ADMA Biologics(ADMA) - 2025 Q2 - Quarterly Results

Definitions This article establishes the precise meaning of key financial, legal, and operational terms, along with general interpretation rules and accounting principles, essential for understanding the Credit Agreement Defined Terms This section provides comprehensive definitions for numerous terms used throughout the Credit Agreement, establishing the precise meaning of key financial, legal, and operational concepts essential for interpreting the covenants, conditions, and obligations within the agreement - The section defines critical terms such as 'Applicable Rate', 'Benchmark Replacement', 'Consolidated Adjusted EBITDA', 'Defaulting Lender', 'Indebtedness', 'Loan Parties', 'Material Adverse Effect', 'Permitted Acquisition', 'Secured Obligations', and 'Total Leverage Ratio', which are fundamental to the agreement's interpretation[11][28][46][83][100][154][183][217][267][296] Key Financial Ratios and Thresholds | Ratio/Threshold | Description | Value/Condition | Source Chunk | | :-------------- | :---------- | :-------------- | :----------- | | Applicable Rate (Category 1) | ABR Spread | 1.50% | 28 | | Applicable Rate (Category 1) | Term Benchmark and RFR Spread | 2.50% | 28 | | Applicable Rate (Category 1) | Commitment Fee Rate | 0.30% | 28 | | Applicable Rate (Category 2) | ABR Spread | 1.75% | 28 | | Applicable Rate (Category 2) | Term Benchmark and RFR Spread | 2.75% | 28 | | Applicable Rate (Category 2) | Commitment Fee Rate | 0.30% | 28 | | Applicable Rate (Category 3) | ABR Spread | 2.00% | 28 | | Applicable Rate (Category 3) | Term Benchmark and RFR Spread | 3.00% | 28 | | Applicable Rate (Category 3) | Commitment Fee Rate | 0.35% | 28 | | Alternate Base Rate Floor | Minimum rate for ABR | 1.00% per annum | 22 | | Daily Simple SOFR Floor | Minimum rate for Daily Simple SOFR | 0.00% | 135 | | Term SOFR Rate Floor | Minimum rate for Term SOFR Rate | 0.00% | 135 | | LC Exposure Limit | Aggregate undrawn amount of Letters of Credit | $10,000,000 | 170 | | Material Indebtedness Threshold | Aggregate principal amount of Indebtedness (excluding Loans/LCs) | Exceeding $10,000,000 | 184 | | Material Real Property Value | Fair market value for owned real property | Exceeding $5,000,000 | 185 | | Disposition Prepayment Trigger | Aggregate Net Proceeds from asset sales in a fiscal year | Exceeds $10,000,000 | 390 | | Casualty Prepayment Trigger | Aggregate Net Proceeds from casualty events in a fiscal year | Exceeds $10,000,000 | 390 | | Revolving Commitments (Initial) | Aggregate amount of Lenders' Revolving Commitments | $225,000,000 | 257 | | Term Loan Commitments (Initial) | Aggregate amount of Lenders' Term Loan Commitments | $75,000,000 | 291 | Classification of Loans and Borrowings This section clarifies that Loans and Borrowings can be classified by their 'Class' (e.g., Revolving Loan, Term Loan, Swingline Loan) or by their 'Type' (e.g., Term Benchmark Loan, ABR Loan), or by both, ensuring consistent terminology throughout the agreement - Loans and Borrowings are classified by Class (Revolving, Term, Swingline) or Type (Term Benchmark, ABR) for clarity[310] Terms Generally This section establishes general rules for interpreting terms within the agreement, including the application of singular/plural forms, the inclusive nature of 'include,' and references to amended documents, statutes, and successors, ensuring consistent legal interpretation - General interpretation rules apply to singular/plural forms, 'include' (without limitation), and references to amended documents, statutes, and successors[311] Accounting Terms; GAAP This section mandates that all accounting and financial terms adhere to GAAP, with provisions for adjusting interpretations if GAAP changes, and explicitly excludes certain fair value accounting treatments for indebtedness to ensure consistent covenant calculations - All accounting terms are to be construed in accordance with GAAP, as in effect from time to time[312] - If GAAP changes, an amendment may be requested to eliminate the effect of such change on the agreement's provisions[312] - Indebtedness and other liabilities are to be valued at full stated principal amount, without giving effect to fair value elections under FASB ASC 825 or 470-20/2015-03[312] - Changes in lease accounting under FASB ASC 2016-02 (Topic 842) will not reclassify operating leases as capital leases if they wouldn't have been under GAAP as of December 31, 2015[314] Pro Forma Adjustments This section details how pro forma adjustments are applied to financial calculations (e.g., Total Leverage Ratio, Fixed Charge Coverage Ratio) following acquisitions or dispositions, ensuring that financial covenants are assessed as if these transactions occurred at the beginning of the relevant period, with specific rules for Delayed Draw Facilities and Restricted Payments - Pro forma adjustments are required for acquisitions and dispositions when calculating Total Leverage Ratio, Fixed Charge Coverage Ratio, and Material Subsidiary definition[315] - Adjustments are based on events directly attributable to the transaction, factually supportable, and expected to have a continuing impact, consistent with Article 11 of Regulation S-X[315] - For 'Applicable Rate' and Section 6.12 compliance (excluding pro forma conditions), events subsequent to the testing period are not given pro forma effect[315] Status of Obligations This section designates the Secured Obligations as 'senior indebtedness' relative to any Subordinated Indebtedness, ensuring the Administrative Agent and Lenders have priority payment rights and remedies as holders of senior debt - Secured Obligations are designated as 'senior indebtedness' and 'designated senior indebtedness' to ensure priority for Administrative Agent and Lenders[317] Interest Rates; Benchmark Notification This section informs parties about the potential discontinuation or reform of interest rate benchmarks and refers to Section 2.14(b) for alternative rate determination. It explicitly states that the Administrative Agent does not warrant or accept responsibility for benchmark administration or performance - Interest rates may be derived from benchmarks subject to discontinuation or reform, with Section 2.14(b) providing an alternative rate mechanism[318] - The Administrative Agent disclaims responsibility for the administration, submission, or performance of any interest rate benchmark or its alternatives[318] Letter of Credit Amounts This section defines how the amount of a Letter of Credit is determined, including provisions for automatic increases to its maximum potential amount and clarifying that expired Letters of Credit with remaining drawing potential are still considered 'outstanding' and 'undrawn' - The amount of a Letter of Credit is deemed its