignment Agreement: | |||
4. | Amounts: | |||
a. | Assigned amount of Loan principal | $ | ||
b. | Assignor’s resulting amount of Loan principal after giving effect to the sale and assignment to Assignee | $ | ||
c. | Assignee’s resulting amount of Loan principal after giving effect to the sale and assignment to Assignee | $ | ||
5. | Settlement Date: | |||
6. | Notice and Payment Instructions, etc. |
Assignee: | Assignor: | |||
Schedule 1
Lender’s Account
Account Name: | Mayflower LP |
Sort Code: | 301218 |
SWIFT Codes: | LOYDGB2LCTY |
Account Number: | 11365835 |
IBAN: | GB30LOYD30121811365835 |
Schedule 2
Designated Account
Credit Bank: |
Wachovia
Bank, N.A.
190 River Rd Summit, NJ 07901 |
ABA Routing Number: | 031 201 467 {domestic only} |
SWIFT Routing Number: | PNB PUS 33 PHL {international only} |
Beneficiary account number: | 2000 012 980 624 |
Beneficiary Name: |
Phibro
Animal Health Corporation
Ridgefield Park, NJ |
Exhibit 10.10
[CONFORMED]
AMENDMENT TO
AMENDED AND RESTATED TERM LOAN AGREEMENT
THIS AMENDMENT TO AMENDED AND RESTATED TERM LOAN AGREEMENT (this “ Amendment ”), is entered into as of January 18, 2011, by and among MAYFLOWER L.P., a limited partnership registered in Jersey, Channel Islands (registered no. LP282) (“ Lender ”), and, on the other hand, PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (“ Borrower ”), and the other parties listed on the signature page hereto (the “ Guarantors ”).
WHEREAS, the parties hereto are parties to a certain Amended and Restated Term Loan Agreement dated June 24, 2010 (the “ Loan Agreement ”; capitalized terms used but not defined herein shall have the meanings ascribed to them in the Loan Agreement); and
WHEREAS, in connection with various transactions contemplated to be entered into by Borrower, the parties hereto mutually desire to amend the Loan Agreement as set forth below;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that, effective as of the effectiveness of a certain supplement to the Indenture to be entered into on or about the date hereof:
1. Section 6.5 of the Loan Agreement is amended as follows:
(i) Clause (a) of the paragraph defining “Permitted Indebtedness” is amended to read in its entirety as follows:
“(a) Indebtedness of Borrower and any Guarantor under this Agreement, the Revolving Credit Facility and any other Credit Facilities and under clause (o) below in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $100,000,000, less, to the extent a permanent repayment and/or commitment reduction is required under a Credit Facility as a result of such application, the aggregate amount of Net Available Proceeds applied to repayments under the Credit Facilities in accordance with Section 6.8 and (y) the sum of (i) 85% of the book value of the accounts receivable of Borrower and the Restricted Subsidiaries plus (ii) 65% of the book value of inventory of Borrower and the Restricted Subsidiaries, in each case, calculated on a consolidated basis and in accordance with GAAP;”
(ii) Clause (j) of the paragraph defining “Permitted Indebtedness” is amended to read in its entirety as follows:
“(j) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to the Coverage Ratio Exception or clause (b) or (c) above, this clause (j) or clause (o) below;”
(iii) Clause (m) of the paragraph defining “Permitted Indebtedness” is amended to strike the word “and” from the end of such clause.
(iv) Clause (n) of the paragraph defining “Permitted Indebtedness” is amended to add the word “and” at the end of such clause.
(v) The following provision is added after clause (n) of the paragraph defining “Permitted Indebtedness”:
“(o) Additional Notes (as defined in the Indenture) up to an aggregate principal amount of $25,000,000, and the guarantees in respect thereof.”
(vi) References to “clauses (a) through (m) above” and “clauses (a) through (n) above” in the last paragraph of Section 6.5 are amended to read “clauses (a) through (o) above”.
2. Except as expressly provided herein, all terms and conditions of the Loan Agreement shall continue in full force and effect.
3. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by electronic transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by electronic transmission also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.
4. This Amendment, together with the Loan Agreement and the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and thereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION, | ||
as Borrower | ||
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
GUARANTORS: | |
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBRO CHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
FIRST DICE ROAD COMPANY, A CALIFORNIA |
LIMITED PARTNERSHIP | ||
By: | WESTERN MAGNESIUM CORP., | |
its General Partner |
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
MAYFLOWER L.P., | ||
as Lender | ||
By: | /s/ C.S. Burnhams | |
Name: C.S. Burnhams | ||
Title: Authorised Signatory |
[SIGNATURE PAGE TO AMENDMENT TO LOAN AGREEMENT]
Exhibit 10.11
SUPPLEMENT TO
AMENDED AND RESTATED TERM LOAN AGREEMENT
THIS SUPPLEMENT TO AMENDED AND RESTATED TERM LOAN AGREEMENT (this “ Supplement ”), is entered into as of January 29, 2013, by and among MAYFLOWER L.P., a limited partnership registered in Jersey, Channel Islands (registered no. LP282) (“ Lender ”), and, on the other hand, PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (“ Borrower ”), and the other parties listed on the signature page hereto (the “ Guarantors ”).
WHEREAS, reference is hereby made to that certain Amended and Restated Term Loan Agreement dated as of June 24, 2010 (as heretofore or hereafter amended, the “ Loan Agreement ”; capitalized terms used but not defined herein shall have the meanings ascribed to them in the Loan Agreement);
WHEREAS, the Loan Agreement establishes certain conditions, as set forth in Section 6.12 thereof, under which Restricted Subsidiaries would be required to guarantee the obligations of the Borrower under the Loan Agreement, with Section 6.12 providing (among other things) that if, after the Effective Date, the Borrower or any Restricted Subsidiary shall acquire or create another Subsidiary (other than a Foreign Subsidiary or a Subsidiary that has been designated an Unrestricted Subsidiary), then the Borrower shall cause such Restricted Subsidiary to execute and deliver to Lender a supplemental to the Guaranty or any other guarantee in form and substance satisfactory to Lender pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of Obligations;
WHEREAS, on December 20, 2012, OmniGen Research, LLC, an Oregon limited liability company (“ OmniGen ”), became a Subsidiary of Prince Agri Products, Inc., a Delaware corporation and Restricted Subsidiary and, by virtue thereof, constitutes a Restricted Subsidiary that is not a Foreign Subsidiary; and
WHEREAS, this Supplement amends or supplements the Loan Agreement and the Guaranty set forth in Section 17.1 of the Loan Agreement to add OminGen as an additional Guarantor under the Loan Agreement, and, accordingly satisfies the criteria of Section 6.12 of the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that, effective as of the date hereof:
1. (a) OminGen hereby agrees to be bound by the Loan Agreement, as amended by this Supplement and as hereafter amended in accordance with the terms of the Loan Agreement, to the same extent as though the Loan Agreement were incorporated and fully set forth in this Supplement; and, by virtue thereof, hereby becomes a Guarantor for all purposes.
(b) Without limiting the generality of subsection (a) above, OminGen (with each other Guarantor), by execution of this Supplement, jointly and severally, unconditionally joins in and becomes bound by the Guaranty as set forth in Section 17.1 of the Loan Agreement.
2. Except as expressly provided herein, all terms and conditions of the Loan Agreement shall continue in full force and effect.
3. This Supplement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same Supplement. Delivery of an executed counterpart of this Supplement by electronic transmission shall be equally as effective as delivery of an original executed counterpart of this Supplement. Any party delivering an executed counterpart of this Supplement by electronic transmission also shall deliver an original executed counterpart of this Supplement, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Supplement.
4. This Supplement, together with the Loan Agreement and the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and thereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
[Signature page to follow.]
2 |
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to Amended and Restated Term Loan Agreement to be executed and delivered as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION, | |
as Borrower |
By: | /s/ David C. Storbeck |
Name: | David C. Storbeck | |
Title: | Vice President |
GUARANTORS: | |
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBRO CHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
OMNIGEN RESEARCH, LLC | |
By: PRINCE AGRI PRODUCTS, INC., | |
Its Sole Member | |
FIRST DICE ROAD COMPANY, A CALIFORNIA LIMITED | |
PARTNERSHIP | |
By: WESTERN MAGNESIUM CORP., | |
Its General Partner |
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
MAYFLOWER L.P., | |
as Lender |
By: | /s/ C S Burnhams |
Name: C S Burnhams | ||
Title: Authorised Signatory |
[SIGNATURE PAGE TO SUPPLEMENT TO AMENDED AND RESTATED TERM LOAN AGREEMENT]
Exhibit 10.12
SECOND AMENDMENT TO
AMENDED AND RESTATED TERM LOAN AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED TERM LOAN AGREEMENT (this “ Amendment ”), is entered into as of February 11, 2013, by and among MAYFLOWER L.P., a limited partnership registered in Jersey, Channel Islands (registered no. LP282) (“ Lender ”), and, on the other hand, PHIBRO ANIMAL HEALTH CORPORATION, a New York corporation (“ Borrower ”), and the other parties listed on the signature page hereto (the “ Guarantors ”).
WHEREAS, the parties hereto are parties to a certain Amended and Restated Term Loan Agreement dated as of June 24, 2010, as amended by that certain Amendment to Amended and Restated Term Loan Agreement dated as of January 18, 2011 (as amended and/or supplemented, the “ Loan Agreement ”; capitalized terms used but not defined herein shall have the meanings ascribed to them in the Loan Agreement); and
WHEREAS, the parties hereto mutually desire to amend the Loan Agreement as set forth below;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that, effective as of the date hereof:
1. The definition of the term “Maturity Date” set forth in Section 1.1 of the Loan Agreement is amended to read in its entirety as follows:
“ Maturity Date ” means December 31, 2016.
2. Except as expressly provided herein, all terms and conditions of the Loan Agreement shall continue in full force and effect.
3. Contemporaneously herewith, Borrower is making a payment to the lender of a loan extension fee in the amount of one hundred eighty thousand dollars ($180,000.00) in immediately available funds to Lender's Account.
4. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by electronic transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by electronic transmission also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.
5. This Amendment, together with the Loan Agreement and the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and thereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
[Signature page to follow.]
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Amended and Restated Term Loan Agreement to be executed and delivered as of the date first above written.
PHIBRO ANIMAL HEALTH CORPORATION, | ||
as Borrower | ||
By: | /s/ Jack C. Bendheim | |
Name: Jack C. Bendheim | ||
Title: President |
GUARANTORS: | |
PRINCE AGRI PRODUCTS, INC. | |
PHIBROCHEM, INC. | |
PHIBRO ANIMAL HEALTH HOLDINGS, INC. | |
PHIBRO CHEMICALS, INC. | |
WESTERN MAGNESIUM CORP. | |
C.P. CHEMICALS, INC. | |
PHILIPP BROTHERS CHEMICALS, INC. | |
PHIBROWOOD, LLC | |
PHIBRO-TECH, INC. | |
OMNIGEN RESEARCH, LLC |
By: PRINCE AGRI PRODUCTS, INC., | |
Its Sole Member |
FIRST DICE ROAD COMPANY, A CALIFORNIA |
LIMITED PARTNERSHIP | |
By: WESTERN MAGNESIUM CORP., | |
its General Partner |
By: | /s/ David C. Storbeck | |
Name: David C. Storbeck | ||
Title: Vice President |
MAYFLOWER L.P., | ||
as Lender | ||
By: | /s/ C S Burnhams | |
Name: C S Burnhams | ||
Title: Authorised Signatory |
[ SIGNATURE PAGE TO SECOND AMENDMENT TO AMENDED AND RESTATED TERM LOAN AGREEMENT]
Exhibit 10.13
Date: 01/14/2014 Time: 01:06 p.m. |
505-Credit Limits, Maximum Open Credit and Interest | [logo]Mizrahi-Tefahot |
Transaction 505 at: 01:04 p.m. 01/14/2014
Credit Limit Agreement in Foreign Currency Current Loan Account (CLA)
Account No.: 151299 Branch: 031 Ramat Siv
Drawn up and signed on the 14 th day of the month of January 2014
Between
Mizrahi-Tefahot Bank Ltd.
(hereinafter: “The Bank”) Of the first part;
And between
Koffolk (1949) Ltd. 510057607
(Jointly and severally, in this Agreement: “The Client”) Of the second part;
Whereas the Client requested from the Bank
to extend him a credit limit in foreign currency in a current
loan account (CLA) in a total amount of $7,000,000 (hereinafter: “Credit Limit”)
And whereas the Bank has agreed to the request of the Client to extend to the Client the Credit Limit
subject to the provisions set forth in this Agreement hereunder;
Therefore, it is declared, stipulated and agreed between the parties as follows:
1. | Terms of provision of the Credit Limit |
The Credit Limit shall be provided subject to and in accordance with the original terms of engagement between the Client and the Bank and in accordance with the documents that the Client has signed in the original engagement with the Bank, which are:
- | An application to open an account and/or make changes in an account |
- | General terms for managing an account (including annexes and amendments thereof) |
- | A document of general terms for credit transactions (including annexes and amendments thereof) |
The statements set forth in the original terms of engagement between the Client and the Bank (hereinafter: “Terms of Engagement”) including all terms thereof, shall apply to and shall bind the Client and the Bank in connection with the Credit Limit as well.
2. | Details of the Credit Limit |
The following are the details of the Credit Limit agreed between the Bank and the Client:
Frame amount in U.S. Dollars | Composition of interest (in % per year) | |
Basic Libor interest (L) | Additional risk | |
1. – 6,950,000 | L – Libor | 2.25 |
2. 6,950,001 – 7,000,000 | 4.25 |
Libor interest (London Interbank Offered Rate) shall mean – the interest offered to banks on deposits in foreign currency (which is identical to the same currency in which credit is extended) in the Interbank market in London, for the interest period, within its meaning hereunder, as published every day at 11:00 a.m. London time, two business days in which trade is conducted in the London financial markets before the commencement of each interest period. The source of information from which the Libor rate shall be taken shall be page 3750 or page 3740 (as the case may be) in Telerate, or the page in Reuters known by the name of: BRITISH BANKERS ASSOC. INTEREST RATES SETTLEMENT or any other customary system according to the Bank’s discretion.
In this clause: “interest period” – a period of one day.
If more than one type of foreign currency was withdrawn from the account, interest shall be calculated separately for each currency, one currency after the other, according to ascending order of currency codes (01 – U.S. Dollar, 02 – British Pound, 09 – Euro, 33 – Japanese Yen).
3. | The interest rate in the event of Credit Frame overdraft |
In the event the Client is in overdraft with relation to the Credit Limit that was set forth in clause 2 –
431 Ramat Siv | 08 | 01449: Nechama Ben Tovim | Page 1 of 3 | ||
Executing Branch | Station | Clerk Number, name and Signature |
the Client’s account shall be debited for the
overdraft by the highest interest set forth in the credit limit in that clause. However, the Bank shall be entitled to debit the
account for overdraft with maximum interest, when this is possible in accordance with the provisions set forth by law and the instructions
set forth by the Bank of Israel.
Maximum interest as of today is Libor plus 8.00% a year.
4. | Commissions |
- | Credit allocation commission: |
0.50% a year, for Limit A only. The commission is debited once a quarter.
Collection date: at the end of each quarter.
- |
Commission for preparation of legal instruments for a credit transaction:
1.35%. Maximum: 33,000.00, commission amount for debiting: ILS 33,000.00. Commission shall be debited on or about the time of signing this Agreement. |
5. | Date of debiting interest |
The account shall be debited in the beginning of each calendar quarter with the interest amount that accrued in respect of use of the Limit in the previous quarter.
6. | Changes in Credit Limit and interests |
A. | The Bank may change the debit date, the calculation method and the interest rates – due to change in the basic interest rates and/or for other reasons, in accordance with the notice delivered by the Bank and/or publication in accordance with the instructions set forth by the Banking Rules (Customer Service) (Proper Disclosure and Delivery of Documents) 5752-1992. |
B. | The Bank may change the rate, date and method of debit of the credit allocation commission. |
C. | The Bank may decrease or discontinue the extension of credit – in full or in part – upon notice at least 10 days in advance. |
D. | The Bank may decrease or discontinue the Credit Limit immediately, without advance notice, when the Bank believes that there are circumstances that could jeopardize its ability to collect the credit. |
E. | As of the date of canceling the Limit, the entire debit balance shall be debited with maximum interest. |
7. | The obligations of the Client and the obligations of the Bank in the event of Credit Limit overdraft |
A. | The Client hereby undertakes not to make withdrawals – whether by check or cash – and/or transfers and/or any other transaction that will cause the debit balance in the account to become higher than the Credit Limit that was approved as specified hereinabove. |
B. | The Client undertakes to regularly check the balances in his account and the expected withdrawals, so as not to be in overdraft. |
C. | In accordance with the instructions set forth by the Banking Supervision Department (Proper Banking Management, Directive 325), the Bank is required to act so that no debit balance that exceeds the Credit Limit determined is created in a current loan account, except in certain circumstances that are specified in the Directive and the General Terms for Credit Transactions, on which the Client has signed. Return of withdrawals and/or debits and/or checks that cause overdraft shall be made without prior notice. |
D. | It should be noted that return of debits and/or withdrawals and/or checks has grievous consequences, including limitation of the account in accordance with the Dishonored Cheques Law 5741-1981. |
E. | In any event in which, on a particular date, the Bank receives a number of debits and/or withdrawals and/or checks which total amount will cause overdraft in the Credit Limit, the Bank shall first act to honor debits that it made, including interest debits, payments, loans, commissions, etc., and then, if possible, other debits will be paid. |
In such circumstances the Client is obligated to notify the Bank in writing, on the same date at 10:00 a.m. in the morning at the latest, which of the debits or the withdrawals that were made by the Client should be honored, and which should be returned. In the event the Client failed to deliver a written notice, the Bank shall act solely at its discretion and the Client shall make no allegations and/or demands from the Bank in connection therewith.
8. | The date of commencement of allocation of the Credit Limit |
A. | The Credit Limit shall be allocated to the Client when this Agreement comes into force, and shall stay in effect until 01/10/2015. |
431 Ramat Siv | 08 | 01449: Nechama Ben Tovim | Page 2 of 3 | ||
Executing Branch | Station | Clerk Number, name and Signature |
B. |
After the said date the Credit Limit shall be canceled automatically without delivery of notice, unless the Bank approves its
extension in writing for another period under the same terms that were set forth beforehand.
Such unilateral extension shall not bind the Client in the event the Client has notified the Bank in writing about his wish not to extend the Limit for another period, within three days of the date of receiving the Bank’s notice. |
C. | This Agreement shall take effect on the condition that it is duly signed by the Client, no later than on 01/16/2014, and on the condition that all the securities agreed upon with the Client (if agreed) are furnished to the Bank, and on the condition that the Bank signs the agreement. However, the Bank may, at its discretion, provide the Credit Limit even if the client fails to fulfill its terms. |
The effective date of the agreement: the date of providing the Credit Limit.
D. | In the event any change occurs in anything related to the Credit Limit, and as long as the Credit Limit was not actually provided, the Bank shall not be obligated to provide the Credit Limit. |
9. | Declaration |
The Client hereby confirms that he received an explanation about the different and special implications of credit in variable interest and the possibilities and risks in connection with this type of credit.
And in witness hereof the Client has signed:
Name | ID. No. | Signature | Date |
[handwritten:] Koffolk (1949) Ltd. | [hw:] 510057607 | [hw:] X | [hw:] 01/14/2014 |
And in witness hereof the Bank assigned:
Bank Signature and Stamp |
Mizrahi-Tefahot Bank Ltd. |
Transaction 505 at 01:04 p.m. 01/14/2014
431 Ramat Siv | 08 | 01449: Nechama Ben Tovim | Page 3 of 3 | ||
Executing Branch | Station | Clerk Number, name and Signature |
Exhibit 10.14
Date: [handwritten:] 06/07/2010
To
Mizrahi-Tefahot Bank Ltd.
Re: Letter of Undertaking
We, the undersigned, Koffolk (1949) Ltd. Company No. 510057607 (Hereinafter: “The Company”), account holders in your Bank, hereby confirm and undertake as follows:
1. | You extended and/or you will extend to the Company credit within its meaning in the agreement and general business terms – or “Application to open an account” and/or “Application for changes in account” and “General terms for managing an account” and “General terms for credit transactions” including all annexes and amendments thereof, all as agreed between you and the Company, in connection with any type of credit (hereinafter: “ The Credit ”). |
2. | As long as the Credit is not repaid to you in full, the Company undertakes before you, in accordance with the consolidated statements, to fulfill all the conditions set forth hereunder, cumulatively: |
A. | Tangible capital equity (including shareholders’ loan and with setoff of investments in related companies, related accounts receivable and reputation) shall not fall below $25,000,000 and its rate from the balance shall not fall below 35%. |
B. | Debt/EBITDA ratio shall not be greater than 5. |
C. | EBITDA/return on principal and annual interest + financing expenses shall not fall below 1.3. |
D. | Total banking credit shall not exceed $15,000.000. |
E. | Receivables debt (with deduction of debt of related companies)/banking credit shall not fall below 1, according to the quarterly report that we shall deliver to the Bank. |
F. | The Company shall not provide guarantee to third parties and to related companies in an amount higher than $1,000,000, except for guarantees to wholly-owned subsidiaries. |
G. | No resolution shall be passed on distribution of dividends in the Company without obtaining the Bank’s prior and written consent. The term “dividend” shall be construed within its meaning in the Companies Law 5759-1999, including management fees, consulting fees, participation fees, amounts of money, property and rights of any kind disbursed from our profits and/or from any other source. Except for payment of management fees that are transferred to the parent company in an amount that shall not exceed a total of $1,000,000 a year . |
H. | There shall be no breach of any of our undertakings towards the Bank. |
* For the purpose of this Letter of Undertaking, the term “tangible capital equity” shall mean – as presented in the quarterly and annual consolidated financial statements hereunder, including outstanding share capital, undivided surpluses, principals and balances of loan amounts, including shareholders’ loan in respect of which subordination letters towards the Bank were signed by the Company and its shareholders, and with deduction of investments in related companies, deferred costs, intangible assets such as reputation, patents, trademarks, trade names, copyright, etc., and with deduction of treasury shares and with deduction of receivables to the Company that are stakeholders and/or related subsidiaries of the Company (within the meaning of these terms in the Securities Law 5728-1968) and with deduction of guarantees that were provided by the Company for the purpose of securing the debts of stakeholders and/or companies and/or related companies of the Company.
3. | These financial relationships shall be examined in accordance with audited financial statements of the Company and quarterly statements. We shall deliver to you, at your request, any information in connection with the Company’s business and its financial situation. |
We undertake that, no later than 31/10 of each year, we shall deliver to you the reconciled financial statements of the Company true to 30/06 of the previous year, audited by a certified external accountant and prepared in accordance with generally-accepted auditing standards in Israel, as they are from time to time.
We undertake that, within 60 days of the end of each calendar quarter, we shall deliver to the Bank a quarterly report including a balance sheet, statements of income, and cash flow. In addition, and without derogating from the foregoing, we hereby undertake to deliver to the Bank from time to time at its request additional information in connection with the business, the financial situation and our total credit.
4. | The Company hereby affirms that the Credit was extended and/or will be extended to it, inter alia based upon its undertakings towards the Bank, as specified in this Letter, and that breach of any of its undertakings in accordance with this Letter, including any of the financial relationships, shall grant the Bank the right to all reliefs against the Company it is entitled to by law or by agreement, including the right to put for immediate payment any Credit that the Company received from the Bank, even prior to its agreed repayment date, and the right to enforce and realize any security or guarantee that was provided or will be provided to the Bank for the purpose of securing the Credit |
[signature:]
|
||
[stamp:]
Koffolk (1949) Ltd. |
5. | To dispel any doubt, it is hereby clarified that the statements made in this Letter shall not derogate or diminish in any manner from any undertaking of the Company towards the Bank in accordance with any other document that was signed and/or will be signed by the Company, and the Company’s undertakings in this Letter are made in addition to any other document that the Company has signed and/or will sign towards the Bank. |
6. | The undertakings in this Letter are irrevocable and may not be modified or cancelled without obtaining your prior and written consent. |
7. | The financial criteria that were set forth in section 2 of the Letter of Undertaking hereinabove (hereinafter: “Criteria”) are based upon existing accounting standards and accounting rules that were implemented in the last financial statements of the Company. |
The implementation of different accounting standards and/or rules than the ones on the basis of which the last financial statements were prepared, in the Company’s financial statements, including IFRS – International financial reporting standards, accounting standards in Israel and/or the U.S.A. (hereinafter: “New Standards”), may result in changes that will affect the Criteria.
Therefore, the Company agrees as follows:
Whenever the Bank finds that the changes that occurred and/or that are about to occur in the
[handwritten text is indicated in italics]
Company’s financial statements due to implementation of New Standards so require, it shall be entitled, after consulting with the Company but without having to obtain its consent, to notify the Company what changes the Bank requires in the Criteria so as to adjust them to the said changes, with the intention to adjust them to the original financial purpose according to which the Criteria were set (“Amended Criteria”). In the event the Bank notifies the Company what the Amended Criteria are – they shall bind the Company as of the date the Bank delivered notice.
[signature:]
|
||
[stamp:]
Koffolk (1949) Ltd |
Koffolk (1949) Ltd. |
Advocate Confirmation [handwriting indicated in italics]:
I, the undersigned, Bahir Saban , of Daniel Frish St. number 3 in the city of Tel Aviv , hereby confirm that Koffolk (1949) Ltd. Company No. 510057607 (Hereinafter: “The Company”) has lawfully passed a resolution to sign this Letter of Undertaking in favor of Mizrahi-Tefahot Bank Ltd., and that the signature of the honorable gentlemen Avner Birnbaum ID. No. 024013617 and Yonatan Bendheim ID. No. 327012340 , along with the Company’s stamp or with its printed name, shall bind the Company in accordance with this Letter. In addition, I confirm that this Letter was signed before me by the said honorable gentlemen.
