CONFORMED COPY
PARENT GUARANTY
GUARANTY, dated as of September 28, 1994, made by A.L.
Laboratories, Inc. (to be renamed A.L. Pharma Inc.), a Delaware
corporation (together with its successors and assigns, the
"Guarantor"), in favor of the banks (the "Banks") parties, from
time to time, to the Credit Agreement (as defined below), Union
Bank of Norway as agent (the "Agent"), Union Bank of Norway, as
arranger (the "Arranger"), and Den norske Bank AS, as co-arranger
(the "Co-Arranger", and collectively with the Banks, the Agent
and the Arranger, the "Guaranteed Parties").
W I T N E S S E T H:
WHEREAS, the Guaranteed Parties have entered into the Credit
Agreement dated as of September 28, 1994 (said agreement, as it
may hereafter be amended, supplemented or otherwise modified from
time to time, being the "Credit Agreement", and the terms defined
therein and not otherwise defined herein being used herein as
therein defined) with A.L. Restructuring Sub, Inc. (to be renamed
A.L. Laboratories, Inc.), a corporation organized and existing
under the laws of the State of Delaware (the "Borrower"), or any
successor thereto;
WHEREAS, it is a condition precedent to the Initial Funding
Date under the Credit Agreement that the Parent Guarantor shall
have executed and delivered this Guaranty;
NOW, THEREFORE, in consideration of the premises and in
order to induce the Banks to make the loans under the Credit
Agreement, the Parent Guarantor hereby agrees as follows (with
terms being used as defined in Section 15):
SECTION 1. Guaranty. The Parent Guarantor hereby
unconditionally and irrevocably guarantees the punctual payment
when due, whether at stated maturity, by acceleration or
otherwise, of all obligations of the Borrower now or hereafter
existing under the Loan Documents, whether for borrowed money,
interest, fees or any other amounts due thereunder or otherwise
(the "Guaranteed Obligations") and any and all expenses
(including counsel fees and expenses) reasonably incurred by any
Guaranteed Party in enforcing any rights under this Guaranty.
SECTION 2. Guaranty Absolute. The Parent Guarantor
guarantees that the obligations will be paid strictly in
accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any
Guaranteed Party with respect thereto. The liability of the
Parent Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Loan
Documents (including this Guaranty) or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed
Obligations, or any other amendment or waiver of or any consent
to departure from the Loan Documents;
(c) any exchange, release or nonperfection of any
collateral, or any release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the
Guaranteed Obligations; or
(d) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, the Borrower, or a
guarantor.
SECTION 3. Waiver. The Parent Guarantor hereby waives all
notices with respect to any of the Guaranteed Obligations and
this Guaranty and any requirement that any Guaranteed Party
protect, secure, perfect or insure any security interests or lien
on any property subject thereto or exhaust any right or take any
action against the Borrower, or any other person or entity or any
collateral.
SECTION 4. Subrogation. (a) The Parent Guarantor shall not
exercise any rights which it may have acquired by way of
subrogation under this Guaranty, by any payment made hereunder or
otherwise nor shall the Parent Guarantor seek any reimbursement
from the Borrower in respect of payments made by the Parent
Guarantor hereunder, unless and until all of the Guaranteed
Obligations shall have been paid and discharged, in full, and if
any payment shall be made to the Parent Guarantor on account of
such subrogation or reimbursement rights at any time when the
Guaranteed Obligations shall not have been paid and discharged,
in full, each and every amount so paid shall forthwith be paid to
the Agent to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured.
(b) If, pursuant to Applicable Law, the Parent Guarantor,
by payment or otherwise, becomes subrogated to all or any of the
rights of the Guaranteed Parties under any of the Loan Documents,
the rights of the Guaranteed Parties to which the Parent
Guarantor shall be subrogated shall be accepted by the Parent
Guarantor "as is" and without any representation or warranty of
any kind by the Guaranteed Parties, express or implied, with
respect to the legality, value, validity or enforceability of any
- 2 -
of such rights, or the existence, availability, value,
merchantability or fitness for any particular purpose of any
collateral and shall be without recourse to the Guaranteed
Parties.
SECTION 5. Representations and Warranties. The Parent
Guarantor hereby represents and warrants as follows:
(a) Incorporation and Good Standing. It is (i) a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware; and (ii) duly
qualified and in good standing as a foreign corporation under the
laws of each other jurisdiction in which the failure so to
qualify would have a Material Adverse Effect.
(b) Corporate Power and Authorization. The execution,
delivery and performance by the Parent Guarantor of this Guaranty
are within the Parent Guarantor's corporate powers, have been
duly authorized by all necessary corporate action, do not
contravene the Parent Guarantor's charter or by-laws, any law or
any contractual restriction binding on or affecting and material
to the Parent Guarantor, and do not result in or require the
creation of any Lien upon or with respect to any of its
properties.
(c) Authorization. No authorization, consent or approval
or other action by, and no notice to or filing with, any
Governmental Authority or regulatory body is required for the due
execution, delivery and performance by the Parent Guarantor of
this Guaranty, other than (i) consents, authorizations and
approvals that have been obtained, are final and not subject to
review on appeal or to collateral attack, and are in full force
and effect and, in the case of any such required under Applicable
Law as in effect on the Agreement Date, are listed on Schedule
7.2(a)(iv) of the Credit Agreement, (ii) notices, filings or
registrations that have been given or effected, and (iii) the
filing of copies of Loan Documents with the Securities and
Exchange Commission as exhibits to its public filings.
(d) Valid Guaranty. This Guaranty is a legal, valid and
binding obligation of the Parent Guarantor, enforceable against
the Parent Guarantor in accordance with its terms, except where
such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
limiting creditor's rights generally or equitable principles
relating to enforceability.
(e) Litigation. There is no pending or threatened action
or proceeding affecting the Parent Guarantor or its Subsidiaries
before any court, governmental agency or arbitrator, in which,
individually or in the aggregate, there is a reasonable
- 3 -
probability of an adverse decision which could have a Material
Adverse Effect or result in a Material Credit Agreement Change.