stated amount available to be drawn, including maximum amounts after automatic increases[319] - Expired Letters of Credit with remaining drawing potential due to governing rules (e.g., UCP 600, ISP98) are considered 'outstanding' and 'undrawn'[319] Divisions This section clarifies the treatment of assets, rights, obligations, and liabilities in the context of corporate divisions under Delaware law or similar events, deeming transfers to occur from the original to the subsequent person and new entities as organized/acquired on their first existence date - In a corporate division, assets, rights, obligations, or liabilities transferred to a different person are deemed transferred from the original person[321] - New persons coming into existence through a division are deemed organized and acquired on their first date of existence by their equity holders[321] The Credits This article details the terms and conditions for various loan types, including commitments, borrowing procedures, interest rates, fees, prepayments, and mechanisms for managing increased costs and benchmark rate changes Commitments This section outlines the commitments of Revolving Lenders to make reborrowable Revolving Loans during the Availability Period, up to their respective and aggregate Revolving Commitments, and the one-time commitment of Term Lenders to make non-reborrowable Term Loans on the Effective Date - Revolving Lenders agree to make Revolving Loans during the Availability Period, with reborrowing permitted, provided individual and aggregate Revolving Exposure limits are not exceeded[323] - Term Lenders agree to make a one-time Term Loan on the Effective Date, up to their Term Loan Commitment, with amounts prepaid or repaid not being reborrowable[324] Loans and Borrowings This section details the structure of loans and borrowings, specifying that most loans are made ratably by Lenders of the same Class and Type, and outlining the available types (ABR or Term Benchmark), minimum borrowing amounts, and restrictions on Interest Periods - Each Loan (excluding Swingline Loans) is made ratably by Lenders of the same Class and Type[325] - Revolving and Term Loan Borrowings can be ABR Loans or Term Benchmark Loans; Swingline Loans are ABR Loans[326] - Term Benchmark Borrowings must be integral multiples of $100,000 and not less than $500,000[328] - ABR and RFR Borrowings must be integral multiples of $100,000 and not less than $500,000, with exceptions for full unused Revolving Commitments or LC Disbursement reimbursement[328] - A maximum of ten Term Benchmark and RFR Borrowings can be outstanding simultaneously[328] Requests for Borrowings This section describes the Borrower's process for requesting a Borrowing, requiring an irrevocable written notice (Borrowing Request) to the Administrative Agent, specifying the Class, amount, date, Type, and, for Term Benchmark Borrowings, the Interest Period, with specific deadlines for different loan types - Borrowing requests must be submitted via a signed Borrowing Request or Approved Borrower Portal[331] - Term Benchmark Borrowing requests require notice by 1:00 p.m. New York City time, three U.S. Government Securities Business Days prior to the proposed Borrowing date[331] - ABR Borrowing requests require notice by 11:00 a.m. New York City time on the proposed Borrowing date, with an exception for LC Disbursement reimbursement (9:00 a.m.)[331] [Intentionally Omitted]](index=53&type=section&id=SECTION%202%2E04%2E%5BIntentionally%20Omitted%5D%2E) This section is intentionally omitted, indicating no specific provisions are defined here Swingline Loans This section details the terms for Swingline Loans, including a maximum outstanding amount, the request process, and the mechanism for Revolving Lenders to acquire participations. It also covers the replacement and resignation procedures for the Swingline Lender - The aggregate principal amount of outstanding Swingline Loans cannot exceed $20,000,000[337] - Requests for Swingline Loans must be submitted by 1:00 p.m. New York City time on the day of the proposed loan[337] - Revolving Lenders are obligated to acquire participations in Swingline Loans, with payments due promptly upon notice from the Administrative Agent[339] Letters of Credit This section governs the issuance, amendment, and extension of Letters of Credit, specifying conditions for issuance (e.g., aggregate LC Exposure limit), expiration dates, the absolute and unconditional nature of the Borrower's reimbursement obligations, and the process for cash collateralization upon an Event of Default. It also outlines the roles and reporting requirements of the Issuing Bank and Lenders - The aggregate LC Exposure shall not exceed $10,000,000[344] - No Issuing Bank is obligated to issue more than 20 Letters of Credit outstanding[343] - Letters of Credit expire one year after issuance (or extension), but no later than five Business Days prior to the Revolving Credit Maturity Date[347] - Upon an Event of Default, the Borrower must deposit cash collateral equal to 105% of the LC Exposure into an LC Collateral Account[358] Funding of Borrowings This section describes the process for Lenders to fund their respective Loans by wire transfer to the Administrative Agent, which then disburses the funds to the Borrower's Funding Account. It also addresses the consequences if a Lender fails to make its share available - Lenders make Loans by wire transfer of immediately available funds to the Administrative Agent's account by 2:00 p.m. New York City time on the proposed date[362] - The Administrative Agent credits funds to the Borrower's Funding Account, or remits ABR Revolving Loans for LC Disbursement reimbursement to the Issuing Bank[362] - If a Lender fails to fund, both the Lender and Borrower severally agree to pay the corresponding amount with interest to the Administrative Agent[363] Interest Elections This section grants the Borrower the ability to convert or continue Borrowings between ABR and Term Benchmark Types and to select Interest Periods for Term Benchmark Borrowings, subject to specific notice requirements and restrictions, such as not permitting RFR Loans prior to a Benchmark Transition Event - The Borrower may elect to convert or continue Borrowings to a different Type (ABR or Term Benchmark) or select Interest Periods for Term Benchmark Borrowings[364] - Interest Election Requests are irrevocable and must be submitted by the same deadlines as Borrowing Requests[365] - If an Event of Default is continuing, no outstanding Borrowing may be converted to or continued as a Term Benchmark Borrowing, and existing Term Benchmark/RFR Borrowings convert to ABR Borrowings[368] Termination and Reduction of Commitments; Increase in Revolving Commitments; Incremental Term Loans This section details the termination of Term