[signature:]
|
||
[stamp:]
Bahir Avraham Saban, Adv. License No. 45521 |
Exhibit 10.15
[logo] Union Bank | ||
Date: | 12.24.2013 | [bilingual text] |
Ref. | CLA/1369-13/063 | [bilingual text] |
To
Koffolk Ltd. | Attn. Ada Shochatowitz |
Dear Sir/Madam,
Re: Approved Credit Limit in your Account in the name of Koffolk (1949) Ltd. No. 827400/93
In continuation to your request, we hereby notify you that the approved credit limit in your account is as follows:
1. | A credit limit in the amount of ILS 15,000 that can be used as short-term credit – for regular operations and/or documentary credit. |
2. | A limit for decreasing loans in the amount of ILS 15,000 (for a period that shall not exceed 10 years, average duration 5 years). |
The limit is subject to the existence of the following securities at all times, as follows:
1. | Current encumbrance Pari-passu with Bank Leumi and Mizrahi-Tefahot Bank according to debt ratio. |
2. |
Financial term as follows:
The total tangible capital equity of the Company shall not fall below $15,000,000 or 18.5% of the balance based upon consolidated financial statements, the higher of the two. |
3. | The financial strength of the Company. |
Commission for unused credit limit up to one year at a rate of 0.3% a year (the Bank’s current is 0.7% a year)
A total limit approval commission in the amount of ILS 13,000 shall be charged for the approved limit (the Bank’s current rate is 0.1% of the total approved limit).
Comments:
1) | The specification of total credit and securities hereinabove is provided for informational purposes only and shall not derogate from any right granted to the Bank. |
2) | The information specified hereinabove may be altered in accordance with your agreement with the Bank and/or in accordance with the provisions of law including, without derogating from the generality of the aforesaid, in accordance with the provisions set forth in the Banking (Customer Service) Law 5741-1981, Banking Rules (Customer Service and Production of Documents) 5752-1992, the instructions of the Banking Supervision Department and the decisions made by the Bank’s management. |
3) | The specification of total credit and securities hereinabove is provided for informational purposes only and shall not derogate from any right granted to the Bank. |
4) | The statements made above shall not constitute an implied or explicit undertaking to extend the credit limits. These shall be examined by the Bank from time to time in accordance with the Bank’s procedures and in accordance with the facts and the findings that the Bank shall hold at the time and at the Bank’s sole discretion. |
5) | This letter is based upon the information and documents that were presented to the Bank until the date of this letter. Therefore, the content of this letter is subject to all alterations and/or additions required according to the Bank’s discretion upon receipt of additional information and/or documents. |
6) | The content of this letter shall not derogate from the rights of the Bank by virtue of engagement documents and/or agreements that you signed in the past and that will be signed in the future in connection with managing the bank account. |
7) | The Bank shall be entitled to alter the terms set forth hereinabove in full or in part, upon notice 14 days in advance. |
This letter shall be in effect until 12/05/2014, and its extension is conditional upon approval by the Bank’s Credit Committee.
[stamp:] | |||
Respectfully yours, | Yogev Pelintzki | ||
[signature] | |||
Union Bank of Israel Ltd., | |||
Main Branch Tel Aviv |
[stamp:] | |||
Eyal Asher |
EO&E
[bilingual text]
UNION BANKOF ISRAEL LTD www.unionbank.co.il
Main Branch*6-8 Ahuzat Bait St. Tel –Aviv 65143*POB 2428 Tel-Aviv 61024*Tel. 03-5191364*Fax 03-5191343
[logo] Union Bank | ||
Date: | 12.24.2013 | [bilingual text] |
Ref. | CLA/1374-13/063 | [bilingual text] |
To
Abic Biological Laboratories Ltd. | Attn. Ada Shochatowitz |
Dear Sir/Madam,
Re: Approved Credit Limit in your Account in the Name of Abic Biological Laboratories Ltd. No. 743500/04
In continuation to your request, we hereby notify you that the approved credit limit in your account is as follows:
A credit limit in the amount of ILS 2,000 for use as short-term credit – for regular operations.
The limit is subject to the existence of the following securities at all times as follows:
1. | encumbrance of deferred receivables (as security according to the Bank’s policy) |
2. | The Company’s financial strength. |
Commission for unused limit up to one year at a rate of 0.3% a year (the Bank’s current rate is 0.7% a year)
A total limit approval commission in the amount of ILS 2,000 shall be charged for the approved limit (the Bank’s current rate is 0.1% of the total approved limit).
Comments:
1) | The specification of total credit and securities hereinabove is provided for informational purposes only and shall not derogate from any right granted to the Bank. |
2) | The information specified hereinabove may be altered in accordance with your agreement with the Bank and/or in accordance with the provisions of law including, without derogating from the generality of the aforesaid, in accordance with the provisions set forth in the Banking (Customer Service) Law 5741-1981, Banking Rules (Customer Service and Production of Documents) 5752-1992, the instructions of the Banking Supervision Department and the decisions made by the Bank’s management. |
3) | The specification of total credit and securities hereinabove is provided for informational purposes only and shall not derogate from any right granted to the Bank. |
4) | The statements made above shall not constitute an implied or explicit undertaking to extend the credit limits. These shall be examined by the Bank from time to time in accordance with the Bank’s procedures and in accordance with the facts and the findings that the Bank shall hold at the time and at the Bank’s sole discretion. |
5) | This letter is based upon the information and documents that were presented before the Bank until the date of this letter. Therefore, the content of this letter is subject to all alterations and/or additions required according to the Bank’s discretion upon receipt of additional information and/or documents. |
6) | The content of this letter shall not derogate from the rights of the Bank by virtue of engagement documents and/or agreements that you signed in the past and that will be signed in the future in connection with managing the bank account. |
7) | The Bank shall be entitled to alter the terms set forth hereinabove in full or in part, upon notice 14 days in advance. |
This letter shall be in effect until 12/05/2014, and its extension is conditional upon approval by the Bank’s Credit Committee.
[stamp:] | |||
Respectfully yours, | Yogev Pelintzki | ||
[signature] | |||
Union Bank of Israel Ltd., | |||
Main Branch Tel Aviv |
[stamp:] | |||
Eyal Asher |
EO&E
[bilingual text]
UNION BANKOF ISRAEL LTD www.unionbank.co.il
Main Branch*6-8 Ahuzat Bait St. Tel –Aviv 65143*POB 2428 Tel-Aviv 61024*Tel. 03-5191364*Fax 03-5191343
Exhibit 10.16
Date: [handwritten:] 01/27/2009
To
Union Bank of Israel Ltd.
Tel Aviv Main Branch
Dear Sir,
Re: Letter of Undertaking
Whereas we, Koffolk (1949) Ltd. (Hereinafter: “The Company”), are about to receive and/or do receive at our request from time to time credits, loans and other banking services (hereinafter: “Credit”) from Union Bank of Israel Ltd. (hereinafter: “The Bank”), and whereas you stipulated the extension of Credit on the Company’s undertakings as specified hereunder, the Company therefore hereby undertakes before you as follows:
The preamble to this Letter of Undertaking shall be deemed an
integral part hereof.
The Company hereby undertakes towards you that at all times during the Credit term, its total equity of any kind ( inter alia , outstanding stock and/or accumulated profit, capital notes, different funds), in addition to the balance of the shareholders’ loan and/or of the loan of anyone on their behalf to the Company, with deduction of loans that were provided to owners and/or related companies (except for debit balances of related companies arising from regular commercial relationships) and with deduction of intangible assets ( inter alia , reputation, knowledge and patents) shall not fall below $15,000,000 (fifteen million U.S. dollars) or 18.5% of the balance sheet, as specified in the consolidated financial statements of the Company for that year.
The Company shall not be entitled to cancel its undertakings hereinabove without obtaining your prior and written consent, as it is aware that you rely on said undertaking when extending the Credit.
In the event that we breach any of our undertakings set forth in this Letter of Undertaking, then in addition to any other relief you may be entitled to by law or agreement or any other undertaking we made towards you, you shall be entitled to put to immediate payment all or part of the secured amounts in addition to any amount that will cover, in your opinion, the losses and/or expenses you incurred due to the breach and/or putting said Credit to immediate payment.
Hereby attached is the resolution of the Company confirming the issuance of this Letter of Undertaking and empowering [hw:] Avner Birnbaum to sign this Letter of Undertaking on behalf of the Company, certified by an advocate.
Respectfully yours,
[signature] | ||
[stamp:] Koffolk (1949) Ltd.] |
||
Company Signature and Stamp |
COV Koffolk
Date: [hw:] 01/27/2009
We hereby notify you that in the Board meeting of Koffolk (1949) Ltd. (Hereinafter: “The Company”) that was convened on [hw:] 01/27/2009 , the following was decided:
1. | The Company assumes the undertakings as specified in the Letter of Undertaking hereby attached to this notice, constituting an integral part thereof. |
2. | To empower the honorable gentlemen [hw:] Avner Birnbaum and designate them to sign said Letter of Undertaking. |
3. | To notify the Bank about said resolution. |
Respectfully,
Koffolk (1949) Ltd
[signature]
I, the undersigned, [hw:] Bahir Saban , Adv., License No. [hw:] 45521 , the legal counsel of the Company referenced hereinabove, hereby confirm that the resolution specified hereinabove was made lawfully in accordance with the Company’s Memorandum and Articles of Association.
[signature] |
[stamp:] Bahir Avraham Saban, Adv., License No. 45521 |
||||
Date: | [hw:] 01/27/2009 | ||||
Advocate Signature + Stamp | |||||
COV Koffolk
UNANIMOUS WRITTEN CONSENT
OF THE
BOARD OF DIRECTORS OF
KOFFOLK (1949) LTD.
The undersigned, being all of the members of the Board of Directors of Koffolk (1949) Ltd., an Israeli company, (the “Company”), and acting in accordance with the laws of the State of Israel, do hereby consent to the adoption of the resolutions attached hereto as Annex A and the taking of the actions contemplated thereby by unanimous written consent in lieu of a meeting of the Board of Directors of the Company.
This instrument may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same consent.
IN WITNESS WHEREOF, each of the undersigned has executed this consent as of January, 2009.
/s/ Jack Clifford Bendheim | /s/ Richard Johnson | |
Jack Clifford Bendheim | Richard Johnson |
/s/ Yehudah Markovitz | /s/ Avner Birnbaum | |
Yehudah Markovitz | Avner Birnbaum |
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Annex A
RESOLUTIONS
OF THE
BOARD OF DIRECTORS
KOFFOLK (1949) Ltd.
WHEREAS , the Board of Directors of Koffolk (1949) Ltd., an Israeli company (the “Company”), deems it in the best interest of the Company to take the actions and carry out the transactions contemplated by the various agreements, instruments, documents and transactions, all as more particularly described below:
Union Bank Loan
WHEREAS , it is proposed that Koffolk borrow funds from Union Bank of Israel (the “Union Bank Loan”);
NOW, THEREFORE, BE IT RESOLVED, that the terms of the proposed commitment letter (“Commitment Letter”) to Union Bank, be, and hereby are, approved and authorized in all respects and the execution of the Commitment Letter in the name and on behalf of the Company by Avner Birnbaum is hereby approved and authorized, including the commitment that the share capital, together with shareholders’ loans (or loans on the shareholders’ behalf) that were provided to the Company, less loans by the Company to shareholders or affiliates (other than loans in the ordinary course), and less intangible property, shall not be less than $15 million or 18.5% of the balance sheet, as set forth in the consolidated financial statements of the Company for that year.
Exhibit 10.17
UNPROTECTED leASE agreement
Made and entered into in Petach Tikva, this 26 th day of the month of January, 2011
By and between: | Samaria Carpets Ltd., Private Co. No. 51-107870-1 |
(hereinafter: the “ Lessor ”) | |
Whose address for the purposes of this Lease is in the Western Industrial Zone, Beit Shemesh, POB 372, and after delivery of the possession of the Leased Premises pursuant to the provisions of this Agreement – c/o Mr. Moshe Goren, Bearer of ID No. 068862232 Of 48 HaGefen Street, Kidron |
of the first part
And: | ABIC Biological Laboratories Ltd. |
Private Co. No. 510608284 | |
(hereinafter: the “ Lessee ”) | |
Whose address for the purposes of this Lease is: | |
3 Hamelacha St., Western Industrial Zone | |
Beit Shemesh, 99100 |
of the second part
WHEREAS: | the Lessor is registered with the Administration (as defined below) as the owner of the perpetual capitalized lease rights in the Land, as defined below, in the Western Industrial Zone of the town of Beit Shemesh, in whose area the Structure (as defined below) is located, as set forth in the ‘Approval of the Rights’ attached as Appendix A to this Agreement, and as marked on the plan attached as Appendix B to this Agreement; and |
the Land and the Structure jointly constitute the Leased Premises which are the subject of this Agreement; and |
WHEREAS: | the Lessee wishes to lease the Leased Premises (as defined below) from the Lessor, and the Lessor wishes to lease the Leased Premises (as defined below) to the Lessee, under an unprotected lease, in accordance with and subject to the terms and provisions of this Agreement; |
The following has therefore been declared, agreed and stipulated between the parties:
1. | Preamble and Interpretation |
1.1 | The preamble to this Agreement and the appendices hereto form an integral part hereof. |
1.2 | The headings of the sections in this Agreement have been inserted for convenience of reference only, and they have and shall have no weight whatsoever for the purpose of the interpretation hereof. |
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2. | Definitions |
2.1 | In this Agreement, the terms set forth below, which appear according to alphabetical order [ Translator’s Note: according to the Hebrew ], shall have the meaning set forth beside them, unless otherwise expressly stated: |
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The “ Index ” | – |
Means the Consumer Price Index, which includes fruit and vegetables, and which is published from time to time by the Central Bureau of Statistics and Economic Research, and should the said Index cease to be published on any particular date, it shall be replaced by any index [which] shall come in place thereof and which shall be published by another government institution or entity, or in the absence thereof, any price index which represents the increase in the cost of living in the State of Israel. In such an event where another index shall be in effect, and the Bureau, institution or entity, as aforesaid, shall not determine the ratio between the said index and the replaced index, this ratio shall be determined with the parties’ consent, and in the absence of such consent, by an arbitrator who shall be appointed by the parties for the purpose of the determination of the said index, and in the absence of consent regarding the identity of the arbitrator, by the President of the Institute of Certified Public Accountants in Israel, at the request of one of the parties, and the said determination shall be final and shall be binding on the parties.
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The “ Base Index ” | – |
The index known on the date of the execution of this Agreement, which is the index published on November 15, 2010 and which relates to the month of October 2010, which equates to 107.5 points.
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The “ Known Index ” | – |
The index known on the date of the making of any payment in accordance with the provisions of this Agreement.
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“ Date of Delivery of Possession ” | – |
The date specified in section 9.1 of this Agreement as the date of delivery of possession of the Leased Premises.
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“ Lease Term Expiration Date ” | – |
The expiration of the Lease Term as defined in section 6 of this Agreement or any date earlier than the said date on which the Lease shall come to an end pursuant to the provisions of this Agreement or pursuant to any law.
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The “ Leased Premises ” | – | The Land and the Structure, and also any addition to the Structure which shall be built by the Lessee in accordance with the provisions of this Agreement. |
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2.2 | The Appendices as set forth below are attached to this Agreement and form an integral part hereof – |
2.2.1 | The up-to-date approval of rights of the Administration in respect of the Land – Appendix A ; |
2.2.2 | The plan in which the land is demarcated in yellow – Appendix B . |
3. | Engagement |
The Lessor hereby undertakes to lease the Leased Premises to the Lessee, and the Lessee hereby undertakes to lease the Leased Premises from the Lessor, under an unprotected lease, for such consideration and upon such terms and conditions in accordance with and subject to the terms and provisions of this Agreement.
4. | Purpose of the Lease and Nature of the Lease |
4.1 | The Purpose of the Lease pursuant to this Agreement is a plant for the manufacture, development, storage and marketing of biological, pharmaceutical and veterinary products, including all of the uses related to this purpose, including offices, laboratories and warehouses, provided that they are permitted pursuant to any law, and without derogating from that stated in this Agreement. In addition, the Lessee may not make use of the Leased Premises or any part thereof for any other purpose, with the exception of the foregoing, in the absence of the Lessor’s prior, written consent. |
4.2 | The Lessee hereby declares and confirms that it has visited the Leased Premises, that it has seen and examined the condition of the Leased Premises, and that the condition thereof is consistent with the Lessee’s requirements and the purpose of the Lease, and that it has and shall have no claims of unsuitability and/or claims of choice and/or choice and/or claims of defects in the Leased Premises, against the Lessor. |
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4.3 | The Lessor declares that there is no impediment pursuant to law and/or agreement and/or otherwise to the leasing of the Leased Premises to the Lessee, pursuant to this Agreement, or to the making use of the Leased Premises for the purpose of industry, subject to that stated in this Agreement. |
4.4 | The Lessee may terminate the Lease Term, by giving written notice to the Lessor, also prior to the Lease Term [ Translator’s Note: apparent error in the Hebrew; presumably should read “ prior to the expiration of the Lease Term”] or (as the case may be) prior to the expiration of the Option Periods, in the event that the Lessee shall be unable, due to the Terminating Circumstances (as defined below), to make use of the Leased Premises for one or more of the main uses included in the definition of the purpose of the Lease, that is to say, a plant for the manufacture, development, storage and marketing of biological, pharmaceutical and veterinary products. The provisions of this section above shall apply in any event where the Lessee shall be unable to make use of the Leased Premises, as stated above, for reasons of a force majeure and/or act and/or omission of any third party and/or following an instruction and/or order and/or regulation of a competent authority not following an act and/or omission of the Lessee (hereinafter, in this section: the “ Terminating Circumstances ”) for a period of 90 consecutive days. For the avoidance of doubt, it is hereby clarified that during the said period of 90 days, the Lessee shall continue to pay Rent, and the rest of the obligations imposed thereon pursuant to this Agreement shall apply to the Lessee, and it is agreed that, in the event that the Lessee is unable to make use of the Leased Premises as aforesaid, and should it arise, out of the circumstances of the matter, that there is no possibility of acting to remedy the situation in such a manner that it shall be possible to make use of the Leased Premises, as aforesaid, and should it arise, out of the circumstances, that there is no possibility of acting to remedy the situation in such a manner that it shall be possible to make use of the Leased Premises as aforesaid during 90 days from the date of the occurrence of the Terminating Circumstances, then the Lessee may terminate the Lease Term, as aforesaid, immediately upon the occurrence of the Terminating Circumstances. It is hereby clarified that the Lessee shall have no claim and/or lawsuit against the Lessor in connection with the occurrence of the Terminating Circumstances, as aforesaid. |
It shall also be hereby clarified that failure to obtain a license and/or permit pursuant to any law to make use of the Leased Premises for the purpose of the Lease shall not constitute grounds for cancellation of this Agreement and compliance by the Lessee with all of its obligations pursuant hereto, including payment of the Rent. |
In the event of the occurrence of the Terminating Circumstances, as aforesaid, the Lessee undertakes to give the Lessor written notice to this effect, immediately after the occurrence thereof. |
For the avoidance of doubt, it is hereby clarified that in the event that the Lessee is unable to make use of the Leased Premises, as aforesaid, following an act and/or omission of the Lessor, it shall be deemed to be a fundamental breach of this Agreement by the Lessor, in respect of which the Lessee shall be entitled to any remedy and/or relief conferred thereon in respect of a |
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fundamental breach in accordance with the provisions of this Agreement and/or any law, however, it shall not be entitled to make use of the right conferred thereon by virtue of this section 4.4 above.
5. | Non-Payment of Key Money and Non-Application of the Tenant Protection Laws |
5.1 | The Lessee hereby declares and confirms that it is aware that the Structure was built after February 28, 1968, and that in any event, on August 20, 1968, there was no tenant who was entitled to occupy the Leased Premises as a protected tenant, and since then, the Leased Premises have not been leased to any tenant for key money. Consequently, pursuant to the provisions of the Tenant Protection (Consolidated Version) Law, 5732 – 1972 (in this section: the “ Law ”), the Law and/or any law which is intended to amend and/or add to and/or replace the Law, shall not apply to the Lease of the Leased Premises which is the subject of this Agreement, and that the Lessee, the Leased Premises, this Agreement and the Lease pursuant hereto are not and shall not be protected pursuant to the provisions of these laws. |
5.2 | The Lessee hereby declares and confirms that it has not paid, does not pay, did not intend to pay, has not been required to pay and has not undertaken to pay, to the Lessor, any amount, either directly or indirectly, either in cash or cash equivalents, in respect of key money for the lease right in the Leased Premises, and that upon the vacation of the Leased Premises, the Lessee shall not be entitled to claim and/or receive any amount whatsoever or any benefit whatsoever in respect of key money or in respect of goodwill. |
5.3 | The Lessee hereby declares and confirms that this Agreement, and the Lease pursuant hereto, the Lessee and the Leased Premises are not and shall not be protected by the provisions of the Law and/or by the provisions of any law which is intended to amend and/or add to and/or replace the Law and/or any other law which grants and/or shall grant to tenants and/or to leases any protection of a kind similar to the protections pursuant to the aforesaid laws; and the Law, as it shall be amended and/or replaced, as aforesaid, and any other law, as aforesaid, and also, any regulation and/or statute which has been enacted and/or which shall be enacted in the future pursuant to the said Law, shall not apply to the Lessee, to the Leased Premises, to the Lease, or to this Agreement. |
6. | The Lease Term and the Option |
6.1 | The Lease Term which is the subject of this Agreement is for a period of 180 (one hundred and eighty) months, commencing on the Lease Term Commencement Date as defined below. |
In this Agreement:
The “Lease Term Commencement Date” means: January 1, 2011 .
Without derogating from the Lessee’s right to any remedy and/or relief in accordance with the provisions of this Agreement and/or any law, should the
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Date of Delivery of Possession be postponed, the Lease Term Commencement Date shall be postponed accordingly.
The “Lease Term Expiration Date” means: the date on which the Lease Term expired.
6.2 | The Option |
6.2.1 | The Lessor hereby grants the Lessee an option to extend the Lease Term for an additional period of 119 months, commencing on January 1, 2026, and expiring on November 30, 2035 (hereinafter and hereinabove: the “ Option Period ”). |
6.2.2 | Exercise of the option shall be done automatically without requiring any prior notice from the Lessee to the Lessor. Should the Lessee request not to exercise the option, the Lessee shall give notice thereof to the Lessor, by registered mail and/or by hand delivery, at least 180 (one hundred and eighty) days prior to the Lease Term Expiration Date, of its wish not to extend the Lease. |
6.2.3 | During the Option Period, the provisions of this Agreement shall apply in full, mutatis mutandis , as the case may be, and in such an event, the term “Lease Term” and any term related to this term, shall also include the Option Period. |
6.2.4 | Should the Lessee give notice that it does not wish to exercise the option, as stated above, the Lessee shall vacate the Leased Premises immediately at the expiration of the Lease Term. |
6.3 | The duration of the Lease Terms and also the duration of the Option Period are of the essence of this Agreement, and neither party may shorten them (in the absence of mutual consent or subject to the provisions of this Agreement), in view of the expectations and intentions of the parties at the time they entered into this Agreement. |
7. | Rent and Manner of Payment Thereof |
7.1 | In consideration of the Lease pursuant to this Agreement, the Lessee undertakes to pay the Rent, to the Lessor or in the Lessor’s favor, in such amounts, at such rates, at such times and in such manner as set forth in this section 7 below. |
Commencing from January 1, 2011 and up until March 31, 2011 – an amount of NIS 63,882 per month. The Rent for this period has been paid on the date of execution of this Agreement, and the signing by the parties of this Agreement is proof of payment thereof.
Commencing from April 1, 2011 and up until March 31, 2016 – an amount of NIS 90,000 per month, linked to the Base Index.
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For the period between April 1, 2016 and up until March 31, 2021 – an amount of NIS 90,000 per month, linked to the Base Index, together with a supplement of 5%. This payment shall also be linked to the Base Index.
For the period between April 1, 2021 and up until March 31, 2026 – a supplement of 5% shall be added to the last Rent payment. This payment shall be linked to the Base Index.
For the period between April 1, 2026 and up until March 31, 2031 – a supplement of 5% shall be added to the last Rent payment. This payment shall be linked to the Base Index.
For the period between April 1, 2031 and up until March 31, 2035 – a supplement of 5% shall be added to the last Rent payment. This payment shall be linked to the Base Index.
7.2 | Value Added Tax shall be added to all of the payments specified in the Agreement, including the Rent payments as set forth in section 7.1 above, and shall apply at such rate as shall be in effect on the date of the Rent payment and/or the actual payment, and the VAT shall be paid by it to the Lessor together with the Rent payment and/or the payment, and in addition to the payment thereof. In respect of any Rent payment and/or payment as aforesaid, the Lessor shall submit to the Lessee a tax invoice for payment thereof. |
7.3 | The Rent in respect of a period of every 6 (six) months of the Lease shall be paid by a bank transfer to the Lessor’s account once every 6 (six) months of the Lease in advance, on the first business day of the commencement of every six months of the Lease, for the said 6 (six) months of the Lease. |
The term “business day” – means in this subsection – any day on which most of the banks in Israel are open for business.
Without derogating from the provisions of this section above and below, the Rent (principal) and the VAT in respect thereof shall be paid in the following manner: first, the Lessee shall pay the Rent, and after the Lessee shall receive possession of the invoice in respect of the Rent (principal) together with the VAT in respect thereof, the Lessee shall pay the amount of the VAT. The amount of the VAT shall also be paid by bank transfer, not later than within 21 (twenty one) days from the date of receipt of the invoice by the Lessee.
7.4 | The making of the aforesaid payments is subject to submission by the Lessor to the Lessee from time to time of confirmations of deduction of tax at source and proper bookkeeping as duly required, updated pursuant to law. |
7.5 | For the avoidance of doubt, it is hereby clarified that the actual transfer of the Rent to the Lessor’s account shall be deemed, upon receipt thereof, as consideration and payment of the Rent at such rate and in such amount as actually paid. The Lessee undertakes to transfer to the Lessor confirmation of the deposit or transfer of the Rent to the Lessor’s account within 14 (fourteen) days from the date of the making of the deposit or the transfer. |
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7.6 | The Lessee shall be liable for payment of the Rent and the other payments applicable to the Lessee pursuant to this Agreement for the entire Lease Term and/or for the Option Period, if exercised, unless the Lessee shall vacate the Leased Premises by virtue of section 4.4 of this Agreement, prior to the expiration of the Lease Term or prior to the expiration of the Option Period. |
7.7 | In respect of any delay in the payment of the Rent exceeding 14 (fourteen) days, the Lessee shall pay, in addition to the Rent plus linkage differentials, also arrears interest at the dollar-denominated rate of interest collected by the bank in respect of unauthorized debit balances in current loan accounts (hereinafter: the “ Arrears Interest ”), in respect of each day of delay commencing from the 14 th day. In respect of a delay exceeding 37 (thirty seven) days, the Lessee shall pay, in addition to the Arrears Interest, additional compensation at a rate equal to US$ 200 (two hundred dollars) for each day of arrears (commencing from the 37 th day), provided that the Lessor sent the Lessee written notice of the payment of the amount in arrears, at least 7 (seven) days in advance. |
The payment of interest as aforesaid shall not derogate from the Lessor’s right to any other remedy set forth in this Agreement and/or in any law in respect of a breach of the Agreement by the delay in payment, and receipt of the interest, as aforesaid, shall not be interpreted as a waiver by the Lessor of any other such remedy.
