Exhibit 10.7
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CREDIT AGREEMENT
dated as of
August 26, 1997
among
ENDO PHARMACEUTICALS INC.,
as Borrower
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
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CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions
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SECTION 1.01 Defined Terms............................................... 1
SECTION 1.02 Classification of Loans and Borrowings...................... 31
SECTION 1.03 Terms Generally............................................. 31
SECTION 1.04 Accounting Terms; GAAP...................................... 31
ARTICLE II
The Credits
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SECTION 2.01 Commitments................................................. 32
SECTION 2.02 Loans and Borrowings........................................ 32
SECTION 2.03 Requests for Borrowings..................................... 32
SECTION 2.04 Swingline Loans............................................. 34
SECTION 2.05 Letters of Credit........................................... 36
SECTION 2.06 Funding of Borrowings....................................... 41
SECTION 2.07 Interest Elections.......................................... 42
SECTION 2.08 Termination and Reduction of Commitments.................... 44
SECTION 2.09 Repayment of Loans; Evidence of Debt........................ 45
SECTION 2.10 Amortization of Terms Loans................................. 46
SECTION 2.11 Prepayment of Loans......................................... 48
SECTION 2.12 Fees........................................................ 50
SECTION 2.13 Interest.................................................... 51
SECTION 2.14 Alternate Rate of Interest.................................. 52
SECTION 2.15 Increased Costs............................................. 53
SECTION 2.16 Break Funding Payments...................................... 54
SECTION 2.17 Taxes....................................................... 55
SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.................................................... 57
SECTION 2.19 Mitigation Obligations; Replacement of Lenders.............. 59
ARTICLE III
Representations and Warranties
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SECTION 3.01 Organization; Powers........................................ 61
SECTION 3.02 Autorization; Enforceability................................ 61
SECTION 3.03 Governmental Approvals; No Conflicts........................ 61
SECTION 3.04 Financial Condition, No Material Adverse Change............. 61
SECTION 3.05 Properties.................................................. 62
SECTION 3.06 Litigation and Environmental Matters........................ 63
SECTION 3.07 Compliance with Laws and Agreements......................... 64
SECTION 3.08 Investment and Holding Company Status....................... 64
SECTION 3.09 Taxes....................................................... 64
SECTION 3.10 ERISA....................................................... 64
SECTION 3.11 Disclosure.................................................. 65
SECTION 3.12 Subsidiaries................................................ 65
SECTION 3.13 Insurance................................................... 65
SECTION 3.14 Labor Matters............................................... 65
SECTION 3.15 Solvency.................................................... 66
SECTION 3.16 Security Documents.......................................... 66
SECTION 3.17 Federal Reserve Regulations................................. 67
ARTICLE IV
Conditions
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SECTION 4.01 Effective Date.............................................. 68
SECTION 4.02 Each Credit Event........................................... 71
ARTICLE V
Affirmative Covenants
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SECTION 5.01 Financial Statements and Other Information.................. 72
SECTION 5.02 Notice of Material Events................................... 74
SECTION 5.03 Information Regarding Colleteral............................ 75
SECTION 5.04 Existence; Conduct of Business.............................. 76
SECTION 5.05 Payment of Obligations...................................... 76
SECTION 5.06 Maintenance of Properties................................... 76
SECTION 5.07 Insurance................................................... 76
SECTION 5.08 Casualty and Condemnation................................... 77
SECTION 5.09 Books and Records, Inspection and Audit Rights.............. 77
SECTION 5.10 Compliance with Laws........................................ 78
SECTION 5.11 Use of Proceeds and Letters of Credit....................... 78
SECTION 5.12 Additional Subsidiaries..................................... 78
SECTION 5.13 Further Assurances.......................................... 78
SECTION 5.14 Interest Rate Protection.................................... 79
SECTION 5.15 Extension of DMPC Promissory Notes and Transferred
Inventory Note.............................................. 79
ARTICLE VI
Negative Convenants
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SECTION 6.01 Indebtedness; Certain Equity Securities..................... 80
SECTION 6.02 Liens....................................................... 82
SECTION 6.03 Fundamental Changes......................................... 83
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions... 84
SECTION 6.05 Asset Sales................................................. 85
SECTION 6.06 Sale and Lease-Back Transactions............................ 86
SECTION 6.07 Hedging Agreements.......................................... 86
SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness....... 86
SECTION 6.09 Transactions with Affiliates................................ 88
SECTION 6.10 Restrictive Agreements...................................... 88
SECTION 6.11 Amendment of Material Documents............................. 89
SECTION 6.12 Capital Expenditures........................................ 89
SECTION 6.13 Leverage Ratio.............................................. 89
SECTION 6.14 Consolidate Cash Interest Expense Coverage Ratio............ 90
SECTION 6.15 Minimum Consolidated EBITDA................................. 90
ARTICLE VII
Events of Default........................... 91
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ARTICLE VIII
The Administrative Agent.................... 94
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ARTICLE IX
Miscellaneous
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SECTION 9.01 Notices..................................................... 97
SECTION 9.02 Waivers; Amendments......................................... 98
SECTION 9.03 Expenses; Indemnity; Damage Waiver.......................... 100
SECTION 9.04 Successors and Assigns...................................... 102
SECTION 9.05 Survival.................................................... 105
SECTION 9.06 Counterparts; Integration; Effectiveness.................... 106
SECTION 9.07 Severability................................................ 106
SECTION 9.08 Right of Set-off............................................ 106
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process.. 107
SECTION 9.10 WAIVER OF JURY TRIAL........................................ 107
SECTION 9.11 Headings.................................................... 108
SECTION 9.12 Confidentiality............................................. 108
SECTION 9.13 Interest Rate Limitation.................................... 109
SECTION 9.14 Senior Indebtedness......................................... 109
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CREDIT AGREEMENT dated as of August 26,
1997, among ENDO PHARMACEUTICALS INC., a Delaware
corporation, the LENDERS party hereto, and THE CHASE
MANHATTAN BANK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ABR" when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ACQUIRED BUSINESS" means the worldwide business operations
relating to the development, marketing, sale and distribution of, and right to
manufacture, the branded and generic pharmaceutical products of DMPC and DuPont
Pharma described in the Asset Purchase Agreement.
"ACQUISITION" means the acquisition, pursuant to the Asset
Purchase Agreement, by the Borrower from DMPC, DuPont Pharma and Endo
Laboratories, L.L.C., a Delaware limited liability company, of all the assets
constituting the Acquired Business for consideration consisting of (a) a cash
payment on the Effective Date by the Borrower to DMPC in the amount of
$260,000,000 and (b) the issuance on the Effective Date by the Borrower to DMPC
of the Transferred Inventory Note.
"ACQUISITION DOCUMENTS" means the Asset Purchase Agreement and
the DMPC Agreements.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if neces-
3
sary, to the next 1/16 of 1 %) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means The Chase Manhattan Bank, in its
capacity as. administrative agent for the Lenders hereunder.
"ADMINISTRATIVE OUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"ADMINISTRATIVE SERVICES AGREEMENT" means the Administrative
Services Agreement effective as of August 26, 1997, between the Borrower and
DMPC, as such agreement may be amended from time to time in accordance with this
Agreement. -
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1 % and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1 %. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"APPLICABLE PERCENTAGE" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"APPLICABLE RATE" means, for any day (a) with respect to any
Tranche B Term Loan, the applicable Tranche B Rate, and (b) with respect to any
ABR Loan or Eurodollar Loan that is a Revolving Loan or a Tranche A Term Loan,
or with respect to the commitment fees payable hereunder, as the case may be,
the applicable rate per annum set forth below under the caption "ABR Spread",
"Eurodollar Spread" or "Commitment Fee Rate", as the case may be, based upon the
Leverage Ratio for the period of four consecutive fiscal quarters of the
Borrower most recently
4
ended as of such day, PROVIDED that until the delivery to the Administrative
Agent, pursuant to Section 5.01(a) or (b), of the Borrower's consolidated
financial statements for the Borrower's first full fiscal quarter ending after
the first anniversary of the Effective Date, the "Applicable Rate" for purposes
of clause (b) above shall be the applicable rate per annum set forth below in
Category 1:
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ABR EURODOLLAR COMMITMENT FEE
LEVERAGE RATIO: SPREAD SPREAD RATE
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CATEGORY I
Equal to or greater than 4.00 to 1.25% 2.25% 0.500%
1.00
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CATEGORY 2
Less than 4.00 to l.00 but equal to 1.00% 2.00% 0.500%
or greater than 3.50 to 1.00
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CATEGORY 3
Less than 3.50 to 1.00 but equal to 0.75% 1.75% 0.375%
or greater than 3.00 to 1.00
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CATEGORY 4
Less than 3.00 to 1.00 but equal to 0.50% 1.50% 0.375%
or greater than 2.50 to 1.00
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CATEGORY 5 0.25% 1.25% 0.375%
Less than 2.50 to 1.00
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For purposes of the foregoing, (a) the Leverage Ratio as
described above shall be determined as of the end of each fiscal quarter of the
Borrower's fiscal year based upon the Borrower's consolidated financial
statements delivered pursuant to Section 5.0 1(a) or (b) and (b) each change in
the Applicable Rate resulting from a change in the Leverage Ratio shall be
effective during the period commencing on and including the third day (such day,
the "APPLICABLE RATE DETERMINATION DATE") after the date of delivery to the
Administrative Agent of such consolidated financial statements indicating such
change and ending on the date immediately preceding the effective date of the
next such change, PROVIDED that the Leverage Ratio shall be deemed to be in
Category I (i) at any time that an Event of Default has occurred and is
continuing or (ii) if the Borrower fails to deliver the consolidated financial
statements required to be delivered by it pursuant to Section 5.0 1(a) or (b),
during
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the period from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.
"APPLICABLE RATE DETERMINATION DATE" has the meaning assigned
to such term in the definition of the term "Applicable Rate".
"APPROVED FUND" means, with respect to any Lender that is a
fund that invests in bank loans and similar commercial extensions of credit, any
other fund that invests in bank loans and similar commercial extensions of
credit and is man aged by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"ASSESSMENT RATE" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States, PROVIDED that if, as a result of
any change in any law, rule or regulation, it is no longer possible to
determine the Assessment Rate as aforesaid, then the Assessment Rate shall be
such annual rate as shall be determined by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement
dated as of June 27, 1997, among the Borrower, DMPC, DuPont Pharma and Endo
Laboratories, L.L.C., a Delaware limited liability company, as such agreement
may be amended from time to time in accordance with this Agreement.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"BASE CD RATE" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
6
"BORROWER" means Endo Pharmaceuticals Inc., a Delaware
corporation.
"BORROWING" means (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"BORROWING REQUEST" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed, PROVIDED 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.
"CAPITAL EXPENDITURES" means, for any period, (a) the
additions to property, plant and equipment and other capital expenditures of the
Borrower and its consolidated Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared in
accordance with GAAP or supplementally disclosed and, without duplication, (b)
Capital Lease Obligations incurred by the Borrower and its consolidated
Subsidiaries during such period.
"CAPITAL LEASE OBLIGATIONS" of any Person means 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. The term "Capital Lease Obligations" shall
not include any operating lease of any Person.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C.ss.9601 et seq.
"CHANGE OF CONTROL" means (a) prior to an initial public
offering of common stock by the Borrower (it being understood that the term
"initial public offering" shall not include any registration of the Borrower's
Common Stock under Form S-4 or Form S-8 in connection with a transaction
otherwise permitted by this Agreement), the Permitted Holders cease to be the
"beneficial owner" (as defined in
7
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), as currently in effect), directly or indirectly, of a majority
in the aggregate of the total ordinary voting power of the capital stock of the
Borrower, whether as a result of the issuance of securities of the Borrower, any
merger, consolidation, liquidation or dissolution of the Borrower, any direct
or indirect transfer of securities or otherwise, (b) any "person" (as such term
is used in Section 13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders, is or becomes the beneficial owner (as defined in clause (a)
above), directly or indirectly, of more than 30% of the total ordinary voting
power of the capital stock of the Borrower, unless the Permitted Holders
"beneficially own" (as defined in clause (a) above), directly or indirectly, in
the aggregate a greater percentage of the total ordinary voting power of the
capital stock of the Borrower than such other person or (c) occupation of a
majority of the seats on the Board of Directors of the Borrower by Persons whose
nomination for election by the stockholders of the Borrower was not approved by
either (i) a majority of the Permitted Holders or (ii) a vote of a majority of
the directors of the Borrower whose election or nomination for election was
previously so approved. For purposes of clause (a) and clause (b) of the
immediately preceding sentence, the Permitted Holders shall be deemed to
beneficially own any voting stock of a corporation (the "specified corporation")
held by any other corporation (the "parent corporation") so long as the
Permitted Holders beneficially own, directly or indirectly, in the aggregate a
majority of the voting power of the voting stock of the parent corporation.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"CLASS", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Tranche A Term Loans, Tranche B Term Loans or Swingline Loans
and, when used in reference to any Commitment, refers to whether such Commitment
is a Revolving Commitment, Tranche A Commitment or Tranche B Commitment.
8
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COLLATERAL" means any and all "Collateral", as defined in any
applicable Security Document.
"COLLATERAL AGENT" means the "Collateral Agent", as defined in
the Security Agreement.
"COLLATERAL ASSIGNMENT" means the Collateral Assignment,
substantially in the form of Exhibit G, among the Borrower, the Subsidiary Loan
Parties and the Collateral Agent for the benefit of the Senior Secured Parties.
"COMMITMENT" means a Revolving Commitment, Tranche A Com-
mitment or Tranche B Commitment, or any combination thereof (as the context
requires).
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net
Income for such period, plus, without duplication and to the extent deducted
from revenues in determining Consolidated Net Income for such period, the sum of
(a) the aggregate amount of Consolidated Cash Interest Expense for such period,
(b)the aggregate amount of letter of credit fees paid during such period, (c)
the aggregate amount of income tax expense for such period, (d) all amounts
attributable to depreciation and amortization for such period, (e) all
extraordinary charges during such period and (f) all other non-cash charges
during such period, and minus, without duplication and to the extent added to
revenues in determining Consolidated Net Income for such period, the sum of (i)
all extraordinary gains during such period and (ii) all other non-cash gains
during such period, all as determined on a consolidated basis with respect to
the Borrower and the Subsidiaries in accordance with GAAP, provided that, for
purposes of calculating the Leverage Ratio for each of the first three fiscal
quarters of 1997, Consolidated EBITDA shall be deemed to be $11,100,000 for each
such fiscal quarter.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
the interest expense, to the extent paid or payable in cash on the Total Debt
(including the interest component in respect of Capital Lease Obligations and
excluding amortization of transaction fees and expenses for such period) by the
Borrower and
9
the Subsidiaries during such period, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, net income or
loss of the Borrower and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, provided that there shall be
excluded from such net income or loss (a) the income of any Person in which any
other Person (other than the Borrower or any of the Subsidiaries or any director
holding qualifying shares in compliance with applicable law) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of the Subsidiaries by such Person during
such period and (b) the income (or loss) of any Person accrued prior to the date
it becomes a Subsidiary or is merged into or consolidated with the Borrower or
any of the Subsidiaries or the date that Person's assets are acquired by the
Borrower or any of the Subsidiaries.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. The terms "CONTROLLING" and "CONTROLLED" have meanings correlative
thereto.