Loan and Revolving Commitments, the Borrower's right to reduce Revolving Commitments, and the ability to increase Revolving Commitments or obtain Incremental Term Loans. Such increases are subject to minimum amounts, a maximum of four requests, a total cap of $100,000,000, and satisfaction of specific conditions including no existing Default and compliance with financial covenants - Term Loan Commitments terminate on the Effective Date; Revolving Commitments terminate on the Revolving Credit Maturity Date[369] - Borrower may reduce Revolving Commitments in integral multiples of $1,000,000, with a minimum of $5,000,000, provided Aggregate Revolving Exposure does not exceed commitments[371] - Borrower may increase Revolving Commitments or obtain Incremental Term Loans, with a minimum of $5,000,000 per request and a maximum of four requests[373] - The sum of additional Revolving Commitments and Incremental Term Loans cannot exceed $100,000,000[373] - Conditions for increase/tranche include no Default/Event of Default, true and correct representations/warranties, and pro forma compliance with Section 6.12 financial covenants[374] - Incremental Term Loans rank pari passu with Revolving Loans and initial Term Loans, are secured only by Collateral, and have no obligors other than Loan Parties[376] Repayment and Amortization of Loans; Evidence of Debt This section outlines the Borrower's unconditional obligation to repay Revolving Loans by the Revolving Credit Maturity Date and Swingline Loans within five Business Days. It also provides a detailed amortization schedule for Term Loans, with full repayment due on the Term Loan Maturity Date, and specifies how Lenders and the Administrative Agent maintain records of indebtedness - Revolving Loans are due on the Revolving Credit Maturity Date[380] - Swingline Loans are due on the earlier of the Revolving Credit Maturity Date and the fifth Business Day after being made[380] Term Loan Amortization Schedule | Date | Amount | | :--- | :----- | | September 30, 2025 | $468,750.00 | | December 31, 2025 | $468,750.00 | | March 31, 2026 | $468,750.00 | | June 30, 2026 | $468,750.00 | | September 30, 2026 | $937,500.00 | | December 31, 2026 | $937,500.00 | | March 31, 2027 | $937,500.00 | | June 30, 2027 | $937,500.00 | | September 30, 2027 | $1,406,250.00 | | December 31, 2027 | $1,406,250.00 | | March 31, 2028 | $1,406,250.00 | | June 30, 2028 | $1,406,250.00 | | Term Loan Maturity Date | The entire unpaid principal amount of all Term Loans | - All unpaid Term Loans are due in full on the Term Loan Maturity Date (August 5, 2028)[292][381] Prepayment of Loans This section details the Borrower's right to voluntarily prepay loans without penalty and outlines mandatory prepayment requirements. Mandatory prepayments are triggered by excess Revolving Exposure, or Net Proceeds from certain asset dispositions, casualty events (exceeding $10,000,000 per fiscal year), or new indebtedness, with provisions for reinvestment of proceeds from dispositions and casualties - Voluntary prepayments of any Borrowing are permitted in whole or in part without premium or penalty, subject to notice and break funding expenses[387] - Mandatory prepayment is required if Aggregate Revolving Exposure exceeds aggregate Revolving Commitments[388] - Mandatory prepayment of 100% of Net Proceeds is required from Prepayment Events (asset sales, casualty, new indebtedness)[389] - Disposition Prepayment Trigger: No prepayment required for asset sales until aggregate Net Proceeds exceed $10,000,000 in a fiscal year[390] - Casualty Prepayment Trigger: No prepayment required for casualty events until aggregate Net Proceeds exceed $10,000,000 in a fiscal year[390] - Net Proceeds from dispositions/casualties may be reinvested within 180 days (or extended 180 days with commitment), provided no Event of Default exists[390] - Mandatory prepayments are applied first to Term Loans (inverse order of maturity), then to Revolving Loans/Swingline Loans, and then to cash collateralize LC Exposure[393] Fees This section details the various fees payable by the Borrower, including commitment fees on undrawn Revolving Commitments, participation fees for Letters of Credit, fronting fees to the Issuing Bank, and administrative agent fees, specifying their accrual rates, calculation bases, and payment schedules - Commitment fees accrue at the Applicable Rate on the daily undrawn portion of each Revolving Lender's Commitment[395] - Participation fees accrue for Revolving Lenders on outstanding Letters of Credit at the Term Benchmark Revolving Loan Applicable Rate[397] - Fronting fees accrue to the Issuing Bank on outstanding Letters of Credit at a separately agreed rate (not exceeding 0.125% per annum)[397] - All fees are computed on a 360-day year basis (except for Prime Rate-based ABR interest) and payable in arrears quarterly or on termination[395][397][405] Interest This section defines the interest rates for different loan types: ABR Loans (Alternate Base Rate plus Applicable Rate), Term Benchmark Loans (Term SOFR Rate plus Applicable Rate), and RFR Loans (Daily Simple SOFR plus Applicable Rate). It also specifies an increased interest rate of 2% above the otherwise applicable rate during an Event of Default and outlines interest accrual and payment schedules - ABR Loans (including Swingline Loans) bear interest at the Alternate Base Rate plus the Applicable Rate[400] - Term Benchmark Loans bear interest at the Term SOFR Rate for the Interest Period plus the Applicable Rate[400] - RFR Loans bear interest at the Daily Simple SOFR plus the Applicable Rate[401] - During an Event of Default, all Loans bear interest at 2% plus the otherwise applicable rate[403] - Interest is generally computed on a 360-day year basis (365/366 for Prime Rate-based ABR) and payable in arrears on Interest Payment Dates[405] Alternate Rate of Interest This section establishes a framework for determining an alternative interest rate if the primary benchmark (Term SOFR Rate or Daily Simple SOFR) becomes unavailable or non-representative due to a 'Benchmark Transition Event'. It outlines the hierarchy of replacement rates, the process for implementing 'Benchmark Replacement Conforming Changes', and the Administrative Agent's role in these determinations - If the Administrative Agent determines adequate means do not exist for ascertaining Term SOFR Rate or Daily Simple SOFR, or is advised by Required Lenders that the rate will not adequately reflect costs, an alternative rate will be used[406][407] - Upon a 'Benchmark Transition Event' and 'Benchmark Replacement Date', a 'Benchmark Replacement' will automatically replace the current benchmark[408] - The Administrative Agent has the right to make 'Benchmark Replacement Conforming Changes' without further consent[409] - If it becomes