(f) Taxes. All federal, and all material state, local and
foreign tax returns, reports and statements required to be filed
by the Parent Guarantor or any of its Subsidiaries have been
filed with the appropriate governmental agencies in all
jurisdictions in which such returns, reports and statements are
required to be filed. All consolidated, combined or unitary
returns which include the Parent Guarantor or any of its
Subsidiaries have been filed with the appropriate governmental
agencies in all jurisdictions in which such returns, reports and
statements are required to be filed except where such filing is
being contested or may be contested. All federal, and all
material state, local and foreign taxes, charges and other
impositions of the Parent Guarantor, its Subsidiaries or any
consolidated, combined or unitary group which includes the Parent
Guarantor or any of its Subsidiaries which are due and payable
have been timely paid prior to the date on which any fine,
penalty, interest, late charge or loss may be added thereto for
non-payment thereof except where contested in good faith and by
appropriate proceedings if adequate reserves therefor have been
established on the books of the Parent Guarantor or such
Subsidiary in accordance with GAAP. Proper and accurate amounts
have been withheld by or on behalf of the Parent Guarantor and
each of its Subsidiaries from their respective employees for all
periods in full and complete compliance with the tax, social
security and unemployment withholding provisions of applicable
federal, state, local and foreign law and such withholdings have
been timely paid to the respective governmental agencies, in all
material respects. Neither the Parent Guarantor nor any of its
Tax Affiliates has agreed or has been requested to make any
adjustment under Section 481(a) of the Code by reason of a change
in accounting method or otherwise relating to the Borrower or any
of its Subsidiaries which will affect a taxable year of the
Parent Guarantor or a Tax Affiliate ending after December 31,
1993, which has not been reflected in the financial statements
delivered pursuant to Section 6(g) and which would have a
Material Adverse Effect. The Parent Guarantor has no obligation
to any Person other than the Borrower and the Parent Guarantor's
Subsidiaries under any tax sharing agreement or other tax sharing
arrangement.
(g) Financial Information. (i) The reports of the Parent
Guarantor on Form 10-K for the Fiscal Year ended December 31,
1993 and on Form 10-Q for the Fiscal Quarters ended March 31,
1994 and June 30, 1994, the Proxy Statement of the Parent
Guarantor dated August 22, 1994, the report on Form 8-K of the
Parent Guarantor dated August 4, 1994 and the report on Form 8K/A
of the Parent Guarantor dated as of August 22, 1994 which have
been furnished to the Agent and each Bank, are respectively
complete and correct in all material respects as of such
- 4 -
respective dates, and the financial statements therein have been
prepared in accordance with GAAP and fairly present the financial
condition and results of operations of the Parent Guarantor and
its consolidated Subsidiaries as of such respective dates
(subject, in the case of such reports on Form 10-Q, to changes
resulting from normal year-end adjustments).
(ii) Since December 31, 1993 there has been no
Material Adverse Change or Material Credit Agreement Change.
(iii) None of the Parent Guarantor or any Subsidiary
of the Parent Guarantor had at June 30, 1994 any obligation,
contingent liability, or liability for taxes or long-term
leases material to the Parent Guarantor and its Subsidiaries
taken as a whole which is not reflected in the balance
sheets referred to in subsection (i) above or in the notes
thereto.
(h) ERISA.
(i) No liability under Sections 4062, 4063, 4064 or
4069 of ERISA has been or is expected by the Parent
Guarantor to be incurred by the Parent Guarantor or any
ERISA Affiliate with respect to any Plan which is a
Single-Employer Plan in an amount that could reasonably be
expected to have a Material Adverse Effect.
(ii) No Plan which is a Single-Employer Plan had an
accumulated funding deficiency, whether or not waived, as of
the last day of the most recent fiscal year of such Plan
ended prior to the date hereof. Neither the Parent
Guarantor nor any ERISA Affiliate is (A) required to give
security to any Plan which is a Single-Employer Plan
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, or (B) subject to a Lien in favor of such a Plan
under Section 302(f) of ERISA.
(iii) Each Plan of the Parent Guarantor, each of its
Subsidiaries and each of its ERISA Affiliates is in
compliance in all material respects with the applicable
provisions of ERISA and the Code, except where the failure
to comply would not result in any Material Adverse Effect.
(iv) Neither the Parent Guarantor nor any of its
Subsidiaries has incurred a tax liability under Section 4975
of the Code or a penalty under Section 502(i) of ERISA in
respect of any Plan which has not been paid in full, except
where the incurrence of such tax or penalty would not result
in a Material Adverse Effect.
(v) None of the Parent Guarantor, any of its
Subsidiaries or any ERISA Affiliate has incurred or
- 5 -
reasonably expects to incur any Withdrawal Liability under
Section 4201 of ERISA as a result of a complete or partial
withdrawal from a Multiemployer Plan which will result in
Withdrawal Liability to the Parent Guarantor, any of its
Subsidiaries or any ERISA Affiliate in an amount that could
reasonably be expected to have a Material Adverse Effect.
(i) No Defaults. Neither the Parent Guarantor nor any of
its Subsidiaries is in breach of or default under or with respect
to any instrument, document or agreement binding upon the Parent
Guarantor or such Subsidiary which breach or default is
reasonably probable to have a Material Adverse Effect or result
in the creation of a Lien on any Property of the Parent Guarantor
or its Subsidiaries.
(j) Disclosure. All written information relating to the
Parent Guarantor and any of its Subsidiaries which has been
delivered by or on behalf of the Parent Guarantor or the Borrower
to the Agent or the Banks in connection with the Loan Documents
and all financial and other information furnished to the Agent is
true and correct in all material respects and contains no
misstatement of a fact of a material nature. Any financial
projections and other information regarding anticipated future
plans or developments contained therein was based upon the Parent
Guarantor's best good faith estimates and assumptions at the time
they were prepared.
(k) Intentionally Omitted.
(l) Intentionally Omitted.
(m) Subsidiaries. (i) Schedule 5(m) hereto sets forth all
of the Subsidiaries, their jurisdictions of incorporation and the
percentages of the various classes of their capital stock owned
by the Parent Guarantor or another Subsidiary of the Parent
Guarantor, (ii) the Parent Guarantor or another Subsidiary, as
the case may be, has the unrestricted right to vote, and to
receive dividends and dividends on, all capital stock indicated
on such Schedule as owned by the Parent Guarantor or such
Subsidiary (subject to limitations imposed by Applicable Law or
the Loan Documents) and (iii) such capital stock has been duly
authorized and issued and is fully paid and nonassessable.
(n) Principal Subsidiaries. Schedule 5(n) hereto sets
forth all of the Principal Subsidiaries in existence as of the
Agreement Date.
(o) Insurance. All policies of insurance of any kind or
nature owned by the Parent Guarantor and its Subsidiaries are
maintained with reputable insurers which to the Parent
Guarantor's best knowledge are financially sound. The Parent
Guarantor currently maintains insurance with respect to its
- 6 -
Properties and business and causes its Subsidiaries to maintain
insurance with respect to their respective Properties and
business against loss or damage of the kinds customarily insured
against by corporations engaged in the same or similar business
and similarly situated, of such types and in such amounts as are
customarily carried under similar circumstances by such other
corporations including, without limitation, worker's compensation
insurance.
(p) Environmental Protection. (i) There are no known
conditions or circumstances known to the Parent Guarantor
associated with the currently or previously owned or leased
properties or operations of the Parent Guarantor or its
Subsidiaries or tenants which may give rise to any Environmental
Liabilities and Costs which would have a Material Adverse Effect;
and
(ii) No Environmental Lien has attached to any Property of
the Parent Guarantor or any of its Subsidiaries which would have
a Material Adverse Effect.