8. | Additional Payments |
8.1 | In addition to the Rent and the VAT as stated above, the Lessee shall bear all of the payments as set forth below, on time and in full, and the Lessee shall perform the following actions, in connection with and/or pertaining to the Leased Premises, for the duration of the entire Lease Term. |
8.1.1 | General municipal property taxes and/or business municipal property taxes, and also any taxes, charges, levies and other or additional compulsory payments, whether government or municipal, of any kind or nature, which are applicable and/or shall apply in the future pursuant to any law, to the user and/or occupant of the Leased Premises, including business taxes, signage charge and/or tax, and payments for licenses which shall apply to the Lessee, shall be paid by the Lessee at the lawful time for payment thereof to the authorities. |
8.1.2 | Any tax, charge or compulsory payment, whether government or municipal, of any kind or nature, which applies to the management of the Lessee’s business in the Leased Premises. |
8.1.3 | Payments in respect of water, electricity and telephony services which are provided to the Leased Premises and/or to the facilities in the Leased Premises and/or in respect of the Lessee’s use thereof, and also any other and/or additional payment and/or expense in respect of the services provided to the Leased Premises. |
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8.2 | Property tax and a compensation fund and also any compulsory payment and/or any other tax which applies and/or shall apply and/or is imposed and/or is imposed [sic] and/or shall be imposed thereon in the future, if any, on the owner of assets, as distinct from the occupants of the assets, shall apply to the Lessor, and shall be paid by the Lessor, unless otherwise stated in this Agreement or in the said law which shall be published. |
8.3 | The Lessee undertakes to transfer into its name the municipal property tax bills, the water bills and the electricity bills and any other payment applicable to the Leased Premises, at the Municipality of Beit Shemesh, at the Israel Electric Corporation, and at any other institution or entity, as shall be required. |
8.4 | The Lessee shall bear all of the expenses entailed in the works for the adjustment of the Leased Premises to the Lessee’s requirements as set forth in section 10 below, including the adjustment of the telephony and electricity systems, and any other system and/or facility and/or infrastructure situated at the Leased Premises, however, with the exception of the expenses entailed in the making of repairs, which shall be made by the Lessor, and at the Lessor’s expense, as set forth in section 9.3 below. |
8.5 | At the Lessor’s request, the Lessee shall present to the Lessor all of the confirmations and receipts attesting to payment of all of the taxes and payments applicable to the Lessee pursuant to this Agreement, in full and on time. |
8.6 | Should a party to this Agreement (hereinafter: the “ Paying Party ”) make, for any reason, any payment which, pursuant to the provisions of this Agreement, is payable by the other party (hereinafter: the “ Liable Party ”) in respect of a debt from the Lease Term only – the Liable Party shall be required to reimburse to the Paying Party any amount which shall be paid by it, as aforesaid, immediately at its first request, and it shall be linked to the Index from the date of payment thereof up to the date of reimbursement thereof, in full, together with any linkage differentials and/or interest and/or fine that were actually paid, provided that the Paying Party gave the Liable Party prior, written notice of 14 (fourteen) days at least of its intention to make the payment instead of the Liable Party, and the Liable Party failed to respond to the application of the Liable Party [ Translator’s Note: apparent error in the Hebrew; presumably should read “Paying Party”]. If the amount requested was not paid, in whole or in part, within 14 days from the date of the request of the Paying Party, as stated above, the amount in arrears shall bear, in addition to the linkage differentials as stated above, Arrears Interest as stated in section 7.9 above. |
9. | Delivery of Possession of the Leased Premises |
9.1 | The Lessor shall deliver possession of the Leased Premises to the Lessee on the Date of Delivery of Possession, which shall be not later than January 1, 2011 (hereinafter and hereinabove: the “ Date of Delivery of Possession ”). |
9.2 | The Lessor undertakes to deliver the Leased Premises to the Lessee, in their as-is condition on the date of the execution of this Agreement, and free of any |
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person or object, connected to the electricity, water and sewerage networks, and all of the systems thereof shall be in good and proper working condition, in their as-is condition on the date of execution of this Agreement.
The Lessor undertakes to repair any defect and/or fault caused to the Leased Premises and to the systems thereof from the date of the execution of this Agreement and up to the Date of Delivery of Possession, with the exception of any defect and/or fault which were caused following reasonable use to the Leased Premises.
10. | Cancelled . |
11. | Manner of Use of the Leased Premises |
The Lessee hereby undertakes to safeguard the completeness of the Leased Premises and the cleanliness of the surrounding area thereof, and the good and proper condition thereof, to make use of and conduct its business, subject to the provisions of any law, solely within the confines of the Leased Premises and not to cause and not to allow another to cause any hazard, nuisance or trespassing, in contravention of the provisions of any law.
12. | Protection and Repair of the Leased Premises |
12.1 | The Lessee undertakes to make use of the Leased Premises in a reasonable and cautious manner and to maintain the clean condition thereof, and to bear all of the expenses entailed therein pursuant to the provisions of this Agreement and without derogating from the generality of the foregoing, the Lessee hereby undertakes the following: |
12.1.1 | To hold and maintain, on a regular basis, throughout the entire Lease Term, the Leased Premises, and to keep them in good and proper condition. |
12.1.2 | To make use of the Leased Premises in a reasonable and cautious manner, as is consistent with the purposes of the Lease. |
12.1.3 | Not to perform any act or omission that could cause harm to the Leased Premises. |
12.1.4 | To notify the Lessor of any defect, damage or material breakdown caused to the Leased Premises. |
12.2 | The Lessor and/or any entity on its behalf may enter the Leased Premises at any reasonable time, after prior arrangement with the Lessee, in order to inspect the condition of the Leased Premises, and also for the purpose of making repairs, performing works, and technical or other arrangements (which the Lessor has undertaken to perform in accordance with the provisions of this Agreement) and the Lessee undertakes to allow the Lessor and/or any entity on its behalf to enter the Leased Premises for this purpose. |
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12.3 | The Lessee shall be responsible for and shall repair at its expense any damage and/or breakdown and/or loss which shall be caused to the Leased Premises (hereinafter, jointly, in this section: “Damages”), and which arise from use of the Leased Premises. |
12.4 | The Lessor undertakes to perform all of the rain leak repairs in the roof of the Structure of the Leased Premises, as a consequence of ordinary wear and tear arising from regular use and/or as a consequence of structural defects in the Leased Premises, within 30 (thirty) days from the date on which it received notice thereof from the Lessee. In any event of Damages which do not allow the Lessee to conduct its business in the Leased Premises, and which disrupt its regular course of work, the Lessor undertakes to repair the Damages immediately. Should the Lessor fail to act as stated above, the Lessee shall repair the Damages at the Lessor’s expense, provided that it gave notice, in writing, of its intention to do so, except as regards Damages which do not allow the Lessee to conduct its business in the Leased Premises and which disrupt its regular course of work, as aforesaid. It is hereby expressly agreed that the Lessor’s undertaking to make the rain leak repairs, as stated above, shall apply in the first three years of the Lease Term only, and not during the Option Period, during which time this obligation shall apply to the Lessee. |
12.5 | The Lessee undertakes to allow the Lessor and/or any entity on its behalf, to repair the Damages, as aforesaid. In the repair of the Damages, as aforesaid, the Lessor shall use its best endeavors to ensure that the damage caused to the Lessee, if any, shall be reduced to the possible minimum, and that the duration of the performance of the actions shall be as short as possible. |
13. | Alterations to the Leased Premises |
13.1 | It is agreed by the Lessor that the Lessee may make alterations and improvements to the Leased Premises, including the extension of the Structure, the construction of additional galleries, the construction of additional structures, and so on and so forth, subject to these works being performed at the Lessee’s expense and at the Lessee’s responsibility, and pursuant to the provisions of any law. The Lessee shall not pay additional rent in respect of the said additional galleries. |
13.2 | The Lessor declares that it has no objection to the Lessee acting to exercise the balance of the existing building rights, if any, in the Leased Premises (hereinafter: the “ Additional Building Rights ”), subject to the provisions of any law. For the avoidance of doubt, it is hereby clarified that the exercise of the Additional Building Rights, as stated above, shall be at the Lessee’s expense only, and the Lessee alone shall bear the sole liability in all matters pertaining to the exercise of the Additional Building Rights and the obtaining of all of the authorizations and permits as required for this purpose. |
It is hereby expressly agreed that the exercise of the Additional Building Rights as aforesaid and/or in respect of all of the adjustment works in the Leased Premises and/or in respect of any addition to the Leased Premises, shall not grant any right and/or consideration whatsoever to the Lessee in the Leased Premises, including an unprotected lease right and/or the payment of
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key money. In addition, the Lessee, and solely the Lessee, shall bear all of the taxes, charges, levies (including a betterment levy, insofar as and to such extent as applicable) and any additional payment demand in respect of the exercise of the Additional Building Rights and/or use thereof as stated above, including the making of all of the payments as set forth in section 8 above.
13.3 | The Lessee undertakes to obtain all of the insurance policies as required to cover its liability at any time it shall perform renovation and construction works to the Leased Premises, as set forth in section 16.12 below. |
13.4 | The Lessor undertakes to cooperate with the Lessee in all matters pertaining to the making of alterations in the Leased Premises and to assist the Lessee in connection therewith, insofar as depends on the Lessor, and insofar as required given the circumstances of the matter, provided that this shall not cause any expense and/or impose any financial liability on the Lessor. |
13.5 | The Lessee undertakes to perform the works in the Leased Premises whilst protecting the shell of the Leased Premises and whilst obtaining all of the permits required for the performance of the works pursuant to law. It is clarified that the Lessor is not liable for ensuring and/or does not undertake that the permits and licenses shall be granted as required pursuant to any law for the making of alterations in the Leased Premises and/or for the conducting of the Lessee’s business therein, and the Lessee hereby waives any claim and/or demand against the Lessor in this regard, with the exception of a claim and/or demand against the Lessor in this regard arising from a direct act and/or omission of the Lessor. |
13.6 | It is agreed by the parties that all of the changes which have been and/or shall be made to the Leased Premises by the Lessee and/or by any entity on its behalf, in connection with the adjustment works in the Leased Premises as stated in section 10 above, shall remain as they are, and in any event, at the expiration of the Lease Term, the Lessee is not required to restore the Leased Premises to their former condition, to the condition they were in on the Date of Delivery of Possession of the Leased Premises. |
It is hereby expressly agreed that at the expiration of the Lease Term, the Lessee shall be permitted to dismantle from the Leased Premises any equipment, systems and installations which were installed by the Lessee in the course of the adjustment works in the Leased Premises, as set forth below:
In the rest of the area of the Structure (the area of the Structure, without the office area) the Lessee may, in its sole discretion, dismantle the adjustment works in the Leased Premises which it performed as stated in section 10 above, in whole or in part, including any system and/or equipment and installation and/or structure (also including those which are permanently affixed to the Leased Premises) and provided that the dismantling thereof, insofar as practicable, shall not cause any damage to the Structure, and if it does cause damage to the Structure, as aforesaid, then the Lessee shall repair same at its expense, and the Lessor shall have no claim and/or demand in respect thereof.
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In the office area – the Lessee may dismantle, in its sole discretion, equipment, systems and installations which are not permanently affixed to the Leased Premises, only. Without derogating from the generality of the foregoing, it is hereby clarified that in the office area, the Lessee may not dismantle partitions and doors which it constructed within the office area in the course of the adjustment works and the alterations which it shall perform [ Translator’s Note: apparent error in the Hebrew; presumably should read “ performed”] in the Leased Premises in accordance with the provisions of this Agreement.
14. | Licenses and Compliance with the Provisions of any Law |
14.1 | Throughout the Lease Term and the Option Period, if exercised, the Lessee undertakes to manage its business in the Leased Premises, pursuant to the purpose of the Lease, in accordance with the provisions of any law and in accordance with all of the licenses, permits and approvals as required pursuant to any law for the purpose of the existence, management and operations of its business in the Leased Premises (hereinafter, jointly, in this section – the “ Licenses ”). |
The Lessor undertakes to cooperate with the Lessee in connection with the obtaining of any approval, permit and license, as aforesaid, provided that this shall not constitute the imposition of any financial liability on the Lessor beyond the liability imposed thereon by virtue of its being the owner of the Leased Premises, in accordance with the provisions of this Agreement and/or any law.
The Lessee shall refrain from any act or omission which could constitute a breach of the aforesaid provisions or the violation thereof.
14.2 | The Lessee undertakes to indemnify the Lessor in respect of any damage caused thereto and/or which it shall be forced to bear and in respect of any charge and/or payment which it shall be forced to bear, following a breach of the provisions of this section by the Lessee and any user on the Lessee’s behalf of the Leased Premises pursuant to the provisions of this Agreement, within 30 days from the date of being requested to do so by the Lessor, provided that the Lessee was given prior notice of any claim and/or demand as aforesaid immediately upon the submission thereof, and that it was also given a good opportunity to defend itself against any such claim and/or demand, without prejudice to any other and/or additional relief and/or remedy to which the Lessee is entitled, in accordance with the provisions of this Agreement and/or any law. |
14.3 | The Lessor declares that a Form 4 Certificate of Occupancy has been obtained in respect of the Leased Premises. During the term of this Lease Agreement, the Lessor shall continue to be liable pursuant to any law in connection with the construction of the Leased Premises, and it shall indemnify the Lessee in respect of any damage caused thereto and/or which it shall be forced to bear and in respect of any charge and/or payment which it shall be forced to bear (including expenses of any kind or nature and attorneys’ fees). In any event where the Lessor is responsible, as aforesaid, directly, and within 30 days from the date of being requested to do so by the Lessee, and provided that the |
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Lessee was given prior notice of any claim and/or demand as aforesaid immediately upon the submission thereof, and was also given a good opportunity to defend itself against any claim and/or demand and/or lawsuit against the Lessor and/or any entity on its behalf, solely following an inconsistency between the representations made by the Lessor as set forth in this section 14.3 above and the actual situation.
15. | The Lessee’s Liability |
15.1 | The Lessee shall be liable pursuant to any law for any damages, of any kind or nature, which shall be caused to the Leased Premises and/or to the contents thereof and/or to any third party situated in the Leased Premises and/or in the surrounding area and/or to the Lessee itself in connection with the loss of the Rent from the Leased Premises in the event that the Lessee is unable to continue to make use of the Leased Premises for the purpose of the Lease, and as arise from the acts of the Lessee and/or from the omissions of its employees and/or any entity on its behalf following the conducting of its business in the Leased Premises. |
15.2 | The Lessee undertakes to compensate and indemnify the Lessor in respect of any loss and/or damage and/or expense caused to the Leased Premises as a consequence of a judgment against the Lessor as a consequence of any other civil and/or criminal proceeding, insofar as the said proceeding arises from the non-compliance with and/or breach of the Lessee’s obligations as set forth in section 15.1 above and/or arising from damage and/or breach of the obligations for which the Lessee is responsible in accordance with the provisions of this Agreement and/or pursuant to any law. The Lessor shall inform the Lessee of any such claim immediately upon receipt thereof, and shall allow the Lessee to appoint, at its expense, an attorney whose identity shall be determined by the Lessee, who shall represent the Lessor before any such claim and/or demand, and the Lessee shall cooperate with the said attorney, insofar as necessary, for the purpose of conducting the proceedings, and it shall act in accordance with the instructions of the said attorney, and all without prejudice to any other remedy and/or relief to which the Lessor is entitled in accordance with the provisions of this Agreement and/or any law, and without it derogating from any obligations of the Lessee pursuant to this Agreement, including any payment pursuant hereto. |
16. | Insurance |
16.1 | Without derogating from the Lessee’s liability as stated in section 15 above and in accordance with the provisions of any law, the Lessee undertakes to insure at its expense the contents of the Leased Premises, the additions and the improvements which have been and shall be made to the Structure of the Leased Premises and to the installations thereof, by the Lessee, and the insurance values shall be updated from time to time as necessary, and as against extended fire risks, with a duly authorized and reputable insurance company. Without derogating from the generality of the foregoing, the Lessee hereby undertakes to insure the contents of the Leased Premises against fire risks, break-in, by penetrating by force and leaving signs of violence, glass breakage, flooding, and water damages arising from the bursting of pipes, all |
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according to the reinstatement values thereof, with the exception of inventory, at cost value.
16.2 | The Lessee also undertakes to insure, at its expense, its activities in the Leased Premises under such insurance as set forth below: |
16.2.1 | Third party insurance in respect of its activities in the Leased Premises – to cover the Lessee’s obligations to any person and/or entity and/or any third party, following bodily injuries and/or property damages which occurred in connection with its activities in the Leased Premises. |
The limits of liability in the policy for third party insurance, body and property, shall be not less than the limits of liability of US$ 1,000,000 per occurrence and US$ 2,000,000 per annual insurance period.
16.2.2 | Employers’ liability insurance – The limits of liability in the employers’ liability insurance policy shall be not less than the limits of liability of US$ 1,500,000 per occurrence and per annual insurance period. |
16.2.3 | Insurance for the Structure of the Leased Premises – based on a reinstatement value in an amount of 13 million [Translators Note: no currency is denominated in the Hebrew] against loss or damage following fire risks, smoke, lightning, explosion, earthquake, commotion, strikes and malicious damage, flooding, liquid damages, the bursting of pipes, storm and tempest, damage by vehicle, damage by aircraft, break-in and also against any additional risk as necessary, in the Lessor’s opinion. The said insurance shall include a clause regarding a waiver of a subrogation (recourse) right against the Lessor and its employees in respect of damage caused by them, provided that the provisions regarding the waiver of the subrogation right shall not apply in favor of a person who caused the damage with malicious intent. For the purpose of this section, the term ‘the Structure of the Leased Premises’ shall include all of the systems which constitute an integral part of the structure and it shall expressly include all of the additions, improvements or extensions which were made to the Leased Premises by the Lessor, including for the Lessee. The Lessor shall be registered as an additional insured party in the insurance policy. The policies shall be obtained by the Lessee as stated in this Agreement and shall contain a section requiring the insurance company to notify the Lessor of any change which shall be requested to the insurance policies and also of the non-renewal or cancellation thereof. |
The Lessee confirms that it is aware that the Lessor’s rights pursuant to this Agreement are pledged to Bank Hapoalim Ltd. In addition, the Lessee confirms, by affixing its signature, that the Lessor may at any time pledge its rights pursuant to this Agreement to any other bank and/or financial institution subject to, insofar as the pledge to
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Bank Hapoalim Ltd. remains in effect, its obtaining their prior, written consent thereto, provided that it shall be determined that the insurance benefits in respect of partial damages amounting to 25% out of the amount insured shall be paid directly to the Lessee, subject to the repair of the damages by the Lessee.
The Lessee shall ensure that the above-mentioned insurance policy shall be subject to an irrevocable pledge clause in favor of Bank Hapoalim Ltd., Branch Hatzor (715) (hereinafter: the “Beneficiary”), and it shall include a paragraph according to which upon the occurrence of any insurance event covered under the terms of the policy, the insurance benefits which shall be approved pursuant to the terms of the policy shall be paid to the Beneficiary, according to the lower of the following: its beneficial right in the insured property, the amount of the insurance benefits or the multiplication of the proportion of its interest in the pledged property by the amount of the insurance benefits. In the pledge clause, it shall be determined that the insurance benefits in respect of partial damages in an amount of up to 25% of the total insurance amount shall be paid to the Lessee subject to the repair of the damages by the Lessee.
The policy shall also include a condition pursuant to which confirmation of receipt of the amount by the Beneficiary constitutes final and binding confirmation vis-à-vis the insurer.
It shall also be determined in the policy that in the event that the insurer shall decide to cancel the policy in accordance with its right pursuant to law and/or pursuant to the terms and conditions of the policy, it shall be required to give written notice to this effect, to the Beneficiary, not later than 30 days prior to the taking of effect of the cancellation.
The Lessee undertakes to submit to the Beneficiary, according to the request made by the Beneficiary to the Lessee, a copy of the insurance policy which includes the pledge in favor of the Beneficiary, as set forth above.
16.3 | The Lessee shall ensure that an express condition is added to the insurance policies, which shall be obtained as stated above, pursuant to which condition the insurer expressly waives any right of recourse (subrogation) or any other right pursuant to any law to have recourse to the Lessor and/or to the Beneficiary (subject to the provision regarding the waiver of the right of recourse also being included in the insurance policies which they shall obtain), with a claim for recourse or reimbursement or indemnity in respect of any direct or indirect damage which shall be caused due to the Lessor, should any such damage be caused, provided that the revocation of the right of recourse shall not apply to any person who caused the damage with malicious intent. |
16.4 | The Lessee hereby undertakes that a cross-liability clause shall be included in third party insurance, pursuant to which a separate insurance policy shall be |
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deemed to have been issued for each of the constituent entities of the insured party.
16.5 | The Lessee hereby undertakes to indemnify the Lessor immediately against any claim of subrogation filed against it by the National Insurance Institute. |
16.6 | The Lessee hereby undertakes to obtain the aforesaid insurance policies with a top-ranking duly authorized insurance company, immediately after the execution of this Agreement, for the duration of the entire Lease Term. |
The Lessee hereby undertakes to comply with the provisions of the insurance policies which it shall obtain, and to make all of the premium payments required in respect thereof, all so that the said insurance policies shall be in effect for the duration of the entire Lease Term.
16.7 | The validity of the insurance policies shall be subject to the Lease Term pursuant to the Lease Agreement, and the Lessee undertakes to extend them in accordance with that stated in this section throughout the entire Lease Term and the Option Period, if automatically exercised, and to present certifications of insurance to the Lessor at its request. |
16.8 | The Lessee undertakes to submit to the Lessor not later than two weeks after the commencement of the Lease Term, certification from the insurer of the existence of the Lessee’s insurance policies, as a prerequisite for the receipt of possession of the Leased Premises by it. |
16.9 | Failure to submit certification from the insurance company and also non-payment of the premiums to the insurer shall be deemed to be a breach of the Lease Agreement, and the Lessor shall be entitled to make use of the securities submitted to it in connection with this Agreement, after the provision of notice to the Lessee, both for the payment of the insurance premiums and also for the liquidated damages. |
16.10 | The Lessee undertakes to inform the insurance company of any damage to the Leased Premises and/or to any person and/or entity. |
16.11 | The insurance funds which are received shall first be applied to restore the damage in respect of which they were received. |
16.12 | In any event where the Lessee shall perform, itself, construction works in the Leased Premises, the Lessee undertakes to insure, at its expense, prior to the date of receipt of possession and/or prior to the date of commencement of performance of any works in the Leased Premises – whichever is the earlier of the said dates, all of the works being performed by it and/or for it in the Leased Premises, in accordance with this Agreement, including repairs, renovations, improvements, changes and additions at the full reinstatement value thereof (including the value of materials and work) in a contractors’ all-risk insurance policy (including third party insurance which shall be not less than US$ 250,000 limits of liability per occurrence), and also in an employers’ liability insurance policy. |
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In addition, the name of the insured party in the insurance policy shall include the Lessor, and the policy shall include a cross-liability clause. The rest of the provisions of this section 16 shall apply with regard to the insurance policy during the adjustment period, mutatis mutandis , as the case may be.
16.13 | The obtaining of one or all of the insurance policies as stated above shall not release the Lessee from its liability or from its obligations pursuant to the rest of the sections of this Agreement, including all of the payments pursuant hereto. In the event that damage is caused which is not insured, or which is higher than the limits of liability of the policy, and also damage within the limits of the deductible – for which the Lessee is liable pursuant to this Agreement, the Lessee shall be solely liable to bear same. The Lessee hereby undertakes to indemnify the Lessor in respect of any judgment whose execution was not stayed which shall be handed down against the Lessor, in connection with damages as stated above for which the Lessee is liable pursuant to this Agreement, including in respect of any reasonable expense such as in respect of attorneys’ fees which shall be caused to it as a consequence of that stated at the head of this section, provided that the Lessor shall give notice to the Lessee of any such claim immediately after receiving same, and shall allow the Lessee to defend itself against the said claim. |
16.14 | The Lessor hereby declares that it shall have no claim and/or demand and/or lawsuit against the Lessee in respect of damage for which the Lessor is entitled to indemnity pursuant to the insurance obtained pursuant to this section 16 in its entirety (provided that insurance coverage exists pursuant to the insurance obtained pursuant to section 16 in respect of this damage), and it hereby releases the Lessee from any liability for any such damage. The foregoing regarding a release from liability shall not apply in favor of a person who caused the damage with malicious intent. |
17. | Vacation of the Leased Premises |
17.1 | At the expiration of the Lease Term or (as the case may be) at the expiration of the Option Period or (as the case may be) in any event of the lawful cancellation or termination of the Lease, the Lessee undertakes to vacate the Leased Premises, without delay or impediment, and to return the Leased Premises to the Lessor, when the Leased Premises shall be free of any person or object, and in such condition as set forth in section 13.6 above, and in the event that alterations and/or additions were made to the Leased Premises, and they were not dismantled by the Lessee as specified in this Agreement, they shall become the Lessor’s property, and they shall remain in the Leased Premises. In addition, the Lessee undertakes to submit to the Lessor authorizations attesting to the payment of all of the obligations applicable thereto pursuant to this Agreement up until the date specified herein. |
17.2 | Without derogating from and/or reducing the Lessor’s rights pursuant to this Agreement, and in addition to all of the remedies set forth herein, it is hereby agreed that upon the occurrence of one or more of the following events, the Lessor shall be entitled, but not obligated, in its sole discretion, to cancel the Lease Agreement and to demand the vacation of the Leased Premises by the Lessee, all without derogating from the Lessee’s obligations as set forth in this |
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Agreement above, and the Lessee hereby undertakes to vacate the Leased Premises, and to return the Leased Premises within 30 (thirty) days from the date of the demand.