unlawful for a Lender to make/maintain Term Benchmark Loans or charge Term SOFR Rate interest, that Lender's obligations are suspended, and the ABR calculation for that Lender will exclude the Term SOFR Rate component[414] Increased Costs This section requires the Borrower to compensate Lenders and the Issuing Bank for any increased costs or reductions in received sums (e.g., principal, interest) resulting from a 'Change in Law', including new or modified reserve requirements, other conditions, or certain Taxes. It also covers reductions in return on capital due to changes in capital or liquidity requirements - Borrower must compensate Lenders/Issuing Bank for increased costs due to 'Change in Law' affecting reserves, deposits, liquidity, or other conditions (excluding certain Taxes)[415] - Compensation is also required for reductions in return on capital due to 'Change in Law' regarding capital or liquidity requirements[416] - Lenders/Issuing Bank must notify the Borrower of increased costs within 270 days of the Change in Law, with an extension for retroactive effects[419] Break Funding Payments This section obligates the Borrower to compensate Lenders for any loss, cost, or expense incurred if principal payments, conversions, or assignments of Term Benchmark Loans or RFR Loans occur on dates other than their scheduled Interest Period end or Interest Payment Date, respectively, or if a borrowing fails to occur as specified - Borrower must compensate Lenders for losses from principal payments, conversions, or assignments of Term Benchmark Loans occurring outside their Interest Period end date[420] - Borrower must compensate Lenders for losses from principal payments or failures to borrow/prepay RFR Loans occurring outside their Interest Payment Date[421] Taxes This section addresses tax obligations, requiring Loan Parties to make payments free of deductions for Indemnified Taxes and to gross up payments if withholding is legally required. It outlines indemnification obligations for Loan Parties and Lenders regarding various Taxes, and specifies documentation requirements for Lenders to claim tax exemptions - Payments by Loan Parties under Loan Documents must be made without deduction or withholding for Taxes, except as required by law[423] - If withholding for an Indemnified Tax is required, the sum payable by the Loan Party must be increased (grossed-up) so the Recipient receives the full intended amount[423] - Loan Parties must indemnify each Recipient for Indemnified Taxes and related expenses[426] - Each Lender must indemnify the Administrative Agent for Indemnified Taxes attributable to such Lender (if not already indemnified by Loan Parties) and Excluded Taxes attributable to such Lender[427] - Lenders entitled to tax exemptions or reductions must provide appropriate IRS forms (e.g., W-9, W-8BEN, W-8ECI, W-8IMY) and other documentation[428][429][430] Payments Generally; Allocation of Proceeds; Sharing of Set-offs This section establishes general payment terms, including due dates, currency, and methods. It specifies how payments and collateral proceeds are allocated, particularly after an Event of Default, prioritizing fees, interest, principal, and then other Secured Obligations. It also includes provisions for Lenders to share set-offs ratably to ensure equitable distribution - All payments must be made by 2:00 p.m. New York City time on the due date, in immediately available funds, without setoff or counterclaim[436] - After an Event of Default, payments and collateral proceeds are applied in a specific order: first to Administrative Agent/Swingline Lender/Issuing Bank fees/indemnities/expenses, then to Lenders' fees/indemnities/expenses, then to interest, then to principal/LC Disbursements/cash collateral/Swap/Banking Services Obligations, and finally to other Secured Obligations[437] - Lenders exercising setoff rights must share payments ratably with other similarly situated Lenders[441] Mitigation Obligations; Replacement of Lenders This section requires Lenders to make reasonable efforts to mitigate increased costs or tax burdens by designating alternative lending offices. It also grants the Borrower the right to replace a Lender if it requests compensation for increased costs or taxes, or becomes a Defaulting Lender, subject to specific conditions and administrative procedures - Lenders must use reasonable efforts to designate a different lending office to reduce amounts payable under Sections 2.15 (Increased Costs) or 2.17 (Taxes), if not disadvantageous to the Lender[445] - The Borrower may require a Lender to assign its rights and obligations if it requests compensation under Section 2.15 or 2.17, or becomes a Defaulting Lender[447] - Replacement requires prior written consent from the Administrative Agent (and Issuing Bank/Swingline Lender if applicable), payment of all amounts due to the replaced Lender, and the assignee agreeing to the applicable terms[447] Defaulting Lenders This section outlines the consequences for a 'Defaulting Lender,' including the cessation of commitment fees, specific application of payments received, restrictions on voting rights, and the reallocation or cash collateralization of its Swingline and LC Exposures among non-Defaulting Lenders. It also addresses conditions for a Defaulting Lender to remedy its status - Fees cease to accrue on the Unfunded Revolving Commitment of a Defaulting Lender[448] - Payments received for a Defaulting Lender are applied in a specific waterfall: first to amounts owing to Administrative Agent, then to Issuing Bank/Swingline Lender, then to cash collateralize LC Exposure, then to fund failed Loans, then to hold for future obligations, then to judgments against the Defaulting Lender, and finally to the Defaulting Lender[448] - Defaulting Lenders lose voting rights on most issues, and their commitments/exposures are excluded from Required Lenders calculations[449] - Swingline and LC Exposures of a Defaulting Lender are reallocated to non-Defaulting Lenders or cash collateralized by the Borrower[449] Returned Payments This section stipulates that if any payment applied to the Obligations is later rescinded, restored, or returned (e.g., due to bankruptcy), the affected Obligations are revived, and the Credit Agreement remains in full force, ensuring the Lenders' rights are preserved - If any payment on Obligations is rescinded or returned, the Obligations are revived and the Agreement continues in full force[453] Banking Services and Swap Agreements This section requires Lenders or their Affiliates providing Banking Services or Swap Agreements to Loan Parties to notify the Administrative Agent of the aggregate amounts of such obligations. This information is crucial for determining the priority of these obligations in the allocation of proceeds, particularly