(q) Regulatory Matters. Except as disclosed in the Parent
Guarantor's Form 10-K for the fiscal year ending December 31,
1993, its Report on Form 10-Q for the fiscal quarter ending June
30, 1994, or in its definitive Proxy Statement relating to the
Restructuring filed with the Securities and Exchange Commission
on August 22, 1994, the Parent Guarantor and its Subsidiaries are
to the best of their knowledge in compliance with all rules,
regulations and other requirements of the Food and Drug
Administration ("FDA") and other regulatory authorities of
jurisdictions in which the Parent Guarantor or any of its
Subsidiaries do business or operate manufacturing facilities,
including without limitation those relating to compliance by the
Parent Guarantor's or any such Subsidiary's manufacturing
facilities with "Current Good Manufacturing Practices" as
interpreted by the FDA, except to the extent any such
noncompliance would not have a Material Adverse Effect. Except
as so disclosed, neither the FDA nor any other such regulatory
authority has requested (or, to the Parent Guarantor's knowledge,
are considering requesting) any product recalls or other
enforcement actions.
(r) Title and Liens. Each of the Parent Guarantor and its
Subsidiaries has good and marketable title to its real properties
and owns or leases all its other material Properties, in each
case, as shown on its most recent quarterly balance sheet, and
none of such Properties is subject to any Lien except for
Permitted Liens.
(s) Compliance with Law. Each of the Parent Guarantor and
its Subsidiaries is in compliance with all Applicable Law,
including, without limitation, all Environmental Laws, except
- 7 -
where any failure to comply with any such laws would not, alone
or in the aggregate, have a Material Adverse Effect on the
business or financial condition of the Parent Guarantor and its
Subsidiaries taken as a whole, or the Parent Guarantor's ability
to perform its obligations under the Loan Documents.
(t) Trademarks, Copyrights, Etc. The Parent Guarantor and
each of its Subsidiaries own or have the rights to use such
trademarks, service marks, trade names, copyrights, licenses or
rights in any thereof, as in the aggregate are adequate in the
reasonable judgment of the Parent Guarantor for the conduct of
the business of the Parent Guarantor and its Subsidiaries as now
conducted.
SECTION 6. Affirmative Covenants. As long as any of the
Guaranteed Obligations or any other amounts shall remain unpaid,
or any Bank shall have any Commitment under the Credit Agreement,
unless otherwise agreed by the written consent of the Majority
Banks:
(a) Compliance with Laws, Etc. The Parent Guarantor shall
comply, and cause each of its Subsidiaries to comply, in all
material respects with all Applicable Law except such
non-compliance as would not have a Material Adverse Effect or
result in a Material Credit Agreement Change.
(b) Payment of Taxes, Etc. The Parent Guarantor and any
consolidated, combined or unitary group which includes the Parent
Guarantor or any of its Subsidiaries shall pay and discharge, and
cause each Subsidiary of the Parent Guarantor to pay and
discharge, before the same shall become delinquent, all lawful
claims, Taxes, assessments and governmental charges or levies
except where contested in good faith, by proper proceedings, and
where adequate reserves therefor have been established on the
books of the Parent Guarantor or such Subsidiary in accordance
with GAAP.
(c) Maintenance of Insurance. The Parent Guarantor shall
maintain, and cause each of its Subsidiaries to maintain,
insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the
Parent Guarantor or such Subsidiary operates. The Parent
Guarantor will furnish to the Agent from time to time such
information as may be requested as to such insurance.
(d) Preservation of Corporate Existence, Etc. The Parent
Guarantor shall preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, their respective corporate
existences; provided, that this Section 6(d) shall not apply at
any time with respect to the corporate existence of a Subsidiary
- 8 -
of the Parent Guarantor (other than the Borrower and the
Scandinavian Principal Companies) in any case where the Parent
Guarantor's Board of Directors determines in good faith that such
termination of corporate existence is in the best interests of
the Parent Guarantor and its Subsidiaries taken as a whole and
where noncompliance will not have a Materially Adverse Effect on
the Parent Guarantor and its Subsidiaries or any Loan Document
(other than a Loan Document delivered by a Subsidiary that at
such time is no longer a Principal Subsidiary, as determined at
such time); provided, further that this Section 6(d) shall be
without prejudice to the other provisions of this Guaranty and
the Credit Agreement.
(e) Books and Access. The Parent Guarantor shall, and
shall cause each of its Subsidiaries to, keep proper books of
record and accounts in conformity with GAAP, and upon reasonable
notice and at such reasonable times during the usual business
hours as often as may be reasonably requested, permit
representatives of the Agent, at its own initiative or at the
request of any Bank, to make inspections of its Properties, to
examine its books, accounts and records and make copies and
memoranda thereof and to discuss its affairs and finances with
its officers or directors and independent public accountants.
(f) Maintenance of Properties, Etc. The Parent Guarantor
shall maintain and preserve, and cause each of its Subsidiaries
to maintain and preserve, all of their respective Properties
which are used or useful in the conduct of its business in good
working order and condition and, from time to time make or cause
to be made all appropriate repairs, renewals and replacements,
except where the failure to do so would not have a Material
Adverse Effect.