"DEFAULT" means any event or condition that constitutes an
Event of Default or that upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"DESIGNATED AFFILIATE" means any Affiliate of ▇▇▇▇▇ other than
any corporation or other Person (except for any corporation or other Person
engaged in a business similar, complementary or related to the nature or type of
the business of the Borrower and the Subsidiaries) controlled by, or any
investment fund (other than ▇▇▇▇▇ Investment Associates V, L.P. or any
investment fund that is solely comprised of current and former professionals of
▇▇▇▇▇) managed by, ▇▇▇▇▇.
"DISCLOSED MATTERS" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 3.06.
"DMPC" means The DuPont Merck Pharmaceutical Company, a
Delaware general partnership.
10
"DMPC AGREEMENTS" means the Lease Agreement, the Manufacture
and Supply Agreement, the Administrative Services Agreement and the Warehousing
and Distribution Agreement.
"DMPC PROMISSORY NOTES" means, collectively, (a) a note issued
annually by the Borrower to DMPC for its fixed costs in the face amount of
$6,000,000 and (b) a note issued annually by the Borrower, payable to DMPC or
DuPont Pharma, in an amount equal to the lesser of (i) 100% of the sum of all of
DMPC' s and DuPont Pharma's fixed and variable costs (as calculated pursuant to
the Manufacture and Supply Agreement) and (ii) $17,000,000. Each DMPC Promis-
sory Note will be in substantially the form of Exhibit H.
"DMPC TRANSACTIONS" means (a) the execution and delivery of
the DMPC Agreements and (b)the execution and delivery of each of the DMPC
Promissory Notes.
"DOLLARS" or "$" refers to lawful money of the United States
of America.
"DUPONT PHARMA" means DuPont Merck Pharma, a Delaware general
partnership.
"EFFECTIVE DATE" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"ENVIRONMENTAL LAWS" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions or binding agreements
issued, promulgated or entered into by or with any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources or the handling, treatment, storage, disposal, Release or threatened
Release of any Hazardous Material.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, natural resource damage, costs
of environmental remediation, administrative oversight costs, fines, penalties
or indemnities), of the Borrower or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materi-
11
als into the environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
"EQUITY FINANCING" means the contribution by certain
Affiliates of ▇▇▇▇▇, ▇▇▇▇▇ Designees, Greenwich Street Capital and certain
individuals, consisting primarily of members of the existing management of the
Borrower, to the Borrower of an aggregate cash amount of not less than
$110,000,000 as common equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, 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.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) 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; (c) the filing pursuant to Section 4 12(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; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from 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.
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"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in
Article VII.
"EXCESS CASH FLOW" means, for any period, the sum (without
duplication) of:
(a) the Consolidated Net Income for such period, adjusted
to exclude any gains or losses attributable to Prepayment Events; PLUS
(b) depreciation, amortization and other non-cash charges
or losses deducted in determining such consolidated net income (or
loss) for such period; PLUS
(c) the sum of (i) the amount, if any, by which Net
Working Capital decreased during such period plus (ii) the aggregate
principal amount of Capital Lease Obligations and other Indebtedness
incurred during such period to finance Capital Expenditures, to the
extent that mandatory principal payments in respect of such
Indebtedness would not be excluded from clause (g) below when made;
MINUS
(d) the sum of (i) any non-cash gains included in
determining such consolidated net income (or loss) for such period plus
(ii) the amount, if any, by which Net Working Capital increased during
such period; MINUS
(e) Capital Expenditures for such period; MINUS
(f) Restricted Payments permitted by Section
6.08(a)(iii); MINUS
(g) the aggregate principal amount of Indebtedness repaid
or prepaid by the Borrower and its consolidated Subsidiaries during
such period, excluding (i) Indebtedness in respect of Revolving Loans
and Letters of Credit, (ii) Term Loans prepaid pursuant to Section
2.11(b) or (c), (iii) repayments or prepayments of Indebtedness
financed by incurring other Indebtedness, to the extent that mandatory
principal payments in respect of such other Indebtedness would,
pursuant to this clause (g), be deducted in
13
determining Excess Cash Flow when made and (iv) Indebtedness referred
to in clauses (a)(iii) and (a)(iv) of Section 6.01 and Indebtedness
(other than term Indebtedness) referred to in clause (a)(vii) of
Section 6.01.
"EXCLUDED TAXES" means, with respect to the Administrative
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income,
franchise, branch profits or functionally similar taxes imposed on (or measured
by) its net income by the United States of America, or by the jurisdiction (or
any political subdivision thereof or taxing authority therein) under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is located
and (b) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.19(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office),
except to the extent that such Foreign Lender (or its assignor, if any) would
have been entitled, at the time of designation of a new lending office (or
assignment) or change in circumstances, to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.17(a) but
for such designation of a new lending office (or assignment) or change in
circumstances, or is attributable to such Foreign Lender's failure to comply
with Section 2.17(e) or to a change in circumstances of such Foreign Lender
other than a Change in Law.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1 %) 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
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
"FINANCING TRANSACTIONS" means (a) the execution, delivery and
performance by each Loan Party of the Loan Documents to which it is to be a
party,
14
the borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder and (b) the Equity Financing.
"FOREIGN LENDER" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"FOREIGN SUBSIDIARY" means any Subsidiary that is organized
under the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (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 or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation, PROVIDED that the term "Guarantee" shall not
include endorse ments for collection or deposit in the ordinary course of
business.
"HAZARDOUS MATERIALS" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including
15
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law,
including any material listed as a hazardous substance under Section 101(14) of
CERCLA.
"HEDGING AGREEMENT" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"INDEBTEDNESS" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (e) 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
Indebtedness secured thereby has been assumed, PROVIDED that the amount of such
Indebtedness shall, for purposes of this Agreement, be deemed to be limited to
the value of the property so pledged, (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" means the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Borrower, the Subsidiary Loan Parties and the
Administrative Agent.
16
"INFORMATION MEMORANDUM" means the Confidential Information
Memorandum dated July 1997 relating to the Borrower and the Transactions.
"INTEREST ELECTION REQUEST" means a request by the Borrower to
convert or continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.07.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, 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 prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"INTEREST PERIOD" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect, PROVIDED that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initial shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"ISSUING BANK" means The Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.05(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term "Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
17
"JOINT VENTURE" means, as to a Person, any corporation,
partnership or other legal entity or arrangement in which such Person has any
direct or indirect equity interest (or owns securities convertible into such an
equity interest) and that is not a subsidiary of such Person.
"▇▇▇▇▇" means ▇▇▇▇▇ & Company, L.P., a Delaware limited
partnership.
"▇▇▇▇▇ DESIGNEES" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, U. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. and the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇.
"LC AVAILABILITY PERIOD" means the period from and including
the Effective Date to but excluding the earlier of (a) the date that is five
Business Days prior to the Revolving Maturity Date and (b) the date of
termination of the Revolving Commitments.
"LC DISBURSEMENT" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amour of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by
or on behalf of the Borrower at such time. The LC Exposure of any Revolving
Lender at any time shall be its Applicable Percentage of the total LC Exposure
at such time.
"LEASE AGREEMENT" means the Lease Agreement effective as of
August 26, 1997. between Borrower and DMPC, pursuant to which DMPC will lease
its Garden City, New York, facility to Borrower, as such agreement may be
amended from time to time in accordance with this Agreement.
"LENDERS" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance. Unless the context otherwise requires,
the term "Lenders" includes the Swingline Lender.
"LETTER OF CREDIT" means any letter of credit issued pursuant
to this Agreement.
18
"LEVERAGE RATIO" means, with respect to any period, the ratio
of (a) Total Debt as of the last day of such period to (b) Consolidated EBITDA
for such period, all determined on a consolidated basis in accordance with GAAP.
"LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by 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" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN DOCUMENTS" means this Agreement, the Letters of Credit,
the Subsidiary Guarantee Agreement, the Indemnity, Subrogation and Contribution
Agreement and the Security Documents.
"LOAN PARTIES" means the Borrower and the Subsidiary Loan
Parties.
"LOANS" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
19
"MANAGEMENT AGREEMENT" means the Financial Advisory Agreement
between the Borrower and ▇▇▇▇▇ dated as of August 26, 1997.
"MANAGEMENT INVESTORS" means the officers and employees of the
Borrower at any time when ▇▇▇▇▇ beneficially owns (as defined in clause (a) of
the definition of the term "Change of Control") (a) more than 30% of the total
ordinary voting power of the capital stock of the Borrower and (b) a greater
percentage of the total ordinary voting power of the capital stock of the
Borrower than is then beneficially owned in the aggregate by the officers and
employees of the Borrower.
"MANUFACTURE AND SUPPLY AGREEMENT" means the Manufacture and
Supply Agreement dated as of August 26, 1997, among DMPC, DuPont Pharma and
Borrower, pursuant to which DMPC or DuPont Pharma will manufacture, for sale by
the Borrower, certain products described in such agreement, as such agreement
may be amended from time to time in accordance with this Agreement.
"MARGIN STOCK" has the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries taken as a whole, (b) the
ability of any Loan Party to perform any of its obligations under any Loan
Document or (c) the rights of or benefits available to the Lenders under any
Loan Document.
"MATERIAL INDEBTEDNESS" means indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more the Borrower and the Subsidiaries in an aggregate
principal amount exceeding $5,000,000. For purposes of determining Material
indebtedness, the "principal amount" of the obligations of the Borrower or any
Subsidiary in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MORTGAGE" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document granting a Lien
on any Mort-
20
gaged Property to secure the Senior Obligations. Each Mortgage shall
be satisfactory in form and substance to the Collateral Agent.
"MORTGAGED PROPERTY" means, initially, each parcel of real
property and the improvements thereto owned by a Loan Party and identified on
Schedule 1.01(a), and includes each other parcel of real property and
improvements thereto with respect to which a Mortgage is granted pursuant to
Section 5.12 or 5.13.
"MULTIEMPLOVER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET PROCEEDS" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and
the Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and lease-back transaction or a casualty or
other insured damage or condemnation or similar proceeding), the amount of all
payments required to be made by the Borrower and the Subsidiaries as a result of
such event to repay Indebtedness (other than Loans) secured by such asset or
otherwise subject to mandatory prepayment as a result of such event, and (iii)
the amount of all taxes paid (or reasonably estimated to be payable) by the
Borrower and the Subsidiaries, and the amount of any reserves established by the
Borrower and the Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event
(as determined reasonably and in good faith by the chief financial officer of
the Borrower); PROVIDED, HOWEVER, that, with respect to any sale, transfer or
other disposition of an asset (including pursuant to a sale and lease-back
transaction or, subject to Section 5.08, a casualty or other insured damage or
condemnation or similar proceeding), if the Borrower shall deliver a certificate
of a Financial Officer to the Administrative Agent at the time of such sale,
transfer or other disposition setting forth the Borrower's intent to use the
proceeds of such sale, transfer or other disposition to replace or repair the
assets that are the subject of such sale, transfer or other disposition with
other assets to be used in the same line of business within 365 days of receipt
of such proceeds and no Default or Event of Default shall have occurred and
shall be continuing at the time of such certificate or at the proposed time of
the application of such proceeds, such
21
proceeds shall not constitute Net Proceeds except to the extent not so used at
the end of such 365-day period, at which time such proceeds shall be deemed to
be Net Proceeds.
"NET WORKING CAPITAL" means, at any date, (a) the consolidated
current assets of the Borrower and its consolidated Subsidiaries as of such date
(excluding cash and Permitted Investments) minus (b) the consolidated current
liabilities of the Borrower and its consolidated Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness), in each case
excluding purchase accounting adjustments. Net Working Capital at any date may
be a positive or negative number. Net Working Capital increases when it becomes
more positive or less negative and decreases when it becomes less positive or
more negative.
"OTHER TAXES" means any and all current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"PERFECTION CERTIFICATE" means a certificate in the form of
Annex 1 to the Security Agreement or any other form approved by the Collateral
Agent.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes or other governmental
charges that are not yet due or are being contested in compliance with
Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 60 days or are being contested in compliance with
Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
22
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary obligations
and do not materially detract from the value of the affected property
or interfere with the ordinary conduct of business of the Borrower or
any Subsidiary;
(g) any interest of a landlord in or to property of the
tenant imposed by law, arising in the ordinary course of business and
securing lease obligations that are not overdue by more than 60 days or
are being contested in compliance with Section 5.05, or any possessory
rights of a lessee to the leased property under the provisions of any
lease permitted by the terms of this Agreement;
(h) Liens of a collection bank arising in the ordinary
course of business underss.4-208 of the Uniform Commercial Code in
effect in the relevant jurisdiction; and
(i) Liens arising under applicable Environmental Laws
that are being contested in compliance with Section 5.05,
PROVIDED that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERMITTED HOLDERS" means ▇▇▇▇▇ and the Designated Affiliates,
the ▇▇▇▇▇ Designees, the Management Investors, any employee stock ownership plan
established by the Borrower for the benefit of the employees of the Borrower or
any Subsidiary (an "ESOP") and their Permitted Transferees; PROVIDED, HOWEVER,
that for purposes of clauses (a) and (b) of the definition of the term "Change
of Control", if the shares of capital stock of the Borrower held by ESOPs
represent in the aggregate in excess of 10% of the total ordinary voting power
of the capital stock of the
23
Borrower, then such ESOPs will not be considered to be Permitted Holders with
respect to such excess.
"PERMITTED INVESTMENTS" means:
(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 one year from the date
of acquisition thereof;
(b) investments in commercial paper maturing within 270
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 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
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 $500,000,000;
(d) fully collateralized repurchase agreements with a
term of not more than 30 days for securities described in clause (a)
above and entered into with a financial institution satisfying the
criteria described in clause (c) above; and
(e) shares of funds registered under the Investment
Company Act of 1940, as amended, that have assets of at least
$500,000,000 and invest only in obligations described in clauses (a)
through (c) above to the extent that such shares are rated by Moody's
or S&P in one of the two highest rating categories assigned by such
agency for shares of such nature.
"PERMITTED TRANSFEREES" means (a) in the case of ▇▇▇▇▇, (i)
any Designated Affiliate, (ii) any managing director, general partner, limited
partner, director, officer or employee of ▇▇▇▇▇ or any Designated Affiliate
(collectively, "▇▇▇▇▇ ASSOCIATES"), (iii) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any ▇▇▇▇▇ Associate or ▇▇▇▇▇
Designee and (iv) any trust,
24
the beneficiaries of which, or a corporation or partnership, the stockholders or
partners of which, include only a ▇▇▇▇▇ Associate or ▇▇▇▇▇ Designee, his spouse,
parents, siblings, members of his or her immediate family (including adopted
children) and/or direct lineal descendants, and (b) in the case of any
Management Investors, (i) his executor, administrator, testamentary trustee,
legatee or beneficiaries, (ii) his spouse, parents, siblings, members of his or
her immediate family (including adopted children) and/or direct lineal
descendants or (iii) a trust, the beneficiaries of which, or a corporation or
partnership, the stockholders or partners of which, include only the Management
Investor, as the case may be, and his spouse, parents, siblings, members of his
or her immediate family (including adopted children) and/or direct lineal
descendants.
"PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"PLAN" means 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 302 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" means the Pledge Agreement, substantially
in the form of Exhibit E, among the Borrower, the Subsidiaries party thereto and
the Collateral Agent for the benefit of the Senior Secured Parties.
"PREPAYMENT EVENT" means:
(a) any sale, transfer or other disposition (including
pursuant to a sale and lease-back transaction) of any property or asset
of the Borrower or any Subsidiary, other than (i) dispositions
described in clauses (a) and (b) of Section 6.05 and (ii) other
dispositions resulting in aggregate Net Proceeds not exceeding
$1,000,000 during any fiscal year of the Borrower; or
(b) any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of the Borrower or any Subsidiary,
other than casualties, insured damage or takings resulting in aggregate
Net Proceeds not exceeding $1,000,000 during any fiscal year of the
Borrower; or
25
(c) the issuance by the Borrower or any Subsidiary of any
equity securities, or the receipt by the Borrower or any Subsidiary of
any capital contribution, other than (i) any such issuance of equity
securities to, or receipt of any such capital contribution from, the
Borrower or a Subsidiary, (ii) the issuance of equity securities of the
Borrower to employees of the Borrower or any of the Subsidiaries in
their capacity as such pursuant to employee benefit plans and
employment agreements, (iii) the issuance of equity securities of the
Borrower to ▇▇▇▇▇ Designees pursuant to subscription agreements dis-
closed in writing to the Administrative Agent prior to the date of this
Agreement, (iv) the issuance of equity securities of the Borrower to
any one or more of the Permitted Holders pursuant to a private
placement and (v) the issuance of other equity securities of the
Borrower, the proceeds of which do not exceed $1,000,000; or
(d) the incurrence by the Borrower or any Subsidiary of
any Indebtedness, other than Indebtedness permitted by Section 6.01.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"REGISTER" has the meaning set forth in Section 9.04.
"REGULATION G" means Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION T" means Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION U" means Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION X" means Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
26
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"RELEASE" has the meaning set forth in Section 101(22) of
CERCLA.
"REQUIRED LENDERS" means, at any time, Lenders having
Revolving Exposures, Term Loans and unused Commitments representing more than
50% of the sum of the total Revolving Exposures, outstanding Term Loans and
unused Commitments at such time.
"RESTRICTED PAYMENT" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancelation or termination of any such shares of capital stock of
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any such shares of capital stock of the Borrower or any Subsidiary.
"REVOLVING AVAILABILITY PERIOD" means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of termination of the Revolving Commitments.
"REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The initial aggregate amount of the
Lenders' Revolving Commitments is $25,000,000.
"REVOLVING EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
27
"REVOLVING LENDER" means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with
Revolving Exposure.
"REVOLVING LOAN" means a Loan made pursuant to clause (c) of
Section 2.01.
"REVOLVING MATURITY DATE" means December 31, 2002.
"S&P" means Standard & Poor's Ratings Service.
"SECURITY AGREEMENT" means the Security Agreement,
substantially in the form of Exhibit F, among the Borrower, DMPC, the Subsidiary
Loan Parties and the Collateral Agent for the benefit of the Senior Secured
Parties.
"SECURITY DOCUMENTS" means the Security Agreement, the Pledge
Agreement, the Collateral Assignment, the Mortgages and each other security
agreement, mortgage or other instrument or document executed and delivered
pursuant to Section 5.12 or 5.13 to secure any of the Senior Obligations.
"SENIOR OBLIGATIONS" has the meaning assigned to such term in
the Security Agreement.
"SENIOR SECURED PARTIES" has the meaning assigned to such term
in the Security Agreement.
"STATUTORY RESERVE RATE" means 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 to which the Administrative Agent 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
funding (currently referred to as "Eurocurrency Liabilities" 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
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any
28
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"SUBSIDIARY" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"SUBSIDIARY" means any subsidiary of the Borrower.
"SUBSIDIARY GUARANTEE AGREEMENT" means the Subsidiary
Guarantee Agreement, substantially in the form of Exhibit C, made by the
Subsidiary Loan Parties in favor of the Collateral Agent for the benefit of the
Senior Secured Parties.
"SUBSIDIARY LOAN PARTY" means any Subsidiary that is not a
Foreign Subsidiary.
"SWINGLINE EXPOSURE" means, at any time, the aggregate
principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
"SWINGLINE LENDER" means The Chase Manhattan Bank, in its
capacity as lender of Swingline Loans hereunder.
"SWINGLINE LOAN" means a Loan made pursuant to Section 2.04.
"TAXES" means any and all current or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
29
"TERM COMMITMENTS" means a Tranche A Commitment or Tranche B
Commitment or any combination thereof (as the context requires).
"TERM LOANS" means Tranche A Term Loans and Tranche B Term
Loans.
"THREE-MONTH SECONDARY CD RATE" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not 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(5 19)
during the week following such day) or, if such rate is not 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 is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"TOTAL DEBT" means, as-of any date of determination, without
duplication, (a) the aggregate principal amount of Indebtedness of the Borrower
and the Subsidiaries outstanding as of such date, determined on a consolidated
basis in accordance with GAAP (other than (i) the Transferred Inventory Note,
(ii) the DMPC Promissory Notes and (iii) Indebtedness of the type referred to in
clause (h) of the definition of the term "Indebtedness", except to the extent of
any unreimbursed drawings thereunder).
"TRANCHE A COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche A Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche A Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Tranche A
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche A Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche A Commitments
is $60,000,000.
30
"TRANCHE A LENDER" means a Lender with a Tranche A Commitment
or an outstanding Tranche A Term Loan.
"TRANCHE A MATURITY DATE" means December 31,2002.
"TRANCHE A TERM LOAN" means a Loan made pursuant to clause (a)
of Section 2.01.
"TRANCHE B COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche B Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche B Term Loan -to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Tranche B
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche A Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche B Commitments
is $105,000,000.
"TRANCHE B LENDER" means a Lender with a Tranche B Commitment
or an outstanding Tranche B Term Loan.
"TRANCHE B MATURITY DATE" means June 30, 2004.
"TRANCHE B RATE" means, for any day with respect to any ABR
Loan or Eurodollar Loan that is a Tranche B Term Loan, the applicable rate per
annum set forth below under the caption "ABR Spread" or "Eurodollar Spread", as
the case may be, based upon the Leverage Ratio for the period of four
consecutive fiscal quarters of the Borrower most recently ended as of such day,
PROVIDED that until the delivery to the Administrative Agent, pursuant to
Section 5.0 1(a) or (b), of the Borrower's consolidated financial statements for
the Borrower's first full fiscal quarter ending after the first anniversary of
the Effective Date, the "Tranche B Rate" shall be the applicable rate per annum
set forth below in Category 1:
===============================================================================
ABR EURODOLLAR
LEVERAGE RATIO: SPREAD SPREAD
--------------------------------------------------------------------------------
31
--------------------------------------------------------------------------------
CATEGORY 1
Equal to or greater than 4.00 to 1.75% 2.75%
1.00
--------------------------------------------------------------------------------
CATEGORY 2
Less than 4.00 to 1.00 but equal 1.50% 2.50%
to or greater than 3.50 to 1.00
--------------------------------------------------------------------------------
CATEGORY 3 1.25% 2.25%
Less than 3.50 to 1.00
===============================================================================
For purposes of the foregoing, (a) the Leverage Ratio as described above shall
be determined as of the end of each fiscal quarter of the Borrower's fiscal year
based upon the Borrower's consolidated financial statements delivered pursuant
to Section 5.0 1(a) or (b) and (b) each change in the Applicable Rate resulting
from a change in the Leverage Ratio shall be effective during the period
commencing on and including the Applicable Rate Determination Date with respect
to such consolidated financial statements indicating such change and ending on
the date immediately preceding the effective date of the next such change,
PROVIDED that the Leverage Ratio shall be deemed to be in Category 1 (i) at any
time that an Event of Default has occurred and is continuing or (ii) if the
Borrower fails to deliver the consolidated financial statements required to be
delivered by it pursuant to Section 5.01(a) or (1,), during the period from the
expiration of the time for delivery thereof until such consolidated financial
statements are delivered.
"TRANCHE B TERM LOAN" means a Loan made pursuant to clause (b)
of Section 2.01.
"TRANSACTIONS" means the Acquisition, the DMPC Transactions
and the Financing Transactions.
"TRANSFERRED INVENTORY NOTE" means a note issued on the
Effective Date by the Borrower to DMPC pursuant to Article 3 of the Asset
Purchase Agreement. The Transferred Inventory Note will be in substantially the
form of Exhibit I.
"TYPE". when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
32
"WAREHOUSING AND DISTRIBUTION AGREEMENT" means the Warehousing
and Distribution Agreement effective as of August 26, 1997, between the Borrower
and DMPC, as such agreement may be amended from time to time in accordance with
this Agreement.
"WITHDRAWAL LIABILITY" means 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.
SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS. For pur-
poses of this Agreement, Loans may be classified and referred to by Class (E.G.,
a "Revolving Loan") or by Type (E.G., a "Eurodollar Loan") or by Class and Type
(E.G., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (E.G., a "Revolving Borrowing") or by Type (E.G., a
"Eurodollar Borrowing") or by Class and Type (E.G., a "Eurodollar Revolving
Borrowing").
SECTION 1.03 TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof' and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04 ACCOUNTING TERMS: GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time, PROVIDED
that, if
33
the Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accor dance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01 COMMITMENTS. Subject to the terms and conditions
set forth herein, each Lender agrees (a) to make a Tranche A Term Loan to the
Borrower on the Effective Date in a principal amount not exceeding its Tranche A
Commitment, (b) to make a Tranche B Term Loan to the Borrower on the Effective
Date in a principal amount not exceeding its Tranche B Commitment and (C) to
make Revolving Loans to the Borrower from time to time during the Revolving
Availability Period in an aggregate principal amount that will not result in
such Lender's Revolving Exposure exceeding such Lender's Revolving Commitment.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts
repaid in respect of Term Loans may not be reborrowed.
SECTION 2.02 LOANS AND BORROWINGS. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their respec-
tive Commitments of the applicable Class. The failure of any Lender to make any
Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder, PROVIDED that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Subject to Section 2.14, each Revolving Borrowing and
Term Borrowing shall be comprised entirely of ABR Loans or Eurodollar
Loans as the Borrower may request in accordance herewith.
Notwithstanding anything to the
34
contrary contained herein, all Borrowings made on the Effective Date shall be
ABR Borrowings. Each Swingline Loan shall be an ABR Loan. Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan, PROVIDED that 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.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $1,000,000,
PROVIDED that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e). Each Swingline Loan shall be in an amount that is an integral
multiple of $100,000 and not less than $100,000. Borrowings of more than one
Type and Class may be outstanding at the same time, PROVIDED that there shall
not at any time be more than a total of 10 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to elect
to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Revolving Maturity Date,
Tranche A Maturity Date or Tranche B Maturity Date, as applicable.
SECTION 2.03 REQUESTS FOR BORROWINGS. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the date
of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of the proposed
Borrowing, PROVIDED that any such notice of an ABR Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e) may be given not later than 11:00a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and
35
signed by the Borrower. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Borrowing, Tranche A Term Borrowing or Tranche B Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) subject to the second sentence of Section 2.02(b),
whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower'.s account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04 SWINGLINE LOANS. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the Borrower from time to time during the Revolving Availability Period, in
an aggregate principal amount at any time outstanding that will not result in
(1) the aggregate principal amount of outstanding Swingline Loans exceeding
$5,000,000 or (ii) the sum of the total Revolving Exposures exceeding the total
Revolving Commitments, PROVIDED that the Swingline Lender shall not be required
to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Swingline Loans.
36
(b) To request a Swingline Loan, the Borrower shall
notify the Administrative Agent of such request by telephone (confirmed
by telecopy), not later than 12:00 noon, New York City time, on the day
of a proposed Swingline Loan. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and
amount of the requested Swingline Loan. The Administrative Agent will
promptly advise the Swingline Lender of any such notice received from
the Borrower. The Swingline Lender shall make each Swingline Loan
available to the Borrower by means of a credit to the general deposit
account of the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement
as provided in Section 2.05(e), by remittance to the Issuing Bank) by
3:00 p.m., New York City time, on the requested date of such Swingline
Loan.
(c) The Swingline Lender may by written notice given to
the Administrative Agent not later than 10:00 a.m., New York City time,
on any Business Day require the Revolving Lenders to acquire
participations on such Business Day in all or a portion of the
Swingline Loans outstanding. Such notice shall specify the aggregate
amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Revolving Lender, specifying in such notice
such Lender's Applicable Percentage of such Swingline Loan or Loans.
Each Revolving Lender hereby absolutely and unconditionally agrees,
upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of the Swingline Lender, such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Revolving
Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a
Default or reduction or termination of the Commitments, and that each
such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Revolving Lender shall comply with its
obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply,
MUTATIS MUTANDIS, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender
the amounts so received by it from the Revolving Lenders. The
Administrative Agent shall notify the Borrower of any participations in
any Swingline Loan acquired pursuant to this paragraph, and thereafter
payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline
37
Lender. Any amounts received by the Swingline Lender from the Borrower (or other
party on behalf of the Borrower) in respect of a Swingline Loan after receipt by
the Swingline Lender of the proceeds of a sale of participations therein shall
be promptly remitted to the Administrative Agent; any such amounts received by
the Administrative Agent shall be promptly remitted by the Administrative Agent
to the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.
SECTION 2.05 LETTERS OF CREDIT. (a) GENERAL. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the LC Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION;
CERTAIN CONDITIONS. To request the issuance of a Letter of Credit (or
the amendment, renewal or extension of an outstanding Letter of
Credit), the Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested 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, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply
with paragraph (c) of this Section), 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, amend, renew or extend
such Letter of Credit. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank's
standard form in connection with any request for a 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, amend-
38
ment, renewal or extension (i) the LC Exposure shall not exceed
$5,000,000 and (ii) the total Revolving Exposures shall not exceed the
total Revolving Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire
at or prior to the close of business on the earlier of (i) the date one
year after the date of the issuance of such Letter of Credit (or, in
the case of any renewal or extension thereof, one year after such
renewal or extension) and (ii) the date that is five Business Days
prior to the Revolving Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof)
and without any further action on the part of the Issuing Bank or the
Lenders, the Issuing Bank hereby grants to each Revolving Lender, and
each Revolving Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the
Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Bor-
rower on the date due as provided in paragraph (e) of this Section, or
of any reimbursement payment required to be refunded to the Borrower
for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the
Commitments, 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 LC
Disbursement in respect of a Letter of Credit, the Borrower shall
reimburse such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement not later than 12:00 noon, New
York City time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to
10:00 a.m., New York City time, on such date, or, if such notice has
not been received by the Borrower prior to such time on such date, then
not later than 12:00 noon, New York City time, on (i) the Business Day
that the Borrower receives such notice, if such notice is received
prior to 10:00 a.m., New York City time, on the day of receipt, or (ii)
the Business Day immediately following the day that the Borrower
receives such notice, if such notice is not received prior to
39
such time on the day of receipt, PROVIDED that the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section
2.03 or 2.04 that such payment be financed with an ABR Revolving Borrowing or
Swingline Loan in an equivalent amount and, to the extent so financed, the
Borrower's obligation to make such payment shall be discharged and replaced by
the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails
to make such payment when due, the -Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from
the Borrower in respect thereof and such Lender's Applicable Percentage thereof.