17.2.1 | Should the Lessee fail to pay the Rent during the Lease Term and/or during the Option Period, if exercised, all as the case may be, on time. |
It is hereby agreed that any delay in payment which does not exceed 30 days shall not be deemed, for the purpose of this section only, to be a breach entitling the Lessor to cancel the Lease Agreement.
17.2.2 | Should the Lessee grant a right of use in the Leased Premises or in any part thereof to another/others which is not in accordance with the terms and conditions of this Agreement. |
17.2.3 | Should the Lessee conduct business in the Leased Premises which is not in accordance with the purposes of the Lease. |
17.2.4 | Should a decision be made regarding the dissolution of the Lessee or should a decision be made regarding the appointment of a liquidator, receiver or special administrator, whether temporary or permanent, to the Lessee, or should a receivership order be issued against the Lessee, or should an attachment order be issued against the Lessee’s assets, in whole or in part, or should an order be given for a stay of proceedings against the Lessee in accordance with the provisions of the Companies Law, 5759 – 1999, and should the said decision not be cancelled within 90 (ninety) days from the date on which it was given. |
17.2.5 | Should the Lessee liquidate its business or should the Lessee perform an act of bankruptcy or should the Lessee enter into voluntary dissolution proceedings or should the Lessee be dissolved or should a bankruptcy application be filed against the Lessee or should an application be filed against the Lessee and/or against most of the Lessee’s property for the appointment of a receiver or should an application be filed against the Lessee for the appointment of a receiver and administrator, or should an application be filed against the Lessee for the appointment of a liquidator or any other official appointment, whether temporary or permanent, which is made pursuant to law, or should an application be filed against the Lessee for the grant of an order for the stay of proceedings against the Lessee in accordance with the provisions of any law or should an attachment be imposed on most of the Lessee’s assets, and should they not be removed or cancelled within 90 days from the date on which they were issued or (as the case may be) from the date of the filing thereof. |
17.2.6 | Should the Lessee breach the provisions of this Agreement by way of a fundamental breach, as defined in this Agreement and/or in any law, and should it fail to remedy same within 21 (twenty one) days |
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from the date on which it was asked to do so, in writing, by the Lessor. |
17.3 | In the event where the Lessee failed to remove any person or object from the Leased Premises, on time, as stated in section 17.1 above, the Lessee shall be required to pay to the Lessor, in respect of each day of delay up until the actual vacation of the Leased Premises and the return thereof to the Lessor, as aforesaid, an amount equal to 700 (seven hundred) dollars for each day, in addition to any payment which the Lessee is required to bear in connection with the Leased Premises pursuant to this Agreement and pursuant to any law, with the exception of rent. The aforesaid payment shall be made immediately upon request, and it shall constitute pre-estimated, liquidated damages determined by the parties, taking into consideration all of the circumstances of the matter. For the avoidance of doubt, it is hereby clarified that the said payment does not and shall not grant to the Lessee any right to remain in the Leased Premises, and this amount shall not be deemed to be rent or user fees of any kind or nature. The liquidated damages as aforesaid in this section come in addition to and shall not derogate from and/or prejudice any of the Lessor’s other rights pursuant to this Agreement and/or pursuant to any law, including its right to claim and receive the appointment [Translator’s Note: apparent error in the Hebrew; presumably should read “vacation” ] of the Leased Premises and possession thereof, as stated above. |
18. | Prohibition on Assignment of the Lessee’s Rights |
18.1 | The Lessee hereby undertakes not to transfer and/or assign this Agreement or any part thereof and/or any right and/or obligation arising herefrom to any person or entity (hereinafter, in this section: the “ Transferee ”), and also not to submit and/or transfer and/or grant to any person or entity any right of any kind or nature in the Leased Premises or any part thereof, including a right of use or possession, and all whether directly or indirectly, whether for consideration or without consideration, without obtaining the Lessor’s prior, written consent. The Lessor may only withhold its consent, as aforesaid, upon giving reasonable cause therefor. |
It is hereby expressly agreed that noise and odors deviating from the provisions of the law shall be deemed to be reasonable cause for the purpose of this section, and in addition, the lack of economic soundness of the Transferee shall also be deemed to be reasonable cause for the purpose of this section, however, in the event of the withholding of consent for this reason, the Lessee may continue to guarantee the fulfillment of its obligations pursuant to this Agreement, by the Transferee. Should the Lessee choose to do so, the Lessor may no longer withhold its consent for this reason. Should the Lessee choose not to do so, the Lessor may continue to withhold its consent as aforesaid, without releasing the Lessee from all of its obligations pursuant to this Agreement, and provided that the Transferee has made an undertaking to the Lessee in the form of an undertaking which is identical to its undertakings to the Lessor.
Should the Lessee request to terminate the Option Period prior to the date of expiration thereof, it shall give notice to this effect, in writing, to the Lessor 9
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(nine) months prior to the date on which it requests to terminate the Option and to leave the Leased Premises. Should the Lessee be required to find another lessee instead of itself, and in such a case, in all matters pertaining to the approval of the replacement lessee by the Lessor, the provisions of the head of this section above shall apply in all matters pertaining to the Lessor’s withholding its consent for reasonable cause. The Lessor’s notice of its selection shall be given within three months from the date on which it received the Lessee’s notice. Should the replacement lessee not be approved, the Lessee shall continue to pay all of its obligations pursuant to this Agreement until it shall find a replacement lessee who shall be approved by the Lessor and/or up until the expiration of the Lease Term and/or the Option Period, whichever is the earlier of the two dates. It is hereby clarified that this paragraph shall apply solely during the Option Period, and after the implementation of the Lease Term by the Lessee.
It is hereby expressly agreed that the provisions of the section above shall not apply in the following events:
1. | Should the Lessee allow any company out of the Phibro Animal Health Group to make use of the Leased Premises, in a manner which is consistent with the purpose of the Lease and the use of the Leased Premises, whether as an invitee or as a sub-lessee, provided that the Lessee shall remain solely liable to the Lessor for compliance with its obligations in accordance with the provisions of this Agreement. |
2. | Should the Lessee transfer and/or sell the manufacturing activities of the plant which it is due to set up in the Leased Premises to any person or entity. In such an event, this Agreement shall be transferred in its entirety to the said person or entity in such a manner that the said person or entity shall step into the shoes of the Lessee for all intents and purposes, provided that the Lessee shall guarantee the fulfillment of its obligations pursuant to this Agreement by the said person or entity, in an exclusive manner to the Lessor, and provided that the recipient of the right, as stated in this subsection, has made an undertaking, in writing, to the Lessee, in the form of an undertaking which is identical to the undertaking to the Lessor. |
19. | Transfer of Rights by the Lessor |
Subject to and without derogating from the right of first notice which is conferred on the Lessee in accordance with the provisions of section 21.1 above [sic], it is hereby clarified and agreed that the Lessor may at any time assign and/or transfer and/or sell and/or lease and/or pledge its rights in the Leased Premises (including a pledge and/or charge and/or rights of the Lessee in the Leased Premises and/or rent in favor of the Lessor’s bank), in whole or in part, and it may perform any action therein, all in its sole discretion, without being required to obtain the Lessee’s consent, and provided that the Lessor give notice thereof to the Lessee, and that the Lessee’s rights pursuant to this Agreement shall not be adversely affected.
For the purpose of the assignment of the rights in favor of Bank Hapoalim Ltd., the Lessor shall sign, as the Assignor, and the Lessee shall sign, as the Debtor, the Deed
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of Assignment of Rights attached hereto, marked with the letter “B” and which forms an integral part of the Agreement.
20. | Breaches and Remedies |
20.1 | Without derogating from any of the provisions of this Agreement, should the Agreement be breached, and should the breach not be remedied within 30 (thirty) days from the date on which the injured party gave an instruction, in writing, to the breaching party to remedy the breach, the injured party may cancel the Agreement, and the provisions of section 17 above shall apply with regard to the vacation of the Leased Premises. |
20.2 | Without derogating from the provisions of section 8.6 above, any obligation imposed pursuant to this Agreement on either of the parties (hereinafter: the “Liable Party”), where the Liable Party failed to comply therewith at such time as determined for compliance therewith, the other party (hereinafter: the “Performing Party”) may, but is not obligated to, comply with the obligation, in whole or in part, instead of the Liable Party, provided that the Performing Parties shall first give an extension in writing of 14 (fourteen) days to the Liable Party, to comply with the obligation. The Liable Party shall reimburse the Performing Party for all of its expenses in connection with the compliance with the said obligation. |
For the purpose of this subsection, “compliance with the obligation” means – including the performance of an act or the payment of money.
20.3 | Any remedy or right conferred on a party to this Agreement in connection with a breach of the Agreement by the other party come in addition to any other remedy conferred on the said party, whether pursuant to this Agreement or pursuant to any law, and they shall not derogate therefrom. The parties hereby declare that their intention in this Agreement is to allow each party to enforce, in any event of a breach, the maximum remedies available pursuant to law or this Agreement, whether concurrently, cumulatively or alternatively, all in its sole discretion, and all unless otherwise expressly stated in this Agreement. |
20.4 | In any event of the cancellation of this Agreement due to breach thereof by a party to this Agreement, the other party shall be entitled to any other and/or additional period [Translator’s Note: apparent error in the Hebrew; presumably should read “relief” ] available to it pursuant to law due to the breach, including a remedy of compensation, restitution, an injunction, a mandamus order or a declaratory order. |
21. | Miscellaneous |
21.1 | During the entire Lease Term and Option Period, the Lessor hereby gives to the Lessee a right of first notice in relation to and in connection with a voluntary sale, of any kind or nature, of the Leased Premises or any part thereof or of the entire Structure which constitutes part thereof, in whole or in part, as set forth below. The provisions of this section shall not apply with regard to any transfer and/or sale as stated above to a corporation controlled |
23 |
by Mr. Moshe Goren – the party holding the controlling interest in the Leased Premises as of the date of execution of this Agreement and/or any of his relatives (his wife, his descendants, descendants of his descendants) and/or to a corporation controlled by any of them.
Should the Lessor decide to sell the Leased Premises or any part thereof as stated above and/or should the Lessor receive an offer from a third party to purchase the asset or any part thereof, as stated above, it shall give notice of the price being requested or the price being offered to the Lessee, and it shall give the Lessee a right to purchase the Leased Premises or any part thereof, as stated above, at the price being requested or at the price being offered for a period of 30 (thirty) days from the date of receipt of the notice. During the said period, the Lessor shall be enjoined from holding negotiations and/or from selling the Leased Premises or any part thereof, as stated above. The Lessee’s response shall be in writing and shall be given within 30 (thirty) days from the date of the Lessor’s notice.
Should an offer not be accepted by the Lessee, the Lessor shall be entitled to sell the Leased Premises upon such terms and conditions as it may deem fit.
Without derogating from the foregoing, should the Lessor wish to sell and/or transfer its rights, as stated above, it shall first apply to the Lessee, in writing, and it shall inform the Lessee of its intention, whilst stating the consideration being requested, so as to allow the Lessee to advance the internal decision-making process within the Lessee.
The Lessor shall use its best endeavors with the aim of causing the situation whereby the Lessee shall receive a right of first offer in accordance with that stated above, also with regard to the land situated adjacent to the Parcel known as Plot No. 22, which is owned by the brother of the Lessor’s representative (as defined below) – Mr. Abraham Magrafta or a company in his control, as soon as practicable, given the circumstances of the matter.
21.2 | Not later than the Date of Delivery of Possession, the Lessee shall submit to the Lessor a blank promissory note, signed by the Lessee, and limited to an amount of NIS 300,000 (three hundred thousand New Israel Shekels), to secure compliance with the Lessee’s obligations in accordance with and subject to the provisions of this Agreement. The promissory note shall be deposited with the Lessor’s representative – Mr. Moshe Goren, who shall be entitled to fill in, on the promissory note, the date and the amount of payment (within the limits of the amount stated above), and he may make use thereof solely after sending written notice to the Lessee, to amend the breach which is the subject of the application within 21 (twenty one) days from the date of the application, which was not remedied during the notice period, not later than within 90 (ninety) days from the expiration of the Lease Term or (as the case may be) at the expiration of any of the Option Periods, the Lessor undertakes to cause the return of the promissory note to the Lessee. |
By affixing his signature to this Agreement on behalf the Lessor, the Lessor’s representative hereby undertakes to act in accordance with and subject to the provisions of this section above.
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21.3 | Each of the parties to this Agreement shall be represented by its own attorney, and shall bear the attorney’s full costs. |
21.4 | This Agreement sets forth the entirety of the agreements, stipulations, declarations and legal relations between the parties, and no proposal, summary, understanding, representation or promise which was made or given prior to the signing of this Agreement or at the time of the signing hereof, by one party to the other, whether in writing or orally, whether expressly or impliedly, shall be valid, except for that stated in this Agreement. |
21.5 | No modification of, addition to or removal from this Agreement after the date of execution hereof shall be valid, unless made in writing and signed by the parties. |
21.6 | It is hereby declared and agreed that the provisions of this Agreement override the provisions of the Hire and Loan Law, 5731 – 1971, and that the provisions of Chapter A of the said law shall not apply to the Lease which is the subject of this Agreement. |
21.7 | The expenses incurred in stamping this Agreement, insofar and to such extent as applicable, shall apply to the parties in equal shares between them. |
21.8 | Any omission, delay or waiver by either of the parties in the exercise of any of its rights pursuant to the provisions of this Agreement and/or any law shall not be deemed to be a waiver, impediment, consent or notice by the said party, and they may use their rights pursuant to this Agreement and/or pursuant to any law at any time as they may wish, without being enjoined from doing so. |
21.9 | Any waiver or extension given by one party to the other party in a particular instance shall not constitute a precedent for another instance. For the purpose of this Agreement, no waiver or extension shall be valid, unless made in writing. |
21.10 | The exclusive jurisdiction in any matter pertaining to this Agreement or arising herefrom shall rest with the competent court in Tel Aviv – Jaffa only. |
22. | Addresses and Notices |
22.1 | The addresses of the parties for the purpose of this Agreement shall be that of the parties as set forth in the preamble to this Agreement and/or the address of their attorneys as set forth below: |
The Lessor – c/o Attorney Haggai Kurzweil, POB 10101, Ramat Gan, 52001, 39 Arlozorov St., Ramat Gan.
The Lessor – c/o Attorney Shlomo Cohen, 11 Ramban St., Jerusalem, 92422.
22.2 | Notices pursuant to this Agreement shall be given in writing, by registered mail or by hand delivery, according to the address stated in section 22.1 above. Notice sent by registered mail shall be deemed to have reached its |
25 |
destination after the expiration of 72 hours from the time of submission thereof for dispatch as aforesaid, with the confirmation of the Post Office; notice delivered by hand shall be deemed to have reached its destination from the time of delivery thereof by hand, as aforesaid.
IN WITNESS WHEREOF, the parties have affixed their signatures:
[ Signature ] Stamped : Samaria Carpets Ltd. |
[ Signature ] Stamped : ABIC Biological Laboratories Ltd. |
|
________________ | ________________ | |
The Lessor | The Lessee |
ATTORNEY’S CONFIRMATION
I, Haggai Kurzweil, Attorney at Law, who serves as the attorney of Samaria Carpets Ltd. (hereinafter: the “ Lessor Company ”), hereby confirm that the signatories to this Lease Agreement and the appendices hereto are authorized to sign on behalf of the Lessor Company, and that their signature together with the Company’s stamp is binding on the Company for all intents and purposes.
[ Signature ]
Stamped : | Haggai Kurzweil, Attorney at Law |
License No. 26207 | |
39 Arlozorov St., Ramat Gan |
[ Handwritten ] January 26, 2011 | |
Haggai Kurzweil, Attorney at Law
I, Shlomo Cohen, Attorney at Law, who serves as the attorney of (hereinafter: the “ Lessee Company ”), ABIC Biological Laboratories Ltd. [Translator’s Note: word order is incorrect in the Hebrew] hereby confirm that the signatories to this Lease Agreement and the appendices hereto are authorized to sign on behalf of the Lessee Company, and that their signature together with the Company’s stamp is binding on the Company for all intents and purposes.
[ Signature ]
Stamped : | Shlomo Cohen, Attorney at Law |
License No. 19162 | |
11 Ramban St., Jerusalem, 92422 | |
Tel: 02 – [illegible] |
Shlomo Cohen, Attorney at Law |
Personal Guarantee
I, the undersigned, Mr. Moshe Goren, bearer of ID No. 68862234, hereby make a personal guarantee to the Lessee in respect of any claim and/or demand which shall be filed against same, by Bank Hapoalim Ltd., by virtue of the Deed of Assignment of Rights, as stated in section 19 of this Agreement only. My guarantee shall be valid insofar as the Lessee has acted in accordance with that set forth in the Deed of Assignment of Rights, and has not made any
26 |
modifications thereto and/or as long as the Lessee has acted in accordance with an application made, expressly and in writing, by the Lessor, to make modifications to that stated in the Deed of Assignment of Rights.
[ Signature ]
Stamped : Samaria Carpets Ltd.
Moshe Goren | Date |
27 |
[ Logo – Israel Lands Administration ]
[ Handwritten] APPENDIX A
File No.: Aleph 10211216
Date: December 22, 2010
For the attention of:
Samaria Carpets Ltd.
Beit Shemesh
Beit Shemesh
Re: Confirmation of Registration of Right in Asset
Block: 5084 Parcel: 5 The Parcel:
Plan: Taf /5/32/5 Plot: 23
Address of the Asset: Beit Shemesh Beit Shemesh
Area: Approximately 5,000.00 sq.m.
1. | We hereby confirm that the rights in the Asset are registered with us, in the name of – |
Name : | ID/ Corporation No.: | Proportion of the Rights: | |||
Samaria Carpets Ltd. | ID No. 511078701 | 1 / 1 |
2. | The owners of the rights have a capitalized lease agreement in respect of the above-mentioned asset, which is in effect until September 30, 2033. |
3. | As of the date of this Confirmation – the records, the comments and the actions (the undertakings to register a mortgage, attachments, injunctions, consent to the pledging of rights, and so on and so forth) in respect of the above-mentioned asset and as are updated in the Asset File situated with the Israel Lands Administration (not including pledges which have been registered not with the Israel Lands Administration, or which the Israel Lands Administration does not know about) are set forth below: |
There is a first mortgage with Bank Leumi LeIsrael, without limitation in amount;
There is a first mortgage with Bank Leumi LeIsrael Ltd., without limitation in amount;
There is a second mortgage with Bank Hapoalim Ltd., without limitation in amount.
4. | As of the date of this Confirmation (December 22, 2010 – 08:38), no obligation has been submitted to the Israel Lands Administration for the transfer of rights in the above-mentioned asset. |
5. | This document does not modify any legal rights or obligations, as reflected in the ILA file, and it does not constitute consent to a deviation from/ breach of the terms and conditions of the above-mentioned Agreement. The rest of the details (the terms of the lease, financial terms and the building rights) are as set forth in the Lease Agreement. |
6. | The information set forth in this document does not refer to records which are not kept at the ILA, including records at the Company, as stated above, at the Land Registry Office, at the Registrar of Pledges, Registrar of Associations and Registrar of Companies. |
Stamped: Israel Lands Administration – Jerusalem District
[ Signature ] Stamped : Samaria Carpets Ltd. |
[ Signature ] Stamped : ABIC Biological Laboratories Ltd. |
December 22, 2010 – 08:38 1/ 2…
Jerusalem District, 216 Jaffa St., “Shaarei HaIyr”, Jerusalem POB 36259, Zip Code 91361
Tel: 02 - 5318888, Fax: 02 – 5318706 Israel Lands Administration Website: www.mmi.gov.il
National Call Center: * 5575 Government Portal: www.gov.il
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7. | The registration at the Land Registry Office prevails over the registration in the records of the Israel Lands Administration, and in the event of an inconsistency between the two – the registration at the Land Registry Office shall prevail. |
Sincerely yours,
Lihi Shalom | Municipal Transactions | ||
(Name) | (Position) |
Note : | The details of the asset (address, block, parcel, plan) are in accordance with the data recorded in the ILA File. Please be advised – that the legal status of the rights in land is kept at the Land Registry Offices pursuant to that set forth in the Land Law, 5729 – 1969, after undergoing up-to-date registration proceedings. At the Land Registry Office, the definition of the asset is pursuant to the legend of the final (up-to-date) Block and Parcel (Sub-Parcel). The rights in the above-mentioned land have not yet been registered at the Land Registry Office, and therefore the data referring to the Block and the Parcel on this form are not necessarily the final data. |
Stamped: Israel Lands Administration – Jerusalem District
[ Signature ] | [ Signature ] | |
Stamped : Samaria Carpets Ltd. | Stamped : ABIC Biological Laboratories Ltd. |
December 22, 2010 – 08:38 2/ 2…
Jerusalem District, 216 Jaffa St., “Shaarei HaIyr”, Jerusalem POB 36259, Zip Code 91361
Tel: 02 - 5318888, Fax: 02 – 5318706 Israel Lands Administration Website: www.mmi.gov.il
National Call Center: * 5575 Government Portal: www.gov.il
29 |
[ PLAN ]
[ Signature ] | [ Signature ] | |
Stamped : Samaria Carpets Ltd. | Stamped : ABIC Biological Laboratories Ltd. |
30 |
[ PLAN ]
[ Signature ] | [ Signature ] | |
Stamped : Samaria Carpets Ltd. | Stamped : ABIC Biological Laboratories Ltd. |
31 |
Mem Shin 7
Name of the Assignor | ID / Corporation No. | Address and Zip Code | Tel No. |
Samaria Carpets Ltd. | 51-107870 | 48 HaGefen St., Kidron |
Date: [Handwritten] January 31, 2011
For the attention of:
[Handwritten] ABIC Biological Laboratories Ltd.
Dear Sir/ Madam,
Re: Notice of Assignment of Rights
1. | We hereby inform you that we have assigned or we are going to assign by way of a pledge to Bank Hapoalim Ltd. (hereinafter: “ Bank Hapoalim ”), in accordance with the Assignment of Obligations Law, 5729 – 1969, as set forth below: |
|
|
¨ | All of the rights, funds and any other payments whatsoever (hereinafter, jointly and severally: the “ Funds ”) which are due and/or which shall be due to us from you in connection with the Lease Agreement which was signed between us |
(description of the agreement)
and yourselves on [Handwritten] January 26, 2011 (hereinafter: the “ Agreement ”), up to an amount of ____________ /without limitation in amount (*) including all of the Funds which shall be due to us in restitution following cancellation of the Agreement, for any reason whatsoever, and any additional agreement, the extension of an existing agreement, and any amendment to an agreement which shall be signed between us and you in the said matter.
2. | Therefore, you are required to pay all of the above-mentioned Funds to Bank Hapoalim, and we hereby instruct you, by way of an irrevocable instruction, to transfer all of the above-mentioned Funds to Bank Hapoalim only. |
3. | As long as you are not instructed otherwise by Bank Hapoalim, the payment shall be made by crediting Account No. [Handwritten] 353330 at Branch No. [Handwritten] 715 of Bank Hapoalim. |
Sincerely yours,
[ Signature ]
Stamped : Samaria Carpets Ltd.
_______________________
Assignor’s Signature
(*) | Delete and complete as appropriate. |
¨ | Mark with an X in the appropriate box. |
CONFIRMATION OF THE DEBTOR
For the attention of:
Bank Hapoalim Ltd.
Branch:_______
We hereby confirm receipt of the above-mentioned notice, and that we shall act pursuant to that stated therein.
Date: [Handwritten] January 31, 2011
[ Signature ]
Stamped : ABIC Biological Laboratories Ltd.
___________________
Debtor’s Signature
1. To the Debtor; 2. To the Bank; 3. To the Assignor.
32 |
PROMISSORY NOTE
In accordance with the provisions of the Lease Agreement dated January 26, 2011
Made in Petach Tikva on the 26 th of January
We hereby undertake to pay to:
Samaria Carpets Ltd., Private Company No. 511107870
An amount which shall not exceed NIS 300,000
Place of payment: _________________
Date of payment: on the ___ of the month of______________ in the year _____
The Bearer of the Promissory Note is released from all of the obligations imposed on the Bearer of the Note, including from the presentation for payment and a non-honoring provision.
The maker of the note:
Stamped
:
ABIC Biological
Laboratories Ltd. |
510608284 |
3 Hamelacha St., Industrial
Zone, Beit Shemesh |
[ Signature ]
Stamped : ABIC Biological Laboratories Ltd. |
|||
Name | Private Co. No. | Address | Signature |
AVAL GUARANTEE
We, the guarantors, make this aval guarantee, for payment of the Note by the Maker of the Note.
Signature of Guarantor: | Name of Guarantor, Private Co. No. and Address | |
[ Signature ] | Name: Stamped : Koffolk (1949) Ltd. | |
Stamped : Koffolk (1949) Ltd. | Private Co. No. 510057607 | |
Address: 7 Magshimim St., Petach Tikva |
33 |
With the assistance of the Almighty
SAMARIA CARPETS LTD. | Private Co. No. 51107 8701 |
POB 372, Beit Shemesh |
Tax Invoice No. 5155 | Date: October 1, 2010 |
Original
For the attention of: ABIC LTD .
Address: POB 1098, Tel Aviv, 61010
Quantity | Details | Price per Unit | Amount | ||
Rent for the Period: | |||||
October 2010 – March 2011 | |||||
US$ 11,918 X | |||||
4.145 representative rate of exchange in NIS | |||||
123.97 X 99.70 |
|||||
X 104% Option Supplement 63,882.61
X 6 months |
383,296 | ||||
Structure in Beit Shemesh | [ Illegible ] | ||||
SUB-TOTAL | 383,296 | ||||
VAT at 16 % | 61,327 | ||||
TOTAL | 444,623 |
[ Handwritten ]
October 2010 | 51011302 | 63,882.67 | |
1001 | |||
November 2010 – March 2011 | 13110001 | 319,413.33 |
34 |
Exhibit 10.20
Gerald K. Carlson, Chief Executive Officer
Direct Dial: 201-329-7330
Direct Fax: 201-329-7060
May 2, 2008
Larry L. Miller
8 Hazelwood Court
Warren, NJ 07059
Dear Larry:
I am pleased to extend an offer of employment to you as President, Phibro Animal Health and Nutrition, of Phibro Animal Health Corporation, a New York corporation (the “Company”), with its principal place of business located at 65 Challenger Road, Third Floor, Ridgefield Park, New Jersey 07660, reporting directly to me, the Chief Executive Officer. Initially, you will be primarily responsible for management of the Phibro Animal Health division, and you will also be involved in pursuing acquisition targets in the animal health industry. Within fiscal year 2009 you will assume additional responsibility for the Prince Agriproducts animal nutrition business.