in a payment waterfall scenario - Lenders or Affiliates providing Banking Services or Swap Agreements must notify the Administrative Agent of the aggregate amounts of such obligations[455] - The most recent information provided to the Administrative Agent determines the tier in the payment waterfall (Section 2.18(b)) for these obligations[455] - JPMCB or its Affiliates, when acting as Administrative Agent and providing these services, are not required to provide such notice[455] Representations and Warranties This article contains the Loan Parties' affirmations regarding their legal status, financial condition, compliance with laws, property ownership, and other material facts, which are fundamental to the agreement Organization; Powers Each Loan Party and Subsidiary represents that it is duly organized, validly existing, in good standing, and possesses all necessary power and authority to conduct its business, and is qualified to do business in all required jurisdictions, except where failure would not result in a Material Adverse Effect - Each Loan Party and Subsidiary is duly organized, validly existing, and in good standing in its jurisdiction of organization[457] - They possess all requisite power and authority to conduct their business as currently conducted[457] - They are qualified to do business in, and in good standing in, every required jurisdiction, unless failure would not result in a Material Adverse Effect[457] Authorization; Enforceability Each Loan Party represents that the transactions contemplated by the Credit Agreement are within its corporate powers, have been duly authorized by all necessary actions, and that each Loan Document it is a party to constitutes a legal, valid, and binding obligation, enforceable subject to general bankruptcy and equity principles - Transactions are within each Loan Party's corporate powers and duly authorized[458] - Each Loan Document is a legal, valid, and binding obligation, enforceable in accordance with its terms, subject to bankruptcy and equity laws[458] Governmental Approvals; No Conflicts Each Loan Party represents that the transactions do not require any unobtained governmental consents or approvals, will not violate any applicable laws or material agreements, and will not result in the creation of any Liens other than those expressly permitted by the Loan Documents - Transactions do not require unobtained governmental consents or approvals, except for filings to perfect Liens[459] - Transactions will not violate any Requirement of Law or material agreements applicable to Loan Parties or Subsidiaries[459] - Transactions will not result in the creation of any Liens on assets, except those created pursuant to Loan Documents[459] Financial Condition; No Material Adverse Change The Borrower represents that its previously furnished audited consolidated financial statements for 2023 and 2024, and unaudited interim statements for Q1 2025, fairly present its financial condition in accordance with GAAP. It also warrants that no event has occurred since December 31, 2024, that could reasonably be expected to have a Material Adverse Effect - Audited consolidated financial statements for fiscal years ended December 31, 2023 and 2024, and unaudited interim statements for fiscal quarter ended March 31, 2025, have been furnished[460] - Financial statements fairly present financial position and results in accordance with GAAP, subject to normal year-end adjustments and absence of footnotes for interim statements[460] - No event has occurred since December 31, 2024, that could reasonably be expected to have a Material Adverse Effect[461] Properties Each Loan Party and Subsidiary represents that it holds good and indefeasible title or valid leasehold interests to all its real and personal property, free of unpermitted Liens. It also warrants ownership or license to use all material intellectual property, without infringing on third-party rights - Each Loan Party and Subsidiary has good and indefeasible title or valid leasehold interests to all its real and personal property, free of Liens other than those permitted by Section 6.02[462] - Each Loan Party and Subsidiary owns or is licensed to use all material trademarks, tradenames, copyrights, patents, and other intellectual property necessary for its business[463] - The use of intellectual property does not materially infringe upon the rights of any other Person[463] Litigation and Environmental Matters Each Loan Party represents that there are no pending or threatened legal actions that could result in a Material Adverse Effect or involve the Loan Documents. It also states that no Loan Party or Subsidiary has received notice of, or knows of any basis for, any Environmental Liability or non-compliance with Environmental Laws that could reasonably be expected to have a Material Adverse Effect - No pending or threatened actions, suits, or proceedings against any Loan Party or Subsidiary that could result in a Material Adverse Effect or involve Loan Documents[464] - No Loan Party or Subsidiary has received notice of, or knows of any basis for, any Environmental Liability or non-compliance with Environmental Laws that could reasonably be expected to result in a Material Adverse Effect[465] Compliance with Laws and Agreements; No Default Each Loan Party and Subsidiary represents that it is in compliance with all applicable Requirements of Law (including Environmental and Health Care Laws) and all material agreements binding upon it, except where non-compliance would not reasonably be expected to result in a Material Adverse Effect. It also confirms that no Default has occurred and is continuing - Each Loan Party and Subsidiary is in compliance with all applicable Requirements of Law and material agreements, except where failure to comply would not result in a Material Adverse Effect[466] - No Default has occurred and is continuing[466] Investment Company Status Each Loan Party and Subsidiary represents that it is not an 'investment company' as defined in, or subject to regulation under, the Investment Company Act of 1940 - No Loan Party or Subsidiary is an 'investment company' as defined in, or subject to regulation under, the Investment Company Act of 1940[467] Taxes Each Loan Party and Subsidiary represents that it has timely filed all required tax returns and paid all Taxes, except for those being contested in good faith with adequate reserves, or where the failure to do so would not reasonably be expected to result in a Material Adverse Effect - Each Loan Party and Subsidiary has timely filed all required Tax returns and reports[468] - All Taxes have been paid, except those contested in good faith with adequate reserves, or where failure to pay would not result in a Material Adverse Effect[468] ERISA Each Loan Party represents that no ERISA