Exhibit 10.7
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CREDIT AGREEMENT
Dated as of July 24, 2003
among
NBTY, INC.,
the Borrower,
The Several Lenders from Time
to Time Parties Hereto,
JPMORGAN CHASE BANK,
as Administrative Agent and Collateral Agent,
and
FLEET NATIONAL BANK,
as Syndication Agent
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▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Joint Lead Bookrunner and Joint Lead Arranger
FLEET SECURITIES, INC.,
as Joint Lead Bookrunner and Joint Lead Arranger
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS 2
1.1. Defined Terms 2
1.2. Other Definitional Provisions 24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 25
2.1. Revolving Credit Commitments 25
2.2. Procedure for Revolving Credit Borrowing 25
2.3. Repayment of Revolving Credit Loans; Evidence of Debt 26
2.4. Termination or Reduction of Revolving Credit Commitments 27
2.5. Swing Line Commitment 27
2.6. Term Loan Commitments 29
2.7. Procedure for Term Loan Borrowing 29
2.8. Repayment of Term Loans; Evidence of Debt 30
SECTION 3. LETTERS OF CREDIT 32
3.1. Letters of Credit 32
3.2. Procedure for Issuance of Letters of Credit 33
3.3. Participating Interests 33
3.4. Payments 33
3.5. Further Assurances 34
3.6. Obligations Absolute 34
3.7. Letter of Credit Application 35
3.8. Purpose of Letters of Credit 35
SECTION 4. GENERAL PROVISIONS 35
4.1. Interest Rates and Payment Dates 35
4.2. Conversion and Continuation Options 36
4.3. Minimum Amounts of Tranches 37
4.4. Optional and Mandatory Prepayments 37
4.5. Commitment Fees; Other Fees 39
4.6. Computation of Interest and Fees 40
4.7. Inability to Determine Interest Rate 40
4.8. Pro rata Treatment and Payments 41
4.9. Illegality 43
4.10. Increased Costs 43
4.11. Indemnity 45
4.12. Taxes 45
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4.13. Use of Proceeds 47
4.14. Change in Lending Office; Replacement of Lender 47
4.15. Break Funding Payments 48
SECTION 5. REPRESENTATIONS AND WARRANTIES 48
5.1. Financial Condition; Accuracy of Public Information 48
5.2. No Change 49
5.3. Corporate Existence; Compliance with Law 49
5.4. Corporate Power; Authorization; Enforceable Obligations 50
5.5. No Legal Bar 50
5.6. No Material Litigation 51
5.7. No Default 51
5.8. Ownership of Property; Liens 51
5.9. Intellectual Property 52
5.10. Taxes 52
5.11. Federal Regulations 52
5.12. ERISA 52
5.13. Investment Company Act; Public Utility Holding Company Act;
Other Regulations 53
5.14. Subsidiaries 53
5.15. Environmental Matters 53
5.16. Solvency 54
5.17. Security Documents 54
5.18. Insurance 55
5.19. Affiliate Transactions 55
5.20. Accuracy of Information 55
SECTION 6. CONDITIONS PRECEDENT 56
6.1. Conditions to Closing Date 56
6.2. Conditions to Each Extension of Credit 60
SECTION 7. AFFIRMATIVE COVENANTS 60
7.1. Financial Statements 61
7.2. Certificates; Other Information 61
7.3. Payment of Obligations 62
7.4. Maintenance of Existence 62
7.5. Maintenance of Property; Insurance 63
7.6. Inspection of Property; Books and Records; Discussions 63
7.7. Notices 63
7.8. Environmental Laws 64
7.9. Additional Subsidiaries; Additional Collateral 64
7.10. Rexall Purchase Agreement Remedies 65
7.11. Post-Closing Obligations 65
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SECTION 8. NEGATIVE COVENANTS 66
8.1. Financial Condition Covenants 66
8.2. Limitation on Indebtedness 67
8.3. Limitation on Liens 68
8.4. Limitation on Guarantee Obligations 70
8.5. Limitation on Fundamental Changes 70
8.6. Limitation on Sale of Assets 71
8.7. Limitation on Dividends and Other Restricted Payments 71
8.8. Limitation on Capital Expenditures 72
8.9. Limitation on Investments, Loans and Advances 72
8.10. Limitation on Optional Payments and Modifications of Debt
Instruments 73
8.11. Limitation on Transactions with Affiliates 73
8.12. Limitation on Sales and Leasebacks 73
8.13. Limitation on Changes in Fiscal Year 73
8.14. Limitation on Negative Pledge Clauses 74
8.15. Limitation on Lines of Business 74
8.16. Hedging Agreements 74
8.17. Rexall Acquisition 74
SECTION 9. EVENTS OF DEFAULT 74
SECTION 10. THE AGENTS AND THE ARRANGERS 78
10.1. Appointment 78
10.2. Delegation of Duties 78
10.3. Exculpatory Provisions 78
10.4. Reliance by Agents 79
10.5. Notice of Default 79
10.6. Non-Reliance on Agents and Other Lenders 80
10.7. Indemnification 80
10.8. Agent in Its Individual Capacity 81
10.9. Successor Agents 81
10.10. Issuing Lender 81
SECTION 11. MISCELLANEOUS 81
11.1. Amendments and Waivers 81
11.2. Notices 83
11.3. No Waiver; Cumulative Remedies 84
11.4. Survival 85
11.5. Payment of Expenses and Taxes 85
11.6. Successors and Assigns; Participation and Assignments 86
11.7. Adjustments; Set-off 89
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11.8. Counterparts 89
11.9. Severability 90
11.10. Integration 90
11.11. GOVERNING LAW 90
11.12. Submission to Jurisdiction; Waivers 90
11.13. Acknowledgements 91
11.14. WAIVERS OF JURY TRIAL 91
11.15. Confidentiality 91
11.16. Designation of Senior Indebtedness 92
SCHEDULES:
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I Commitments; Addresses
II Domestic Subsidiaries; Foreign Subsidiaries
5.1 Contingent Liabilities
5.4 Consents
5.6 Litigation
5.8 Real Property Owned and Leased
5.10 Tax Filings and Payments
5.18 Insurance
5.19 Certain Affiliate Transactions
6.1(u) Indebtedness
7.11 Accounts Subject to Control Agreements
8.2 Existing Indebtedness
8.3 Existing Liens
8.4 Existing Guarantee Obligations
8.6(d) Property To Be Sold
8.9(e) Existing Investments
EXHIBITS:
A-1 Form of Revolving Credit Note
A-2 Form of Swing Line Note
A-3 Form of Term A Note
A-4 Form of Term B Note
B Form of Guarantee and Collateral Agreement
C Form of Swing Line Loan Participation Certificate
D Form of Assignment and Acceptance
E-1 Form of Opinion of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
E-2 Form of Opinion of ▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel to the
Borrower
F Form of Closing Certificate
G Form of Administrative Questionnaire
H Form of Landlord's Lien Waiver, Access Agreement and Consent
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CREDIT AGREEMENT, dated as of July 24, 2003, among NBTY, INC., a
Delaware corporation (the "Borrower"), the several banks and other financial
institutions from time to time parties hereto as lenders (the "Lenders"),
JPMORGAN CHASE BANK, a New York banking corporation, as administrative agent
and collateral agent for the Lenders hereunder (in such capacities, the
"Administrative Agent" and the "Collateral Agent," respectively), and FLEET
NATIONAL BANK, a national banking association organized and existing under
the laws of the United States of America, as syndication agent for the
Lenders hereunder (in such capacity, the "Syndication Agent" and, together
with the Administrative Agent and the Collateral Agent, the "Agents").
W I T N E S S E T H :
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WHEREAS, the Borrower, Holland & ▇▇▇▇▇▇▇ Holdings Limited ("Holland &
▇▇▇▇▇▇▇"), certain lenders and the Administrative Agent are parties to that
certain Third Amended and Restated Credit and Guarantee Agreement, dated as
of April 27, 2001 (as amended through the date hereof, the "Existing Credit
Agreement");
WHEREAS, the Borrower intends to acquire (the "Rexall Acquisition")
from Royal Numico N.V. ("Royal Numico") and from its wholly owned
subsidiary, Numico USA, Inc. (the "Seller"), all of the membership interests
in Rexall US Newco 1 LLC ("Rexall 1") and all of the partnership interests
in Rexall Newco DGP 1 ("Rexall DGP" and, collectively with Rexall 1,
"Rexall") and certain intellectual property owned by Numico Financial
Services, S.A, as set forth in the purchase agreement among Royal Numico,
the Seller and the Borrower dated as of June 9, 2003 and related disclosure
schedules and other documents (as in effect on the date thereof,
collectively, the "Rexall Purchase Agreement");
WHEREAS, the Borrower has entered into this Agreement (i) to provide
for the financing of the Rexall Acquisition, the refinancing of outstanding
indebtedness of the Borrower and Holland & ▇▇▇▇▇▇▇ of up to $15,000,000
under the Existing Credit Agreement (the "Refinancing") and the payment of
fees, commissions and expenses in connection therewith and (ii) following
the Closing Date (as defined below), to continue to provide financing for
the general corporate purposes of the Borrower and its Subsidiaries; and
WHEREAS, the Lenders are willing to enter into this Agreement on the
terms and conditions hereof, including the condition precedent that this
Agreement be executed and delivered by each Lender hereunder;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein set forth, the parties hereto agree as follows:
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SECTION 1. DEFINITIONS
1.1.Defined Terms As used in this Agreement, the following terms
shall have the following meanings:
"ABR Loans": Loans the rate of interest applicable to which is based
upon the Alternate Base Rate.
"Acquisition": any transaction or series of related transactions by
which the Borrower or any of its Subsidiaries (a) acquires any going
business or all or substantially all of the assets of any Person, whether
through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or in a series of related
transactions) at least (i) a majority (in number of votes) of the Capital
Stock having ordinary voting power for the election of directors (or other
managers) of any Person or (ii) a majority of the ownership interests in any
Person.
"Administrative Agent": as defined in the preamble hereto, and shall
include any successor appointed in accordance with subsection 10.9.
"Administrative Questionnaire": an administrative questionnaire
substantially in the form attached hereto as Exhibit G.
"Affiliate": of any Person, (a) any other Person (other than a wholly
owned Subsidiary of such Person) which, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Person
or (b) any other Person who is a director or officer of (i) such Person,
(ii) any Subsidiary of such Person or (iii) any Person described in clause
(a) above. For purposes of this definition, a Person shall be deemed to be
"controlled by" such other Person if such other Person possesses, directly
or indirectly, power either to (A) vote 10% or more of the securities having
ordinary voting power for the election of directors of such first Person or
(B) direct or cause the direction of the management and policies of such
first Person whether by contract or otherwise.
"Agents": as defined in the preamble hereto.
"Aggregate Available Revolving Credit Commitments": as at any date of
determination with respect to all Lenders, the Available Revolving Credit
Commitments of all Lenders on such date.
"Aggregate Available Term Loan Commitments": as at any date of
determination with respect to all Lenders, the Available Term Loan
Commitments of all Lenders on such date.
"Aggregate Revolving Credit Commitments": the aggregate amount of the
Revolving Credit Commitments of all the Lenders.
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"Aggregate Revolving Credit Outstanding": as at any date of
determination with respect to any Lender, the sum of (a) the aggregate
unpaid principal amount of such Lender's Revolving Credit Loans on such date
and (b) such Lender's Revolving Credit Commitment Percentage of the
aggregate Letter of Credit Obligations and Swing Line Loans on such date.
"Agreement": this Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Alternate Base Rate": for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) 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 or the Federal
Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Margin": for Revolving Credit Loans and Term A Loans and
for purposes of subsection 4.5(a), the rate per annum set forth under the
relevant column heading below based on the ratio of Consolidated
Indebtedness of the Borrower and its Subsidiaries to Consolidated EBITDA of
the Borrower and its Subsidiaries, as most recently determined in accordance
with subsection 7.2(b), for any fiscal quarter of the Borrower:
Relevant Ratio of
Consolidated
Indebtedness to Applicable Applicable
Consolidated Margin for Margin for
EBITDA Eurodollar Loans ABR Loans Commitment Fee
----------------- ---------------- ---------- --------------
Greater than or equal
to 2.5x 2.50% 1.50% 0.50%
Less than 2.5x but
greater than or equal
to 2.0x 2.25% 1.25% 0.50%
Less than 2.0x but
greater than or equal
to 1.5x 2.00% 1.00% 0.50%
Less than 1.5x but
greater than or equal
to 1.0x 1.75% 0.75% 0.375%
Less than 1.0x 1.50% 0.50% 0.25%
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Notwithstanding the relevant ratio of Consolidated Indebtedness to
Consolidated EDITDA, up to and including the date of delivery of financial
statements and related compliance certificate of the Borrower for the first
fiscal quarter ending at least six months after the Closing Date in
accordance with subsection 7.1, (x) the Applicable Margin for Revolving
Credit Loans and Term A Loans shall be 2.25% per annum for Eurodollar Loans
and 1.50% per annum for ABR Loans, and (y) the commitment fee shall be 0.50%
per annum. The Applicable Margin for Term B Loans shall at all times be
2.50% per annum for Eurodollar Loans and 1.50% per annum for ABR Loans.
If and in the event the financial statements required to be delivered
pursuant to subsection 7.1(a) or 7.1(b), as applicable, and the related
compliance certificate required to be delivered pursuant to subsection
7.2(b), are delivered on or prior to the date when due (or, in the case of
the fourth quarterly period of each fiscal year of the Borrower, if
financial statements which satisfy the requirements of, and are delivered
within the time period specified in, subsection 7.1(b) and a related
compliance certificate which satisfies the requirements of, and is delivered
within the time period specified in, subsection 7.2(b), with respect to any
such quarterly period are so delivered within such time periods), then the
Applicable Margin for Revolving Credit Loans and Term A Loans during the
period from the date that is five Business Days after the date upon which
such financial statements were due to be delivered shall be the Applicable
Margin as set forth in the relevant column heading above; provided, however,
that in the event that the financial statements delivered pursuant to
subsection 7.1(a) or 7.1(b), as applicable, and the related compliance
certificate required to be delivered pursuant to subsection 7.2(b), are not
delivered when due, then:
(a) if such financial statements and certificate are
Delivered after the date such financial statements and certificate
were required to be delivered (without giving effect to any
applicable cure period) and the Applicable Margin increases from that
previously in effect as a result of the delivery of such financial
statements, then the Applicable Margin during the period from the
date upon which such financial statements were required to be
delivered (without giving effect to any applicable cure period) until
the date upon which they actually are delivered shall, except as
otherwise provided in clause (c) below, be the Applicable Margin as
so increased;
(b) if such financial statements and certificate are
delivered after the date such financial statements and certificate
were required to be delivered and the Applicable Margin decreases
from that previously in effect as a result of the delivery of such
financial statements, then such decrease in the Applicable Margin
shall not become applicable until the date upon which such financial
statements and certificate actually are delivered; and
(c) if such financial statements and certificate are not
delivered prior to the expiration of the applicable cure period,
then, effective upon such expiration, for the period from the date
upon which such financial statements and certificate were required to
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be delivered (after the expiration of the applicable cure period)
until two Business Days following the date upon which they actually
are delivered, the Applicable Margin in respect of Revolving Credit
Loans and Term A Loans shall be 2.50% per annum in the case of
Eurodollar Loans and 1.50% per annum in the case of ABR Loans and
1/2% per annum, in the case of subsection 4.5(a) (it being understood
that the foregoing shall not limit the rights of the Agents and the
Lenders set forth in Section 9).
"Arrangers": ▇.▇. ▇▇▇▇▇▇ Securities Inc. and Fleet Securities, Inc.
"Asset Sale": any sale, sale-leaseback or other disposition by the
Borrower or any Subsidiary of any of its property or assets, including the
stock of any Subsidiary, other than any sale, sale-leaseback or other
disposition permitted under subsection 8.6 or subsection 8.12.
"Assignee": as defined in subsection 11.6(b)(iii).
"Assignment and Acceptance": an assignment and acceptance agreement
substantially in the form attached hereto as Exhibit D.
"Available Revolving Credit Commitment": as at any date of determination
with respect to any Lender, an amount equal to the excess, if any, of (a)
the amount of such Lender's Revolving Credit Commitment in effect on such
date over (b) the Aggregate Revolving Credit Outstanding of such Lender on
such date.
"Available Term Loan Commitment": as at any date of determination
with respect to any Lender, an amount equal to the excess, if any, of (a)
the amount of such Lender's Term Loan Commitment in effect on such date over
(b) the aggregate principal amount of Term Loans theretofore made hereunder
by such Lender.
"Benefited Lender": as defined in subsection 11.7(a).
"Board": the Board of Governors of the Federal Reserve System of the United
States of America (or any successor thereto).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2, 2.5(a), 2.7 or 3.2 as a date on which the Borrower requests
the Lenders to make Loans hereunder or issue a Letter of Credit.
"Business": as defined in subsection 5.15(b).
"Business Day": (a) for all purposes other than as covered by clause
(b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close
and (b) with respect to all notices and determinations
6
in connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (a) and which is
also a London Banking Day.
"Capital Expenditures": direct or indirect (by way of the acquisition
of securities of a Person or the expenditure of cash or the incurrence of
Indebtedness) expenditures (other than expenditures in connection with
Acquisitions permitted hereunder, including, without limitation, the Rexall
Acquisition) in respect of the purchase or other acquisition of fixed or
capital assets.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) (collectively, "Underlying Equity Interests"), and any and all
warrants or options to purchase any of the foregoing. For purposes of
subsections 4.4(e) and 8.7 hereof, the term "Capital Stock" shall exclude
options and warrants issued pursuant to employee stock option plans and
Underlying Equity Interests issued upon the exercise thereof.
"Cash Equivalents": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition and overnight bank deposits of any Lender or of
any commercial bank having capital and surplus in excess of $500,000,000,
(c) repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a term
of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States Government, (d) commercial paper
of a domestic issuer rated at least A-2 by S&P or P-2 by ▇▇▇▇▇'▇, (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at
least A by S&P or A by ▇▇▇▇▇'▇ (or the equivalent rating by either such
rating agency for such type of securities), (f) securities with maturities
of one year or less from the date of acquisition backed by standby letters
of credit issued by any commercial bank satisfying the requirements of
clause (b) of this definition or (g) shares of money market mutual or
similar funds which invest exclusively in assets satisfying the requirements
of clauses (a) through (f) of this definition.
"Class": the classification of loans as Revolving Credit Loans, Term
A Loans, Term B Loans and Swing Line Loans, each of which categories shall
be deemed to be a "Class" of Loans.
"Closing Date": the date on which all of the conditions precedent set
forth in subsection 6.1 shall have been met or waived.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
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"Collateral Agent": as defined in the preamble hereto, and shall
include any successor appointed in accordance with subsection 10.9.
"Commercial Letters of Credit": as defined in subsection 3.1(ii).
"Commitment Letter": the commitment letter dated May 21, 2003 among
Borrower, the Agents and the Arrangers.
"Commitments": the collective reference to the Revolving Credit
Commitments, the Term Loan Commitments and the Swing Line Commitment.
"Consolidated Current Assets": with respect to any Person as at any
date of determination, the total assets of such Person and its consolidated
Subsidiaries which may properly be classified as current assets on a
consolidated balance sheet of such Person and its consolidated Subsidiaries
in accordance with GAAP.
"Consolidated Current Liabilities": with respect to any Person as at
any date of determination, the total liabilities of such Person and its
consolidated Subsidiaries which may properly be classified as current
liabilities (other than the current portion of any Loans) on a consolidated
balance sheet of such Person and its consolidated Subsidiaries in accordance
with GAAP.
"Consolidated Debt Service": for any period of four consecutive
fiscal quarters, the sum of (a) the Trailing Consolidated Interest Expense
of the Borrower for such period, plus (b) the principal amounts of all long-
term indebtedness payable by the Borrower and its Subsidiaries during the
next succeeding twelve-month period determined in accordance with GAAP,
excluding, however, from such indebtedness the Revolving Credit Loans and
the Swing Line Loans during the final twelve months of the Revolving Credit
Commitment Period.
"Consolidated EBITDA": for any period of four consecutive fiscal
quarters, the sum of (i) Trailing Consolidated Net Income for such period,
(ii) Trailing Consolidated Interest Expense for such period and (iii) the
Trailing amount of taxes, depreciation and amortization deducted from
earnings in determining such Consolidated Net Income.
"Consolidated Fixed Charge Coverage Ratio": for any period of four
consecutive fiscal quarters, the ratio of (i) the result of (A) the
Consolidated EBITDA of the Borrower and its Subsidiaries plus (B) Trailing
Consolidated Rent Expense minus (C) Trailing Capital Expenditures of the
Borrower and its Subsidiaries to (ii) (x) the Consolidated Debt Service of
the Borrower and its Subsidiaries plus (y) Trailing Consolidated Rent
Expense.
"Consolidated Indebtedness": at a particular date, all Indebtedness
of the Borrower and its Subsidiaries, determined on a consolidated basis.
8
"Consolidated Interest Coverage Ratio": for any period of four
consecutive fiscal quarters, the ratio of (i) Consolidated EBITDA of the
Borrower and its Subsidiaries to (ii) Trailing Consolidated Interest
Expense.
"Consolidated Interest Expense": for any fiscal period, the amount
which would, in conformity with GAAP, be set forth opposite the caption
"interest expense" (or any like caption) on a consolidated income statement
of the Borrower and its Subsidiaries for such period.
"Consolidated Net Income": for any fiscal period, the consolidated
net income (or deficit) of the Borrower and its Subsidiaries for such period
(taken as a cumulative whole), determined on a consolidated basis in
accordance with GAAP; provided that any non-cash extraordinary gains and
losses shall be excluded in determining Consolidated Net Income.
"Consolidated Rent Expense": for any fiscal period, the amount which
would, in conformity with GAAP, be set forth opposite the caption "rent
expense" (or any like caption) on a consolidated income statement of the
Borrower and its Subsidiaries for such period.
"Consolidated Senior Indebtedness": all Indebtedness of the Borrower
which is not by its terms expressly subordinated to the Loans under this
Agreement.
"Continuing Directors": the directors of the Borrower on the Closing
Date and each other director, if such other director's nomination for
election to the Board of Directors of the Borrower is recommended by a
majority of the then Continuing Directors.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Dollars", "U.S. Dollars" and "$": dollars in lawful currency of the
United States of America.
"Domestic Subsidiary": any Subsidiary other than a Foreign
Subsidiary.
"Environmental Laws": means the common law and all laws, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or
binding agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, the preservation or
reclamation of natural resources, the management, release or threatened
release of any Hazardous Materials or to health and safety matters.
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"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate": any trade or business (whether or not incorporated)
that, together with the Borrower or any of its Subsidiaries, 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": (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, the failure to make by its due date a required installment under
Section 412(m) of the Code with respect to any Pension Plan or the failure
to make any required contribution to a Multiemployer Plan; (c) the filing
pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (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; (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;
or (h) the making of any amendment to any Pension Plan which could result in
the imposition of a lien or the posting of a bond or other security.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to a Eurodollar Loan for the relevant
Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the sum,
without duplication, of
(a) Consolidated EBITDA for such fiscal year, plus
10
(b) gains excluded from Consolidated Net Income, plus
(c) reductions to non-cash working capital of the Borrower
and its consolidated Subsidiaries for such fiscal year
(i.e., the decrease, if any, in Consolidated Current
Assets of the Borrower minus Consolidated Current
Liabilities of the Borrower from the beginning to the end
of such fiscal year), minus
(d) the amount of any cash income taxes paid or payable by
the Borrower and its consolidated Subsidiaries with respect to such
fiscal year, net of any cash tax refunds received by the Borrower or
any of its Subsidiaries in such fiscal year, minus
(e) cash interest paid by the Borrower and its Consolidated
Subsidiaries during such fiscal year, minus
(f) Capital Expenditures made in cash in accordance with
subsection 8.8 during such fiscal year or Acquisitions made in cash
in accordance with subsection 8.9(g) or 8.9(h) during such fiscal
year, to the extent such Capital Expenditures or Acquisitions are
funded from internally generated funds, minus
(g) permanent repayments and prepayments of Loans made by the
Borrower during such fiscal year, minus
(h) extraordinary cash losses from the sale of assets during
such fiscal year and not included in Consolidated Net Income, minus
(i) additions to non-cash working capital for such fiscal
year (i.e., the increase, if any, in Consolidated Current Assets of
the Borrower minus Consolidated Current Liabilities of the Borrower
from the beginning to the end of such fiscal year);
provided that, to the extent otherwise included therein, the Net Cash
Proceeds of Asset Sales and Recovery Events shall be excluded from the
calculation of Excess Cash Flow.
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Lender or any other recipient of any payment to be made
by or on account of any obligation of the Borrower hereunder, (a) any Taxes
imposed by any jurisdiction other than the United States (or any taxing
authority thereof or therein), any jurisdiction in which the Borrower
conducts business or claims an interest deduction with respect to this
Agreement or any other taxing jurisdiction from or through which payments
hereunder are made, (b) income or franchise taxes imposed on (or measured
by) its net income or net profits by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized, in which
such recipient conducts business (other than a business that is deemed to
arise solely as a result of entering into this Agreement, receipt of
payments hereunder or enforcement of its rights hereunder)) or in
11
which its principal office is located or, in the case of any Lender, in
which its applicable lending office is located, (c) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any
other jurisdiction in which the Borrower is located and (d) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under subsection 4.14(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) or is
attributable to such Foreign Lender's failure to comply with subsection
4.12(e), except to the extent that such Foreign Lender (or its assignor, if
any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to subsection 4.12(a).
"Existing Credit Agreement": as defined in the recitals hereto.
"Existing Notes": the Borrower's 8-5/8% Senior Subordinated Notes due
2007.
"Existing Notes Indenture": as defined in subsection 6.1(p).
"Extension of Credit": as to any Lender, the making of a Loan by such
Lender and, with respect to any Lender, the issuance of any Letter of
Credit.
"Federal Funds Effective Rate": 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.
"Fee Property": as defined in subsection 5.8.
"Financing Lease": (a) any lease of property, real or personal, the
obligations under which are capitalized on a consolidated balance sheet of
the Borrower and its Subsidiaries and (b) any other such lease to the extent
that the then present value of the minimum rental commitment thereunder
should, in accordance with GAAP, be capitalized on a balance sheet of the
lessee.
"Foreign Plan": any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by, or entered into
with, Borrower or any Subsidiary with respect to employees employed outside
the United States.
"Foreign Lender": 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.
12
"Foreign Subsidiary": as to any Person, any Subsidiary of such
Person which is organized under the laws of any jurisdiction outside of the
country of the jurisdiction of organization of such Person.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"Gel-Cap Facility": the soft gelatin capsule manufacturing facility
located at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇.
"Governmental Authority": any nation or government, any state,
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement, substantially in the form attached hereto as Exhibit B, executed
and delivered by the Borrower and each of its Domestic Subsidiaries, as the
same may be amended, supplemented or otherwise modified.
"Guarantee Obligation": as to any Person, any obligation of such
Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the "primary obligations") of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance
or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(d) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation shall be deemed to be an amount equal to the value as
of any date of determination of the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made
(unless such Guarantee Obligation shall be expressly limited to a lesser
amount, in which case such lesser amount shall apply) or, if not stated or
determinable, the value as of any date of determination of the maximum
reasonably anticipated liability in respect thereof as determined by such
Person in good faith.
"Hazardous Materials": any solid wastes, toxic or hazardous
substances, materials or wastes, defined, listed, classified or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, petroleum or petroleum products (including gasoline, crude oil or
any fraction thereof), polychlorinated biphenyls, and urea-formaldehyde
insulation,
13
and any other substance the presence of which may give rise to liability
under any Environmental Law.
"Hedge Agreement": any interest rate protection agreement, interest
rate swap or other interest rate hedge arrangement, or currency swap or
other currency hedge arrangement (other than any interest rate cap or other
similar agreement or arrangement pursuant to which the Borrower has no
credit exposure), to or under which the Borrower or any of its Subsidiaries
is a party or a beneficiary.
"Hedge Agreement Obligations": all obligations of the Borrower under
any one or more Hedge Agreements to make payments to the counterparties
thereunder upon the occurrence of a termination event or similar event
thereunder.
"Holland & ▇▇▇▇▇▇▇": as defined in the recitals hereto.
"Indebtedness": of a Person, at a particular date, the sum (without
duplication) at such date of (a) indebtedness for borrowed money or for the
deferred purchase price of property or services in respect of which such
Person is liable as obligor (other than current trade liabilities incurred
in the ordinary course of business and payable in accordance with customary
practices of such Person), (b) indebtedness secured by any Lien on any
property or asset owned or held by such Person regardless of whether the
indebtedness secured thereby shall have been assumed by or is a primary
liability of such Person, (c) obligations of such Person under Financing
Leases, (d) the face amount of all letters of credit issued for the account
of or upon the application of such Person and, without duplication, the
unreimbursed amount of all drafts drawn thereunder and (e) obligations (in
the nature of principal or interest) of such Person in respect of
acceptances or similar obligations issued or created for the account of such
Person.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 5.9.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding,
(b) as to any Eurodollar Loan having an Interest Period of three months or
less, the last day of such Interest Period and (c) as to any Eurodollar Loan
having an Interest Period longer than three months, (i) each day which is
three months after the first day of such Interest Period and (ii) the last
day of such Interest Period.
14
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months (or nine or twelve
months, if available to all Lenders) thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion, as the
case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months (or nine or twelve months, if
available to all Lenders) thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that all of the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(ii) any Interest Period applicable to a Eurodollar Loan that
would otherwise extend beyond the date final payment is due on such
Loan shall end on such date of final payment; and
(iii) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business
Day of a calendar month.
"Issuing Lender": JPMorgan Chase or any of its Affiliates, in its
capacity as issuer of the Letters of Credit, and any other Lender which the
Borrower, the Administrative Agent and the Majority Lenders shall have
approved, in its capacity as issuer of the Letters of Credit.
"JPMorgan Chase": JPMorgan Chase Bank.
"Landlord's Lien Waiver, Access Agreement and Consent": a lien waiver,
access agreement and consent substantially in the form attached hereto as
Exhibit H.
"Leased Property": as defined in subsection 5.8.
15
"Legal Requirement": as to (a) any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property
is subject, and (b) any property, any law, treaty, rule, regulation,
requirement, judgment, decree or determination of any Governmental Authority
applicable to or binding upon such property or to which such property is
subject.
"Lenders": as defined in the preamble hereto.
"Letter of Credit Applications": (a) in the case of Standby Letters
of Credit, a letter of credit application for a Standby Letter of Credit on
the standard form of the applicable Issuing Lender for standby letters of
credit, and (b) in the case of Commercial Letters of Credit, a letter of
credit application for a Commercial Letter of Credit on the standard form of
the applicable Issuing Lender for commercial letters of credit.
"Letter of Credit Obligations": at any particular time, all
liabilities of the Borrower with respect to Letters of Credit, whether or
not any such liability is contingent, including (without duplication) the
sum of (a) the aggregate undrawn face amount of all Letters of Credit then
outstanding plus (b) the aggregate amount of all unpaid Reimbursement
Obligations at such time.
"Letters of Credit": as defined in subsection 3.1(ii).
"LIBO Rate": with respect to any Eurodollar Loan for any Interest
Period, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇ Market 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 Loan 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": any mortgage, pledge, hypothecation, assignment, deposit
arrangement (other than a bank or similar deposit account), encumbrance,
lien (statutory or other), or preference, priority or other security
interest or similar preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any Financing Lease having substantially the same
economic effect as any of the foregoing, the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
16
jurisdiction in respect of any of the foregoing, and, in the case of
securities, a third party's right to purchase such securities).
"Loan Documents": the collective reference to this Agreement, any
Notes, the Security Documents and any documents or instruments evidencing or
governing the Security Documents.
"Loan Parties": the collective reference to the Borrower and each
guarantor or grantor party to any Security Document.
"Loans": the collective reference to the Revolving Credit Loans, the
Term Loans and the Swing Line Loans.
"London Banking Day": any day on which banks in London are open for
general banking business, including dealings in foreign currency and
exchange.
"Majority Lenders": at any time, Lenders, the Total Loan Percentages
of which aggregate more than 50%.
"Material Adverse Effect": a material adverse change in the business,
assets, operations, properties, condition (financial or otherwise),
contingent liabilities (including as to products, and whether such
liabilities have been or yet may be asserted), prospects or material
agreements of the Borrower and its Subsidiaries taken as a whole.
"Material Environmental Amount": $500,000.
"Material Foreign Subsidiary": any Foreign Subsidiary accounting for
5% or more of the assets or revenues (computed for the most recent fiscal
year) of the Borrower and its consolidated Subsidiaries, taken as a whole.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. or any successor thereto.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment
of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such
Asset Sale or Recovery Event, net of attorneys' fees, accountants' fees,
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset
that is the subject of such Asset Sale or Recovery Event (other than any
Lien pursuant to a Security Document) and other customary fees and expenses
actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be
17
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and (b) in
connection with any issuance or sale of Capital Stock or any incurrence of
Indebtedness, the cash proceeds received from such issuance or incurrence,
net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
"Notes": the collective reference to the Revolving Credit Notes, the
Term Notes and the Swing Line Notes.
"Obligations": collectively, the unpaid principal of and interest on
the Loans, the Reimbursement Obligations and all other obligations and
liabilities of the Borrower to any Agent, the Issuing Lender and the Lenders
under or in connection with this Agreement, the other Loan Documents and any
Hedge Agreement with any Lender or any Affiliate of a Lender (including in
each case, without limitation, interest accruing at the then applicable rate
provided in this Agreement or any other applicable Loan Document or Hedge
Agreement after the maturity of the Loans and interest accruing at the then
applicable rate provided in this Agreement or any other applicable Loan
Document or Hedge Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
this Agreement, the Notes, the Letters of Credit, the Letter of Credit
Applications, the other Loan Documents or any Hedge Agreement with a Lender
or any Affiliate of a Lender or any other document made, delivered or given
in connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the Agents or to the Lenders).
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement.
"Participants": as defined in subsection 11.6(c).
"Participating Interest": with respect to any Letter of Credit (a) in
the case of the Issuing Lender, its interest in such Letter of Credit and
any Letter of Credit Application relating thereto after giving effect to the
granting of any participating interests therein pursuant hereto and (b) in
the case of each Participating Lender, its undivided participating interest
in such Letter of Credit and any Letter of Credit Application relating
thereto.
"Participating Lender": any Lender (other than the Issuing Lender)
with respect to its Participating Interest in a Letter of Credit.
18
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor thereto.
"Pension Plan" shall mean an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code or Section 302
of ERISA and is maintained or contributed to by any ERISA Affiliate or with
respect to which the Borrower or a Subsidiary could incur liability.
"Person": an individual, partnership, corporation, business trust, joint
stock company, limited liability company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": 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, any of
its Subsidiaries 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.
"Pledged Stock": as defined in the Guarantee and Collateral Agreement
or any other Security Document.
"Preferred Stock": with respect to any Person, any and all preferred
or preference Capital Stock (however designated) of such Person, whether now
outstanding or issued after the Closing Date.
"Prime Rate": the rate of interest per annum publicly announced from
time to time by JPMorgan Chase 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.
"Pro Forma Data": as defined in subsection 5.1(b).
"Pro Forma Financial Statements": as defined in subsection 5.1(b).
"Properties": as defined in subsection 5.15(a).
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Borrower or any of its Subsidiaries.
"Refinancing": as defined in the preamble hereto.
"Refinancing Indebtedness": Indebtedness that refinances, renews,
extends, replaces, defeases or refunds, in whole or in part, any
Indebtedness of the Borrower or any of its
19
Subsidiaries; provided that (i) any such Refinancing Indebtedness is in an
aggregate principal amount not greater than the aggregate principal amount
of the Indebtedness being renewed or refinanced, plus the amount of any
premiums required to be paid thereon and reasonable fees and expenses
associated therewith; and (ii) such Refinancing Indebtedness has a later or
equal final maturity and longer or equal weighted average life than the
Indebtedness being renewed or refinanced.
"Refunded Swing Line Loans": as defined in subsection 2.5(b).
"Register": as defined in subsection 11.6.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender in accordance with the terms of this Agreement
and the related Letter of Credit Application for any payment made by the
Issuing Lender under any Letter of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any of
its Subsidiaries in connection therewith that are not applied to prepay the
Term Loans pursuant to subsection 4.4(d) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer of the Borrower stating that the Borrower (directly or indirectly
through a Subsidiary) intends and expects to use all or a specified portion
of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire
assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire
assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months after such
Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets useful
in the Borrower's business with all or any portion of the relevant
Reinvestment Deferred Amount.
"Related Parties": 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.
20
"Release": any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, escaping, leaking, dumping, disposing, spreading,
depositing or dispersing of any Hazardous Materials in, unto or onto the
environment.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Requirement of Law": as to (a) any Person, the certificate of
incorporation and by-laws or the partnership or limited partnership
agreement or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of
its property is subject, and (b) any property, any law, treaty, rule,
regulation, requirement, judgment, decree or determination of any
Governmental Authority applicable to or binding upon such property or to
which such property is subject, including, without limitation, any
Environmental Laws.
"Responsible Officer": with respect to any Loan Party, the chief
executive officer, the president, the chief financial officer, any vice
president, the treasurer or the assistant treasurer of such Loan Party.
"Restricted Payments": as defined in subsection 8.7.
"Revolving Credit Commitment": as to any Lender at any time, its
obligation to make Revolving Credit Loans, issue or participate in Letters
of Credit issued for the account of the Borrower and/or make or participate
in Swing Line Loans to the Borrower in an aggregate amount not to exceed at
any time outstanding the amount set forth opposite such Lender's name in
Schedule I under the heading "Revolving Credit Commitment", as such amount
may be changed from time to time pursuant to subsection 2.4 and the other
applicable provisions hereof.
"Revolving Credit Commitment Percentage": as to any Lender at any
time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the Aggregate Revolving Credit Commitments (or, if the
Revolving Credit Commitments have terminated or expired at such time, the
percentage which (a) the Aggregate Revolving Credit Outstanding of such
Lender at such time then constitutes of (b) the Aggregate Revolving Credit
Outstanding of all Lenders at such time).
"Revolving Credit Commitment Period": the period from and including
the Closing Date to but not including the Revolving Credit Termination Date,
or such earlier date on which the Revolving Credit Commitments shall
terminate as provided herein.
"Revolving Credit Loan": as defined in subsection 2.1(a).
"Revolving Credit Note": as defined in subsection 2.3(e).
21
"Revolving Credit Termination Date": the earliest to occur of (i) the fifth
anniversary of the Closing Date, (ii) March 15, 2007 if any of the Existing
Notes shall be outstanding on such date and (iii) the earliest date of
maturity of any Indebtedness of the Borrower or any of its Subsidiaries that
refinances the Existing Notes.
"Rexall": as defined in the recitals hereto.
"Rexall Acquisition": as defined in the recitals hereto.
"Rexall DGP": as defined in the recitals hereto.
"Rexall 1": as defined in the recitals hereto.
"Rexall Purchase Agreement": as defined in the recitals hereto.
"Royal Numico": as defined in the recitals hereto.
"S&P": Standard & Poor's Ratings Services or any successor thereto.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement and each other pledge agreement, security document or
similar agreement that may be delivered to the Administrative Agent as
collateral security for any or all of the Obligations, in each case as
amended, supplemented or otherwise modified from time to time.
"Seller": as defined in the recitals hereto.
"Solvent": with respect to any Person on a particular date, that on
such date, (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the
assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become
absolute and mature, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, (d) such Person is not
engaged in business or a transaction, and is not about to engage in business
or a transaction, for which such Person's property would constitute an
unreasonably small amount of capital and (e) such Person is able to pay its
debts as they become due and payable.
"Standby Letters of Credit": as defined in subsection 3.1(i).
"Statutory Reserve Rate": 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 with respect to the Eurodollar Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board). Such reserve percentages shall in-
22
clude 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 comparable regulation. The Statutory Reserve Rate shall
be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Subordinated Debt": $150,000,000 in aggregate principal amount of
Existing Notes.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly, through one or more
intermediaries, or both, by such Person (exclusive of any Affiliate in which
such Person has a minority ownership interest). Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Swing Line Commitment": the Swing Line Lender's obligation to make
Swing Line Loans pursuant to subsection 2.5.
"Swing Line Lender": JPMorgan Chase, in its capacity as lender of the
Swing Line Loans.
"Swing Line Loan Participation Certificate": a certificate in
substantially the form attached hereto as Exhibit C, as the same may be
amended, supplemented or otherwise modified from time to time.
"Swing Line Loans": as defined in subsection 2.5(a).
"Swing Line Note": as defined in subsection 2.3(e).
"Syndication Agent": as defined in the preamble hereto, and shall
include any successor appointed in accordance with subsection 10.9.
"Target": Rexall Sundown, Inc.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term A Loans": as defined in subsection 2.6.
"Term A Note": a Term Note evidencing a Term A Loan.
23
"Term B Loans": as defined in subsection 2.6.
"Term B Note": a Term Note evidencing a Term B Loan.
"Term Loan A Commitment": as to any Lender at any time, its
obligation to make Term A Loans to the Borrower in an aggregate amount equal
to the amount set forth opposite such Lender's name in Schedule I under the
heading "Term Loan A Commitment" as such amount may be reduced from time to
time in accordance with Section 4 and the other applicable provisions
hereof.
"Term Loan A Termination Date": the earliest to occur of (i) the
fifth anniversary of the Closing Date, (ii) March 15, 2007 if the Existing
Notes shall be outstanding on such date and (iii) the earliest date of
maturity of any Indebtedness of the Borrower or any of its Subsidiaries that
refinances the Existing Notes.
"Term Loan B Commitment": as to any Lender at any time, its
obligation to make Term B Loans to the Borrower in an aggregate amount equal
to the amount set forth opposite such Lender's name in Schedule I under the
heading "Term Loan B Commitment" as such amount may be reduced from time to
time in accordance with Section 4 and the other applicable provisions
hereof.
"Term Loan B Termination Date": the earliest to occur of (i) the
sixth anniversary of the Closing Date, (ii) March 15, 2007 if the Existing
Notes shall be outstanding on such date and (iii) the earliest date of
maturity of any Indebtedness of the Borrower or any of its Subsidiaries that
refinances the Existing Notes.
"Term Loan Commitment": as to any Lender at any time, the sum of its
Term Loan A Commitment and Term Loan B Commitment.
"Term Loans": as defined in subsection 2.6.
"Term Note": as defined in subsection 2.8(f).
"Total Loan Percentage": as to any Lender at any time, the percentage
which (i) the sum of (x) such Lender's Revolving Credit Commitment (or, if
the Revolving Credit Commitments have terminated or expired at such time,
the Aggregate Revolving Credit Outstanding of such Lender) at such time plus
(y) the sum of such Lender's Available Term Loan Commitment and the
aggregate principal amount of Term Loans outstanding for such Lender then
constitutes of (ii) the sum of (x) the Aggregate Revolving Credit
Commitments (or, if the Revolving Credit Commitments have terminated or
expired at such time, the Aggregate Revolving Credit Outstanding of all
Lenders) plus (y) the sum of the Aggregate Available Term Loan Commitments
and the aggregate principal amount of Term Loans outstanding for all Lenders
at such time.
24
"Trailing": with respect to the determination of any financial
results for any period, the applicable financial result for the four fiscal
quarters ended on such date.
"Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to which begin on the same date and
end on the same later date (whether or not such Loans shall originally have
been made on the same day).
"Transactions": the Rexall Acquisition, the Refinancing, the
Extensions of Credit made hereunder on the Closing Date and the payment of
fees, commissions and expenses in connection therewith (including any
payment by the Borrower pursuant to the Rexall Purchase Agreement).
"Transferee": as defined in subsection 11.15.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"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.
1.2. Other Definitional Provisions.(a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, the other Loan Documents or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the Notes and any other Loan Document, and
any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms relating to the Borrower and its Subsidiaries not
defined in subsection 1.1 and accounting terms partly defined in subsection
1.1, to the extent not defined, shall have the respective meanings given to
them under GAAP; provided that, if 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 Majority 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 accordance herewith.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
25
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1. Revolving Credit Commitments Subject to the terms and conditions
hereof, each Lender with a Revolving Credit Commitment severally agrees to
make revolving credit loans (each, a "Revolving Credit Loan") in U.S.
Dollars to the Borrower from time to time during the Revolving Credit
Commitment Period so long as after giving effect thereto (i) the Available
Revolving Credit Commitment of each Lender with a Revolving Credit
Commitment is greater than or equal to zero and (ii) the Aggregate Revolving
Credit Outstanding of all Lenders does not exceed the Aggregate Revolving
Credit Commitments. During the Revolving Credit Commitment Period the
Borrower may use the Revolving Credit Commitments by borrowing, prepaying
the Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with subsections 2.2 and 4.2, provided that no Revolving Credit
Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Revolving Credit Termination Date.
2.2. Procedure for Revolving Credit Borrowing The Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 11:00 A.M., (New York City time) at
least (a) three Business Days prior to the requested Borrowing Date, if all
or any part of the requested Revolving Credit Loans are to be initially
Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing
Date, otherwise), specifying in each case (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the amount of
such Type of Loan and the length of the initial Interest Periods therefor;
provided that until the date that is one month after the Closing Date,
Eurodollar Loans may be made only for one month Interest Periods. Each
borrowing under the Revolving Credit Commitments shall be in an amount equal
to (A) in the case of ABR Loans, $1,000,000 or a whole multiple of
$1,000,000 in excess thereof (or, if the then Aggregate Available Revolving
Credit Commitments are less than $1,000,000, such lesser amount) and (B) in
the case of Eurodollar Loans, $5,000,000 or a whole multiple of $5,000,000
in excess thereof. Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Lender thereof not later
than 9:00 A.M., New York City time, on the requested Borrowing Date. Not
later than 12:00 Noon, New York City time, on each requested Borrowing Date
each Lender shall make an amount equal to its Revolving Credit Commitment
Percentage of the principal amount of the Revolving Credit Loans requested
to be made on such Borrowing Date
26
available to the Administrative Agent at its office specified in subsection
11.2 in U.S. Dollars and in immediately available funds. The Administrative
Agent shall on such date credit the account of the Borrower on the books of
such office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
2.3. Repayment of Revolving Credit Loans; Evidence of Debt. The
Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Credit Loan of such Lender (whether made before or after the
termination or expiration of the Revolving Credit Commitments) on the
Revolving Credit Termination Date and on such other dates and in such other
amounts as may be required from time to time pursuant to this Agreement.
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Revolving Credit Loans from time to time outstanding until
payment thereof in full at the rates per annum, and on the dates, set forth
in subsection 4.1.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Revolving Credit Loan of such Lender from time to
time, including the amounts of principal and interest payable thereon and
paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 11.6(b), and a subaccount therein for each Lender, in which shall
be recorded (i) the amount of each Revolving Credit Loan made hereunder, the
Type thereof and each Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder in respect of the Revolving Credit
Loans and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower in respect of the Revolving Credit Loans
and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.3(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect
the obligation of the Borrower to repay (with applicable interest) the
Revolving Credit Loans made to the Borrower by such Lender in accordance
with the terms of this Agreement.
(e) The Borrower agrees that it will, upon the request of any
Lender, execute and deliver to such Lender (i) a promissory note of the
Borrower evidencing the Revolving Credit Loans of such Lender, substantially
in the form attached hereto as Exhibit A-1 with appropriate insertions as to
date and principal amount (each, a "Revolving Credit Note"), and/or (ii) a
promissory note of the Borrower evidencing the Swing Line Loans of such
Lender, substantially in the form attached hereto as Exhibit A-2 with
appropriate insertions as to date and principal amount (each, a "Swing Line
Note"); provided that any Revolving Credit Note or
27
Swing Line Note previously delivered to such Lender (or any predecessor
thereof) has been returned to the Borrower and marked cancelled.
2.4. Termination or Reduction of Revolving Credit Commitments
.. The Borrower shall have the right, upon not less than three Business
Days' notice to the Administrative Agent (which shall promptly notify each
Lender thereof), to terminate the Revolving Credit Commitments or, from time
to time, to reduce the amount of the Revolving Credit Commitments; provided
that no such termination or reduction shall be permitted if, after giving
effect thereto and to any prepayments of the Revolving Credit Loans made on
the effective date thereof, the Available Revolving Credit Commitment of any
Lender would not be greater than or equal to zero. Any such reduction shall
be in an amount equal to $2,500,000 or a whole multiple of $1,000,000 in
excess thereof and shall reduce permanently the Revolving Credit Commitments
then in effect.
2.5. Swing Line Commitment.Subject to the terms and conditions hereof,
the Swing Line Lender agrees to make swing line loans (individually, a
"Swing Line Loan"; collectively, the "Swing Line Loans") to the Borrower
from time to time during the Revolving Credit Commitment Period in an
aggregate principal amount at any one time outstanding not to exceed
$5,000,000; provided that the Swing Line Lender shall not make any Swing
Line Loan if, after giving effect thereto, the sum of the Swing Line Loans,
the Revolving Credit Loans and the Letter of Credit Obligations (in each
case after giving effect to the Loans requested to be made and the Letters
of Credit requested to be issued on such date) exceeds the Aggregate
Revolving Credit Commitments. During the Revolving Credit Commitment
Period, the Borrower may use the Swing Line Commitment by borrowing,
prepaying the Swing Line Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof. All Swing Line Loans shall
be made as ABR Loans and shall not be entitled to be converted into
Eurodollar Loans. The Borrower shall give the Swing Line Lender irrevocable
notice (which notice must be received by the Swing Line Lender prior to
12:00 Noon, New York City time) on the requested Borrowing Date specifying
the amount of the requested Swing Line Loan which shall be in a minimum
amount of $100,000 or a whole multiple of $100,000 in excess thereof. The
proceeds of the Swing Line Loan will be made available by the Swing Line
Lender to the Borrower at the Houston office of the Swing Line Lender set
forth in subsection 11.2, or at such other address the Swing Line Lender
shall designate in writing to the Borrower from time to time in accordance
with subsection 11.2, by 3:00 P.M., New York City time, on the Borrowing
Date by crediting the account of the Borrower at such office with such
proceeds. The Borrower may at any time and from time to time prepay the
Swing Line Loans, in whole or in part, without premium or penalty, by
notifying the Swing Line Lender prior to 12:00 Noon, New York City time, on
any Business Day of the date and amount of prepayment. If any such notice
is given, the amount specified in such notice shall be due and payable on
the date specified therein. Partial prepayments shall be in an aggregate
principal amount of $100,000 or a whole multiple of $100,000 in excess
thereof.
(b) The Swing Line Lender, at any time in its sole and absolute discretion,
may, on behalf of the Borrower (which hereby irrevocably directs the Swing
Line Lender to act on its behalf) request each Lender, including the Swing
Line Lender, to make a Revolving Credit
28
Loan which is an ABR Loan in an amount equal to such Lender's Revolving
Credit Commitment Percentage of the amount of the Swing Line Loans
outstanding on the date such notice is given (the "Refunded Swing Line
Loans"). Unless any of the events described in paragraph (h) of Section 9
shall have occurred with respect to the Borrower (in which event the
procedures of paragraph (d) of this subsection 2.5 shall apply), each Lender
shall make the proceeds of such Revolving Credit Loan available to the
Administrative Agent for the account of the Swing Line Lender at the office
of the Administrative Agent specified in subsection 11.2 prior to 12:00 Noon
(New York City time) in funds immediately available on the Business Day next
succeeding the date such notice is given. The proceeds of such Revolving
Credit Loans shall be immediately applied to repay the Refunded Swing Line
Loans. Effective on the day such Revolving Credit Loans are made, the
portion of the Swing Line Loans so paid shall no longer be outstanding as
Swing Line Loans, shall no longer be due under any Swing Line Note and shall
be due as the respective Revolving Credit Loans made by the Lenders in
accordance with their respective Revolving Credit Commitment Percentages.
The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of the Swing Line Lender the then unpaid principal
amount of each Swing Line Loan of the Swing Line Lender on the Revolving
Credit Termination Date (to the extent such Swing Line Loan has not
previously been repaid in full with the proceeds of Revolving Credit Loans).
(c) Notwithstanding anything herein to the contrary, the Swing Line
Lender shall not be obligated to make any Swing Line Loans if the conditions
set forth in subsection 6.2 have not been satisfied in respect thereof.
(d) If prior to the making of a Revolving Credit Loan pursuant to
paragraph (b) of this subsection 2.5 one of the events described in
paragraph (h) of Section 9 shall have occurred and be continuing with
respect to the Borrower, each Lender with a Revolving Credit Commitment
will, on the date such Revolving Credit Loan was to have been made pursuant
to the notice in this subsection 2.5, purchase an undivided participating
interest in the Refunded Swing Line Loans in an amount equal to (i) its
Revolving Credit Commitment Percentage times (ii) the Refunded Swing Line
Loans. Each Lender will immediately transfer to the Swing Line Lender, in
immediately available funds, the amount of its participation, and upon
receipt thereof the Swing Line Lender will deliver to such Lender a Swing
Line Loan Participation Certificate dated the date of receipt of such funds
and in such amount.
(e) Whenever, at any time after any Lender has purchased a
participating interest in a Swing Line Loan, the Swing Line Lender receives
any payment on account thereof, the Swing Line Lender will distribute to
such Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such Lender's participating interest was outstanding and
funded); provided, however, that in the event that such payment received by
the Swing Line Lender is required to be returned, such Lender will return to
the Swing Line Lender any portion thereof previously distributed by the
Swing Line Lender to it.
29
(f) Each Lender's obligation to make the Loans referred to in
subsection 2.5(b) and to purchase participating interests pursuant to
subsection 2.5(d) shall be absolute, irrevocable and unconditional and shall
not be affected by any circumstance, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right which such Lender
or the Borrower may have against the Swing Line Lender, the Borrower or any
other Person for any reason whatsoever, (ii) the occurrence or continuance
of a Default or an Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower or any other Loan Party;
(iv) any breach of this Agreement or any other Loan Document by the Borrower
or any of its Subsidiaries or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
2.6. Term Loan Commitments. On the Closing Date, each Lender shall
make a term loan to the Borrower (each, a "Term A Loan") in an aggregate
principal amount set forth opposite such Lender's name on Schedule I under
the heading "Term A Loan Commitment". On the Closing Date, each Lender
shall make a term loan to the Borrower (each, a "Term B Loan", and together
with the Term A Loans, the "Term Loans") in an aggregate principal amount
set forth opposite such Lender's name on Schedule I under the heading "Term
B Loan Commitment". The Term Loans may from time to time be (a) Eurodollar
Loans, (b) ABR Loans or (c) a combination thereof, as determined by the
Borrower and notified to the Administrative Agent in accordance with
subsections 2.7 and 4.2.
2.7. Procedure for Term Loan Borrowing. The Borrower may borrow under
the Term Loan Commitments only on the Closing Date, provided that the
Borrower shall give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent prior to 11:00 A.M.
(New York City time) at least (a) three Business Days prior to the Closing
Date, if all or any part of the requested Term Loans are to be initially
Eurodollar Loans, or (b) one Business Day prior to the Closing Date,
otherwise), specifying in each case (i) the amount to be borrowed, (ii) the
requested Closing Date, (iii) whether the borrowing is to be of Eurodollar
Loans, ABR Loans or a combination thereof, (iv) if the borrowing is to be
entirely or partly of Eurodollar Loans, the amount of such Type of Loan and
the length of the initial Interest Periods therefor; provided that until the
date that is one month after the Closing Date, Eurodollar Loans may be made
only for one month Interest Periods, and (v) the amount of Term A Loans and
Term B Loans. The Term Loan Commitments shall expire at 5:00 P.M., New York
City time, on the Closing Date, whether or not the Term Loans thereunder are
made. Each borrowing under the Term Loan Commitments shall be in an amount
equal to (A) in the case of ABR Loans, $1,000,000 or a whole multiple of
$1,000,000 in excess thereof and (B) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $5,000,000 in excess thereof. Upon
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Lender thereof not later than 9:00 A.M., New York City
time, on the Closing Date. Not later than 12:00 Noon, New York City time,
on the Closing Date, each Lender shall make an amount equal to its Term Loan
Commitment available to the Administrative Agent at its office specified in
subsection 11.2 in U.S. Dollars and in immediately available funds. The
Administrative Agent shall on such date credit the account of the Borrower
on the books of such office with the
30
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.
2.8. Repayment of Term Loans; Evidence of Debt. The aggregate amount
of Term A Loans and Term B Loans, as the case may be, of all the Lenders
outstanding on the Term Loan A Termination Date and the Term Loan B
Termination Date, as the case may be, shall be paid on such date. Prior to
such Term Loan A Termination Date or Term Loan B Termination Date, the
Borrower shall pay quarterly installments on the dates set forth below in a
principal amount equal to the percentage set forth opposite such date
multiplied by the aggregate amount of the Term A Loans or Term B Loans, as
the case may be, outstanding as of the Closing Date:
Term Term
Loan A Loan B
Dates Percentage Percentage
----- ---------- ----------
September 30, 2003 5% 0.25%
December 31, 2003 5% 0.25%
March 31, 2004 5% 0.25%
June 30, 2004 5% 0.25%
September 30, 2004 5% 0.25%
December 31, 2004 5% 0.25%
March 31, 2005 5% 0.25%
June 30, 2005 5% 0.25%
September 30, 2005 5% 0.25%
December 31, 2005 5% 0.25%
March 31, 2006 5% 0.25%
June 30, 2006 5% 0.25%
September 30, 2006 5% 0.25%
December 31, 2006 5% 0.25%
March 31, 2007 5% 0.25%
June 30, 2007 5% 0.25%
September 30, 2007 5% 0.25%
December 31, 2007 5% 0.25%
March 31, 2008 5% 0.25%
June 30, 2008 5% 0.25%
September 30, 2008 - 23.75%
December 31, 2008 - 23.75%
March 31, 2009 - 23.75%
June 30, 2009 - 23.75%
The percentages set forth in the table above shall be automatically reduced
upon application of any prepayment pursuant to subsection 4.4 in the manner
set forth in such subsection.
31
(b) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the amounts specified in
subsection 2.8(a) on the dates specified in subsection 2.8(a) and on such
other dates and in such other amounts as may be required from time to time
pursuant to this Agreement. The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Term Loans from time to time
outstanding until payment thereof in full at the rates per annum, and on the
dates, set forth in subsection 4.1.
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Term Loan of such Lender from time to time,
including the amounts of principal and interest payable thereon and paid to
such Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register pursuant to
subsection 11.6(b), and a sub-account therein for each Lender, in which
shall be recorded (i) the amount of each Term Loan made hereunder, the Type
thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder in respect of the Term Loans, (iii)
whether such Term Loan is a Term A Loan or a Term B Loan and (iv) both the
amount of any sum received by the Administrative Agent hereunder from the
Borrower in respect of the Term Loans and each Lender's share thereof.
(e) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.8(c) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect
the obligation of the Borrower to repay (with applicable interest) the Term
Loans made to the Borrower by such Lender in accordance with the terms of
this Agreement.
(f) The Borrower agrees that it will, upon the written request of
any Lender, execute and deliver to such Lender a promissory note of the
Borrower evidencing the Term Loans of such Lender, substantially in the form
attached hereto as Exhibit A-3 in the case of Term A Loans and Exhibit A-4
in the case of Term B Loans, with appropriate insertions as to date and
principal amount (each, a "Term Note"); provided that any Term Note
previously delivered to such Lender (or any predecessor thereof) has been
returned to the Borrower and marked cancelled.
SECTION 3. LETTERS OF CREDIT
3.1. Letters of Credit. Subject to the terms and conditions of this
Agreement, the Issuing Lender agrees, on behalf of the Lenders, and in
reliance on the agreement of the Lenders set forth in subsection 3.3, to
issue for the account of the Borrower letters of credit in an aggregate face
amount, together with any unpaid Reimbursement Obligations, not to exceed
$10,000,000 at any time outstanding, as follows:
32
(i) standby letters of credit (collectively, the "Standby
Letters of Credit") in a form reasonably satisfactory to the Issuing
Lender and in favor of such beneficiaries as the Borrower shall
specify from time to time (which shall be reasonably satisfactory to
the Issuing Lender); and
(ii) commercial letters of credit in the form of the Issuing
Lender's standard commercial letters of credit ("Commercial Letters
of Credit") in favor of sellers of goods or services to the Borrower
or its Subsidiaries (the Standby Letters of Credit and Commercial
Letters of Credit being referred to collectively as the "Letters of
Credit");
provided that on the date of the issuance of any Letter of Credit, and after
giving effect to such issuance, the Aggregate Revolving Credit Outstanding
of all Lenders does not exceed the Aggregate Revolving Credit Commitments at
such time. Each Standby Letter of Credit shall (i) have an expiry date no
later than one year from the date of issuance thereof or, if earlier, five
Business Days prior to the Revolving Credit Termination Date, (ii) be
denominated in U.S. Dollars and (iii) be in a minimum face amount of
$100,000. Each Commercial Letter of Credit shall (i) provide for the
payment of sight drafts when presented for honor thereunder, or of time
drafts, in each case in accordance with the terms thereof and when
accompanied by the documents described or when such documents are presented,
as the case may be, (ii) be denominated in U.S. Dollars and (iii) have an
expiry date no later than six months from the date of issuance thereof or,
if earlier, five Business Days prior to the Revolving Credit Termination
Date. Upon the issuance of any Letter of Credit, the Administrative Agent
shall promptly notify each Lender thereof.
3.2. Procedure for Issuance of Letters of Credit. The Borrower may
from time to time request, upon at least three Business Days' notice, the
Issuing Lender to issue a Letter of Credit by delivering to the Issuing
Lender at its address specified in subsection 11.2 a Letter of Credit
Application, completed to the reasonable satisfaction of such Issuing
Lender, together with such other certificates, documents and other papers
and information as such Issuing Lender may reasonably request. Upon receipt
of any Letter of Credit Application, the Issuing Lender will process such
Letter of Credit Application, and the other certificates, documents and
other papers delivered in connection therewith, in accordance with its
customary procedures and shall promptly issue such Letter of Credit (but in
no event earlier than three Business Days after receipt by the Issuing
Lender of the Letter of Credit Application relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof and by
furnishing a copy thereof to the Borrower. Prior to the issuance of any
Letter of Credit, the Issuing Lender will confirm with the Administrative
Agent that the issuance of such Letter of Credit is permitted pursuant to
Section 3 and subsection 6.2. Additionally, the Issuing Lender and the
Borrower shall inform the Administrative Agent of any modifications made to
outstanding Letters of Credit, of any payments made with respect to such
Letters of Credit, and of any other information regarding such Letters of
Credit as may be reasonably requested by the Administrative Agent, in each
case pursuant to procedures established by the Administrative Agent.
33
3.3. Participating Interests. Effective as of the date of the
issuance of each Letter of Credit (in the case of a Letter of Credit issued
after the date hereof), the Issuing Lender agrees to allot, and does allot,
to each other Lender with a Revolving Credit Commitment, and each such
Lender severally and irrevocably agrees to take and does take, a
Participating Interest in such Letter of Credit and the related Letter of
Credit Application in a percentage equal to such Lender's Revolving Credit
Commitment Percentage. On the date that any Participating Lender becomes a
party to this Agreement in accordance with subsection 11.6, Participating
Interests in any outstanding Letter of Credit held by the Lender from which
such Participating Lender acquired its interest hereunder shall be
proportionately reallocated between such Participating Lender and such
transferor Lender. Each Participating Lender hereby agrees that its
obligation to participate in each Letter of Credit issued in accordance with
the terms hereof and to pay or to reimburse the Issuing Lender in respect of
such Letter of Credit for its participating share of the drafts drawn
thereunder shall be irrevocable and unconditional; provided that no
Participating Lender shall be liable for the payment of any amount under
subsection 3.4(b) resulting solely from the Issuing Lender's gross
negligence or willful misconduct.
3.4. Payments. The Borrower agrees (i) to reimburse the Administrative
Agent for the account of the Issuing Lender, forthwith upon its demand and
otherwise in accordance with the terms of the Letter of Credit Application,
if any, relating thereto, for any payment made by the Issuing Lender under
any Letter of Credit and (ii) to pay to the Administrative Agent for the
account of such Issuing Lender, interest on any unreimbursed portion of any
such payment from the date of such payment until reimbursement in full
thereof at a fluctuating rate per annum equal to the rate then borne by
Revolving Credit Loans that are ABR Loans pursuant to subsection 4.1(b) plus
2% per annum.
(b) In the event that the Issuing Lender makes a payment under any
Letter of Credit and is not reimbursed in full therefor, forthwith upon
demand of the Issuing Lender, and otherwise in accordance with the terms
hereof or of the Letter of Credit Application, if any, relating to such
Letter of Credit, the Issuing Lender will promptly through the
Administrative Agent notify each Participating Lender that acquired its
Participating Interest in such Letter of Credit from the Issuing Lender or
pursuant to an assignment as provided in subsection 11.6(c). No later than
the close of business on the date such notice is given, each such
Participating Lender will transfer to the Administrative Agent, for the
account of the Issuing Lender, in immediately available funds, an amount
equal to such Participating Lender's pro rata share of the unreimbursed
portion of such payment.
(c) Whenever, at any time, after the Issuing Lender has made payment
under a Letter of Credit and has received from any Participating Lender such
Participating Lender's pro rata share of the unreimbursed portion of such
payment, the Issuing Lender receives any reimbursement on account of such
unreimbursed portion or any payment of interest on account thereof, the
Issuing Lender will distribute to the Administrative Agent, for the account
of such Participating Lender, its pro rata share thereof; provided, however,
that in the event that the receipt by the Issuing Lender of such
reimbursement or such payment of interest (as the case may
34
be) is required to be returned, such Participating Lender will promptly
return to the Administrative Agent, for the account of the Issuing Lender,
any portion thereof previously distributed by the Issuing Lender to it.
3.5. Further Assurances. The Borrower hereby agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender more fully to effect
the purposes of this Agreement and the issuance of the Letters of Credit
issued hereunder.
3.6. Obligations Absolute. The payment obligations of the Borrower
and each Participating Lender under subsection 3.4 shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms of
this Agreement under all circumstances, including, without limitation, the
following circumstances:
(a) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against any
beneficiary, or any transferee, of any Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), the Issuing Lender or any Participating Lender, or any other
Person, whether in connection with this Agreement, the transactions
contemplated herein, or any unrelated transaction;
(b) any statement or any other document presented under any
Letter of Credit opened for its account proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(c) payment by the Issuing Lender under any Letter of Credit
against presentation of a draft or certificate which does not comply
with the terms of such Letter of Credit, except payment resulting
solely from the gross negligence or willful misconduct of the Issuing
Lender; or
(d) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing, except circumstances or
happenings resulting from the gross negligence or willful misconduct
of the Issuing Lender.
3.7. Letter of Credit Application. To the extent not inconsistent
with the terms of this Agreement (in which case the provisions of this
Agreement shall prevail), provisions of any Letter of Credit Application
related to any Letter of Credit are supplemental to, and not in derogation
of, any rights and remedies of the Issuing Lender and the Participating
Lenders under this Section 3 and applicable law. The Borrower acknowledges
and agrees that all rights of the Issuing Lender under any Letter of Credit
Application shall inure to the benefit of each Participating Lender to the
extent of its Revolving Credit Commitment Percentage as fully as if such
Participating Lender was a party to such Letter of Credit Application.
35
3.8. Purpose of Letters of Credit. Each Standby Letter of Credit
shall be used by the Borrower solely (a) to provide credit support for
borrowings by the Borrower or its Subsidiaries, or (b) for other working
capital purposes of the Borrower and Subsidiaries in the ordinary course of
business. Each Commercial Letter of Credit will be used by the Borrower and
Subsidiaries solely to provide the primary means of payment in connection
with the purchase of goods or services by the Borrower and its Subsidiaries
in the ordinary course of business.
SECTION 4. GENERAL PROVISIONS
4.1. Interest Rates and Payment Dates. Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto
at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest for each day on which it is
outstanding at a rate per annum equal to the Alternate Base Rate for such
day plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon or (iii) any fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such amount shall bear interest for each day
after the due date until such amount is paid in full at a rate per annum
equal to (x) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection
plus 2% per annum or (y) in the case of any such overdue interest, fee or
other amount, the rate described in paragraph (b) of this subsection plus 2%
per annum. If any Event of Default described in subsections 9(c) (with
respect to subsection 8.1 only), (f), (h) or (j) shall occur and be
continuing, and the Majority Lenders shall give notice to the Borrower that
this sentence shall apply, then, until such Event of Default shall be cured
or waived or such notice shall be withdrawn, the outstanding principal
amount of all Loans shall bear interest at 2% per annum above the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions
of this subsection 4.1 (other than the first sentence of this paragraph (c)).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
subsection 4.1 shall be payable from time to time on demand.
4.2. Conversion and Continuation Options.The Borrower may elect from
time to time to convert outstanding Eurodollar Loans (in whole or in part)
to ABR Loans by giving the Administrative Agent at least two Business Days'
prior irrevocable notice of such election, provided that any such conversion
of Eurodollar Loans may only be made on the last day of an Interest Period
with respect thereto. The Borrower may elect from time to time to convert
outstanding ABR Loans (in whole or in part) to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable
notice of such election. Any such notice of conversion to Eurodollar Loans
shall specify the length of the initial Interest Period or Interest Periods
therefor; provided that until the date that is one month after the Closing
Date, Eurodollar Loans may be made only for one month Interest Periods.
Upon receipt of any such
36
notice the Administrative Agent shall promptly notify each relevant Lender
thereof. All or any part of outstanding Eurodollar Loans and ABR Loans may
be converted as provided herein, provided that (i) no ABR Loan may be
converted into a Eurodollar Loan when any Default or Event of Default has
occurred and is continuing and the Administrative Agent or Lenders holding
the majority of the outstanding principal amount of Loans of such Type have
determined that such conversion is not appropriate, (ii) any such conversion
may only be made if, after giving effect thereto, subsection 4.3 shall not
have been violated, and (iii) no ABR Loan may be converted into a Eurodollar
Loan after the date that is one month prior to the Revolving Credit
Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent of the length of the next
Interest Period to be applicable to such Loans determined in accordance with
the applicable provisions of the term "Interest Period" set forth in
subsection 1.1, provided that no Eurodollar Loan may be continued as such
(i) when any Default or Event of Default has occurred and is continuing and
the Administrative Agent or Lenders holding the majority of the outstanding
principal amount of Loans of such Class have determined that such
continuation is not appropriate, (ii) if, after giving effect thereto,
subsection 4.3 would be contravened or (iii) after the date that is one
month prior to the Revolving Credit Termination Date; and provided, further,
that if the Borrower shall fail to give such notice or if such continuation
is not permitted pursuant to the preceding proviso, such Eurodollar Loans
shall, subject to the preceding proviso, be automatically continued as such,
with the length of the next Interest Period to be 30 days. Upon receipt of
any notice pursuant to this subsection 4.2(b), the Administrative Agent
shall promptly notify each Lender thereof.
4.3. Minimum Amounts of Tranches. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, (i) the aggregate principal amount of the
Eurodollar Loans comprising each Tranche shall be equal to $5,000,000 or a
whole multiple of $5,000,000 in excess thereof and (ii) there shall not be
more than (ten) 10 Tranches at any one time outstanding.
4.4. Optional and Mandatory Prepayments.The Borrower may at any time
and from time to time prepay Revolving Credit Loans or Term Loans, in whole
or in part, upon at least three Business Days' irrevocable notice to the
Administrative Agent (in the case of Eurodollar Loans) and at least one
Business Day's irrevocable notice to the Administrative Agent (in the case
of ABR Loans), specifying the date and amount of prepayment and whether the
prepayment is (i) of Revolving Credit Loans or Term A Loans or Term B Loans
and (ii) of Eurodollar Loans, ABR Loans or a combination thereof, and, in
each case if a combination thereof, the amount allocable to each. Upon the
receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein. Partial
prepayments of the Loans
37
shall be in an aggregate principal amount of $2,500,000 or a whole multiple
of $1,000,000 in excess thereof.
(b) If, at any time during the Revolving Credit Commitment Period,
for any reason the Aggregate Revolving Credit Outstanding of all Lenders
exceeds the Aggregate Revolving Credit Commitments then in effect, or the
Aggregate Revolving Credit Outstanding of any Lender exceeds the Revolving
Credit Commitment of such Lender then in effect, the Borrower shall, without
notice or demand, immediately prepay the Revolving Credit Loans in an
aggregate principal amount at least sufficient to eliminate any such excess.
(c) If any Preferred Stock (other than Preferred Stock of the
Borrower issued in connection with the formation or acquisition of a joint
venture so long as such Preferred Stock does not mature or provide for
redemption prior to the Term Loan B Termination Date and does not provide
for the payment of any dividends) or Indebtedness shall be issued or
incurred by the Borrower or any of its Subsidiaries (excluding any
Indebtedness permitted in accordance with subsection 8.2 as such subsection
is in effect on the date of this Agreement), an amount equal to 100% of the
Net Cash Proceeds thereof shall be applied on the date of such issuance or
incurrence in accordance with subsection 4.8. This subsection 4.4(c) shall
not affect any rights and remedies that the Administrative Agent or the
Lenders may otherwise have under Section 9.
(d) If on any date the Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event, then,
unless a Reinvestment Notice shall be delivered in respect thereof, 100% of
such Net Cash Proceeds shall be applied on such date, to prepay the Term
Loans in accordance with subsection 4.8(a); provided that, notwithstanding
the foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales that may
be excluded from the foregoing requirement pursuant to a Reinvestment Notice
shall not exceed $2,000,000 in any fiscal year of the Borrower and (ii) on
each Reinvestment Prepayment Date, an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event shall be
applied to prepay the Term Loans in accordance with subsection 4.8.
(e) If Capital Stock (other than Preferred Stock) shall be issued by
the Borrower or any of its Subsidiaries, an amount equal to 75% of the Net
Cash Proceeds thereof shall be applied on the date of such issuance to
prepay the Term Loans in accordance with subsection 4.8. This subsection
4.4(e) shall not affect any rights and remedies that the Administrative
Agent or the Lenders may otherwise have under Section 9.
(f) If any amount is received by the Borrower or any of its
Subsidiaries from Royal Numico or its Affiliates in connection with the
Rexall Purchase Agreement (other than any amount representing a purchase
price adjustment) or as a direct or indirect result of any breach of any
term or provision of the Rexall Purchase Agreement or otherwise in respect
of any claim by the Borrower or any of its Subsidiaries arising out of the
Rexall Acquisition (other than to the extent relating to indemnification or
reimbursements of amounts paid or to be paid by the Borrower or any of its
Subsidiaries to Persons other than the Borrower or any of its Subsidiar
38
JPMorgan Chase Bank
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Fleet National Bank
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TOTAL
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