EXHIBIT 4.1
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CREDIT AGREEMENT
Among
SCHEIN PHARMACEUTICAL, INC.,
THE LENDERS,
as defined herein,
and
CHEMICAL BANK,
as Issuing Bank,
as Administrative Agent
and as Collateral Agent for the Lenders
[LOGO]SCHEIN
PHARMACEUTICAL
Dated as of September 5, 1995
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Schein Pharmaceutical After $5MM Pre-Payment
Revised
T/L
Repayment Schedule
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Date Balance after $5MM Applied
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Sep-96
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Dec-96
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Mar-97
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Jun-97
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Sep-97
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Dec-97
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Mar-98
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Jun-98
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Sep-98 $7,368,421
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Dec-98 $7,368,421
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Mar-99 $9,210,527
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Jun-99 $9,210,527
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Sep-99 $9,210,527
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Dec-99 $9,210,527
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Mar-00 $11,052,631
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Jun-00 $11,052,631
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Sep-00 $11,052,631
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Dec-00 $11,052,631
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Mar-01 $11,052,631
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Jun-01 $11,052,631
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Sep-01 $11,052,631
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Dec-01 $11,052,633
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Total $140,000,000
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Page 1
Schein Pharmaceutical, Inc.
$350M Credit Facilities
Chemical Bank, Agent
Amount: $350M
RC Facility $100M
Term Facility $250M
Tenor:
6.5 Years (Matures 12/31/01 )
Interest (price grid): LIBOR + 1.25% Range .75%[arrow] 1.50% 7.25%
Prime + .25% Range 0% [arrow] .50% 9.00%
Letter of Credit: Up to 330M available @ 1.625% (subject to grid)
Commitment Fee: 0.375% (unused portion) Range .25% [arrow] .50%
Arrangement Fee: 1.5% -- ($5,250,000)
Agent Fee: $100K annually
Mandatory Prepayments: 75% of Excess cash flow, 100% of new financing
above $10M, and % of proceeds from stock
offering:
50% if leverage is between 3.0x - 4.0x
25% if leverage is between 2.5x - 3.0x
0% if leverage is between 1.0x - 2.5x
Scheduled Prepayments: '95 - $0 '99 - $50M
'96 - $10M '00 - $60M
'97 - $30M '01 - $60M
'98 - $40M
Security: Mortgage all real property
Liens on receivables & inventory
Pledge of all domestic subsidiaries stock including
Marsam and 65% of wholly owned foreign
subsidiaries
Cross company guarantees by domestic subsidiaries
Schein Pharmaceutical, Inc.
$350M Credit Facilities
Chemical Bank, Agent
Conditions to Closing: Status
---------------------- ------
Bank required due diligence
Schein Pharmaceutical, Inc.
Financial review Done
Facilities visit Done
Collateral review Done
Environmental review Done
Solvency opinion 8/23/95
Marsam Pharmaceuticals, Inc.
Financial review Done
Facilities visit Done
Collateral review 8/21-22/95
Environmental review Done
Syndication:
Bank Meeting: Done
Information Memorandum Done
Management slides Done
Loan documents 4th Draft 8/22/95
Bank commitments due 8/24/95
Pre Closing 8/24/95
Closing 9/1/95
Funding 9/6/95
Merger Agreement: Done
Tender Offer Expires 9/1/95
Hart Scott Rodino Release Done
Financial Schedules
$350M Credit Facilities
PRICING GRID:
Frcst
Financial Ratio Price Grid Commitment
(Category) 0.75%- 1.50% Fee
---------- ------------ ----------
YR 1995 4 1.25 .375
YR 1996 4-3 1.25 - 1.00 .375
YR 1997 2-1 .875 - .75 .3125-.25
YR 1998 1 .75 .25
YR 1999 1 .75 .25
WORKING CAPITAL:
Working Capital (June 30, 1995) 3.0X
Projections (1996-1999) 2.5X (Average)
CAPITAL EXPENDITURE:
Projected Limitation
--------- ----------
YR 1995 20 25
YR 1996 22 25
YR 1997 24 25
YR 1998 23 25
YR 1999 23 25
INTERNATIONAL JV'S
Projected Limitation
--------- ----------
YR 1995 7 10
YR 1996 10 10
YR 1997 5 10
YR 1998 0 10
YR 1999 0 10
INVESTMENTS (ALL OTHER)
Projected
---------
YR 1995 3 Limitation = $10M Aggregate (95,96,97
YR 1996 3 Limitation = $15M Aggregate (97,98,99
YR 1997 3
YR 1998 3
YR 1999 3
Financial Schedules
$350M Credit Facilities
NET WORTH
Projected Test
--------- ----
YR 1995 154 145
YR 1996 196 170
YR 1997 262 225
YR 1998 345 275
YR 1999 435 350
LEVERAGE RATIO
{Total Debt/EBITDA}
Projected Test Senior Test
--------- ---- -----------
YR 1995 4.4 5.0 5.0
YR 1996 2.5 4.0 4.0
YR 1997 1.6 3.5 3.0
YR 1998 1.0 3.0 2.5
YR 1999 0.6 3.0 2.5
MINIMUM FIXED CHARGE COVERAGE
Projected Test
--------- ----
YR 1995 3.6 1.5
YR 1996 3.0 1.5
YR 1997 2.5 1.5
YR 1998 2.6 1.5
YR 1999 2.8 1.5
DIVIDEND LIMITATION
Dividend Limitation is in effect until Total Debt/EBITDA = 2.5X Estimated at
Year End 1996
[EXECUTION COPY]
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CREDIT AGREEMENT
Among
SCHEIN PHARMACEUTICAL, INC.,
THE LENDERS,
as defined herein,
and
CHEMICAL BANK,
as Issuing Batik,
as Administrative Agent
and as Collateral Agent for the Lenders
Dated as of September 5, 1995
================================================================================
[CS&M Ref. 6700-331/P95-0114]
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Defined Terms .............................................. 3
SECTION 1.02. Terms Generally ............................................ 35
ARTICLE II
The Credits
SECTION 2.01. Commitments ................................................ 35
SECTION 2.02. Loans ...................................................... 36
SECTION 2.03. Borrowing Procedure ........................................ 39
SECTION 2.04. Evidence of Debt; Repayment of Loans ....................... 40
SECTION 2.05. Fees ....................................................... 41
SECTION 2.06. Interest on Loans .......................................... 43
SECTION 2.07. Default Interest ........................................... 44
SECTION 2.08. Alternate Rate of Interest ................................. 44
SECTION 2.09. Termination and Reduction of
Commitments .............................................. 45
SECTION 2.10. Conversion and Continuation of
Borrowings ............................................... 46
SECTION 2.11. Repayment of Term Facility
Borrowings ................................................ 48
SECTION 2.12. Optional Prepayment ........................................ 49
SECTION 2.13. Mandatory Prepayments ...................................... 50
SECTION 2.14. Reserve Requirements; Change in
Circumstances ............................................ 51
SECTION 2.15. Change in Legality ......................................... 54
SECTION 2.16. Indemnity .................................................. 55
SECTION 2.17. Pro Rata Treatment ......................................... 56
SECTION 2.18. Sharing of Setoffs ......................................... 56
SECTION 2.19. Payments ................................................... 57
SECTION 2.20. Taxes ...................................................... 58
SECTION 2.21. Assignment of Commitments under
Certain Circumstances; Duty To
Mitigate ................................................. 62
2
Page
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SECTION 2.22. Letters of Credit ........................................... 63
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers ........................................ 69
SECTION 3.02. Authorization ............................................... 69
SECTION 3.03. Enforceability .............................................. 70
SECTION 3.04. Governmental Approvals ...................................... 70
SECTION 3.05. Financial Statements ........................................ 71
SECTION 3.06. No Material Adverse Change .................................. 72
SECTION 3.07. Title to Properties; Possession
under Leases .............................................. 72
SECTION 3.08. Subsidiaries ................................................ 73
SECTION 3.09. Litigation; Compliance with Laws ............................ 73
SECTION 3.10. Agreements .................................................. 74
SECTION 3.11. Federal Reserve Regulations ................................. 74
SECTION 3.12. Investment Company Act; Public
Utility Holding Company Act ............................... 74
SECTION 3.13. Use of Proceeds ............................................. 75
SECTION 3.14. Tax Returns ................................................. 75
SECTION 3.15. No Material Misstatements ................................... 75
SECTION 3.16. Employee Benefit Plans ...................................... 75
SECTION 3.17. Environmental Matters ....................................... 76
SECTION 3.18. Insurance ................................................... 77
SECTION 3.19. Solvency .................................................... 77
SECTION 3.20. Location of Real Property and Leased
Premises .................................................. 78
SECTION 3.21. Labor Matters ............................................... 79
SECTION 3.22. Tender Offer; Merger ........................................ 79
SECTION 3.23. Capitalization of the Borrower .............................. 80
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events ........................................... 81
SECTION 4.02. First Credit Event .......................................... 82
SECTION 4.03. Additional Conditions Precedent ............................. 88
3
Page
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ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties ....................... 89
SECTION 5.02. Insurance .................................................. 89
SECTION S.03. Obligations and Taxes ...................................... 91
SECTION 5.04. Financial Statements, Reports, etc ......................... 91
SECTION 5.05. Litigation and Other Notices ............................... 93
SECTION 5.06. Employee Benefits .......................................... 93
SECTION 5.07. Maintaining Records; Access to
Properties and Inspections ............................... 93
SECTION 5.08. Use of Proceeds ............................................ 94
SECTION 5.09. Compliance with Environmental Laws ......................... 94
SECTION 5.10. Preparation of Environmental Reports ....................... 94
SECTION 5.11. Further Assurances ......................................... 95
SECTION 5.12. Rate Protection Agreements ................................. 96
SECTION 5.13. Merger ..................................................... 96
SECTION 5.14. Board of Directors of the Company .......................... 96
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness ............................................... 96
SECTION 6.02. Liens ...................................................... 98
SECTION 6.03. Sale and Lease-Back Transactions ........................... 100
SECTION 6.04. Investments, Loans and Advances ............................ 100
SECTION 6.05. Mergers, Consolidations and Sales of
Assets ................................................... 101
SECTION 6.06. Dividends and Distributions;
Restrictions on Ability of
Subsidiaries To Pay Dividends ........................... 102
SECTION 6.07. Transactions with Affiliates ............................... 103
SECTION 6.08. Business of Borrower and Subsidiaries ...................... 103
SECTION 6.09. Operating Leases ........................................... 104
SECTION 6.10. Amendments of Certain Agreements;
Conduct of Acquisition ................................... 104
SECTION 6.11. Fiscal Year ................................................ 104
SECTION 6.12. Payment on Other Indebtedness .............................. 104
SECTION 6.13. Capital Expenditures ....................................... 105
4
Page
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SECTION 6.14. Leverage Ratio ............................................. 105
SECTION 6.15. Senior Debt Ratio .......................................... 106
SECTION 6.16. Net Worth .................................................. 107
SECTION 6.17. Working Capital ............................................ 107
SECTION 6.18. Fixed Charge Coverage Ratio ................................ 107
ARTICLE VII
Events of Default ........................................................ 107
ARTICLE VIII
The Administrative Agent and the Collateral Agent ........................ 112
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices .................................................... 116
SECTION 9.02. Survival of Agreement ...................................... 117
SECTION 9.03. Binding Effect ............................................. 118
SECTION 9.04. Successors and Assigns ..................................... 118
SECTION 9.05. Expenses; Indemnity ........................................ 123
SECTION 9.06. Rights of Setoff ........................................... 124
SECTION 9.07. Applicable Law ............................................. 125
SECTION 9.08. Waivers; Amendment ......................................... 125
SECTION 9.09. Interest Rate Limitation ................................... 127
SECTION 9.10. Entire Agreement ........................................... 127
SECTION 9.11. WAIVER OF JURY TRIAL ....................................... 127
SECTION 9.12. Severability ............................................... 128
SECTION 9.13. Counterparts ............................................... 128
SECTION 9.14. Headings ................................................... 128
SECTION 9.15. Jurisdiction; Consent to Service of
Process ................................................. 128
SECTION 9.16. Mortgaged Property Casualty and
Condemnation ............................................ 129
SECTION 9.17. Confidentiality ............................................ 135
5
Schedule 1.01 Certain Permitted Holders
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries
Schedule 3.18 Insurance
Schedule 3.20(a) Owned Real Property
Schedule 3.20(b) Leased Real Property
Schedule 4.02(a) Local Counsel
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.04 Existing Investments
Exhibit A Form of Administrative
Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Guarantee Agreement
Exhibit E Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit F Form of Mortgage
Exhibit G Form of Pledge Agreement
Exhibit H Form of Security Agreement
Exhibit I-1 Form of Opinion of PRG&M
Exhibit I-2 Form of Opinion of Local Counsel
Exhibit J Form of Opinion of Counsel to the
Company
CREDIT AGREEMENT dated as of September 1, 1995, among SCHEIN
PHARMACEUTICAL, INC., a Delaware corporation (the "Borrower"); the LENDERS (as
defined in Article I); and CHEMICAL BANK, a New York banking corporation as
issuing bank (in such capacity, the "Issuing Bank"), as administrative agent (in
such capacity, the "Administrative Agent") and as collateral agent (in suck
capacity, the "Collateral Agent") for the Lenders.
The Borrower has requested the Lenders to extend credit in order to enable
the Borrower, on the terms and subject to the conditions of this Agreement, to
borrow (a) on a term basis, on the Tender Offer Date (such term and each other
tern used but not otherwise defined in this preamble having the meaning assigned
to it in Article I), an aggregate principal amount not in excess of $250,000,000
(the "Tender Facility") and (b) on a revolving basis, at any time and from time
to time on or after the Tender Offer Date and prior to the Pre-Merger Facilities
Maturity Date, an aggregate principal amount at any time outstanding not in
excess of $100,000,000 (the "Pre-Merger Revolving Facility"). The proceeds of
borrowings under the Tender Facility and up to $50,000,000 of proceeds of
borrowings under the Pre-Merger Revolving Facility are to be used (a) by the
Borrower or Acquisition Co. (i) to purchase outstanding shares of common stock,
par value $.01 per share (the "Shares"), of Marsan Pharmaceuticals Inc., a
Delaware corporation (the "Company"), which Shares will be acquired by the
Borrower or Acquisition Co. pursuant to an all cash tender offer for all the
outstanding Shares (the "Tender Offer") to be made by Acquisition Co. pursuant
to the Merger Agreement, or (ii) to pay related fees and expenses not in excess
of $15,000,000, or (b) used by the Borrower to refinance up to $65,000,000
existing debt of the Borrower and the Subsidiaries (other than the Company and
its subsidiaries). The remaining proceeds of borrowings under the Pre-Merger
Revolving Facility are to be used to provide working capital for the Borrower
and the Subsidiaries and for general corporate purposes.
The Borrower has also requested the Lenders to extend credit in order to
enable the Borrower, on the terms and subject to the conditions of this
Agreement, to borrow (a) on a term basis, from time to time on or after the
2
Merger Date and prior to the date 120 days after the Merger Date, an aggregate
principal amount not in excess of $250,000,000 (the "Term Facility"), and (b) on
a revolving basis, at any time and from time to time on or after the Merger Date
and prior to the Post-Merger Facilities Maturity Date, an aggregate principal
amount at any time outstanding not in excess of $100,000,000 (the "Post-Merger
Revolving Facility").
The Borrower has also requested the Issuing Bank to issue letters of credit
from time to time on or after the Merger Date and prior to the date that is five
Business Days prior to the Post-Merger Facilities Maturity Date, in an aggregate
face amount at any time outstanding not in excess of $30,000,000, to support
payment obligations incurred in the ordinary course of business by the Borrower
and its Subsidiaries.
The proceeds of the borrowings under the Term Facility and $50,000,000 of
the proceeds of borrowings under the Post-Merger Revolving Facility are to be
used solely (a) to pay any cash consideration due in the Merger to holders of
Shares, (b) to refinance borrowings under the Tender Facility and the Pre-Merger
Revolving Facility and (c) to pay fees and expenses related to the Acquisition
not in excess of $15,000,000 less the amount of such fees and expenses paid on
the Tender Offer Date. The remaining proceeds of borrowings under the
Post-Merger Revolving Facility are to be used to refinance borrowings under the
Pre-Merger Revolving Facility and to provide working capital for the Borrower
and the Subsidiaries.
The Lenders are willing to extend such credit to the Borrower and the
Issuing Bank is willing to issue letters of credit for the account of the
Borrower on the
3
terms and subject to the conditions set forth herein. Accordingly, the parties
hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Term Loan or ABR Revolving Loan.
"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Acquisition" shall mean the Tender Offer, the Merger and the other
transactions contemplated by the Merger Agreement and the Tender Offer
Materials.
"Acquisition Co." shall mean SM Acquiring Co., Inc., a Delaware
corporation.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 3%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to such term in
Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A.
6
Interest Expense Coverage Ratio shall be effective with respect to all Loans,
Commitments and Letters of Credit outstanding on and after the due date for
delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.04(a) or 5.04(b) and Section 5.04(c)
indicating such change (even if such statements and certificates are delivered
prior to such due date) until the date immediately preceding the next due date
for delivery of such financial statements and certificates indicating another
such change (even if such statements and certificates are delivered prior to
such due date). Notwithstanding the foregoing, the Applicable Percentage shall
be determined by reference to (a) Category 5(i) for any period after the last
day of the second complete fiscal quarter to commence after the Merger Date
during which the Borrower has failed to deliver the financial statements and
certificates required by Section 5.04(a) or 5.04(b) and Section 5.04(c) if such
failure has continued unremedied for three Business Days following notice
thereof from the Administrative Agent or any Lender and (ii) at any time after
the last day of the second complete fiscal quarter to commence after the Merger
Date during the continuance of an Event of Default and (b) subject to clause (a)
above, Category 4 on or prior to the delivery of the financial statements and
certificates required by Section 5.04(a) or 5.04(b) and Section 5.04(c) for the
second complete fiscal quarter to commence after the Merger Date.
"Assessment Rate" shall mean for any date the annual rate (rounded upwards,
if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor thereto) for insurance
by such Corporation (or such successor) of time deposits made in dollars at the
Administrative Agent's domestic offices.
"Asset Sale" shall mean (a) the sale, transfer or other disposition by the
Borrower or any Subsidiary to any person, other than the Borrower or a wholly
owned Subsidiary that is a Guarantor, of (i) any outstanding capital stock of
any Subsidiary or (ii) any other assets of the Borrower or any Subsidiary (other
than inventory, obsolete or worn out assets and Permitted Investments, in each
case disposed of in the ordinary course of business) and (b) the issuance or
sale by any Subsidiary of any shares of its capital stock or other equity
securities of such Subsidiary, or any
7
obligations convertible into or exchangeable for, or giving any person a right,
option or warrant to acquire such securities or such convertible or exchangeable
obligations, other than an issuance or sale to the Borrower or a wholly owned
Subsidiary.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative Agent and
the Borrower, respectively, in the form of Exhibit B or such other form as shall
be approved by the Administrative Agent and the Borrower, respectively.
"Base CD Rate" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment Rate.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States of America.
"Book-Entry Shares" shall mean the Shares tendered pursuant to the Tender
Offer in book-entry form through the Book-Entry Transfer Facilities.
"Book-Entry Transfer Facilities" shall mean the registered clearing
corporations designated by Acquisition Co. as "Book-Entry Facilities" for the
purpose of the Tender Offer.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request by the Borrower in accordance with
the terms of Section 2.03 and substantially in the form of Exhibit C.
"Breakage Event" shall have the meaning assigned to such term in Section
2.16.
"Business Day" shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close;
provided, however, that, when used in connection with a Eurodollar Loan, the
term "Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
8
"Capital Expenditures" for any period shall mean (a) the sum of (i) net
property, plant and equipment a property rights and deferred license costs of
the Borrower and the Subsidiaries as of the last May of such period, in each
case determined on a consolidated basis in accordance with GAAP, and (ii)
depreciation and amortization of property, plant and equipment and property
rights and deferred license costs of the Borrower and the Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP minus (b) the
sum of (i) the book value as of the last day prior to such period, for the
Borrower and the Subsidiaries determined on a consolidated basis in accordance
with GAAP, of those items of property, plant and equipment, and property rights,
and deferred license costs attributable to licenses, held by the Borrower or a
Subsidiary throughout such period, (ii) any additions to "net property, plant
and equipment" during such period, for the Borrower and the Subsidiaries,
determined on a consolidated basis in accordance with GAAP, resulting from
expenditures of proceeds of insurance settlements in respect of lost, destroyed
or damaged assets, equipment or other property to the extent such expenditures
are made to replace or repair all or any part of such lost, destroyed or damaged
assets, equipment or other property within 12 months of the receipt of such
proceeds and (iii) any additions, net of minority interests, if any, to "net
property, plant and equipment" and "net property rights and deferred license
costs" arising from the Acquisition.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Casualty" shall have the meaning assigned to such term in Section 9.16.
A "Chance in Control" shall be deemed to have occurred if (a) any person or
group (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934
as in effect on the date hereof) other than a Permitted Holder or a group
consisting solely of Permitted Holders shall own directly or indirectly,
beneficially or of record, shares
9
representing (i) both more than 30% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower and a
higher percentage of such aggregate ordinary voting power than is then
represented by shares owned by the Permitted Holders or (ii) more than 50% of
such aggregate ordinary voting power; (b) a majority of the seats (other than
vacant seats) on the board of directors of the Borrower shall at any time have
been occupied by persons who were neither (i) nominated by a Permitted Holder,
nor (ii) on the board of directors of the Borrower on the date of this Agreement
(the "Incumbent Board"); (c) any person or group other than a Permitted Holder
or a group consisting solely of Permitted Holders shall otherwise Control the
Borrower; or (d) a "change in control", however defined, shall occur under any
instrument evidencing other Indebtedness in a principal amount in excess of
$5,000,000 of the Borrower or any Subsidiary. For purposes of clause (b)(ii)
hereof, any individual who becomes a member of the board of directors of the
Borrower subsequent to the date of this Agreement, and whose election, or
nomination for election by the Borrower's stockholders, was approved by the
members of the board who are also members of the Incumbent Board (or so deemed
to be pursuant hereto) shall be deemed a member of the Incumbent Board;
provided, however, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A under the Securities Exchange
Act of 1934) or other actual or threatened solicitation of proxies or consents
by or on behalf of a person other than the then board of directors of the
Borrower shall be deemed not to be member of the Incumbent Board.
"Charges" shall have the meaning assigned to such term in Section 9.09.
"Chattel Mortgages" shall mean the chattel mortgages, chattel mortgage
notes and pledge agreements related to the Puerto Rico Subsidiary's machinery
and equipment and other security documents executed and delivered by the Puerto
Rico Subsidiary pursuant to Section 4.02(g)(ii) or 5.11, all in form and
substance acceptable to the Lenders.
"Closing Date" shall mean the date of the first Credit Event.
10
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
Document and shall also include the Mortgaged Properties.
"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment and Term Loan Commitment.
"Commitment Fee" shall have the meaning assigned to such term in Section
2.05(a).
"Commitments" shall mean the Tender Facility Commitments, the Pre-Merger
Revolving Credit Commitments, the Term Facility Commitments, the Post-Merger
Revolving Credit Commitments and the L/C Commitment.
"Company" shall have the meaning assigned to such term in the preamble.
"Condemnation" shall have the meaning assigned to such term in Section
9.16.
"Condemnation Proceeds" shall have the meaning assigned to such term in
Section 9.16.
"'Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower dated August 1995.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.
"Credit Event" shall have the meaning assigned to such term in Section
4.01.
"Current Assets" as of any date shall mean the total assets that would
properly be classified as consolidated current assets, excluding cash and
Permitted Investments, of the Borrower and the Subsidiaries as of such date in
accordance with GAAP.
11
"Current Liabilities" as of any date shall mean the total liabilities that
would properly be classified as consolidated current liabilities, excluding all
Loans, of the Borrower and the Subsidiaries as of such date in accordance with
GAAP.
"Default" shall mean any event or condition that upon notice, lapse of time
or both would constitute an Event of Default.
"Defaulted Advance" shall mean, with respect to any Lender at any time, the
amount of any Loan required to have been made by such Lender to the Borrower
pursuant to Section 2.01 at or prior to such time that has not been so made as
of such time by such Lender or by the Administrative Agent on its behalf;
provided, however, any such amount arising in connection with the failure by the
Required Lenders to make Loans that would have been part of a single Borrowing
shall be deemed not to be a Defaulted Advance. In the event that a portion of a
Defaulted Advance shall be deemed made pursuant to Section 2.02(g), the
remaining portion of such Defaulted Advance shall continue to be considered a
Defaulted Advance. To the extent any portion of a Loan made by the
Administrative Agent on a Lender's behalf is not fully repaid by such Lender by
the close of the Business Day following the making of such Loan and the
Administrative Agent thereafter exercises its right pursuant to Section 2.02(c)
to require repayment of such advance by the Borrower, then effective at the time
of such repayment by the Borrower, a Defaulted Advance shall arise equal to the
amount of such repayment.
"Defaulting Lender" shall mean, at any time, any Lender that, at such time,
owes a Defaulted Advance.
"dollars" or "$" shall mean lawful money of the United States of America.
"Domestic Subsidiary" shall mean any Subsidiary organized under the laws of
the United States of America, any State or territory thereof, the District of
Columbia or Puerto Rico.
"EBITDA" for any period shall mean Net Income for such period plus, to the
extent deducted in computing Net Income, the sum of (a) income tax expense, (b)
Interest Expense and (c) depreciation and amortization expense minus, to the
extent added in computing Net Income, (i) any non-
12
cash, non-recurring gains and (ii) any interest income, all as determined on a
consolidated basis with respect to the Borrower and the Subsidiaries in
accordance with GAAP; provided, however, that, for the purpose of determining
the Leverage Ratio and compliance with Section 6.15 as of any date prior to the
last day of the third fiscal quarter of 1996, EBITDA for any four quarter period
shall equal EBITDA for the period from and including the first day of the fourth
fiscal quarter of 1995 to and including the last day of the most recently
completed fiscal quarter period multiplied by a fraction the numerator of which
is four and the denominator of which is the number of complete fiscal quarters
since September 30, 1995.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation, notice
of violation, claim, demand, order, directive, cost recovery action or other
cause of action by, or on behalf of, any Governmental Authority or any person
for damages, injunctive or equitable relief, Remedial Action costs, property
damage, natural resource damages, nuisance, pollution or for fines, penalties or
restrictions, resulting from or based upon: (a) the existence, or the
continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases); (b) exposure to any Hazardous Material;
(c) the presence, ___; handling, transportation, storage, treatment or disposal
of any Hazardous Material; or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.