Event has occurred or is reasonably expected to occur that, individually or in aggregate, could result in a Material Adverse Effect. It also states that the present value of accumulated benefit obligations under each Plan does not materially exceed the fair market value of Plan assets - No ERISA Event has occurred or is reasonably expected to occur that could result in a Material Adverse Effect[469] - The present value of accumulated benefit obligations under each Plan does not materially exceed the fair market value of Plan assets[469] Disclosure Loan Parties represent that all furnished information, including the Information Memorandum and public filings, contains no material misstatements of fact or omissions necessary to make statements not misleading. They also affirm that projected financial information was prepared in good faith based on reasonable assumptions - All information furnished by Loan Parties (including public filings and Information Memorandum) contains no material misstatement of fact or omission[470] - Projected financial information was prepared in good faith based on assumptions believed to be reasonable at the time of delivery[470] [Reserved]](index=85&type=section&id=SECTION%203%2E12%2E%5BReserved%5D) This section is intentionally reserved, indicating no specific provisions are defined here Solvency Each Loan Party represents that, immediately after the consummation of the transactions and each credit event, its assets will exceed its debts and liabilities, it will be able to pay its debts as they mature, and it will not have unreasonably small capital to conduct its business - Immediately after transactions and each credit event, the fair value of each Loan Party's assets will exceed its debts and liabilities[473] - Each Loan Party will be able to pay its debts and liabilities as they mature[473] - No Loan Party will have unreasonably small capital to conduct its business[473] - No Loan Party intends to incur, or believes it will incur, debts beyond its ability to pay as they mature[475] Insurance Loan Parties represent that they and their Subsidiaries maintain adequate insurance coverage with financially sound and reputable companies, covering all real and personal property in amounts and against risks customary for similar businesses in similar locations - Loan Parties and Subsidiaries maintain insurance with financially sound and reputable companies[476] - Insurance covers all real and personal property in customary amounts and against customary risks for similar businesses[476] Capitalization and Subsidiaries This section represents the capitalization structure of the Borrower and its Subsidiaries, including a complete list of Subsidiaries, their entity types, and their status as Loan Parties, Material Subsidiaries, or Excluded Subsidiaries. It confirms that all Equity Interests owned by any Loan Party are duly authorized, issued, fully paid, and non-assessable, with no outstanding commitments to issue additional equity - Schedule 3.15 provides a correct and complete list of each Subsidiary's name, relationship to Borrower, entity type, and status (Loan Party, Material Subsidiary, Excluded Subsidiary)[477] - All issued and outstanding Equity Interests owned by any Loan Party are duly authorized, issued, fully paid, and non-assessable[477] - There are no outstanding commitments or rights for any Person to acquire additional Equity Interests of any Subsidiary[477] Security Interest in Collateral This section represents that the Loan Documents create legal, valid, perfected, and first-priority Liens on all Collateral in favor of the Administrative Agent for the benefit of the Secured Parties, enforceable against the applicable Loan Party, subject only to certain permitted Liens - Loan Documents create legal and valid Liens on all Collateral in favor of the Administrative Agent for the benefit of Secured Parties[478] - Such Liens constitute perfected and continuing first-priority Liens, enforceable against the Loan Party, except for Liens permitted by Section 6.02 and Liens perfected only by possession where the Administrative Agent does not maintain possession[478] Employment Matters Loan Parties represent that there are no pending or threatened strikes, lockouts, or slowdowns. They also warrant that employee hours and payments comply with applicable labor laws, except where non-compliance would not reasonably be expected to result in a Material Adverse Effect, and that all due payments for wages and benefits have been paid or accrued - No strikes, lockouts, or slowdowns are pending or threatened against any Loan Party or Subsidiary[479] - Employee hours and payments comply with the Fair Labor Standards Act and other applicable laws, except where non-compliance would not result in a Material Adverse Effect[479] - All due payments for wages and employee benefits have been paid or accrued as a liability[479] Margin Regulations Loan Parties represent that they are not engaged in the business of purchasing or carrying Margin Stock, nor will loan proceeds be used for such purposes. They also affirm that, after applying loan proceeds, Margin Stock will not constitute more than 25% of the value of their assets, ensuring compliance with Federal Reserve Board Regulations U and X - No Loan Party is engaged in, or will engage in, the business of purchasing or carrying Margin Stock[480] - No part of loan proceeds or Letters of Credit will be used to buy or carry Margin Stock[480] - After applying loan proceeds, Margin Stock will not exceed 25% of the value of assets (Loan Party only or consolidated)[480] - The making of any Loan or use of proceeds will not violate Regulations U or X of the Federal Reserve Board[480] Use of Proceeds This section states that the proceeds of the Loans have been and will be used only as set forth in Section 5.08, which details permitted uses such as refinancing existing indebtedness, working capital, and general corporate purposes - Proceeds of Loans have been and will be used as set forth in Section 5.08[481] No Burdensome Restrictions Loan Parties represent that they are not subject to any Burdensome Restrictions, except for those expressly permitted under Section 6.10 of the agreement - No Loan Party is subject to any Burdensome Restrictions except those permitted under Section 6.10[483] Anti-Corruption Laws and Sanctions Each Loan Party represents that it has implemented and maintains policies and procedures to ensure compliance with Anti-Corruption Laws and applicable Sanctions. It also warrants that Loan Parties, their Subsidiaries, officers, directors, employees, and agents are in material compliance and are not Sanctioned Persons, and that no transaction under the agreement will violate these laws - Each Loan Party has implemented and maintains policies and procedures for