The terms of our offer to you are as follows:
Announcement and Start Date
I anticipate a start date no later than May 19, 2008; in the event that your current employer excuses you before your notice period is served, we would be pleased to move your start date earlier in May to a date on which we mutually agree.
Base Salary and Compensation
You will be paid an annual base salary of $375,000, payable on the 15 th and last business day of each month. Your base salary is subject to periodic review as per Company policy, but shall not be less than $375,000 per year.
Beginning in fiscal year 2009, you are eligible to participate in the Phibro Animal Health Corporate Incentive Plan. Your target bonus for 2009 will be 50% of your base salary or $187,500 with a maximum annual payout of 75% of your base salary or $281 ,250. Annual Incentive Plan bonus payments are made after the conclusion of the Company’s fiscal year on June 30. Incentive Plan bonus payments are made at the sole and absolute discretion of the Company, and are subject to the approval of the Company’s Board of Directors.
Additionally you will receive two special, one time bonus payments. The first will be in the amount of $75,000 and paid on September 30, 2008. The second payment will be in the amount of $175,000 and payable on July 1, 2009.
In order to receive the special, one time bonus payments, you must be employed by the Company on the date that the applicable bonus is scheduled to be paid, unless your employment has been involuntarily terminated without “Cause” or you have resigned for “Good Reason” (each as defined in this Agreement). In order to receive the incentive Plan bonus payments, you must be employed by the Company on the date that the applicable bonus is scheduled to be paid, except as provided below under “Severance.”
With the completion of our recently announced Equity Sale and AIM offering the Corporation will implement an executive incentive stock plan in which you will participate at a level reflective of your role as President, Phibro Animal Health and Nutrition. It is anticipated that awards under the plan will be implemented by
65 Challenger Road, Third Floor, Ridgefield Park, NJ 07660 • 201-329-7300 • Fax: 201-329-7399 |
Phibro Animal Health Corporation
March 31, 2009, with failure to do so by the Company constituting a basis for “Good Reason” resignation by you provided the Company has not implemented an executive incentive stock plan prior to the date of your resignation.
You will be provided with a vehicle for your business and personal use paid for by Phibro Animal Health pursuant to the Company Fleet Policy. Alternatively, you may opt to receive a car allowance of $750 per month.
Benefit Plans
You will be eligible to participate in the Company’s benefit plans and programs, which includes Health, Dental, Life and Disability Insurance after a 30-day waiting period; 401 (k) Retirement and Savings Plan; and a Defined Benefit Retirement Plan, to the same extent and under the same conditions that such benefits are afforded to other senior executives of the Company. Participation in these plans and programs is subject to the terms and conditions of the plans and programs and nothing in this Agreement shall prevent the Company from terminating, amending, or otherwise altering any such plan or program.
Vacation
You will be entitled to four weeks of vacation per calendar year.
Conditions of Employment
You will be expected to sign a Non-Compete/Non-Solicitation Agreement, a Confidentiality/Non-Disclosure Agreement, and an Employee Invention Agreement. These agreements are enclosed.
You will be entitled to the benefit of the Company’s Directors and Officers liability insurance coverage on the same terms and conditions as other senior executives of the Company. You will also enter into an Indemnification Agreement with the Company for your benefit.
You agree, at the request of the Company, to cooperate with the Company in connection with any ongoing or future investigation, litigation, dispute or claim of any kind involving the Company, including any proceeding before any arbitral, administrative, judicial, legislative, or other body or agency against the Company or any of its affiliates involving misconduct or noncompliance by the Company, its affiliates or any of its present or former employees, provided, that, except where the matter involves misconduct on your part, the Company shall (i) promptly reimburse you for any reasonable out of pocket expenses that you shall incur in the course of such cooperation, and (ii) if reasonably requested by you to avoid a material conflict of interest, promptly reimburse you for any reasonable attorney’s fees for independent legal counsel selected by you to represent you in connection with any such matter.
The Company will reimburse you for your legal fees in connection with the review and negotiation of this and other agreements, including review of the plan documents, up to a maximum of $2,000.
Severance
If your employment by the Company (or its successor(s)) is involuntarily terminated without “Cause” or you resign for “Good Reason,” then the Company shall pay to you, within ten (10) days following the effective date of your termination, one hundred percent (100%) of your annual base salary in effect immediately prior to the date of termination plus a pro rata portion of your bonus under the incentive Plan (based on year-to-date results through the most recently completed calendar month, and pro rated based on your termination date). Severance payments, including payment of the special, one time bonus payments following your termination, if applicable, are subject to the execution by you of a termination agreement to be agreed upon between you and the Company, which would include execution of a General Waiver and Release substantially in the form attached hereto as Exhibit A, as the same may be modified by the Company in its reasonable discretion.
- 2 - |
Phibro Animal Health Corporation
Definitions
For purposes of this Agreement,
The term “Good Reason” shall mean: (A) a material adverse change in your duties, responsibilities or authority (including status, office, title, reporting relationships or working conditions) from those in effect on the date of this Agreement without your written consent; provided that before you assert a claim for Good Reason to resign pursuant to this Agreement, you must provide the Company with written notice that identifies the manner in which you believe the Company has created a material adverse change in your duties, responsibilities or authority and a 30-day period for the Company to respond to such claims; or (B) a relocation of your principal place of employment more than 50 miles from Ridgefield Park, New Jersey without your consent. The acquisition of the assets or capital stock of the Company by another or any other change in control shall not, by itself, constitute “Good Reason” for purposes of this Agreement.
The term “Cause” shall mean: (A) any willful or repeated failure by you to substantially perform your duties hereunder, other than a failure resulting from your complete or partial incapacity due to physical or mental illness or impairment; (B) a material and willful violation of a federal or state law or regulation applicable to the business of the Company or that adversely affects the image of the Company; (C) commission of a willful act by you which constitutes gross misconduct and is injurious to the Company; or (D) a willful breach of a material provision of this Agreement.
Withholding
All payments and benefits hereunder shall be provided in accordance with applicable federal, state and local law and with the application of appropriate deductions and withholding amounts.
Employment-At-Will
Your employment status with the Company will be that of an at-will employee. Nothing in this offer of employment at-will shall alter your status as an at-will employee. This offer of employment is effective following your notice to your current employer that you are resigning from your current position, and is in force through May 2, 2008.
Larry, I am delighted to present this offer of employment, and I look forward to the substantial achievements that will occur as result of your leadership. Please return a signed copy of this letter to me at your earliest convenience. Don’t hesitate to call me at (201) 329-7330 or Dan Welch, Senior Vice President, Human Resources (201) 329-7324 should you have any questions regarding your employment with Phibro Animal Health Corporation.
Sincerely,
PHIBRO ANIMAL HEALTH CORPORATION
By: | /s/ Gerald K. Carlson |
Gerald K. Carlson |
Chief Executive Officer |
Offer Accepted: | |||
/s/ Larry L. Miller | |||
Larry L. Miller | |||
May 2, 2008 | |||
Date | |||
cc: |
Jack Bendheim
Alan MacKay Dan Welch |
- 3 - |
Phibro Animal Health Corporation
Exhibit A
GENERAL WAIVER AND RELEASE
I, _______________________, in consideration of certain payments to which I am entitled pursuant to that certain Agreement between me and Phibro Animal Health Corporation (the “Company”) dated ____________ (“Agreement”), on behalf of myself and anyone who succeeds to my rights and responsibilities, such as my heirs or the executor of my estate, waive any and all claims against the Company, its owners, subsidiaries and affiliated companies, and their respective successors, assigns, representatives, agents, shareholders, officers, directors, attorneys and employees (collectively “Releasees”), and release and discharge the Releasees from liability for any claims or damages that I may have against the Releasees, whether known or unknown to me, whether asserted or unasserted, including but not limited to any claims or causes of action under federal, state or local law, rule or ordinance, tort, express or implied contract, public policy, or statute, including, but not limited to, claims or causes of action regarding my employment with or termination of employment from the Company and claims or causes of action arising under Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Employee Retirement Income Security Act, the Worker Adjustment and Retraining Notification Act of 1988, the Fair Credit Reporting Act, the Immigration Reform and Control Act, the Corporate and Criminal Fraud Accountability Act also known as the Sarbanes Oxley Act, the Family and Medical Leave Act, the New Jersey Family Leave Act, the New Jersey Conscientious Employee Protection Act, and the New Jersey Law Against Discrimination, and any other labor law, employee relations, and/or fair employment practice statute, rule or ordinance and all claims for wages, monetary or equitable relief, vacation, other employee fringe benefits, damages, punitive damages, taxes or attorneys’ fees.
I represent and agree that I have not filed any lawsuits, claims, complaints, actions, proceedings or arbitrations against the Company, or filed or caused to be filed any charges or complaints against the Company, with any municipal, state or federal agency charged with the enforcement of any law. Pursuant to and as a part of my release and discharge of the Company, as set forth herein, with the sole exception of my right to bring a proceeding pursuant to the Older Workers Benefit Protection Act to challenge the validity of my release of claims pursuant to the Age Discrimination in Employment Act, I agree, not inconsistent with EEOC Enforcement Guidance On Non-Waivable Employee Rights Under EEOC-Enforced Statutes dated April 11, 1997, and to the fullest extent permitted by law, not to sue or file a charge, complaint, grievance or demand for arbitration against the Company, in any forum or assist or otherwise participate willingly or voluntarily in any claim, arbitration, suit, action, investigation or other proceeding of any kind which relates to any matter that involves the Company, and that occurred up to and including the date of my execution of this General Waiver and Release, unless required to do so by court order, subpoena or other directive by a court, administrative agency, arbitration panel or legislative body, or unless required to enforce the Agreement. To the extent any such action may be brought by a third party, I expressly waive any claim to any form of monetary or other damages, or any other form of recovery or relief in connection with any such action. Nothing in the foregoing paragraph shall prevent me (or my attorneys) from (i) commencing an action or proceeding to enforce this Agreement or (ii) exercising my right under the Older Workers Benefit Protection Act of 1990 to challenge the validity of my waiver of ADEA claims.
- 4 - |
Phibro Animal Health Corporation
In consideration of the payments provided to me, I acknowledge and agree that this General Waiver and Release constitutes a knowing and voluntary waiver of all rights or claims I have or may have against the Company as set forth herein, including, but not limited to, all rights or claims arising under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), including, but not limited to, all claims of age discrimination in employment and all claims of retaliation in violation of the ADEA; and I have no physical or mental impairment of any kind that has interfered with my ability to read and understand the meaning of this General Waiver and Release or its terms, and that I am not acting under the influence of any medication or mind-altering chemical of any type in entering into this General Waiver and Release.
I represent, warrant and acknowledge that I have reported all hours worked as of the date of this General Waiver and Release and have been paid all, and that the Company owes me no, wages, commissions, bonuses, sick pay, personal leave pay, severance pay, vacation pay or other compensation or benefits or payments or form of remuneration of any kind or nature, other than that specifically provided for in the Agreement. In addition, I represent that I have no known workplace injuries or occupational diseases and have been provided and/or not been denied any leave under the Family and Medical Leave Act.
This releases all claims, including those of which I am not aware and those not mentioned in the Agreement or this General Waiver and Release, and applies to claims resulting from anything which has happened up to now, and specifically anything which has occurred from the date I signed the Agreement. In addition, I confirm all the acknowledgements I made in the Agreement.
I acknowledge that the payments stated in the Agreement constitute good and valuable consideration by the Company in full consideration for this General Waiver and Release. I agree that I will not seek anything further including any other payment from the Company.
I EXPRESSLY ACKNOWLEDGE, REPRESENT, AND WARRANT THAT I HAVE READ THIS GENERAL WAIVER AND RELEASE CAREFULLY; THAT I FULLY UNDERSTAND THE TERMS, CONDITIONS, AND SIGNIFICANCE OF THIS GENERAL WAIVER AND RELEASE; THAT THE COMPANY HAS ADVISED ME TO CONSULT WITH AN ATTORNEY CONCERNING THIS GENERAL WAIVER AND RELEASE; THAT I HAVE HAD A FULL OPPORTUNITY TO REVIEW THIS GENERAL WAIVER AND RELEASE WITH AN ATTORNEY; THAT I UNDERSTAND THAT THIS GENERAL WAIVER AND RELEASE HAS BINDING LEGAL EFFECT; AND THAT I HAVE EXECUTED THIS GENERAL WAIVER AND RELEASE FREELY, KNOWINGLY AND VOLUNTARILY.
[Employee Name] | |
Date:_________________ | |
Phibro Animal Health Corporation |
By: |
Name: |
Title: |
Date: |
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PHIBRO ANIMAL HEALTH CORPORATION
CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT
For good and valuable consideration, including but not limited to my initial or continued at-will employment by PHIBRO ANIMAL HEALTH CORPORATION, or any of its subsidiaries or affiliates (collectively “PAHC”), I hereby acknowledge and agree:
1. | In the course of my employment with PAHC, certain trade secrets or confidential or proprietary information (“Protected Matters”) of PAHC may be disclosed to or otherwise become known by me, including, but not limited to: |
a. | Technical Information: Methods, processes, formulae, compositions, raw materials, inventions, machines, computer programs, research projects and other non-public technical information, data, and techniques having value to PAHC. |
b. | Business Information: Customer lists, pricing data, sources of supply, marketing, production or merchandising systems and plans, cost information, and other non-public business information, data and techniques having value to PAHC. |
c. | The foregoing types of information belonging to third parties in the possession of PAHC. |
2. | Other than in carrying out my duties as an employee of PAHC in an authorized and approved manner, I will not at any time during my employment, or after the termination of my employment with PAHC (regardless of the reason for termination), use for myself or others, or disclose to others, any Protected Matters. |
3. | Upon termination of my employment with PAHC, I shall return to PAHC all documents relating to PAHC or to Protected Matters, or obtained by me during the course of my employment with PAHC, and shall not retain any copies of such documents. For the purpose of this Agreement, “document” means, without limitation, any paper or other writing, any electronically or digitally stored data or collection of data, and any item of audio, video or graphic material, however recorded or reproduced. |
4. | This Agreement shall not apply to any information or materials that (i) is or becomes available in the public domain through no fault of, or act, or failure to act on my part, or (ii) is obtained by me on a non-confidential basis from any third party that is lawfully in possession of such information or materials, provided, that such third party is not in violation of a confidentiality obligation to PAHC with respect to such information or materials, or (iii) I am compelled by a judicial or administrative proceeding or by any governmental or regulatory authority to disclose, provided that I will give PAHC prompt notice of such action, furnish only that portion of such information or materials that is legally required and exercise all reasonable efforts to obtain reliable assurance that confidential treatment will be afforded such information or materials. |
5. | I shall notify any future or prospective employer of mine of the existence of this Agreement. I further agree that PAHC may notify any future or prospective employer of mine of the existence of this Agreement |
6. | The unenforceability of any provision of this Agreement shall not impair or affect any other provision. |
7. | THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD FOR CONFLICTS OF LAWS PRINCIPLES. I EXPRESSLY CONSENT TO VENUE IN, AND THE PERSONAL JURISDICTION OF, THE STATE AND FEDERAL COURTS LOCATED IN NEW JERSEY FOR ANY LAWSUIT ARISING FROM OR RELATING TO THIS AGREEMENT. |
8. | This Agreement does not alter the status of my employment as an at-will employee of PAHC. |
9. | In the event of breach or threatened breach of this Agreement, PAHC shall have full rights to injunctive relief, in addition to any other existing rights and remedies, without requirement of posting bond. |
10. | The terms of this Agreement shall survive termination of employment with PAHC. |
11. | This Agreement shall be binding upon me and my personal representatives and successors in interest, and shall inure to the benefit of PAHC, its successors and assigns. |
12. | This Agreement constitutes the entire agreement between PAHC and me with respect to the subject of this Agreement, and supersedes all prior agreements between us relating to the same subject matter. Any waiver of a breach of any provision of this Agreement by PAHC shall not be construed as a waiver of any other breach of the Agreement, and no failure or delay by PAHC in exercising any right under this Agreement shall operate as a waiver of any breach by me. This Agreement cannot be changed except by written agreement of PAHC and me. |
I have read, understand and consent to the above Agreement.
By: | /s/ Larry L. Miller |
Employee Signature | |
Larry L. Miller | |
Employee Name (please print) | |
May 2, 2008 | |
Date |
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PHIBRO ANIMAL HEALTH CORPORATION
EMPLOYEE INVENTION AGREEMENT
For good and valuable consideration, including but not limited to my initial or continued at-will employment by PHIBRO ANIMAL HEALTH CORPORATION, or any of its subsidiaries or affiliates (collectively “PAHC”), I hereby acknowledge and agree:
1. | During my employment with PAHC, and for a period of one year after my termination of employment regardless of reason, I shall promptly disclose in writing to PAHC all Inventions that: |
a. | Result from any work performed on behalf of PAHC, or pursuant to a suggested research project by PAHC, or |
b. | Relate in any manner to the existing or stated contemplated business of PAHC, or |
c. | Result from the use of PAHC’s time, material, employment or facilities. |
For purposes of this Agreement, “Inventions” shall mean all works of authorship, inventions, discoveries, improvements, developments, and innovations, whether patentable, copyrightable, trademarkable, or not, conceived in whole or in part by the undersigned or through the assistance of the undersigned, and whether conceived or developed during working hours or not and whether conceived individually or jointly.
2. | I agree to assign to PAHC, its successors and assigns, all right, title and interest to each and every Invention, whether or not such Invention is a “work for hire” as that term is defined in the United States Copyright Act. I understand and agree that the decision whether or not to commercialize or market any Invention developed by me solely or jointly with others is within PAHC’s sole discretion and for PAHC’s sole benefit and that no royalty will be due to me as a result of PAHC’s efforts to commercialize or market any such Invention. |
3. | I agree to assist PAHC, or its designee, at PAHC’s expense, in every proper way to secure PAHC’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including, but not limited to, the disclosure to PAHC of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which PAHC shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to PAHC, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. I further agree that my obligation |
to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement. If PAHC is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to PAHC as above, then I hereby irrevocably designate and appoint PAHC and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.
4. | I understand that the provisions of this Agreement requiring assignment of Inventions to PAHC shall not apply to any works of authorship, inventions, discoveries, improvements, developments, and innovations, whether patentable, copyrightable, trademarkable, or not, conceived in whole or in part by me or through my assistance (collectively “Outside Discoveries”), that I have developed entirely on my own time without using PAHC’s equipment, supplies, facilities, trade secret information or Confidential Information except for those Outside Discoveries that either (i) relate at the time of conception or reduction to practice of the invention to PAHC’s business, or actual or anticipated research or development of PAHC or (ii) result from any work that I performed for PAHC. |
In accordance with Paragraph 1 above, I will advise PAHC promptly in writing in accordance with PAHC practices, policies and procedures of any Outside Discoveries that I believe meet the foregoing criteria, including those on Exhibit A hereto that I claim were conceived or reduced to practice before the date of this Agreement.
5. | The unenforceability of any provision of this Agreement shall not impair or affect any other provision. |
6. | THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD FOR CONFLICTS OF LAWS PRINCIPLES. I EXPRESSLY CONSENT TO VENUE IN, AND THE PERSONAL JURISDICTION OF, THE STATE AND FEDERAL COURTS LOCATED IN NEW JERSEY FOR ANY LAWSUIT ARISING FROM OR RELATING TO THIS AGREEMENT. |
7. | This Agreement does not alter the status of my employment as an at-will employee of PAHC. |
8. | This Agreement does not alter my obligations to maintain the confidentiality of PAHC protected information or my obligations under the PAHC Confidentiality and Nondisclosure Agreement. |
9. | In the event of breach or threatened breach of this Agreement, PAHC shall have full rights to injunctive relief, in addition to any other existing rights and remedies, without requirement of posting bond. |
10. | The terms of this Agreement shall survive termination of employment with PAHC. |
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11. | This Agreement shall be binding upon me and my personal representatives and successors in interest, and shall inure to the benefit of PAHC, its successors and assigns. |
12. | This Agreement constitutes the entire agreement between PAHC and me with respect to the subject of this Agreement, and supersedes all prior agreements between us relating to the same subject matter. Any waiver of a breach of any provision of this Agreement by PAHC shall not be construed as a waiver of any other breach of the Agreement, and no failure or delay by PAHC in exercising any right under this Agreement shall operate as a waiver of any breach by me. This Agreement cannot be changed except by written agreement of PAHC and me. |
I have read, understand and consent to the above Agreement.
By: | /s/ Larry L. Miller |
Employee Signature | |
Larry L. Miller | |
Employee Name (please print) | |
May 2, 2008 | |
Date |
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PHIBRO ANIMAL HEALTH CORPORATION
NONCOMPETITION AND NONSOLICITATION AGREEMENT
For good and valuable consideration, including but not limited to my initial or continued at-will employment by PHIBRO ANIMAL HEALTH CORPORATION, or any of its subsidiaries or affiliates (collectively “PAHC). I hereby acknowledge and agree:
1. | During my employment with PAHC and for a period of one year after my termination of employment regardless of the reason, I shall not compete with PAHC, its successors and assigns. This means that I shall not: |
a. | Directly or indirectly own, be employed by or work on behalf of any firm engaged in a business similar to, and competitive with, PAHC in those geographic markets in which PAHC had sales during the twelve-month period prior to the termination of my employment at PAHC. |
b. | Directly or indirectly, or in any capacity, on my own behalf or on behalf of another, undertake or assist in the solicitation of any customer or account which has purchased products or services from PAHC during the 12-month period prior to the date of termination of my employment with PAHC. |
c. | Directly or indirectly solicit any employee of PAHC to leave the employ of PAHC or to violate the terms of his or her employment arrangement with PAHC. |
2. | For the purposes of this Agreement, I understand that, as of December 1, 2007, PAHC is engaged in the businesses of manufacturing and/or marketing medicated and nutritional feed additives for production farm animals, and manufacturing and/or marketing specialty chemicals including products used in wood-preservation, ethanol-production, surface finishing and coating materials, and personal care ingredients. I further understand that, for the purposes of this Agreement, from time to time the businesses engaged in by PAHC may change from this description. |
3. | I shall notify any future or prospective employer of mine of the existence of this Agreement. I further agree that PAHC may notify any future or prospective employer of mine of the existence of this Agreement |
4. | The unenforceability of any provision of this Agreement shall not impair or affect any other provision. |
5. | THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD FOR CONFLICTS OF LAWS PRINCIPLES. I EXPRESSLY CONSENT TO VENUE IN, AND THE PERSONAL JURISDICTION OF, THE STATE AND FEDERAL COURTS LOCATED IN NEW JERSEY FOR ANY LAWSUIT ARISING FROM OR RELATING TO THIS AGREEMENT. |
6. | This Agreement does not alter the status of my employment as an at-will employee of PAHC. |
7. | In the event of breach or threatened breach of this Agreement, PAHC shall have full rights to injunctive relief, in addition to any other existing rights and remedies, without requirement of posting bond. |
8. | The terms of this Agreement shall survive termination of employment with PAHC. |
9. | This Agreement shall inure to the benefit of PAHC, its successors and assigns. |
10. | This Agreement constitutes the entire agreement between PAHC and me with respect to the subject of this Agreement, and supersedes all prior agreements between us relating to the same subject matter. Any waiver of a breach of any provision of this Agreement by PAHC shall not be construed as a waiver of any other breach of the Agreement, and no failure or delay by PAHC in exercising any right under this Agreement shall operate as a waiver of any breach by me. This Agreement cannot be changed except by written agreement of PAHC and me. |
I have read, understand and consent to the above Agreement.
By: | /s/ Larry L. Miller |
Employee Signature | |
Larry L. Miller | |
Employee Name (please print) | |
May 2, 2008 | |
Date |
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Exhibit 10.21
CLARIFYING AMENDMENT TO
EMPLOYMENT OFFER LETTER
This Clarifying Amendment to the Employment Offer Letter by and between PHIBRO ANIMAL HEALTH CORPORATION (the “Company” ) and Larry L . Miller (the “Executive” ) dated May 2, 2008 (the “Agreement” ) is effective December 21, 2009.
WHEREAS, the Company and the Executive previously entered into the Agreement; and
WHEREAS, the parties desire to further clarify and amend the Agreement to reflect its compliance with the requirements of the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
NOW, THEREFORE, the Company and the Executive, each intending to be legally bound hereby, do mutually covenant and agree as follows:
1. The Section of the Agreement regarding Severance payments is amended to include the following provisions after the first sentence therein:
“Notwithstanding the foregoing, any amounts payable to you under this paragraph in excess of two times the lesser of (a) the sum of your annualized compensation (based on the annual rate of pay for services provided) for the calendar year immediately preceding the calendar year of the date of termination or (b) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the termination from employment occurs, shall be delayed to comply with the restriction in Section 409A(a)(2)(8) of the Code concerning payments to “Specified Employees” and paid to you in a one-time , lump sum payment on the first day of the seventh month following your termination of employment together with interest on such cumulative amount during the period of such restriction at a rate, per annum, equal to the applicable federal short-term rate (compounded monthly) in effect under Section 1274(d) of the Code on the date of termination. You shall not be considered to have terminated employment with the Company for purposes of this section unless you would be considered to have incurred a “termination of employment” from the Company within the meaning of Treasury Regulation § 1.409A- l(h)(1)(ii).”
2. The Section of the Agreement regarding Definitions is amended to include the following provisions:
(a) The definition of “Good Reason” is hereby clarified to provide that you must provide the Company with written notice that identifies the manner in which you believe the Company has created a material adverse change in your duties, responsibilities or authority, or geographic location where you must perform services, within 90 days of the initial existence of such condition.
(b) The term “Specified Employee” shall mean an employee who for the 12 month period beginning on the first day of the fourth month following each “Identification Date” is a
“key employee” (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) thereof) of the Company at any time during the 12-month period ending on the “Identification Date”.