"Environmental Law" shall mean any and all applicable treaties, laws,
rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions
or binding agreements issued, promulgated by or entered into with any
Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, Release or threatened Release
of any Hazardous Material or to health and safety matters, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
ss.ss. 9601 et seq. (collectively "CERCLA"), the Solid
13
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976 and Hazardous and Solid Amendments of 1984, 42 U.S.C. ss.ss. 6901 et seq.
the Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 U.S.C. ss.ss. 1251 et seq. the Clean Air Act of 1970, as amended 42
U.S.C. ss.ss. 7401 et seq. the Toxic Substances Control Act of 1976, 15 U.S.C.
ss.ss. 2601 et seq., the Occupational Safety and Health Act of 1970, as amended,
29 U.S.C. ss.ss. 651 et seq., the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. ss.ss. 11001 et seq. the Safe Drinking Water Act of 1974,
as amended, 42 U.S.C. ss.ss. 300(f) et seq. the Hazardous Materials
Transportation Act, 49 U.S.C. ss.ss. 1801 et sea., and any similar or
implementing state or local law, and all amendments or regulations promulgated
thereunder.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equity Issuance" shall mean any issuance or sale by the Borrower of any
shares of its capital stock or other equity securities of the Borrower, or any
obligations convertible into or exchangeable for, or giving any person a right,
option or warrant to acquire such securities or such convertible or exchangeable
obligations; provided, however, that Equity Issuance shall not include any of
the foregoing to the extent arising from or in connection with the issuance of
any stock rights, options or warrants to a director, officer or employee of the
Borrower or any Subsidiary under a duly instituted stock option plan and any
exercise thereof, to the extent the aggregate Net Proceeds thereof in any fiscal
year do not exceed $3,000,000.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower or the Company, is treated as a
single employer under Section 414(b) or (c) of the Code, or solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
14
"ERISA Event" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan; (b)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (f) the receipt by the Borrower or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g)
the receipt by the Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (h) the occurrence of a "prohibited transaction" with respect
to which the Borrower or any of its Subsidiaries is a "disqualified person"
(within the meaning of Section 4975 of the Code) or with respect to which the
Borrower or any such Subsidiary could otherwise be liable, other than a
transaction for which a statutory exemption is available or for which an
administrative exemption has been obtained; and (i) any other event or condition
with respect to a Plan or Multiemployer Plan that would reasonably be expected
to result in liability or the Borrower.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or Eurodollar
Term Loan.
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the Adjusted LIBO Rate in accordance with
the provisions of Article II.
"Eurodollar Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the
15
Adjusted LIBO Rate in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VII.
"Excess Cash Flow" for any period shall mean EBITDA for such period minus
(a) Interest Expense for such period, to the extent paid in cash during such
period, (b) any prepayments of Term Loans made during such period and any
scheduled repayments of principal of Indebtedness made by the Borrower or any
Subsidiary in cash during such period, (c) permitted Capital Expenditures and
investments pursuant to Section 6.04(i) or 6.04(1) during such period that are
paid in cash, (d) taxes paid in cash by the Borrower and the Subsidiaries on a
consolidated basis during such period, (e) an amount equal to any increase in
Net Working Capital during such period (to the extent not taken into account in
clauses (a), (d) and (f) of this definition), (f) extraordinary cash expenses of
the Borrower and the Subsidiaries paid on a consolidated basis during such
period but not included in determining EBITDA, (g) cash disbursements incurred
by the Borrower in transactions described in Section 6.07(d) to the extent that
GAAP does not permit such disbursements to be accounted for as expenses and
requires such disbursements to be accounted for as a distribution to
shareholders and (h) cash dividends paid by the Borrower in accordance with
Section 6.06(a)(iv) plus (i) an amount equal to any decrease in Net Working
Capital during such period (to the extent not taken into account in clauses (a),
(d) and (f) of this definition) and (ii) extraordinary cash income of the
Borrower and the Subsidiaries received on a consolidated basis during such
period but not included in determining EBITDA.
"Facility" shall mean the Tender Facility, the Pre-Merger Revolving Credit
Facility, the Term Loan Facility or the Post-Merger Revolving Credit Facility.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day for such transactions received by the
16
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fee Letter" shall mean the Amended and Restated Fee Letter dated June 6,
1995, between the Borrower and the Administrative Agent.
"Fees" shall mean the Commitment Fees, the Administrative Agent Fees, the
L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such
corporation.
"Fixed Charge Coverage Ratio" as of any date shall mean the ratio of (a)(i)
EBITDA plus (ii) if such date is on or after the last day of the third fiscal
quarter of 1997, the Permitted Carryforward Amount, minus (iii) Capital
Expenditures, in each case for the most recent complete four fiscal quarter
period ended on or prior to such date, to (b)(i) Interest Expense plus (ii) the
aggregate scheduled payments of principal in respect of Indebtedness of the
Borrower or any Subsidiary, in each case for the most recent complete four
fiscal quarter period ended on or prior to such date. The "Permitted
Carryforward Amount" for any four fiscal quarter period (the "subject period")
shall mean the lowest of (A) 50% of the excess, if any, of (I) $25,000,000 over
(II) Capital Expenditures for the four fiscal quarter period (the "prior
Period") ending immediately prior to the commencement of the subject period, (B)
50% of the amount of additional Capital Expenditures that could have been made
in the prior period without violating Section 6.18 and (C) actual Capital
Expenditures for the subject period.
"Foreign Subsidiary" shall mean any Subsidiary other than a Domestic
Subsidiary.
"GAAP" shall mean United States generally accepted accounting principles
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or foreign
government, court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing any Indebtedness of any other person (the
17
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase or lease property, securities
or services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or any other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness; provided, however,
that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.
"Guarantee Agreements" shall mean the Guarantee Agreement, substantially in
the form of Exhibit D, made by the Guarantors in favor of the Collateral Agent
for the benefit of the Secured Parties.
"Guarantor" shall mean any person from time to time party to the Guarantee
Agreement as a guarantor.
"Hazardous Materials" shall mean all explosive or radioactive substances or
wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Health Care Laws" shall mean any and all applicable current and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by the Food and Drug Administration, the Health Care Financing
Administration, the Department of Health and Human Services ("HHS"), the Office
of Inspector General of HHS, the Drug Enforcement Administration or any other
Governmental Authority (including any professional licensing laws, certificate
of need laws and state reimbursement laws), relating in any way to the
manufacture, distribution, marketing, sale, supply or other disposition of any
product or service of the Borrower or any Subsidiary, the conduct of the
business of the
18
Borrower or any Subsidiary, the provision of health care services generally, or
to any relationship among the Borrower and the Subsidiaries, on the one hand,
and their suppliers and customers and patients and other end-users of their
products and services, on the other hand.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such person of Indebtedness of others, (h) all Capital Lease
Obligations of such person, (i) all obligations of such person in respect of
Rate Protection Agreements add (j) all obligations of such person as an account
party in respect of letters of credit and bankers' acceptances (and the amount
of such Indebtedness shall equal the net payments accrued by such person in
accordance with GAAP); provided, however, that Indebtedness described in clause
(i) above shall be excluded for purposes of determining the Leverage Ratio and
the amount of Senior Debt. The Indebtedness of any person shall include the
Indebtedness of any partnership in which such person is a general partner.
"Indemnitee" shall have the meaning assigned to such term in Section 9.05.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit E, among the Borrower, the Guarantors and the Collateral Agent.
"Information" shall have the meaning assigned to such term in Section 9.17.
19
"Insurance Proceeds" shall have the meaning assigned to such term in
Section 9.16.
"Interest Expense" for any period shall mean the gross interest expense of
the Borrower and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP, including (a) the amortization of debt discounts,
(b) the amortization of all fees (including fees with respect to interest rate
protection agreements) payable in connection with the incurrence of Indebtedness
to the extent included in interest expense and (c) the portion of any payments
or accruals with respect to Capital Lease Obligations allocable to interest
expense. For purposes of the foregoing, gross interest expense shall be
determined after giving effect in accordance with GAAP to any net payments made,
received or accrued by such person with respect to Rate Protection Agreements
entered into as a hedge against interest rate exposure.
"Interest Expense Coverage Ratio" as of any date shall mean the ratio of
(a) EBITDA to (b) Interest Expense, in each case for the most recent complete
four fiscal quarter period ended on or prior to such date.
"Interest Payment Date" shall mean, with respect to any Loan, (a) the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day that would have been an Interest Payment
Date had successive Interest Periods of three months' duration been applicable
to such Borrowing, (b) the date of any prepayment of such Loan (other than the
prepayment pursuant to Section 2.12(a) of an ABR Revolving Loan) or conversion
of such Loan (if a Eurodollar Loan) to a Borrowing of a different Type and (c)
the Pre-Merger Facilities Maturity Date and the Post-Merger Facilities Maturity
Date.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months (or, if Interest Periods
of such duration shall be available from each Lender, 9 or 12 months)
thereafter, as the Borrower may elect and (b) as to any ABR Borrowing, the
period commencing on the date of such Borrowing and ending on the next
succeeding March 31, June 30, September 30 or
21
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing, the rate
(rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits
approximately equal in principal amount to the Administrative Agent's portion of
such Eurodollar Borrowing and for a maturity comparable to such Interest Period
are offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset
(excluding any leases that constitute operating leases under GAAP) and (c) in
the case of securities, shall also include any purchase option, call or similar
right of a third party with respect to such securities (excluding any option,
call or similar right in respect of securities that are not issued and
outstanding).
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
Guarantee Agreement, the Security Documents and the Indemnity, Subrogation and
Contribution Agreement.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Loans" shall mean the Revolving Loans and the Term Loans.
"Margin Stock" shall have the meaning assigned to such term in Regulation
U.
"Material Adverse Effect" shall mean (a) a materially adverse effect on the
business, assets, operations or condition, financial or otherwise, of the
Borrower and the Subsidiaries, taken as a whole, (b) impairment of the ability
of the Borrower and the Subsidiaries, taken as a whole, to perform their
obligations under the Loan Documents in any material respect or (c) material
impairment of the rights of or benefits available to the Lenders under any Loan
Document. In determining whether any Casualty or Condemnation has
22
resulted in a Material Adverse Effect, appropriate regard shall be had for any
related Insurance Proceeds or Condemnation Proceeds and the Borrowers or any
Subsidiary's application thereof.
"Maturity Date" shall mean the Pre-Merger Facilities Maturity Date or the
Post-Merger Facilities Maturity Date, as applicable.
"Maximum Rate" shall have the meaning assigned to such term in Section
9.09.
"Merger" shall mean the merger of Acquisition Co. with and into the
Company, in which the Company shall be the surviving corporation, to be effected
pursuant to the Merger Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger dated as of
July 28, 1995, among the Borrower, Acquisition Co. and the Company.
"Merger Date" shall mean the date of consummation of the Merger.
"Mortgaged Properties" shall mean the owned real properties of the Loan
Parties from time to time.
"Mortgages" shall mean the mortgages, deeds of trust, assignments of
leases and rents and other security documents executed and delivered by any Loan
Party pursuant to Section 4.02(j) or 5.11, each substantially in the form of
Exhibit F.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income" for any period shall mean the consolidated net income or loss
of the Borrower and the Subsidiaries for such period determined in accordance
with GAAP, excluding (a) (to the extent included in such consolidated net income
or loss) the income (or loss) of any person (other than any Subsidiary) in which
any other person (other than the Borrower or any wholly owned Subsidiary) has an
equity interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any Subsidiary by such person
during such period, (b) the income (or loss) of any person accrued prior to the
date it becomes a Subsidiary or is merged into or
23
consolidated with the Borrower or any Subsidiary or the date such person's
assets are acquired by the Borrower or any Subsidiary, (c) any after tax gains
or losses attributable to sales of assets not in the ordinary course of business
and (d) (to the extent not included in clauses (a) through (c) above) any
extraordinary gains or non-cash extraordinary losses determined in accordance
with GAAP.
"Net Proceeds" shall mean: (a) with respect to any Asset Sale, the cash
proceeds thereof net of (i) costs of sale (including payment of the outstanding
principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than Loans) required to be repaid under the terms thereof as
a result of such Asset Sale), (ii) taxes paid or payable in the year such Asset
Sale occurs or in the following year as a result thereof and (iii) amounts
provided as a reserve, in accordance with GAAP, against any liabilities under
any indemnification obligations associated with such Asset Sale (provided that,
to the extent and at the time any such amounts are released from such reserve,
such amounts shall constitute Net Cash Proceeds); provided, however, that, with
respect to any Asset Sale described in clause (a)(ii) of the definition thereof,
the Net Proceeds thereof shall equal zero except to the extent that such Net
Proceeds (determined without regard to this proviso), together with the Net
Proceeds of all Asset Sales described in clause (a)(ii) of the definition
thereof (determined without regard to this proviso) previously received during
the then-current fiscal year, exceeds $1,000,000; and (b) with respect to any
Equity Issuance or any Specified Debt Issuance, the cash proceeds thereof net of
underwriting commissions or placement fees and expenses directly incurred in
connection therewith.
"Net Working Capital" as of any date shall mean the excess as of such date
of (a) Current Assets over (b) Current Liabilities.
"Net Worth" as of any date shall mean Stockholder's Equity as of such date.
"New Lending Office" shall have the meaning assigned to such term in
Section 2.20.
"Non-U.S. Lender" shall have the meaning assigned to such term in Section
2.20.
24
"Obligations" shall mean, collectively, (a) the obligation to pay (i) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) all other monetary obligations,
including reimbursement obligations, fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Loan Parties to the Secured Parties under
this Agreement and the other Loan Documents and (iii) any amount in respect of
the foregoing that the Administrative Agent, the Collateral Agent or any Lender,
in its sole discretion, may elect to pay or advance under this Agreement or any
other Loan Document on behalf of any Loan Party after the occurrence and during
the continuation of a Default or an Event of Default, (b) the reimbursement
obligations of the Borrower described in Section 6.01(i) and (c) unless
otherwise agreed upon in writing by the applicable Lender, all net monetary
obligations of the Borrower under each Rate Protection Agreement entered into
with any Lender to hedge interest rate exposure with respect to this Agreement.
"Other Taxes" shall have the meaning assigned to such term in Section
2.20.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 1 to the Security Agreement.
"Permitted Foreign Company" shall mean (a) any corporation, business trust,
joint venture, association, company or partnership formed under the laws of a
country (or any political subdivision thereof) other than the United States,
engaged primarily in a segment of the pharmaceutical or health-care industry or
ancillary thereto and at least 50% of the equity interest of which is held,
directly or indirectly, by the Borrower and Bayer AG (provided that, if
applicable local law would not permit 50% of the equity
25
interest in such an entity to be held by the Borrower and Bayer AG, such
percentage may be as low as 49% if the Borrower and Bayer AG otherwise Control
the applicable entity), (b) any subsidiary of a Permitted Foreign Company
described in clause (a) above and (c) any wholly owned Foreign Subsidiary the
only material assets of which are securities of Permitted Foreign Companies
described in clause (a) above.
"Permitted Holders" shall mean (a)(i) the persons listed on Schedule 1.01,
(ii) any individual forming part of the senior management of the Borrower on the
date of this Agreement, (iii) any trust for the benefit of any of the foregoing
and (iv) the estate or personal representative of any of the foregoing, (b) any
employee benefit plan (or related trust) for the benefit of the employees of the
Borrower and the Subsidiaries and (c) Bayer AG and any of its subsidiaries.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within 90 days from the date of acquisition thereof;
(b) investments in commercial paper maturing within 90 days from the
date of acquisition thereof and having, at such date of acquisition, credit
ratings that are not lower than "A2" if rated by Standard & Poor's or "P2"
if rated by Moody's Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 90 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of (i) any commercial bank
organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of
not less than $25O,000,000 or (ii) any Lender;
(d) in the case of any Foreign Subsidiary, investments not in excess
of $5,000,000 in the
26
aggregate in dollar-denominated certificates of deposit, banker's
acceptances and time deposits maturing within 90 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any local office of (i) any
commercial bank organized under the laws of the United States of America or
any State thereof that has a combined capital and surplus and undivided
profits of not less than $250,000,000, (ii) any Lender or (iii) any local
commercial bank that is an Affiliate of any Lender; and
(e) other investment instruments approved in writing by the Required
Lenders and offered by financial institutions which have a combined capital
and surplus and undivided profits of not less than $250,000,000.
"person" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in the
form of Exhibit G, among Borrower, the Subsidiaries from time to time party
thereto and the Collateral Agent for the benefit of the Secured Parties.
"Post-Merger Facilities Maturity Date" shall mean December 31, 2001.
"Post-Merger Revolving Credit Commitment" shall mean, with respect to any
Lender, the commitment of such Lender to make Post-Merger Revolving Loans
hereunder as set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender assumed its Post-Merger Revolving Credit
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.09
27
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04.
"Post-Merger Revolving Credit Exposure" shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Post-Merger Revolving Loans of such Lender, plus the aggregate
amount at such time of such Lender's L/C Exposure.
"Post-Merger Revolving Facility" shall have the meaning assigned to such
term in the preamble.
"Post-Merger Revolving Facility Borrowing" shall mean a Borrowing comprised
of Post-Merger Revolving Loans.
"Post-Merger Revolving Loan" shall mean a Loan made pursuant to Section
2.01(d).
"Pre-Merger Facilities Maturity Date" shall mean the earlier of the Merger
Date and the date 270 days after the Tender Offer Date.
"Pre-Merger Revolving Credit Commitment" shall mean, with respect to any
Lender, the commitment of such Lender to make Pre-Merger Revolving Loans
hereunder as set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender assumed its Pre-Merger Revolving Credit
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04.
"Pre-Merger Revolving Facility" shall have the meaning assigned to such
term in the preamble.
"Pre-Merger Revolving Facility Borrowing" shall mean a Borrowing comprised
of Pre-Merger Revolving Loans.
"Pre-Merger Revolving Loan" shall mean a Loan made pursuant to Section
2.01(b).
"Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by the Administrative Agent as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as being effective.
28
"Pro Rata Percentage" of any Revolving Credit Lender at any time shall mean
the percentage of the Total Revolving Credit Commitment at such time represented
by such Lender's Revolving Credit Commitment at such time. In the event the
Revolving Credit Commitments shall have expired or been terminated, the Pro Rata
Percentages shall be determined on the basis of the Revolving Credit Commitments
most recently in effect, but giving effect to any assignments pursuant to
Section 9.04.
"Properties" shall have the meaning assigned to such term in Section 3.17.
"Puerto Rico Subsidiary" shall mean Danbury Pharmacal Puerto Rico, Inc., a
Delaware corporation.
"Rate Protection Agreement" shall mean any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, currency exchange
agreement or similar agreement entered into by the Borrower or any Subsidiary to
provide protection against fluctuations in interest rates or currency exchange
rates.
"Register" shall have the meaning assigned to such term in Section 9.04.
"Regulation G" shall mean Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
"Remedial Action" shall mean: (a) "remedial action" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24); and (b) any other action required by any
29
Governmental Authority or voluntarily undertaken to (x) cleanup, remove, treat,
abate or in any other way address any Hazardous Material in the environment; (y)
prevent the Release or threat of Release, or minimize the further Release of any
Hazardous Material so it does not migrate or endanger or threaten to endanger
public health, welfare or the environment; or (z) perform studies and
investigations in connection with, or as a precondition to, clause (x) or (y)
above.
"Repayment Date" shall have the meaning assigned to such term in Section
2.11.
"Required Lenders" at any time shall mean Lenders having Loans, L/C
Exposures and unused Revolving Credit Commitments and Term Loan Commitments at
such time representing at least a majority of the sum of all Loans outstanding,
L/C Exposures and unused Revolving Credit Commitments and Term Loan Commitments
at such time; provided, however, if any Lender shall be a Defaulting Lender at
such time, there shall be excluded from the determination of Required Lenders at
such time (a) the aggregate principal amount of the Loans made by such Lender
and outstanding at such time and (b) the aggregate Commitments of such Lender at
such time.
"Responsible Officer" of any corporation shall mean any senior executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of Revolving
Loans.
"Revolving Credit Commitment" shall mean, with respect to any Lender, (a)
prior to the Merger Date, the Pre-Merger Revolving Credit Commitment of such
Lender and (b) on and after the Merger Date, the Post-Merger Revolving Credit
Commitment.
"Revolving Credit Exposure" shall mean, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Revolving
Loans of such Lender, plus the aggregate amount at such time of such Lender's
L/C Exposure.
30
"Revolving Credit Lender" at any time shall mean a Lender with a Revolving
Credit Commitment at such time.
"Revolving Loans" shall mean the Pre-Merger Revolving Loans and Post-Merger
Revolving Loans. Each Revolving Loan shall be a Eurodollar Revolving Loan or an
ABR Revolving Loan.
"Sale and Lease-Back Transaction" shall mean any arrangement, directly or
indirectly, whereby the Borrower or any Subsidiary shall sell or transfer to any
person any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter the Borrower or any Subsidiary
shall rent or lease (for a term in excess of one year) such property, or other
property that it intends to use for substantially the same purpose or purposes
as the property being sold or transferred, from such person or any of its
Affiliates.
"Secured Parties" shall mean each Lender, the Issuing Bank, the
Administrative Agent, the Collateral Agent, the beneficiary of each
indemnification obligation on the part of any Loan Party contained in any Loan
Document and the successors and assigns of the foregoing.
"Security Agreement" shall mean the Security Agreement, substantially in
the form of Exhibit H, between the Borrower, the Subsidiaries from time to time
party thereto and the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" shall mean the Mortgages, the Security Agreement, the
Pledge Agreement, the Chattel Mortgages and each of the security agreements,
mortgages and other instruments and documents executed and delivered pursuant to
any of the foregoing or pursuant to Section 5.11.
"Senior Debt" shall mean (a) all Indebtedness of the Borrower and the
Guarantors, other than Subordinated Debt, and (b) all Indebtedness of the
Subsidiaries that are not Guarantors.
"Shares" shall have the meaning assigned to such term in the preamble.
31
"Specified Debt Issuance" shall mean the issuance by the Borrower of any
Indebtedness permitted by Section 6.01(g).
"Specified Guarantor" shall mean any Guarantor that would be a "significant
subsidiary" of the Borrower, determined in accordance with Regulation 1.01 of
Regulation S-X of the Securities and Exchange Commission as if the references to
"10 percent" in the definition thereof were references to "5 percent".
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject (a)
with respect to the Base CD Rate, for new negotiable nonpersonal time deposits
in dollars of over $100,000 with maturities approximately equal to three months,
and (b) with respect to the Adjusted LIBO Rate, for Eurocurrency Liabilities (as
defined in Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Stockholder's Equity" as of any date shall mean, on a consolidated basis
for the Borrower and the Subsidiaries, (a) the sum of capital stock taken at par
value, capital surplus and retained earnings as of such date, minus (b) treasury
stock and any minority interest in Subsidiaries as of such date, all determined
in accordance with GAAP.
"Subordinated Debt" means unsecured Indebtedness of the Borrower that (a)
does not have any scheduled payments of principal prior to the 180th day
following the Post-Merger Facilities Maturity Date, (b) the principal of which
is subordinated to the prior payment in full in cash
32
of all the Obligations in a manner reasonably satisfactory to the Administrative
Agent and (c) otherwise has terms and conditions reasonably satisfactory to the
Administrative Agent.
"subsidiary" shall mean, with respect to any person (herein referred to as
the "parent"), any corporation, partnership, limited liability company,
association or other business entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or more than 50% of the general partnership interests are,
at the time any determination is being made, owned, controlled or held by the
parent or one or more other subsidiaries of the parent, or (b) that is or would
otherwise be treated on a consolidated basis with the parent under, and in
accordance with, GAAP.
"Subsidiary" shall mean any subsidiary of the Borrower, including (on and
after the Tender Offer Date) the Company and its subsidiaries.
"Taxes" shall have the meaning assigned to such term in Section 2.20.
"Tender Facility" shall have the meaning assigned to such term in the
preamble.
"Tender Facility Borrowing" shall mean a Borrowing comprised of Tender
Facility Loans.
"Tender Facility Commitment" shall mean, with respect to any Lender, the
commitment of such Lender to make a Tender Facility Loan hereunder as set forth
on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender assumed its Tender Facility Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.
"Tender Facility Loan" shall mean a Loan made pursuant to Section
2.01(a).
"Tender Offer" shall have the meaning assigned to such term in the
preamble.
33
"Tender Offer Date" shall mean the first date on which the Borrower or
Acquisition Co. accepts Shares for payment pursuant to the Tender Offer.
"Tender Offer Materials" shall mean the tender offer statement on Schedule
14D-1 filed by the Borrower with the Securities and Exchange Commission with
respect to the Tender Offer, and all amendments and supplements thereto that are
similarly filed.
"Term Borrowing" shall mean a Borrowing comprised of Tender Facility Loans
or Term Facility Loans.
"Term Facility" shall have the meaning assigned to such term in the
preamble.
"Term Facility Availability Period" shall mean the period from and
including the Merger Date to and including the date 120 days thereafter.
"Term Facility Borrowing" shall mean a Borrowing comprised of Term Facility
Loans.
"Term Facility Commitment" shall mean' with respect to any Lender, the
commitment of such Lender to make Term Facility Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Term Facility Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"Term Facility Loan" shall mean a Loan made pursuant to Section 2.01(c).
"Term Loan Commitment" shall mean, with respect to any Lender, (a) prior to
the Merger Date, the Tender Facility Commitment of such Lender and (b) on and
after the Merger Date, the Term Facility Commitment of such Lender.
"Term Loans" shall mean the Tender Facility Loans and the Term Facility
Loans. Each Term Loan shall be a Eurodollar Term Loan or an ABR Term Loan.
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such
34
day (or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
"Total Debt" as of any date shall mean the total Indebtedness of the
Borrower and the Subsidiaries as of such date determined on a consolidated basis
in accordance with GAP .
"Total Revolving Credit Commitment" at any time shall mean the aggregate
amount of the Revolving Credit Commitments, as in effect at such time.
"Transaction Party" shall mean the Borrower, the Company and each
subsidiary of the Borrower or the Company.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
"Transferee" shall have the meaning assigned to such term in Section 2.20.
"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term "Rate" shall include the
Adjusted LIBO Rate and the Alternate Base Rate.
"wholly owned Subsidiary" shall mean a Subsidiary the securities (except
for directors' qualifying shares) or other ownership interests representing 100%
of the equity or 100% of the ordinary voting power or 100% of the general
partnership interests of which are, at the time any determination is being made,
owned by the Borrower or one of
35
more wholly owned Subsidiaries or by the Borrower and one or more wholly owned
Subsidiaries.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Work" shall have the meaning assigned to such term in Section 9.16.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, (a) any reference in this Agreement to any Loan Document shall
mean such document as amended, restated, supplemented or otherwise modified from
time to time and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that for purposes of determining compliance with the covenants
contained in Article VI and the definition of "Applicable Percentage", all
accounting terms herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP as in effect or the date of this
Agreement and applied on a basis consistent with the application used in the
financial statements referred to in Section 3.05(a).