compliance with Anti-Corruption Laws and applicable Sanctions[484] - Loan Parties, their Subsidiaries, officers, directors, employees, and agents are in material compliance with Anti-Corruption Laws and applicable Sanctions[484] - None of the Loan Parties, Subsidiaries, or their directors, officers, or employees, nor to their knowledge, agents, are Sanctioned Persons[484] - No Borrowing, Letter of Credit, use of proceeds, or transaction will violate Anti-Corruption Laws or applicable Sanctions[484] Affected Financial Institutions This section represents that no Loan Party is an 'Affected Financial Institution' as defined in the agreement, which is relevant for certain regulatory provisions - No Loan Party is an Affected Financial Institution[485] Plan Assets; Prohibited Transactions Loan Parties represent that neither they nor their Subsidiaries are entities deemed to hold 'plan assets' under ERISA regulations. They also warrant that the execution, delivery, and performance of the transactions, including loans and Letters of Credit, will not result in a non-exempt prohibited transaction under ERISA or the Code - None of the Loan Parties or their Subsidiaries are entities deemed to hold 'plan assets' (within the meaning of Plan Asset Regulations)[486] - The transactions will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code[486] Outbound Investment Rules Loan Parties represent that neither they nor their Subsidiaries are 'covered foreign persons' and will not engage in 'covered activities' or 'covered transactions' as defined by the Outbound Investment Rules, or any activity that would cause the Administrative Agent or Lenders to violate these rules - No Loan Party or Subsidiary is a 'covered foreign person' under the Outbound Investment Rules[487] - No Loan Party or Subsidiary will engage in 'covered activities' or 'covered transactions' as defined by the Outbound Investment Rules, or any activity that would cause the Administrative Agent or Lenders to violate these rules[487] Health Care Matters Loan Parties represent material compliance with all applicable Health Care Laws, possession of necessary Permits, and accuracy of filings with the FDA and other Governmental Authorities. They also warrant the absence of material untrue statements or undisclosed facts to regulators, no material Safety Notices or unresolved complaints regarding Products, and no involvement in prohibited transactions or exclusions from healthcare programs, except where failure would not result in a Material Adverse Effect - Borrower and Subsidiaries are in compliance with all applicable Health Care Laws and possess all necessary Permits for their operations and Products, except where failure would not result in a Material Adverse Effect[488] - All reports and documents furnished to the FDA or other Governmental Authorities under Health Care Laws were complete and correct, except where failure would not result in a Material Adverse Effect[489] - No untrue or fraudulent statements have been made to the FDA or other Governmental Authorities, nor have material facts been undisclosed, related to Products, except where failure would not result in a Material Adverse Effect[490] - No Loan Party or Subsidiary has initiated Safety Notices or received unresolved written complaints regarding Products that would result in a Material Adverse Effect[492] - No Loan Party or Subsidiary, nor to their knowledge, employees or agents, has been debarred, excluded, or convicted of felony crimes involving Health Care Laws, except where failure would not result in a Material Adverse Effect[496] - Borrower and Subsidiaries have developed and implemented appropriate safeguards to comply with applicable Privacy and Security Laws, including HIPAA, except where failure would not result in a Material Adverse Effect[497] Conditions This article specifies the prerequisites that must be satisfied for the Credit Agreement to become effective and for each subsequent credit event, ensuring all legal and financial requirements are met Effective Date This section lists the conditions precedent for the Credit Agreement to become effective, including the execution and delivery of all Loan Documents, provision of audited financial statements and projections, closing certificates, payment of all fees and expenses, satisfactory lien and IP searches, pay-off and release letters for existing indebtedness, designation of a funding account, a solvency certificate, pledged equity interests, proper filings, insurance evidence, and compliance with 'know your customer' rules and the USA PATRIOT Act - All Loan Documents must be executed and delivered, along with legal opinions, certificates, and promissory notes[504] - Audited consolidated financial statements for 2023 and 2024, unaudited interim statements, and satisfactory Projections through 2029 must be received[505] - Closing certificates, including resolutions, officer signatures, and organizational documents, along with good standing certificates, are required[506] - A certificate from the Borrower's Financial Officer must confirm no Default and true/correct representations and warranties[508] - All required fees and expenses must be paid on or before the Effective Date[509] - Satisfactory lien and IP searches must reveal no unpermitted Liens[510] - Pay-off and release letters for all existing indebtedness must be received, confirming termination of Liens and Guarantees[511] - A solvency certificate signed by a Financial Officer must be provided[513] - Pledged Equity Interests, stock powers, and pledged notes must be received[514] - All required filings, registrations, and recordings to perfect Liens must be in proper form[516] - Evidence of insurance coverage, satisfactory in form, scope, and substance, must be received[517] - Documentation and information for 'know your customer' and USA PATRIOT Act compliance must be received at least five days prior to the Effective Date[518] Each Credit Event This section specifies that each Borrowing or issuance/amendment/extension of a Letter of Credit is conditional upon the representations and warranties of the Loan Parties remaining true and correct in all material respects, and no Default or Event of Default having occurred and continuing at that time - Representations and warranties in Loan Documents must be true and correct in all material respects at the time of each Borrowing or Letter of Credit event[521] - No Default or Event of Default shall have occurred and be continuing at the time of each Borrowing or Letter of Credit event[523] Affirmative Covenants This article outlines the ongoing obligations of the Loan Parties, including providing financial information, maintaining legal existence, paying liabilities, and complying with laws and insurance requirements Financial Statements and Other