3. The Agreement is amended to include the following provisions regarding Section 409A of the Code:
“ Section 409A Compliance . The terms of this Agreement are intended to comply with the requirements under Section 409A of the Code and regulations thereunder. To the extent that any provision in this Agreement is ambiguous as to its compliance with section 409A, the provision shall be read in such a manner so that no payments due under this Agreement shall be subject to an “additional tax” as defined in Section 409A(a)(1)(B) of the Code. For purposes of Section 409A, each payment made under this Agreement shall be treated as a separate payment. In no event may you, directly or indirectly, designate the calendar year of payment. You further acknowledge that any tax liability incurred by you under Section 409A of the Code is solely your responsibility.”
IN WITNESS WHEREOF, the parties have executed this Clarifying Amendment to the Agreement as of the date first above written. Except as amended herein, the Agreement shall remain in full force and effect.
PHIBRO ANIMAL HEALTH CORPORATION | |||
/s/ Jack C. Bendheim | /s/ Larry L . Miller | ||
By: | Jack C. Bendheim | Larry L . Miller | |
Title: | Chairman |
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Exhibit 10.22
AMENDMENT TO
EMPLOYMENT OFFER LETTER
This Amendment to the Employment Offer Letter by and between PHIBRO ANIMAL HEALTH CORPORATION (the “ Company ”) and LARRY L. MILLER (the “ Executive ”) dated May 2, 2008, as amended December 21, 2009 (the “ Agreement ”), is effective December 15, 2011.
WHEREAS, the parties desire to amend the Agreement to reflect the timing of severance payments where the payment of severance is contingent upon signing a release of claims.
NOW, THEREFORE, the Company and the Executive, each intending to be legally bound hereby, do mutually covenant and agree as follows:
1. The Section entitled Section 409A Compliance is hereby amended to add the following last paragraph:
“Notwithstanding anything herein to the contrary, payment of your severance, including payment of the special, one time bonus, if applicable, shall be made within 60 days after your termination of employment provided that you have executed the General Waiver and Release and it has become irrevocable by the date payment is to be made. To the extent required to comply with Section 409A of the Code, if the period during which you have the discretion to execute or revoke a General Waiver and Release straddles two calendar years, then the Company will make the severance payments in the second year, regardless of which year you actually deliver the executed General Waiver and Release to the Company.”
IN WITNESS WHEREOF, the parties have executed this Amendment to the Agreement as of the date first above written. Except as amended herein, the Agreement shall remain in full force and effect.
PHIBRO ANIMAL HEALTH CORPORATION | |||
/s/ David C. Storbeck | /s/ Larry L. Miller | ||
By: | Larry L. Miller |
Exhibit 10.23
PHIBRO ANIMAL HEALTH CORPORATION
2008 Incentive Plan
PHIBRO ANIMAL HEALTH CORPORATION
2008 Incentive Plan
Table of Contents
Page | ||
1. | Purpose | 1 |
2. | Definitions | 1 |
3. | Administration | 3 |
4. | Stock Subject to Plan | 4 |
5. | Eligibility and Certain Award Limitations | 5 |
6. | Specific Terms of Awards | 6 |
7. | Performance Awards, including Annual Incentive Awards | 10 |
8. | Certain Provisions Applicable to Awards | 13 |
9. | Change in Control | 14 |
10. | General Provisions | 16 |
PHIBRO ANIMAL HEALTH CORPORATION
2008 INCENTIVE PLAN
1. Purpose. The purpose of this 2008 Incentive Plan (the “Plan”) is to aid Phibro Animal Health Corporation, a New York corporation (the “Company”), in attracting, retaining, motivating and rewarding employees and non-employee directors of, and consultants to, the Company or its subsidiaries or affiliates, to provide for equitable and competitive compensation opportunities, to recognize individual contributions and reward achievement of Company goals, and promote the creation of long-term value for stockholders by closely aligning the interests of Participants with those of stockholders. The Plan authorizes stock-based and cash-based incentives for Participants.
2. Definitions. In addition to the terms defined in Section 1 above and elsewhere in the Plan, the following capitalized terms used in the Plan have the meanings set forth in this Section:
(a) “Annual Incentive Award” means a Performance Award granted to a Participant under Section 7(c) representing a conditional right to receive cash, Stock or other Awards or payments, as determined by the Committee, based on performance in a performance period of up to and including one fiscal year.
(b) “Annual Cash Limit” has the meaning specified in Section 5(b).
(c) “Annual Share Limit” has the meaning specified in Section 5(b).
(d) “Award” means an y Option, SAR, Restricted Stock, Deferred Stock, Stock granted as a bonus or in lieu of another award, Other Stock-Based Award, Annual Incentive Award, or other Performance Award, together with any related right or interest, granted to a Participant under the Plan.
(e) “Beneficiary” means the legal representatives of the Participant’s estate entitled by will or the laws of descent and distribution to receive the benefits under a Participant’s Award upon a Participant’s death, provided that, if and to the extent authorized by the Committee, a Participant may be permitted to designate a Beneficiary by separate written designation hereunder, in which case the “Beneficiary” instead will be the person, persons, trust or trusts (if any are then surviving) which have been designated by the Participant in his or her most recent written beneficiary designation filed with the Committee to receive the benefits specified under the Participant’s Award upon such Participant’s death. Unless otherwise determined by the Committee, any designation of a Beneficiary other than a Participant’s spouse shall be subject to the written consent of such spouse.
(f) “Board” means the Company’s Board of Directors.
(g) “Change in Control” has the meaning specified in Section 9.
(h) “Code” means the Internal Revenue Code of 1986, as amended. References to any provision of the Code or regulation (including a proposed regulation) thereunder shall include any successor provisions and regulations.
(i) “Committee” means the Compensation Committee of the Board, the composition and governance of which is subject to the listing guidelines of the organization listing shares of the Company, including AIM and the NASDAQ, as the case may be, and the Company’s corporate governance documents. No action of the Committee shall be void or deemed to be without authority due to the failure of any member, at the time the action was taken, to meet any qualification standard set forth in the Plan. Except to the extent otherwise provided herein, the full Board may perform any function of the Committee hereunder, in which case the term “Committee” shall refer to the Board.
(j) “Covered Employee” means an Eligible Person who is a Covered Employee as specified in Section 10(j).
(k) “Deferred Stock” means a right, granted to a Participant under Section 6(e), to receive Stock or other Awards or a combination thereof at the end of a specified deferral period. Deferred Stock may be denominated as “stock units,” “restricted stock units,” “phantom shares,” “performance shares,” or other appellations.
(1) “Effective Date” means the effective date specified in Section 10(o).
(m) “Eligible Person” has the meaning specified in Section 5(a).
(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended. References to any provision of the Exchange Act or rule (including a proposed rule) thereunder shall include any successor provisions and rules.
(o) “Fair Market Value” means the fair market value of Stock, Awards or other property as determined in good faith by the Committee or under procedures established by the Committee, in accordance, where applicable, with the requirements of Section 422 and Section 409A of the Code. Unless otherwise determined by the Committee, the Fair Market Value of Stock as of any given date shall be the closing sale price per share of Stock reported on the principal stock exchange or market on which Stock is traded on the date as of which such value is being determined or, if there is no sale on that day, then on the last previous day on which a sale was reported.
(p) “Option” means a right, granted to a Participant under Section 6(b), to purchase Stock or other Awards at a specified price during specified time periods.
(q) “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(g).
(r) “Participant” means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person.
(s) “Performance Award” means a conditional right, granted to a Participant under Sections 6(h) and 7, to receive cash, Stock or other Awards or payments, as determined by the Committee, based upon performance criteria specified by the Committee.
(t) “Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association or other entity.
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(u) “Qualified Member” means a member of the Committee who is a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3) and an “outside director” within the meaning of Regulation 1.162-27 under Code Section 162(m).
(v) “Restricted Stock” means Stock granted to a Participant under Section 6(d) which is subject to certain restrictions and to a risk of forfeiture.
(w) “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to Participants, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act.
(x) “Stock” means the Company’s Common Stock, and any other equity securities that may be substituted or resubstituted for Stock pursuant to Section 10(c) and consistent with, where applicable, the requirements of section 409A.
(y) “Stock Appreciation Right” or “SAR” means a right granted to a Participant under Section 6(c).
3. Administration.
(a) Authority of the Committee. The Plan shall be administered by the Committee, which shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants; to grant Awards; to determine the type and number of Awards, the dates on which Awards may be exercised and on which the risk of forfeiture or deferral period relating to Awards shall lapse or terminate, the acceleration of any such dates, the expiration date of any Award, whether, to what extent, and under what circumstances an Award may be settled, or the exercise price thereof may be paid, in cash, Stock, other Awards, or other property, and other terms and conditions of, and all other matters relating to, Awards; to prescribe documents evidencing or setting terms of Awards, amendments thereto, and rules and regulations for the administration of the Plan and amendments thereto; to construe and interpret the Plan and Award documents and correct defects, supply omissions or reconcile inconsistencies therein; and to make all other decisions and determinations as the Committee deems necessary or advisable for the administration and interpretation of the Plan. The Committee shall exercise such discretion with due regard, as it shall deem appropriate, for any rules or guidelines of an exchange on which the Stock may be listed or market on which the Stock may be quoted. Decisions of the Committee with respect to the administration and interpretation of the Plan shall be final, conclusive, and binding upon all persons interested in the Plan, including Participants, Beneficiaries, transferees under Section 10(b) and other persons claiming rights from or through a Participant, and stockholders. The foregoing notwithstanding, the Board shall perform the functions of the Committee for purposes of granting Awards under the Plan to non-employee directors (authority with respect to other aspects of non-employee director awards is not exclusive to the Board, however).
(b) Manner of Exercise of Committee Authority. At any time that a member of the Committee is not a Qualified Member, any action of the Committee relating to an Award intended by the Committee to qualify as “performance-based compensation” within the meaning of Code Section 162(m) and regulations thereunder or intended to be covered by an exemption under Rule 16b-3 under the Exchange Act may be taken by a subcommittee, designated by the Committee or the Board, composed solely of two or more Qualified Members or may be taken
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by the Committee but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action, provided that, upon such abstention or recusal, the Committee remains composed of two or more Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee for purposes of the Plan. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. To the fullest extent authorized under Section 712 and other applicable provisions of the New York Business Corporation Law, the Committee may delegate to officers or managers of the Company or any subsidiary or affiliate, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions, including administrative functions, as the Committee may determine, to the extent that such delegation will not cause Awards intended to qualify as “performance-based compensation” under Code Section 162(m) or intended to qualify for an exemption under Rule 16b-3 under the Exchange Act to fail to so qualify.
(c) Limitation of Liability. The Committee and each member thereof, and any person acting pursuant to authority delegated by the Committee, shall be entitled, in good faith, to rely or act upon any report or other information furnished by any executive officer, other officer or employee of the Company or a subsidiary or affiliate, the Company’s independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee, any person acting pursuant to authority delegated by the Committee, and any officer or employee of the Company or a subsidiary or affiliate acting at the direction or on behalf of the Committee or a delegee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.
4. Stock Subject to Plan.
(a) Overall Number of Shares Available for Delivery. Subject to adjustment as provided in Section 10(c), the total number of shares of Stock reserved and available for delivery in connection with Awards under the Plan shall be 15,000,000 shares, and shall also include the number of shares which become available in accordance with Section 4(b). Any shares of Stock delivered under the Plan shall consist of authorized and unissued shares or treasury shares.
(b) Share Counting Rules. The Committee may adopt reasonable counting procedures, consistent with the express provisions of this Section 4(b) and with the applicable requirements of the regulations under Section 422 of the Code, to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award. Notwithstanding the preceding sentence: (1) shares of Stock that are potentially deliverable under an Award under the Plan that is canceled, expired, forfeited, settled in cash or otherwise terminated without the delivery of such shares (other than pursuant to clause (B) in the following sentence) will not be counted as delivered under the Plan, and will remain available for delivery pursuant to Section 4(a) above; and (2) shares of Stock delivered but subsequently forfeited such that those shares are returned to the Company will again be available for delivery pursuant to Section 4(a) above. Notwithstanding the foregoing, the following shares of Stock will be counted as delivered under the Plan, and will not again become available for delivery pursuant to Section 4(a) above: (A) shares of Stock tendered by a
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Participant as full or partial payment to the Company upon exercise of Options granted under the Plan; (B) shares of Stock reserved for issuance upon the grant of SARs under the Plan, to the extent that the number of reserved shares of Stock exceeds the number of shares of Stock actually issued upon exercise of the SARs; and (C) shares of Stock withheld by, or otherwise remitted to, the Company to satisfy a Participant’s tax withholding obligations upon the lapse of restrictions on Restricted Stock or the exercise of Options or SARs granted under the Plan or upon any other payment or issuance of shares of Stock under the Plan. In addition, in the case of any Award granted in substitution for an award of a company or business acquired by the Company or a subsidiary or affiliate, shares issued or issuable in connection with such substitute Award shall not be counted against the number of shares reserved under the Plan, but shall be available under the Plan by virtue of the Company’s assumption of the plan or arrangement of the acquired company or business.
5. Eligibility and Certain Award Limitations.
(a) Eligibility. Awards may be granted under the Plan only to Eligible Persons. For purposes of the Plan, an “Eligible Person” means (i) an employee of the Company or any subsidiary or affiliate, which term shall include any common-law employee as well as any non-employee executive officer or non-employee director of the Company, or a subsidiary or affiliate, and any person who has been offered employment by the Company or a subsidiary or affiliate, provided that such prospective employee may not receive any payment or exercise any right relating to an Award until such person has commenced employment with the Company or a subsidiary or affiliate, or (ii) a consultant, advisor or other independent contractor of the Company or any subsidiary or affiliate. An employee on leave of absence may be considered as still in the employ of the Company or a subsidiary or affiliate for purposes of eligibility for participation in the Plan. For purposes of the Plan, a joint venture in which the Company or a subsidiary has a substantial direct or indirect equity investment shall be deemed an affiliate, if so determined by the Committee. Notwithstanding the preceding, for purposes of determining eligibility for the grant of an Option or SAR by reason of service with an affiliate, the term “affiliate” shall be limited to Persons that stand in a relationship to the Company that would result in the Company and such Person being treated as a single employer under Section 414(b) or Section 414(c) of the Code, as modified in accordance with the definition of the definition of “service recipient” applicable to stock rights under Section 409A of the Code and the guidance thereunder. Options intended to qualify as “incentive stock options” as defined in Section 422 of the Code may be granted only to an Eligible Person who is an employee (as determined under the statutory option rules of Section 421 et seq. of the Code) of the Company or of a “parent corporation” or “subsidiary corporation” (as those terms are defined in Section 424 of the Code) with respect to the Company.
(b) Per-Person Award Limitations. In each fiscal year during any part of which the Plan is in effect, an Eligible Person may be granted Awards intended to qualify as “performance-based compensation” under Code Section 162(m) under each of Section 6(b), 6(c), 6(d), 6(e), 6(f) or 6(g) relating to up to his or her Annual Share Limit (such Annual Share Limit to apply separately to the type of Award authorized under each specified subsection). Subject to Section 4(a) and subject to adjustment as provided in Section 10(c), an Eligible Person’s “Annual Share Limit” shall equal, in any year during any part of which the Eligible Person is then eligible under the Plan, 1,500,000 shares plus the amount of the Eligible Person’s unused Annual Share Limit
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relating to the same type of Award as of the close of the previous year. In the case of any Awards denominated in cash that are intended to qualify as “performance-based compensation” under Code Section 162(m), an Eligible Person may not be granted Awards authorizing the earning during any fiscal year of an amount that exceeds the Eligible Person’s Annual Cash Limit, which for this purpose shall equal $2,000,000 plus the amount of the Eligible Person’s unused Annual Cash Limit as of the close of the previous year (this limitation is separate and not affected by the number of Awards granted during such fiscal year subject to the limitation in the preceding sentence). For this purpose, (i) “earning” means satisfying performance conditions so that an amount becomes payable, without regard to whether it is to be paid currently or on a deferred basis or continues to be subject to any service requirement or other non-performance condition, and (ii) an Eligible Person’s Annual Share Limit is used to the extent an amount or number of shares may be potentially earned or paid under an Award, regardless of whether such amount or shares are in fact earned or paid. In applying the limitations of this Section 5(b), a Performance Award under Section 6(i) and Section 7 shall be treated as an Award under Section 6(b), 6(c), 6(d), 6(e), 6(f) or 6(g), as the case may be, depending on the nature and terms of the Award.
6. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10(e)), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment or service by the Participant and terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion with respect to any term or condition of an Award that is not mandatory under the Plan. The Committee shall require the payment of lawful consideration for an Award to the extent necessary to satisfy the requirements of the New York Business Corporation Law, and may otherwise require payment of consideration for an Award except as limited by the Plan.
(b) Options. The Committee is authorized to grant Options to Participants on the following terms and conditions, provided that no Option that is intended to qualify as an “incentive stock option” as defined in Section 422 of the Code shall be granted after March __, 2018.
(i) Exercise Price. The exercise price per share of Stock purchasable under an Option shall be determined by the Committee, provided that such exercise price shall be not less than the Fair Market Value of a share of Stock on the date of grant of such Option. Without the affirmative vote of holders of a majority of the shares of Stock cast in person or by proxy at a meeting of the stockholders of the Company at which a quorum representing a majority of all outstanding shares of Stock is present or represented by proxy, the Committee shall not approve a program providing for either (a) the cancellation of outstanding Options and the grant in substitution therefor of new Awards having a lower exercise price that constitutes a repricing or (b) the amendment of outstanding Options to reduce the exercise price thereof. The preceding sentence shall not be construed to apply to: (i) “issuing or assuming a stock option in a transaction to which section 424(a) applies,” within the meaning of Section 424 of the Code or (ii) the substitution or assumption of an Award by reason of or pursuant to a corporate transaction, to the extent such substitution or
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assumption would not be treated as a grant of a new stock right or a change in the form of payment for purposes of Section 409A of the Code within the meaning of Treas. Reg. Section 1.409A-l(b)(5)(iii)(E)(4), Notice 2005-1, A-4(d) and any subsequent Section 409A guidance.
(ii) Option Term; Time and Method of Exercise. The Committee shall determine the term of each Option, provided that in no event shall the term of any Option or of any SAR granted in tandem with any Option, exceed a period of ten years from the date of grant. The Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the methods by which such exercise price may be paid or deemed to be paid and the form of such payment, including, without limitation, cash, Stock (including through withholding of Stock deliverable upon exercise, if such withholding will not result in additional accounting expense to the Company), other Awards or awards granted under other plans of the Company or any subsidiary or affiliate, or other property (including through “cashless exercise” arrangements, to the extent permitted by applicable law), and the methods by or forms in which Stock will be delivered or deemed to be delivered in satisfaction of Options to Participants (including deferred delivery of shares representing the Option “profit,” at the election of the Participant or as mandated by the Committee, with such deferred shares subject to any vesting, forfeiture or other terms as the Committee may specify).
(iii) 409A. Except where the Committee determines otherwise, no Option shall have deferral features or shall be administered in a manner that would cause such Option to fail to qualify for exemption under Section 409A of the Code.
(c) Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants on the following terms and conditions:
(i) Right to Payment. A SAR shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee, which grant price shall be not less than the Fair Market Value of a share of Stock on the date of grant of such SAR. Without the affirmative vote of holders of a majority of the shares of Stock cast in person or by proxy at a meeting of the stockholders of the Company at which a quorum representing a majority of all outstanding shares of Stock is present or represented by proxy, the Committee shall not approve a program providing for either (a) the cancellation of outstanding SARs and the grant in substitution therefor of new Awards having a lower exercise price that constitutes a repricing or (b) the amendment of outstanding SARs to reduce the exercise price thereof. The preceding sentence shall not be construed to apply to the substitution or assumption of an Award by reason of or pursuant to a corporate transaction, to the extent such substitution or assumption would not be treated as a grant of a new stock right or a change in the form of payment for purposes of Section 409A of the Code within the meaning of Treas. Reg. Section 1.409A-l(b)(5)(iii)(E)(4), Notice 2005-1, A-4(d) and any subsequent Section 409A guidance.
(ii) Other Terms. The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future
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service requirements), the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Stock will be delivered or deemed to be delivered to Participants, whether or not a SAR shall be free-standing or in tandem or combination with any other Award, and the maximum term of an SAR, which in no event shall exceed a period of ten years from the date of grant. Limited SARs that may only be exercised in connection with a Change in Control or other event as specified by the Committee may be granted on such terms, not inconsistent with this Section 6(c), as the Committee may determine. The Committee may require that an outstanding Option be exchanged for an SAR exercisable for Stock having vesting, expiration, and other terms substantially the same as the Option, so long as such exchange will not result in additional accounting expense to the Company.
(iii) 409A. Except where the Committee determines otherwise, no SAR shall have deferral features, or shall be administered in a manner that would cause such SAR to fail to qualify for exemption under Section 409A of the Code.
(d) Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants on the following terms and conditions:
(i) Grant and Restrictions. Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise and under such other circumstances as the Committee may determine at the date of grant or thereafter. Except to the extent restricted under the terms of the Plan and any Award document relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a stockholder, including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee).
(ii) Forfeiture. Except as otherwise determined by the Committee, upon termination of employment or service during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company; provided that the Committee may provide, by rule or regulation or in any Award document, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will lapse in whole or in part, including in the event of terminations resulting from specified causes.
(iii) Certificates for Stock. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. The Committee may require that any certificates representing shares of Restricted Stock bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock. The Committee may impose similar restrictions and conditions with respect to uncertificated shares of Restricted Stock.
(iv) Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, the Committee may require that any dividends paid on a share of Restricted Stock shall be either (A) paid with respect to such Restricted Stock at the dividend payment date in cash,
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in kind, or in a number of shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) automatically reinvested in additional Restricted Stock or held in kind, which shall be subject to the same terms as applied to the original Restricted Stock to which it relates, or (C) deferred as to payment, either as a cash deferral or with the amount or value thereof automatically deemed reinvested in shares of Deferred Stock, other Awards or other investment vehicles, subject to such terms as the Committee shall determine or permit a Participant to elect. Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.
(v) 409A. Any award of Restricted Stock, including any deferral or restriction of dividends or other distributions thereunder, resulting in a deferral of compensation subject to Section 409A of the Code shall be construed, to the maximum extent possible, as determined by the Committee consistent with the requirements of Section 409A of the Code.
(e) Deferred Stock. The Committee is authorized to grant Deferred Stock to Participants, which are rights to receive Stock, other Awards, or a combination thereof at the end of a specified deferral period, subject to the following terms and conditions:
(i) Award and Restrictions. Issuance of Stock will occur upon expiration of the deferral period specified for an Award of Deferred Stock by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, Deferred Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, and under such other circumstances as the Committee may determine at the date of grant or thereafter. Deferred Stock may be satisfied by delivery of Stock, other Awards, or a combination thereof, as determined by the Committee at the date of grant or thereafter.
(ii) Forfeiture. Except as otherwise determined by the Committee, upon termination of employment or service during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award document evidencing the Deferred Stock), all Deferred Stock that is at that time subject to such forfeiture conditions shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award document, or may determine in any individual case, that restrictions or forfeiture conditions relating to Deferred Stock will lapse in whole or in part, including in the event of terminations resulting from specified causes.
(iii) 409A. Awards of Deferred Stock shall be established consistent with the requirements of Section 409A of the Code, and shall be construed accordingly.
(f) Bonus Stock and Awards in Lieu of Obligations. The Committee is authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu of obligations of the Company or a subsidiary or affiliate to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Committee. Any
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such Award shall be established and administered consistent either with an exemption from, or in compliance with, the requirements of Section 409A of the Code.
(g) Other Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards as may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock or factors that may influence the value of Stock, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or business units thereof or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified subsidiaries or affiliates or other business units. The Committee shall determine the terms and conditions of such Awards. Stock delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(g) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Stock, other Awards, notes, or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other Award under the Plan, may also be granted pursuant to this Section 6(g). Any such Award shall be established and construed either to be exempt from the requirements of Section 409A of the Code, or to comply with such requirements.
(h) Performance Awards. Performance Awards, denominated in cash or in Stock or other Awards, may be granted by the Committee in accordance with Section 7.
7. Performance Awards, including Annual Incentive Awards.
(a) Performance Awards Generally. The Committee is authorized to grant Performance Awards on the terms and conditions specified in this Section 7. Performance Awards may be denominated as a cash amount, number of shares of Stock, or specified number of other Awards (or a combination) which may be earned upon achievement or satisfaction of performance conditions specified by the Committee. In addition, the Committee may specify that any other Award shall constitute a Performance Award by conditioning the grant, exercise or settlement, and the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase the amounts payable under any Award subject to performance conditions, except as limited under Sections 7(b) and 7(c) in the case of a Performance Award intended to qualify as “performance-based compensation” under Code Section 162(m).
(b) Performance Awards Granted to Covered Employees. If the Committee determines that a Performance Award to be granted to an Eligible Person who is designated by the Committee as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Performance Award shall be contingent upon achievement of a preestablished performance goal and other terms set forth in this Section 7(b).
(i) Performance Goal Generally. The performance goal for such Performance Awards shall consist of one or more business criteria and an objectively determinable targeted level or levels of performance with respect to each of such criteria, as specified by the Committee
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consistent with this Section 7(b). The performance goal shall otherwise meet the requirements of Code Section 162(m) and regulations thereunder (including Regulation 1.162-27 and successor regulations thereto), including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.” The Committee may determine that such Performance Awards shall be granted, exercised and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a condition to grant, exercise and/or settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants.
(ii) Business Criteria. One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries or affiliates or other business units of the Company, shall be used by the Committee in establishing performance goals for such Performance Awards, either on an absolute basis or relative to an index: (1) revenues on a corporate or product by product basis; (2) earnings from operations, earnings before or after taxes, earnings before or after interest, depreciation, amortization, incentives, service fees or extraordinary or special items; (3) net income or net income per common share (basic or diluted); (4) return on assets, return on investment, return on capital, or return on equity; (5) cash flow, free cash flow, cash flow return on investment, or net cash provided by operations; (6) economic value created or added; (7) operating margin or profit margin; (8) stock price, dividends or total stockholder return; (9) development of new technologies, (10) raising of equity or debt, (11) successful hiring of key individuals; (12) resolution of significant litigation; and (13) strategic business criteria, consisting of one or more objectives based on the following goals: meeting specified market penetration or value added, product development, registration or introduction (including, without limitation, any trial accomplishments, regulatory or other filings or approvals, or other product development milestones), geographic business expansion, cost targets, customer satisfaction, employee satisfaction, information technology, corporate development (including, without limitation, licenses or establishment of third party joint venture or other collaborations), manufacturing or process development, legal compliance or risk reduction, patent application or issuance goals, product registration or approval goals, or goals relating to acquisitions or divestitures of subsidiaries, affiliates or joint ventures. The targeted level or levels of performance with respect to such business criteria may be established at such levels and in such terms as the Committee may determine, in its discretion, including in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies.