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, (a) to make a term loan to the Borrower on the Tender
Offer Date in an aggregate principal amount not to exceed the Tender Facility
Commitment of such Lender, (b) to make revolving loans to the Borrower, at any
time and
36
from time to time on or after the Tender Offer Date and until the earlier of the
Pre-Merger Facilities Maturity Date and the termination of the Pre-Merger
Revolving Credit Commitment of such Lender in accordance with the terms hereof,
in an aggregate principal amount at any time outstanding not to exceed the
Pre-Merger Revolving Credit Commitment of such Lender, (c) to make term loans to
the Borrower, at any time and from time to time during the Term Facility
Availability Period, in an aggregate principal amount not to exceed the Term
Facility Commitment of such Lender and (d) to make revolving loans to the
Borrower, at any time and from time to time on or after the Merger Date and
until the earlier of the Post-Merger Facilities Maturity Date and the
termination of the Post-Merger Revolving Credit Commitment of such Lender in
accordance with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in (i) the Post-Merger Revolving Credit
Exposure of such Lender exceeding (ii) the Post-Merger Revolving Credit
Commitment of such Lender. Within the limits set forth in clauses (b) and (d) of
the preceding sentence, the Borrower may borrow, pay or prepay and reborrow
Pre-Merger Revolving Loans and Post-Merger Revolving Loans subject to the terms,
conditions and limitations set forth herein. Amounts paid or prepaid in respect
of Tender Facility Loans and Term Facility Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
applicable Tender Facility Commitments, Pre-Merger Revolving Credit Commitments,
Term Facility Commitments or Post-Merger Revolving Credit Commitments; provided,
however, that the failure of any Lender to make any Loan shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). Except
for Loans deemed made pursuant to Section 2.02(f) or 2.02(g), the Loans
comprising any Borrowing shall be in an aggregate principal amount that is (i)
an integral multiple of $1,000,000 and, in the case of a Eurodollar Borrowing,
not less than $5,000,000 or (ii) equal to the remaining available balance of the
applicable Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of AIR Loans or Eurodollar Loans, as the Borrower may request pursuant
to
37
Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided, however, that (i) any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement and (ii) the exercise of such option shall not result in an
increase in Statutory Reserves above those applicable to members of the Federal
Reserve System. Borrowings of more than one Type may be outstanding at the same
time; Provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than 15 Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account in New York City as the Administrative Agent may designate not later
than 1:00 p.m., New York City time, and the Administrative Agent shall by 2:00
p.m., New York City time, credit the amounts so received to an account with the
Administrative Agent designated by the Borrower in the applicable Borrowing
Request, which account must be in the name of the Borrower, or, if a Borrowing
shall not occur on such date because any condition precedent herein specified
shall not have been met, return the amounts so received to the respective
Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to 1:00 p.m. on the date of any Borrowing that such Lender shall
not make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, the Borrower and such Lender severally
agree to repay to the Administrative Agent, in the case of the Borrower, within
one Business Day of demand, and in the case of such Lender, forthwith on demand,
such corresponding amount together with
38
interest thereon, for each day from and including the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, a rate determined by the Administrative Agent to represent
its cost of overnight or short-term funds (which determination shall be
conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement. The
Administrative Agent will promptly notify the Borrower of any Lender's failure
to make available such Lender's portion of any Borrowing if such failure
continues unremedied for one Business Day.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Eurodollar Borrowing if the Interest Period
requested with respect thereto would end after the Pre-Merger Facilities
Maturity Date or the Post-Merger Facilities Maturity Date, as applicable.
(f) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.22(e) within the time specified in such
Section, the Issuing Bank shall promptly notify the Administrative Agent of the
L/C Disbursement and the Administrative Agent shall promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage
thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Credit Lender shall have received
such notice later than 12:00 noon, New York City time, on any day, not later
than 10:00 a.m., New York City time, on the immediately following Business Day),
an amount equal to such Lender's Pro Rata Percentage of such L/C Disbursement
(it being understood that such amount shall be deemed to constitute an ABR
Revolving Loan of such Lender and such payment shall be deemed to have reduced
the L/C Exposure), and the Administrative Agent shall promptly pay to the
Issuing Bank amounts so received by it from the Revolving Credit Lenders. The
Administrative Agent shall promptly pay to the Issuing Bank any amounts received
by it from the Borrower pursuant to Section 2.22(e) prior to the time that any
Revolving Credit Lender makes any payment pursuant to
39
this paragraph (f); any such amounts received by the Administrative Agent
thereafter shall be promptly remitted by the Administrative Agent to the
Revolving Credit Lenders that shall have made such payments and to the Issuing
Bank, as their interests may appear. If any Revolving Credit Lenders shall not
have made its Pro Rata Percentage of such L/C Disbursement available to the
Administrative Agent as provided above, the Borrower and such Lender severally
to pay interest on such amount, for each day from and including the date such
amount is required to be paid in accordance with this paragraph (f) to but
excluding the date such amount is paid, to the Administrative Agent at (i) in
the case of the Borrower, a rate per annum equal to the interest rate applicable
to ABR Revolving Loans and (ii) in the case of such Lender, for the first such
day, the Federal Funds Effective Rate, and for each day thereafter, the
Alternate Base Rate. The Administrative Agent will promptly notify the Borrower
or any Lender's failure to make available such Lender's Pro Rata Percentage of
any L/C Disbursement if such failure continues unremedied for one Business Day.
(g) If the Borrower shall exercise its right of set-off pursuant to Section
9.06(b), the amount so set off shall be deemed to be a Eurodollar Revolving Loan
with an Interest Period of one month made by the applicable Defaulting Lender on
the date, and to the extent, of such set-off.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other
than a deemed Borrowing pursuant to Section 2.02(f) or 2.02(g), as to which this
Section 2.03 shall not apply), the Borrower shall telecopy (with receipt
confirmed telephonically) to the Administrative Agent a duly completed Borrowing
Request (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon,
New York City time, three Business Days before a proposed Borrowing, and (b) in
the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on
the same Business Day as the proposed Borrowing is to be made. Each Borrowing
Request shall be irrevocable, shall be signed by or on behalf of the Borrower
and shall specify the following information: (i) whether being requested is to
be a Tender Facility Borrowing, a Term Facility Borrowing, a Pre-Merger
Revolving Facility Borrowing or a Post-Merger Revolving Facility Borrowing, and
whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii)
the date of such Borrowing (which shall be a Business Day); (iii) the
40
number and location of the account to which funds are to be disbursed (which
shall be an account that complies with the requirements of Section 2.02(c));
(iv) the amount of such Borrowing; and (v) if such Borrowing is to be a
Eurodollar Borrowing, the Interest Period with respect thereto; provided,
however, that, notwithstanding any contrary specification in any Borrowing
Request, each requested Borrowing shall comply with the requirements set forth
in Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly (and in
any event on the same day that the Administrative Agent receives such notice, if
received by 1:00 p.m., New York City time, on such day) advise the applicable
Lenders of any notice given pursuant to this Section 2.03 (and the contents
thereof), and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) Subject to Section
9.06(b), the Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender (i) the principal amount of
each Tender Facility Loan of such Lender on the Pre-Merger Facilities Maturity
Date, (ii) the principal amount of each Term Facility Loan of such Lender as
provided in Section 2.11 and (iii) the then unpaid principal amount of each
Revolving Loin of such Lender on the applicable Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable from the Borrower to each Lender hereunder and (iii) the amount
of any sum received by the Administrative Agent hereunder from the Borrower and
each Lender's share thereof.
41
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms, except to the extent that the correction of such
error results in a reduction of the Borrower's obligations hereunder.
(e) Notwithstanding any other provision of this Agreement, in the event any
Lender shall request and receive a promissory note payable to such Lender and
its registered assigns to evidence the Loans made by it hereunder, the interests
represented by such note shall at all times (including after any assignment of
all or part of such interests pursuant to Section 9.04) be represented by one or
more promissory notes payable to the payee named therein or its registered
assigns.
SECTION 2.05. Fees. (a) The Borrower shall pay to each Lender, through the
Administrative Agent, on the date of this Agreement and on the last day of
March, June, September and December in each year and on each date on which the
Tender Facility Commitment or the Pre-Merger Revolving Credit Commitment of such
Lender shall expire or be terminated as provided herein, a commitment fee (a
"Commitment Fee") equal to 0.375% per annum on the average daily unused amount
of the Tender Facility Commitment and Pre-Merger Revolving Loan Commitment of
such Lender during the preceding quarter (or other period commencing with the
date, on or prior to the date of this Agreement, on which the Borrower shall
accept the Commitments of such Lender or ending with the Pre-Merger Facilities
Maturity Date or the date on which the Commitments of such Lender shall expire
or be terminated). In addition, the Borrower shall, after the Merger Date, pay
to each Lender, through the Administrative Agent, on the last day of March,
June, September and December in each year and on the date on which the Term
Facility Commitment and the Post-Merger Revolving Credit Commitment of such
Lender shall expire or be terminated as provided herein, a Commitment Fee equal
to the Applicable Percentage per annum in effect from time to time on the
average daily unused amount of the Term Facility Commitment and the Post-Merger
Revolving Credit Commitment (taking into account such Lender's L/C Exposure as a
used amount thereof) of such Lender during the preceding quarter (or other
period
42
commencing with the Merger Date or ending with the Post-Merger Facilities
Maturity Date or the date on which the Term Facility Commitment and the
Post-Merger Revolving Credit Commitment of such Lender shall expire or be
terminated). All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days. The Commitment Fee due to each
Lender shall commence to accrue on the date of acceptance by the Borrower of the
Commitment of such Lender and shall cease to accrue on the date on which the
Commitment of such Lender shall be terminated as provided herein.
Notwithstanding this paragraph (a), no Commitment Fee shall be due or payable to
any Lender that is a Defaulting Lender on the due date for payment of such
Commitment Fee.
(b) The Borrower shall pay to the Administrative Agent, for its own
account, the administrative fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "Administrative Agent Fees").
(c) The Borrower shall pay (i) to each Revolving Credit Lender with a
Post-Merger Revolving Credit Commitment, through the Administrative Agent, on
the last day of March, June, September and December of each year (commencing
with the first such day following the Merger Date) and on the date on which the
Post-Merger Revolving Credit Commitment of such Lender shall be terminated
pursuant to Section 2.09 and no Letter of Credit shall remain outstanding, a fee
(an "L/C Participation Fee") calculated on such Lender's Pro Rata Percentage of
the average daily aggregate L/C Exposure during the preceding quarter (or other
period commencing with the Merger Date or ending with the Post-Merger Revolving
Facilities Maturity Date or the date on which all Letters of Credit have been
canceled or have expired and the Post-Merger Revolving Credit Commitments of all
Lenders shall expire or be terminated pursuant to Section 2.09) at a rate equal
to the Applicable Percentage from time to time used pursuant to Section 2.06 to
determine the interest rate on Revolving Credit Borrowings comprised of
Eurodollar Loans, and (ii) to the Issuing Bank on the last day of March, June,
September and December of each year (commencing with the first such day
following the Merger Date), a fronting fee of 0.125% per annum on the average
daily aggregate L/C Exposure during the preceding quarter (or other period
commencing with the Merger Date or ending with the Post-Merger Facilities
Maturity Date or the date on which all Letters of Credit have been canceled or
have expired and the Post-Merger
43
Revolving Credit Commitments of all Lenders shall expire or be terminated) and,
with respect to each Letter of Credit, any other fees agreed upon by the
Borrower and the Issuing Bank plus, in connection with the issuance, amendment
or transfer of any Letter of Credit or any L/C Disbursement, the Issuing Bank's
customary documentary and processing charges, as disclosed to the Borrower prior
to the issuance of such Letter of Credit (the "Issuing Bank Fees"). All L/C
Participation Fees and Issuing Bank Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. Notwithstanding this
paragraph (c), no L/C Participation Fee shall be due or payable to any Lender
that is a Defaulting Lender on the due date for payment of such L/C
Participation Fee.
(d) The payment of Fees shall be subject to Section 9.06(b). All Fees shall
be paid on the dates due, in immediately available funds, to the Administrative
Agent for distribution, if and as appropriate, among the Lenders, except that
the Issuing Bank Fees shall be paid directly to the Issuing Bank. Once paid,
none of the Fees shall be refundable under any circumstances, except to the
extent such payment shall have been made as a consequence of manifest error.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section
2.07, the Loans comprising each ABR Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, when the Alternate Base Rate is determined by reference to
the Prime Rate and over a year of 360 days at all other times) at a rate per
annum equal to the Alternate Base Rate plus the Applicable Percentage in effect
from time to time.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Percentage in effect from time to time.
(c) The payment of interest shall be subject to Section 9.06(b). Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period. Interest on each Loan shall
accrue daily for the account of the holder from time
44
to time of such Loan and shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Loan Document,
the Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal,
at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus
2.00% per annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) equal to the sum of the Alternate Base Rate plus
2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined in good faith that dollar deposits in the principal amounts of the
Loans comprising such Borrowing are not generally available in the London
interbank market, or that the rates at which such dollar deposits are being
offered will not adequately and fairly reflect the cost any Lender of making or
maintaining its Eurodollar Loan during such Interest Period, or that reasonable
means do not exist for ascertaining the Adjusted LIBO Rate, the Administrative
Agent will, as soon as practicable thereafter, give written notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. The
Administrative Agent will promptly advise the Borrower once the circumstances
giving rise to any such notice no longer exist. Each determination by the
45
Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Tender
Facility Commitments shall automatically terminate at 5:00 p.m., New York City
time, on the Tender Offer Date. The Term Facility Commitments shall
automatically terminate at 5:00 p.m., New York City time, on the last day of the
Term Facility Availability Period. The Pre-Merger Revolving Credit Commitments
shall automatically terminate at 5:00 p.m., New York City time, on the
Pre-Merger Facilities Maturity Date. The Post-Merger Revolving Credit
Commitments shall automatically terminate on the Post-Merger Facilities Maturity
Date. The L/C Commitment shall automatically terminate at the earlier-of (i)
5:00 p.m., New York City time, on the sixth Business Day prior to the
Post-Merger Facilities Maturity Date and (ii) the termination of the Post-Merger
Revolving Credit Commitments. Notwithstanding the foregoing, (i) all the
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
December 1, 1995, if the initial Credit Event shall not have occurred by such
time and (ii) the Post-Merger Revolving Credit Commitments and the Term Facility
Commitments shall automatically terminate at 5:00, New York City time, on the
Pre-Merger Facilities Maturity Date unless the Merger shall previously have been
consummated.
(b) Upon at least three Business nays' prior irrevocable telephonic notice
to the Administrative Agent (confirmed in writing), the Borrower may at any time
in whole permanently terminate, or from time to time in part permanently reduce,
the Tender Facility Commitments, the Term Facility Commitments, the Pre-Merger
Revolving Loan Commitments or the Post-Merger Revolving Credit Commitments;
provided, however, that (i) each partial reduction of the Commitments with
respect to any Facility shall be in an integral multiple of $1,000,000 and in a
minimum amount of $5,000,000 and (ii) the Total Revolving Credit Commitment
shall not be reduced to an amount that is less than the Aggregate Revolving
Credit Exposure at the time. Any payment of Revolving Loans pursuant to Section
2.13(a) or 2.13(c) shall automatically reduce the applicable Revolving Credit
Commitments by the amount of such payment.
(c) Each reduction in the Tender Facility Loan Commitments, the Term
Facility Loan Commitments, the Pre-Merger Revolving Loan Commitments or the
Post-Merger
46
Revolving Credit Commitments hereunder shall be made ratably among the Lenders
in accordance with their respective applicable Commitments. The Borrower shall
pay to the Administrative Agent for the account of the applicable Lenders, on
the date of each termination or reduction, the Commitment Fees on the amount of
the Commitments so terminated or reduced accrued to but excluding the date of
such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall
have the right at any time upon prior irrevocable telephonic notice to the
Administrative Agent (confirmed promptly in writing) (a) not later than 11:00
a.m., New York City time, on the Business Day of the proposed conversion, to
convert any Eurodollar Borrowing into an ABR Borrowing, (b) not later than 12:00
noon, New York City time, three Business Days prior to conversion or
continuation, to convert any ABR Borrowing, into a Eurodollar Borrowing or to
continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional
Interest Period, and (c) not later than 12:00 noon, New York City time, three
Business Days prior to conversion, to convert the Interest Period with respect
to any Eurodollar Borrowing to another permissible Interest Period, subject in
each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount;
(iv) if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the Borrower shall pay, upon
47
demand, any amounts due to the Lenders pursuant to Section 2.16;
(v) unless each Lender otherwise agrees, any portion of a Borrowing
maturing or required to be repaid in less than one month from the date of
any conversion or continuation may not be converted into or continued as a
Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;
(vii) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than a Repayment Date occurring on or after
the first day of such Interest Period if, after giving effect to such
selection, the aggregate outstanding amount of (A) the Eurodollar Term
Borrowings with Interest Periods ending on or prior to such Repayment Date
and (B) the ABR Term Borrowings would not be at least equal to the
principal amount of Term Borrowings to be paid on such Repayment Date;
(viii) no Borrowing may be converted into, or continued as, a
Eurodollar Borrowing when any Default has occurred and is continuing and
the Administrative Agent or the Required Lenders have determined that such
conversion or continuation is not appropriate (and, instead, any such
Borrowing will be converted into or remain as an ABR Borrowing on the last
day of the Interest Period applicable thereto); and
(ix) no Borrowing may be converted into, or continued as, a Eurodollar
Borrowing when any Event of Default has occurred and is continuing, unless
the Required Lenders have determined that such conversion or continuation
is appropriate (and, instead, any such Borrowing will be converted into or
remain as an ABR Borrowing on the last day of the Interest Period
applicable thereto).
Each notice pursuant to this Section 2.10 shall refer to this Agreement and
specify (i) the identity and amount of the Borrowing that the Borrower requests
be
48
converted or continued, (ii) whether such Borrowing is to be converted to or
continued as a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice
requests a conversion, the date of such conversion (which shall be a Business
Day) and (iv) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest
Period is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one months duration. The Administrative Agent
shall advise the Lenders of any notice given pursuant to this Section 2.10 and
of each Lender's portion of any converted or continued Borrowing. If the
Borrower shall not have given notice in accordance with this Section 2.10 to
continue any Borrowing into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.10 to convert such
Borrowing), such Borrowing shall, at the end of the Interest Period applicable
thereto (unless repaid pursuant to the terms hereof), automatically be continued
into a new Interest Period as an ABR Borrowing, unless such Borrowing is
comprised of Loans deemed made pursuant to Section 2.02(g), in which case such
Borrowing shall be continued as a Eurodollar Borrowing with an Interest Period
of one month.
SECTION 2.11. Repayment of Term Facility Borrowings. (a) The Term Facility
Borrowings shall be
================================================================================
SCHEIN DEBT REPAYMENT SCHEDULE CHANGE
Balance After
Original Date Original Amount $100 MM Applied
- --------------------------------------------------------------------------------
Sep-96 $5,000,000 $0(1)
Dec-96 $5,000,000 $0
Mar-96 $7,500,000 $0
Jun-97 $7,500,000 $0
Sep-97 $7,500,000 $0
Dec-97 $7,500,000 $0
Mar-98 $10,000,000 $0
Jun-98 $10,000,000 $0
Sep-98 $10,000,000 $7,631,579
Dec-98 $10,000,000 $7,631,579
Mar-99 $12,500,000 $9,539,474
Jun-99 $12,500,000 $9,539,474
Sep-99 $12,500,000 $9,539,474
Dec-99 $12,500,000 $9,539,474
Mar-00 $15,000,000 $11,447,368
Jun-00 $15,000,000 $11,447,368
Sep-00 $15,000,000 $11,447,368
Dec-00 $15,000,000 $11,447,368
Mar-01 $15,000,000 $11,447,368
Jun-01 $15,000,000 $11,447,368
Sep-01 $15,000,000 $11,447,368
Dec-01 $15,000,000 $11,447,370
(1) regular payment made prior to $100 MM subordinated debt prepayment
49
repaid in 22 consecutive installments payable on the dates (each a "Repayment
Date") and in the amounts set forth below:
Repayment Date Amount
-------------- ------------
9/30/96 $5,000,000
12/31/96 $5,000,000
3/31/97 $7,500,000
6/30/97 $7,500,000
9/30/97 $7,500,000
12/31/97 $7,500,000
3/31/98 $10,000,000
6/30/98 $10,000,000
9/30/98 $10,000,000
12/31/98 $10,000,000
3/31/99 $12,500,000
6/30/99 $12,500,000
9/30/99 $12,500,000
12/31/99 $12,500,000
3/31/00 $15,000,000
6/30/00 $15,000,000
9/30/00 $15,000,000
12/31/00 $15,000,000
3/31/01 $15,000,000
6/30/01 $15,000,000
9/30/01 $15,000,000
12/31/01 $15,000,000
(b) Each prepayment of Term Loans pursuant to this Section 2.11 shall be
subject to Section 9.06(b). Each prepayment of principal of Term Facility
Borrowings pursuant to Section 2.12 or 2.13 shall be applied to reduce pro rata
the scheduled payments of principal due under this Section 2.11 after the date
of such prepayment. To the extent not previously paid, all Term Facility
Borrowings shall be due and payable on the Post-Merger Facilities Maturity Date.
Each payment of Term Facility Borrowings pursuant to this Section 2.11 shall be
accompanied by accrued interest on the principal amount paid to but excluding
the date of payment.
SECTION 2.12. Optional Prepayment. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing, in whole or in part,
upon at least three Business Days' prior irrevocable telephonic notice (promptly
confirmed in writing) to the Administrative Agent before 11:00 a.m., New York
City time; provided,
50
however, that each partial prepayment of Borrowings under any Facility shall be
in an amount that is an integral multiple of $1,000,000.
(b) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid and shall
commit the Borrower to prepay such Borrowing by the amount stated therein on the
date stated therein. All prepayments under this Section 2.12 shall be subject to
Section 2.16 but otherwise without premium or penalty and shall be subject to
Section 9.06(b). All prepayments under this Section 2.12 (other than prepayments
of ABR Revolving Loans) shall be accompanied by accrued interest on the
principal amount being prepaid to but excluding the date of payment.
SECTION 2.13. Mandatory Prepayments. (a) Not later than 100 days after the
end of each fiscal year of Borrower, commencing with the fiscal year ending
December 28, 1996, the Borrower shall (i) calculate Excess Cash Flow for such
fiscal year and apply 75% of such Excess Cash Flow to prepay Borrowings in
accordance with paragraph (d) below and (ii) deliver to the Administrative Agent
a certificate signed by any Financial Officer of the Borrower setting forth the
amount, if any, of Excess Cash Flow for such period and the calculation thereof,
in reasonable detail.
(b) In the event of any termination of all the Pre-Merger Revolving Credit
Commitments or Post-Merger Revolving Credit Commitments, the Borrower shall
repay or prepay all the outstanding Pre-Merger Revolving Facility Borrowings or
Post-Merger Revolving Facility Borrowings, respectively, on the date of such
termination. In the event of any partial reduction of the Revolving Credit
Commitments, then (i) at or prior to the effective date of such reduction, the
Administrative Agent shall notify the Borrower and the Revolving Credit Lenders
of the Aggregate Revolving Credit Exposure after giving effect thereto and (ii)
if the Aggregate Revolving Credit Exposure would exceed the Total Revolving
Credit Commitment after giving effect to such reduction or termination, then the
Borrower shall, on the date of such reduction or termination, repay or prepay
Revolving Credit Borrowings or cash-collateralize outstanding Letters of Credit
in an amount sufficient to eliminate such excess.
51
(c) The Borrower shall apply 100% of Net Proceeds promptly upon its receipt
thereof (or, if applicable, promptly upon any amounts being deemed to constitute
Net Proceeds as provided in the definition of such term) to prepay Borrowings in
accordance with paragraph (d) below; provided, however, that, in the case of Net
Proceeds from an Equity Issuance, (x) the Borrower shall only be required to
apply 50% of such Net Proceeds to the prepayment of Loans if immediately prior
to receipt thereof the Leverage Ratio is greater than 3.00 to 1.00 but not
greater than 4.00 to 1.00 and 25% of such Net Proceeds to the prepayment of
Loans if at the time of receipt thereof the Leverage Ratio is greater than 2.50
to 1.00 but not greater than 3.00 to 1.00 and (y) the Borrower shall not be
required to apply any of such Net Proceeds to the prepayment of Loans if at the
time of receipt thereof the Leverage Ratio is not greater than 2.50 to 1.00. The
Borrower shall deliver to the Administrative Agent (i) at the time of each
prepayment required under this paragraph (c), a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) not later than the later
of (A) the date on which a Responsible Officer of the Borrower becomes aware
that such prepayment will be made and (B) the date that is three Business Days
prior to the date of such prepayment, a notice of such prepayment. Such
certificate shall also describe in reasonable detail the facts and circumstances
giving rise to the applicable prepayment event and a reasonably detailed
calculation of the Net Proceeds therefrom.
(d) Prepayments under paragraphs (a) and (c) above shall be applied first
against outstanding Term Loans and second against outstanding Revolving Loans.
Prepayments required under this Section 2.13 in respect of any Facility shall be
applied first against ABR Loans outstanding under such Facility and then against
Eurodollar Loans outstanding under such Facility.
(e) All prepayments under this Section 2.13 shall be subject to Section
2.16 but otherwise without premium or penalty and shall be subject to Section
9.06(b). All prepayments under this Section 2.13 shall be accompanied by accrued
interest on the principal amount being prepaid to but excluding the date of
payment.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any
52
change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or the Issuing
Bank of the principal of or interest on any Eurodollar Loan made by such Lender
or any Fees or other amounts payable hereunder (other than changes in respect of
taxes imposed on the overall net income of such Lender or the Issuing Bank by
the jurisdiction in which such Lender or the Issuing Bank has its principal
office or by any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or the Issuing Bank (except any such reserve requirement
that is fully reflected in the Adjusted LIBO Rate) or shall impose on such
Lender or the Issuing Bank or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender or any Letter
of Credit or participation therein, and the result of any of the foregoing shall
be to increase the cost to such Lender or the Issuing Bank of making or
maintaining any Eurodollar Loan or increase the cost to any Lender of issuing or
maintaining any Letter of Credit or purchasing or maintaining a participation
therein or to reduce the amount of any sum received or receivable by such Lender
or the Issuing Bank hereunder (whether of principal, interest or otherwise) by
an amount deemed by such Lender or the Issuing Bank to be material, then the
Borrower shall pay to such Lender or the Issuing Bank, as the case may be, upon
demand such additional amount or amounts as shall compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank shall determine that the adoption
after the date of this Agreement of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the date hereof in any
such law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or the Issuing Bank or any Lender's or the
Issuing Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force
53
of law) of any Governmental Authority has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made or participation's in Letters of
Credit purchased by such Lender pursuant hereto or the Letters of Credit issued
by the Issuing Bank pursuant hereto to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such applicability, adoption, change or compliance (taking
into consideration such Lenders or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy) by an amount deemed by such Lender or the Issuing Bank to be material,
then from time to time the Borrower shall pay to such Lender or the Issuing
Bank, as the case may be, such additional amount or amounts as shall compensate
such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth in
reasonable detail (i) the calculation of amount or amounts necessary to
compensate such Lender or the Issuing Bank or its holding company, as
applicable, as specified in paragraph (a) or (b) above and (ii) the facts and
circumstances giving rise to such compensation, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Bank the amount shown as due on any such certificate
delivered by it within 10 Business Days after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided,
however, that neither any Lender nor the Issuing Bank may demand compensation
under this Section 2.14 for any period commencing earlier than 60 days prior to
such demand. The protection of this Section 2.14 shall be available to each
Lender and the Issuing Bank regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, agreement, guideline
or other change or condition that shall have occurred or been imposed; provided,
however, that each Lender and the Issuing Bank shall take reasonable actions
54
(which shall not require such Lender or the Issuing Bank to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any action
precluded by legal or regulatory restrictions or suffer any disadvantage or
burden deemed by it to be significant) to avoid any need to claim compensation
under this Section 2.14 arising out of any reasonably foreseeable change in
circumstances.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.14 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder, the expiration or cancellation of all Letters of Credit and the
reimbursement of all draws thereunder.
SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision
of this Agreement, if after the date of this Agreement, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans shall not thereafter
(for the duration of such unlawfulness) be made by such Lender hereunder
(or be continued for additional Interest Periods and ABR Loans will not
thereafter (for such duration) be converted into Eurodollar Loans),
whereupon any request for a Eurodollar Borrowing (or to convert an ABR
Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing,
for an additional Interest Period) shall, as to such Lender only, be deemed
a request for an ABR Loan (or a request to continue an ABR Loan as such for
an additional Interest Period or to convert a Eurodollar Loan into an ABR
Loan, as the case may be), unless such declaration shall be subsequently
withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the
55
effective date of such notice as provided in paragraph (b) below (and
Section 2.16 shall not apply to any such automatic conversion).