Promptly following receipt of such notice, each Revolving Lender shall pay to
the Administrative Agent its Applicable Percentage of the payment then due from
the Borrower, in the same manner as provided in Section 2.06 with respect to
Loans made by such Lender (and Section 2.06 shall apply, MUTATIS MUTANDIS, to
the payment obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such Lenders and the Issuing Bank as their interests may
appear. Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Revolving Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section 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 this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) 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, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of set-off against, the Borrower's obligations hereunder. None
of the Administrative Agent, the Lenders, the Issuing Bank or any of their
40
Related Parties shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank, PROVIDED that 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 failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or wilful misconduct on the part of the
Issuing Bank, the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
that appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, unless it has received written notice to the contrary, or refuse
to accept and make payment upon such documents if such documents are not in
strict compliance with the terms of such Letter of Credit.
(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 promptly notify the Administrative Agent and the
Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder, PROVIDED 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 Revolving Lenders with respect to
any such LC Disbursement.
(h) INTERIM INTEREST. If the issuing Bank shall make any
LC Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the
date that the Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to ABR Revolving Loans, PROVIDED that, if the
41
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(e) of this Section, then Section 2.13(c) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Revolving Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may
be replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor
Issuing Bank. The Administrative Agent shall notify the Lenders of any
such replacement of the Issuing Bank. At the time any such replacement
shall become effective, the Borrower shall pay all unpaid fees accrued
for the account of the replaced Issuing Bank pursuant to Section
2.12(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of
the Issuing Bank under this Agreement with respect to Letters of Credit
to be issued thereafter and (ii) references herein 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 replacement of an Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party hereto and
shall continue to have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit issued by
it prior to such replacement, but shall not be required to issue
additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to 105% of the LC Exposure
as of such date plus any accrued and unpaid interest thereon, PROVIDED that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Article VII. Each such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and
42
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
(if requested by the Borrower) shall be made at the option and sole discretion
of the Administrative Agent and at the Borrower's risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. 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 to the Borrower within three Business Days after
all Events of Default have been cured or waived. -
SECTION 2.06 FUNDING OF BORROWINGS. (a) Each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders, PROVIDED that Swingline Loans shall be made as
provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
New York City and designated by the Borrower in the applicable Borrowing
Request, PROVIDED that ABR Revolving Loans made to finance the reimbursement of
an LC Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Administrative Agent such
Lender's share of such Borrowing, the Administrative Agent may assume
that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon
such assumption, make available to the Borrower a corresponding amount.
In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to
43
the Administrative Agent forthwith on demand such corresponding amount
with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of
payment to the Administrative Agent, at (i) in the case of such Lender,
the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the
interest rate applicable to ABR Loans. If such Lender pays such amount
to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.07 INTEREST ELECTIONS. (a) Each Revolving Borrowing
and Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Revolving Borrowing of
the Type resulting from such election to be made on the effective date
of such election. Each such telephonic Interest Election Request shall
be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02
and paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions
44
thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition
of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the
details thereof and of such Lender's portion of each resulting
Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and Be Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so
long as an Event of Default is continuing (i) no outstanding Borrowing
may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or
continued as a Eurodollar Borrowing if after giving effect thereto (i)
the Interest Period therefor would commence before and end after a date
on which any principal of the Loans of such Class is scheduled to be
repaid and (ii) the sum
45
of the aggregate principal amount of outstanding Eurodollar Borrowings
of such Class with Interest Periods ending on or prior to such
scheduled repayment date plus the aggregate principal amount of
outstanding ABR Borrowings of such Class would be less than the
aggregate principal amount of Loans of such Class required to be repaid
on such scheduled repayment date.
SECTION 2.08 TERMINATION AND REDUCTION OF COMMITMENTS, (a)
Unless previously terminated, (i) the Tranche A Commitments and Tranche B
Commitments shall terminate at 5:00 p.m., New York City time, on the Effective
Date and (ii) the Revolving Commitments shall terminate on the Revolving
Maturity Date.
(b) The Borrower may at any time terminate, or from time
to time reduce, the Commitments of any Class, PROVIDED that (i) each
reduction of the Commitments of any Class shall be in an amount that is
an integral multiple of $1,000,000 and not less than $5,000,000 and
(ii) the Borrower shall not terminate or reduce the Revolving
Commitments if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.11, the sum of the
Revolving Exposures would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of
any election to terminate or reduce the Commitments under paragraph (b)
of this Section at least three Business Days prior to the effective
date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice,
the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable, PROVIDED that a notice of termination of the
Revolving Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination or
reduction of the Commitments of any Class shall be permanent. Each
reduction of the Commitments of any Class shall be made ratably among
the Lenders in accordance with their respective Commitments of such
Class.
46
SECTION 2.09 REPAYMENT OF LOANS, EVIDENCE OF DEBT, (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Term Loan of such Lender as provided in Section 2. 10 and (iii)
to the Swingline Lender the then unpaid principal amount of each Swingline Loan
on the earlier of the Revolving Maturity Date and the date of any demand for
payment by the Swingline Lender, PROVIDED that on each date that a Revolving
Borrowing is made, the Borrower shall repay all Swingline Loans then
outstanding.
(b) Each Lender shall maintain in accordance with its
usual practice an account or amounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in
which it shall record the amount of each Loan made hereunder, the Class
and Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due
and payable torn me Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for me
account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant
to paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence
of the existence and amounts of the obligations recorded therein,
provided 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 obligation of the Borrower to repay the Loans in accordance
with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made
by it be evidenced by a promissory now. In such event, the Borrower
shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender,
to such Lender and its registered assigns) and in a form approved by
the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 9.04) be represented
47
by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered
note, to such payee and its registered assigns).
SECTION 2.10 AMORTIZATION OF TERM LOANS. (a) Subject to
adjustment pursuant to paragraph (d) of this Section, the Borrower shall repay
Tranche A Term Borrowings on each date set forth below in the aggregate
principal amount set forth opposite such date:
DATE AMOUNT
December 31, 1998 $ 4,000,000
March 31, 1999 2,000,000
June 30, 1999 2,000,000
September 30, 1999 2,000,000
December 3 1, 1999 2,000,000
March 31, 2000 3,000,000
June 30, 2000 3,000,000
September 30, 2000 3,000,000
December 31, 2000 3,000,000
March 31, 2001 4,000,000
June 30, 2001 4,000,000
September 30, 2001 4,000,000
December 31, 2001 4,000,000
March 31, 2002 5,000,000
June 30, 2002 5,000,000
September 30, 2002 5,000,000
December 31, 2002 5,000,000
(b) subject to adjustment pursuant to paragraph (d) of
this Section, the Borrower shall repay Tranche B Term Borrowings on
each date set forth below in the aggregate principal amount set forth
opposite such date:
DATE AMOUNT
December 31, 1998 $ 1,000,000
March 31, 1999 250,000
June 30, 1999 250,000
September 30, 1999 250,000
48
December 3 1, 1999 250,000
March 31, 2000 250,000
June 30, 2000 250,000
September 30, 2000 250,000
December 31, 2000 250,000
March 31, 2001 250,000
June 30, 2001 250,000
September 30, 2001 250,000
December 31, 2001 250,000
March 31, 2002 250,000
June 30, 2002 250,000
September 30, 2002 250,000
December 31, 2002 250,000
March 31, 2003 11,500,000
June 30, 2003 11,500,000
September 30, 2003 11,500,000
December 31, 2003 11,500,000
March 31, 2004 27,000,000
June 30, 2004 27,000,000
(c) To the extent not previously paid, (i) all Tranche A
Term Loans shall be due and payable on the Tranche A Maturity Date and
(ii) all Tranche B Term Loans shall be due and payable on the Tranche B
Maturity Date.
(d) If the initial aggregate amount of the Lenders' Term
Commitments of either Class exceeds the aggregate principal amount of
Term Loans of such Class that are made on the Effective Date, then the
scheduled repayments of Term Borrowings of such Class to be made
pursuant to this Section shall be reduced ratably by an aggregate
amount equal to such excess. Any prepayment of a Term Borrowing of
either Class shall be applied to reduce the subsequent scheduled
repayments of the Term Borrowings of such Class to be made pursuant to
this Section ratably, PROVIDED that any prepayment made pursuant to
Section 2.11 (a) shall be applied, first, to reduce (in the direct
order of maturity) the next four scheduled repayments of the Term
Borrowings of such Class to be made pursuant to this Section (to the
extent that such scheduled repayments would otherwise occur within 12
months of such prepayment made pursuant to Section 2.11 (a)) unless and
until such next four scheduled repayments have been eliminated as a
result of reductions
49
hereunder and, second, to reduce me remaining scheduled repayments of
the Term Borrowings of such Class to be made pursuant to this Section
ratably.
(e) Prior to any repayment of any Term Borrowings of
either Class hereunder, the Borrower shall select the Borrowing or
Borrowings of the applicable Class to be repaid and shall notify the
Administrative Agent by telephone (confirmed by telecopy) of such
selection not later than 11:00 a.m., New York City time, three Business
Days before the scheduled date of such repayment PROVIDED that each
repayment of Term Borrowings of either Class shall be applied to repay
any outstanding ABR Term Borrowings of such Class before any other
Borrowings of such Class. Each repayment of a Borrowing shall be
applied ratably to the Loans included in the repaid Borrowing.
Repayments of Term Borrowings shall be accompanied by accrued interest
on the amount repaid.
SECTION 2.11 PREPAYMENT OF LOANS. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) Subject to the provisions of Section 5.08(b), in the
event and on each occasion that any Net Proceeds are received by or on
behalf of the Borrower or any Subsidiary in respect of any Prepayment
Event, the Borrower shall, within three Business Days after such Net
Proceeds are received, (i) deliver to the Administrative Agent a
certificate signed by an executive officer of the Borrower with respect
to the computation of such Net Proceeds and (ii) prepay Term Borrowings
in an aggregate amount equal to such Net Proceeds.
(c) Following the end of each fiscal yam of the Borrower,
commencing with the fiscal year ending December 31, 1998, the Borrower
shall prepay Term Borrowings in an aggregate amount equal to 75 % of
Excess Cash Flow for such fiscal year, provided that such percentage
shall be reduced from 75 % to 50 % with respect to the mandatory
prepayment under this paragraph (c) in respect of any fiscal year if
the Leverage Ratio as of the first Applicable Rate Determination Date
following the end of such fiscal year is less than 4.00 to 1.00. Each
prepayment pursuant to this paragraph shall be made on or before the
date that is three Business Days after the date on which financial
statements are delivered pursuant to Section 5.01 with
50
respect to the fiscal year for which Excess Cash Flow is being
calculated (and in any event within 123 days after the end of each such
fiscal year).
(d) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select the Borrowing or
Borrowings to the prepaid and shall specify such selection in the
notice of such prepayment pursuant to paragraph (e) of this Section,
provided that each prepayment of Borrowings of any Class shall be
applied to prepay ABR Borrowings of such Class before any other
Borrowings of such Class. In the event of any optional or mandatory
prepayment of Term Borrowings made at a time when Term Borrowings of
both Classes remain outstanding, the Borrower shall select Term
Borrowings to be prepaid so that the aggregate amount of such prepay-
ment is allocated between the Tranche A Term Borrowings and Tranche B
Term Borrowings pro rata based on the aggregate principal amount of
outstanding Borrowings of each such Class (a "PRO RATA ALLOCATION"),
PROVIDED that if such prepayment is a voluntary prepayment pursuant to
para graph (a) of this Section, the Borrower may, in its sole
discretion, select Term Borrowings to be prepaid so that the amount of
such prepayment allocated to the Tranche A Term Borrowings is greater
than the amount that would be allocated to the Tranche A Term
Borrowings under a Pro Rata Allocation; PROVIDED FURTHER that if such
prepayment is a mandatory prepayment pursuant to paragraph (a) or (c)
of this Section, and to the extent Tranche A Term Loans remain
outstanding on the prepayment date, any Tranche B Lender may elect, by
notice to the Administrative Agent by telephone (confirmed by telecopy)
at least one Business Day prior to the prepayment date, to decline all
or any portion of any prepayment of its Tranche B Term Loans pursuant
to this Section, in which case the aggregate amount of the prepayment
that would have been applied to prepay Tranche B Term Loans but was so
declined shall be applied to prepay Tranche A Term Borrowings.
(e) The Borrower shall notify the Administrative Agent (and,
in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in
the case of prepayment of a Eurodollar Borrowing, not later than 11:00
a.m., New York City time, three Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Borrowing, rat
later than 11:00 a.m., New York City time, one Business Day before the
date of prepayment or (iii) in the case of prepayment of a Swingline
Loan, not later than 12:00 noon, New York City time, on the date of
prepayment. Each such notice shall be
51
irrevocable and shall specify the prepayment date, the principal amount
of each Borrowing or portion thereof to be prepaid and, in the case of
a mandatory prepayment, a reasonably detailed calculation of the
amount of such prepayment, PROVIDED that, if a notice of optional
prepayment of any Loan is given in connection with a conditional notice
of termination of the Revolving Commitments as contemplated by Section
2.08, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.08. Promptly
following receipt of any such notice (other than a notice relating
solely to Swingline Loans), the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of
an advance of a Borrowing of the same Type as provided in Section 2.02,
except as necessary to apply fully the required amount of a mandatory
prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.
SECTION 2.12 FEES. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily unused amount of the
Revolving Commitment of such Lender during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates.
Accrued commitment fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including be list
day but excluding the last day). For purposes of computing commitment fees with
respect to Revolving Commitments, a Revolving Commitment of a Lender shall be
deemed to be used to the extent of the outstanding Revolving Loans and LC
Exposure of such Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue
at the same Applicable Raw as interest on Eurodollar Revolving Loans on
the average daily amount of such Lender's LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during
the period from and including the Effective Date to but excluding the
later of the date on which such Lender's
52
Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee, which shall accrue at the rate or rates per annum separately
agreed upon between the Borrower and the Issuing Bank on the avenge
daily amount of the LC Exposure (excluding any portion thereof
attributable to unreirnbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date
of termination of the Revolving Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank's standard
fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrue through and including the
last day of March, June, September and December of each year shall be
payable on the third Business Day following such last day, commencing
on the first such date to occur after the Effective Date, provided that
all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on
which the Revolving Commit ments terminate shall be payable on demand.
Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and shall be payable for the actual number
of days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrower and the Administrative
Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the
Issuing Bank, in the case of fees payable to it) for distribution, in
the case of commitment fees and participation fees, to the Lenders
entitled thereto. Fees paid shall not be refundable under any
circumstances.