(iii) Performance Period; Timing for Establishing Performance Goals. Achievement of performance goals in respect of such Performance Awards shall be measured over a performance period of up to one year or more than one year, as specified by the Committee. A performance goal shall be established not later than the earlier of (A) 90 days after the beginning of any performance period applicable to such Performance Award or (B) the time 25% of such performance period has elapsed.
(iv) Performance Award Pool. The Committee may establish a Performance Award pool, which shall be an unfunded pool, for purposes of measuring performance of the Company in connection with Performance Awards. The amount of such Performance
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Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 7(b)(ii) during the given performance period, as specified by the Committee in accordance with Section 7(b)(ii). The Committee may specify the amount of the Performance Award pool as a percentage of any of such business criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria.
(v) Settlement of Performance Awards; Other Terms. Settlement of such Performance Awards shall be in cash, Stock, other Awards or other property, in the discretion of the Committee. The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to this Section 7(b). Any settlement which changes the form of payment from that originally specified shall be implemented in a manner such that the Performance Award and other related Awards do not, solely for that reason, fail to qualify as “performance-based compensation” for purposes of Code Section 162(m). The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant or other event (including a Change in Control) prior to the end of a performance period or settlement of such Performance Awards.
(c) Annual Incentive Awards Granted to Designated Covered Employees. The Committee may grant an Annual Incentive Award to an Eligible Person who is designated by the Committee as likely to be a Covered Employee. Such Annual Incentive Award will be intended to qualify as “performance-based compensation” for purposes of Code Section 162(m), and therefore its grant, exercise and/or settlement shall be contingent upon achievement of preestablished performance goals and other terms set forth in this Section 7(c).
(i) Grant of Annual Incentive Awards. Not later than the earlier of 90 days after the beginning of any performance period applicable to such Annual Incentive Award or the time 25% of such performance period has elapsed, the Committee shall determine the Covered Employees who will potentially receive Annual Incentive Awards, and the amount(s) potentially payable thereunder, for that performance period. The amount(s) potentially payable shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 7(b)(ii) in the given performance period, as specified by the Committee. The Committee may designate an annual incentive award pool as the means by which Annual Incentive Awards will be measured, which pool shall conform to the provisions of Section 7(b)(iv). In such case, the portion of the Annual Incentive Award pool potentially payable to each Covered Employee shall be preestablished by the Committee. In all cases, the maximum Annual Incentive Award of any Participant shall be subject to the limitation set forth in Section 5(b).
(ii) Payout of Annual Incentive Awards. After the end of each performance period, the Committee shall determine the amount, if any, of the Annual Incentive Award for that performance period payable to each Participant. The Committee may, in its discretion, determine that the amount payable to any Participant as a final Annual Incentive Award shall be reduced from the amount of his or her potential Annual Incentive Award, including a determination to make no final Award whatsoever, but may not exercise discretion to increase any such amount. The Committee shall specify the circumstances in which an
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Annual Incentive Award shall be paid or forfeited in the event of termination of employment by the Participant or other event (including a Change in Control) prior to the end of a performance period or settlement of such Annual Incentive Award.
(d) Written Determinations. Determinations by the Committee as to the establishment of performance goals, the amount potentially payable in respect of Performance Awards and Annual Incentive Awards, the level of actual achievement of the specified performance goals relating to Performance Awards and Annual Incentive Awards, and the amount of any final Performance Award and Annual Incentive Award shall be recorded in writing in the case of Performance Awards intended to qualify under Section 162(m). Specifically, the Committee shall certify in writing, in a manner conforming to applicable regulations under Section 162(m), prior to settlement of each such Award granted to a Covered Employee, that the performance objective relating to the Performance Award and other material terms of the Award upon which settlement of the Award was conditioned have been satisfied.
8. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any subsidiary or affiliate, or any business entity to be acquired by the Company or a subsidiary or affiliate, or any other right of a Participant to receive payment from the Company or any subsidiary or affiliate. Awards granted in addition to or in tandem with other Awards or awards may be granted either as of the same time as or a different time from the grant of such other Awards or awards. The Committee may determine that, in granting a new Award, the in-the-money value or fair value of any surrendered Award or award may be applied to reduce the purchase price of any Award other than an Option or SAR, provided, that no such reduction shall be made, in the case of an Award subject to and intended to comply with the requirements of Section 409A of the Code, except to the extent consistent with Section 409A of the Code.
(b) Term of Awards. The term of each Award shall be for such period as may be determined by the Committee, subject to the express limitations set forth in Section 6(b)(ii).
(c) Form and Timing of Payment under Awards; Deferrals. Subject to the terms of the Plan and any applicable Award document, payments to be made by the Company or a subsidiary or affiliate upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. The settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events. Installment or deferred payments may be required by the Committee (subject to Section 10(e)) or permitted at the election of the Participant on terms and conditions established by the Committee. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of other amounts in respect of installment or deferred payments denominated in Stock.
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(d) Exemptions from Section 16(b) Liability. With respect to a Participant who is then subject to the reporting requirements of Section 16(a) of the Exchange Act in respect of the Company, the Committee shall implement transactions under the Plan and administer the Plan in a manner that will ensure that each transaction with respect to such a Participant is exempt under Rule 16b-3 (or satisfies another exemption under Section 16(b)), except that this provision shall not limit sales by such a Participant, and such a Participant may engage in other non-exempt transactions with respect to shares delivered under the Plan. The Committee may authorize the Company to repurchase any Award or shares of Stock deliverable or delivered in connection with any Award.
(e) Limitation on Vesting of Certain Awards. If the granting or vesting of full-value Awards (as defined in Section 4(a)) is subject to performance conditions, the minimum vesting period of such Awards shall be no less than one year. If neither the granting nor vesting of Full-value Awards is subject to performance conditions, such Awards shall have a minimum vesting period of no less than three years; provided, however, that such Awards may vest on an accelerated basis in the event of a Participant’s death, disability, retirement, or in the event of a Change in Control or other special circumstances. For purposes of this Section 8(e), (i) a performance period that precedes the grant of the Award will be treated as part of the vesting period if the participant has been notified promptly after the commencement of the performance period that he or she has the opportunity to earn the Award based on performance and continued service, and (ii) vesting over a one-year period or three-year period will include periodic vesting over such period if the rate of such vesting is proportional (or less rapid) throughout such period.
(f) 409A. Awards under the Plan are intended either to be exempt from the rules of Section 409A and the Code or to satisfy these rules, and shall be construed accordingly.
9. Change in Control.
(a) Effect of “Change in Control” on Outstanding Awards. Unless otherwise provided in the Plan (including, without limitation in Section 3(a)), if there shall be a Change of Control, the Committee or the board of directors of any entity assuming the obligations of the Company under the Plan, shall, as to outstanding Awards, take one or more of the following actions: (i) make appropriate provision for the continuation of such Awards by substituting on an equitable basis for the shares then subject to such Awards, or make provision for the exchange of such Awards for, the consideration payable with respect to the outstanding Common Shares in connection with the Change of Control (less the exercise price thereof not paid); or (ii) make appropriate provision for the continuation of such Awards by substituting on an equitable basis for the shares then subject to such Awards any equity securities of the successor corporation; or (iii) upon written notice to the optionees, provide that all Awards must be exercised, to the extent then exercisable, within a specified number of days from the date of such notice, at the end of which period the Awards shall terminate; or (iv) terminate all Awards in exchange for a cash payment equal to the excess of the fair market of the shares subject to such Awards (to the extent then exercisable) over the exercise price thereof; or (v) accelerate the date of exercise of such Awards or of any installment of any such Awards; or (vi) terminate all Awards in exchange on an equitable basis for the grant of similar stock options for the purchase of shares of capital stock of any successor corporation; or (vii) any combination of any of the foregoing referred to in clauses (i) through (vi) above. The Committee shall make such determination for each type of
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Award, which determination need not be the same determination for each type of Award, in each case subject to the grant agreement issued under the Plan relating to the Award and, to the extent not adverse to the optionee, in any other plan or agreement relating directly or indirectly to an Award. Notwithstanding the foregoing, the Committee shall take no action per this section that would be treated as a grant of a new stock right or a change in the form of payment for purposes of Section 409A of the Code within the meaning of Treas. Reg. Section 1.409A- l(b)(5)(iii)(E)(4), Notice 2005-1, A-4(d) and any subsequent Section 409A guidance and to the maximum extent possible, as determined by the Committee, substitutions and modification of Awards under this section shall be consistent with the requirements of Section 409A of the Code.
(b) Definition of “Change in Control.” Unless otherwise provided in the relevant grant agreement relating to an Award, in any other plan or agreement relating directly or indirectly to the Award, a “Change in Control” shall be deemed to have occurred if there shall have occurred any of the following:
(i) any Person (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company) becomes the beneficial owner (except that a Person shall be deemed to be the beneficial owner of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants or options or otherwise, without regard to the sixty day period referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company or any Significant Subsidiary (as defined below), representing 50% or more of the combined voting power of the Company’s or such subsidiary’s then outstanding securities;
(ii) during any period of one year (not including any period prior to the adoption of the Plan), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii), or (iv) of this paragraph) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved but excluding for this purpose any such new director whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, associate or other entity or Person other than the Board, cease for any reason to constitute at least a majority of the Board;
(iii) the consummation of a merger or consolidation of the Company or any subsidiary owning directly or indirectly all or substantially all of the consolidated assets of the Company (a “Significant Subsidiary”) with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company or a Significant Subsidiary outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or
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resulting entity) more than 50% of the combined voting power of the surviving or resulting entity outstanding immediately after such merger or consolidation;
(iv) the stockholders of the Company or any affiliate approve a plan or agreement for the sale or disposition of all or substantially all of the consolidated assets of the Company (other than such a sale or disposition immediately after which such assets will be owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company immediately prior to such sale or disposition) and the satisfaction of all material conditions to completion of the transaction, in which case the Board shall determine the effective date of the Change in Control resulting therefrom; or
(v) any other event occurs which the Board determines, in its discretion, would materially alter the structure of the Company or its ownership.
10. General Provisions.
(a) Compliance with Legal and Other Requirements. The Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of Stock or payment of other benefits under any Award until completion of such registration or qualification of such Stock or other required action under any federal or state law, rule or regulation or listing or other required action with respect to any stock exchange or automated quotation system upon which the Stock or other securities of the Company are listed or quoted, as the Committee may consider appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Stock or payment of other benefits in compliance with applicable laws, rules, and regulations or listing requirements. The foregoing notwithstanding, in connection with a Change in Control, without the express written consent of the affected Participant the Company shall take or cause to be taken no action, and shall undertake or permit to arise no legal or contractual obligation, that results or would result in any postponement of the issuance or delivery of Stock or payment of benefits under any Award or the imposition of any other conditions on such issuance, delivery or payment, to the extent that such postponement or other condition would represent a greater burden on a Participant than existed on the 90th day preceding the Change in Control.
(b) Limits on Transferability; Beneficiaries. No Award or other right or interest of a Participant under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party (other than the Company or a subsidiary or affiliate thereof), or assigned or transferred by such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative; provided, that Awards and other rights (other than with respect to Options intended to qualify as “incentive stock options” as defined in Section 422 of the Code) may be transferred to one or more transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such transfers are permitted by the Committee, subject to any terms and conditions which the Committee may impose thereon (including limitations the Committee may deem appropriate in order that offers and sales under the Plan will meet applicable requirements of registration forms under the
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Securities Act of 1933 specified by the Securities and Exchange Commission); and provided, further, that any such transfer, if permitted, must be a gratuitous transfer. A Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award document applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.
(c) Adjustments. In the event that any large, special and non-recurring dividend or other distribution (whether in the form of cash or property other than Stock), recapitalization, forward or reverse split, Stock dividend, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Stock such that an adjustment is determined by the Committee to be appropriate under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of shares of Stock which may be delivered in connection with Awards granted thereafter, (ii) the number and kind of shares of Stock by which annual per-person Award limitations are measured under Section 5(b), (iii) the number and kind of shares of Stock subject to or deliverable in respect of outstanding Awards and (iv) the exercise price, grant price or purchase price relating to any Award or, if deemed appropriate, the Committee may make provision for a payment of cash or property to the holder in cancellation of an outstanding Option, SAR or other Award with respect to which Stock has not been previously issued. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including Performance Awards and performance goals and any hypothetical funding pool relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence, as well as acquisitions and dispositions of businesses and assets) affecting the Company, any subsidiary or affiliate or other business unit, or the financial statements of the Company or any subsidiary or affiliate, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee’s assessment of the business strategy of the Company, any subsidiary or affiliate or business unit thereof, performance of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant; provided that no such adjustment shall be authorized or made if and to the extent that the existence of such authority (i) would cause Options, SARs, or Performance Awards granted under Section 7 to Participants designated by the Committee as Covered Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder to otherwise fail to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder, or (ii) would cause the Committee to be deemed to have authority to change the targets, within the meaning of Treasury Regulation 1.162-27(e)(4)(vi), under the performance goals relating to Options or SARs granted to Covered Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder. All adjustments pursuant to this Section 10(c) with respect to an Award intended to qualify for an exemption from, or to comply with the requirements of, Section 409A of the Code shall be accomplished in a manner consistent with such intent.
(d) Tax Provisions.
(i) Withholding. The Company and any subsidiary or affiliate is authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from
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a distribution of Stock, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant’s withholding obligations, either on a mandatory or elective basis in the discretion of the Committee. Other provisions of the Plan notwithstanding, only the minimum amount of Stock deliverable in connection with an Award necessary to satisfy statutory withholding requirements will be withheld, except a greater amount of Stock may be withheld if such withholding would not result in additional accounting expense to the Company.
(ii) Required Consent to and Notification of Code Section 83(b) Election. No election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Code Section 83(b)) or under a similar provision of the laws of a jurisdiction outside the United States may be made unless expressly permitted by the terms of the Award document or by action of the Committee in writing prior to the making of such election. In any case in which a Participant is permitted to make such an election in connection with an Award, the Participant shall notify the Company of such election within ten days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Code Section 83(b) or other applicable provision.
(iii) Taxes. For purposes of this Plan, “taxes” shall mean any form of tax or levy, impost, duty, contribution or withholding in the nature of tax (including, without limitation, corporate income tax, wage withholding, backup withholding, social security contributions, capital gains tax, value added tax, stamp duty, documentary stamp tax, real estate transfer tax, and excise tax) imposed, collected or assessed by, or payable to, a Tax Authority and all penalties and interest included in or relating to any of the above. For the propose of this definition, Tax Authority means any government state or municipality or local, state, federal or other revenue, customs or excise authority, body or official in the United States or elsewhere competent to impose, collect or assess any tax.
(e) Changes to the Plan. The Board may amend, suspend or terminate the Plan or the Committee’s authority to grant Awards under the Plan without the consent of stockholders or Participants; provided, however, that any amendment to the Plan shall be submitted to the Company’s stockholders for approval not later than the earliest annual meeting for which the record date is after the date of such Board action if such stockholder approval is required by the Plan by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted, and the Board may otherwise, in its discretion, determine to submit other amendments to the Plan to stockholders for approval and provided further, that, without the consent of an affected Participant, no such action may materially and adversely affect the rights of such Participant under any outstanding Award.
(f) Right of Setoff. The Company or any subsidiary or affiliate may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company or any subsidiary or affiliate may owe to the Participant from time to time, including amounts payable in
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connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff. By accepting any Award granted hereunder, the Participant agrees to any deduction or setoff under this Section 10(f).
(g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute, or to provide the means for the grant of Awards that constitute, an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant or obligation to deliver Stock pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Stock, other Awards or other property, or make other arrangements to meet the Company’s obligations under the Plan. Such trusts or other arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant.
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements, apart from the Plan, as it may deem desirable, including incentive arrangements and awards which do not qualify under Code Section 162(m), and such other arrangements may be either applicable generally or only in specific cases.
(i) Payments in the Event of Forfeitures; Fractional Shares. Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash consideration, the Participant shall be repaid the amount of such cash consideration. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
(j) Compliance with Code Section 162(m). It is the intent of the Company that Options and SARs granted to Covered Employees and other Awards designated as Awards to Covered Employees subject to Section 7 shall constitute qualified “performance-based compensation” within the meaning of Code Section 162(m) and regulations thereunder, unless otherwise determined by the Committee at the time of allocation of an Award. Accordingly, the terms of Sections 7(b), (c), and (d), including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee as likely to be a Covered Employee with respect to a specified fiscal year. If any provision of the Plan or any Award document relating to a Performance Award that is designated as intended to comply with Code Section 162(m) does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements, and no provision shall be deemed to confer upon the Committee
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or any other person discretion to increase the amount of compensation otherwise payable in connection with any such Award upon attainment of the applicable performance objectives.
(k) Governing Law. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan and any Award document shall be determined in accordance with the laws of the State of New York, without giving effect to principles of conflicts of laws, and applicable provisions of federal law.
(1) Awards to Participants Outside the United States. The Committee may modify the terms of any Award under the Plan made to or held by a Participant who is then resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that such Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant’s residence or employment abroad shall be comparable to the value of such an Award to a Participant who is resident or primarily employed in the United States. An Award may be modified under this Section 10(1) in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation or result in actual liability under Section 16(b) for the Participant whose Award is modified.
(m) Limitation on Rights Conferred under Plan. Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a subsidiary or affiliate, (ii) interfering in any way with the right of the Company or a subsidiary or affiliate to terminate any Eligible Person’s or Participant’s employment or service at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and employees, or (iv) conferring on a Participant any of the rights of a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award or an Option is duly exercised. Except as expressly provided in the Plan and an Award document, neither the Plan nor any Award document shall confer on any person other than the Company and the Participant any rights or remedies thereunder.
(n) Severability; Entire Agreement. If any of the provisions of the Plan or any Award document is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining provisions shall not be affected thereby; provided, that, if any of such provisions is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder. The Plan and any Award documents contain the entire agreement of the parties with respect to the subject matter thereof and supersede all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral with respect to the subject matter thereof (unless an employment agreement entered into between the Company and the Participant specifically provides contradictory terms, in which case the terms of the employment agreement shall govern).
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(o) Stockholder Approval and Termination. The Plan is effective as of March 12, 2008 (the “Effective Date”), subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under applicable law or regulation or other rules or guidelines of AIM or any stock exchange or automated quotation system upon which Shares or other securities of the Company are listed or quoted. Unless earlier terminated by action of the Board of Directors, the Plan will remain in effect until such time as no Stock remains available for delivery under the Plan and the Company has no further rights or obligations under the Plan with respect to outstanding Awards under the Plan.
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Exhibit 10.25
PHIBRO ANIMAL HEALTH CORPORATION |
RETIREMENT INCOME AND |
DEFERRED COMPENSATION PLAN |
Amended and Restated as of April 15, 2009 |
PREAMBLE
This Plan is an unfunded deferred compensation arrangement for a select group of management or highly compensated personnel. The Plan is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended.
ARTICLE 1. DEFINITIONS
Section 1.01
“Company” means PHIBRO ANIMAL HEALTH CORPORATION, a New York Corporation, CP CHEMICALS, INC., a New Jersey Corporation, and PHIBRO-TECH, INC., a Delaware Corporation and their corporate successors.
Section 1.02
“Board” means the Board of Directors of Phibro Animal Health Corporation.
Section 1.03
“Committee” means the Deferred Compensation Plan Committee.
Section 1.04
“Plan” means this Phibro Animal Health Corporation Retirement Income and Deferred Compensation Plan as it may be amended from time to time. The calendar year shall be the Plan Year.
Section 1.05
“Effective Date of Plan” means March 18, 1994.
Section 1.06
“Employee” means an employee of the Company.
Section 1.07
“Annual Compensation” shall mean the regular compensation paid to an employee in a calendar year, exclusive of any bonus or other incentive compensation.
Section 1.08
“Base Salary Amount” shall be a minimum amount of Annual Compensation, determined by the Committee at the beginning of each Plan Year, which must be earned by an employee in order for said employee to be eligible to participate in the Plan during said Plan Year. The Base Salary Amount for the calendar years 1993 and 1994 shall be $150,000. In no event shall said amount be less than $150,000 in any subsequent calendar year.
Section 1.09
“Eligible Compensation” shall mean the maximum amount of a Participant’s Annual Compensation that may be taken into account in determining his Retirement Income Benefits
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hereunder. For the calendar year 1993, Eligible Compensation shall be $235,840; that amount shall be increased 6% each calendar year thereafter that the Plan is in force and effect.
Section 1.10
“Eligible Employee” means an Employee designated for participation by the Board or the Committee.
Section 1.11
“Participants” means all Eligible Employees who participate in the Plan, or persons who were such at the time of their retirement, death, disability or resignation and who retain, or whose beneficiaries obtain, benefits under the Plan in accordance with its terms. An employee shall be deemed to have been a Participant in the Plan during each year of his employment on or after the Effective Date in which he was eligible to earn a Retirement Income Benefit hereunder. A Participant will remain in the Plan, during any period in which he is on an approved leave of absence, or is on disability leave provided he is then receiving disability payments paid for by Company.
Section 1.12
“Normal Retirement Date” means the date on which a Participant attains the age of sixty-five (65) years and has completed at least ten (10) years of service with the Company. “Early Retirement Date” means the date on which the employment of a Participant terminates, provided he has completed at least ten (10) years of service with the Company and has attained the age of fifty—five (55) years.
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Section 1.13
“Benefit Percentage” means that percentage (if any) declared by the Committee with respect to a Plan Year, which when multiplied by a Participant’s Eligible Compensation shall determine the Annual Percentage Accrual.
Section 1.14
“Annual Percentage Accrual” shall mean the amount, if any, of the Eligible Compensation earned by a Participant in a Plan Year, with respect to which the Committee shall determine to award a Retirement Income Benefit for said year. Said determination shall be made during the first quarter of the immediately following year with respect to Participants who are employed by the Company at the time said determination is made. Thus, for example, the Committee will determine the 1993 Annual Percentage Accrual, if any, during the first quarter of 1994.
Section 1.15
“Retirement Income Benefit” is equal to the sum of the Annual Percentage Accrual(s), if any, declared by the Committee during the years that said Participant participated in the Plan. Within thirty (30) days after the end of each Plan Year, each Participant shall receive a statement of benefits reflecting the Participant’s Retirement Income Benefit (if any) earned for the previous Plan Year, as well as the total of said Participant’s accrued benefit, to date.
Section 1.16
“Survivor’s Income Benefit” is the benefit payable to the Beneficiary of a Participant who dies before having retired from the Company.
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Section 1.17
“Deferred Compensation Benefit” is an optional benefit which a Participant may elect, prior to the start of each Plan Year, (except the first Plan Year, in which such election must be made within thirty (30) days of the Effective Date with respect to Compensation payable to said Participant for that period in 1994 subsequent to the date of such election) and which the Company may (partially) match each year. In addition, a Participant who first becomes eligible to participate during a Plan Year may elect to so participate within 30 days of becoming eligible.
Section 1.18
“Deferred Compensation Account” means the account maintained by the Trustee in the name of each Participant.
Section 1.19
“Beneficiary” means the person or persons a Participant shall have designated to succeed to his right to receive payments hereunder in the event of his death. In case of a failure to designate a beneficiary, or the death of a designated beneficiary without a designated successor, such payments shall be made to the Participant’s estate. No designation of beneficiaries shall be valid unless in writing signed by the Participant, dated, and filed with both the Committee and the Trustee. Beneficiaries may be changed without the consent of any prior beneficiaries.
Section 1.20
“Trust” means the Phibro Animal Health Corporation Retirement Income & Deferred Compensation Trust created as of January 1994, which is a grantor trust.
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Section 1.21
“Trustee” means the Trustee of the Trust.
Section 1.22
The terms hereof shall be read in the plural or singular, or masculine or feminine, as the case may be, whenever appropriate.
ARTICLE II. ANNUAL DEFERRALS
Section 2.01
During the first Plan Year, each Participant shall notify Company within thirty (30) days of the Effective Date, on a form provided by Company, of the portion, if any, of said Participant’s Base Salary Amount in excess of $150,000 payable to said Participant for the period in 1994 subsequent to the date of such election, that said Participant elects to defer (the “1994 Deferral Amount”). Thereafter, on or before the fifteenth (15th) day of the month preceding the first day of each Plan Year (or within 30 days of becoming eligible to participate in the Plan), each Participant shall notify Company, on a form provided by Company, of the portion, if any, of said Participant’s Base Salary Amount in excess $150,000 payable to said Participant in the next calendar year (or for the remainder of that calendar year in the case of a mid-year eligibility) that said Participant elects to defer (hereinafter “Annual Deferral”). The election, once made, shall be irrevocable. However, a Participant who has received a Hardship Distribution as provided for in Section 8.01, shall not be eligible to make an Annual Deferral until after the close of the Plan Year following the date of such Hardship Distribution.
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Section 2.02
The amount of the Annual Deferral elected by a Participant in any calendar year may not be less than $3,000.00 and may not exceed $20,000.00.
Section 2.03
If a Participant who has elected a 1994 Deferral Amount or in any Plan Year after 1994 has elected an Annual Deferral is a member of the Company’s Qualified Section 401(k) Plan and has elected to contribute the maximum deductible amount to said Plan in 1994 or any subsequent calendar year, Company will match the first $3,000 which said Participant has elected to defer hereunder during said calendar year (hereinafter “Company Matching Contribution Amount”). The Company shall withhold, each quarter, or such other period determined by Company, from the compensation payable to said Participant, one-quarter (1/4), or such other proportionate amount of said Participant’s Annual Deferral.
Section 2.04
The Annual Deferral Amount and the Company Matching Contribution Amount, if any, shall be credited to a Participant’s Deferred Compensation Account at the time said amounts are withheld from the Participant’s salary and/or paid by Company, as the case may be.
Section 2.05
Notwithstanding the provisions of Section 2.01, on or before the first (1st) day of the month preceding the first month of each Plan Year commencing January 1, 1995, Company may determine, in its sole discretion, to advise each Participant that no Annual Deferral will be permitted in the next calendar year.
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ARTICLE III. RETIREMENT BENEFITS
Section 3.01
“Normal Retirement Benefit” . A Participant who retires on or after his Normal Retirement Date shall be paid a monthly retirement benefit in an amount determined by dividing his Retirement Income Benefit by twelve (12).
Section 3.02
“Early Retirement Benefit” . Upon the retirement of a Participant who shall have attained his Early Retirement Date, he shall be paid a monthly retirement benefit in an amount determined by dividing his Retirement Income Benefit, by twelve (12), reduced as follows:
REDUCTION FOR EACH | REDUCTION FOR EACH | |||||||
AGE AT RETIREMENT | MONTH LESS THAN AGE 65 | YEAR LESS THAN 65 | ||||||
Greater than 55 but less than 60 | .1667 | % | 2 | % | ||||
60 to 62 | .0833 | % | 1 | % | ||||
Greater than 62 | 0 | % | 0 | % |
Section 3.03
“Survivor’s Income Benefit” . If a Participant shall die during his employment prior to having begun to receive any Retirement Income Benefits hereunder, his Beneficiary shall be entitled to receive, in said Beneficiary’s discretion, a monthly death benefit in an amount equal to either (i) the then value of said Participant’s Retirement Income Benefit, (hereinafter “Survivor’s Retirement Benefit”) or (ii) an amount determined as follows:
Section 3.03.1. If said Participant died prior to attaining the age of forty (40) years, an amount equal to three (3) times the Participant’s Annual Compensation at the time of death (annualized).
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Section 3.03.2. If said Participant died after having attained the age of forty (40) years but prior to having attained the age of fifty (50) years, an amount equal to two (2) times the Participant’s Annual Compensation at the time of death (annualized).
Section 3.03.3. If said Participant died after having attained at least the age of fifty (50) years, an amount equal to the Participant’s Annual Compensation at the time of death (annualized).
Section 3.03.4. The benefit determinable under Section 3.03.1, 3.03.2 or 3.03.3, as the case may be, is hereinafter referred to as the “Annualized Benefit”.
Section 3.04
“Survivor’s Income Benefit” . A Beneficiary electing to receive the “Annualized Benefit” shall be entitled to receive only those amounts accrued as of December 31, 2004. A Beneficiary electing to receive the deceased Participant’s Retirement Income Benefit shall be entitled to receive a monthly benefit based on the amount accrued as of the date of death.
Section 3.05
“Forfeiture For Cause” . Notwithstanding anything contained in the Plan to the contrary, if, in the Committee’s discretion, it is determined that a Participant’s employment be terminated for Cause, such Participant shall forfeit all rights to any Retirement Income Benefit payable under the Plan. For purposes of the foregoing, “Cause” shall mean any one or more of the following: (a) theft or misappropriation of Company funds or assets, or intentionally damaging the Company’s assets; (b) falsification of Company records; (c) willful failure or refusal to perform duties reasonably assigned; (d) conviction (including a guilty plea) of a felony or misdemeanor which creates apprehension or insecurity on the part of the Committee, other
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officers of the Company, customers or the public in dealing with the Participant; or (e) acting either willfully or with gross negligence in a disloyal manner or to the detriment of the Company’s best interest.
ARTICLE IV. PAYMENT OF BENEFITS
Section 4.01
“Retirement Income Benefit” . The payment of a Participant’s Retirement Income Benefit shall commence on or about the first day of the month next following thirty (30) days after his separation from service with the Company, and shall be payable on or about the first day of each subsequent month until a total of 180 such payments have been made. If said Participant shall die after having received any of said payments and before having received the entire benefit to which he is entitled, said payments shall continue to be made to his Beneficiary. Notwithstanding the foregoing, the remaining Retirement Income Benefit due to former employees Nathan Bistricer and James Herlands shall be paid out in lump sums as of May 1, 2009. The lump sum shall be calculated using an interest rate equal to the Applicable Federal Rate for April, 2009 and, in the case of Mr. Herlands, shall apply only to benefits accrued through December 31, 2004 plus earnings thereon.
Section 4.02
“Survivor’s Income Benefit” . The payment of a Participant’s Survivor’s Income Benefit shall be made as follows:
Section 4.02.1. If his Beneficiary shall have elected to receive the “Survivor’s Retirement Benefit,” payment of same shall commence, at the election of said Beneficiary, on or about the first day of the month next following thirty (30) days after (a) the Participant’s date of
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death, if the Participant died after having attained his Early Retirement Date, or his Normal Retirement Date, as the case may be, (b) the date on which the Participant would have attained his Early Retirement Date if he died prior to his Early Retirement Date, or (c) the date on which the Participant would have attained his Normal Retirement Date if he died prior to his Normal Retirement Date, and shall continue to be payable on or about the first day of each subsequent month until a total of 180 such payments have been made. Payment of the amount described in Section 3.04 shall commence thirty (30) days after the later to occur of (i) the Participant’s date of death, if the Participant died after having attained his Early Retirement, (b) the date on which the Participant would have attained his Early Retirement Date if he died prior to his Early Retirement Date.
Section 4.02.2. If his Beneficiary shall have elected to receive the “Annualized Benefit”, payment of same shall be made in that number of equal monthly installments commencing on or about the first day of the month next following thirty (30) days after the death of the Participant, determined as follows:
(i) If Section 3.03.1 applies, thirty—six (36) months;
(ii) If Section 3.03.2 applies, twenty—four (24) months; and
(iii) If Section 3.03.3 applies, twelve (12) months
ARTICLE V. FUNDING
Section 5.03
“Unfunded Character” . Notwithstanding the fact that the Company has established the Trust for the purpose of providing the benefits payable under the Plan, such Trust, or the Company’s assets, as the case may be, shall be subject to the claims of the Company’s general
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unsecured creditors. Any liability of the Company to any person with respect to benefits payable under the Plan shall be based solely upon such contractual obligations, if any, as shall be created by the Plan, and shall give rise only to a claim against the general assets of the Company. No such liability shall be deemed to be secured by any pledge or any other encumbrance on any specific property of the Company. The Plan is not intended to comply with the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended, and is intended to be unfunded for tax purposes and for purposes of Title I of ERISA.
Section 5.02
“Life Insurance” . The Trust may apply for and become the owner and beneficiary of a life insurance policy on the life of each Participant, so as to provide some or all of the benefits hereunder. Accordingly, each Participant, as a condition of participation in the Plan, may be required to submit to a physical examination by the carrier issuing said policy, said examination to be paid for by the Company. Any such policy which the Company may utilize to assure itself of the funds to provide the benefits hereunder, shall not serve in any way as security to a Participant for the Company’s performance hereunder and shall remain the sole property of the Trust. The rights accruing to a Participant or any Beneficiary hereunder shall be solely those of an unsecured creditor of the Company. Notwithstanding anything herein contained to the contrary, if a Participant is not insurable at standard rates, the Committee shall have the option to reduce (or eliminate, if said Participant is uninsurable) the Survivor Benefit payable hereunder with respect to such Participant. Notice of any such determination shall be delivered by the Committee to said Participant, in writing, within thirty (30) days after said determination has been made, and shall be final, conclusive, and binding on the Participant, and his heirs, successors, assigns and beneficiary.
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Section 5.03
Title to and beneficial ownership of any assets, whether cash or investments, which the Trust may hold to pay any Plan benefits, shall at all times remain in the Trustee and neither the Participants nor their designated Beneficiaries shall have any property interest whatsoever therein.
Section 5.04
Payment of the Retirement Income Benefit payable under the Plan shall be conditioned upon the Participant remaining in the employ of Company at least until he attains his Early Retirement Date. If a Participant’s employment terminates prior to his having attained his Early Retirement Date, (other than on account of his death or permanent disability) he shall forfeit the Retirement Income Benefit otherwise payable to him hereunder.
VI. DEFERRED COMPENSATION ACCOUNT
Section 6.01
Company shall establish a Deferred Compensation Account in the name of each Participant. Notwithstanding the establishment of each said Account, no Participant shall be deemed to have any present interest therein and the amounts credited thereto shall be subject to the claims of Company’s general creditors.
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Section 6.02
At the end of any Plan Year in which a Participant makes a deferral election hereunder, his Deferred Compensation Account shall be credited with (i) the amount of said deferrals, (ii) all Company Matching Contribution Amount(s) (if any), and (iii) interest, from the date of actual deferral, compounded annually in arrears at the Moody’s Corporate Bond Index rate as published by Moody’s Investors Services, Inc. Within thirty (30) days after the end of each Plan Year, each such Participant shall receive a statement reflecting the value of said Participant’s Deferred Compensation Account (if any).
Section 6.03
If a Participant shall have completed the number of years of Plan participation from and after December 31, 1993 indicated in the table below, his Deferred Compensation Account shall retroactively be credited with an additional rate of interest as set forth in the table below:
YEARS OF PARTICIPATION | ADDITIONAL RATE | |
SINCE JANUARY 1, 1994 - | OF INTEREST | |
Five (5) Years | One (1%) Percent | |
Ten (10) Years | Two (2%) Percent |
Notwithstanding the above, the interest rate credited to the Deferred Compensation Account of a Participant who shall have made a hardship withdrawal in accordance with the terms of Section 8.01 hereof prior to having attained the age of sixty-two (62) years, shall be retroactively reduced to seventy-five (75%) percent of the rates indicated above.
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ARTICLE VII. DISTRIBUTION OP DEFERRED
COMPENSATION ACCOUNT
Section 7.01
With respect to amounts deferred before January 1, 2005, and earnings and match thereon, a Participant may elect at any time prior to the year of his separation from service to have the value of his Deferred Compensation Account paid to him, upon his termination of service with the Company, or to his designated Beneficiary in the event of his death prior to his termination of service with the Company, as follows:
Section 7.01.1. Upon termination of service for any reason other than death, by one of the following methods:
(i) In a lump sum, paid no later than the April 1st of the year following said termination of service, or
(ii) In monthly installments, for any period (selected by Participant) from two (2) to fifteen (15) years certain, commencing no later than the April 1st following the year of termination (hereinafter “Installment Payment Inception Date”), in an amount determined as follows:
Commencing on the Installment Payment Inception Date, and continuing thereafter in substantially equal amounts (but not less than $100 per month), an amount equal to the average of payments for a period certain annuity, as quoted by two (2) insurance companies at the time of said Installment Inception Payment Date, for the selected number of installments.
A Participant’s election may be changed at any time prior to the year of his termination of employment.
Section 7.01.2. Upon the death of a Participant, in a lump sum no later than sixty (60) days following his date of death.
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Section 7.02
With respect to amounts deferred after December 31, 2004, and earnings and match thereon, a Participant shall elect at the time of such deferral to have the value of his Deferred Compensation Account paid to him, upon his termination of service with the Company, or to his designated Beneficiary in the event of his death prior to his termination of service with the Company, in one of the following methods:
Section 7.02.1. Upon termination of service for any reason other than death, by one of the following methods:
(i) In a lump sum, on a date selected by the Participant, but no later than the April 1st of the year following said termination of service, or
(ii) In monthly installments, for any period (selected by Participant) from two (2) to fifteen (15) years certain, commencing on a date selected by the Participant but no later than the April 1st following the year of termination (hereinafter “Installment Payment Inception Date”), in an amount determined as follows:
Commencing on the Installment Payment Inception Date, and continuing thereafter in substantially equal amounts (but not less than $100 per month), an amount equal to the average of payments for a period certain annuity, as quoted by two (2) insurance companies at the time of said Installment Inception Payment Date, for the selected number of installments.
Such election cannot be changed in a manner that would accelerate payments, and any election to further defer payments must be made at least twelve (12) months before payments would otherwise have commenced, and must result in an additional deferral of at least five (5) years.
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Section 7.02.2. Upon the death of a Participant, in a lump sum no later than sixty (60) days following his date of death.
ARTICLE VIII. HARDSHIP DISTRIBUTION
Section 8.01
“Financial Hardship” means an immediate and substantial financial need of the Participant or Beneficiary, resulting from an illness or accident of the Participant, the Participant’s spouse or Beneficiary (or Participant’s dependent), loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant. In the event a Participant has a Financial Hardship, he may apply to the Committee for permission to withdraw an amount from his Deferred Compensation Account. Such amount shall be no more than that amount needed to satisfy the Financial Hardship, plus any taxes resulting from the withdrawal. The Committee will promptly act upon such request, and if it is approved, the amount requested will be distributed to said Participant within thirty (30) days of said approval.
ARTICLE IX. MISCELLANEOUS
Section 9.01
The Plan shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and assigns of Company and the Participants. Notwithstanding the foregoing, a Participant’s right to receive payment hereunder shall not be subject to attachment or garnishment by creditors of the Participant or the Participant’s beneficiary, and is hereby expressly declared to be personal, and not subject in any manner to alienation, sale, transfer,
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assignment, pledge or incumbrance, and in the event of any attempted assignment or transfer of such rights contrary to the provisions hereof, Company shall have no further liability for payments hereunder.
Section 9.02
Any payments under the Plan shall be independent of, and in addition to, those under any other plan, program or agreement which may have been adopted by Company or any other compensation payable to a Participant or a Participant’s designated Beneficiary by the Company.
Section 9.03
Notwithstanding anything contained herein to the contrary, Company reserves the right to terminate the Plan if there is an adverse change in the Federal Income Tax laws governing the taxation of deferred compensation plans similar to the Plan; provided, however, that any such termination shall be prospective in effect and shall not diminish in any way the then current Deferred Compensation Obligation to Participants in the Plan.
Section 9.04
It is intended and understood by the Company, the Trustee and the Participants, that this Plan is designed to comply with the provisions of Internal Revenue Code Section 409A and the Regulations issued thereunder.
Section 9.05
The Plan, and any amendment thereto, shall be interpreted and administered so as to be consistent with, the terms of the Trust.
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Exhibit 10.26
Executive Income
Deferred Compensation Agreement
AGREEMENT, made and entered into this First day of March, 1990, by and between Philipp Brothers Chemicals, Inc., a Corporation duly organized and existing under the laws of the State of New Jersey, and having its usual place of business at 1 Parker Plaza, Fort Lee, NJ, (hereinafter sometimes called the “Corporation”), and James Herlands, currently residing at 115 Central Park West, New York, NY (hereinafter call “Executive”),
WITNESSETH THAT:
WHEREAS, the Executive is presently employed by the Corporation in the position of Treasurer, in which capacity his services have contributed to the successful operation of the Corporation, and the Corporation and its Directors believe it is in the best interest of the Corporation to retain the services of the Executive; and
WHEREAS, the Executive desires to enter into this Agreement with the Corporation under which, in consideration of services rendered and to be rendered by him to the Corporation, it will agree to make certain payments to him in the event of his retirement while in the employment of the Corporation or as otherwise provided for herein, all subject to the terms and conditions hereof; and
WHEREAS, the Directors of the Corporation have concluded and agreed that it is in the best interests of the Corporation to enter into this Agreement with the Executive;
NOW, THEREFORE, in consideration of the premises, and the services rendered and to be rendered to the Corporation by the Executive, and for other good and valuable consideration, receipt of which is hereby acknowledged, the Corporation and the Executive hereby mutually convenant and agree as follows:
ARTICLE I
Retirement of Executive Following Age 65
1.01 The Corporation agrees that the Executive may retire from the active and daily service of the Corporation on the day which is one day prior to the first day of the month in which the Executive has his sixty-fifth (65th) birthday. It is understood and agreed that the word “retirement” as used in this Agreement shall refer to the actual retirement of the Executive, and that no benefits shall be paid the Executive under this Agreement until his actual retirement from regular full-time employment in the Corporation, unless the Executive and the Corporation shall otherwise mutually agree in writing.
1.02 The Corporation agrees that commencing on the first payment date (as defined in Section 5.02) after the date of the Executive’s retirement, and on each payment date thereafter for the term of this Agreement, it will make monthly retirement payments in the amount provided in Article IV hereof. The Corporation agrees to continue to make such monthly payments to the Executive during his life for Ten (10) years and until the Executive shall have received one Hundred Twenty (120) monthly payments; subject, however, to the conditions and limitations provided for and set forth hereinbelow.
ARTICLE II
Death During Retirement
2.01 The Corporation agrees that if the Executive shall retire but shall die before receiving any or all of the said monthly payments as provided in Section 1.02, it will continue to make such monthly retirement payments to the designated beneficiary of the Executive who shall be living and entitled to receive such payment on the then current monthly payment date. If the Executive retires and dies after the expiration of said One Hundred Twenty month period, no further payments shall be due or payable by the Corporation under this Agreement.
2.02 As long as this Agreement is in force, the Executive shall be entitled to specify, in accordance with the procedures set forth in Section 11.01, the beneficiary or beneficiaries of any payments remaining to be paid at the time of his death under the provisions of Section 2.01 above.
ARTICLE III
Termination of Employment
3.01 In the event that the Executive terminates his employment with the Corporation voluntarily, or if he is discharged for any reason prior to his retirement date as set out in Section 1.01, no payments shall be due or payable by the Corporation under this Agreement.
ARTICLE IV
Amount of Monthly Payments
4.01 The amount of each monthly retirement payment to be made by the Corporation from its own funds and by its own check to the Executive or the Executive’s beneficiary, as provided for in this Section 1.02, shall be One Thousand Six Hundred Sixty-Six dollars ($1,666).
4.02 Monthly retirement benefits shall commence on the first business day following the Executive’s retirement, and thereafter shall be made on the first business day of each succeeding calendar month.
ARTICLE V
Employee Retirement Income Security Act of 1974 (ERISA)
5.01 For the purposes of ERISA, the Corporation will be the “Named Fiduciary” and “Plan Administrator” of the plan for which this Agreement is hereby designated the written plan instrument.
5.02 The Corporation’s Board of Directors may authorize a person or group of persons to fulfill the responsibilities of the Corporation as Plan Administrator. The Named Fiduciary or the Plan Administrator may employ others to render advice with regard to its responsibilities under the plan. The Named Fiduciary may also allocate fiduciary responsibilities to others and may exercise any other powers necessary for the discharge of its duties to the extent not in conflict with ERISA.
ARTICLE VI
Claims Procedure
6.01 The following Claims Procedure shall control the determination of benefit payments under this Plan:
(a) | Filing of a Claim for Benefits |
If the Executive, the Executive’s beneficiary or other individual (“Claimant”) believes he or she is entitled to receive benefits under the plan he or she must submit a written claim for benefits to the Plan Administrator. The Corporation’s independent decision on the beneficiary’s Claim for Benefits shall be determinative of whether or not the beneficiary shall be entitled to receive benefits under this Plan. A beneficiary’s Claim for Benefits shall be submitted in writing to the Plan Administrator on a form to be supplied by said Administrator.
(b) | Denial of Claim |
A Claim for Benefits under the Plan will be denied if the Corporation determines that the Claimant is not entitled to receive benefits under the Plan. Notice of a denial shall be furnished to the Claimant within a reasonable period of time after receipt of the Claim for Benefits by the Plan Administrator.
(c) | Content of Notice |
The Plan Administrator shall provide within ninety (90) days to every Claimant who is denied a Claim for Benefits written notice setting forth, in a manner calculated to be understood by the Claimant, the following:
1. | The specific reason or reasons for the denial; |
2. | Specific reference to pertinent Plan provisions on which the denial is based; |
3. | A description of any additional material or information necessary for the Claimant to perfect the claim, and any explanation of why such material or information is necessary; and |
4. | An explanation of the Plan’s Claim Review Procedure as set forth below. |
(d) Review Procedure
The purpose of the Review Procedure is to provide a method by which a Claimant may have a reasonable opportunity to appeal a denial of a Claim to the Named Fiduciary for a full and fair review. To accomplish that purpose, the Claimant or his duly authorized representative:
1. | May require a review upon written application to the Named Fiduciary; |
2. | May review pertinent Plan documents; and |
3. | May submit issues and comments in writing. |
A Claimant (or his duly authorized representative) shall request a review by filing a written application for review with the Named Fiduciary at any time within sixty (60) days after receipt by the Claimant of written notice of the denial of his claim.
(e) Decision on Review
A decision on review of a denied claim shall be made in the following manner:
1. | The decision on review shall be made by the Named Fiduciary, who may in his discretion hold a hearing on the denied claim. Such decision shall be made promptly, and not later than sixty (60) days after receipt of the request for review, unless special circumstances (such as the need to hold a hearing) require an extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than one hundred and twenty (120) days after receipt of the request for review. |
2. | The decision on review shall be in writing and shall include specific reasons for the decisions, written in a manner calculated to be understood by the Claimant, and specific references to the pertinent Plan provisions upon which the decision is based. |
ARTICLE VII
Financing of Benefits
7.01 All benefits under the plan shall be provided out of the general assets of the Corporation at the time such benefits are to be paid. The parties agree that the Corporation is under no obligation to set aside funds in advance of the time for payment, or to otherwise provide security for its obligations under this Agreement.
7.02 Payments from the Plan shall be made out of the general assets of the Corporation upon submission and approval of a Claim for Benefits made pursuant to the Claims Procedure established as required by ERISA, and set forth above.
ARTICLE VIII
Governing Laws
8.01 This Agreement shall be governed by and construed in accordance with the laws of New Jersey, where it is made and to be performed. It sets forth the entire agreement between the parties concerning the subject matter thereof, and any amendment or discharge will be made only in writing. This Agreement will bind and benefit the parties and their legal representatives and successors.
ARTICLE IX
Not a Contract of Employment
9.01 This Agreement shall not be deemed to constitute a contract of employment between the parties, nor shall any provision restrict the right of the Corporation to discharge the Executive.
ARTICLE X
Amendment or Termination
10.01 No beneficiary under this Agreement shall obtain any vested right to have this Agreement continued in force and it may be amended or modified, in whole or in part, by the Executive and the Corporation in writing at any time without the consent of said beneficiary.
ARTICLE XI
Further Provisions
11.01 The term “beneficiary” as used herein shall mean any person or trust, or combination thereof, last designated by the Executive in writing and filed with the Corporation by the Executive during his lifetime upon a Nomination of Beneficiary form provided by the Corporation. Any such designation or designations of beneficiary shall be revocable at any time or times without the consent of any beneficiary, whether now living or born hereafter, by written designation of beneficiary made by the Executive and similarly filed by him with the Corporation during his lifetime. In the absence of or failure of designated beneficiaries, the executor(s) or administrator(s) of the Executive shall be his beneficiary.
11.02 It is agreed that neither the Executive nor any beneficiary hereunder shall have any right to commute, sell, assign, transfer or otherwise convey the right to receive any payments hereunder, which payments and the right thereto are expressly declared to be nonassignable and nontransferable, and in the event of any attempted assignment or transfer, this Agreement shall terminate and the Corporation shall have no further liability hereunder.
11.03 The Corporation agrees that it will not merge or consolidate with another Corporation or organization, or permit its business activities to be taken over by any other organization unless and until the succeeding or continuing corporation or other organization shall expressly assume the rights and obligations of the Corporation herein set forth.
11 .04 This Agreement shall be executed in duplicate, each copy of which when so executed and delivered shall be an original, but both copies shall, together, constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals this First day of March, 1990.
/s/ James Herlands | |
James Herlands | |
Philipp Brothers Chemicals, Inc. | |
By: | /s/ Jack C. Bendheim |
President |
NOMINATION OF BENEFICIARY
TO: Philipp Brothers Chemicals, Inc. (hereinafter called the “Corporation”)
I James Herlands, in accordance with the right granted to me in Section 2.01 of the Executive Income Deferred Compensation Agreement between me and the Corporation dated March 1, 1990, do hereby nominate as Beneficiary thereunder in the event of my death:
Joyce Herlands, Spouse, if living, otherwise to my Estate
still reserving the privilege of changing the Beneficiary herein named at any time or times without the consent of any such Beneficiary.
This nomination is made upon the following terms and conditions:
1. | The word Beneficiary as used herein shall include the plural wherever the contract so permits. |
2. | If any sole Beneficiary who is then receiving monthly payments hereunder and under said agreement shall not be living on any monthly payment date provided for in said agreement, any and all remaining monthly payments shall be payable to the next Beneficiary in the order named above unless the executors or administrators of such sole Beneficiary are named as Beneficiaries hereinabove. |
3. | If more than one Beneficiary is named either individually or as a class, monthly payments shall be made equally to such Beneficiaries unless otherwise provided hereinabove. If any such Beneficiaries die while receiving monthly payments under said agreement, any and all remaining payments shall be made equally to the surviving Beneficiaries of such designation or class or all to the sole survivor of them unless otherwise provided hereinabove. If all of such Beneficiaries shall die, any and all remaining payments shall be made to the next Beneficiary in the order named hereinabove. |
4. | If none of the Beneficiaries named hereinabove is living on any said monthly payment date, any and all remaining payments shall be made to my executors or administrators. |
5. | If any such monthly payments shall be payable upon any trust, the Corporation shall not be liable to see to the application by the Trustee of any payment hereunder at any time, and may rely upon the sole signature of the Trustee to any receipt, release or waiver, or to any transfer or other instrument to whomsoever made purporting to affect this nomination or any right hereunder. |
This nomination shall be executed in duplicate, but it shall not be valid unless one copy thereof is filed with and receipt thereof is acknowledged thereon by the Corporation during my lifetime. Any revocation or change of this Nomination of Beneficiary shall not be valid unless it is filed with and receipt thereof is acknowledged thereon by the Corporation during my lifetime, and loss or destruction of any copy retained by me shall NOT constitute a revocation or change of this nomination.
This nomination cancels and supersedes any Nomination of Beneficiary heretofore made by me with respect to said agreement and the right to receive payments thereunder.
Date: March 1, 1990
/s/ James Herlands | |
James Herlands |
The Corporation hereby acknowledges receipt of the above Nomination of Beneficiary this First day of March, 1990.
Philipp Brothers Chemicals, Inc . | ||
By | /s/ Jack C. Bendheim |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-1 of Phibro Animal Health Corporation of our report dated September 17, 2013, except for the effects for the revisions and restatement described in Note 2 and the change in composition of the reportable segments discussed in Note 17 as to which the date is January 9, 2014 relating to the financial statements of Phibro Animal Health Corporation which appear in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
New York, New York
March 10, 2014