In the event any Lender shall exercise its rights under clause (i) or (ii)
above, all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender against
any loss or expense that such Lender may sustain or incur as a direct
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal of
any Eurodollar Loan prior to the end of the Interest Period in effect therefor,
(ii) the conversion of any Eurodollar Loan to an ABR Loan, or the conversion of
the Interest Period with respect to any Eurodollar Loan, in each case other than
on the last day of the Interest Period in effect therefor, or (iii) any
Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to be
made pursuant to a conversion or continuation under Section 2.10) not being made
after notice of such Loan shall have been given by the Borrower hereunder (any
of the events referred to in this clause (a) being called a "Breakage Event") or
(b) any default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such
56
Breakage Event for such period. A certificate of any Lender setting forth in
reasonable detail (i) the calculation of any amount or amounts which such Lender
is entitled to receive pursuant to this Section 2.16 and (ii) the facts and
circumstances giving rise to such entitlement, shall be delivered to the
Borrower (in the case of a claim under clause (a) above, within 60 days of the
applicable Breakage Event) and shall be conclusive absent manifest error.
Without prejudice to the survival of any other agreement contained herein, the
agreements and obligations contained in this Section 2.16 shall survive the
payment in full of the principal of and interest on all Loans made hereunder,
the expiration or cancellation of all Letters of Credit and the reimbursement of
all draws thereunder.
SECTION 2.17. Pro Rata Treatment. Except as required under Section 2.15 and
subject to Section 9.06(b), each Borrowing, each payment or prepayment of
principal of any Borrowing, each payment of interest on the Loans, each payment
of the Commitment Fees, each reduction of Commitments and each refinancing of
any Borrowing with, conversion of any Borrowing to or continuation of any
Borrowing as a Borrowing of any Type shall be allocated pro rata among the
Lenders in accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). In computing any
Lender's portion of any Borrowing to be made hereunder, the Administrative Agent
may, in its discretion, round each Lender's percentage of such Borrowing to the
next higher or lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. If any Lender shall, through the exercise
of a right of banker's lien, setoff or counterclaim against the Borrower, or
pursuant to a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, obtain pavement
(voluntary or involuntary) in respect of any Loan or Loans or L/C Disbursement
as a result of which the unpaid principal portion of its Term Loans and
Revolving Loans and participations in L/C Disbursements shall be proportionately
less than the unpaid principal portion of the Term Loans and Revolving Loans and
participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
57
promptly pay to such other Lender the purchase price for, a participation in the
Term Loans and Revolving Loans and L/C Exposure, as the case may be of such
other Lender, so that the aggregate unpaid principal amount of the Term Loans
and Revolving Loans and L/C Exposure and participations in Term Loans and
Revolving Loans and L/C Exposure held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all Term Loans and
Revolving Loans and L/C Exposure then outstanding as the principal amount of its
Term Loans and Revolving Loans and L/C Exposure prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal amount
of all Term Loans and Revolving Loans and L/C Exposure outstanding prior to such
exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in a
Term Loan or Revolving Loan or L/C Disbursement deemed to have been so purchased
may exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the Borrower in
the amount of such participation.
SECTION 2.19. Payments (a) Subject to Section 9.06(b), the Borrower shall
make each payment (including principal of or interest on any Borrowing or any
L/C Disbursement or any Fees or other amounts) hereunder and under any other
Loan Document not later than 1:00 p.m., New York City time, on the date when due
in immediately available dollars, without setoff, defense or counterclaim (but
without prejudice, waiver or effect of estoppel with respect to any defense or
counterclaim). Each such payment (other than Issuing Bank Fees, which shall be
paid directly to the Issuing Bank) shall be made to the Administrative Agent at
its offices at 270 Park Avenue, New York, New York.
(b) Whenever any payment (including principal of or interest on any
Borrowing, any Fees or any other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Busi-
58
ness Day, and such extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by the Borrower hereunder and
under any other Loan Document shall be made, in accordance with Section 2.19,
free and clear of and without deduction for any and all current or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding (i) income taxes imposed on the net income of the
Administrative Agent, any Lender or the Issuing Bank (or any transferee or
assignee thereof, including a participation holder (any such entity a
"Transferee")) and (ii) franchise taxes imposed on the net income of the
Administrative Agent, any Lender or the Issuing Bank (or Transferee), in each
case by the jurisdiction (A) under the laws of which the Administrative Agent,
such Lender or the Issuing Bank (or Transferee) is organized or any political
subdivision thereof or (B) in which the applicable lending office of the
Administrative Agent, such Lender or the Issuing Bank (or any Transferee) is
located or any political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities, collectively
or individually, being called "Taxes"). If the Borrower shall be required to
deduct any Taxes from or in respect of any sum payable hereunder or under any
other Loan Document to the Administrative Agent, any Lender or the Issuing Bank
(or any Transferee), (i) the sum payable shall be increased by the amount (an
"additional amount") necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.20) the Administrative Agent, such Lender or the Issuing Bank (or Transferee),
as the case may be, shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower agrees to bear and shall pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (including mortgage recording taxes and similar fees) that arise
from any payment made hereunder or under any other Loan Document or from the
execution, delivery or registration of, or otherwise with
59
respect to, this Agreement or any other Loan Document ("Other Taxes').
(c) The Borrower shall indemnify the Administrative Agent, each Lender and
the Issuing Bank (or Transferee) for the full amount of Taxes and Other Taxes
paid by the Administrative Agent, such Lender or the Issuing Bank (or
Transferee), as the case may be, and any liability (including penalties,
interest and expenses (including reasonable attorney's fees and expenses))
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability prepared by the
Administrative Agent, a Lender or the Issuing Bank (or Transferee), or the
Administrative Agent on its behalf, and setting forth in reasonable detail (i)
the calculation of and (ii) the facts and circumstances giving rise to such
payment or liability, absent manifest error, shall be final, conclusive and
binding for all purposes. Such indemnification shall be made within 30 days
after the date the Administrative Agent, any Lender or the Issuing Bank (or
Transferee), as the case may be, makes written demand therefor. Neither any
Lender nor the Issuing Bank (or Transferee) may make any claim for
indemnification more than 180 days after such Lender or the Issuing Bank (or
Transferee), as applicable, knows of the payment or liability with respect to
which such indemnification is to be sought (such 180 days to be reduced to 60
days if at the time of such claim for indemnification such Lender (or
Transferee) holds Loans or participations therein or the Issuing Bank has
outstanding Letters of Credit, as applicable).
(d) If the Administrative Agent, a Lender or the Issuing Bank (or
Transferee) receives a refund in respect of any Taxes or Other Taxes as to which
it has been indemnified by the Borrower or with respect to which the Borrower
has paid additional amounts pursuant to this Section 2.20, it shall within 30
days from the date of such receipt pay over such refund to the Borrower (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrower under this Section 2.20 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent, such Lender or the Issuing Bank (or Transferee) and
without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund); provided, however, that the Borrower,
upon the request of the Administrative
60
Agent, such Lender or the Issuing Bank (or Transferee), shall repay the amount
paid over to the Borrower (plus penalties, interest or other charges) to the
Administrative Agent, such Lender or the Issuing Bank (or Transferee) in the
event the Administrative Agent, such Lender or the Issuing Bank (or Transferee)
is required to repay such refund to such Governmental Authority.
(e) As soon as practicable after the date of any payment of Taxes or Other
Taxes by the Borrower to the relevant Governmental Authority, the Borrower shall
deliver to the Administrative Agent, at its address referred to in Section 9.01,
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.20 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder, the expiration or cancellation of all Letters of Credit and the
reimbursement of all draws thereunder.
(g) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, certificate representing that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Borrower under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before
61
the date such participation holder becomes a Transferee hereunder) and on or
before the date, if any, such Non-U.S. Lender changes its applicable lending
office by designating a different lending office (a "New Lending Office"). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Notwithstanding any other provision of this paragraph (g), a Non-U.S.
Lender shall not be required to deliver any form pursuant to this paragraph (g)
that such Non-U.S. Lender is not legally able to deliver.
(h) The Borrower shall not be required to indemnify any Non-U.S. Lender or
to pay any additional amounts to any Non-U.S. Lender, in respect of United
States Federal withholding tax pursuant to paragraph (a) or (c) above to the
extent that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S. Lender became a party
to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan; provided, however,
that this paragraph (h) shall not apply (x) to any Transferee or New Lending
Office that becomes a Transferee or New Lending Office as a result of an
assignment, participation, transfer or designation made at the request of the
Borrower and (y) to the extent the indemnity payment or additional amounts any
Transferee, or any Lender (or Transferee), acting through a New Lending Office,
would be entitled to receive (without regard to this paragraph (h)) do not
exceed the indemnity payment or additional amounts that the person making the
assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (g) above.
(i) Nothing contained in this Section 2.20 shall require any Lender or the
Issuing Bank (or any Transferee) or the Administrative Agent to make available
any of its tax returns (or any other information that it deems to be
confidential or proprietary).
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SECTION 2.21. Assignment of Commitments under Certain Circumstances; Duty
To Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15, (iii) the Borrower
is required to pay any additional amount to any Lender or the Issuing Bank or
any Governmental Authority on account of any Lender or the Issuing Bank pursuant
to Section 2.20 or (iv) the Administrative Agent notifies the Borrower of any
Lender's failure to fund as provided in Section 2.02(d) or 2.02(f), the Borrower
may, at its sole expense and effort, upon notice to such Lender or the Issuing
Bank and the Administrative Agent, require such Lender or the Issuing Bank to
transfer and assign, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such assigned
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided, however, that (x) such assignment shall not conflict with
any law, rule or regulation or order of any court or other Governmental
Authority having jurisdiction, (y) the Borrower or such assignee shall have paid
to the affected Lender or the Issuing Bank in immediately available funds an
amount equal to the sum of the principal of the outstanding Loans and
participations in L/C Disbursements of such Lender or the Issuing Bank plus all
other amounts (excluding interest and Fees, which shall be paid when due to the
assigning Lender or the Issuing Bank under Sections 2.06 and 2.05, respectively)
accrued for the account of such Lender or the Issuing Bank hereunder (including
any amounts under Sections 2.14, 2.16 and 2.20) and (z) if prior to any such
transfer and assignment the circumstances or event that resulted in such
Lender's or the Issuing Bank's claim for compensation under Section 2.14 or
notice under Section 2.1 or the amounts paid pursuant to Section 2.20, as the
case may be, cease to cause such Lender or the Issuing Bank to suffer increased
costs or reductions in amounts received or receivable or reduction in return on
capital, or cease to have the consequences specified in Section 2.15, or cease
to result in amounts being payable under Section 2.20, as the case may be
(including as a result of any action taken by such Lender or the Issuing Bank
pursuant to paragraph (b) below), or if such Lender or the Issuing Bank shall
waive its right to claim further compensation under Section 2.14 in respect of
such circumstances or event or shall withdraw its notice under Section 2.15 or
shall waive its right to
63
further payments under Section 2.20 in respect of such circumstances or event or
shall fund as provided in Section 2.02(d) or 2.02(f), as the case may be, then
such Lender or the Issuing Bank shall not thereafter be required to make any
such transfer and assignment hereunder.
(b) If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice described in
Section 2.15 or (iii) the Borrower is required to pay any additional amount to
any Lender or the Issuing Bank or any Governmental Authority on account of any
Lender or the Issuing Bank, pursuant to Section 2.20, then such Lender or the
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or the Issuing Bank to incur an unreimbursable loss or unreimbursable cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it in good faith to be significant) (x) to file any certificate or document
reasonably requested in writing by the Borrower or (y) to assign its rights and
delegate and transfer its obligations hereunder to another of its offices,
branches or affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice pursuant to
Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as the
case may be, in the future. The Borrower shall pay all reasonable costs and
expenses incurred by any Lender or the Issuing Bank in connection with any such
filing or assignment, delegation and transfer.
SECTION 2.22. Letters of Credit. (a) General. The Borrower may request the
issuance, after the Merger Date, of a Letter of Credit, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, appropriately
completed, for the account of the Borrower, at any time and from time to time
while the L/C Commitment remains in effect. This Section 2.22 shall not be
construed to impose an obligation upon the Issuing Bank to issue any Letter of
Credit that is inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
In order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the Borrower shall hand deliver or
telecopy to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested
64
date of issuance, amendment, renewal or extension) a notice requesting the
issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) below), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare such Letter of Credit. Following receipt of such notice and
prior to the issuance of the requested Letter of Credit or the applicable
amendment, renewal or extension, the Administrative Agent shall notify the
Borrower and the Issuing Bank of the amount of the Aggregate Revolving Credit
Exposure after giving effect to (i) the issuance, amendment, renewal or
extension of such Letter of Credit, (ii) the issuance or expiration of any other
Letter of Credit that is to be issued or shall expire prior to the requested
date of issuance of such Letter of Credit and (iii) the borrowing or repayment
of any Revolving Credit Loans that (based upon notices delivered to the
Administrative Agent by the Borrower) are to be borrowed or repaid prior to the
requested date of issuance of such Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if, and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that, after giving effect to such issuance, amendment,
renewal or extension (A) the L/C Exposure shall not exceed $30,000,000, and (B)
the Aggregate Revolving Credit Exposure shall not exceed the Total Revolving
Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Post-Merger Facilities Maturity Date, unless such Letter of Credit expires by
its terms on an earlier date.
(d) Participations. By the issuance of a Letter of Credit and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each such Lender hereby acquires from the
applicable Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Pro Rata Percentage of the aggregate amount available to be drawn under
such Letter of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally
65
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
in accordance with Section 2.02(f), such Lender's Pro Rata Percentage of each
L/C Disbursement made by the Issuing Bank and not reimbursed by the Borrower
forthwith on the date due as provided in paragraph (e) below. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph (d) in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Borrower shall pay the amount of such L/C
Disbursement to the Administrative Agent, for the account of the Issuing Bank,
not later than two hours after the Borrower shall have received notice from the
Issuing Bank that payment of such draft has been made, or, if the Borrower shall
have received such notice later than 10:00 a.m., New York City time, on any
Business Day, not later than 10:00 a.m., New York City time, on the immediately
following Business Day. The Borrower's obligations to reimburse L/C
Disbursements as provided in this paragraph (e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, under any and all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or
any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right that
the Borrower, any other party guaranteeing, or otherwise obligated with,
the Borrower, any Subsidiary or other Affiliate thereof or any other person
may at any time have against the beneficiary under any Letter of Credit,
the Issuing Bank, the Administrative Agent or any Lender or any other
person, whether in connection with this
66
Agreement, any other Loan Document or any other related or unrelated
agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.22,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder;
provided, however, that any payment by the Borrower under this paragraph (e)
shall be without prejudice to, and shall not have any effect of estoppel or
waiver with respect to, any claim of the Borrower against the Issuing Bank under
paragraph (f) below.
(f) Liability of Issuing Bank. Without limiting the generality of paragraph
(e) above, it is expressly understood and agreed that the absolute and
unconditional obligation of the Borrower hereunder to reimburse L/C
Disbursements shall not be excused by the gross negligence or wilful misconduct
of the Issuing Bank. However, the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's gross negligence or wilful
misconduct in determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof; it is understood that the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit, (i) the Issuing Bank's exclusive reliance on the documents presented to
it
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under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute wilful misconduct or gross negligence of
the Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by telecopy, to the Administrative Agent
and the Borrower of such demand for payment and whether the Issuing Bank has
made or will make an L/C Disbursement thereunder; provided, however, that any
failure to give or delay in giving such notice shall not relieve the Borrower of
its obligation to reimburse the Issuing Bank and the Lenders with respect to any
such L/C Disbursement. The Administrative Agent shall promptly give each Lender
notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the Borrower shall reimburse such
L/C Disbursement in full on such date, the unpaid amount thereof shall bear
interest for the account of the Issuing Bank, for each day from and including
the date of such L/C Disbursement, to but excluding the earlier of the date of
payment or the date on which interest shall commence to accrue thereon at the
rate per annum that would apply to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may resign
at any time by giving 180 days' prior written notice to the Administrative
Agent, the Lenders and the Borrower, and may be removed at any time by the
Borrower by notice to the Issuing Bank, the Administrative Agent and the
Lenders. Subject to the next
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succeeding paragraph, upon the acceptance of any appointment as the Issuing Bank
hereunder by a Lender that shall agree to serve as successor Issuing Bank, such
successor shall succeed to and become vested with all the interests, rights and
obligations of the retiring Issuing Bank and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Letters of Credit hereunder.
At the time such removal or resignation shall become effective, the Borrower
shall pay all accrued and unpaid Fees pursuant to Section 2.05(c)(ii). The
acceptance of any appointment as the Issuing Bank hereunder by a successor
Lender shall be evidenced by an agreement entered into by such successor, in a
form satisfactory to the Borrower and the Administrative Agent, and, from and
after the effective date of such agreement, (i) such successor Lender shall have
all the rights and obligations of the previous Issuing Bank under this Agreement
and the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term "Issuing Bank" shall be deemed to refer to such successor
or to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the resignation or removal of the
Issuing Bark hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralizatlon. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date. Such deposit shall be held by the Collateral Agent as
collateral for the payment and performance of the Obligations. The Collateral
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits in Permitted Investments, which investments shall be
made at the option and sole discretion of the Collateral Agent, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) automatically be
applied by the Collateral Agent to reimburse the Issuing Bank for L/C
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Disbursements for which it has not been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Borrower for the L/C
Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned, together
with any remaining interest, to the Borrower within two Business Days after all
Events of Default have been cured or waived.
ARTICLE III
Representations and warranties
The Borrower represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders that:
SECTION 3.01. Organization; Powers. The Borrower and each Subsidiary (a) is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (b) has all requisite power and
authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (c) is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required, except where the failure so to qualify could not reasonably be
expected to result in a Material Adverse Effect, and (d) has the corporate power
and authority to execute, deliver and perform its obligations under each of the
Loan Documents, the Merger Agreement and each other agreement or instrument
contemplated hereby to which it is or will be a party and, in the case of the
Borrower, to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
each Loan Party of the Merger Agreement, each of the Loan Documents and the
borrowings hereunder (collectively, the "Transactions") and the Acquisition (a)
have been duly authorized by all requisite corporate and, if required,
stockholder action (other than
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any action by the stockholders of the Company to approve the Merger) and (b)
will not (i) violate (A) any provision of law, statute, rule or regulation, or
of the certificate or articles of incorporation or other constitutive documents
or by-laws of the Borrower or any Subsidiary, (B) any order of any Governmental
Authority or (C) any provision of any indenture, agreement or other instrument
to which the Borrower or any Subsidiary is a party or by which any of them or
any of their property is or may be bound, (ii) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such indenture,
agreement or other instrument or (iii) result in the creation or imposition of
any Lien upon or with respect to any property or assets now owned or hereafter
acquired by the Borrower or any Subsidiary (other than any Lien created under
the Security Documents), other than (in the case of clauses (b)(i)(C) and (ii)
above) for such matters that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party thereto will constitute, a legal,
valid and binding obligation of such Loan Party enforceable against such Loan
Party in accordance with its terms, except as enforceability thereof may be
limited by bankruptcy, insolvency or similar laws of general application
affecting creditors' rights.
SECTION 3.04. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions or the Acquisition,
except for (a) the filing of Uniform Commercial Code financing statements, (b)
recordation of the Mortgages, (c) the items described in Section 3.22, (d)
securing documentation from the New Jersey Department of Environmental
Protection to the effect that the requirements of the New Jersey Industrial Site
Recovery Act have been complied with and that the Acquisition may proceed and
(e) such as have been made or obtained and are in full force and effect.
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SECTION 3.05. Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders its consolidated balance sheets and statements of
income, shareholders' equity and cash flows (i) as of and for the fiscal year
ended December 31, 1994, audited by and accompanied by the opinion of BDO
Seidman, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended July 1, 1995, certified by a
Financial Officer. Such financial statements present fairly the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries as of such dates and for such periods. Such balance sheets and the
notes thereto disclose all material liabilities, direct or contingent, of the
Borrower and its consolidated Subsidiaries as of the dates thereof. Such
financial statements were prepared in accordance with GAAP applied on a
consistent basis, subject (in the case of the statements referred to in clause
(ii) above) to normal, year-end recurring adjustments.
(b) The Borrower has heretofore furnished to the Lenders its unaudited pro
forma consolidated balance sheet as of July 1, 1995, and pro forma consolidated
income statement for the two fiscal quarters ended July 1, 1995, prepared giving
effect to the Transactions and the Acquisition as if they had occurred on July
1, 1995, and December 31, 1994, respectively. Such pro forma financial
statements have been prepared in good faith by the Borrower, based on the
assumptions used to prepare the pro forma financial information contained in the
Confidential Information Memorandum (which assumptions are believed by the
Borrower on the date hereof and on the Tender Offer Date to be reasonable), are
based on the best information available to the Borrower as of the date of
delivery thereof, accurately reflect all adjustments required to be made to give
effect to the Transactions and the Acquisition and present fairly on a pro forma
basis the estimated consolidated financial position of the Borrower and the
Subsidiaries as of July 1, 1995, and estimated consolidated results of
operations of the Borrower and the Subsidiaries for the two fiscal quarters
ended July 1, 1995, assuming that the Transactions and the Acquisition had
actually occurred at July 1, 1995, and December 31, 1994, respectively.
(c) The Borrower has heretofore furnished to the Lenders the consolidated
balance sheets and statements of operations, stockholders' equity and cash flows
of the
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Company (i) as of and for the fiscal year ended December 31, 1994, audited by
and accompanied by the opinion of Coopers & Lybrand LLP, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended June 30, 1995. The Borrower has no knowledge that these
financial statements have not been prepared in accordance with GAAP applied on a
consistent basis (except to the extent set forth in those financial statements,
including the notes, if any) or do not present fairly in all material respects
the consolidated financial position of the Company as of their respective dates,
and the consolidated results of operations and changes in financial condition
and cash flows for the periods presented, subject, in the case of the unaudited
interim financial statements, to normal, recurring, year-end adjustments.
SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, operations, prospects or condition,
financial or otherwise, of the Borrower and the Subsidiaries, taken as a whole,
since December 31, 1994.
SECTION 3.07. Title to Properties; Possession under Leases. (a) Each of the
Borrower and the Subsidiaries has good and marketable title to, or valid
leasehold interests in, all its material properties and assets (including all
Mortgaged Property). All such material properties and assets are free and clear
of Liens, other than Liens expressly permitted by Section 6.02, and no material
portion of any Mortgaged Property is subject to any lease, license, sublease or
other agreement granting to any person any right to use, occupy or enjoy such
portion.
(b) Each of the Borrower and the Subsidiaries has complied with all
obligations under all material leases to which it is a party and all such leases
are in full force and effect. Each of the Borrower and the Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases.
(c) Neither the Borrower nor any Subsidiary has received any notice of, nor
has any knowledge of, any pending or contemplated condemnation proceeding
affecting the Mortgaged Properties or any sale or disposition thereof in lieu of
condemnation.
(d) Neither the Borrower nor any Subsidiary is obligated under any right of
first refusal, option or other
73
contractual right to sell, assign or otherwise dispose of any Mortgaged Property
or any interest therein.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Tender Offer
Date a list of the Subsidiaries (other than the Company and its subsidiaries)
and the percentage ownership interest of the Borrower therein. The shares of
capital stock or other ownership interests so indicated on Schedule 3.08 are
fully paid and non-assessable and are owned by the Borrower, directly or
indirectly, free and clear of all Liens (other than Liens pursuant to the
Security Documents).
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as disclosed in
the Tender Offer Materials or the Company's Schedule 14D-9 with respect to the
Tender Offer, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting any Transaction Party
or any business, property or rights of any such person (i) that involve any Loan
Document, the Transactions or the Acquisition or (ii) as to which there is a
likelihood of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
(b) None of the Borrower and the Subsidiaries or any of their respective
material properties or assets (including the Mortgaged Properties) is in
violation of, nor will the continued operation of such material properties and
assets as currently conducted violate, any law, rule or regulation (including
any Health Care Law, any Environmental Law, any zoning or building ordinance,
code or approval or any building permit) or any restriction of record or
agreements affecting the Mortgaged Property, or is in default with respect to
any judgment, writ, injunction, decree or order of any Governmental Authority,
other than, in each case, such violations and defaults that, individually and in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Certificates of occupancy and material permits (or other documents
expressly provided for under applicable law in lieu thereof) are in effect for
each Mortgaged Property as currently constructed, and true and complete copies
of such certificates of occupancy have been
74
delivered to the Collateral Agent as mortgagee with respect to each Mortgaged
Property.
SECTION 3.10. Agreements. (a) Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any corporate restriction
that has resulted or could reasonably be expected to result in a Material
Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, the General Shareholders Agreement dated September 30,
1994, or any other agreement or instrument to which it is a party or by which it
or any of its properties or assets are or may be bound, other than such defaults
that, individually and in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) Neither the Borrower nor any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including, to one extent
applicable, Regulation G, U or X. Margin Stocks do not constitute 25% or more of
the assets of the Borrower and the Subsidiaries, taken as a whole.
(c) No Indebtedness of the Borrower or any Subsidiary (other than the
Obligations) is "directly or indirectly secured" (within the meaning of
Regulation U and Regulation G) by any Margin Stock.
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any Subsidiary is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940,
(b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of
75
1935 or (c) otherwise subject to any law, rule or regulation that limits its
ability to incur Indebtedness.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit only for the purposes
specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of the Borrower and the Subsidiaries has
filed or caused to be filed all Federal, state, local and foreign tax returns or
materials required to have been filed by it and has paid or caused to be paid
all taxes due and payable by it and all assessments received by it, except taxes
that are being contested in good faith by appropriate proceedings and for which
the Borrower or such Subsidiary, as applicable, shall have set aside on its
books (in accordance with GAAP accounting requirements) adequate reserves.
SECTION 3.15. No Material Misstatements. (a) the Confidential Information
Memorandum or (b) information, report, financial statement, schedule authored
by, and furnished by or on behalf of, the Borrower in writing to the
Administrative Agent in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they are made
misleading; provided, however, that to the extent any such information, report,
financial statement, exhibit or schedule was based upon or constitutes a
forecast or projection, the Borrower represents only that (x) it acted in good
faith and utilized reasonable assumptions and due care in the preparation of
such information, report, financial statement, exhibit or schedule and (y) with
respect to the projections contained in the Confidential Information Memorandum,
as of the date of this Agreement and as of the Closing Date, the Borrower
believes the assumptions underlying such projections are reasonable.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and the ERISA
Affiliates is in compliance in all respects with the applicable provisions of
ERISA and the Code and the regulations and published interpretations thereunder,
except for such failures to comply that, individually and in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
ERISA
76
Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events, could reasonably be expected to result in a
Material Adverse Effect. As of the date of this Agreement, none of the Plans is
a "defined benefit plan" as defined in Section 3(35) of ERISA or Section 414(j)
of the Code. The present value of all benefit liabilities under each Plan (based
on those assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the last annual valuation date applicable
thereto, exceed by more than $15,000,000 the fair market value of the assets of
such Plan, and the present value of all benefit liabilities of all underfunded
Plans (based on those assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the last annual valuation dates
applicable thereto, exceed by more than $15,000,000 the fair market value of the
assets of all such underfunded Plans.
SECTION 3.17. Environmental Matters. (a) The properties owned or operated
by the Borrower and the Subsidiaries (the "Properties") do not contain any
Hazardous Materials in amounts or concentrations that constitute a violation of,
or could give rise to under, any Environmental Law, other than such violations
and liabilities that, individually and in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
(b) The Properties and all operations of the Borrower and the Subsidiaries
are in compliance, and in the last six years have been in compliance, with all
Environmental Laws and all Environmental Permits have been obtained and are in
effect, other than such items that, individually and in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) There have not been any Releases or threatened Releases at, from, under
or, to the knowledge of the Borrower, proximate to the Properties or otherwise
in connection with the operations of the Borrower or the Subsidiaries, which
Releases or threatened Releases, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.