SECTION 2.13 INTEREST. (a) The Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the Alternate
Base Rate plus the Applicable Rate.
53
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by me Borrower
hereunder is not paid when due whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest,
after as well as before judgement at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2 % plus the rate (including
margin) otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate (including margin) applicable to ABR Revolving Loans as
provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of
Revolving Loans, upon termination of the Revolving Commitments,
PROVIDED that (A) interest accrued Pursuant to paragraph (c) of this
Section shall be payable on demand, (B) in the event of any repayment
or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan prior to the end of the Revolv ing Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and Q in the event of any
conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on
the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year, and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding
the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate
shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.14 ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
54
(i) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period, or
(ii) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will riot
adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and die Lenders that the:
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be -made as an ABR Borrowing.
SECTION 2.15 INCREASED COST. (a) If any Change in Law shall:
(1) impose, modify or deem appli-
cable any reserve, special &-posit or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Bank; or
(2) impose on any Lender or the
Issuing Bank or the London interbank market any other condition
affecting lids 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 of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Under or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
ISSUING Bank iii respect thereof (whether of principal, interest or otherwise),
then the Borrower will pay to such Lender or the Issuing Bank, as the case may
be, such additional amount or amounts
55
as will 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 determines that any
Change in Law regarding capital requirements has or would have the
effect of reducing the ran 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 by, or participations in Letters of Credit held by, such
Lender, or the Letters of Credit issued by the Issuing Bank, 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
Change in Law (taking into consideration such Lender's 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), then from time to
time the Borrower will pay to such Lender or the Issuing Bank, as the
case may be, such additional amount or amounts as will 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 the amount or amounts necessary to compensate such Lender or the
Issuing Bank or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender's or the Issuing Bank's right to
demand such compensation, PROVIDED that the Borrower shall not be
required to compensate a Lender or the Issuing Bank pursuant to this
Section for any increased costs or reduc tions incurred more than 180
days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Lender's or the Issuing
Bank's intention to claim compensation therefor, and PROVIDED FURTHER
that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.
56
SECTION 2.16 BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan other don on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other don on the last day of
the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice, may be revoked
under Section 2A I and is revoked in accor dance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest that would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest that would accrue on
such principal amount for such period at the interest rate that such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
SECTION 2.17 TAXES. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes, PROVIDED that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be in creased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
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.
57
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Bank, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent, such Lender or the Issuing Bank, as
the case may be, on or with respect to any payment by or on account of
any obligation of the Borrower hereunder or under any other Loan
Document (including Indemni fied Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and
any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Under or the Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to the
Administrative Agent.
(e) Each Foreign Lender, and any Issuing Bank that is not a
"United States person" within the meaning of Section 7701(a)(30) of the
Code (together with the Foreign Lenders, the "NON-U.S. LENDERS"), shall
deliver to the Borrower (with a copy to 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", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such
Non-U.S. Under delivers a Form W-8, a certificate representing that
such Non-U.S. Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Code)), properly completed and duly
58
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 or any other Loan Document. Such forms
shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement or designates a new lending off ice.
In addition, each Non-U.S. Lender shall deliver such forms promptly
upon the obsolescence, expiration or invalidity of any form previously
delivered by such Non-U.S. Lender. Notwithstanding any other provision
of this Section 2.17, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this Section 2.17(e) that such Non-U.S.
Lender is not legally able to deliver.
(f) If the Administrative Agent or any Lender receives a
refund solely in respect of 'Taxes or Other Taxes, it shall pay over
such refund to the Borrower to the extent that it has already received
indemnity payments or additional amounts pursuant to this Section 2.17
with respect to such Taxes or Other Taxes giving rise to the refund,
net of all out-of-pocket expenses and without interest (other than
interest paid by the relevant Governmental Authority with respect to
such refund); PROVIDED, however, that the Borrower shall, upon request
of the Administrative Agent or such Under, repay such refund (plus
penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender if
the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. Nothing contained herein shall
require the Administrative Agent or any Lender to make its tax returns
(or any other information relating to its taxes that it deems
confidential) available to the Borrower or any other Person.
SECTION 2.18 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF SET-OFFS. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16,
59
2.17 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Busi ness Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent 0 pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursement then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Revolving Loans, Term Loans or
participations in LC Disbursements or Swingline Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate
amount of its Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term Loans and participations in
LC Disbursements and Swingline Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Revolving Loans,
Term Loans and participations in LC Disbursements and Swingline Loans,
PROVIDED that (i) if any such participations are purchased and all or
any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to
the extent of such recovery, without interest, and (ii) the provisions
of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the
60
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). The
Borrower consents to the foregoing and agrees, to be extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counter claim with respect
to such participation as fully as if such Lender were a direct creditor
of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment
on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Bank, as the case
may be, the amount due. In such event, if the Borrower has not in fact
made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or Issuing
Bank with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in
accor dance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b),
2.18(d) or 9.03(c), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account
of such Lender to satisfy such Lender's obligations under such Sections
until all such unsatisfied obligations are fully paid.
SECTION 2.19 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use
61
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the reasonable judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 117, as the cue may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvanta geous to such Lender. The Borrower
hereby agrees in pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assign ment.
(b) If are, lender requests compensation under Section 2.15,
or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, or if any Lender defaults in its obligation
to fund Loans hereunder, then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section
9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), PROVIDED that
(i) the Borrower shall have received the prior written consent of the
Administrative Agent (and, if a Revolving Commitment is being assigned,
the Issuing Bank and Swingline Lender), which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower Q the case of
all other amounts) and (iii) in the case of any such assignment result
ing from a claim for compensation under Satan 115 or payments required
to be made pursuant to Section 2.17, such assignment will result in a
reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto,
as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease
to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
62
The Borrower represents and warrants to the Lenders that:
SECTION 3.01 ORGANIZATION; POWERS. Each of the Borrower and
the Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY. The Transactions
to be entered into by each Loan Party are within such Loan Party's corporate
powers and have been duly authorized by all necessary corporate and, if
required, stock holder action. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document to which
any Loan Party is to be a party, when executed and delivered by such Loan Party,
will constitute, a legal, valid and binding obligation of the Borrower or such
Loan Party (as the case may be), enforceable in accordance with its terms,
subject to applicable bankruptcy, insol vency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding, in
equity or at law.
SECTION 3.03 GOVERNMENTAL APPROVALS; NO CONFLICTS. The
Transactions (a) do not require any consent or approval of. registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Loan Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of the Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instru ment binding upon the Borrower or any
of the Subsidiaries or its assets, or give rise to a right thereunder to require
any payment to be made by the Borrower or any of the Subsidiaries, and (d) will
not result in the creation or imposition of any Lien (other than any Lien
expressly permitted by Section 6.02) on any asset of the Borrower or any of me
Subsidiaries, except Liens created under the Loan Documents.
63
SECTION 3.04 FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) The Borrower has heretofore furnished to the Lenders the statement of assets
to be sold as of December 31, 1996 and 1995, and the related statement of
earnings of Generic and U.S. MultiSource Products of the DuPont Merck
Pharmaceutical Company (the "Products") for the years then ended, reported on by
Price Waterhouse LLP, independent public accountants. Such financial statements
present fairly, in all material respects, the assets to be sold as of December
31, 1996 and 1995, and me related earnings for the Products for the two years
ended December 31, 1996, all in accordance with GAAP.
(b) The Borrower has heretofore furnished to the Lenders its
pro forma consolidated balance sheet as of June 30, 1997, prepared
giving effect to the Transactions as if the Transactions had occurred
on such date. Such pro forma consolidated balance sheet (i) except as
stated therein, has been prepared in good faith based on the same
assumptions used to prepare the pro forma financial statements included
in the Information Memorandum (which assumptions were believed by the
Borrower to be reasonable at the time of preparation of such financial
statements and at be time of preparation of such balance sheet), (ii)
is based on the best information available to the Borrower after due
inquiry, (iii) reasonably reflects the adjustments necessary to give
effect to the Transactions and (iv) presents fairly, in all material
respects, the pro forma financial position of the Borrower and its
consolidated Subsidiaries as of June 30, 1997 as if the Transactions
had occurred on such date.
(c) Except as disclosed in the financial statements referred
to above or the notes thereto or in the Information Memorandum and
except for the Disclosed Matters, after giving effect to the
Transactions, neither the Borrower nor any of the Subsidiaries has, as
of the Effective Date, any material contingent liabilities, unusual
long-term commitments or unrealized losses.
(d) Since December 31, 199C there has been no material adverse
change in the business, assets, operations, prospects or condition,
financial or otherwise, of the Acquired Business, taken as a whole.
SECTION 3.05 PROPERTIES. (a) Each of the Borrower and the
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for
64
minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes.
(a) Each of the Borrower and the Subsidiaries owns, or is
licensed to use, all trademarks, trade names, copyrights, patents and
other intellectual property material to its business, and the use
thereof by the Borrower and the Subsidiaries does not infringe upon the
rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
(b) Schedule 3.05 sets forth the address of each real property
that is owned or leased by the Borrower or any of the Subsidiaries as
of be Effective Date after giving effect to be Transactions.
(c) As of the Effective Date, (i) neither the Borrower nor any
of the Subsidiaries has received notice of, or has knowledge of, any
pending or contemplated condemnation proceeding affecting any Mortgaged
Property or any sale or disposition thereof in lieu of condemnation and
(ii) neither any Mortgaged Property nor any interest therein is subject
to any right of first refusal, option or other contractual right to
purchase such Mortgaged Property or interest therein.
SECTION 3.06 LITIGATION AND ENVIRONMENTAL MATTERS. (a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of the Subsidiaries (i) as to which
there is a reason able possibility 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 (other than the Disclosed
Matters) or (H) that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither
the Borrower nor any of the Subsidiaries (i) has failed to comply with
any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii)
has received notice of any claim with respect to any Environmental
Liability or (iii) knows of any basis for any Environmental Liability.
65
(c) Since the date Of lids Agreement there has been no change
in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of,
a Material Adverse Effect.
SECTION 3.07 COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the
Borrower and the Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08 INVESTMENT AND HOLDING COMPANY STATUS. Neither
the Borrower nor any of the Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09 TAXES. The Borrower and each of the Subsidiaries
has timely filed or caused to be filed all Tax returns and reports required to
have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10 ERISA. No ERISA Event has occurred or is reason
ably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of State ment of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed by more than $500,000 the fair market value of me anew of such Plan, and
the present value of all accumu lated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of me date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans by an amount that would be reasonably likely to
result in a Material Adverse Effect.
66
SECTION 3.11 DISCLOSURE. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
the Borrower or any of the Subsidiaries is subject, and all other matters known
to any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. As of the Effective Date,
neither the Information Memo randum nor any of the other reports, financial
statements, certificates or other information furnished by or on behalf of any
Loan Party to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by other information so furnished)
contained any material misstatement of fact or omitted to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, PROVIDED that, with respect to
projected financial information, the Borrower recipients only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
SECTION 3.12 SUBSIDIARIES. The Borrower does not have any
subsidiaries other than the Subsidiaries. Schedule 3.12 sets forth the name of,
and the ownership interest of the Borrower in, each Subsidiary of the Borrower
and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as
of the Effective Date.
SECTION 3.13 INSURANCE. Schedule 3.13 sets forth a description
of all insurance maintained by or on behalf of the Borrower and the Subsidiaries
as of the Effective Date. As of the Effective Date, all premiums in respect of
such insur ance that are due and payable have been paid.
SECTION 3.14 LABOR MATTERS. As of the Effective 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, except where any
such violations, individually or in the aggregate, would not be reasonably
likely to result in a Material Adverse Effect. All material payments due from
the Borrower or any Subsidiary, or for which any claim may be ma&e 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 Transactions
will not give rise to any right of termination or
67
right of renegotiation on the part of any union under any collective bargaining
agreement to which the Borrower or any Subsidiary is bound.
SECTION 3.15 SOLVENCY. Immediately after the consummation of
the Transactions to occur on the Effective Date and immediately following the
making of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted follow
ing the Effective Date.
SECTION 3.16 SECURITY DOCUMENTS. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Senior Secured Parties, a legal, valid and enforceable security interest in
the Collat eral (as defined in the Pledge Agreement) and, when the Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of the pledgor thereunder in such Collateral, in each case prior and
superior in right to any other person.
(b) The Security Agreement is effective to create in favor of
the Collateral Agent, for the ratable benefit of the Senior Secured
Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Security Agreement) and, when financing
statements in appropriate form are filed in the offices specified on
Schedule 6 to the Perfection Certificate, the Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the grantors thereunder in such Collateral
(other than the Intellectual Property (as defined in the Security
Agreement)), in each case prior and superior in right to any other
person, other than with respect to Liens expressly permitted by Section
6.02.
(c) When the Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Off-ice,
the
68
Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties
in the Intellectual Property (as defined in the Security Agreement) in
which a security interest may be: perfected by filing, recording or
registering a security agreement, financing statement or analogous
document in the United States Patent and Trademark Office or the United
States Copyright Office, as applicable, in each case prior and superior
in right to any other person other than Liens expressly permitted by
Section 6.02 (it being understood that subsequent recordings in the
United States Patent and Trademark Office and the United States
Copyright Office may be necessary to perfect a lien on registered
trademarks, trademark applications and copyrights acquired by the Loan
Parties after the date hereof).
(d) The Collateral Assignment is effective to create in favor
of the Collateral Agent, for the ratable benefit of the Senior Secured
Parties, a legal, valid and enforceable security interest in the
Assigned Contract (as defined in the Collateral Assignment) and, when
financing statements in appropriate form are filed in the office as
specified on Schedule 6 to the Perfection Certificate, the Collateral
Assignment shall constitute a fully perfected Lien on, and security
interest IN, all right, title and interest of the Grantors thereun der
in such Assigned Contracts, in each case prior and superior in right to
any other person, other than respect to Liens expressly permitted by
Section 6.02.
(e) The Mortgages, when executed and delivered, will be
effective to create, subject to the exceptions listed in each title
insurance policy cover ing such Mortgage, in favor of the Collateral
Agent, for the ratable benefit of the Senior 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, and when the Mortgages are filed in the offices specified on
Schedule 3.16(d), the Mortgages shall constitute a Lien on, and
security interest in, all right, title and interest of the Loan Parties
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 the rights of persons pursuant to Liens expressly permitted
by Section 6.02.
SECTION 3.17 FEDERAL RESERVE REGULATIONS. (a) Neither the
Borrower nor any of the Subsidiaries is engaged principally, or as one of its
impor tant activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
69
(b) No part of the proceeds of any Loan or any Letter of
Credit will be used, whether directly or indirectly, and whether
immediately, inci dentally or ultimately, for any purpose that entails
a violation of, or that is inconsistent with, the provisions of the
Regulations of the Board, including Regulation G, U or X.
ARTICLE IV
CONDITIONS
SECTION 4.01 EFFECTIVE DATE. The obligations of the Lenders to
make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (h) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agree ment.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, special counsel for the Borrower, substantially in the form of
Exhibit B, and Buc & ▇▇▇▇▇▇▇▇▇, special regulatory counsel for the
Borrower, each covering such other matters relating to the Loan
Parties, the Loan Documents or the Transactions as the Required Lenders
shall reasonably request. The Borrower hereby request such counsel to
deliver such opinion.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of each Loan Party, the authorization of the Transactions and
any other legal matters, relating to the Loan Parties, the Loan
Documents or the Transactions, all in form and substance satisfactory
to the Administrative Agent and its counsel.
70
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement, or payment of all
out-of-pocket expenses required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document.
(f) The Administrative Agent shall have received counterparts
of the Pledge Agreement signed on behalf of the Borrower and each.
Subsidiary Loan Party thereto, together with stock certificates, if
any, representing all the outstanding shares of capital stock of each
Subsidiary or Joint Venture owned by or on behalf of any Loan Party as
of the Effective Date after giving effect to the Transactions (except
that stock certificates representing shares of common stock of a
Foreign Subsidiary may be limited to 65 96 of the out standing shares
of common stock of such Foreign Subsidiary), promissory notes
evidencing all intercompany Indebtedness owed to any Loan Party by the
Borrower or any Subsidiary as of the Effective Date after giving effect
to the Transactions and stock powers and instruments of transfer,
endorsed in blank, with respect to such stock certificates and
promissory notes.
(g) The Administrative Agent shall have received counterparts
of the Security Agreement signed on behalf of the Borrower, DMPC and
each Subsidiary Loan Party, together with the following:
(1) all documents and instruments,
including Uniform Commercial Code financing statements, required by law
or reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens intended to be
created under the Security Agreement; and
(2) a completed Perfection Certifi-
cate dated the Effective Date and signed by an executive officer or
Financial Officer of the Borrower, together with all attachments
contemplated thereby, including the results of a search of the Uniform
Commercial Code (or equivalent) filings made with respect to the
71
Loan Parties in the jurisdictions contemplated by the Perfection
Certificate and copies of the financing statements or similar docu
ments) disclosed by such search and evidence reasonably satisfactory to
the Administrative Agent that the Liens indicated by such financing
statements (or similar documents) are permitted by Section 6.02 or have
been released.
(h) The Administrative Agent shall have received counterparts
of the Collateral Assignment signed on behalf of the Borrower.
(i) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 5.07 is in
effect.
(j) The Lenders shall be reasonably satisfied with (i) the
terms and conditions of the Acquisition Documents, (ii) the corporate
and capital structure of the Borrower and the Subsidiaries after giving
effect to the Transactions and (iii) all legal, tax and accounting
matters relating to the Transactions.
(k) The Lenders shall be reasonably satisfied with the
sufficiency of amounts available under this Agreement to meet the
ongoing working capital requirements of the Borrower and the
Subsidiaries following the Transactions and the consummation of the
other transactions contemplated hereby.
(l) All consents and approvals required to be obtained from
any Governmental Authority or other Person in connection with the
Acquisition and the other Transactions shall have been obtained, all
applicable waiting periods and appeal periods shall have expired, in
each case without the imposition of any burdensome conditions and there
shall be no action by any Governmental Authority, actual or threatened,
that has a reasonable likeli hood of restraining, preventing or
imposing burdensome conditions on the Transactions or the other
transactions contemplated hereby. The Acquisition and the other
Transactions that are to occur on the Effective Date shall have been,
or substantially simultaneously with the initial funding of Loans on
the Effective Date shall be, consummated in accordance with the
Acquisition Documents and applicable law, without any amendment to or
waiver of any material terms or conditions of the Acquisition Documents
not approved by the Lenders. The Administrative Agent shall have
received copies of the
72
Acquisition Documents and all certificates, opinions and other
documents delivered thereunder, certified by an executive officer of
the Borrower as complete and correct.
(m) The Lenders shall have received a pro forma consolidated
balance sheet of the Borrower as of June 30, 1997, reflecting all pro
forma adjustments as if the Transactions had been consummated on such
date, and such pro forma consolidated balance sheet shall ht consistent
in all material respects with the forecasts and other information
previously provided a) die Lenders. After giving effect to the
Transactions, neither the Borrower nor any of the Subsidiaries shall
have outstanding any shares of preferred stock or any Indebtedness
other than (i) Indebtedness incurred under the Loan Documents and (ii)
Indebtedness set forth on Schedule 6.01. The aggregate amount of fees
and expenses (including underwriting discounts and commissions) payable
or otherwise borne by the Borrower and the Subsidiaries in connec tion
with the Transactions shall not exceed $15,000,000.
(n) Neither the Borrower nor any of the Subsidiaries shall be
obligated after the Effective Date to pay any fee to any Affiliate
(other than fees permitted by Section 6.09) or third parry in respect
of management services (other than as required under the DMPC
Agreements).
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the forego ing, the obligations of the Lenders to make Loam and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 3:00 p.m., New York City time, on September 30, 1997 (and, in the
event such conditions are rot so satisfied or waived, the Commitments shall
terminate at such time).
SECTION 4.02 EACH CREDIT EVENT. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to
issue, Amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of each Loan Parry set
forth in the Loan Documents shall be true and correct in all material
respects on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, except to the
73
extent such representations and warranties expressly relate to an
earlier date in which case such representations and warranties shall be
true and correct as of such earlier date.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or teen terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01 FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 120 days after the end of each fiscal year of the
Bor rower, its audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of the
end of and for such year, and commencing after the second full fiscal
year after the Effective Date, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported
on by Deloitte & Touche LLP or other independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualifica tion or exception
as to the scope of such audit) to the effect that such ▇▇▇▇▇▇▇ dated
financial statements present fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;
74
(b) Commencing with the fiscal quarter ending March 31, 1998,
within 60 days after the end of each of the first three fiscal quarters
of each fiscal year of the Borrower, its consolidated balance sheet and
related state ments of operations, stockholders' equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, and commencing after the first full fiscal
year after the Effective Date, setting forth in each case in
comparative form the figures for the corresponding period or periods of
(or, in be case of be balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects 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 nominal year-end audit adjustments and the absence of
footnotes;
(c) commencing with the fiscal month ending on January 31,
1998, within 30 days after the end of each of the first two fiscal
months of each fiscal quarter of the Borrower, its consolidated balance
sheet and related statements of operations, stockholders' equity and
cash flows as of the end of and for such fiscal month and the then
elapsed portion of the fiscal year, all certified by one of its
Financial Officers as presenting in all material aspects 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
and the absence of footnotes;
(d) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower (i) certifying, as to whether a Default has occurred and,
if a Default has oc curred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations demonstrating compliance with
Sections 6.12, 6.13, 6.14 and 6.15 and (iii) stating whether any change
in GAAP or in the application thereof has oc curred since the date of
the Borrower's most recent audited financial state ments and, if any
such change has occurred, specifying the effect of such change on the
financial statements, accompanying such certificate;
(e) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the
75
course of their examination of such financial statements of any Default
(which certificate may be limited to the extent required by accounting
rules or guidelines);
(f) within 45 days after the end of each fiscal year of the
Bor rower, a detailed consolidated budget for such fiscal year
(including a pro jected consolidated balance sheet and related
statements of projected opera tions and cash flow as of the end of and
for such fiscal year) and, promptly when available, any significant
revisions of such budget,
(g) 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 Commis sion or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national
securities exchange, as the case may be; and
(h) promptly following any request therefor, such other
informa tion 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 5.02 NOTICES OF MATERIAL EVENTS. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(i) the occurrence of any Default;
(ii) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Borrower or any Affiliate thereof that could
reasonably be expected to have to an adverse outcome that would result
in a Material Adverse Effect;
(iii) the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and the
Subsidiaries in an aggregate amount exceeding $5,000,000; and
76
(iv) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details - of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03 INFORMATION REGARDING COLLATERAL. (a) The
Borrower will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party's corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Collateral owned by it or any office or facility at which Collateral
owned by it with an aggregate book value in excess of $5,000,000 is located
(including the establishment of any such new office or facility, but excluding
the consolidation of one existing office location with another existing office
location), (iii) in any Loan Party's identity or corporate structure or (iv) in
any Loan Party's Federal Taxpayer Identification Number. The Borrower agrees to
give not less than 30 days prior written notice of any change referred to in the
immedi ately preceding sentence and to provide to the Administrative Agent all
filings necessary under the Uniform Commercial Code or otherwise that are
required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral. The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to
clause (a) of Section 5.01, the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer of the
Borrower (i) setting forth the informa tion required pursuant to
Section 2 of the Perfection Certificate or confirming that there has
been no change in such information since the date of the Perfection
Certificate delivered on the Effective Date or the date of the most
recent certificate delivered pursuant to this Section and (ii)
certifying that all Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate
filings, recordings or registrations, including all refiling,
rerecording and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or
other
77
appropriate office in each jurisdiction identified pursuant to clause
(i) above to the extent necessary to protect and perfect the security
interests under the Security Agreement for a period of not less than 18
months after the date of such certificate (except as noted therein with
respect to any continuation statements to be filed within such period).
SECTION 5.04 EXISTENCE; CONDUCT OF BUSINESS. The Borrower
will, and will cause each of the Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business,
PROVIDED that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03.
SECTION 5.05 PAYMENT OF OBLIGATIONS. The Borrower will, and
will cause each of the Subsidiaries to, satisfy its Indebtedness and other
obligations, including Tax liabilities, before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) the Borrower or such
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP, (c) such contest effectively suspends collection of the
contested obligation and the enforce ment of any Lien securing such obligation
or (d) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.06 MAINTENANCE OF PROPERTIES. The Borrower will, and
will cause each of the Subsidiaries to, keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
SECTION 5.07 INSURANCE. The Borrower will, and will cause each
of the Subsidiaries to, maintain, with financially sound and reputable insurance
compa ▇▇▇▇ (a) adequate insurance for its insurable properties, all to such
extent and against such risks, including fire, casualty 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 and (b) such other
insurance as is required pursuant to the terms of any Security Document.
78
SECTION 5.08 CASUALTY AND CONDEMNATION. (a) The Borrower will
furnish to the Administrative Agent and the Lenders prompt written notice of any
casualty or other insured damage to any portion of any Collateral in excess of
$500,000 or the commencement of any action or proceeding for the taking of any
Collateral or any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance proceeds, condemnation
award or otherwise), the Administrative Agent is authorized to collect such Net
Proceeds and, if received by the Borrower or any Subsidiary, such Net Proceeds
shall be paid over to the Administrative Agent, PROVIDED that (i) if the
aggregate Net Proceeds in respect of such event (other than proceeds of business
income insurance) are less than $5,000,000, such Net Proceeds shall be paid over
to the Borrower unless a Default has occurred and is continuing, and (ii) all
proceeds of business income insurance shall be paid over to the Borrower unless
a Default has occurred and is continuing. All such Net Proceeds retained by or
paid over to the Administrative Agent shall be held by the Administrative Agent
and released from time to time to pay the costs of repairing, restoring or
replacing the affected property in accordance with the terms of the applicable
Security Document, subject to the provisions of the applicable Security Document
regarding application of such Net Proceeds during a Default.
(c) If any Net Proceeds retained by or paid over to the
Adminis trative Agent as provided above continue to be held by the
Administrative Agent on the date that is 365 days after the receipt of such Net
Proceeds, then such Net Proceeds shall be applied to prepay Term Borrowings as
provided in Section 2.11(b).
SECTION 5.09 BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS.
The Borrower will, and will cause each of the Subsidiaries to, keep proper books
of record and account in which full, true and correct entries in all material
respects are made of all dealings and transactions in relation to its business
and activities. The Borrower will, and will cause each of the Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested.
79
SECTION 5.10 COMPLIANCE WITH LAWS. The Borrower will, and will
cause each of the Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.11 USE OF PROCEEDS AND LETTERS OF CREDIT. The
proceeds of the Term Loans, together with the proceeds of the Equity Financing,
will be used only for the payment of (a) amounts payable under the Acquisition
Documents as consideration for the Acquisition and (b) fees and expenses payable
in connection with the Transactions. The proceeds of the Revolving Loans and
Swingline Loans will be used only for general corporate purposes. No part of the
proceeds of any Loan will be used whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations G, U and X. Letters of Credit will be issued only for
general corporate purposes.
SECTION 5.12 ADDITIONAL SUBSIDIARIES. If any additional
Subsidiary is formed or acquired after the Effective Date, the Borrower will
notify the Adminis trative Agent and the Lenders thereof and (a) if such
Subsidiary is a Subsidiary Loan Party, the Borrower (i) will become a party to
the Indemnity, Subrogation and Contribution Agreement, if it is not already
party to such agreement, and (ii) will cause such Subsidiary to become a party
to the Subsidiary Guarantee Agreement, the Indemnity, Subrogation and
Contribution Agreement and each applicable Security Document in the manner
provided therein within ten Business Days after such Subsidiary is formed or
acquired and promptly take such actions to create and perfect Liens on such
Subsidiary's assets to secure the Senior Obligations as the Administra tive
Agent or the Required Lenders shall reasonably request and (b) if any shares of
capital stock or Indebtedness of such Subsidiary are owned by or on behalf of
any Loan Party, the Borrower will cause such shares and promissory notes
evidencing such Indebtedness to be pledged pursuant to the Pledge Agreement
within ten Business Days after such Subsidiary is formed or acquired (except
that, if such Subsidiary is a Foreign Subsidiary, shares of common stock of such
Subsidiary to be pledged pursuant to the Pledge Agreement may be limited to 65 %
of the outstanding shares of common stock of such Subsidiary).
SECTION 5.13 FURTHER ASSURANCES. (a) The Borrower will, and
will cause each Subsidiary Loan Party to, execute any and all further documents,
financ ing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mort-
80
gages, deeds of trust and other documents), that may be required under any
applica ble law, or which the Administrative Agent or the Required Lenders may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties. The Borrower also agrees
to provide to the Administrative Agent, from time to time upon request, evidence
reasonably satisfactory to the Administrative Agent as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents.
(b) If any material assets (including any real property or
improve ments thereto (other than any individual real property or improvements
with a fair market value not in excess of $250,000, PROVIDED that the aggregate
fair market value of all real property or improvements excluded pursuant to this
parenthetical shall in no event exceed $750,000 in the aggregate) or any
interest therein other than leasehold interests in real property) are acquired
by the Borrower or any Subsidiary Loan Party after the Effective Date (other
than assets constituting Collateral under the Security Agreement that become
subject to the Lien of the Security Agreement upon acquisition thereof), the
Borrower will notify the Administrative Agent and the Lenders thereof, and, if
requested by the Administrative Agent or the Required Lenders, the Borrower will
cause such assets to be subjected to a Lien securing the Senior Obligations and
will take, and cause the Subsidiary Loan Parties to take, such actions as shall
be necessary or reasonably requested by the Administrative Agent to grant and
perfect such Liens, including actions described in paragraph (a) of this
Section, all at the expense of the Loan Parties.
SECTION 5.14 INTEREST RATE PROTECTION. As promptly as
practicable, and in any event within 60 days after the Effective Date, the
Borrower will enter into with one or more Lenders, and thereafter for a period
of not less than three years will maintain in effect, one or more interest rate
protection agreements on such terms as shall be reasonably satisfactory to the
Administrative Agent, the effect of which shall be to fix or limit the interest
cost to the Borrower with respect to at least 50% of the outstanding Term
Loans.
SECTION 5.15 EXTENSION OF DMPC PROMISSORY NOTES AND TRANS
FERRED INVENTORY NOTE. Not less than five days prior to (a) the Original
Maturity Date (as defined in the DMPC Promissory Notes and the Transferred
Inventory Note) and (b) each subsequent date on which any DMPC Promissory Note
or the Transferred Inventory Note would otherwise mature, take all steps
necessary to extend the
81
maturity of such DMPC Promissory Note or the Transferred Inventory Note, as
applicable, for the longest period of extension that is then permitted under the
terms of such Note.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
SECTION 6.01 INDEBTEDNESS; CERTAIN EQUITY SECURITIES. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the date hereof and set
forth in Schedule 6.01 and extensions, renewals and
replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier
maturity date or decreased weighted average life thereof;
(iii) Indebtedness of the Borrower to any Subsidiary
and of any Subsidiary to the Borrower or any other Subsidiary,
PROVIDED that Indebtedness of any Subsidiary that is not a
Loan Party to the Borrower or any Subsidiary Loan Party shall
be subject to Section 6.04;
(iv) Guarantees by the Borrower of Indebtedness of
any Subsidiary and by any Subsidiary of Indebtedness of the
Borrower or any other Subsidiary, PROVIDED that Guarantees by
the Borrower or any Subsidiary Loan Party of Indebtedness of
any Subsidiary that is not a Loan Party shall be subject to
Section 6.04;
(v) Indebtedness of the Borrower or any Subsidiary in
curred to finance the acquisition, construction or improvement
of any fixed or capital assets, including Capital Lease
Obligations and any
82
Indebtedness assumed in connection with the acquisition of any
such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier
maturity date or decreased weighted average life thereof,
PROVIDED that (A) such Indebtedness is incurred prior to or
within 90 days after such acquisition or the completion of
such construction or improvement and (B) the aggregate
principal amount of Indebtedness permitted by this clause (v)
shall not exceed $10,000,000 at any time outstanding;
(vi) Indebtedness of any Person that becomes a
Subsidiary after the date hereof, PROVIDED that (A) such
Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary and (B) the
aggregate principal amount of Indebtedness permitted by this
clause (vi) shall not exceed $5,000,000 at any time
outstanding;
(vii) other unsecured Indebtedness in an aggregate
principal amount not exceeding $10,000,000 at any time
outstanding, PROVIDED that the aggregate principal amount of
Indebtedness of the Borrower's Subsidiaries permitted by this
clause (vii) shall not exceed $1,000,000 at any time
outstanding;
(viii) Indebtedness under Hedging Agreements entered
into in accordance with Section 6.07;
(ix) Indebtedness under the Transferred Inventory
Note and any DMPC Promissory Notes issued in accordance with
the Manufac ture and Supply Agreement; and
(x) Indebtedness of the Borrower incurred (A) in
consider ation for the repurchase, redemption, retirement or
other acquisition of shares of its capital stock, or options
or warrants for the purchase of shares of its capital stock,
held by officers, directors or employees of the Borrower or
any Subsidiary pursuant to a compensation plan or arrangement
in connection with the death, disability or termination of
employment of such officer, director or employee or (B) in
exchange for or in payment of Indebtedness permitted under
this Section 611 (a)
83
(x), PROVIDED that such Indebtedness is subordinate to the
Senior Obligations to at least the same extent as the DMPC
Promissory Notes and the Transferred Inventory Note.
(b) The Borrower will not, and will not permit any Subsidiary to, issue
any preferred stock (except for preferred stock (i) that is not subject to
redemption other than redemption at the option of the Borrower or such
Subsidiary and (ii) all payments in respect of which are expressly subordinated
to the Senior Obligations) or be or become liable in respect of any obligation
(contingent or otherwise) to purchase, redeem, retire, acquire or make any other
payment in respect of any shares of capital stock of the Borrower or any
Subsidiary or any option, warrant or other right to acquire any such shares of
capital stock, except as permitted under Section 6.09(c).
SECTION 6.02 LIENS. The Borrower will not, and will not permit
any Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02,
PROVIDED that (i) such Lien shall not apply to any other property or
asset of the Borrower or any Subsidiary and (ii) such Lien shall secure
only those obliga tions that it secures on the date hereof and
extensions, renewals and replace ments thereof that do not increase the
outstanding principal amount thereof;
(d) any Lien existing on any property or asset prior to the
acquisi tion thereof by the Borrower or any Subsidiary or existing on
any property or asset of any Person that becomes a Subsidiary after the
date hereof prior to the time such Person becomes a Subsidiary,
PROVIDED that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary,
as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such
Lien shall secure only those obligations that it secures on the date of
such acquisition or the date such Person becomes a Subsidiary, as the
case
84
may be and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary, PROVIDED that (i) such
security interests secure Indebtedness permitted by clause (v) of
Section 6.01(a), (ii) such security interests and the Indebtedness
secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement,
(iii) the Indebtedness secured thereby does not exceed 100 % of the
cost of acquiring, constructing or improving such fixed or capital
assets and (iv) such security interests shall not apply to any other
property or assets of the Borrower or any Subsidiary;
(f) any second-priority Lien on real estate acquired by the
Bor rower or any Subsidiary, provided that (i) such real estate is
subject to a first-priority Lien securing the Senior Obligations
created pursuant to Section 5.13(b) and (ii) such second-priority Lien
(A) secures only the DMPC Promissory Notes and the Transferred
Inventory Note, (B) is expressly subject and subordinate to the
first-priority Lien with respect to such real estate securing the
Senior Obligations created pursuant to Section 5.13(b) and (iii) is
created pursuant to arrangements satisfactory in all respects to the
Administrative Agent; and
(g) Liens (other than those permitted by paragraphs (a)
through (f) above) securing liabilities permitted hereunder in an
aggregate amount not exceeding $2,500,000 at any time outstanding.
SECTION 6.03 FUNDAMENTAL CHANGES. (a) The Borrower will not,
and will not permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing, (i) any
Subsidiary may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary
Loan Party in a transaction in which the surviving entity is a Subsidiary Loan
Party, (iii) any Subsidiary that is not a Loan Party may merge into any
Subsidiary that is not a Loan Party and (iv) any Subsidiary may liquidate or
dissolve if me Borrower determines in good faith that such liquidation or
dissolution is in me bet interests of the Borrower and is not materially
disadvantageous to the Lenders, PROVIDED that any such merger
85
involving a Person that is rot a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04.
(b) The Borrower will not, and will not permit any of the
Subsidiaries to, engage to any material extent in any business other than
businesses of the ripe conducted by the Borrower and the Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
SECTION 6.04 INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS. The Borrower will not, and will not permit any of the Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(a) the Acquisition;
(b) Permitted Investments;
(c) investments existing on the date hereof and set forth on
Schedule 6.04;
(d) investments by the Borrower in the capital stock of the
Subsidiaries, PROVIDED that any such shares of capital stock shall be
pledged pursu ant to the Pledge Agreement (subject to the limitations
applicable to common stock of a Foreign Subsidiary referred to in
Section 5.12) and (ii) the amount of investments by the Borrower in
Subsidiaries that are not Loan Parties shall not exceed $1,000,000 in
the aggregate at any time outstanding;
(e) loans or advances made by the Borrower to any Subsidiary
and made by any Subsidiary to the Borrower or any other Subsidiary, PRO
VIDED that any such loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged pursuant to the Pledge Agreement
and (ii) the amount of all such loans and advances by Loan Parties to
Subsid-
86
iaries that are not Loan Parties shall not exceed $1,000,000 in the
aggregate at any time outstanding;
(f) Guarantees constituting Indebtedness permitted by Section
6.01, PROVIDED that the amount of Indebtedness that is (i) outstanding
with respect to Subsidiaries that are not Loan Parties and (ii)
Guaranteed by any Loan Party shall not exceed $1,000,000 in the
aggregate at any time outstanding;
(g) loans to employees of the Borrower and the Subsidiaries in
their capacity as such, in an aggregate principal amount not to exceed
$1,000,000) at any the outstanding;
(h) Hedging Agreements permitted under Section 6.07;
(i) investments in Joint Ventures in an aggregate amount not
to exceed $10,000,000 at any time outstanding;
(j) (i) non-recourse loans to employees the proceeds of which
shall be used to purchase common stock of the Borrower and (ii) loans
to management shareholders the proceeds of which shall be used to
purchase common stock of the Borrower, PROVIDED that all loans under
this clause (j) shall not exceed $4,000,000 in the aggregate at any
time outstanding;
(k) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business; and
(l) other investments in an aggregate amount not to exceed
$2,500,000 at any time outstanding.
SECTION 6.05 ASSET SALES. The Borrower will not, and will not
permit any of the Subsidiaries to, sell, transfer, lease or otherwise dispose of
any asset, including any capital stock, nor will the Borrower permit any of it
Subsidiaries to issue any additional shares of its capital stock or other
ownership interest in such Subsidiary, except:
87
(a) sales of inventory, used or surplus equipment and
Permitted Investments in the ordinary course of business, PROVIDED that
all such sales shall be made for fair value and solely for cash
consideration;
(b) sales, transfers and dispositions to the Borrower or a
Subsidiary, PROVIDED that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09; and
(c) sales, transfers and dispositions of assets (other than
capital stock of a Subsidiary) that are not permitted by any other
clause of this Section, PROVIDED that the aggregate fair market value
of all assets sold, transferred or otherwise disposed of in reliance
upon this clause (c) shall not exceed $2,000,000 during any fiscal year
of the Borrower, and PROVIDED that all sales, transfers, leases and
other dispositions permitted under this clause (c) shall be made for
fair value and solely for cash consideration.
SECTION 6.06 SALE AND LEASE-BACK TRANSACTIONS. The Borrower
will not, and will not permit any of the Subsidiaries to, enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred, provided that the Borrower
and the Subsidiaries may enter into any such transaction to the extent the
Capital Lease Obligation and Liens associated therewith would be permitted by
Sections 6.01(a)(v) and 6.02(e).
SECTION 6.07 HEDGING AGREEMENTS. The Borrower will not, and
will not permit any of the Subsidiaries to, enter into any Hedging Agreement,
other than (a) Hedging Agreements required by Section 5.14 and (b) Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower or any Subsidiary is exposed in the conduct of its
business or the manage ment of its liabilities.
SECTION 6.08 RESTRICTED PAYMENTS; CERTAIN PAYMENTS OF
INDEBTEDNESS. (a) The Borrower will not, and will not permit any Subsidiary to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except (i) the Borrower may declare and pay dividends with respect to
its capital stock payable solely in additional shares of its common stock, (ii)
Subsidiaries may declare
88
and pay dividends ratably with respect to their capital stock, (iii) the
Borrower may make Restricted Payments, not exceeding $1,000,000 during any
fiscal year, pursuant to and in accordance with stock option plans or other
benefit plans for manage ment or employees of the Borrower and the Subsidiaries,
(iv) the Borrower may make Restricted Payments to purchase, redeem, retire or
otherwise acquire shares of its capital stock, or options or warrants to
purchase shares of its capital stock, held by officers, directors or employees
of the Borrower or any Subsidiary pursuant to a compensation plan or arrangement
in connection with the death, disability or termination of employment of any
such officer, director or employee, so long as the aggregate amount of all
payments pursuant to this clause (iv) during any fiscal year does not exceed (A)
$1,000,000 minus (B) any amounts paid pursuant to Section 6.08(b)(v) in such
fiscal year, and (v) so long as prior to and after giving effect to such
payments the Borrower shall be in compliance with Sections 6.13 and 6.14,
additional Restricted Payments in any fiscal year out of Excess Cash Flow for
the immediately preceding fiscal year to the extent that such Excess Cash Flow
(A) is not required to be applied to make prepayments of Loans pursuant to
Section 2.11(c) and (B) has not been applied to make Capital Expenditures
permitted pursuant to the proviso to Section 6.12.
(b) The Borrower will not, and will not permit any Subsidiary
to, make or agree to pay or make, directly or indirectly, any payment or other
distribu tion (whether in cash securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness,
except:
(i) payment of regularly scheduled interest and
principal payments as and when due in respect of any
Indebtedness other than Indebtedness described in clause (iv)
of this Section 6.08(b);
(ii) prepayment of any Borrowings as permitted or
required by Section 2.11;
(iii) refinancings of Indebtedness to the extent
permitted by Section 6.01;
(iv) payment of principal or accrued interest in
respect of the DMPC Promissory Notes or the Transferred
Inventory Note if, at
89
the time of such payment and after giving effect thereto, (A)
the aggregate amount of outstanding Term Loans is less than or
equal to $65,000,000, (B) no Revolving Loans are outstanding
and (C) no Default or Event of Default has occurred and is
continuing; and
(v) payments of principal of and interest on
Indebtedness permitted under Section 6.01(a)(x) so long as the
aggregate amount of such payments during any fiscal year does
not exceed (A) $1,000,000 minus (B) any amounts paid pursuant
to Section 6.08(a)(iv) in such fiscal year.
SECTION 6.09 TRANSACTIONS WITH AFFILIATES. The Borrower will
not, and will not permit any Subsidiary to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business that are
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, (b) transactions between or among the Borrower and the Subsidiary Loan
Parties not involving any other Affiliate, (c) any Restricted Payment permitted
by Section 6.08, (d) the Borrower may make payments specified in the Management
Agreement, (e) transactions with Affiliates set forth on Schedule 6.09, (f)
employment arrangements entered into in the ordinary course of business with
officers of the Borrower and its Subsidiaries and (g) customary fees paid to
members of the Board of Directors of the Borrower and its Subsidiaries.
SECTION 6.10 RESTRICTIVE AGREEMENTS. The Borrower will not,
and will not permit any Subsidiary to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of the Borrower or any Subsidiary
to create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or
advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of
the Borrower or any other Subsidiary, PROVIDED that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document,
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.10 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to
90
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof.
SECTION 6.11 AMENDMENT OF MATERIAL DOCUMENTS. (a) The Borrower
will not, and will not permit any Subsidiary to, amend, modify or waive any of
its rights under (i) its certificate of incorporation, by-laws or other
organizational documents, (ii) the Management Agreement, (iii) any of the
Acquisition Documents, (iv) the Transferred Inventory Note or (v) any of the
DMPC Promissory Notes, in each case to the extent that such amendment,
modification or waiver would be adverse to the interests of the Lenders.
(b) Prior to the fifth anniversary of the Effective Date, the
Borrower will not cause or permit the Board of Directors of the Borrower to
grant any consent to the assignment by DMPC or DuPont Pharma of the (i) the
Transferred Inventory Note or (ii) any of the DMPC Promissory Notes.
SECTION 6.12 CAPITAL EXPENDITURES. The Borrower will not
permit the aggregate amount of Capital Expenditures made by the Borrower and the
Subsidiaries in any fiscal year to exceed $2,000,000, PROVIDED that, so long as
prior to and after giving effect to such payments the Borrower shall be in
compliance with Sections 6.13 and 6.14, the Borrower may in any fiscal year also
apply Excess Cash Flow for the immediately preceding fiscal year toward Capital
Expenditures to the extent such Excess Cash Flow (a) is not required to be
applied to make prepayments of Loans pursuant to Section 2.1 l(c) and (b) has
not been applied to make Restricted Payments pursuant to Section 6.08(a)(v). The
amount of permitted Capital Expenditures set forth in the immediately preceding
sentence in respect of any fiscal year shall be increased by (a) the amount of
unused permitted Capital Expenditures for the immediately preceding fiscal year
less (b) an amount equal to unused Capital Expenditures carried forward to such
preceding fiscal year.
SECTION 6.13 LEVERAGE RATIO. The Borrower will not permit the
Leverage Ratio for any four-fiscal-quarter period ending during any period set
forth below to be in excess of the ratio set forth below opposite such period:
91
PERIOD RATIO
December 31, 1997-
December 31, 1998 5.00 to 1.00
March 31, 1999- 4.50 to 1.00
June 30, 1999
September 30, 1999- 4.00 to 1.00
September 30, 2000
December 31, 2000- 3.00 to 1.00
thereafter
SECTION 6.14 CONSOLIDATED CASH INTEREST EXPENSE COVERAGE
RATIO. The Borrower will not permit the ratio of (a) Consolidated EBITDA to (b)
Consolidated Cash Interest Expense (i) for the two-fiscal-quarter period ending
March 31, 1998, to be less than 2.00 to 1.00, (ii) for the three-fiscal-quarter
period ending June 30, 1998, to be less than 2.00 to 1.00 or (iii) for any
four-fiscal-quarter period ending during any period set forth below to be less
than the ratio set forth below opposite such period:
PERIOD RATIO
September 30, 1998- 2.00 to 1.00
December 31, 1998
March 31, 1999- 2.25 to 1.00
June 30, 1999
September 30, 1999- 2.50 to 1.00
September 30, 2000
December 31, 2000- 3.00 to 1.00
thereafter
SECTION 6.15 MINIMUM CONSOLIDATED EBITDA. The Borrower
will not permit Consolidated EBITDA (a) for the two-fiscal-quarter period ending
92
March 31, 1998, to be less than $15,000,000, (b) for the three-fiscal-quarter
period ending June 30, 1998, to be less than $23,000,000 or (c) for any
four-fiscal-quarter period ending on any date set forth below to be less than
the amount set forth below opposite such date:
DATE AMOUNT
September 30, 1998 $32,000,000
December 31, 1998 $33,000,000
March 31, 1999 $35,000,000
June 30, 1999 $37,000,000
September 30, 1999 $39,000,000
December 31, 1999 $41,000,000
March 31, 2000 $41,000,000
June 30, 2000 $41,000,000
September 30, 2000 $41,000,000
December 31, 2000 $45,000,000
March 31, 2001 $45,000,000
June 30, 2001 $45,000,000
September 30, 2001 $45,000,000
December 31, 2001- $50,000,000
thereafter
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC 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 otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;
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(c) any representation or warranty made or deemed made by or
on behalf of the Borrower or any Subsidiary in or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, shall
prove to have been incorrect in any material respect when made or
deemed made;
(d) The Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of the Borrower) 5.11, 5.15 or in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
written notice thereof from the Administrative Agent to the Borrower
(which notice will be given at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become
due and payable (giving effect to any applicable grace period);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits the holder or holders of any Material Indebtedness
or any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity,
PROVIDED that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntarily sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Subsidiary or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or
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similar official for the Borrower or any Subsidiary or for a
substantial part of its assets, and, in any such case, 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;
(a) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (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 its assets, (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
or (vi) take any action for the purpose of effecting any of the
foregoing;
(b) the Borrower or any Subsidiary shall become unable, admit
in writing its inability or fail generally to pay its debts as they
become due;
(c) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against the
Borrower, any Subsidiary or any combination thereof 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 be
legally taken by a judgment creditor to attach or levy upon any assets
of the Borrower or any Subsidiary to enforce any such judgment;
(d) an ERISA Event shall have occurred that, when taken
together with all other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and the
Subsidiaries in an aggregate amount exceeding (i) $1,250,000 in any
year or (ii) $2,500,000 for all periods;
(e) (i) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not
to be, a valid and perfected Lien on any Collateral having a value in
excess of $1,000,000, with the priority required by the applicable
Security Document,
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except (A) as a result of the sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan
Documents or (B) as a result of the Administrative Agent's failure to
maintain possession of any stock certificates, promissory notes or
other instruments delivered to it under the Pledge Agreement, or (ii)
the provisions of Article VIII of the Security Agreement shall cease to
be, or shall be asserted by any Loan Party not to be, in full force and
effect;
(f) DMPC shall assert that (i) the Lien purported to be
created under the Security Agreement in favor of the Collateral Agent
for the benefit of the Senior Secured Parties is not a valid and
perfected first-priority Lien on the Collateral described therein or
(ii) the provisions of Article VIII of the Security Agreement are not
in full force and effect; or
(g) a Change of Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), 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
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (h) or (i)
of this Article, the Commitments shall automatically terminate and the principal
of the Loans then outstanding, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
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Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its 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 the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discre tionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Loan Documents that the Administrative Agent is required to exercise in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Loan Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of the Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent
or any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or wilful misconduct. The
Administrative Agent shall not be deemed to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (a) any statement, warranty or
representation made in or in connection with any Loan Document, (b) the contents
of any certificate, report or other document delivered thereunder or in
connection therewith, (c) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan ▇▇▇▇-
▇▇
▇▇▇▇, (▇) the validity, enforceability, effectiveness or genuineness of any Loan
Document or any other agreement, instrument or document or (e) the satisfaction
of any condition set forth in Article IV or elsewhere in any Loan Document,
other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor to
the Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor with the consent of the Borrower (so long as no Event of
Default has occurred and is continuing), such consent not to be unreasonably
withheld. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent that shall be a bank with an office in New
York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by
98
a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article
and Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent 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
Administrative Agent 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,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇, with a copy
to ▇▇▇▇▇ & Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇,
▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇), with a copy to The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇ (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇);
(c) if to the Issuing Bank, to The Chase Manhattan Bank, Loan
and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (212)
552-5658) with a copy to The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇ (Telecopy No. (212)
270-4584);
(d) if to the Swingline Lender, to The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇) with a copy to The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇); and
(e) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties 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.
SECTION 9.02 WAIVERS; AMENDMENTS. (a) No failure or delay by
the Administrative Agent, the Issuing Bank or any Lender in exercising any right
or power 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 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 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 any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific
100
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders, PROVIDED
that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
or the definition of the term "Required Lenders" or any other provision of any
Loan Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release any
Subsidiary Loan Party from its Guarantee under the Subsidiary Guarantee
Agreement (except as expressly provided in such Subsidiary Guarantee Agreement
or as a result of the termination of the existence or sale of such Subsidiary
Loan Party in a transaction permitted by Section 6.03), or limit its liability
in respect of such Guarantee, without the written consent of each Lender, (vii)
release all or any substantial portion of the Collateral from the Liens of the
Security Documents, without the written consent of each Lender, except in
connection with any sale of assets permitted hereunder, (viii) change any
provisions of any Loan Document in a manner that by its terms adversely affects
the rights in respect of payments due to Lenders holding Loans of any Class
differently than those holding Loans of any other Class, without the written
consent of Lenders holding a majority in interest of the outstanding Loans and
unused
101
Commitments of each affected Class or (ix) change the rights of the Tranche B
Lenders to decline mandatory prepayments as provided in Section 2.11, without
the written consent of Tranche B Lenders holding a majority of the outstanding
Tranche B Loans, and PROVIDED FURTHER that (A) no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent, the
Issuing Bank or the Swingline Lender without the prior written consent of the
Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may
be, and (B) any waiver, amendment or modification of this Agreement that by its
terms affects the rights or duties under this Agreement of the Revolving Lenders
(but not the Tranche A Lenders and Tranche B Lenders), the Tranche A Lenders
(but not the Revolving Lenders and Tranche B Lenders) or the Tranche B Lenders
(but not the Revolving Lenders and Tranche A Lenders) may be effected by an
agreement or agreements in writing entered into by the Borrower and requisite
percentage in interest of the affected Class of Lenders. If, in connection with
any proposed change, waiver, discharge or termination of or to any of the
provisions of this Agreement as contemplated by this Section 9.02(b), the
consent of the Required Lenders is obtained but the consent of one or more other
Lenders whose consent is required is not obtained, then the Borrower may, at its
sole expense and effort, upon notice to such non-consenting Lender or Lenders
and the Administrative Agent, require such non-consenting Lender or Lenders to
assign or delegate (so long as all non-consenting Lenders are so required),
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 (so long as such assignee at the time of the assignment consents
to such proposed change, waiver, discharge or termination) that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), PROVIDED that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a Revolving Commitment is
being assigned, the Issuing Bank and Swingline Lender), which consent shall not
unreasonably be withheld, and (ii) such non-consenting Lender shall have
received payment of an amount equal to the outstanding principal amount of its
Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts).
SECTION 9.03 EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of
102
the credit facilities provided for herein, the preparation and administration of
the Loan Documents or any amendments, modifications or waivers of the provisions
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank
or any Lender, including the reasonable fees, charges and disbursements of any
counsel for the Administrative Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout or restructuring in respect
of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "INDEMNITEE") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any Mortgaged Property or any other property currently or formerly
owned or operated by the Borrower or any of the Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of the
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto,
PROVIDED that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
resulted from the gross negligence or wilful misconduct of such Indemnitee or
any Affiliate of such
103
Indemnitee (or of any officer, director, employee, advisor or agent of such
Indemnitee or any of such Indemnitee's Affiliates).
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Issuing Bank or the
Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender's pro rata share (determined
as of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, PROVIDED that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent, the Issuing
Bank or the Swingline Lender in its capacity as such. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the sum of
the total Revolving Exposures, outstanding Term Loans and unused Commitments at
the time.
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04 SUCCESSORS AND ASSIGNS. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
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(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it), PROVIDED that
(i) except in the case of an assignment to a Lender or an Affiliate or an
Approved Fund of a Lender, each of the Borrower and the Administrative Agent
(and, in the case of an assignment of all or a portion of a Revolving Commitment
or any Lender's obliga tions in respect of its LC Exposure or Swingline
Exposure, the Issuing Bank and the Swingline Lender) must give their prior
written consent to such assignment (which consent shall not be unreasonably
withheld or delayed), (ii) except in the case of an assignment to a Lender or an
Affiliate or an Approved Fund of a Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment or Loans, the amount of
the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, except that this clause (iii) shall not be construed to prohibit
the assign ment of a proportionate part of all the assigning Lender's rights and
obligations in respect of one Class of Commitments or Loans, (iv) the parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire, and PROVIDED FURTHER that
any consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default under clause (a), (b),(h) or (i) of Article VII
has occurred and is continuing. Subject to acceptance and recording thereof
pursuant to paragraph (d) of this Section from and after the effective date
specified in each Assignment and Acceptance the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall
105
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
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 and LC Disbursements 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 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 and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b)of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "PARTICIPANT") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it),
PROVIDED that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall be
solely responsible for any withholding taxes or any filing or reporting
requirements relating to such Participant and (iv) the Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole
106
right to enforce the Loan Documents and to approve any amendment, modification
or waiver of any provision of the Loan Documents, PROVIDED that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso (other than clauses (viii) or (ix) thereof) to Section 9.02(b)
that affects such Participant. Subject to paragraph (f) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15 and 2.16 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
this restriction is waived by the Borrower.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest, PROVIDED that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05 SURVIVAL. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, 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 is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.15, 2.16, 2.17 anti 9.03 and Article VIII shall
107
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof.
SECTION 9.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. 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. This Agreement,
the other Loan Document and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and under standings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07 SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08 RIGHT OF SET-OFF. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates 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 obligations at
any time owing by such Lender or Affiliate 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 held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender may have.
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SECTION 9.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) The Borrower hereby irrevocably and unconditionally sub-
mits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties 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 of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right
that the Administrative Agent, the Issuing Bank or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement or any other Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that 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 any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10 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
109
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 9.11 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 shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12 CONFIDENTIALITY. Each of the Administrative
Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b)to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, PROVIDED that, to the extent reasonably practicable and
not prohibited by applicable laws or regulations or by any judicial or
administrative order, such Person will provide the Borrower with prior notice of
such disclosure, (d) to any other party to this Agreement, (e) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, or to any direct or indirect
contractual counterparties in swap agreements or such contractual
counterparties' professional advisors, (g) with the consent of the Borrower or
(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source
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other than the Borrower. For the purposes of this Section, the term
"INFORMATION" means all information received from the Borrower relating to the
Borrower or any of its Subsidiaries or their business, other than any such
information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by the Borrower or any
of its Subsidiaries. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 9.13 INTEREST RATE LIMITATION. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts that are treated as
interest on such Loan under applicable law (collectively, the "CHARGES"), shall
exceed the maximum lawful rate (the "MAXIMUM RATE") that may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan 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 but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans 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 9.14 SENIOR INDEBTEDNESS. The parties hereto
acknowledge and agree that the Senior Obligations shall constitute Senior Debt
for the purposes of, and as defined in, the
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Transferred Inventory Note and each of the DMPC Promissory Notes.
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.
ENDO PHARMACEUTICALS INC.,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title President and CEO
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by _____________________________________
Name
Title
112
Transferred Inventory Note and each of the DMPC Promissory Notes.
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.
ENDO PHARMACEUTICALS INC.,
by
-------------------------------------
Name
Title
THE CHASE MANHATTAN BANK.
individually and as Administrative Agent,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Vice President
113
THE FIRST NATIONAL BANK OF CHICAGO,
by /s/ ▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name ▇▇▇ ▇. ▇▇▇▇
Title Vice President
114
KEYBANK NATIONAL ASSOCIATION
by /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title Vice President
115
FIRST UNION NATIONAL BANK,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title Senior Vice President
116
CAISSE NATIONALE DE CREDIT AGRICOLE,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇ ▇▇▇▇▇ FVP
Title Head of Corporate Banking
Chicago
117
CREDIT LYONNAIS, NEW YORK BRANCH,
by /s/ ▇▇▇▇▇▇ ▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇ ▇▇▇
Title First Vice President
118
PNC BANK, NATIONAL ASSOCIATION,
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title Vice President
119
BANKBOSTON, N.A.,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title Division Executive
120
FLEET NATIONAL BANK,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title AVP
121
SOCIETE GENERALE,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
_____________________________________
Name ▇▇▇▇ ▇. ▇▇▇▇▇
Title Director
122
▇▇▇▇▇▇ FINANCIAL, INC.,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇
Title Senior vice President
123
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE
FUND, INC.,
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title Authorized Signatory
124
FLOATING RATE PORTFOLIO
BY: Chancellor LGT Senior Secured Management,
Inc. as Attorney in Fact
BY: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Vice President
125
KZH HOLDING CORPORATION III,
by /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Authorized Agent
126
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME
RATE INCOME TRUST,
by /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title Vice President
127
KZH-ING-1 CORPORATION,
by /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Authorized Agent
128