Information The Borrower covenants to regularly furnish the Administrative Agent and Lenders with comprehensive financial information, including audited annual financial statements (within 90 days), unaudited quarterly financial statements (within 45 days), Compliance Certificates, annual Projections, and other requested operational and compliance information, including ERISA documents and public filings - Audited consolidated financial statements (balance sheet, income, equity, cash flows) for each fiscal year must be furnished within 90 days (or SEC 10-K filing date), commencing with fiscal year ending December 31, 2025[526] - Unaudited interim consolidated financial statements for the first three fiscal quarters must be furnished within 45 days (or SEC 10-Q filing date), commencing with fiscal quarter ended June 30, 2025[527] - A Compliance Certificate must be delivered within two Business Days of financial statements, certifying fair presentation, Default status, compliance with Section 6.12, and any GAAP changes[527] - Annual Projections (consolidated balance sheet, income statement, cash flow) for the upcoming fiscal year must be furnished within 60 days after the end of each fiscal year[527] - Promptly furnish other information regarding operations, ownership changes, financial condition, compliance, and 'know your customer' documentation upon request[527] - Promptly furnish copies of ERISA documents (Section 101(k)(1) and 101(l)(1)) and public SEC filings[527] Notices of Material Events The Borrower covenants to provide prompt written notice (within five Business Days, or shorter as specified) to the Administrative Agent and Lenders of various material events, including Defaults, significant investigations or proceedings, material changes in accounting practices, ERISA Events, developments causing a Material Adverse Effect, Health Care Law violations, data breaches, and corporate integrity agreements - Written notice within five Business Days (or shorter) is required for: Defaults, material investigations/proceedings (e.g., seeking damages > $10,000,000, injunctive relief with Material Adverse Effect, criminal misconduct, Environmental Law violations, tax liability > $10,000,000, Product recalls with Material Adverse Effect)[530] - Notice is required for material changes in accounting practices, ERISA Events with Material Adverse Effect, and any other development resulting in a Material Adverse Effect[530] - Notice is required for written notices from Governmental Authorities regarding Health Care Law violations, suspension/revocation of Permits, data breaches/security incidents with Material Adverse Effect, and corporate integrity agreements[530][531] Existence; Conduct of Business Each Loan Party covenants to maintain its legal existence, rights, qualifications, licenses, and permits essential to its business. It also agrees to conduct its business in substantially the same manner and fields of enterprise as currently, subject to permitted mergers, consolidations, liquidations, or dissolutions - Each Loan Party and Subsidiary must preserve its legal existence and material rights, qualifications, licenses, permits, privileges, franchises, governmental authorizations, and intellectual property rights[533] - Business must be carried on in substantially the same manner and fields of enterprise as currently conducted, subject to permitted fundamental changes[533] Payment of Obligations Each Loan Party covenants to timely pay all Material Indebtedness and other material liabilities, including Taxes, before they become delinquent or default. Exceptions apply if the validity or amount is contested in good faith with adequate reserves, and failure to pay would not result in a Material Adverse Effect, though withholding and payroll taxes must always be remitted - Each Loan Party and Subsidiary must pay all Material Indebtedness and other material liabilities, including Taxes, before delinquency or default[534] - Exceptions apply if obligations are contested in good faith with adequate reserves and failure to pay would not result in a Material Adverse Effect[534] - Withholding and payroll taxes must be remitted to Governmental Authorities as due, notwithstanding other exceptions[534] Maintenance of Properties Each Loan Party covenants to maintain all property material to its business in good working order and condition, allowing for ordinary wear and tear - Each Loan Party and Subsidiary must keep all property material to its business in good working order and condition, ordinary wear and tear excepted[535] Books and Records; Inspection Rights Each Loan Party covenants to maintain proper books and records and to permit the Administrative Agent and Lenders (upon reasonable notice) to inspect properties, examine records, and discuss affairs with officers and independent accountants. These rights are subject to limitations regarding frequency (once per year absent default) and protection of non-financial trade secrets, privileged information, or legally/contractually prohibited disclosures - Each Loan Party and Subsidiary must keep proper books of record and account with full, true, and correct entries[536] - Administrative Agent and Lenders may inspect properties, conduct field examinations, and discuss affairs with officers and accountants upon reasonable prior notice[536] - Absent an Event of Default, inspections are limited to once per calendar year, with the Borrower reimbursing costs for one such inspection[536] - Disclosure is not required for non-financial trade secrets, proprietary/confidential information, legally/contractually prohibited information, or privileged information[536] Compliance with Laws and Material Contractual Obligations Each Loan Party covenants to comply with all applicable Requirements of Law (including Environmental and Health Care Laws) and material agreements. They also commit to maintaining and enforcing policies and procedures designed to ensure compliance with Anti-Corruption Laws and applicable Sanctions - Each Loan Party and Subsidiary must comply with all applicable Requirements of Law (including Environmental Laws and Health Care Laws) and material agreements[538] - Policies and procedures must be maintained and enforced to ensure compliance with Anti-Corruption Laws and applicable Sanctions[538] Use of Proceeds The Borrower covenants that the proceeds of Loans and Letters of Credit will be used exclusively for (i) refinancing existing indebtedness and (ii) working capital and general corporate purposes, including Permitted Acquisitions and Restricted Payments. It explicitly prohibits using proceeds in violation of Federal Reserve Board regulations, Anti-Corruption Laws, or Sanctions - Proceeds of Loans and Letters of Credit will be used to refinance certain existing Indebtedness[539] - Proceeds wi