(d) Neither the Borrower nor any Subsidiary has received any notice of an
Environmental Claim in connection with the Properties or the operations of the
Borrower or the Subsidiaries or with regard to any person whose liabilities for
environmental matters the Borrower or the Subsidiaries
77
has retained or assumed, in whole or in part, contractually, or to the knowledge
of the Borrower by operation of law or otherwise, which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
nor do the Borrower or the Subsidiaries have any knowledge that any such notice
is likely to be received or is being threatened.
(e) Hazardous-Materials have not been transported from the Properties, nor
have Hazardous Materials been generated, treated, stored or disposed of at, on
or under any Property in a manner that could reasonably be expected to give rise
to any material liability under any Environmental Law, nor has the Borrower or
Subsidiary retained or assumed any liability, contractually, or to the knowledge
of the Borrower by operation of law or otherwise, with respect to the
generation, treatment, storage or disposal of Hazardous Materials, which
transportation, generation, treatment, storage or disposal, or retained or
assumed liabilities, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or the
Subsidiaries as of the date hereof and the Closing Date. As of each such date,
such insurance is in full force and effect and all premiums due have been paid.
The Borrower and the Subsidiaries have insurance in such amounts and covering
such risks and liabilities as are in accordance with normal industry practice.
SECTION 3.19. Solvency. (a) The fair salable value of the assets of the
Borrower and each Subsidiary exceeds and shall, immediately following each of
the Tender Offer Date and the Merger Date and the consummation of the related
financings, exceed the amount that will be required to be paid on or in respect
of the existing debts and other liabilities (including contingent liabilities)
of the Borrower or such Subsidiary as they mature.
(b) The assets of the Borrower and each Subsidiary do not, and upon
consummation of the Acquisition will not, constitute unreasonably small capital
for the Borrower or such Subsidiary to carry out its business as now conducted
and as proposed to be conducted, including the capital needs of the Borrower or
such Subsidiary, taking
78
into account the particular capital requirements of the business conducted by
the Borrower and each Subsidiary, and the projected capital requirements and
capital availability thereof.
(c) The Borrower and each Subsidiary do not intend to and shall not incur
debts beyond their respective ability to pay such debts as they mature taking
into account the timing and amounts of cash to be received by the Borrower and
such Subsidiary and of amounts to be payable on or in respect of obligations of
the Borrower and such Subsidiary. The cash flow of the Borrower and each
Subsidiary, after taking into account all anticipated uses of the cash of the
Borrower and each Subsidiary, will at all times be sufficient to pay all such
amounts on or in respect of debt of the Borrower or such Subsidiary when such
amounts are required to be paid.
(d) The representations made in this Section 3.19 with respect to any
Subsidiary that is a Guarantor are made after taking into consideration and
giving effect to the Indemnity, Contribution and Subrogation Agreement.
SECTION 3.20. Location of Real Property and Leased Premises. (a) Schedule
3.20(a) lists completely and correctly as of the date of this Agreement all real
property owned by the Borrower and the Subsidiaries and the addresses thereof
and, to the knowledge of the Borrower, all real property owned by the Company
and its subsidiaries as of the date of this Agreement and the addresses thereof.
The Borrower and the Subsidiaries own in all the real property set forth on
Schedule 3.20(a) as owned by the Borrower or any Subsidiary and, to the
knowledge of the Borrower, the Company and its subsidiaries own in fee all the
real property set forth on Schedule 3.20(a) as owned by the Company or any of
its subsidiaries.
(b) Schedule 3.20(b) lists completely and correctly as of the date of this
Agreement all material real property leased by the Borrower and the Subsidiaries
and the addresses thereof and, to the knowledge of the Borrower, all real
property leased by the Company and its subsidiaries as of the date of this
Agreement and the addresses thereof. The Borrower and the Subsidiaries, as the
case may be, have valid leasehold interests in all the material real property
set forth on Schedule 3.20(b) as leased by the Borrower or any Subsidiary and,
to the knowledge of the Borrower, the Company and its subsidiaries, as the case
may be, have valid
79
leasehold interests in all the real property set forth on Schedule 3.20(b) as
leased by the Company or any of its subsidiaries.
SECTION 3.21. Labor Matters. As of the date of this Agreement and the
Closing Date, there are no strikes, lockouts or slowdowns against the Borrower
or any Subsidiary pending or, to the knowledge of the Borrower, threatened. The
hours worked by and payments made to employees of the Borrower and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such matters.
All payments due from the Borrower or any Subsidiary, or for which any claim may
be made against the Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary. The consummation of
the Acquisition will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower or any Subsidiary is bound.
SECTION 3.22. Tender Offer; Merger. (a) All consents and approvals of,
filings and registrations with and other actions in respect of all Governmental
Authorities required in order to make or consummate the Tender Offer, to
purchase Shares pursuant thereto and to consummate the Merger have been
obtained, given, filed or taken and are in full force and effect, other than (i)
the filing of the certificates of merger necessary to accomplish the Merger
with, and their acceptance by, the Secretary of State of the State of Delaware
and any necessary approval of the Merger by the stockholders of the Company, in
each case pursuant to the General Corporation Law of the State of Delaware, (ii)
filings and other actions required pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the respective rules and regulations
thereunder in connection with the Merger and any necessary approval thereof by
the stockholders of the Company and (iii) filings and other actions required
pursuant to state securities or blue sky laws in connection with the Merger.
(b) The Tender Offer Materials and all amendments or supplements thereto
disseminated to the public on or prior to the Tender Offer Date at the time of
their dissemination to the public did not and will not on the Tender Offer Date,
and the Tender Offer Materials and all
80
amendments or supplements thereto that were or will be disseminated to the
public after the Tender Offer Date did not or will not at the time of their
dissemination to the public, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were or are made,
not misleading. Copies of the Tender Offer Materials and all amendments or
supplements thereto will be delivered to the Administrative Agent not later than
the time they are made available to the public or filed with the Securities and
Exchange Commission.
(c) The Merger Agreement has been duly authorized, executed and delivered
by each of the Borrower, Acquisition Co. and the Company and constitutes a
legal, valid and binding obligation of each such corporation, enforceable in
accordance with its terms. A true, correct and complete copy of the Merger
Agreement has been furnished to the Administrative Agent.
(d) As of the date of this Agreement and as of the Closing Date, (i) each
of the representations and warranties made by the Borrower and Acquisition Co.
in the Merger Agreement is true and correct in all material respects and (ii)
the Borrower does not have any knowledge of any circumstances or conditions that
would render the representations and warranties of the Company in the Merger
Agreement untrue or incorrect in any material respect.
(e) Prior to the Tender Offer Date, none of the Transaction Parties
purchased or otherwise acquired any Shares for a price per Share in excess of
the price specified in Section 1.1 (a) of the Merger Agreement, other than
Shares acquired by the Company not in violation of the Merger Agreement.
SECTION 3.23. Capitalization of the Borrower. As of the date of this
Agreement, the authorized capital stock of the Borrower consists of 529,295
shares of common stock, par value $0.01 per share, of which 273,742 shares are
issued and outstanding. All such outstanding shares of Stock are fully paid and
nonassessable.
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ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue, renew or extend Letters of Credit hereunder are subject to the
satisfaction of the following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing and each
issuance, renewal or extension of a Letter of Credit (each such event being
called a "Credit Event"):
(a) The Administrative Agent shall have received any notice of such
Borrowing required by Section 2.03 or, in the case of the issuance, renewal or
extension of a Letter of Credit, the Issuing Bank and the Administrative Agent
shall have received a notice requesting the issuance of such Letter of Credit as
required by Section 2.22(b).
(b) The representations and warranties set forth in Article III shall be
true and correct in all material respects on and as of the date of such Credit
Event with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date.
(c) The Loan Parties, taken as a whole, shall be in compliance in all
material respects with all the terms and provisions set forth in this Agreement
and in the other Loan Documents, and at the time of and immediately after such
Credit Event, no Event of Default or Default shall have occurred and be
continuing.
(d) The Lenders shall be satisfied, in the exercise of good faith, that, so
long as the Shares constitute Margin Stock, 50% of the loan value (determined in
accordance with Regulation U) of the Shares held by the Borrower or Acquisition
Co., together with the good faith loan value (determined in accordance with
Regulation U) of all the other Collateral, shall exceed the outstanding
principal amount of the Loans and the L/C Exposure (taking into account the
Loans to be made and Letters of Credit to be issued on the date of such Credit
Event).
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Each Credit Event shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) above.
SECTION 4.02. First Credit Event. On the Closing Date
(a) The Administrative Agent shall have received, on behalf of itself,
the Lenders and the Issuing Bank, a favorable written opinion of (i)
Proskauer Rose Goetz & Mendelsohn LLP, counsel for the Borrower,
substantially to the effect set forth in Exhibit I-1 and (ii) each local
counsel listed on Schedule 4.02(a), substantially to the effect set forth
in Exhibit I-2, in each case (A) dated the Closing Date, (B) addressed to
the Issuing Bank, the Administrative Agent and the Lenders, and (C)
covering such other matters relating to the Loan Documents, the
Transactions and the Acquisition as the Administrative Agent shall
reasonably request, and the Borrower hereby requests such counsel to
deliver such opinions.
(b) All legal matters incident to this Agreement and the other Loan
Documents shall be reasonably satisfactory to the Administrative Agent.
(c) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments thereto,
of each Loan Party, certificates of a recent date by the Secretary of State
of the state of its organization, and a certificate as to the good standing
of each Loan Party as of a recent date, from such Secretary of State; (ii)
a certificate of the Secretary or Assistant Secretary of each Loan Party
dated the Closing Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws of such Loan Party as in effect on the
Closing Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the Board of
Directors of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such person is a party and, in
the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full
force and effect, (C) that
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the certificate or articles of incorporation of such Loan Party have not
been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above, and
(D) as to the incumbency and specimen signature of each officer executing
any Loan Document or any other document delivered in connection herewith on
behalf of such Loan Party; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; and (iv) such
other documents as the Administrative Agent may reasonably request.
(d) The Administrative Agent shall have received a certificate, dated
the Closing Date and signed by a Financial Officer of the Borrower,
confirming compliance with the conditions precedent set forth in Sections
4.01(b) and 4.04(c).
(e) The Administrative Agent shall have received all Fees and other
amounts due and payable on or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all reasonable out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder or
under any other Loan Document.
(f) The Pledge Agreement shall have been duly executed by the Borrower
and each Subsidiary (other than the Company and its subsidiaries) and
delivered to the Collateral Agent and shall be in full force and effect,
and all the outstanding capital stock of the Subsidiaries held by the
Borrower or any such Subsidiary shall have been duly and validly pledged
thereunder to the Collateral Agent for the ratable benefit of the Secured
Parties, and certificates representing such shares, accompanied by
instruments of transfer and undated stock powers endorsed in blank, shall
be in the actual possession of the Collateral Agent or, in the case of
Book-Entry Shares, transferred into an account of the Collateral Agent
maintained with the applicable Book-Entry Transfer Facility; provided,
however, that (i) neither the Borrower nor any Domestic Subsidiary shall be
required to pledge more than 65% of the capital stock of any Foreign
Subsidiary and (ii) no Foreign Subsidiary shall be required to pledge the
capital stock of any Foreign Subsidiary.
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(g) (i) The Security Agreement shall have been duly executed by the
Borrower and each Subsidiary (other than the Company and its subsidiaries)
and shall have been delivered to the Collateral Agent and shall be in full
force and effect on such date and each document (including each Uniform
Commercial Code financing statement) required by law or reasonably
requested by the Collateral Agent to be filed, registered or recorded in
order to create in favor of the Collateral Agent for the benefit of the
Secured Parties a valid and perfected first priority security interest in
and lien on the Collateral (subject to any Lien expressly permitted by
Section 6.02 and in existence on the Closing Date) described in such
agreement shall have been delivered to the Collateral Agent; provided,
however, that the Foreign Subsidiaries and the Puerto Rico Subsidiary shall
not be required to execute the Security Agreement and (ii) the Chattel
Mortgages shall have been duly executed by the Puerto Rico Subsidiary and
shall have been delivered to the Collateral Agent and shall be in full
force and effect on such date and each document required by law or
reasonably requested by the Collateral Agent to be filed, registered or
recorded in order to create in favor of the Collateral Agent for the
benefit of the Secured Parties a valid and perfected first priority
security interest in and lien on the Collateral (subject to any Lien
expressly permitted by Section 6.02 and in existence on the Closing Date)
described in such agreement shall have been delivered to the Collateral
Agent.
(h) The Collateral Agent shall have received the results of a search
of the Uniform Commercial Code (or equivalent) filings made with respect to
the Loan Parties in the states (or other jurisdictions) in which the chief
executive office of each such person is located, any offices of such
persons in which records have been kept relating to Accounts and the other
jurisdictions in which Uniform Commercial Code filings (or equivalent
filings) are to be made pursuant to paragraph (g) above, together with
copies of the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence satisfactory to the Collateral Agent
that the Liens indicated in any such financing statement (or similar
document) would be permitted under Section 6.02 or have been released.
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(i) The Collateral Agent shall have received a Perfection Certificate
with respect to the Loan Parties dated the Closing Date and duly executed
by a Responsible Officer of the Borrower.
(j) (i) Each of the Security Documents, in form and substance
satisfactory to the Lenders, relating to each of the Mortgaged Properties
shall have been duly executed by the parties thereto and delivered to the
Collateral Agent and shall be in full force and effect, (ii) each of such
Mortgaged Properties shall not be subject to any Lien other than those
permitted under Section 6.02, (iii) a lender's title insurance policy, in
form and substance acceptable to the Collateral Agent, insuring such
Security Document as a first lien on such Mortgaged Property (subject to
any Lien permitted by Section 6.02 and in existence on the Closing Date)
shall have been received by the Collateral Agent) and (iv) the Collateral
Agent shall have received such other documents, including a policy or
policies of title insurance issued by a nationally recognized title
insurance company, together with such endorsements, coinsurance and
reinsurance as may be requested by the Collateral Agent, insuring the
Mortgages as valid first liens on the Mortgaged Properties, free of Liens
other than those permitted under Section 6.02 and in existence on the
Closing Date, together with such surveys and legal opinions required to be
furnished pursuant to the terms of the Mortgages or as reasonably requested
by the Collateral Agent or the Lenders.
(k) The Guarantee Agreement shall have been duly executed by each
Subsidiary (other than the Company and its subsidiaries), shall have been
delivered to the Collateral Agent and shall be in full force and effect;
provided, however, that no Foreign Subsidiary shall be required to execute
the Guarantee Agreement.
(l) The Indemnity, Subrogation and Contribution Agreement shall have
been duly executed by each Loan Party, shall have been delivered to the
Collateral Agent and shall be in full force and effect.
(m) The Administrative Agent shall have received a copy of, or a
broker's or insurance company certificate as to coverage under, the
insurance
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policies required by Section 5.02 and the applicable provisions of the
Security Documents.
(n) The Shares to be purchased with the proceeds of the Loans to be
made on the Closing Date shall have been validly tendered to Acquisition
Co. in accordance with the Tender Offer Materials, and not withdrawn, and
shall be available for purchase pursuant to the Tender Offer.
(o) All conditions to the purchase of Shares in the Tender Offer shall
have been satisfied without giving effect to any waiver or amendment
thereof not approved by the Required Lenders, and Acquisition Co. shall
have accepted for payment pursuant to the Tender Offer a majority of the
Shares (on a fully diluted basis) (excluding any Shares tendered through
"guaranteed delivery" procedures and not yet delivered to Acquisition Co.
or its agents); provided, however, that the approval of the Required
Lenders shall not be required for any extension of the Tender Offer.
(p) There shall not be any action, suit or proceeding at law or in
equity or by or before any Governmental Authority pending or, to the
knowledge of the Borrower, threatened against or affecting any Transaction
Party or any business, property or rights of such person and relating to
the Transactions or the Acquisition (i) that could reasonably be expected
to result in a Material Adverse Effect or (ii) that is reasonably likely to
restrain, prevent or impose materially burdensome conditions on any
Transaction or the Acquisition.
(q) To the extent applicable, the Borrower shall have delivered to
each Lender a statement on Form U-1 or Form G-3 complying with the
requirements of Regulation U or Regulation G, as applicable.
(r) No change, and no development or event involving a prospective
change, in respect of the assets, capitalization, corporate structure,
securities, condition (financial or otherwise), prospects or results of
operations of the Borrower or the Company shall have occurred that is
deemed by the Lenders, in their good faith judgment, to involve a
reasonable likelihood of a Material Adverse Effect.
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(s) The Administrative Agent shall have received a customary
collateral review, reasonably satisfactory in form and substance to the
Administrative Agent.
(t) The Administrative Agent shall have received (i) the financial
statements referred to in Section 3.05(b) and (ii) consolidated income
statement projections, consolidated cash flow projections, consolidated
balance sheet projections and related assumptions for the Borrower for each
year until the Post-Merger Facilities Maturity Date, after giving effect to
the Transactions and the Acquisition.
(u) The Administrative Agent shall have received for each Mortgaged
Property a copy of the original permanent or temporary certificate of
occupancy, if any, issued upon completion of such Mortgaged Property (or
any amendment issued upon completion of any alteration) by the appropriate
Governmental Authority.
(v) The Administrative Agent shall have received (i) an environmental
assessment report in form, scope and substance reasonably satisfactory to
the Lenders, from Dames & Moore, as to any material environmental hazards,
liabilities or Remedial Action to which the Borrower or any of the
Subsidiaries may be subject and the Lenders shall be reasonably satisfied
with the nature and cost of any such hazards, liabilities or Remedial
Action and with the Borrower's plans with respect thereto and (ii) written
evidence of compliance with the New Jersey Industrial Site Recovery Act
pursuant to paragraph (I) of Annex A to the Merger Agreement.
(w) The Lenders shall have received a solvency letter from Valuation
Research Corporation satisfactory to the Lenders confirming the solvency of
the Borrower after giving effect to the Acquisition.
(x) The Administrative Agent shall have received evidence reasonably
satisfactory to it of the termination or cancellation of, and payment in
full of all amounts outstanding under or in respect of, (i) the Credit
Agreement dated as of November 25, 1992, among the Borrower, the Banks
named therein and Citibank, N.A., as agent, (ii) the Standby Letter of
Credit Agreement dated October, 1992, between the Borrower and Mellon Bank,
N.A., (iii) the $10,000,000 promissory
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note dated November 22, 1994, from the Borrower to Midlantic National Bank
and (iv) the Financing Agreement dated March 9, 1992, between Danbury
Pharmacal Puerto Rico, Inc. (formerly known as Danbury Pharmacal Caribe,
Inc.), and Banco Popular de Puerto Rico.
SECTION 4.03. Additional Conditions Precedent. On the date of the initial
Term Facility Borrowing or Post-Merger Revolving Facility Borrowing:
(a) The Merger shall have been, or simultaneously therewith shall be,
consummated in accordance with applicable law and the terms of the Merger
Agreement (and without giving effect to any waiver or amendment not
approved by the Required Lenders).
(b) The Company and each of its subsidiaries shall have become parties
to the Guarantee Agreement, the Security Agreement, the Pledge Agreement
and the Indemnity, Subrogation and Contribution Agreement and the
conditions set forth in paragraphs (f), (g), (h), (i), (j), (k), (1) and
(m) of Section 4.02 (but without giving effect to the first parenthetical
in each paragraph) shall, insofar as they relate to the Company and its
subsidiaries, have been satisfied on and as of such date as if all
references therein to the Closing Date were references to such date. The
Administrative Agent shall have received, with respect to the Company and
each of its subsidiaries, the certificates contemplated by Section 4.02(c)
and an opinion of counsel to the Company substantially in the form of
Exhibit J.
ARTICLE V
Affirmative Covenants
The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full and all
Letters of Credit have been canceled or have expired and all amounts drawn
thereunder
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have been reimbursed in full, unless the Required Lenders shall otherwise
consent in writing, the Borrower shall, and shall cause each Subsidiary to:
SECTION 5.01. Existence. Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise expressly permitted under Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; comply with all applicable laws, rules,
regulations and decrees and orders of any Governmental Authority, whether now in
effect or hereafter enacted, except where the failure to comply could not
reasonably be expected to result in a Material Adverse Effect; and at all times
maintain and preserve all property material to the conduct of such business and
keep such property in good repair, working order and condition and from time to
time make, or cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary, in the Borrower's
reasonable judgment, in order that the business carried on in connection
therewith may be properly conducted at all times.
SECTION 5.02. Insurance. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; and maintain
such other insurance, to such extent and against such risks, including fire and
other risks insured against by extended coverage, as is customary with companies
in the same or similar businesses operating in the same or similar locations.
(b) If at any time the area in which the Premises (as defined in the
Mortgages) are located is designated a "flood hazard area" in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), obtain flood insurance in such total amount as may be
required by applicable law and otherwise comply with the National Flood
Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as
it may be amended from time to time.
(c) With respect to any Mortgaged Property, carry and maintain
comprehensive general liability insurance,
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including the "broad form CGL endorsement" and coverage against claims made for
personal injury (including bodily injury, death and property damage) and
umbrella liability insurance against any and all claims, in no event for a
combined single limit of less than $1,000,000, naming the Collateral Agent as an
additional insured, on forms reasonably satisfactory to the Collateral Agent.
Cause all policies insuring against damage to the Mortgaged Property to be
endorsed or otherwise amended to include a "standard" or "New York" lender's
loss payable endorsement, in form and substance satisfactory to the
Administrative Agent and the Collateral Agent, which endorsement shall provide
that, from and after the Closing Date, the insurance carrier shall give the
Administrative Agent or the Collateral Agent at least 30 days' prior notice of
termination of such policies.
(d) In connection with the covenants set forth in this Section 5.02, it is
understood and agreed that:
(i) none of the Administrative Agent, the Lenders, the Issuing Bank,
or their respective agents or employees shall be liable for any loss or
damage insured by the insurance policies required to be maintained under
this Section 5.02, it being understood that (A) the Borrower and the other
Loan Parties shall look solely to their insurance companies or any other
parties other than the aforesaid parties for the recovery of such loss or
damage and (B) such insurance companies shall have no rights of subrogation
against the Administrative Agent, the Collateral Agent, the Lenders, the
Issuing Bank or their agents or employees; provided, however, that the
insurance policies do not provide waiver of subrogation rights against such
parties, as required above, then the Borrower hereby agrees, to the extent
permitted by law, to waive (and to cause each Subsidiary to waive) its
right of recovery, if any, against the Administrative Agent, the Collateral
Agent, the Lenders, the Issuing Bank and their agents and employees; and
(ii) the designation of any form, type or amount of insurance coverage
by the Administrative Agent, the Collateral Agent or the Required Lenders
under this Section 5.02 shall in no event be deemed a representation,
warranty or advice by the Administrative Agent, the Collateral Agent or the
Lenders that such insurance is adequate for the purposes of the business
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of the Borrower and the Subsidiaries or the protection of their properties.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and pay or
perform its other material obligations in accordance with their terms and pay
and discharge when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise that, if unpaid, might
give rise to a Lien upon such properties or any part thereof; provided, however,
that such payment and discharge shall not be required with respect to any such
obligation, tax, assessment, charge, levy or claim so long as the validity,
amount or entitlement thereof shall be contested in good faith by appropriate
proceedings and the Borrower shall have set aside on its books adequate reserves
with respect thereto in accordance with GAAP and such contest operates to
suspend enforcement of any related Lien and, in the case of a Mortgaged
Property, there is no material risk of forfeiture of such property.
SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent:
(a) within 100 days after the end of each fiscal year, its
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows showing the financial condition of the
Borrower and its consolidated Subsidiaries as of the close of such fiscal
year and the results of its operations and the operations of such
Subsidiaries during such year, all audited by BDO Seidman LLP or other
independent public accountants of recognized national standing and
accompanied by an opinion of such accountants (which shall not be qualified
in any material respect) to the effect that such consolidated financial
statements fairly present the financial condition and results of operations
of the Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows showing
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the financial condition of the Borrower and its consolidated Subsidiaries
as of the close of such fiscal quarter and the results of its operations
and the operations of such Subsidiaries during such fiscal quarter and the
then elapsed portion of the fiscal year, all certified by one of its
Financial Officers as fairly presenting the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of the accounting firm (in the case
of delivery under clause (a) above) or Financial Officer (in the case of
delivery under clause (b) above) opining on or certifying such statements
(which certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal interpretations)
certifying that, to the knowledge of the signer, no Event of Default or
Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto, and attaching
calculations showing compliance with Sections 6.13, 6.14, 6.15, 6.16, 6.17
and 6.18 and the Interest Expense Coverage Ratio as of the end of such
fiscal period;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any Subsidiary with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
to its shareholders, as the case may be;
(e) as soon as available, and in any event no later than 100 days
after the end of each fiscal year, commencing with the fiscal year ending
December 30, 1995, forecasted financial projections for the Borrower
through the end of the then-current fiscal year (including a description of
the underlying assumptions and management's discussion of historical
results), all certified by a Financial Officer of the Borrower to be a good
faith estimate of the forecasted financial
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projections and results of operations for the period through the
then-current fiscal year; and
(f) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative
Agent, the Issuing Bank and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against the Borrower or any Subsidiary thereof that could
reasonably be expected to result in a Material Adverse Effect; and
(c) any effect or impairment known to the Borrower that has resulted
in, or could reasonably be expected to result in, a Material Adverse
Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all respects with the
applicable provisions of ERISA and the Code, except where the failure to comply
could not reasonably be expected to result in a Material Adverse Effect, and (b)
furnish to the Administrative Agent (i) as soon as possible after, and in any
event within 20 days after any Responsible Officer of the Borrower or any ERISA
Affiliate knows, any ERISA Event has occurred that, alone or together with any
other ERISA Events that have occurred could reasonably be expected to result in
liability of the Borrower in an aggregate amount exceeding $1,000,000, a
statement of a Financial Officer of the Borrower setting forth details as to
such ERISA Event and the action, if any, that the Borrower proposes to take with
respect thereto.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.
Keep proper books of record and
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account in which full, true and correct entries in conformity with GAAP and all
requirements of applicable law are made of all material dealings and
transactions in relation to its business. The Borrower will, and will cause each
Subsidiary to, permit any representatives designated by the Administrative Agent
or any Lender to visit and inspect the financial records and the properties of
the Borrower or any Subsidiary upon prior notice to a Financial Officer of the
Borrower, at mutually agreed times during normal business hours and as often as
reasonably requested and to make extracts from and copies of such financial
records (such visits and inspections to be coordinated, to the extent possible,
through the Administrative Agent). Permit any representatives designated by the
Administrative Agent or any Lender to discuss the affairs, finances and
condition of the Borrower or any Subsidiary with the officers thereof (all in a
manner reasonably calculated not to materially disrupt the normal business
operations and activities of the Borrower and the Subsidiaries) and independent
accountants therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.09. Compliance with Environmental Laws. Comply, and cause all
lessees and other persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Properties; obtain and renew all material Environmental Permits
necessary for its operations and Properties; and conduct any Remedial Action in
accordance with Environmental Laws; provided, however, that neither the Borrower
nor any Subsidiary shall be required to undertake any Remedial Action to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to
such circumstances.
SECTION 5.10. Preparation of Environmental Reports. If a Default caused by
reason of a breach of Section 3.17 or 5.09 shall have occurred and be
continuing, at the written request of the Required Lenders through the
Administrative Agent, provide to the Lenders within 45 days after such request,
at the expense of the Borrower, an environmental site assessment report for the
Properties which are the subject of such default prepared by an
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environmental consulting firm acceptable to the Administrative Agent and
indicating the presence or absence of Hazardous Materials and the estimated cost
of any compliance or Remedial Action required by Environmental Laws in
connection with such Properties.