(g) Financial Statements. The Parent Guarantor shall
furnish, or cause to be furnished, to the Agent (with sufficient
copies for the Banks):
(i) as soon as available but not later than fifty-five
(55) days after the close of each of the first three (3)
Fiscal Quarters of each Fiscal Year of the Parent Guarantor,
consolidated and consolidating balance sheets of the Parent
Guarantor and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated and consolidating
statements of operations and the consolidated statement of
cash flows of the Parent Guarantor and its Subsidiaries for
such Fiscal Quarter and (in the case of the second and third
Fiscal Quarters) for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter,
setting forth in each case in comparative form the
consolidated figures for the corresponding periods of the
previous Fiscal Year, all in reasonable detail and certified
by a Responsible Financial Officer of the Parent Guarantor
- 9 -
as fairly presenting, in accordance with GAAP, the financial
condition and results of operations of the Parent Guarantor
and its Subsidiaries, subject to changes resulting from
normal year-end audit adjustments; provided, that to the
extent set forth therein and otherwise complying with the
requirements of this clause, the Parent Guarantor may
satisfy the requirements hereof by delivering its Form 10Q
for the applicable period;
(ii) (1) as soon as available but no later than one-
hundred (100) days after the close of each Fiscal Year of
the Parent Guarantor, consolidated and consolidating balance
sheets of the Parent Guarantor and its Subsidiaries as at
the end of such year and the related consolidated and
consolidating statements of operations and the consolidated
statement of cash flows of the Borrower and its Subsidiaries
for such year, setting forth in each case in comparative
form the consolidated and consolidating figures for the
previous Fiscal Year, all in reasonable detail and certified
in the case of the consolidated financial statements by
Coopers & Lybrand or another firm of nationally recognized
independent public accountants, which report shall state
without qualification as to the scope of the audit or as to
going concern that such consolidated financial statements
present fairly the financial position and the results of
operations as at the dates and for the periods indicated in
conformity with GAAP and that the audit by such accountants
in connection with such consolidated financial statements
has been made in accordance with GAAS, (2) as soon as
available but not later than one hundred twenty (120) days
after the close of each Fiscal Year of the Parent Guarantor,
a certificate from such accounting firm that in the course
of the regular audit of the business of the Parent Guarantor
and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with GAAS, such accounting
firm reviewed the financial covenants included in Section 8
and such review disclosed no evidence that an Event of
Default or Default has occurred based on such financial
covenants or, if in the opinion of such accounting firm,
such an Event of Default or Default has occurred and is
continuing, a statement as to the nature thereof; provided,
that to the extent set forth therein and otherwise complying
with the requirements of this clause, the Parent Guarantor
may satisfy the requirements hereof by delivering its Form
10K for the applicable period;
(iii) together with each delivery of financial
statements of the Parent Guarantor pursuant to clauses (i)
and (ii) above and commencing with the Fiscal Quarter ending
September 30, 1994, a certificate issued by a Responsible
Financial Officer of the Parent Guarantor (1) demonstrating
compliance at the end of the accounting period described in
- 10 -
such statements with the financial covenants contained
herein and (2) containing in reasonable detail the component
figures contained in the respective total figures stated in
such certificate;
(iv) together with each delivery of financial
statements of the Parent Guarantor and its Subsidiaries
pursuant to clauses (i) or (ii) above, and commencing with
the Fiscal Quarter ending December 31, 1994, a certificate
signed by a Responsible Financial Officer of the Parent
Guarantor stating that (1) such officer is familiar with
both this Guaranty and the business and financial condition
of the Parent Guarantor (2) that the representations and
warranties set forth in Section 5 hereof are true and
correct in all material respects as though such
representations and warranties had been made by the Parent
Guarantor on and as of the date thereof (other than those
that are expressly stated to be made as of a certain date),
and (3) no Event of Default or Default has occurred and is
continuing or if an Event of Default or Default has occurred
and is continuing a statement as to the nature thereof, and
whether or not the same shall have been cured; and
(v) together with each delivery of financial statements
of the Parent Guarantor and its Subsidiaries pursuant to
clause (ii) above, a certificate signed by a Responsible
Financial Officer of the Parent Guarantor stating that as of
the date of such certificate, the entities listed on a
schedule attached thereto are all of the Principal
Subsidiaries in existence at such time (describing any
changes in the entities constituting Principal Subsidiaries
since the delivery of the last such certificate).
(h) Reporting Requirements. The Parent Guarantor shall
furnish to the Agent for distribution to the Banks:
(i) from time to time as the Agent may reasonably
request, copies of such statements, lists of Property,
accounts, reports or information prepared by or for the
Parent Guarantor or within the Parent Guarantor's control.
In addition, the Parent Guarantor shall furnish to the Agent
for distribution to the Banks, within five (5) days after
delivery thereof to the Parent Guarantor's Board of
Directors, copies of budgets and forecasts prepared by or
for the Parent Guarantor or within the Parent Guarantor's
control;
(ii) promptly and in any event within thirty (30) days
after the Parent Guarantor, any of its Subsidiaries or any
ERISA Affiliate knows that any ERISA Event has occurred
(other than a Reportable Event for which notice to the PBGC
is waived), a written statement of the chief financial
- 11 -
officer or other appropriate officer of the Parent Guarantor
describing such ERISA Event and the action, if any, which
the Borrower, any of its Subsidiaries or any ERISA Affiliate
proposes to take with respect thereto, and a copy of any
notice filed with the PBGC or the IRS pertaining thereto;
(iii) promptly and in any event within thirty (30) days
after notice or knowledge thereof, notice that the Parent
Guarantor or any of its Subsidiaries becomes subject to the
tax on prohibited transactions imposed by Section 4975 of
the Code, together with a copy of Form 5330;
(iv) promptly after the commencement thereof, notice of
all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, against or
affecting the Parent Guarantor or any of its Subsidiaries,
in which there is a reasonable probability of an adverse
decision which would have a Material Adverse Effect;
(v) promptly upon the Parent Guarantor or any of its
Subsidiaries learning of (i) any Event of Default or any
Default, or (ii) any Material Credit Agreement Change,
telephonic or telegraphic notice specifying the nature of
such Event of Default, Default or Material Credit Agreement
Change, including the anticipated effect thereof, which
notice shall be promptly confirmed in writing within five
days;
(vi) promptly after the sending or filing thereof,
copies of all reports which the Parent Guarantor sends to
its security holders generally, and copies of all reports
and registration statements which the Parent Guarantor or
any of its Subsidiaries files with the Securities and
Exchange Commission or any national securities exchange;
(vii) promptly upon, and in any event within 30 days
of, the Parent Guarantor or any of its Subsidiaries learning
of any of the following:
(1) notice that any Property of the Parent
Guarantor or any of its Subsidiaries is subject to any
Environmental Liens individually or in the aggregate
which would have a Material Adverse Effect;
(2) any proposed acquisition of stock, assets or
real estate, or any proposed leasing of Property, or
any other action by the Parent Guarantor or any of its
Subsidiaries in which there is a reasonable probability
that the Parent Guarantor or any of its Subsidiaries
would be subject to any material Environmental
Liabilities and Costs, provided, that, in the event of
- 12 -
any such proposed acquisition or lease, the Parent
Guarantor must furnish to the Agent evidence in a form
acceptable to the Agent that the proposed acquisition
will not have a Material Adverse Effect;
(viii) prior to the effectiveness thereof,
information relating to any proposed change in the
accounting treatment or reporting practices of the Parent
Guarantor and its Subsidiaries the nature or scope of which
materially affects the calculation of any component of any
financial covenant, standard or term contained in this
Guaranty; and
(ix) prior to the Parent Guarantor, or any of its
Subsidiaries, (i) entering into any agreement relating to
the sale of, or the granting of a Lien on, assets having a
fair market value of $10,000,000 or more, or (ii) incurring
Indebtedness pursuant to a single transaction the aggregate
principal amount of which is $10,000,000 or more, the Parent
Guarantor shall give the Agent 15 days' notice of its
intention to enter into such an agreement; and
(x) from time to time, such other information and
materials as the Agent (or the Banks through the Agent) may
reasonably request.
(i) Additional Credit Support Documents. The Parent
Guarantor shall deliver, or shall cause to be delivered, within
five (5) Business Days of delivery to the Agent of a certificate
pursuant to Section 6(g)(v) hereof, in respect of each Principal
Subsidiary, disclosed on the schedule attached to such
certificate (a) a Subsidiary Guaranty duly executed by each such
Principal Subsidiary or (b) if any such Principal Subsidiary is a
Non-U.S. Subsidiary, a Pledge Agreement duly executed by the
Shareholders of such Non-U.S. Subsidiary; provided, that this
Section (i) shall not apply to any Principal Subsidiary as to
which there already is at such time a valid and binding
Subsidiary Guaranty or Pledge Agreement (as the case may be).