SECTION 5.11. Further Assurances. Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
mortgages and deeds of trust) that may be required under applicable law, or that
the Required Lenders, the Administrative Agent or the Collateral Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the validity
and first priority of the security interests created or intended to be created
by the Security Documents. The Borrower shall cause any subsequently acquired or
organized Subsidiary to became a party to the Guarantee Agreement and the
Indemnity Subrogation and Contribution Agreement and each applicable Security
Document; provided, however, that no Foreign Subsidiary shall be required to
become a party to the Guarantee Agreement or to any Security Document. In
addition, from time to time, the Borrower shall, at its cost and expense,
promptly secure the Obligations by pledging or creating, or causing to be
pledged or created, perfected security interests with respect to such of its
assets and properties as the Administrative Agent or the Required Lenders shall
designate (it being understood that it is the intent of the parties that the
Obligations shall be secured by, among other things, substantially all the
assets of the Borrower and the Domestic Subsidiaries (including real and other
properties acquired subsequent to the Closing Date)). Such security interests
and Liens shall be created under the Security Documents and other security
agreements, mortgages, deeds of trust and other instruments and documents in
form and substance satisfactory to the Collateral Agent, and the Borrower shall
deliver or cause to be delivered to the Lenders all such instruments and
documents (including legal opinions, title insurance policies and lien searches)
as the Collateral Agent shall reasonably request to evidence compliance with
this Section 5.11. The Borrower shall provide such evidence as the Collateral
Agent shall reasonably request as to the perfection and priority status of each
such security interest and Lien.
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SECTION 5.12. Rate Protection Agreements. In the case of the Borrower,
within 100 days following the Merger Date, enter into (and thereafter maintain
in effect) Rate Protection Agreements providing for interest rate protection on
customary terms, for a period of at least two years following the Merger Date,
with respect to at least 50% of the sum of the aggregate principal amount of the
then-outstanding Term Loans.
SECTION 5.13. Merger. (a) Use best efforts, consistent with applicable law,
to effect the Merger as promptly as practicable after the consummation of the
Tender Offer.
(b) If the Borrower or Acquisition Co. shall own at least 90% of the Shares
following the consummation of the Tender Offer, effect the Merger without a
meeting of stockholders of the Company within seven days.
SECTION 5.14. Board of Directors of the Company. In the case
of the Borrower, exercise its rights with respect to the Company's Board of
Directors under Section 1.4 of the Merger Agreement as soon as practicable
following the consummation of the Tender Offer.
ARTICLE VI
Negative Covenants
The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full and all
Letters of Credit have been canceled or have expired and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, the Borrower shall not, and shall not cause or
permit any Subsidiary to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness existing on the date of this Agreement and set forth
in Schedule 6.01;
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(b) Indebtedness created hereunder or under any other Loan Document;
(c) in the case of any Subsidiary, Indebtedness owed to the Borrower
or any wholly owned Subsidiary that is a Guarantor, which Indebtedness is
evidenced by a note or notes pledged to the Collateral Agent under the
Pledge Agreement;
(d) prior to the Merger Date, Indebtedness of any subsidiary of the
Company owed to the Company;
(e) in the case of the Borrower, Indebtedness under Rate Protection
Agreements entered into in the ordinary course of business on terms and
with counterparties reasonably satisfactory to the Administrative Agent
(and any Lender is hereby deemed to be satisfactory);
(f) Indebtedness of the Company and its subsidiaries incurred after
the date of this Agreement and prior to the Tender Offer Date and not
incurred in violation of the Merger Agreement;
(g) Subordinated Debt issued after the Merger Date;
(h) accounts payable, rent obligations (other than Capital Lease
Obligations) and operating expenses incurred in the ordinary course of
business;
(i) in the case of the Borrower, reimbursement obligations in favor of
any Lender in respect of letters of credit issued by such Lender after the
date of this Agreement and prior to the Merger Date and not in excess of
$2,000,000, in the aggregate for all Lenders, at any time outstanding;
(j) purchase money Indebtedness incurred in the ordinary course of
business after the date of this Agreement (including financings through
industrial revenue and similar bonds) to finance Capital Expenditures
permitted under Section 6.13; provided, however, that such Indebtedness is
incurred within 90 days after the making of the Capital Expenditure so
financed;
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(k) in the case of the Borrower, Indebtedness issued as consideration
for the repurchase of stock or options, as permitted by Section 6.06
(a)(ii), not in excess of $5,000,000 aggregate principal amount outstanding
at any time;
(l) Indebtedness consisting of Guarantees of Indebtedness permitted
under clause (h) above; and
(m) other Indebtedness of the Borrower not in excess of $10,000,000
aggregate principal amount at any time outstanding, of which up to
$3,500,000 may be in the form of Capital Lease Obligations and the balance
shall be unsecured.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on
any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:
(a) any Lien on property or assets of the Borrower and the
Subsidiaries existing on the date of this Agreement and set forth in
Schedule 6.02; provided, however, that such Lien shall secure only those
obligations that it secures on the date hereof;
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; provided, however,
that (i) such Lien is not created in contemplation of or in connection with
such acquisition, (ii) such Lien does not apply to any other property or
assets of the Borrower or any Subsidiary and (iii) such Lien does not (A)
materially interfere with the use and occupancy of any Mortgaged Property,
(B) materially reduce the fair market value of such Mortgaged Property but
for such Lien or (C) result in any material increase in the cost of
operating, occupying or owning or leasing such Mortgaged Property;
(d) any Lien incurred by the Company or any of its subsidiaries after
the date of this Agreement and prior to the Tender Offer Date and not
incurred in violation of the Merger Agreement; provided, however, that such
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Lien shall be discharged or released on or prior to the Merger Date;
(e) any Lien for taxes, assessments or government charges not yet due
or that are being contested in compliance with Section 5.03;
(f) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or that are being contested in
compliance with Section 5.03;
(g) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(h) deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(i) zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary
course of business that, in the aggregate, are not substantial in amount
and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct or the business of the
Borrower or any Subsidiary;
(j) unpaid vendors' Liens, rights of reclamation or other like Liens
of sellers of inventory arising in the ordinary course of business and
securing obligations not past due;
(k) any purchase money security interest in fixed assets; provided,
however, that (i) such security interest only secures Indebtedness
permitted under Section 6.01(j), (ii) such security interest is created and
perfected substantially simultaneously with the incurrence of such
Indebtedness, (iii) such security interest applies only to fixed assets the
purchase of which is financed with such Indebtedness and (iv) the
Indebtedness secured thereby is not less than 75% nor
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more than 85% of the fair market value of the fixed assets subject to such
security interest (measured at the date of incurrence of such security
interest); and
(l) any Lien represented by the interest of a lessor in property the
subject of a Capital Lease Obligation of the Borrower permitted by Section
6.01(m); and
(m) any Lien in favor of Bayer AG or any of its subsidiaries in
respect of securities of a Permitted Foreign Company (other than a
Permitted Foreign Company described in clause (c) of the definition
thereof).
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any Sale and
Lease-Back Transaction.
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire
any capital stock, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, Guarantee any Indebtedness of, or make
or permit to exist any investment or any other interest in, any other person,
except:
(a) investments by the Borrower existing on or subscribed to prior to
the date of this Agreement in the capital stock of the Subsidiaries;
(b) investments in the Shares;
(c) investments by the Company existing on the Tender Offer Date in
the capital stock of its subsidiaries; provided, however, that none of such
investments shall have been made in violation of the Merger Agreement;
(d) loans and advances to officers or employees of the Borrower or any
Subsidiary in the ordinary course of business not in excess of $1,500,000
at any time outstanding;
(e) investments in, or loans and advances to, wholly owned
Subsidiaries that are Guarantors or, in the case of an investment, that
shall become wholly owned Subsidiaries that are Guarantors following such
investment;
101
(f) Guarantees entered into in the ordinary course of business of
Indebtedness of wholly owned Subsidiaries that are Guarantors;
(g) Permitted Investments;
(h) investments existing on or subscribed to prior to the date of this
Agreement and set forth on Schedule 6.04;
(i) in the case of the Borrower and the Subsidiaries other than
Permitted Foreign Companies, investments in, and loans or advances to,
Permitted Foreign Companies in a net aggregate amount not to exceed
$10,000,000 in any fiscal year plus, commencing with fiscal year 1997, 50%
of the excess, if any, of (A) $10,000,000 over (B) the aggregate amount of
such investments, loans and advances made during the preceding fiscal year;
(j) in the case of the Borrower and the Subsidiaries other than
Permitted Foreign Companies, Guarantees of Indebtedness of Permitted
Foreign Companies; provided, however, that any payment on such a Guarantee
shall not be permitted under this clause (j) (but may be permitted under
clause (i) above or clause (l) below);
(k) in the case of Permitted Foreign Companies, any investment in, or
loan or advance to, or Guarantee of Indebtedness of, any Permitted Foreign
Company; and
(l) other or additional investments, loans and advances in a net
aggregate amount not to exceed $10,000,000 at any time prior to the last
day of fiscal year 1997 and $15,000,000 thereafter.
SECTION 6.05. Mergers, Consolidations and Sales of Assets. Other than the
Tender Offer and the Merger, merge into or consolidate with any other person, or
permit any other person to merge into or consolidate with it, or sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of its assets (whether now owned or
hereafter acquired) or any capital stock of any Subsidiary, except that (a) the
Borrower and any Subsidiary may sell inventory in the ordinary course of
business, (b) if at the time thereof and immediately after giving effect thereto
no
10Z
Event of Default or Default shall have occurred and be continuing (i) any wholly
owned Subsidiary may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation and (ii) any wholly owned Subsidiary may
merge into or consolidate with any other Subsidiary in a transaction in which
the surviving entity is a wholly owned Subsidiary and (c) if at the time thereof
and immediately after giving effect thereto no Event of Default or Default shall
have occurred and be continuing, any Subsidiary may dissolve or liquidate
through a transfer of its assets to its shareholders.
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries To Pay Dividends. (a) Other than the payment for Shares in the
Merger (including Shares with respect to which appraisal rights shall be
exercised) and payments required by the Merger Agreement in respect of options
covering Shares, declare or pay, directly or indirectly, any dividend or make
any other distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, with respect to any shares of its
capital stock or directly or indirectly redeem, purchase, retire or otherwise
acquire for value (or permit any Subsidiary to purchase or acquire) any shares
of any class of its capital stock or set aside any amount for any such purpose;
provided, however, that (i) any Subsidiary may declare and pay dividends or make
other distributions to the Borrower or any wholly owned Subsidiary that is a
Guarantor, (ii) if at the time thereof and immediately after giving effect
thereto no Event of Default shall have occurred and be continuing, the Borrower
may repurchase stock or options from former directors, former officers and
former employees (or their legal representatives) in the ordinary cause of
business in accordance with any duly instituted stock option plan, (iii) the
Borrower may perform its obligations under the agreements referred to in Section
6.07(d) and (iv) after December 30, 1995, the Borrower may declare and pay
dividends with respect to its common stock if (A) at the time thereof and
immediately after giving effect thereto, no Event of Default or Default shall
have occurred and be continuing, (B) at the time thereof and after giving effect
to any Indebtedness to be incurred in connection therewith, the Leverage Ratio
shall not be greater than 2.5 to 1.0 and (C) after giving effect thereto, the
aggregate amount of all such dividends since December 31, 1995, shall not exceed
25% of Net Income for the period from and including October 1,
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1995, to and including the last day of the most recent complete fiscal quarter.
(b) Other than the Merger Agreement and this Agreement, permit any
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Subsidiary to (i) pay any dividends or make any other distributions on its
capital stock or any other interest or (ii) make or repay any loans or advances
to the Borrower or the parent of such Subsidiary.
SECTION 6.07. Transactions with Affiliates. Sell or transfer any property
or assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except that the
Borrower or any Subsidiary may engage in any of the foregoing transactions in
the ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties; provided, however, that the
foregoing shall not apply to:
(a) loans and advances permitted by Section 6.04(d);
(b) the formation of any Permitted Foreign Company;
(c) transactions between or among the Borrower and wholly owned
Subsidiaries that are Guarantors;
(d) transactions required by the General Shareholders Agreement dated
September 30, 1994, and the Continuing Shareholders Agreement dated
September 30, 1994, in each case as in effect on the date of this
Agreement; and
(e) the grant of stock options by the Borrower to its directors,
officers and employees in the ordinary course of business and the exercise
of such stock options; and
(f) the consummation of the Merger.
SECTION 6.08. Business of Borrower and Subsidiaries. (a) Own, manage or
operate any business not
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principally engaged in a segment of the pharmaceutical or health-care industry
or ancillary thereto.
(b) Make any change materially adverse to the Lenders in the nature of
its business as carried on at the date of this Agreement.
SECTION 6.09. Operating Leases. Permit the aggregate rental expense for the
Borrower and the Subsidiaries for any fiscal year, determined on a consolidated
basis in accordance with GAAP, to exceed $8,000,000.
SECTION 6.10. Amendments of Certain Agreements; Conduct of Acquisition. (a)
Amend, waive, modify or terminate any provisions of its constitutive documents
or any agreement if the effect of such amendment, waiver, modification or
termination could reasonably be expected to have a Material Adverse Effect.
(b) Amend, waive or modify any provision of the Merger Agreement in any
material respect or, after the Closing Date, terminate the Merger Agreement;
provided, however, that the approval of the Lenders shall not be required for
any extension of the Tender Offer.
(c) Pay more than $250,000,000 (net of any cash paid to the Company upon
the exercise of outstanding options) to shareholders to acquire all the
outstanding Shares (other than Shares with respect to which appraisal rights
shall be exercised) and acquire, redeem or terminate all outstanding rights to
acquire Shares.
SECTION 6.11. Fiscal Year. Change the end of its fiscal year; provided,
however, that approval from the Required Lenders for any such changes shall not
be unreasonably withheld.
SECTION 6.12. Payment on Other Indebtedness. Make any distribution, whether
in cash, property, securities or a combination thereof, other than scheduled
payments of principal and interest as and when due (to the extent not prohibited
by applicable subordination provisions), in respect of, or pay, or offer to
commit to pay, or directly or indirectly redeem, repurchase, retire or otherwise
acquire for consideration, or set apart any sum for the aforesaid purposes, any
Indebtedness (other than the
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Obligations), except for payments in the form of common stock of the Borrower.
SECTION 6.13. Capital Expenditures. Permit the aggregate amount of Capital
Expenditures made (a) for the period from and including September 1, 1995, to
and including December 30, 1995, to exceed $10,000,000 or (b) In any fiscal
year, commencing with fiscal year 1996, to exceed $25,000,000 plus, commencing
with fiscal year 1997, 50% of the excess, if any, of (i) $25,000,000 over (ii)
actual Capital Expenditures for the preceding fiscal year.
SECTION 6.14. Leverage Ratio. Permit the Leverage Ratio as of any date
during any period specified below to be in excess of the ratio set forth below
next to such period:
Period Ratio
From and including the last day
of fiscal 1995 to but
excluding the last day of
the second fiscal quarter
of 1996
5.00 to 1.00
From and including the last
day of the second fiscal
quarter of 1996 to but
excluding the last day of
the third fiscal quarter or
1996 4.75 to 1.00
From and including the last
day of the third fiscal
quarter of 1996 to but
excluding the last day of
fiscal 1996 4.50 to 1.00
From and including the last
day of fiscal 1996 to but
excluding the last day of
fiscal 1997 4.00 to 1.00
From and including the last
day of fiscal 1997 to but
excluding the last day of
fiscal 1998 3.50 to 1.00
Thereafter 3.00 to 1.00
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SECTION 6.15. Senior Debt Ratio. Permit the ratio of (i) Senior Debt as of
any date during any period specified below to (ii) EBITDA for the most recent
complete four fiscal quarter period ended on or prior to such date to be in
excess of the ratio set forth below next to such period:
Period Ratio
From and including the last
day of fiscal 1995 to but
excluding the last day of
the second fiscal quarter
of 1996 5.00 to 1.00
From and including the last
day of the second fiscal
quarter of 1996 to but
excluding the last day of
the third fiscal quarter of
1996 4.75 to 1.00
From and including the last
day of the third fiscal
quarter of 1996 to but
excluding the last day
of fiscal 1996 4.50 to 1.00
From and including the last
day of fiscal 1996 to but
excluding the last day of
fiscal 1997 4.00 to 1.00
From and including the last
day of fiscal 1997 to but
excluding the last day of
fiscal 1998 3.00 to 1.00
Thereafter 2.50 to 1.00
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SECTION 6.16. Net Worth. Permit Net Worth as of any date during any period
specified below to be less than the amount set forth below next to such period:
Period Amount
From and including the last
day of the third fiscal
quarter of 1995 to but
excluding the last day of
fiscal 1996 $145,000,000
From and including the last
day of fiscal 1996 to but
excluding the last day of
fiscal 1997 $170,000,000
From and including the last
day of fiscal 1997 to but
excluding the last day of
fiscal 1998 $225,000,000
From and including the last
day of fiscal 1998 to but
excluding the last day of
fiscal 1999 $275,000,000
Thereafter $350,000,000
SECTION 6.17. Working Capital. Permit the ratio of Current Assets to
Current Liabilities as of the last day of any fiscal quarter to be less than
1.75 to 1.Q0.
SECTION 6.18. Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio as of any date to be less than 1.5 to 1.0.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any material representation or warranty made or deemed made by any
Loan Party in any Loan Document or in connection with the borrowings or
issuances of Letters of Credit hereunder, or any representation,
108
warranty, statement or information contained in any report, certificate,
financial statement or other instrument authored and furnished by any Loan
Party to the Administrative Agent in connection with or pursuant to any
Loan Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any Loan
or the reimbursement with respect to any L/C Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any Fee or any interest on
any Loan or L/C Disbursement or any other amount (other than an amount
referred to in clause (b) above) due under any Loan Document, when and as
the same shall become due and payable, and such default shall continue
unremedied for a period of three Business Days;
(d) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement
contained in Section 5.01(a), 5.05 or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in clause (b),
(c) or (d) above) and such default shall continue unremedied for a period
of 30 days after notice thereof from the Administrative Agent or any Lender
to the Borrower;
(f) the Borrower or any Subsidiary shall (i) fail to pay any principal
or interest, regardless of amount, due in respect of any Indebtedness in a
principal amount in excess of $5,000,000, when and as the same shall become
due and payable, or (ii) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or
holders of such Indebtedness or a trustee on its or their behalf (with
109
or without the giving of notice, the lapse of time or both) to cause, such
Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Borrower or any Subsidiary, or of a substantial
part of the property or assets of the Borrower or a Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter amended, or
any other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of the property or assets of the
Borrower or a Subsidiary or (iii) the winding-up or liquidation of the
Borrower or any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of
the foregoing shall be entered;
(h) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law, (ii)
consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described
in clause (g) above, (iii) apply for or consent to the appointment Of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of the
property or assets of the Borrower or any Subsidiary, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for
the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 (net of amounts covered by insurance) shall
be rendered against the Borrower, any Subsidiary or any combination thereof
110
and the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action shall
me legally taken by a judgment creditor to levy upon assets or properties
of the Borrower or any Subsidiary to enforce any such judgment;
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events that
have occurred, could reasonably be expected to result in liability of the
Borrower and the ERISA Affiliates in an aggregate amount exceeding
$5,000,000;
(k) any security interest purported to be created by any Security
Document shall be asserted by the Borrower or any other Loan Party not to
be a valid, perfected, first priority (except as otherwise expressly
provided in this Agreement or such Security Document) security interest in
the securities, assets or properties covered thereby, except to the extent
(i) that any such loss of perfection or priority results from the failure
of the Collateral Agent to maintain possession of certificates representing
securities pledged under the Pledge Agreement, the failure of the
Collateral Agent to make filings in the jurisdictions indicated on the
Perfection Certificate or the failure of the Collateral Agent to make any
necessary continuation filing or (ii) that such loss is covered by a
lender's title insurance policy and the related insurer promptly after such
loss shall have acknowledged in writing that such loss is covered by such
title insurance policy;
(l) (i) the Pledge Agreement shall not, or shall cease to, be
effective to create in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement) or the
Pledge Agreement shall not, or shall cease to, constitute a perfected Lien
on, and security interest in, all right, title and interest of the pledgors
thereunder in such Collateral, in each case prior and superior in right to
any other person, (ii) the Security Agreement or the Chattel Mortgage shall
not, or shall cease to, be effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable
111
security interest in the Collateral (as defined in the Security Agreement)
or the Mortgaged Property (as defined in the Chattel Mortgage), as
applicable, or the Security Agreement or the Chattel Mortgage shall not, or
shall cease to, constitute a perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral
or Mortgaged Property, as applicable, in each case prior and superior in
right to any other person, other than with respect to Liens expressly
permitted by Section 6.02, or (iii) the Mortgages shall not, or shall cease
to, be effective to create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable Lien
on all of the Loan Parties' right title and interest in and to the
Mortgaged Properties thereunder and the proceeds thereof, or the Mortgages
shall not, or shall cease to, constitute a perfected Lien on, and security
interest in, all right, title and interest of the Borrower and the
Subsidiaries in such Mortgaged Properties and the proceeds thereof, in each
case prior and superior in right to any other person, other than with
respect to Liens expressly permitted by Section 6.02, except in each case
to the extent (A) that any such loss of perfection or priority results from
the failure of the Collateral Agent to maintain possession of certificates
representing securities pledged under the Pledge Agreement or mortgage
notes pledged under any other Security Document, the failure of the
Collateral Agent to make filings in the jurisdictions indicated on the
Perfection Certificate (or instruct the Borrower to make such filings) or
the failure of the Collateral Agent to make any necessary continuation
filing (or instruct the Borrower to make such filings), (B) that such loss
is covered by a lender's title insurance policy and the related insurer
promptly after such loss shall have acknowledged in writing that such loss
is covered by such title insurance policy, or (C) the aggregate fair market
value of all Collateral with respect to which such loss applies is less
than $1,000,000;
(m) the Guarantee Agreement shall cease to be, or shall be asserted by
the Borrower or any other Loan Party not to be, a legal, valid and binding
obligation of (i) any Specified Guarantor or (ii) multiple Guarantors that,
taken together, would constitute a Specified Guarantor; or
112
(n) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
ARTICLE VIII
The Administrative Agent and the Collateral Agent
In order to expedite the transactions contemplated by this Agreement,
Chemical Bank is hereby appointed to act as Administrative Agent and Collateral
Agent on behalf of the Lenders and the Issuing Bank (for purposes of this
Article VIII, the Administrative Agent and the Collateral Agent are referred to
collectively as the "Agents"). Each of the Lenders and each assignee of any such
Lender, hereby irrevocably authorizes the Agents to take such actions on behalf
of such Lender or assignee or the Issuing Bank and to exercise such powers as
are specifically delegated to the Agents by the terms and provisions hereof and
of the other Loan Documents, together with such actions and powers as are
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reasonably incidental thereto. The Administrative Agent is hereby expressly
authorized by the Lenders and the Issuing Bank, without hereby limiting any
implied authority, (a) to receive on behalf of the Lenders and the Issuing Bank
all payments of principal of and interest on the Loans, all payments in respect
of L/C Disbursements and all other amounts due to the Lenders hereunder, and
promptly to distribute to each Lender or the Issuing Bank its proper share of
each payment so received; (b) to give notice on behalf of each of the Lenders to
the Borrower of any Event of Default specified in this Agreement of which the
Administrative Agent has actual knowledge acquired in connection with its agency
hereunder; and (c) to distribute to each Lender copies of all notices, financial
statements and other materials delivered by the Borrower pursuant to this
Agreement as received by the Administrative Agent. Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents.
Each Lender specifically acknowledges the provisions of Section 9.06(b),
which provide that, under certain circumstances, payments otherwise due to a
Defaulting Lender need not be made. Each Lender further acknowledges that one of
the consequences of such provisions is that amounts received by the
Administrative Agent for the account of the Lenders may not be distributed on a
pro rata basis. The Administrative Agent shall be conclusively entitled to rely
on any notice furnished pursuant to Section 9.06(b), and neither the
Administrative Agent nor any of its directors, officers, employees or agents
shall be liable as such for any action taken or omitted by them as contemplated
or required by Section 9.06(b) or in reliance upon any such notice except to the
extent of its gross negligence or willful misconduct in determining whether any
notice under Section 9.06(b) on its face meets the requirements thereof. The
exculpation provided in the immediately preceding sentence shall be available
notwithstanding: (a) any dispute as to whether a Lender is a Defaulting Lender;
(b) any dispute as to whether a Default shall have occurred and be continuing;
(c) any dispute as to the amount of any Defaulted Advance; (d) any other dispute
as to the validity of any set-off under Section 9.06(b); or (e) the belief of
the Administrative Agent as to any of the foregoing matters.
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Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or willful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower or any other Loan Party of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Agents shall not be responsible
to the Lenders for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or any other Loan Documents, instruments or
agreements. The Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required Lenders and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on all
the Lenders. Each Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on and instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Agents nor any of their respective directors, officers,
employees or agents shall have any responsibility to the Borrower or any other
Loan Party on account of the failure of or delay in performance or breach by any
Lender or the Issuing Bank of any of its obligations hereunder or to any Lender
or the Issuing Bank on account of the failure of or delay in performance or
breach by any other Lender or the Issuing Bank or the Borrower or any other Loan
Parry of any or their respective obligations hereunder or under any other Loan
Document or in connection herewith or therewith. Each of the Agents may execute
any and all duties hereunder by or through agents or employees and shall be
entitled to rely upon the advice of legal counsel selected by it with respect to
all matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be under any duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders.
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Subject to the appointment and acceptance of a successor Agent as provided
below, either Agent may resign at any time by notifying the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor with the prior approval of the Borrower (such approval
not to be unreasonably withheld or delayed). If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent
which shall be a bank with an office in New York, New York, having a combined
capital and surplus of at least $500,000,000 or an Affiliate of any such bank.
Upon the acceptance of any appointment as Agent hereunder by a successor bank,
such successor shall succeed to and become vested with all the rights,
powers,privileges and duties of the retiring Agent and the retiring Agent shall
be discharged from its duties and obligations hereunder. After the Agent's
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the amount of
its pro rata share (based on its Commitments hereunder) of any reasonable
out-of-pocket expenses incurred for the benefit of the Lenders by the Agents,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, that shall not have been reimbursed
by the Borrower and (b) to indemnify and hold harmless each Agent and any of its
directors, officers, employees or agents, on demand, in the amount of such pro
rata share, from and against any and all liabilities, taxes, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by or asserted against it in its capacity as Agent or any of them in any way
relating to or
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arising out of this Agreement or any other Loan Document or any action taken or
omitted by it or any of them under this Agreement or any other Loan Document, to
the extent the same shall not have been reimbursed by the Borrower, provided,
however, that no Lender shall be liable to an Agent or any such other
indemnified person for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of such Agent or any
of its directors, officers, employees or agents. In the event any Agent is
subsequently reimbursed by any Loan Party for any such expenses, liabilities,
taxes, obligations, losses, damages, penalties, judgments, costs or
disbursements, such Agent shall reimburse each Lender, pro rata, to the extent
of any payment made by such Lender with respect thereto under this paragraph.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agents or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement or any other Loan Document, any related agreement or any
document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 100 Campus Drive, Florham Park, NJ
07932, Attention of the Chief Financial Officer, Telecopy No. (201)
593-5580), with a copy to the General Counsel (Telecopy No. (201)
593-5820);
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(b) if to the Administrative Agent, to Chemical Bank Agency Services,
Grand Central Tower, 140 East 45th Street, New York, New York 10017,
Attention of Janet Belden (Telecopy No. (212) 622-0122), with a copy to
Chemical Bank, at 270 Park Avenue, New York 10017, Attention of David
Corcoran (Telecopy No. (212) 972-0009); and
(c) if to a Lender, to it at its address (or telecopy number)
set-forth in Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. The provisions of Sections 2.14, 2.16, 2.20 and 9.05
shall remain operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any Loans, the expiration of the Commitments, the
expiration of any Letter of Credit, the Invalidity or unenforceability of any
term or provision of his Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative
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Agent, the Collateral Agent, any Lender or the Issuing Bank.
SECTION 9.03. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective permitted successors and assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Borrower, the Administrative Agent, the
Issuing Bank or the Lenders that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns
(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of such Lender, (x) the Borrower and the Administrative Agent (and, in
the case of any assignment of a Revolving Credit Commitment, the Issuing Bank)
must give their prior written consent to such assignment (which consent shall
not be unreasonably withheld), (y) no assignment may be offered or made to any
pharmaceutical company or to any Affiliate of a pharmaceutical company and (z)
the amount of the Commitment and Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $10,000,000 (or, if less, the entire remaining amount of such
Lender's Commitment), (ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, with a copy
thereof furnished to the Borrower, together (except in the case of any
assignment to an Affiliate of the assigning Lender) with a processing and
recordation fee of $3,500 and (iii) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire Upon
acceptance and recording pursuant to paragraph (e) below, from and after
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the effective date specified in each Assignment and Acceptance, which effective
date shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.16, 2.20 and 9.05, as well as to any interest and Fees accrued for its
account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Commitments and the outstanding balances of its Term Loans and Revolving Loans,
in each case without giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and Acceptance, (ii) except as
set forth in (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto, or the financial condition of the Borrower
or any Subsidiary or the performance or observance by the Borrower or any
Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance and that neither it nor any of its
Affiliates is engaged in the pharmaceutical or health-care industry; (iv) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements referred to in Section 3.05(a) or
delivered pursuant to Section 5.04 and such other documents and information as
it has deemed appropriate to make its own
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credit analysis and decision to enter into such Assignment and Acceptance; (v)
such assignee shall independently and without reliance upon the Administrative
Agent, the Collateral Agent, such assigning Lender or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it shall perform in accordance with their terms all the obligations which
by the terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of Net York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Issuing Bank, the
Collateral Agent and the Lenders may treat each person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank, the Collateral Agent
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Borrower, the Issuing
Bank and the Administrative Agent to such assignment, the Administrative Agent
shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Lenders and the Issuing Bank. No assignment shall be
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effective unless it has been recorded in the Register as provided in this
paragraph (e).
(f) Each Lender may without the consent of the Borrower, the Issuing Bank
or the Administrative Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) each participating
bank or other entity shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.14, 2.16 and 2.20 to the same extent as if it
were a Lender, but not in an amount greater than that of the Lender from which
it acquired its participation (and any entitlement thereto of such participant
shall reduce pro tanto the right of such Lender to claim the benefit of such
provisions), (iv) a participation may not be offered or sold to any
pharmaceutical company or to any Affiliate of a pharmaceutical company and (v)
the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable hereunder or the amount of principal of or
the rate at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans or
changing or extending the Commitments).
(g) Notwithstanding Section 9.17, any Lender or participant may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 9.04, disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower; provided,
however, that, prior to any such disclosure of information designated by the
Borrower as confidential, each such assignee or participant or proposed assignee
or participant shall execute an agreement (a copy of which shall be given to the
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Borrower) whereby such assignee or participant shall agree to preserve the
confidentiality of such confidential information on terms no less restrictive
than those applicable to the Lenders pursuant to Section 9.17.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement or any note issued in connection herewith to a Federal
Reserve Bank to secure extensions of credit by such Federal Reserve Bank to such
Lender; provided, however, that no such assignment shall release a Lender from
any of its obligations hereunder or substitute any such Bank for such Lender as
a party hereto. In order to facilitate such an assignment to a Federal Reserve
Bank, the Borrower shall, at the request of the assigning Lender, duly execute
and deliver to the assigning Lender a promissory note or notes evidencing the
Loans made to the Borrower by the assigning Lender hereunder.
(i) The Borrower shall not assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent, the
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.
(j) In the event that Standard & Poor's, Moody's Investors Service, Inc.,
and Thompson's BankWatch (or InsuranceWatch Ratings Service, in the case of
Lenders that are insurance companies (or Best's Insurance Reports, if such
insurance company is not rated by InsuranceWatch Ratings Service)) shall, after
the date that any Lender becomes a Lender, downgrade the long-term certificate
of deposit ratings of such Lender, and the resulting ratings shall be below
BBB-, Baa3 and C (or BE, in the case of a Lender that is an insurance company
(or B. in the case of an insurance company not rated by InsuranceWatch Ratings
Service)), then the Issuing Bank shall have the right, but not the obligation,
at its own expense, upon notice to such Lender and the Administrative Agent, to
replace (or to request the Borrower to use its reasonable efforts to replace)
such Lender with an assignee (in accordance with and subject to the restrictions
contained in paragraph (b) above), and such Lender hereby agrees to transfer and
assign without recourse (in accordance with and subject to the restrictions
contained in paragraph (b) above) all its interests, rights and obligations in
respect of its Revolving Credit Commitment to such assignee; provided, however,
that (i) no such assignment shall conflict with any
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law, rule and regulation or order of any Governmental Authority and (ii) the
Issuing Bank or such assignee, as the case may be, shall pay to such Lender in
immediately available funds on the date of such assignment the principal of and
interest accrued to the date of payment on the Loans made by such Lender
hereunder and all other amounts accrued for such Lender's account or owned to it
hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower shall pay all
reasonable out-of-pocket expenses reasonably incurred by the Administrative
Agent, the Collateral Agent and the Issuing Bank in connection with the
syndication of the credit facilities provided for herein and the preparation and
administration of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or
thereof) (whether or not the transactions hereby or thereby contemplated shall
be consummated) or incurred during the continuance of a Default by the
Administrative Agent, the Collateral Agent or any Lender in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made or Letters of
Credit issued hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore, counsel for the Administrative Agent
and the Collateral Agent, and, in connection with any such enforcement or
protection, the reasonable fees, charges and disbursements of any other counsel
for the Administrative Agent, the Collateral Agent or any Lender; provided,
however, that the Borrower shall not be required to pay for separate counsel for
the Administrative Agent and the Collateral Agent.
(b) The Borrower shall indemnify the Administrative Agent, the Collateral
Agent, each Lender and the Issuing Bank, each Affiliate of any of the foregoing
persons and each of their respective directors, officers, employees and agents
(each such person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
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contemplated thereby (excluding, in the case of each Indemnitee other than
Chemical Bank and its Affiliates, legal expenses incurred prior to the date of
this Agreement), (ii) the use of the proceeds of the Loans or issuance of
Letters of Credit, (iii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is a party
thereto, (iv) any actual or alleged presence or Release of Hazardous Materials
on any property owned or operated by the Borrower or any Subsidiary, or any
Environmental Claim related in any way to the Borrower or the Subsidiaries or
(v) in the case of the Administrative Agent, its Affiliates and each of their
respective directors, officers, employees and agents, any claims by any Lender
arising out of any exercise or attempted exercise by the Borrower of rights
under Section 9.06(b); provided, however, that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee (limited, in the case of
clause (v) above, to gross negligence or wilful misconduct in determining
whether any notice under Section 9.06(b) on its face meets the requirements
thereof).
(c) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, any Lender or the Issuing
Bank. All amounts due under this Section 9.05 shall be payable on written demand
therefor.
SECTION 9.06. Rights of Setoff. (a) If an Event of Default shall have
occurred and be continuing, each Lender 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 Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement and
other Loan Documents held by such
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Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or such other Loan Document and although such obligations
may be unmatured. The rights of each Lender under this paragraph (a) are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.
(b) If, at any time, (i) any Lender shall be a Defaulting Lender and shall
owe a Defaulted Advance to the Borrower, (ii) no Default shall have occurred and
be continuing and neither the Required Lenders (determined without regard for
the proviso in the definition thereof) nor the Administrative Agent shall have
asserted in writing to the Borrower that a Default shall have occurred and be
continuing and (iii) the Borrower shall be required to make any payment
hereunder or under any Loan Document to or for the account of such Defaulting
Lender, then, unless the Borrower otherwise notifies the Administrative Agent,
the Borrower shall, to the fullest extent permitted by law, set off and apply
the amount of such payment against the Defaulted Advance. Prior to the due time
for any payment with respect to which the Borrower intends to exercise its
rights under this paragraph (b), the Borrower will deliver to the Administrative
Agent a notice signed by a Responsible Officer stating (A) that the conditions
set forth in clauses (i) and (ii) above are satisfied, (B) the amount of the
Defaulted Advance and the applicable Defaulting Lender and (C) the amount to be
set off.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR ROLES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any
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abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
any other Loan Document or consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) below, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice or demand on
the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders; provided, however, that no such
agreement shall (i) decrease the principal amount of, or extend the maturity of
or any scheduled principal payment date or date for the payment of any interest
on any Loan or any date for reimbursement of an L/C Disbursement, or waive or
excuse any such payment or any part thereof, or decrease the rate of interest on
any Loan or L/C Disbursement, without the prior written consent of each Lender
directly affected thereby, (ii) change or extend the Commitment or decrease the
Commitment Fees or L/C Participation Fees of any Lender or extend the time for
payment thereof without the prior written consent of such Lender, or (iii) amend
or modify the provisions of Section 2.16 or 9.04(i), the provisions of this
Section 9.08 or the definition of the term "Required Lenders" without the prior
written consent of each Lender, (iv) release all or a substantial part of the
Collateral, or release any Specified Guarantor, without the prior written
consent of Lenders having Loans, L/C Exposures and unused Revolving Credit and
Term Loan Commitments at such time representing at least 80% of the sum of all
Loans outstanding, L/C Exposures and unused Revolving Credit and Term Loan
Commitments at such time, or (v) amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Collateral Agent or the Issuing Bank
hereunder or under any other Loan Document without the prior written consent of
the Administrative Agent, the Collateral Agent or the Issuing Bank.
127
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result or the operation of this Section
shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or participations or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any other previous agreement among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any party other than
the parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG
128
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each party
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction o
f any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each party hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each party hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any
129
right that the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against the Borrower or its properties in
the courts of any jurisdiction.
(b) Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party hereto irrevocably consents to service of process in the
manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 9.16. Mortgaged Property Casualty and Condemnation. (a)
Notwithstanding any other provision of this Agreement or the Security Documents,
the Collateral Agent is authorized, at its option (for the benefit of the
Secured Parties), to collect and receive, to the extent payable to the Borrower
or any other Loan Party, all insurance proceeds, damages, claims and rights of
action under any insurance policies with respect to any casualty or other
insured damage ("Casualty") to any portion of any Mortgaged Property
(collectively "Insurance Proceeds"), unless the amount of the related Insurance
Proceeds is less than $1,000,000 and an Event of Default shall not have occurred
and be continuing. The Borrower shall notify the Collateral Agent and the
Administrative Agent, in writing, promptly after the Borrower or any Subsidiary
obtains notice or knowledge of any Casualty to a Mortgaged Property, which
notice shall set forth a description of such Casualty and the Borrower's good
faith estimate of the amount of related damages. The Borrower shall, subject to
the foregoing limitations, endorse and transfer or cause to be endorsed or
transferred any Insurance Proceeds received by it or any other Loan Party to the
Collateral Agent.
(b) In the event of any Casualty of less than or equal to 50% of the
useable square footage of the
130
improvements of any Mortgaged Property, the Borrower shall, subject to the
conditions contained in paragraph (f) below, restore such Mortgaged Property to
substantially its same condition immediately prior to such Casualty. In the
event of any Casualty of greater than 50% of the useable square footage of the
improvements of any Mortgaged Property and so long as no Default or Event of
Default has occurred and is continuing, the Borrower shall have the option to:
(i) subject to the conditions contained in paragraph (f) below,
restore such Mortgaged Property to a condition substantially similar to its
condition immediately prior to such Casualty and to invest the balance, if
any, of any Insurance Proceeds in equipment or other assets used in the
Borrower's principal lines of business within 20 months after the receipt
thereof, provided that the Borrower, pending such reinvestment, promptly
deposits such excess Insurance Proceeds in a cash collateral account
established with the Collateral Agent for the benefit of the Secured
Parties,
(ii) replace such Mortgaged Property with property of utility
comparable to that of the replaced Mortgaged Property and to invest the
balance, if any, of any Insurance Proceeds, in equipment, vehicles or other
assets used in the Borrowers principal lines of business within 20 months
after the receipt thereof, provided that the Borrower, pending such
reinvestment, promptly deposits such excess Insurance Proceeds in a cash
collateral account established with the Collateral Agent for the benefit of
the Secured Parties, or
(iii) apply the related Insurance Proceeds to (after reimbursement of
the reasonable costs, if any, incurred by the Collateral Agent in
connection with such Casualty) prepay Loans (in the order set forth in
Section 2.13(d)).
Any Insurance Proceeds on account of damage to fixed assets, fixtures, plant or
equipment that are not applied to restore or replace such Mortgaged Property or
reinvested in the Borrower's principal lines of business as contemplated above
shall be applied (after reimbursement of the reasonable costs, if any, incurred
by the Collateral Agent in connection with such Casualty) to prepay Loans (in
the order set forth in Section 2.13(d)).
131
(c) If required to do so, the Borrower shall make the election contemplated
by paragraph (b) above by notifying the Collateral Agent and the Administrative
Agent promptly after the later to occur of (i) 10 Business Days after the
Borrower and its insurance carrier reach a final determination of the amount of
any Insurance Proceeds and (ii) 90 days after the occurrence of the Casualty. If
the Borrower shall be required or shall elect to restore the Mortgaged Property,
the insufficiency of any Insurance Proceeds to defray the entire expense of such
restoration shall in no way relieve the Borrower of such obligation so to
restore. In the event the Borrower shall be required to restore or shall notify
the Collateral Agent and the Administrative Agent of its election to restore,
the Borrower shall diligently and continuously prosecute the restoration of the
Mortgaged Property to completion. In the event of a Casualty where the Borrower
is required to make the election set forth in paragraph (b) above and the
Borrower shall fail to notify the Collateral Agent and the Administrative Agent
of its election within the period set forth above or shall elect not to restore
the Mortgaged Property, the Borrower shall apply such Insurance Proceeds (after
reimbursement of all reasonable costs incurred by the Collateral Agent in
connection with the applicable Casualty) to prepay Loans (in the order set forth
in Section 2.13(d)). In addition, upon such prepayment, the Borrower shall be
obligated to place the remaining portion, if any, of the Mortgaged Property in a
safe condition that is otherwise in compliance with the requirements of
applicable Governmental Authorities and the provisions of this Agreement and the
applicable Mortgage.
(d) The Borrower shall notify the Collateral Agent and the Administrative
Agent immediately upon obtaining knowledge of the institution of any action or
proceeding for the taking of any Mortgaged Property, or any part thereof or
interest therein, for public or quasi-public use under the power of eminent
domain, by reason of any public improvement or condemnation proceeding, or in
any other manner (a "Condemnation"). No settlement or compromise of any claim in
connection with any such action or proceeding shall be made without the consent
of the Collateral Agent, which consent shall not be unreasonably withheld. The
Collateral Agent is authorized, at its option (for the benefit of the Secured
Parties), to collect and receive, for application in accordance with paragraphs
(e) and (f) below, all proceeds of any such Condemnation (in each case, the
"Condemnation Proceeds"), unless the amount
132
of the related Condemnation Proceeds is less than $1,000,000 and an Event of
Default shall not have occurred and be continuing. The Borrower shall execute or
cause to be executed such further assignments of any Condemnation Proceeds as
the Collateral Agent may reasonably require.
(e) In the event of any Condemnation of the Mortgaged Property or any part
thereof, and subject to paragraph (f) below, the Borrower shall apply any
Condemnation Proceeds first, in the case of a partial Condemnation, to the
repair or restoration of any integrated structure subject to such Condemnation
or, in the case of a total Condemnation or a Condemnation of substantially all a
Mortgaged Property (a "substantially all" Condemnation), to the location of a
replacement property, acquisition of such replacement property and construction
of the replacement structures, and second, shall apply the remainder of such
Condemnation Proceeds (after reimbursement of the reasonable costs, if any,
incurred by the Collateral Agent in connection with such Condemnation) to prepay
Loans (in the order set forth in Section 2.13(d)).
(f) Except as otherwise specifically provided in this Section 9.16, all
Insurance Proceeds (other than Insurance Proceeds arising out of any Casualty
but not on account of damage to fixed assets, fixtures, plant or equipment) and
all Condemnation Proceeds (i) are to be applied to the restoration of the
applicable Mortgaged Property (after reimbursement of the reasonable costs, if
any, incurred by the Collateral Agent in connection with the applicable Casualty
or Condemnation, including reasonable attorneys' fees, other charges and
disbursements and costs allocable to inspecting the Work (as defined below)) and
(ii) shall be applied to the payment of the cost of restoring or replacing the
Mortgaged Property so damaged, destroyed or taken or of the portion or portions
of the Mortgaged Property not so taken (the "Work") and (iii) shall be paid out
from time to time to the Borrower as and to the extent the Work (or the location
and acquisition of any replacement of any Mortgaged Property) progresses for the
payment thereof, but subject to each of the following conditions:
(A) the Borrower must promptly commence the restoration process
or the location, acquisition and replacement process in connection
with the Mortgaged Property;
133
(B) the Work shall be in the charge of an architect or engineer
and before the Borrower commences any Work, other than temporary work
to protect property or prevent interference with business, the
Collateral Agent shall have received the plans and specifications and
the general contract for the Work from the Borrower (which plans and
specifications shall provide for such Work that, upon completion
thereof, the improvements shall (x) be in compliance with all
requirements of applicable Governmental Authorities such that all
representations and warranties of the Borrower relating to the
compliance of such Mortgaged Property with applicable laws, rules or
regulations in this Agreement or the Security Documents shall be
correct in all respects and (y) be at least equal in value and general
utility to the improvements that were on such Mortgaged Property (or
that were on the Mortgaged Property that has been replaced, if
applicable) prior to the Casualty or Condemnation, and in the case of
a Condemnation, subject to the effect of such Condemnation;
(C) except as provided in clause (D) below, each request for
payment shall be made on seven days' prior notice to the Collateral
Agent and shall be accompanied by a certificate to be made by a
Responsible Officer of the Borrower, stating (x) that all the Work
completed has been done in substantial compliance with the plans and
specifications and (y) that the sum requested is justly required to
reimburse the Borrower for payments by the Borrower to, or is justly
due to, the contractor, subcontractors, materialmen, laborers,
engineers, architects or other persons rendering services or materials
for the Work (giving a brief description of such services and
materials) and that, when added to all sums previously paid out by the
Collateral Agent, does not exceed the value of the Work done to the
date of such certificate;
(D) each request for payment in connection with the acquisition
of a replacement Mortgaged Property shall be made on 30 days' prior
notice to the Collateral Agent and, in connection therewith, (x) each
such request shall be accompanied by a copy of the sales contract or
other document governing the acquisition of the replacement property
by the Borrower and a certificate of the Borrower stating that the sum
requested represents the sales price under such contract or document
and the related reasonable
134
transaction fees and expenses (including brokerage fees) and setting
forth in sufficient detail the various components of such requested
sum and (y) the Borrower shall (I) in addition to any other items
required to be delivered under this Section 9.16), provide the
Administrative Agent and the Collateral Agent with such opinions,
documents, certificates, title insurance policies, surveys and other
insurance policies as they may reasonably request and (II) take such
other actions as the Administrative Agent and the Collateral Agent may
reasonably deem necessary or appropriate (including actions with
respect to the delivery to the Collateral Agent of a first priority
Mortgage with respect to such real property for the ratable benefit of
the Secured Parties);
(E) there shall be no Default or Event of Default that has
occurred and is continuing (other than any Default or Event of Default
arising out of such Casualty or Condemnation);
(F) the request for any payment after the Work has been completed
shall be accompanied by a copy of any certificate or certificates
required by law to render occupancy of the improvements being rebuilt,
repaired or restored legal; and
(G) after commencing the Work, the Borrower shall continue to
perform the Work diligently and in good faith to completion in
accordance with the approved plans and specifications.
(g) Notwithstanding any other provisions of this Section 9.16, if the
Borrower shall have elected to replace a Mortgaged Property in connection with a
total or "substantially all" Condemnation as contemplated in paragraph (e)
above, all Condemnation Proceeds held by the Collateral Agent in connection
therewith shall be applied to prepay Loans (in the order set forth in Section
2.13(d)) if (i) the Borrower notifies the Collateral Agent and the
Administrative Agent that it does not intend to replace the related Mortgaged
Property, (ii) a Responsible Officer of the Borrower shall not have notified the
Administrative Agent and the Collateral Agent in writing that the Borrower has
acquired or has entered into a binding contract to acquire land upon which it
will construct the replacement property within six months after the related
Condemnation or (iii) the Borrower shall have not have begun construction of
135
the replacement structures within one year after the related Condemnation and
the principal reason for such failure to begin construction is the failure of
the Borrower to diligently pursue the replacement of the related Mortgaged
Property.
(h) Any amounts held by the Collateral Agent pursuant to this Section 9.16
shall be held as collateral for the payment and performance of the Obligations.
Except as otherwise expressly specified in this Section 9.16, the Collateral
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such amounts. At the option of the Collateral Agent, such
amounts may be invested in Permitted Investments (in which event interest
thereon shall be added to such amounts and be subject to this Section 9.16) or,
if the Borrower so directs, used to prepay Revolving Credit Borrowings (in which
event any reborrowing of such amounts shall be applied in accordance with this
Section 9.16). Except as provided in the preceding sentence, such amounts shall
not bear interest. Nothing in this Section 9.16 shall prevent the Collateral
Agent from applying at any time all or any part of the Insurance Proceeds or
Condemnation Proceeds to the curing of any Event of Default under this
Agreement.
(i) Any Insurance Proceeds not on account of damage to fixed assets,
fixtures, plant or equipment need not be applied to restoration, repair or the
prepayment of Loans and, if received by the Collateral Agent, shall promptly be
paid over to the Borrower unless an Event of Default shall be continuing.
SECTION 9.17. Confidentiality . The Administrative Agent, the Collateral
Agent, the Issuing Bank and each of the Lenders agrees to keep confidential (and
to use its best efforts to cause its respective agents and representatives to
keep confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
shall be permitted to disclose Information (a) to such of its respective
officers, directors, employees, agents, affiliates and representatives as need
to know such Information, (b) to the extent requested by any regulatory
authority, (c) to the extent otherwise required by applicable laws and
regulations or by any subpoena or similar legal process, upon prior notice
thereof (unless prohibited by the terms of such subpoena or process) to the
136
Borrower in a manner reasonably calculated to afford the Borrower an opportunity
to seek a protective order or other injunctive relief, (d) in connection with
any suit, action or proceeding relating to the enforcement or protection of its
rights hereunder or under the other Loan Documents or (e) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 9.17 or (ii) becomes available to the Administrative Agent, the
Issuing Bank, any Lender or the Collateral Agent on a nonconfidential basis from
a source other than the Borrower. For the purposes of this Section 9.17,
"Information" stall mean all financial statements, certificates, reports,
agreements and information (including all analyses, compilations and studies
prepared by the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender based on any of the foregoing) that are received from the Borrower
and related to the Borrower, any shareholder of the Borrower or any employee,
customer or supplier of the Borrower, other than any of the foregoing that were
available to the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to its disclosure thereto by the
Borrower, and which are in the case of Information provided after the date
hereof, clearly identified at the time of delivery as confidential. The
provisions of this Section 9.17 shall remain operative and in full force and
effect regardless of the expiration and term of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SCHEIN PHARMACEUTICAL, INC.,
by __________________________
Name:
Title:
Chemical Bank $350 M Loan
Amortization of Loan fees
Schedule of Fees
Syndication Fee 5,250,000
Valuation Research (solvency) 35,566
Dames & Moore (environment) 28,000
PR filing fees (mort tax) 36,618
Cravath Fees (legal bank) 214,786
Proskauer Fees (legal co) 150,000
Title fees (Carmel & Phoenix) 256,120
5,971,090
Repayment Date 250,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
Sep-95 0 250,000,000 100,000,000 350,000,000 29,166,667 0.01808318
31-Dec-95 0 250,000,000 100,000,000 350,000,000 87,500,000 0.05424955
- -----------------------------------------------------------------------------------------------------------------------------------
31-Mar-96 0 250,000,000 100,000,000 350,000,000 87,500,000 0.05424955
30-Jun-96 0 250,000,000 100,000,000 350,000,000 87,500,000 0.05424955
30-Sep-96 5,000,000 245,000,000 100,000,000 345,000,000 86,250,000 0.05347455
31-Dec-96 5,000,000 240,000,000 100,000,000 340,000,000 85,000,000 0.05269956
- -----------------------------------------------------------------------------------------------------------------------------------
31-Mar-97 7,500,000 232,500,000 100,000,000 332,500,000 83,125,000 0.05153707
30-Jun-97 7,500,000 225,000,000 100,000,000 325,000,000 81,250,000 0.05037458
30-Sep-97 7,500,000 217,500,000 100,000,000 317,500,000 79,375,000 0.04921209
31-Dec-97 7,500,000 210,000,000 100,000,000 310,000,000 77,500,000 0.0480496
- -----------------------------------------------------------------------------------------------------------------------------------
31-Mar-98 10,000,000 200,000,000 100,000,000 300,000,000 75,000,000 0.04649961
30-Jun-98 10,000,000 190,000,000 100,000,000 290,000,000 72,500,000 0.04494963
30-Sep-98 10,000,000 180,000,000 100,000,000 280,000,000 70,000,000 0.04339964
31-Dec-98 10,000,000 170,000,000 100,000,000 270,000,000 67,500,000 0.04184965
- -----------------------------------------------------------------------------------------------------------------------------------
31-Mar-99 12,500,000 157,500,000 100,000,000 257,500,000 64,375,000 0.03991217
30-Jun-99 12,500,000 145,000,000 100,000,000 245,000,000 61,250,000 0.03797468
30-Sep-99 12,500,000 132,500,000 100,000,000 232,500,000 58,125,000 0.03603720
31-Dec-99 12,500,000 120,000,000 100,000,000 220,000,000 55,000,000 0.03409972
- -----------------------------------------------------------------------------------------------------------------------------------
31-Mar-00 15,000,000 105,000,000 100,000,000 205,000,000 51,250,000 0.03177474
30-Jun-00 15,000,000 90,000,000 100,000,000 190,000,000 47,500,000 0.02944975
30-Sep-00 15,000,000 75,000,000 100,000,000 175,000,000 43,750,000 0.02712477
31-Dec-00 15,000,000 60,000,000 100,000,000 160,000,000 40,000,000 0.02479979
- -----------------------------------------------------------------------------------------------------------------------------------
31-Mar-01 15,000,000 45,000,000 100,000,000 145,000,000 36,250,000 0.02247481
30-Jun-01 15,000,000 30,000,000 100,000,000 130,000,000 32,500,000 0.02014983
30-Sep-01 15,000,000 15,000,000 100,000,000 115,000,000 28,750,000 0.01782485
31-Dec-01 15,000,000 0 100,000,000 100,000,000 25,000,000 0.01549987
- -----------------------------------------------------------------------------------------------------------------------------------
250,000,000 1,612,916,667 1
Closing Exp $100K Ticking Total Year
Amortization Agent Fee Amortization Expense
Fees Chemical Fees
Repayment Date
- ----------------------------------------------------------------------------------------------------------------------
Sep-95 107,976.31 8,333.33 309,896.00 426,205.64
31-Dec-95 323,928.92 25,000.00 348,928.92 775,134.56
- ----------------------------------------------------------------------------------------------------------------------
31-Mar-96 323,928.92 25,000.00 348,928.92
30-Jun-96 323,928.92 25,000.00 348,928.92
30-Sep-96 319,301.36 25,000.00 344,301.36
31-Dec-96 314,673.80 25,000.00 339,673.80 1,381,833.00
- ----------------------------------------------------------------------------------------------------------------------
31-Mar-97 307,732.47 25,000.00 332,732.47
30-Jun-97 300,791.14 25,000.00 325,791.14
30-Sep-97 293,849.80 25,000.00 318,849.80
31-Dec-97 286,908.47 25,000.00 311,908.47 1,289,281.88
- ----------------------------------------------------------------------------------------------------------------------
31-Mar-98 277,653.36 25,000.00 302,653.36
30-Jun-98 268,398.25 25,000.00 293,398.25
30-Sep-98 259,143.13 25,000.00 284,143.13
31-Dec-98 249,888.02 25,000.00 274,888.02 1,155,082.76
- ----------------------------------------------------------------------------------------------------------------------
31-Mar-99 238,319.13 25,000.00 263,319.13
30-Jun-99 226,750.24 25,000.00 251,750.24
30-Sep-99 215,181.35 25,000.00 240,181.35
31-Dec-99 203,612.46 25,000.00 228,612.46 983,863.19
- ----------------------------------------------------------------------------------------------------------------------
31-Mar-00 189,729.79 25,000.00 214,729.79
30-Jun-00 175,847.13 25,000.00 200,847.13
30-Sep-00 161,964.46 25,000.00 186,964.46
31-Dec-00 148,081.79 25,000.00 173,081.79 775,623.17
- ----------------------------------------------------------------------------------------------------------------------
31-Mar-01 134,199.12 25,000.00 159,199.12
30-Jun-01 120,316.45 25,000.00 145,316.45
30-Sep-01 106,433.79 25,000.00 131,433.79
31-Dec-01 92,551.12 25,000.00 117,551.12 553,500.48
- ----------------------------------------------------------------------------------------------------------------------
5,971,089.70 6,914,319.03 6,914,319.03
SCHEIN PHARMACEUTICAL, INC.