(j) Delivery of Opinions. Concurrently with the execution
and delivery of any additional Credit Support Documents pursuant
to Section 6(i) hereof, the Parent Guarantor shall deliver, or
shall cause to be delivered, to the Agent an opinion of counsel
relating to such additional Credit Support Document in form and
substance substantially similar to the opinions rendered in
connection with comparable agreements on the Effective Date.
(k) A.L. Labs Transfer. The Parent Guarantor shall
consummate the A.L. Labs Transfer (as defined in the
Restructuring Agreement) as soon as practicable and in any event
within 90 days of the Effective Date.
- 13 -
(l) Stock Exchange Listing. The Parent Guarantor's
securities shall at all times be listed on The New York Stock
Exchange.
SECTION 7. Negative Covenants. So long as any of the
Guaranteed Obligations or any other amounts shall remain unpaid
or any Bank shall have any Commitment under the Credit Agreement,
unless otherwise agreed by the written consent of the Majority
Banks:
(a) Liens, Etc. The Parent Guarantor shall not, directly
or indirectly, create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien upon or with
respect to any of its Properties, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign,
any right to receive income, in each case to secure or provide
for the payment of any Indebtedness of any Person, except
Permitted Liens.
(b) Mergers. The Parent Guarantor shall not merge or
consolidate in any transaction in which it or the Borrower is not
the surviving Person. The Parent Guarantor shall not permit
without the consent of the Majority Banks any of its Subsidiaries
to merge or consolidate in any transaction in which such
Subsidiary is not the surviving Person other than in mergers of
any Subsidiary (other than the Borrower) into the Parent
Guarantor, the Borrower or any other wholly owned Subsidiary of
the Parent Guarantor or the Borrower that is incorporated in the
U.S.; provided, that with respect to mergers in which the
surviving entity is not the Parent Guarantor or the Borrower,
then the Parent Guarantor shall cause such surviving entity to
deliver a Subsidiary Guaranty if immediately after the merger the
surviving entity is a Principal Subsidiary (as determined at such
time) in respect of which there is not, at such time, a valid,
legal and binding Subsidiary Guaranty or Pledge Agreement;
provided, further, that the Majority Banks will not unreasonably
withhold their consent to a merger or other combination of A.L.
Pharma AS and New A.L.-Oslo.
(c) Substantial Asset Sale. The Parent Guarantor shall
not, and shall not permit any of its Subsidiaries to, sell,
lease, transfer or otherwise dispose of all or any substantial
part of its or their assets (including any of the stock of the
Scandinavian Principal Companies owned by it or them), except
that this Section 7(c) shall not apply to any disposition of
assets (i) in the ordinary course of business or (ii) any
disposition of assets (other than assets consisting of the stock
of the Scandinavian Principal Companies or assets owned by the
Scandinavian Principal Companies) (A) to the Parent Guarantor,
the Borrower or any Principal Subsidiary (in respect of which
there is in existence a legal, valid and binding Subsidiary
Guaranty or Pledge Agreement) or (B) where the proceeds of such
- 14 -
disposition (I) consist solely of cash or cash equivalents and
(II) the Net Cash Proceeds of such disposition are first applied
towards the prepayment of any Loans then outstanding in
accordance with Section 5.4(a) of the Credit Agreement; provided,
that for purposes of this Section 7(c), any such prepayment shall
be effected on the next succeeding day on which an interest
payment is due in respect of the Loan being prepaid after
consummation of the asset sale, and if such day is not the last
day of the Interest Period in respect of the Loan or Loans being
prepaid, the Borrower shall continue to be liable for any costs
or expenses pursuant to Section 12.4(c) of the Credit Agreement.
(d) Transactions with Affiliates. The Parent Guarantor
shall not engage in, and will not permit any of its Subsidiaries
to engage in, any transaction with an Affiliate of the Parent
Guarantor or of such Subsidiary other than transactions in the
ordinary course of business between a Subsidiary and its parent
or among Subsidiaries of the Parent Guarantor that are on terms
no less favorable to the Parent Guarantor or such Subsidiaries
than as would be obtained in a comparable arms-length transaction
and other than transactions contemplated by, and effected in
accordance with, the Restructuring.
(e) Activities. Following consummation of the A.L. Labs
Transfer, the Parent Guarantor shall not engage in any business
activities, own any Properties or incur any obligations or
Indebtedness other than (a) as contemplated by the Loan Documents
and the Restructuring Agreement, and (b) the ownership of Equity
of its Subsidiaries and of the real estate and improvements
thereon relating to its manufacturing facility in Chicago
Heights, Illinois.
(f) Restrictions on Indebtedness. (i) The Parent Guarantor
shall not incur, and shall not permit its Subsidiaries to incur,
Indebtedness except Permitted Indebtedness (subject to clause
(ii) below); provided, that prior to the incurrence of
Subordinated Indebtedness, the Agent shall have received an
opinion of counsel relating to such Subordinated Indebtedness and
stating that in the opinion of such counsel the Indebtedness of
the Loan Parties under the Loan Documents is senior indebtedness
within the meaning of such term (or a term analogous thereto) as
used in the terms and provisions relating to such Subordinated
Indebtedness.
(ii) Notwithstanding clause (i) above, no Permitted
Indebtedness may be incurred unless (A) with respect to Permitted
Indebtedness described in clauses (3) through (6) of the
definition of Permitted Indebtedness, and except as otherwise
provided in the Loan Documents, the Parent Guarantor or the
Borrower shall have given the Agent at least 7 Business Days'
prior notice of the intention to incur such Indebtedness in
accordance with the terms hereof and (B) if the principal amount
- 15 -
of such Indebtedness is $1,000,000 or more, the Person to whom
the debtor in respect of such Indebtedness shall be obligated
becomes a party to the Intercreditor Agreement (unless it is
already a party to such agreement); provided, however, that
clause (B) hereof shall not apply to (1) Subordinated Debt, (2)
Indebtedness that is otherwise Permitted Indebtedness and that is
issued pursuant to a (x) registration statement filed with the
Securities and Exchange Commission or (y) a private placement
with institutional investors or (3) Permitted Indebtedness that
is secured by Permitted Liens. In the case of such a private
placement with institutional investors, the Parent Guarantor or
the Borrower shall use its reasonable best efforts to ensure that
the institutional investors in such private placement become
parties to the Intercreditor Agreement.
SECTION 8. Financial Covenants. As long as any of the
Guaranteed Obligations shall remain unpaid or any Bank shall have
any Commitment under the Credit Agreement, unless otherwise
agreed by the written consent of the Majority Banks:
(a) Minimum Equity Ratio. The Equity Ratio of the Parent
Guarantor and its Subsidiaries shall not at any time be less than
0.3:1.
(b) Minimum Total Capital. The Total Capital of the Parent
Guarantor and its Subsidiaries shall not be less than (a)
$170,000,000, from the Agreement Date to December 31, 1995, (b)
$185,000,000, from December 31, 1995 to December 31, 1996 and (b)
$200,000,000, at any time thereafter.
(c) Current Ratio. The ratio of Current Assets to Current
Liabilities of the Parent Guarantor and its Subsidiaries shall
not at any time be less than 1.30:1.
(d) Interest Coverage Ratio. The ratio of (i) Earnings
from Operations plus interest income to (ii) Total Cash Interest
Expense shall not be less than (A) 1.75:1 for the period from the
Agreement Date through December 31, 1995 and (B) 1.85:1 at all
times thereafter; provided, however, that for purposes of this
Section 8(d), the calculation of "Earnings from Operations" for
any period during 1994 shall not include any income effect
attributable to (x) the Restructuring Charge or (y) Merger
Expenses specifically expensed in the fourth quarter of 1994;
and, provided, further, that in calculating the Interest Coverage
Ratio for purposes of this Section 8(d), changes in Earnings from
Operations, interest income or Total Cash Interest Expense
attributable to foreign exchange fluctuations shall not be taken
into account.
(e) Minimum Net Worth. The Net Worth of the Parent
Guarantor and its Subsidiaries shall not at any time be less than
$170,000,000.
- 16 -
SECTION 9. Payments and Computations. (a) The Parent
Guarantor shall make each payment payable by it hereunder not
later than 11:00 A.M. (New York City time) on the day when due,
in Dollars, to the Agent at its address referred to in Section
12.2 of the Credit Agreement in immediately available funds
without set-off or counterclaim, for the account of the several
Banks.
(b) No Reductions. (i) Subject to Section 9(b)(ii) and
(iii), payments due to the Agent, the Arranger, the Co-Arranger
or any Bank hereunder, and all other terms, conditions, covenants
and agreements to be observed and performed by the Parent
Guarantor hereunder, shall be made, observed or performed by the
Parent Guarantor without any reduction or deduction whatsoever,
including any reduction or deduction for any set-off, recoupment,
counterclaim (whether sounding in tort, contract or otherwise) or
Tax.
(ii)(x) If any withholding or deduction from any payment to
be made by the Parent Guarantor hereunder is required for any
Taxes under any applicable law, rule or regulation, then the
Parent Guarantor will
(A) pay directly to the relevant taxing authority
the full amount required to be so withheld or deducted;
(B) promptly forward to the Agent an official
receipt or other documentation satisfactory to the Agent
evidencing such payment to such authority; and
(C) pay to the Agent for the account of the Banks
such additional amount or amounts necessary to ensure that
the net amount actually received by each Bank will equal the
full amount such Bank would have received had no such
withholding or deduction been required.
In addition, to the extent permitted by applicable law, the
Parent Guarantor agrees to pay any present or future stamp or
documentary taxes, excise or property taxes, or any other charges
or similar levies which arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise
with respect to, this Guaranty or the Notes (hereinafter referred
to as "Other Taxes").
Each Bank shall use its reasonable best efforts to designate
another of its then existing offices as its Lending Office if the
making of such designation would, without any detrimental effect
to such Bank (as determined by the Bank in its sole discretion),
avoid the need for, or reduce the amount of, such withholding or
deduction from any payment to be made to such Bank by the Parent
Guarantor hereunder required for any Taxes.
- 17 -
The Parent Guarantor will indemnify each Bank and the Agent
for the full amount of Taxes or Other Taxes paid by such Bank or
the Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Bank or the Agent (as the
case may be) makes written demand therefor.
If the Parent Guarantor fails to pay any Taxes or Other
Taxes when due to the appropriate taxing authority or fails to
remit to the Agent, for the account of the respective Banks, the
required receipts or other required documentary evidence, the
Parent Guarantor shall indemnify the Agent and the Banks for any
incremental Taxes or Other Taxes, penalties, interest or expenses
that may become payable by the Agent or any Bank as a result of
any such failure.
(y) Notwithstanding subsection (x), the Parent Guarantor
shall not be required to indemnify or pay additional amounts for
or on account of:
(A) Taxes imposed on or measured by the net income of the
Agent or any Bank or franchise Taxes imposed on the Agent or any
Bank, but in each case only to the extent imposed by the
jurisdiction under the laws of which the Agent or such Bank is
organized or doing business (other than as a result of the
transactions contemplated by the Loan Documents or the Agent's or
any Bank's enforcement of its rights under any Loan Document) or
any political subdivision or taxing authority thereof or therein,
or by any jurisdiction in which the Agent or such Bank's lending
office or principal executive office is located or any political
subdivision or taxing authority thereof or therein (except, in
each case, to the extent required by the following paragraph to
make payments on a net after-tax-basis), or
(B) any Tax or Other Tax imposed by reason of either (i)
the failure of the certification made by a Bank on any form
provided pursuant to Section 9(b)(iii) to be accurate and true in
all material respects unless any such failure is attributable
solely to a Change in Tax Law that occurs on or after the date on
which such form is provided by such Bank, or (ii) the failure by
a Bank to deliver to the Parent Guarantor (or the Borrower) and
the Agent two duly completed and executed copies of IRS Form 1001
or 4224 (or successor applicable forms) in accordance with the
second sentence of Section 9(b)(iii), certifying that such Bank
is entitled to receive payments under this Guaranty and the Loans
without deduction or withholding of any United States federal
income taxes, provided that this clause (B)(ii) will not apply if
such failure is attributable solely to a Change in Tax Law that
occurs on or after the date hereof.
- 18 -
All amounts payable as additional amounts or indemnities
pursuant to this Section 9(b) shall include an amount necessary
to hold the Agent or the relevant Bank harmless on a net after-
tax-basis from and against all Taxes required to be paid with
respect to or as a result of the payment of such additional
amount or indemnity (including, without limitation, Taxes
described in clause (A) of the preceding paragraph.)
(iii) Each Bank that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees that
it will, on or before the date that the Parent Guarantor delivers
this Guaranty (or, in the case of a Bank that becomes a Bank
pursuant to an assignment described in Section 12.7 of the Credit
Agreement, on or before the date that the Agent records the
Notice of the Assignment and Acceptance by which it becomes a
Bank), deliver to the Parent Guarantor and the Agent two duly
completed and executed copies of IRS Form 1001 or 4224 or
successor applicable form, as the case may be, certifying in each
case that such Bank is entitled to receive payments payable to it
under this Guaranty and the Loans without deduction or
withholding of any United States federal income taxes. Each Bank
that undertakes to deliver to the Parent Guarantor and the Agent
an IRS Form 1001 or 4224 under the preceding sentence further
undertakes to deliver to the Agent and the Parent Guarantor two
additional duly completed and executed copies of Form 1001 or
4224 (or successor applicable forms) on or before the date that
any such form expires or becomes obsolete or after the occurrence
of any event requiring a change in the most recent form
previously delivered by it to the Parent Guarantor and the Agent,
and such extensions or renewals thereof as may reasonably be
required by the Parent Guarantor, certifying, in the case of a
Form 1001 or 4224, that such Bank is entitled to receive payments
under this Guaranty and the Loans without deduction or
withholding of any United States federal income taxes, unless, in
any such case, an event (including, without limitation, any
Change in Tax Law) has occurred before the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which causes such Bank to be no longer eligible
to complete and deliver any such form with respect to it, in
which case the Bank shall either (1) furnish to the Parent
Guarantor such forms or other certification as the Bank (in its
sole opinion) is legally entitled to furnish evidencing the
Bank's eligibility for a complete exemption from or a reduced
rate of withholding of United States federal income taxes, or (2)
notify the Parent Guarantor that the Bank is not capable of
receiving payments without any deduction or withholding of United
States federal income tax.
SECTION 10. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic or telecopy communication) and mailed,
telegraphed, telecopied or delivered, if to the Parent Guarantor,
- 19 -
addressed to it at One Executive Drive, P.O. Box 1399, Fort Lee,
New Jersey 07024, Tel: (201) 947-7774, Fax: (201) 947-5541
Attention: Albert N. Marchio, II, Treasurer, if to the Agent,
addressed to it at the address specified in the Credit Agreement,
or as to each party at such other address as shall be designated
by such party in a written notice to each other party complying
as to delivery with the terms of this Section. All such notices
and other communications shall, when mailed or telegraphed,
respectively, be effective when deposited in the mails or
delivered to the telegraph company, respectively, addressed as
aforesaid, and shall, when delivered or telecopied, be effective
when received.
SECTION 11. No Waiver; Remedies. No failure on the part of
any Guaranteed Party to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 12. Right of Set-off. Upon the occurrence and
during the continuance of any Event of Default (as defined in the
Credit Agreement), each Bank is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to
set-off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the credit
or the account of the Parent Guarantor against any and all of the
obligations of the Parent Guarantor now or hereafter existing
under this Guaranty, irrespective of whether or not such Bank
shall have made any demand under this Guaranty. Each Bank agrees
promptly to notify the Parent Guarantor after any such set-off
and application made by such Bank; provided, however, that the
failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Bank under this
Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Bank may
have.
SECTION 13. Continuing Guaranty; Transfer of Interest.
This Guaranty is a continuing guaranty and shall (i) remain in
full force and effect until indefeasible payment in full of the
Guaranteed Obligations and all other amounts payable under this
Guaranty, (ii) be binding upon the Parent Guarantor, its
successors and permitted assigns, provided that the Parent
Guarantor may not assign or transfer its obligations hereunder
without the consent of the Majority Banks, and (iii) inure to the
benefit of and be enforceable by any Guaranteed Party and its
respective successors, transferees, and assigns, without limiting
the generality of the foregoing clause (iii), any Bank may assign
or otherwise transfer all or any part of its rights and
- 20 -
obligations under the Credit Agreement in accordance therewith,
and such other person or entity shall thereupon become vested
with all the rights in respect thereof granted to such Bank
herein or otherwise, subject, however, to the provisions of
Article XII of the Credit Agreement.
SECTION 14. Reinstatement. This Guaranty shall remain in
full force and effect and continue to be effective should any
petition be filed by or against any Loan Party (as defined in the
Credit Agreement) for liquidation or reorganization, should any
Loan Party become insolvent or make an assignment for the benefit
of creditors or should a receiver or trustee be appointed for all
or any significant part of any Loan Party's assets, and shall, to
the fullest extent permitted by law, continue to be effective or
be reinstated, as the case may be, if at any time payment and
performance of the Guaranteed Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount,
or must otherwise be restored or returned by any obligee of the
Guaranteed Obligations, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made. In the event that any payment,
or any part thereof, is rescinded, reduced, restored, or
returned, the Guaranteed Obligations shall, to the fullest extent
permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
SECTION 15. Defined Terms. (a) As used in this Guaranty,
the following terms have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of
the terms defined):
"A.L. Labs Transfer" has the meaning specified in the
Restructuring Agreement.
"Allowable Restructuring Charge" means the lesser of (i) the
Restructuring Charge and (ii) $10,000,000.
"Applicable Restructuring Adjustment" means for the
following periods, the percentage of the Allowable Restructuring
Charge set forth below:
Percentage of
Period Allowable Restructuring Charge
Agreement Date to
June 30, 1995 100%
July 1, 1995 to
December 31, 1995 75%
January 1, 1996 to
June 30, 1996 50%
- 21 -
July 1, 1996 to
December 31, 1996 25%
January 1, 1997 and
thereafter 0%
"Current Assets" means, at any time, as to the Parent
Guarantor and its Subsidiaries, the consolidated current assets
of the Parent Guarantor and its Subsidiaries for the then most
recently ended Fiscal Quarter, as shown on the Parent Guarantor's
then most recent consolidated balance sheet at such time.
"Current Liabilities" of the Parent Guarantor and its
Subsidiaries means, at any time, (a) the consolidated current
liabilities of the Parent Guarantor and its Subsidiaries plus (b)
to the extent not included in (a), the current liabilities of any
Person (other than the Parent Guarantor or any of its
Subsidiaries) that are guaranteed by the Parent Guarantor or any
of its Subsidiaries, in each case for the then most recently
ended Fiscal Quarter as shown on the Parent Guarantor's then most
recent consolidated balance sheet at such time.
"Earnings from Operations" means, at any time, operating
income for the Parent Guarantor and its Subsidiaries on a
consolidated basis as set forth in the consolidated statement of
income of the Parent Guarantor and its Subsidiaries for the
immediately preceding four consecutive Fiscal Quarters (or such
fewer number of consecutive Fiscal Quarters as shall have ended
immediately following the Effective Date) for which financial
statements have been delivered to the Banks pursuant to Section
6(g) of this Guaranty.
"Equity Ratio" means, at any time, the ratio of the Parent
Guarantor's and its Subsidiaries Net Worth to total assets as
shown on the Parent Guarantor's then most recent quarterly
consolidated balance sheet.
"Merger Expenses" means any investment banking, legal,
accounting and other transaction expenses, including the
expensing of debt issuance costs related to existing debt
expected to be refinanced, and tax effects relating to the
combination to be incurred and recorded by the Parent Guarantor
subsequent to the signing of the Restructuring Agreement. The
amount of Merger Expense shall not exceed $3.6 million for the
purpose of the allowance permitted under the Interest Coverage
Ratio test in Section 8(d) hereof.
"Net Worth" means, at any time, as to the Parent Guarantor
and its Subsidiaries on a consolidated basis, the excess of total
assets over total liabilities, as shown on the Parent Guarantor's
- 22 -
then most recent consolidated balance sheet, plus the Applicable
Restructuring Adjustment.
"New Permitted Indebtedness" means, at any time,
Indebtedness (a) that does not otherwise constitute Permitted
Indebtedness pursuant to any clause of the definition of
Permitted Indebtedness other than clause (2)) and (b) the
aggregate outstanding principal amount of which, at any time,
when added to all other New Permitted Indebtedness incurred and
then outstanding at such time by the Parent Guarantor and its
Subsidiaries after the Effective Date does not exceed $20,000,000
in the aggregate.
"Permitted Credit Lines" means the lines of credit available
to the Parent Guarantor and its Subsidiaries that are listed on
Schedule 7(e) hereto.
"Permitted Indebtedness" means:
(1) Indebtedness incurred pursuant to the Loan
Documents; or
(2) New Permitted Indebtedness; or
(3) Any Indebtedness if prior to, and immediately
after, the incurrence thereof, the Equity Ratio equals or
exceeds 0.5:1; or
(4) Subordinated Indebtedness the aggregate outstanding
principal amount of which, at any time, when added to all
other Subordinated Indebtedness previously incurred by the
Parent Guarantor and its Subsidiaries pursuant to this
clause (4) and not otherwise constituting Permitted
Indebtedness does not at such time exceed the aggregate
principal amount of Tranche A Term Loans and Tranche B Term
Loans theretofore prepaid by the Borrower pursuant to
Section 5.4(a) of the Credit Agreement,
(5) Subordinated Indebtedness (A) consisting of
convertible debt securities the aggregate outstanding
principal amount of which, at any time, does not exceed
$100,000,000 and (B) which is used first to refinance any
Indebtedness of the Parent Guarantor and/or its Subsidiaries
then outstanding.
(6) Permitted Intercompany Indebtedness.
(7) Indebtedness incurred pursuant to a Permitted
Credit Line up to an aggregate principal amount which does
not exceed the maximum amount of Indebtedness that is
permitted to be incurred under such Permitted Credit Line by
this Agreement.
- 23 -
(8) Indebtedness representing amounts owed to minority
shareholders of New A.L.-Oslo in connection with the
acquisition of shares not tendered in the Exchange Offer (as
defined in the Restructuring Agreement).
(9) Indebtedness under Swap Agreements.
"Permitted Liens" means:
(i) purchase money Liens or purchase money security
interests upon or in any Property acquired or held in the
ordinary course of business to secure the purchase price of
such Property or to secure Indebtedness incurred solely for
the purpose of financing the acquisition of such Property;
(ii) Liens existing on Property at the time of its
acquisition (other than any such Lien created in
contemplation of such acquisition);
(iii) Liens on Property of Persons which become
Subsidiaries after the Agreement Date securing Indebtedness
existing, with respect to any such Person, on the date such
Person becomes a Subsidiary (other than any such Lien
created in contemplation of such Person becoming a
Subsidiary);
(iv) Liens listed on Schedule 7(a)(iv) hereto; and
(v) Liens securing New Permitted Indebtedness, provided
that (A) such New Permitted Indebtedness by its terms does
not amortize or otherwise require any mandatory installments
of principal earlier than ten years after the incurrence
thereof and (B) the Borrower has given the Agent notice
(including a description in reasonable detail of the nature
of the Lien and the obligations incurred) of the granting of
such Lien within 7 Business Days of the granting thereof;
(vi) Liens securing a tax, assessment or other
governmental charge or levy or the claim of a materialman,
mechanic, carrier, warehouseman or landlord for labor,
materials, supplies or rentals and any other statutory lien
(other than Environmental Liens), but only if (A) such Lien
was incurred in the ordinary course of business and (B) the
liability secured by such Lien (1) is not delinquent or (2)
is being contested in good faith by appropriate proceedings
and adequate reserves or other appropriate provisions have
been provided therefor in an amount not less than the amount
required by GAAP;
(vii) Liens consisting of a deposit or pledge made in
the ordinary course of business in connection with, or to
- 24 -
secure payment of, obligations under worker's compensation,
unemployment insurance or similar legislation;
(viii) Liens constituting an encumbrance in the nature
of zoning restrictions, easements and rights or restrictions
of record on the use of real property that does not have a
materially adverse effect on the Parent Guarantor or its
Subsidiaries;
"Permitted Intercompany Indebtedness" means Indebtedness
incurred by the Parent Guarantor, the Borrower, a Subsidiary
Guarantor or a Pledged Subsidiary and owing to the Parent
Guarantor, the Borrower, a Subsidiary Guarantor or a Pledged
Subsidiary (as the case may be).
"Restructuring Charge" means the amount, on an after tax
basis, of the charge taken by the Parent Guarantor and/or the
Borrower in connection with the Restructuring.
"Subordinated Indebtedness" means, as to the Parent
Guarantor and its Subsidiaries, Indebtedness that (a) is subject
to subordination terms that are no less favorable to the Banks
than those contained in Exhibit A hereto and that are otherwise
satisfactory to the Agent and (b) does not commence to amortize
or otherwise require any mandatory installments of principal
until six months after the Termination Date.
"Total Capital" means, at any time, as to the Parent
Guarantor and its Subsidiaries on a consolidated basis, the sum
for the Parent Guarantor and its Subsidiaries of (a) Net Worth
plus (b) Subordinated Indebtedness.
"Total Cash Interest Expense" means, for any period, the
cash interest expense incurred by the Parent Guarantor and its
Subsidiaries, on a consolidated basis, during the preceding four
consecutive Fiscal Quarters (or such fewer number of consecutive
Fiscal Quarters as shall have ended immediately following the
Effective Date) with respect to the aggregate amount of all
Indebtedness outstanding during such period.
(b) Any terms used in this Guaranty and not otherwise
defined are used with the meaning ascribed thereto in the Credit
Agreement.
SECTION 16. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 17. WAIVER OF JURY TRIAL. THE PARENT GUARANTOR
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES HEREUNDER,
- 25 -
UNDER THE CREDIT AGREEMENT OR UNDER THE OTHER LOAN DOCUMENTS
RELATIVE TO EACH OF THE FOREGOING.
- 26 -
IN WITNESS WHEREOF, the Parent Guarantor has caused this
Guaranty to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
A.L. LABORATORIES, INC.
By: /s/ E.W. Sissener
Name: E.W. Sissener
Title: Chairman & C.E.O.
- 27 -
Schedule 5(m)
Subsidiaries
- 28 -
Schedule 5(n)
Principal Subsidiaries
A. Non-U.S.
1. New A.L. - Oslo
2. A.L.-Pharma A/S
3. A/S Dumex
B. U.S.
1. Barre National, Inc.
2. ParMed Pharmaceuticals, Inc.
3. NMC Laboratories, Inc.
4. Wade Jones Company, Inc.
5. Barre Parent Corporation
6. Mikjan Corporation
- 29 -
Schedule 7(a)(iv)
Permitted Liens
- 30 -
Schedule 7(e)
Permitted Credit Lines
- 31 -
Exhibit A
to
Parent Guaranty
Subordination Terms
[Previously provided. Will be attached at closing.]
- 32 -