CHEMICAL BANK CREDIT AGREEMENT
LIST OF CLOSING DOCUMENTS
SCHEDULE 1.01
CERTAIN PERMITTED HOLDERS
SCHEDULE 3.08
SUBSIDIARIES AND PERCENTAGE OWNED THEREIN
SCHEDULE 3.18
INSURANCE
SCHEDULE 3.20 (A)
LIST OF OWNED LOCATIONS
SCHEDULE 3.20 (B)
LIST OF MATERIAL LEASED LOCATIONS
SCHEDULE 4.02(A)
LIST OF LOCAL COUNSEL
SCHEDULE 6.01
EXISTING INDEBTEDNESS
SCHEDULE 6.02
EXISTING LIENS
SCHEDULE 6.04
EXISTING INVESTMENTS
EXHIBIT D
GUARANTEE AGREEMENT
SCHEDULE I - NAME AND ADDRESS OF EACH GUARANTOR
EXHIBIT G
SCHEDULE I - SHARES OF CAPITAL STOCK PLEDGED
EXHIBIT G
SCHEDULE II - NAME AND ADDRESS OF EACH PLEDGOR
EXHIBIT G
ANNEX I - PERFECTION CERTIFICATE
EXHIBIT H
SCHEDULE I - COPYRIGHTS
SCHEDULE II - LICENSES
SCHEDULE III - PATENTS
SCHEDULE IV - TRADEMARKS
BY LAWS - SCHEIN PHARMACEUTICAL, INC.
BY LAWS - SCHEIN PHARMACEUTICAL INTERNATIONAL, INC.
BY LAWS - SCHEIN PHARMACEUTICAL PA, INC.
BY LAWS - SCHEIN PHARMACEUTICAL SERVICE COMPANY
BY LAWS - SM ACQUIRING CO., INC.
BY LAWS - STERIS LABORATORIES, INC.
BY LAWS - DANBURY PHARMACAL, INC.
BY LAWS - DANBURY PHARMACAL PUERTO RICO, INC.
RESOLUTIONS - SCHEIN PHARMACEUTICAL, INC.
RESOLUTIONS - SCHEIN PHARMACEUTICAL INTERNATIONAL, INC.
RESOLUTIONS - SCHEIN PHARMACEUTICAL PA, INC.
RESOLUTIONS - SCHEIN PHARMACEUTICAL SERVICE COMPANY
RESOLUTIONS - SM ACQUIRING CO., INC.
RESOLUTIONS - STERIS LABORATORIES, INC.
RESOLUTIONS - DANBURY PHARMACAL, INC.
RESOLUTIONS - DANBURY PHARMACAL PUERTO RICO, INC.
CTF INCORP. - SCHEIN PHARMACEUTICAL, INC.
CTF INCORP. - SCHEIN PHARMACEUTICAL INTERNATIONAL, INC.
CTF INCORP. - SCHEIN PHARMACEUTICAL PA, INC.
CTF INCORP. - SCHEIN PHARMACEUTICAL SERVICE COMPANY
CTF INCORP. - SM ACQUIRING CO., INC.
CTF INCORP. - STERIS LABORATORIES, INC.
CTF INCORP. - DANBURY PHARMACAL, INC.
CTF INCORP. - DANBURY PHARMACAL PUERTO RICO, INC.
SECRETARY'S CTF. - SCHEIN PHARMACEUTICAL, INC.
SECRETARY'S CTF. - SCHEIN PHARMACEUTICAL INTERNATIONAL, INC.
SECRETARY'S CTF. - SCHEIN PHARMACEUTICAL PA, INC.
SECRETARY'S CTF. - SCHEIN PHARMACEUTICAL SERVICE COMPANY
SECRETARY'S CTF. - SM ACQUIRING CO., INC.
SECRETARY'S CTF. - STERIS LABORATORIES, INC.
SECRETARY'S CTF. - DANBURY PHARMACAL, INC.
SECRETARY'S CTF. - DANBURY PHARMACAL PUERTO RICO, INC.
FINANCIAL OFFICER'S CERTIFICATE - SCHEIN PHARMACEUTICAL, INC.
CERTIFICATE OF OCCUPANCY FOR EACH MORTGAGED PROPERTY
INSURANCE BROKER'S CERTIFICATES
EVIDENCE OF CANCELLATION - CITIBANK
EVIDENCE OF CANCELLATION - MELLON BANK
EVIDENCE OF CANCELLATION - MIDLANTIC
EVIDENCE OF CANCELLATION - BANCO POPULAR
SOLVENCY LETTER
UCC FINANCING STATEMENTS
FORMS U-1
****** -COMM. JOURNAL- ********* DATE MAR-18-1996 ********** TIME 17:49 *** P.01
MODE = MEMORY TRANSMISSION START=MAR-18 17:46 END=MAR-18 17:49
NO. COM ABBR/NTWK STATION NAME/ PAGES PRG.NO. PROGRAM NAME
TELEPHONE NO.
001 OK [07] PROSKAUR 010/010
-SCHEIN PHARMACEUTICALS -
******************************** -201-593-5598 - ***** - - *********
10
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA,
by
______________________________
Name:
Title:
THE NIPPON CREDIT BANK, LTD.,
by
______________________________
Name:
Title:
UNITED JERSEY BANK,
by
______________________________
Name:
Title:
THE YASUDA TRUST AND BANKING CO.,
LIMITED, NEW YORK BRANCH
by
______________________________
Name:
Title:
****** -COMM. JOURNAL- ********* DATE MAR-18-1996 ********** TIME 12:32 *** P.01
MODE = MEMORY TRANSMISSION START=MAR-18 12:29 END=MAR-18 12:32
FILE NO = 190
NO. COM ABBR/NTWK STATION NAME/ PAGES PRG.NO. PROGRAM NAME
TELEPHONE NO.
001 OK [08] BDO SIEDMAN 011/011
-SCHEIN PHARMACEUTICALS -
******************************** -201-593-5598 - ***** - - *********
CRAVATH, SWAINE & MOORE
Worldwide Plaza, 825 Eighth Avenue
New York, NY 10019
Telephone: (212) 474-1190
Fax: (212) 474-3700
Date: March 18, 1996
================================================================================
Name/Firm Fax No. Phone No.
- --------------------------------------------------------------------------------
To: Mr. James Meer (201) 593-5598 (201) 593-5911
- --------------------------------------------------------------------------------
From: S. Soundararajan (212) 474-3700 (212) 474-1942
================================================================================
TOTAL NUMBER OF PAGES, INCLUDING THIS COVER SHEET: 11
IF YOU DO NOT RECEIVE ALL THE PAGES, PLEASE CALL (212) 474-1190
================================================================================
Message: Attached is the execution copy of the Amendment circulated last week.
Please call if you have any questions.
================================================================================
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH
IT IS ADDRESSED AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND
EXEMPT FROM DISCLOSURE. If the reader of this message is not the intended
recipient or an employee or agent responsible for delivering the message to the
intended recipient, you are hereby notified that any dissemination,
distribution, or COpying of this communication is strictly prohibited. If you
have received this communication in error, please notify us immediately by
telephone at (212)474-1190 and return the original message to us by mail. Thank
you.
Reference No. 6700-331
Document Description: _________________________________________________________
CRAVATH, SWAINE & MOORE
Worldwide Plaza, 825 Eighth Avenue
New York, NY 10019
Telephone: (212) 474-1190
Fax: (212) 474-3700
Date: March 18, 1996
================================================================================
Name/Firm Fax No. Phone No.
- --------------------------------------------------------------------------------
To: Mr. James Meer (201) 593-5598 (201) 593-5911
- --------------------------------------------------------------------------------
From: S. Soundararajan (212) 474-3700 (212) 474-1942
================================================================================
TOTAL NUMBER OF PAGES, INCLUDING THIS COVER SHEET: 11
IF YOU DO NOT RECEIVE ALL THE PAGES, PLEASE CALL (212) 474-1190
================================================================================
Message: Attached is the execution copy of the Amendment circulated last week.
Please call if you have any questions.
================================================================================
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH
IT IS ADDRESSED AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND
EXEMPT FROM DISCLOSURE. If the reader of this message is not the intended
recipient or an employee or agent responsible for delivering the message to the
intended recipient, you are hereby notified that any dissemination,
distribution, or copying of this communication is strictly prohibited. If you
have received this communication in error, please notify us immediately by
telephone at (212)474-1190 and return the original message to us by mail. Thank
you.
Reference No. 6700-331
Document Description: _________________________________________________________
Schein Pharmaceutical, Inc.
$350M Credit Facilities
Chemical Bank, Agent
Amount: $350M
RC Facility $100M
Term Facility $250M
Tenor: 6.5 Years (Matures 12/31/01)
Interest (price grid): LIBOR + 1.25% Range .75% > 1.50% 7.25%
Prime + .25% Range 0% > .50% 9.00%
Letter of Credit: Up to $30M available @ 1.625% (subject to grid)
Commitment Fee: 0.375% (unused portion, Range .25% > .50%
Arrangement Fee: 1.5% -- ($5,250,000)
Agent Fee: $100K annually
Mandatory Prepayments: 75% of Excess cash flow, 100% of new financing
above $10M, and % of proceeds from stock
offering:
50% if leverage is between 3.0x - 4.0x
25% if leverage is between 2.5x - 3.0x
0% if leverage is between 1.0x - 2.5x
Scheduled Prepayments: '95 - $0 '99 - $50M
'96 - $10M '00 - $60M
'97 - $30M '01 - $60M
'98 - $40M
Security: Mortgage all real property
Liens on receivables & inventory
Pledge of all domestic subsidiaries stock including
Marsam and 65% of wholly owned foreign
subsidiaries
Cross company guarantees by domestic subsidiaries
Financial Covenants: Limitations on capital expenditures -
$25M/yr + 50% carryforward of unspent amount
commencing fiscal year '97
Maximum Total Leverage (debt) to EBITDA for '95
5x > '98 3x
Minimum net worth - $145M
+$25M earnings in '96
+$55M earnings in '97
+$50M earnings in '98
+$75M earnings in '99
Minimum levels of working capital - 1.75x
Minimum fixed charge coverage - 1.5x all years
(EBITDA-Cap Exp/Interest + Debt Payments)
Limitations on dividends -
Deemed dividends per the Shareholder
Agreement for registration expenses & fees
permitted + 25% of Net Income after leverage
drop below 2.5x (Est. '96 end of year)
Limitations on investments:
A) $10M annually for foreign investments, Bayer
JV's) (-50% of carryforward of unspent
amount)
B) $10M Aggregate of all other investments up
to '97 and $15M aggregate thereafter
Limitations on Debt to buy back stock options
$5M
Transactions with Affiliates (Bayer and
Shareholders)
A) Limits to Shareholder agreement
B) Stock options permitted
C) Foreign JV's permitted up to $10M/yr
D) Loans to officers and amployees up to $1.5 M
aggregate
Limitations on Merger Agreement
A) Materially change terms other than to extend
Tender Offer period
B) To pay more than $250M for Marsam
Bank Allocation
---- ----------
Arranger and Administrative Agent:
Chemical Bank $ 22,500,000
Lead Managers:
The Bank of Nova Scotia 20,000,000
Chase National Corporate Services, Inc. 20,000,000
Citicorp 20,000,000
Credit Lyonnais 20,000,000
Deutsche Bank 20,000,000
Mellon Bank, N.A. 20,000,000
National Westminster Bank USA 20,000,000
Participants:
The Bank of Tokyo Trust Company 12,500,000
Comerica Bank 12,500,000
Credit Suisse 12,500,000
HypoBank 12,500,000
Midlantic Bank, N.A. 12,500,000
Rabobank Nederland 12,500,000
Societe Generale 12,500,000
Society National Bank 12,500,000
Westdeutsche Landesbank Girozentrale 12,500,000
ABN-Amro Bank 7,500,000
Bank of Montreal 7,500,000
The Bank of New York 7,500,000
Commerzbank 7,500,000
The Daiwa Bank, Limited 7,500,000
DG Bank 7,500,000
First Union National Bank of North Carolina 7,500,000
The Nippon Credit Bank, Ltd. 7,500,000
United Jersey Bank 7,500,000
The Yasuda Trust and Banking Co., LTD. 7,500,000
------------
$350,000,000
Schein Pharmaceutical, Inc.
Fund Summary
As of September 30, 1995
Market % of
Fund Value Total
---- ----- -----
LaSalle Bank (GIC) $ 7,004,409 19.41%
Columbia Fixed Income 7,374,917 20.44%
Vanguard Quantitative 10,357,325 28.70%
PBHG Growth Fund 7,734,374 21.43%
T. Rowe Price Int'l Stock Fund 3,613,526 10.01%
-----------
Total * $36,084,551
* Includes Lifestyle funds
-----------------------------------------------------------
Market % of
Value Total
Lifestyle Funds LaSalle Columbia Vanguard PBHG T. Rowe
- ---------------
Conservative $ 2,266,595 13.21% 832,391 675,602 514,228 138,487 105,888
36.72% 29.81% 22.69% 6.11% 4.67%
Moderate 8,824,227 51.45% 1,161,293 2,942,105 2,890,303 1,040,537 789,999
13.16% 33.34% 32.75% 11.79% 8.95%
Aggressive 6,061,687 35.34% 1,389,574 2,859,584 1,029,314 783,215
22.92% 47.17% 16.98% 12.92%
Total $17,152,508
-----------------------------------------------------------
Schedule 6.04
-------------
EXISTING INVESTMENTS
Nature of
Name Investment
- ---- ----------
Elensys Care Services Inc. Con. Pfd. Stk.
Triomed (Proprietary) Limited, South Africa Common Stock
*Brovar S&P (Proprietary) Ltd., South Africa Common Stock
*Ethical Generics Limited, UK Common Stock
Schein Bayer Pharm. Svcs. Common Stock
*Schein Pharmaceutical Canada, Inc. Common Stock
Duramed Pharmaceuticals, Inc. Convertible Note
Miscellaneous investments not exceeding $250,000 in aggregate.
* Currently owned 100% by Schein Pharmaceutical, Inc. or one of its
affiliates; it is contemplated that a 50% interest will be transferred to
an affiliate of Bayer AC.
CRAVATH, SWAIN & MOORE
Worldwide Plaza, 825 Eighth Avenue
New York, NY 10019
Telephone: (212) 474-1000
Fax: (212) 474-3700
Date: December 17, 1996
================================================================================
Name/Firm Fax No. Phone No.
- --------------------------------------------------------------------------------
To: See Next Page For
Multiple Addressees
- --------------------------------------------------------------------------------
From: S. Soundararajan Room: 4438 (212) 474-3700 (212) 474-1942
================================================================================
TOTAL NUMBER OF PAGES, INCLUDING THIS COVER SHEET: 17
IF YOU DO NOT RECEIVE ALL THE PAGES, PLEASE CALL (212) 474-3130
================================================================================
Message: This version of the amendment will be circulated to the Bank Group
tonight (along with the Subordinated Loan Agreement) absent any
objections. Please call me if you have any questions or comments.
Thank you.
CC: DH, WKS, PF, CO
================================================================================
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH
IT IS ADDRESSED AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND
EXEMPT FROM DISCLOSURE. If the reader of this message is not the intended
recipient or an employee or agent responsible for delivering the message to the
intended recipient, you are hereby notified that any dissemination,
distribution, or copying of this communication is strictly prohibited. If you
have received this communication in error, please notify us immediately by
telephone at (212)474-3130 and return the original message to us by mail. Thank
you.
Reference No. 6700-331
DATE SENT: _______________ DATE CONFIRMED: ____________ [ILLEGIBLE]
================================================================================
Name/Firm Fax No. Phone No.
- --------------------------------------------------------------------------------
1. To: Dawn Lee Lum (212) 270-3279 (212) 2472
Chase
- --------------------------------------------------------------------------------
2. To: Greg Weiss (212) 455-2502 (212) 455-7080
Simpson Thacher & Bartlett
- --------------------------------------------------------------------------------
3. To: Jeff Mullen (212) 455-2502 (212) 455-2000
Simpson Thacher & Bartlett
- --------------------------------------------------------------------------------
4. To: Scott Phillips (212) 278-5387 (212) 278-5460
Societe Generale
- --------------------------------------------------------------------------------
5. To: Robert Cantone (212) 969-2900 (212) 969-3000
Proskauer Rose Goetz &
Mendelsohn
- --------------------------------------------------------------------------------
6. To: Charles Dropkin (212) 969-2900 (212)969-3535
Proskauer Rose Goetz &
Mendelsohn
- --------------------------------------------------------------------------------
7. To: Jim Meer (201) 593-5598 (201) 593-5911
Schein Pharmaceutical
================================================================================
THIRD AMENDMENT dated as of December 20, 1996
(this "Amendment"), to the CREDIT AGREEMENT dated
as of September 1, 1995, among SCHEIN
PHARMACEUTICAL, INC., a Delaware corporation (the
"Borrower"); the LENDERS (as defined in Article I
of the Credit Agreement); and THE CHASE MANHATTAN
BANK, a New York banking corporation as issuing
bank (in such capacity, the "Issuing Bank"), as
administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent
(in such capacity, the "Collateral Agent") for the
Lenders.
The Borrower has requested that the Credit Agreement be amended as
hereinafter set forth, and the Lenders have agreed to such amendment, upon the
terms and subject to the conditions set forth herein. Accordingly, the Borrower
and the Lenders hereby agree as follows:
ARTICLE I
Defined Terms
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement, as amended hereby (the
"Amended Credit Agreement").
ARTICLE II
Amendments to and Waivers under the Credit Agreement
The Credit Agreement is amended, effective as of the date hereof (but
subject to the conditions set forth in Article IV hereof), as set forth below:
SECTION 2.01 Amendments to Article I. (a) The following definitions are
added to Section 1.01 of the Credit Agreement in the proper alphabetical order:
"'Acceptable Refinancing' shall mean a series of transactions in which
the Borrower (a) completes an issuance and sale of its capital stock (or
rights, warrants or options to acquire its capital stock) or of
Subordinated Debt (which Subordinated Debt, unless it (x) is described in
the second sentence of the definition of "Subordinated Debt" or (y) is on
terms (including, without limitation, maturity, interest rates,
subordination provisions, prepayment, redemption, defeasance or similar
provisions, covenants and events of default) at least as favorable in all
respects to the Borrower or the Lenders as the terms of the Indebtedness
issued (or that would have been issued) under the Conversion Note
Indenture), or any combination thereof, in either case yielding net cash
proceeds to the Borrower of at least $96,000,000, and (b) applies such net
cash proceeds to prepay Term Loans in the manner contemplated by Sections
2.11 and 2.13."
3
"'Conversion Note Indenture' shall mean the "Conversion Note
Indenture" referred to in the Senior Subordinated Loan Agreement, in the
form attached as Annex I-B to the Third Amendment."
"'Refinancing Debt' shall have the meaning assigned to such term in
Section 6.01(g)."
"'Senior Subordinated Loan Agreement' shall mean the $100,000,000
Senior Subordinated Loan Agreement dated as of December [ ], 1996, among
the Borrower, certain lenders and Societe Generale, as administrative
agent, in the form attached as Annex I-A to the Third Amendment."
"'Third Amendment' shall mean the Third Amendment dated as of December
20, 1996, to this Agreement."
(b) The definition of "Subordinated Debt" is amended to read as follows:
"'Subordinated Debt' means unsecured Indebtedness of the Borrower that
(a) does not have any scheduled payment of principal prior to the 180th day
following the Post-Merger Facilities Maturity Date, (b) the principal of
which is subordinated to the prior payment in full in cash of all the
Obligations in a manner reasonably satisfactory to the Administrative Agent
and (c) otherwise has terms and conditions reasonably satisfactory to the
Administrative Agent. Notwithstanding any other provision of this
Agreement, Subordinated Debt shall include (i) Indebtedness incurred under
and on the terms set forth in the Senior Subordinated Loan Agreement or the
Conversion Note Indenture, and (ii) Refinancing Debt; provided that the
terms of such Refinancing Debt (including, without limitation, maturity,
interest rates, subordination provisions, prepayment, redemption,
defeasance or similar provisions, covenants and events of default) shall be
in all material respects at least as favorable to the Borrower and the
Lenders as the terms of the Indebtedness being refinanced, or, in the case
of interest rates, shall be consistent with rates of interest at the time
prevailing in the market for comparable obligations (or, if the
Indebtedness being refinanced was incurred under the Senior Subordinated
Loan Agreement or the Conversion Note Indenture, at least as favorable to
the Borrower and the Lenders as the terms of the Indebtedness issued (or
that would have been issued) under the Conversion Note Indenture including,
without limitation, the interest rate provided for in the form of Senior
Subordinated Conversion Note annexed as Exhibit B thereto)."
SECTION 2.02 Amendments to Article II. (a) Section 2.11(b) of the Credit
Agreement is amended by (i) inserting the phrase "(other than Section 2.13(f))"
between "2.13" and "shall" and (ii) inserting the following at the end of the
second sentence following the word "prepayment":
", and each prepayment of principal of Term Facility Borrowings
pursuant to Section 2.13(f) shall be applied (A) first, to reduce
4
in full the amounts due on or prior to June 30, 1998, in order of maturity
and (B) second, to reduce pro rata the scheduled payments of principal due
under this Section 2.11 after June 30, 1998".
(b) Section 2.13 of the Credit Agreement is amended by inserting the
following new subsection (f):
"(f) Notwithstanding anything in paragraph (a), (b) or (c) above, (i)
the Borrower shall apply 100% of the Net Proceeds of any Acceptable
Refinancing promptly upon receipt to prepay outstanding Term Loans in
accordance with Section 2.11(b), and (ii) the Borrower may apply the Net
Proceeds of any Refinancing Debt incurred in compliance with Section
6.01(g) or of any issuance and sale of its capital stock (or rights,
warrants or options to acquire its capital stock) to repay any Indebtedness
incurred as part of an Acceptable Refinancing or any other Refinancing
Debt."
SECTION 2.03 Amendments to Article VI. (a) Clause (g) of Section 6.01 is
amended to read as follows:
"(g) Subordinated Debt issued after the Merger Date (including any
Indebtness incurred as part of an Acceptable Refinancing, and any
Subordinated Debt the proceeds of which are used to refinance any such
Indebtedness or any other Subordinated Debt the proceeds of which have been
so used ("Refinancing Debt"); provided that the terms of such Refinancing
Debt (including, without limitation, maturity, interest rates,
subordination provisions, prepayment, redemption, defeasance or similar
provisions, covenants and events of default) shall be in all material
respects at least as favorable to the Borrower and the Lenders as the terms
of the Indebtedness being refinanced or, in the case of interest rates,
shall be consistent with rates of interest at the time prevailing in the
market for comparable obligations (or, if the Indebtedness being refinanced
was incurred under the Senior Subordinated Loan Agreement or the Conversion
Note Indenture, at least as favorable to the Borrower and the Lenders as
the terms of the Indebtedness issued (or that would have been issued) under
the Conversion Note Indenture including, without limitation, the interest
rate provided for in the form of Senior Subordinated Conversion Note
annexed as Exhibit B thereto)."
(b) Section 6.12 is amended by deleting the text after the word
"Indebtedness" and inserting in place thereof:
"except that the Borrower and the Subsidiaries may (i) make payments in
respect of the Obligations, (ii) make payments in the form of common stock
of the Borrower and (iii) refinance Indebtedness incurred as part of an
Acceptable Refinancing or Refinancing Debt with the proceeds of any
issuance and sale of capital stock (or rights, warrants or options to
acquire capital stock) of the Borrower or of any Refinancing Debt permitted
under Section 6.01(g)."
11
THE BANK OF NOVA SCOTIA,
by ______________________________
Name:
Title:
CITICORP USA, INC.,
by ______________________________
Name:
Title:
CREDIT LYONNAIS, NEW YORK BRANCH,
by ______________________________
Name:
Title:
CREDIT LYONNAIS, CAYMAN ISLAND
BRANCH,
by ______________________________
Name:
Title:
DEUTSCHE BANK, A.G., NEW YORK AND/OR
CAYMAN ISLAND BRANCHES,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
MELLON BANK, N.A.,
by ______________________________
Name:
Title:
FLEET BANK, N.A. (formerly known as
NatWest Bank, N.A.),
by ______________________________
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, successor by merger to:
THE BANK OF TOKYO TRUST COMPANY,
by ______________________________
Name:
Title:
BAYERISCHE HYPOTHEKEN-UND WECHSEL-BANK
AKTIENGESSELLSCHAFT, NEW YORK BRANCH,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
COMERICA BANK,
by ______________________________
Name:
Title:
COOPERATIEVE CENTRALE RAIFFEIFEN-
BOERENLESNBANK, B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
12
CREDIT SUISSE,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
KEYBANK NATIONAL ASSOCIATION,
by ______________________________
Name:
Title:
PNC BANK, N.A.,
by ______________________________
Name:
Title:
SOCIETE GENERALE, NEW YORK BRANCH,
by ______________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
14
ABN AMRO BANK N.V., NEW YORK BRANCH,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
BANK OF MONTREAL,
by ______________________________
Name:
Title:
THE BANK OF NEW YORK,
by ______________________________
Name:
Title:
COMMERZBANK AKTIENGESELLSHAFT, NEW YORK
BRANCH,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
15
FIRST UNION NATIONAL BANK,
by ______________________________
Name:
Title:
THE NIPPON CREDIT BANK, LTD.,
by ______________________________
Name:
Title:
SUMMIT BANK,
by ______________________________
Name:
Title:
THE YASUDA TRUST AND BANKING CO.,
LIMITED, NEW YORK BRANCH,
by ______________________________
Name:
Title: