1
EXHIBIT 10.28
--------------------------------------------------------------------------------
CREDIT AGREEMENT
Dated as of February 27, 1998,
among
KING PHARMACEUTICALS, INC.,
THE LENDERS NAMED HEREIN,
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent,
as Collateral Agent and
as Swingline Lender,
and
WACHOVIA BANK, N.A.,
as Issuing Bank
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Defined Terms .............................................. 2
SECTION 1.02. Terms Generally ............................................ 22
ARTICLE II
The Credits
SECTION 2.01. Commitments ................................................ 23
SECTION 2.02. Loans ...................................................... 23
SECTION 2.03. Borrowing Procedure ........................................ 25
SECTION 2.04. Evidence of Debt; Repayment of Loans ....................... 25
SECTION 2.05. Fees ....................................................... 26
SECTION 2.06. Interest on Loans .......................................... 27
SECTION 2.07. Default Interest ........................................... 27
SECTION 2.08. Alternate Rate of Interest ................................. 27
SECTION 2.09. Termination and Reduction of Commitments ................... 27
SECTION 2.10. Conversion and Continuation of Borrowings .................. 28
SECTION 2.11. Repayment of Term Borrowings ............................... 29
SECTION 2.12. Prepayment ................................................. 31
SECTION 2.13. Mandatory Prepayments ...................................... 32
SECTION 2.14. Reserve Requirements; Change in Circumstances .............. 33
SECTION 2.15. Change in Legality ......................................... 35
SECTION 2.16. Indemnity .................................................. 35
SECTION 2.17. Pro Rata Treatment ......................................... 36
SECTION 2.18. Sharing of Setoffs ......................................... 36
SECTION 2.19. Payments ................................................... 37
SECTION 2.20. Taxes ...................................................... 37
SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate......................................... 38
SECTION 2.22. Swingline Loans ............................................ 39
SECTION 2.23. Letters of Credit .......................................... 41
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers ....................................... 44
SECTION 3.02. Authorization .............................................. 45
SECTION 3.03. Enforceability ............................................. 45
SECTION 3.04. Governmental Approvals ..................................... 45
SECTION 3.05. Financial Statements ....................................... 45
3
Contents, p. 2
SECTION 3.06. No Material Adverse Change ................................. 46
SECTION 3.07. Title to Properties; Possession Under Leases ............... 46
SECTION 3.08. Subsidiaries ............................................... 46
SECTION 3.09. Litigation; Compliance with Laws ........................... 46
SECTION 3.10. Agreements ................................................. 47
SECTION 3.11. Federal Reserve Regulations ................................ 47
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act...................................................... 48
SECTION 3.13. Use of Proceeds ............................................ 48
SECTION 3.14. Tax Returns ................................................ 48
SECTION 3.15. No Material Misstatements .................................. 48
SECTION 3.16. Employee Benefit Plans ..................................... 48
SECTION 3.17. Environmental Matters ...................................... 48
SECTION 3.18. Insurance .................................................. 49
SECTION 3.19. Security Documents ......................................... 49
SECTION 3.20. Location of Real Property and Leased Premises .............. 50
SECTION 3.21. Labor Matters .............................................. 50
SECTION 3.22. Solvency ................................................... 50
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events .......................................... 51
SECTION 4.02. First Credit Event ......................................... 51
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties ....................... 54
SECTION 5.02. Obligations and Taxes ...................................... 54
SECTION 5.03. Financial Statements, Reports, etc ......................... 55
SECTION 5.04. Litigation and Other Notices ............................... 56
SECTION 5.05. Employee Benefits .......................................... 56
SECTION 5.06. Maintaining Records; Access to Properties and Inspections .. 56
SECTION 5.07. Use of Proceeds ............................................ 56
SECTION 5.08. Compliance with Environmental Laws ......................... 57
SECTION 5.09. Preparation of Environmental Reports ....................... 57
SECTION 5.10. Audits ..................................................... 57
SECTION 5.11. Further Assurances ......................................... 57
SECTION 5.12. Real Estate ................................................ 57
4
Contents, p. 3
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness ............................................... 58
SECTION 6.02. Liens....................................................... 59
SECTION 6.03. Sale and Lease-Back Transactions ........................... 60
SECTION 6.04. Investments, Loans and Advances ............................ 60
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions .. 60
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends ........................... 61
SECTION 6.07. Transactions with Affiliates ............................... 61
SECTION 6.08. Business of Borrower and Subsidiaries ...................... 61
SECTION 6.09. Fiscal Year ................................................ 61
SECTION 6.10. Leverage Ratio ............................................. 62
SECTION 6.11. Consolidated Interest Expense Coverage Ratio ............... 62
SECTION 6.12. Consolidated Net Worth ..................................... 62
SECTION 6.13. Consolidated Fixed Charge Coverage Ratio ................... 62
SECTION 6.14. Amendment of Material Documents ............................ 62
SECTION 6.15. Prepayments, Redemptions and Repurchases of Debt ........... 63
ARTICLE VII
Events of Default ............................... 63
ARTICLE VIII
The Administrative Agent and the Collateral Agent ............... 65
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices ........................................................ 68
SECTION 9.02. Survival of Agreement .......................................... 68
SECTION 9.03. Binding Effect ................................................. 68
SECTION 9.04. Successors and Assigns ......................................... 69
SECTION 9.05. Expenses; Indemnity ............................................ 72
SECTION 9.06. Right of Setoff ................................................ 72
SECTION 9.07. Applicable Law ................................................. 73
SECTION 9.08. Waivers; Amendment ............................................. 73
SECTION 9.09. Interest Rate Limitation ....................................... 74
SECTION 9.10. Entire Agreement ............................................... 74
SECTION 9.11. WAIVER OF JURY TRIAL ........................................... 74
SECTION 9.12. Severability ................................................... 75
SECTION 9.13. Counterparts ................................................... 75
5
Contents, p. 4
SECTION 9.14. Headings ............................................. 75
SECTION 9.15. Jurisdiction; Consent to Service of Process .......... 75
SECTION 9.16. Confidentiality ...................................... 76
Schedule 1.01(a) Existing Letters of Credit
Schedule 1.01(b) Guarantors
Schedule 1.01(c) Mortgaged Properties
Schedule 2.01 Commitments
Schedule 3.07(a) Certain Encumbrances
Schedule 3.07(c) Condemnation Proceeds
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.19(d) Mortgage Filing Offices
Schedule 3.20(a) Owned Property
Schedule 3.20(b) Leased Property
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.04(a) Existing Investments
Schedule 6.04(b) Existing Loans
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Guarantee Agreement
Exhibit E Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit F Form of Pledge Agreement
Exhibit G Form of Security Agreement
Exhibit H-1 Form of Opinion of Corporate Counsel of
the Borrower
Exhibit H-2 Form of Opinion of Local Counsel for the
Borrower and the Subsidiaries
Exhibit I Form of Borrowing Base Certificate
Exhibit J-1 Form of Mortgage
Exhibit J-2 Form of Deed of Trust
Exhibit K Form of Escrow Agreement
6
CREDIT AGREEMENT dated as of February 27,
1998, among KING PHARMACEUTICALS, INC., a Tennessee
corporation (the "Borrower"), the Lenders (as defined
in Article I), CREDIT SUISSE FIRST BOSTON, a bank
organized under the laws of Switzerland, acting
through its New York Branch, as administrative agent
(in such capacity, the "Administrative Agent"), as
collateral agent (in such capacity, the "Collateral
Agent") and as swingline lender (in such capacity,
the "Swingline Lender") for the Lenders, and WACHOVIA
BANK, N.A., a national banking association, as
issuing bank (in such capacity, the "Issuing Bank")
for the Lenders.
Parkedale Pharmaceuticals, Inc., a Wholly Owned Subsidiary (such term
and each other capitalized term used but not defined herein having the meaning
assigned to such term in Article I), ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company ("▇-▇") and ▇▇▇▇▇
▇▇▇▇▇ & Company, a wholly owned subsidiary of WL, have entered into an Asset
Purchase Agreement dated as of February 27, 1998 (the "Asset Purchase Agreement
"), pursuant to which the Borrower has agreed to purchase the assets described
therein (such purchase being called the "Acquisition" and the assets so
purchased being called the "Purchased Assets").
The Borrower has requested the Lenders to extend credit in the form of
(a) Tranche A Term Loans on the Closing Date, in an aggregate principal amount
not in excess of $90,000,000, (b) Tranche B Term Loans on the Closing Date, in
an aggregate principal amount not in excess of $85,000,000, and (c) Revolving
Loans at any time and from time to time prior to the Revolving Credit Maturity
Date, in an aggregate principal amount at any time outstanding not in excess of
$20,000,000. The Borrower has requested the Swingline Lender to extend credit,
at any time and from time to time prior to the Revolving Credit Maturity Date,
in the form of Swingline Loans in an aggregate principal amount at any time
outstanding not in excess of $5,000,000. The Borrower has requested the Issuing
Bank to issue letters of credit, in an aggregate face amount at any time
outstanding not in excess of $5,000,000, to support payment obligations incurred
in the ordinary course of business by the Borrower and the Subsidiaries. The
proceeds of the Term Loans are to be used by the Borrower on the Closing Date
solely (i) to finance the Acquisition, (ii) to refinance certain existing
indebtedness of the Borrower and (iii) to pay the fees and expenses related to
the Acquisition, and the proceeds of the Revolving Loans and the Swingline Loans
are to be used by the Borrower and the Subsidiaries to provide working capital
for use in the ordinary course of their businesses and for other general
corporate purposes.
The Lenders and the Swingline Lender are willing to extend such credit
to the Borrower and the Issuing Bank is willing to issue Letters of Credit for
the account of the
7
2
Borrower or any Wholly Owned Subsidiary on the terms and subject to the
conditions set forth herein. Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Loan" shall mean any ABR Term Loan, ABR Revolving Loan or
Swingline Loan.
"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Account" shall mean any right to payment for goods sold or leased or
for services rendered, whether or not earned by performance.
"Account Debtor" shall mean, with respect to any Account, the obligor
with respect to such Account.
"Acquisition" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum equal to the
product of (a) the LIBO Rate in effect for such Interest Period and (b)
Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to such
term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount
of the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, 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%. If for any reason the
Administrative Agent shall have
8
3
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability of the Administrative Agent to obtain sufficient
quotations in accordance with the terms of the definition thereof, the Alternate
Base Rate shall be determined without regard to clause (b) of the preceding
sentence until the circumstances giving rise to such inability no longer exist.
Any change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" shall mean, for any day, with respect to any
Eurodollar Loan or ABR Loan which constitutes part of a Revolving Credit
Borrowing or a Tranche A Term Borrowing, or with respect to the Commitment Fees,
as the case may be, the applicable percentage set forth below under the caption
"Eurodollar Spread", "ABR Spread" or "Fee Percentage", as the case may be, based
upon the Leverage Ratio as of the most recent Determination Date:
Eurodollar ABR Fee
Leverage Ratio Spread Spread Percentage
Category 1
Greater than or equal to 3.50 to 1.00 2.75% 1.75% 0.50%
Category 2
----------
Less than 3.50 to 1.00 but greater
than or equal to 3.25 to 1.00 2.50% 1.50% 0.50%
Category 3
----------
Less than 3.25 to 1.00 but greater
than or equal to 3.00 to 1.00 2.25% 1.25% 0.50%
Category 4 2.00% 1.00% 0.50%
----------
Less than 3.00 to 1.00
; provided that until the Determination Date next following September 30, 1998,
the Applicable Percentage shall be determined by reference to Category 1.
Notwithstanding the foregoing, at any time when the Borrower has failed to
deliver the financial statements and certificates required by Section 5.03(a) or
(b), and at any time after the occurrence and during the continuance of an Event
of Default, the Applicable Percentage shall be determined by reference to
Category 1.
"Asset Purchase Agreement" shall have the meaning assigned to such term
in the preamble to this Agreement.
"Asset Sale" shall mean the sale, transfer or other disposition (by way
of merger or otherwise, and including any casualty event or condemnation that
results in the receipt of any insurance or condemnation proceeds) by any Loan
Party or any of the Subsidiaries to any person (other than a sale or transfer to
any Loan Party) of (a) any capital stock of any of the Subsidiaries or (b) any
other assets (other than inventory, obsolete or worn out assets, scrap and
Permitted Investments, in each case disposed of in the ordinary course or
business) of the Borrower or any of the Subsidiaries; provided that the
following shall not be deemed an
9
4
"Asset Sale" for purposes of this Agreement: (i) any asset sale or series of
related asset sales described in clause (b) above resulting in Net Cash Proceeds
not in excess of $100,000, (ii) the sale of any asset encumbered by Liens of
third-party creditors permitted under Section 6.02(a) and (iii) sales of any
brand name pharmaceutical product lines in an aggregate amount not to exceed
$25,000,000 during any calendar year if (w) the Borrower advises the
Administrative Agent in writing that it will utilize the Net Cash Proceeds of
each such sale within six months of the date of closing of such sale to purchase
additional brand name pharmaceutical product lines, (x) after giving pro forma
effect to each such sale as if it had occurred at the beginning of the most
recent period of four fiscal quarters for which financial statements shall have
been delivered pursuant to Section 5.03(a) or (b), as applicable, the Borrower
is in compliance with the financial covenants set forth in Sections 6.10, 6.11,
6.12 and 6.13, (y) the Net Cash Proceeds of such sale are promptly deposited in
an escrow account with the Administrative Agent, pursuant to an escrow agreement
substantially in the form of Exhibit K, and held in such account pending any
such purchase during such six-month period, and (z) the Borrower in fact uses
such Net Cash Proceeds to purchase additional brand name pharmaceutical product
lines within such six-month period, provided that the aggregate amount held in
the account referred to in clause (y) above shall not exceed $25,000,000 at any
time, and any amount in such account in excess of $25,000,000 will be deemed to
constitute Net Cash Proceeds of an Asset Sale and promptly applied as provided
in Section 2.13(d).
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
"Borrowing Base" shall mean an amount equal to the sum, without
duplication, of (i) 80% of Eligible Accounts Receivable, and (ii) 60% of the
Eligible Inventory Value. The Borrowing Base shall be computed monthly in
accordance with Section 5.03(e). The Borrowing Base at any time in effect shall
be determined by reference to the Borrowing Base Certificate most recently
delivered hereunder. If any amount to be included in the computation of the
Borrowing Base is denominated in a currency other than dollars, such amount
shall be converted to a dollar amount using the spot rate (as reported in The
Wall Street Journal on the Business Day prior to determination of the Borrowing
Base) for purchases of dollars with such currency.
"Borrowing Base Certificate" shall have the meaning assigned to such
term in Section 5.03(e).
"Borrowing Request" shall mean a request by the Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C.
"Business Day" shall mean any day other than a Saturday, Sunday or day
on which banks in New York City, New York and Atlanta, Georgia are authorized or
required by law to close; provided, however, that when used in connection with a
Eurodollar Loan, the term
10
5
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Expenditures" shall mean, for any period, (a) additions to
property, plant and equipment and other capital expenditures of the Borrower and
its consolidated Subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP and (b) Capital Lease Obligations incurred by the Borrower and its
consolidated Subsidiaries during such period.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
A "Change in Control" shall be deemed to have occurred if (a) any
person or group (within the meaning of Rule 13d-5 of the Securities Exchange Act
of 1934, as amended, as in effect on the date hereof) shall own directly or
indirectly, beneficially or of record, shares representing more than 20% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower (other than the ownership of shares of the
Borrower's capital stock, directly or indirectly, beneficially or of record, by
The United Company, a Virginia corporation; provided that any such capital stock
ownership by The United Company shall not result in The United Company or any
group of which The United Company is a member, directly or indirectly,
Controlling the Borrower); (b) a majority of the seats (other than vacant seats)
on the board of directors of the Borrower shall at any time be occupied by
persons who were neither (i) nominated by the board of directors of the
Borrower, nor (ii) appointed by directors so nominated; (c) any change in
control (or similar event, however denominated) with respect to the Borrower or
any of the Subsidiaries shall occur under and as defined in any indenture or
agreement in respect of Indebtedness to which the Borrower or any of the
Subsidiaries is a party; (d) the Permitted Holders shall not beneficially own,
directly or indirectly, shares representing at least 30% of the aggregate
ordinary voting power represented by the outstanding capital stock of the
Borrower; or (e) any person or group shall otherwise directly or indirectly
Control the Borrower.
"Closing Date" shall mean the date of the first Credit Event.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
Document and shall include the Mortgaged Properties.
"Collateral Requirement" shall mean, at any time, that (a) the Pledge
Agreement (or a supplement referred to in Section 23 thereof) shall have been
duly executed by the Borrower and each Subsidiary (other than any Foreign
Subsidiary), existing from time to time, owning any outstanding capital stock or
Indebtedness of the Borrower or any other Subsidiary, shall have been delivered
to the Collateral Agent and shall be in full force and effect, and all the
outstanding capital stock of the Subsidiaries shall have been duly and validly
pledged thereunder to the Collateral Agent for the ratable benefit of the
Secured Parties and certificates representing such shares, accompanied by
instruments of transfer and
11
6
stock powers endorsed in blank, shall be in the actual possession of the
Collateral Agent; provided that the Borrower and the Subsidiaries shall not be
required to pledge more than 65% of the capital stock of any Foreign Subsidiary;
(b) the Security Agreement (or a supplement referred to in Section 7.15 thereof)
shall have been duly executed by the Borrower and each Subsidiary (other than
any Foreign Subsidiary), existing from time to time, and shall have been
delivered to the Collateral Agent and shall be in full force and effect, and
each document (including each Uniform Commercial Code financing statement)
required by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Collateral Agent for
the benefit of the Secured Parties a valid, legal and perfected first-priority
security interest in and lien on the Collateral subject to the Security
Agreement (subject to any Lien expressly permitted by Section 6.02) shall have
been so filed, registered or recorded and evidence thereof delivered to the
Collateral Agent; and (c) the Indemnity, Subrogation and Contribution Agreement
(or a supplement referred to in Section 12 thereof) shall have been executed by
the Borrower and each other Loan Party, shall have been delivered to the
Collateral Agent and shall be in full force and effect.
"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment, Term Loan Commitment and Swingline Commitment.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower dated January 1998.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
Income for such period, plus, without duplication and to the extent deducted
from revenues in determining Consolidated Net Income, the sum of (a) the
aggregate amount of Consolidated Interest Expense for such period, (b) the
aggregate amount of letter of credit fees paid during such period, (c) the
aggregate amount of income tax expense for such period, (d) all amounts
attributable to depreciation and amortization for such period, (e) all
extraordinary charges during such period, (f) all other non-cash charges and (g)
all non-recurring cash charges related to (i) an initial public offering of
common stock of the Borrower registered with the Securities and Exchange
Commission in an aggregate amount not to exceed $1,000,000, (ii) the Acquisition
in an aggregate amount not to exceed $500,000 and (iii) any severance costs and
restructuring charges related to severance that the Borrower may incur from time
to time in an aggregate amount not to exceed $500,000, and minus, without
duplication and to the extent added to revenues in determining Consolidated Net
Income for such period, all extraordinary gains during such period, all as
determined on a consolidated basis with respect to the Borrower and the
Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any period,
the ratio of (a) Consolidated EBITDA for such period, minus Capital Expenditures
during such period to (b) the sum of (i) Consolidated Interest Expense for such
period, (ii) the aggregate amount of cash taxes paid by the Borrower and the
Subsidiaries during such period, (iii) cash dividends on capital stock declared
by the Borrower or any of the Subsidiaries during such period (other than any
such dividend payable to the Borrower or any of its Wholly Owned Subsidiaries)
and (iv) scheduled principal payments of Indebtedness made by the Borrower or
any of the Subsidiaries during such period (other than any such payment made to
the Borrower or any of its Wholly Owned Subsidiaries).
12
7
"Consolidated Interest Expense" shall mean, for any period, the
interest expense, both expensed and capitalized (including the interest
component in respect of Capital Lease Obligations), accrued or paid by the
Borrower and the Subsidiaries during such period, determined on a consolidated
basis in accordance with GAAP. For purposes of the foregoing, interest expense
shall be determined exclusive of deferred financing costs and the amortization
thereof and after giving effect to any net payments made or received by the
Borrower and the Subsidiaries with respect to Hedging Agreements.
"Consolidated Interest Expense Coverage Ratio" shall mean, for any
period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Net Income" shall mean, for any period, net income or
loss of the Borrower and the Subsidiaries for such period, as determined on a
consolidated basis in accordance with GAAP, provided that there shall be
excluded (a) the income of any person in which any other person (other than the
Borrower or any of the Subsidiaries or any director holding qualifying shares in
compliance with applicable law) has a joint interest, except to the extent of
the amount of dividends or other distributions actually paid to the Borrower or
any of the Subsidiaries by such person during such period, (b) the loss of any
person in which any other person (other than the Borrower and any of the
Subsidiaries or any director holding qualifying shares in compliance with
applicable law) has a joint interest, except to the extent of the aggregate
investment of the Borrower and any of the Subsidiaries in such person during
such period, and (c) the income (or loss) of any person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with the Borrower
or any of the Subsidiaries or the date that person's assets are acquired by the
Borrower or any of the Subsidiaries.
"Consolidated Net Worth" shall mean, as at any date of determination,
the consolidated stockholders' equity of the Borrower and the Subsidiaries, as
determined on a consolidated basis in accordance with GAAP.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Credit Event" shall have the meaning assigned to such term in Section
4.01.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Determination Date" shall mean each day that is the 45th day after the
end of any of the first three fiscal quarters, or the 90th day after the end of
the final fiscal quarter, in any fiscal year of the Borrower.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
13
8
"Eligible Accounts Receivable" shall mean, at the time of any
determination thereof, the total outstanding balance of accounts of the Borrower
and the Subsidiaries created in the ordinary course of business ("Accounts") (a)
which are legally enforceable obligations of the account debtor in respect
thereof, (b) which do not contravene, or arise from sales which contravene, any
requirement of law applicable thereto (including, without limitation, usury laws
and laws, rules and regulations relating to truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt collect
practices and privacy), (c) with respect to which all required consents,
licenses, approvals or other authorizations of, or registrations or declarations
with, any Governmental Authority have been duly obtained, effected or given, are
in full force and effect and do not subject such Accounts or the Borrower's or
the Subsidiaries' rights with respect thereto to any materially adverse
limitation, (d) which have not been and are not required to be charged off or
written off as uncollectible in accordance with GAAP or the customary business
practice of the Borrower and the Subsidiaries, (e) which have not remained
unpaid for more than 60 days after the due dates thereof, (f) which are not owed
by an obligor which (i) is an Affiliate of the Borrower or (ii) is organized
under the laws of a jurisdiction outside the United States, unless such Account
is supported by a letter of credit in form and amount, and issued by a bank,
acceptable to the Administrative Agent, (g) which arose from a completed sales
of goods by the Borrower or a Subsidiary and do not represent a consignment
sale, guaranteed sale, ▇▇▇▇ and hold or any similar arrangement, (h) which are
not owed by an Account Debtor (x) which is an Account Debtor in respect of
Accounts more than 50% of the aggregate amount of which are more than 60 days
past due or (y) as to which any case, proceeding or other action under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors has been
commenced, (i) which are denominated in U.S. dollars and payable only in U.S.
dollars in the United States of America, (j) which are owned solely by the
Borrower or a Subsidiary free and clear of all Liens or other rights or claims
of any other person (other than the Administrative Agent, the Collateral Agent
or the Lenders), (k) which are subject to a perfected first priority security
interest in favor of the Collateral Agent for the benefit of the Lenders
pursuant to the Security Agreement, (l) which are not Accounts owed by any
Governmental Authority unless the Borrower or the applicable Subsidiary has
complied, in the opinion of the Collateral Agent, with the Assignment of Claims
Act of 1940, as amended, in respect of such Accounts (in the case of Accounts
owed by the United States Government or any agency or instrumentality thereof),
(m) which constitute an "account" or "chattel paper" within the meaning of the
Uniform Commercial Code of the state in which the chief executive office of the
Borrower or the applicable Subsidiary is located, (n) which conform in all other
respects to the representations and warranties contained in the Security
Agreement, (o) with respect to which the related Account Debtor has not asserted
that such Account is, and neither the Borrower nor any of the Subsidiaries is
aware of any basis upon which such Account could be, subject to any defense,
offset, deduction, credit or dispute and (p) with an Account Debtor whose credit
standing is satisfactory to the Collateral Agent.
"Eligible Inventory" shall mean, at the time of any determination
thereof, without duplication, all inventory (defined to include only raw
materials, finished goods and work-in-process) (a) which is owned solely by the
Borrower or a Subsidiary free and clear of all Liens or other rights or claims
of any other person (other than the Administrative Agent, the Collateral Agent
or the Lenders) and is not subject to any patent, copyright or trademark
disputes that may prevent sale, (b) which is subject to a perfected first
priority security interest in favor of the Collateral Agent for the benefit of
the Lenders pursuant to the Security Agreement, (c) which is located at a
storage, manufacturing or public facility owned or leased by the Borrower or a
Subsidiary in the United States or is in-transit inventory which is fully
insured in amounts and by an insurer satisfactory to the Collateral Agent under
14
9
policies as to which the Collateral Agent is named as loss payee, (d) which is
not damaged, (e) which has not been returned or rejected by any prospective
buyer thereof unless such inventory is resalable in the ordinary course of
business, (f) which is not obsolete or unmerchantable, (g) which is not
inventory allocable to contracts with any Governmental Authority, unless the
Borrower or the applicable Subsidiary has complied, in the opinion of the
Collateral Agent, with the Assignment of Claims Act of 1940, as amended, in
respect of such Accounts (in the case of inventory allocable to contracts with
the United States Government or any agency or instrumentality thereof), (h)
which conforms in all other respects to the representations and warranties
contained in the Security Agreement, plus the aggregate undrawn amount of
Letters of Credit outstanding and issued to support the purchase of inventory by
the Borrower and the Subsidiaries (other than inventory excluded from the
definition of "Eligible Inventory" by any of the foregoing clauses); provided,
however, that no inventory which is located at a storage, manufacturing or
public facility leased by the Borrower or a Subsidiary shall be considered
"Eligible Inventory" unless the Borrower or the applicable Subsidiary shall have
obtained a written waiver from the lessor of such property of any statutory or
common law landlord's lien with respect to such inventory.
"Eligible Inventory Value" shall mean at the time of any determination
thereof the lower of cost (less any appropriate reserve for obsolete inventory
and any profits accrued in connection with transfers of inventory between the
Borrower and the Subsidiaries or between Subsidiaries of the Borrower) and fair
market value of the Eligible Inventory at such time, in dollars, determined on a
basis consistent with the financial statements of the Borrower referred to in
Section 3.05.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any Governmental Authority or any
person for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon (a) the existence, or
the continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases), (b) exposure to any Hazardous Material,
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.
"Environmental Law" shall mean any and all applicable present and
future treaties, laws, rules, 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, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material or to health and safety
matters, including, but not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. ▇▇.▇▇. 9601 et seq.
(collectively "CERCLA"), the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. ▇▇.▇▇. 6901 et seq., the
15
10
Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977,
33 U.S.C. ▇▇.▇▇. 1251 et seq., the Clean Air Act of 1970, as amended 42 U.S.C.
▇▇.▇▇. 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. ▇▇.▇▇.
2601 et seq., the Occupational Safety and Health Act of 1970, as amended, 29
U.S.C. ▇▇.▇▇. 651 et seq., the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. ▇▇.▇▇. 11001 et seq., the Safe Drinking Water Act of
1974, as amended, 42 U.S.C. ▇▇.▇▇. 300(f) et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. ▇▇.▇▇. 5101 et seq., and any similar or
implementing state or local law, and all amendments or regulations promulgated
under any of the foregoing.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equity Issuance" shall mean any issuance and sale by the Borrower, or
by any Subsidiary to a person other than the Borrower or another Subsidiary, of
any capital stock or any rights, warrants or options in respect thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, 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" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (e) the incurrence of any liability under
Title IV of ERISA with respect to the termination of any Plan or the withdrawal
or partial withdrawal of the Borrower or any of its ERISA Affiliates from any
Plan or Multiemployer Plan; (f) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (g) the receipt by the Borrower or any ERISA Affiliate of any notice
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; (h) the occurrence of a "prohibited
transaction" with respect to which the Borrower or any of the Subsidiaries is a
"disqualified person" (within the meaning of Section 4975 of the Code) or with
respect to which the Borrower or any such Subsidiary could otherwise be liable;
and (i) any other event or condition with respect to a Plan or Multiemployer
Plan that could reasonably be expected to result in liability of the Borrower.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or
Eurodollar Term Loan.
16
11
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Term Loan" shall mean any Term Loan bearing interest at a
rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Excess Cash Flow" shall mean, for any fiscal year, the sum (without
duplication) of:
(a) Consolidated Net Income, adjusted to exclude any gains or
losses attributable to any Asset Sale and any sale by the Borrower of a
brand name pharmaceutical product line excluded from the definition of
"Asset Sale" in Section 1.01 pursuant to the conditions set forth
therein; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining Consolidated Net Income for such period;
plus
(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such period, plus (ii) the amount, if any, by
which the consolidated deferred revenues of the Borrower and its
consolidated Subsidiaries increased during such period, plus (iii) the
aggregate principal amount of Capital Lease Obligations and other
Indebtedness incurred during such period to finance Capital
Expenditures, to the extent that mandatory principal payments in
respect of such Indebtedness would not be excluded from clause (f)
below when made; minus
(d) the sum of (i) any non-cash gains included in determining
such consolidated net income (or loss) for such period, plus (ii) the
amount, if any, by which Net Working Capital increased during such
period, plus (iii) the amount, if any, by which the consolidated
deferred revenues of the Borrower and its consolidated Subsidiaries
decreased during such period; minus
(e) Capital Expenditures for such period; minus
(f) the aggregate principal amount of Indebtedness repaid or
prepaid by the Borrower and its consolidated Subsidiaries during such
period, excluding (i) Indebtedness in respect of Revolving Loans and
Letters of Credit or in respect of other revolving credit or similar
facilities, (ii) mandatory prepayments of Term Loans, (iii) repayments
or prepayments of Indebtedness financed by incurring other
Indebtedness, to the extent that mandatory principal payments in
respect of such other Indebtedness would, pursuant to this clause (f),
be deducted in determining Excess Cash Flow when made, (iv)
Indebtedness referred to in clauses (c), (d), (e) and (f) of Section
6.01 and (v) voluntary prepayments of Indebtedness other than Term
Loans.
"Excluded Taxes" shall mean, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured
17
12
by) its net income by the United States of America, or by the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office
is located (provided, however, that no Lender, the Issuing Bank or any other
recipient shall be deemed to be located in any jurisdiction solely as a result
of receiving any payments under, or taking any other action related to, any loan
under this or any other agreement), (b) 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 (c) in the case of a Foreign Lender (other
than an assignee pursuant to a request by the Borrower under Section 2.21(a)),
any withholding tax that (i) is in effect and would apply to amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to any withholding tax pursuant to
Section 2.20(a) or (ii) is attributable to such Foreign Lender's failure to
comply with Section 2.20(e).
"Existing Letter of Credit" shall mean each Letter of Credit previously
issued for the account of the Borrower that (a) is outstanding on the Closing
Date and (b) is listed on Schedule 1.01(a).
"Federal Funds Effective Rate" shall mean, 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 the day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" shall mean the Fee Letter dated January 20, 1998, between
the Borrower and the Administrative Agent.
"Fees" shall mean the Commitment Fees, the Administrative Agent Fees,
the L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such
corporation.
"Foreign Lender" shall mean any Lender that is organized under the laws
of a jurisdiction other than in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean United States generally accepted accounting
principles applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
18
13
"Guarantee" of or by any person shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantee Agreement" shall mean the Guarantee Agreement, substantially
in the form of Exhibit D, made by the Guarantors in favor of the Collateral
Agent for the benefit of the Secured Parties.
"Guarantee Requirement" shall mean, at any time, that the Guarantee
Agreement (or a supplement referred to in Section 20 thereof) shall have been
executed by each Subsidiary (other than any Foreign Subsidiary) existing from
time to time, shall have been delivered to the Collateral Agent and shall be in
full force and effect.
"Guarantors" shall mean each person listed on Schedule 1.01(b) and each
other person that becomes party to a Guarantee Agreement as a Guarantor, and the
permitted successors and assigns of each such person.
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes, hazardous or toxic substances or wastes, pollutants,
solid, liquid or gaseous wastes, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such person of Indebtedness of others, (h) all Capital Lease
Obligations of such person, (i) all obligations of such person in respect of
Hedging Agreements and (j) all obligations of such person as an account party in
respect of letters of credit and bankers'
19
14
acceptances. The Indebtedness of any person shall include the Indebtedness of
any partnership in which such person is a general partner.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnitee" shall have the meaning assigned to such term in Section
9.05(b).
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit E, among the Borrower, the Guarantors and the Collateral Agent.
"Interest Payment Date" shall mean, with respect to any Loan, each day
that is the last day of an Interest Period applicable to the Borrowing of which
such Loan is a part and the date of any prepayment of such Borrowing or
conversion of such Borrowing to a Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
preceding Interest Period applicable thereto and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, or 3 months thereafter, as the Borrower
may elect, (b) as to any ABR Borrowing (other than a Swingline Loan), the period
commencing on the date of such Borrowing or on the last day of the preceding
Interest Period applicable thereto and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii) the Revolving
Credit Maturity Date, Tranche A Maturity Date or Tranche B Maturity Date, as
applicable, and (iii) the date such Borrowing is converted to a Borrowing of a
different Type in accordance with Section 2.10 or repaid or prepaid in
accordance with Section 2.11 or 2.12 and (c) as to any Swingline Loan, the
period commencing on the date of such Loan and ending on the fifth Business Day
thereafter; provided, however, that if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(c).
"L/C Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.
"L/C Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Revolving Credit Lender at any
time shall mean its Pro Rata Percentage of the aggregate L/C Exposure at such
time.
"L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.05(c).
20
15
"Lenders" shall mean (a) the financial institutions listed on Schedule
2.01 (other than any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance. Unless the context clearly indicates otherwise, the term "Lenders"
shall include the Swingline Lender.
"Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.23 and any Existing Letter of Credit.
"Leverage Ratio" shall mean, at any time, the ratio of (a) Total Debt
at such time to (b) Consolidated EBITDA for the most recently ended period of
four fiscal quarters, all as determined on a consolidated basis in accordance
with GAAP; provided that for purposes of calculating the Leverage Ratio, the
Borrower's Consolidated EBITDA for the four-fiscal-quarter periods ending on
March 31, 1998, June 30, 1998 and September 30, 1998, shall be deemed to equal
the Borrower's Consolidated EBITDA for the period commencing on January 1, 1998
and ending on (i) March 31, 1998, multiplied by 4, (ii) June 30, 1998,
multiplied by 2, and (iii) September 30, 1998, multiplied by 4/3, as applicable.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate per annum determined by the Administrative Agent
at approximately 11:00 a.m., London time, on the date which is two Business Days
prior to the beginning of such Interest Period by reference to the British
Bankers' Association Interest Settlement Rates for deposits in dollars (as set
forth by any service selected by the Administrative Agent which has been
nominated by the British Bankers' Association as an authorized information
vendor for the purpose of displaying rates) for a period equal to such Interest
Period, provided that, to the extent that an interest rate is not ascertainable
pursuant to the foregoing provisions of this definition, the "LIBO Rate" shall
be the interest rate per annum determined by the Administrative Agent equal to
the average of the rates per annum (rounded upwards, if necessary, to the next
1/16 of 1%) at which deposits in dollars are offered for such Interest Period by
two major banks selected by the Administrative Agent in the London interbank
market in London, England at approximately 11:00 a.m., London time, on the date
which is two Business Days prior to the beginning of such Interest Period. In
the event that such rate is not available at such time for any reason, then the
"LIBO Rate" with respect to such Eurodollar Borrowing for such Interest Period
shall be the rate (rounded upwards, if necessary, to the next 1/16 of 1%) at
which dollar deposits of an amount equal to the applicable Loans 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" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
Guarantee Agreement, the Security Documents and the Indemnity, Subrogation and
Contribution Agreement.
21
16
"Loan Parties" shall mean the Borrower and each Subsidiary that is, or
is required by this Agreement to be, a party to the Guarantee Agreement or any
Security Document.
"Loans" shall mean the Revolving Loans, the Term Loans and the
Swingline Loans.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" shall mean the result of one or more events,
changes or effects which, individually or in the aggregate, could have a
materially adverse effect on (a) the business, assets, results of operations,
financial condition or prospects of the Borrower and the Subsidiaries, taken as
a whole, (b) the validity or enforceability of any of Loan Documents or any
other documents entered into in connection with the Transactions or the other
transactions contemplated thereby or the rights, remedies and benefits available
to the parties thereunder.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgaged Properties" shall mean the real properties and leasehold and
subleasehold interests in real properties of the Loan Parties specified on
Schedule 1.01(c) and all other real properties and leasehold and subleasehold
interests in real properties hereafter acquired by any of the Loan Parties.
"Mortgages" shall mean mortgages, deeds of trust, leasehold mortgages,
assignments of leases and rents, modifications and other security documents
satisfactory to the Collateral Agent, delivered pursuant to Section 5.12. Each
mortgage shall be substantially in the form of Exhibit J-1 and each deed of
trust shall be substantially in the form of Exhibit J-2.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the
cash proceeds thereof, including any cash received in respect of any non-cash
proceeds, but only as and when received, and any insurance or condemnation
proceeds, net of (i) costs of sale (including payment of the outstanding
principal amount of, premium or penalty, if any, interest and other amounts on
any Indebtedness (other than Loans) required to be repaid under the terms
thereof as a result of such Asset Sale), (ii) taxes paid or payable in the year
such Asset Sale occurs or in the following year as a direct result thereof and
(iii) amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations associated with such Asset
Sale (provided that, to the extent and at the time any such amounts are released
from such reserve, such amounts shall constitute Net Cash Proceeds), and (b)
with respect to any Equity Issuance or any issuance or other disposition of
Indebtedness for borrowed money, the cash proceeds thereof net of underwriting
commissions or placement fees and expenses directly incurred in connection
therewith.
22
17
"Net Working Capital" shall mean, at any date, (a) the consolidated
current assets of the Borrower and its consolidated Subsidiaries as of such date
(excluding cash and Permitted Investments) minus (b) the consolidated current
liabilities of the Borrower and its consolidated Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness). Net Working Capital
at any date may be a positive number or negative number. Net Working Capital
increases when it becomes more positive or less negative and decreases when it
becomes less positive or more negative.
"Obligations" shall mean all obligations defined as "Obligations" in
the Guarantee Agreement and the Security Documents.
"Other Taxes" shall mean 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.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 1 to the Security Agreement.
"Permitted Holders" shall mean ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Dr. R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇ their respective estates, spouses,
ancestors and lineal descendants, the legal representatives of any of the
foregoing and the trustees of any bona fide trusts of which the foregoing are
the sole beneficiaries or the grantors, or any person of which the foregoing
"beneficially owns" (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934) voting securities representing at least 66-2/3% of the
total voting power of all classes of ordinary voting stock of such person
(exclusive of any matters as to which class voting rights exist), including S.J.
L.L.C. and Kingsway L.L.C. to the extent such entities adhere to the
aforementioned minimum beneficial ownership requirements.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 180 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days of the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the
23
18
United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than
$500,000,000; and
(d) other investment instruments approved in writing by the
Required Lenders and offered by financial institutions which have a
combined capital and surplus and undivided profits of not less than
$500,000,000.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in
the form of Exhibit F, between the Borrower, each Subsidiary owning capital
stock or Indebtedness of the Borrower or any other Subsidiary and the Collateral
Agent for the benefit of the Secured Parties.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate in
effect at its principal office in New York City, New York; each change in the
Prime Rate shall be effective on the date such change is publicly announced as
being effective.
"Pro Rata Percentage" of any Revolving Credit Lender at any time shall
mean the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment. In the event the Revolving Credit
Commitments shall have been terminated, the Pro Rata Percentages of the
Revolving Credit Lenders shall be determined by reference to the Revolving
Credit Commitments most recently in effect (giving effect to any assignments
pursuant to Section 9.04).
"Register" shall have the meaning assigned to such term in Section
9.04(d).
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Related Fund" shall mean, with respect to any Lender that is a fund
that invests in loans, any other fund that invests in loans and is managed by
the same investment advisor as such Lender or by an Affiliate of such investment
advisor.
24
19
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
"Remedial Action" shall mean (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority or voluntarily undertaken to: (i) clean
up, remove, treat, ▇▇▇▇▇ or in any other way address any Hazardous Material in
the environment; (ii) prevent the Release or threat of Release, or minimize the
further Release of any Hazardous Material so it does not migrate or endanger or
threaten to endanger public health, welfare or the environment; or (iii) perform
studies and investigations in connection with, or as a precondition to, clause
(i) or (ii) above.
"Required Lenders" shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), L/C Exposures, Swingline Exposures and unused
Revolving Credit and Term Loan Commitments representing at least 66-2/3% of the
sum of all Loans outstanding (excluding Swingline Loans), L/C Exposures,
Swingline Exposures and unused Revolving Credit and Term Loan Commitments at
such time.
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of
Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"Revolving Credit Exposure" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender, plus the aggregate amount at such time of such
Lender's L/C Exposure, plus the aggregate amount at such time of such Lender's
Swingline Exposure.
"Revolving Credit Lender" shall mean a Lender that has a Revolving
Credit Commitment (or that had such a Commitment at the time the Revolving
Credit Commitments were terminated).
"Revolving Credit Maturity Date" shall mean February 27, 2004.
"Revolving Loans" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to clause (c) of Section 2.01. Each Revolving Loan shall
be a Eurodollar Revolving Loan or an ABR Revolving Loan.
"S&P" shall mean Standard & Poor's.
25
20
"Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.
"Security Agreement" shall mean the Security Agreement, substantially
in the form of Exhibit G, between the Borrower, the Subsidiaries (other than any
Foreign Subsidiary) and the Collateral Agent for the benefit of the Secured
Parties.
"Security Documents" shall mean the Mortgages, the Security Agreement,
the Pledge Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.11.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board for Eurocurrency Liabilities (as defined in Regulation
D of the Board). Such reserve percentages shall include those imposed pursuant
to such Regulation D. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"subsidiary" shall mean, with respect to any person (herein referred to
as the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make loans pursuant to Section 2.22, as the same may be reduced from
time to time pursuant to Section 2.09 .
"Swingline Exposure" shall mean at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline Exposure
of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage
of the aggregate Swingline Exposure at such time.
"Swingline Loan" shall mean any loan made by the Swingline Lender
pursuant to Section 2.22.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Borrowing" shall mean a Borrowing comprised of Tranche A Term
Loans or Tranche B Term Loans.
26
21
"Term Loan Commitments" shall mean the Tranche A Commitments and the
Tranche B Commitments.
"Term Loan Repayment Dates" shall mean the Tranche A Term Loan
Repayment Dates and the Tranche B Term Loan Repayment Dates as set forth in
Section 2.11(a).
"Term Loans" shall mean the Tranche A Term Loans and the Tranche B Term
Loans.
"Total Debt" shall mean, as of any date of determination, without
duplication, the aggregate principal amount of Indebtedness of the Borrower and
the Subsidiaries outstanding as of such date, determined on a consolidated basis
in accordance with GAAP (other than Indebtedness of the type referred to in
clause (j) of the definition of the term "Indebtedness", except to the extent of
any unreimbursed drawings thereunder).
"Total Revolving Credit Commitment" shall mean, at any time, the
aggregate amount of the Revolving Credit Commitments, as in effect at such time.
"Tranche A Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Tranche A Term Loans as set forth on Schedule
2.01 or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Tranche A Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"Tranche A Lender" shall mean a Lender with a Tranche A Commitment or
with outstanding Tranche A Term Loans.
"Tranche A Maturity Date" shall mean December 31, 2003.
"Tranche A Term Borrowing" shall mean a Borrowing comprised of Tranche
A Term Loans.
"Tranche A Term Loan Repayment Date" shall have the meaning assigned to
such term in Section 2.11(a)(i).
"Tranche A Term Loans" shall mean the term loans made by the Lenders to
the Borrower pursuant to clause (a) of Section 2.01. Each Tranche A Term Loan
shall be either a Eurodollar Term Loan or an ABR Term Loan.
"Tranche B Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Tranche B Term Loans as set forth on Schedule
2.01 or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Tranche B Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"Tranche B Lender" shall mean a Lender with a Tranche B Commitment or
with outstanding Tranche B Term Loans.
"Tranche B Maturity Date" shall mean December 31, 2005.
27
22
"Tranche B Term Borrowing" shall mean a Borrowing comprised of Tranche
B Term Loans.
"Tranche B Term Loan Repayment Date" shall have the meaning assigned to
such term in Section 2.11(a)(ii).
"Tranche B Term Loans" shall mean the term loans made by the Lenders to
the Borrower pursuant to clause (b) of Section 2.01. Each Tranche B Term Loan
shall be either a Eurodollar Term Loan or an ABR Term Loan.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "Rate" shall include
the Adjusted LIBO Rate and the Alternate Base Rate.
"Wholly Owned Subsidiary" shall mean a Subsidiary of which securities
(except for directors' qualifying shares) or other ownership interests
representing 100% of the equity or 100% of the ordinary voting power or 100% of
the general partnership interests are, at the time any determination is being
made, owned, controlled or held, directly or indirectly, by the Borrower or one
or more wholly owned subsidiaries of the Borrower.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that, 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 Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
28
23
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, (a) to make a Tranche A Term Loan to the
Borrower on the Closing Date in a principal amount not to exceed its Tranche A
Commitment, (b) to make a Tranche B Term Loan to the Borrower on the Closing
Date in a principal amount not to exceed its Tranche B Commitment and (c) to
make Revolving Loans to the Borrower, at any time and from time to time on or
after the Closing Date and until the earlier of the Revolving Credit Maturity
Date and the termination of the Revolving Credit Commitment of such Lender in
accordance with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in (i) such Lender's Revolving Credit Exposure
exceeding (ii) the lesser of (x) such Lender's Revolving Credit Commitment and
(y) such Lender's Pro Rata Percentage of the Borrowing Base in effect at such
time. Within the limits set forth in clause (c) of the preceding sentence and
subject to the terms, conditions and limitations set forth herein, the Borrower
may borrow, pay or prepay and reborrow Revolving Loans. Amounts paid or prepaid
in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall
be made as part of a Borrowing consisting of Loans made by the Lenders ratably
in accordance with their applicable Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being understood, however, that
no Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). Except for Loans deemed made
pursuant to paragraph (f) below, the Loans comprising any Borrowing shall be in
an aggregate principal amount that is (i) an integral multiple of $1,000,000 and
not less than $1,000,000 or (ii) equal to the remaining available balance of the
applicable Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
pursuant to Section 2.03. Notwithstanding anything to the contrary contained
herein, all Borrowings made on the Closing Date shall be ABR Borrowings. Each
Swingline Loan shall be an ABR Loan. Each Lender may at its option make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement. Borrowings of more than one Type may be outstanding at
the same time; provided, however, that the Borrower shall not be entitled to
request any Borrowing that, if made, would result in more than ten Eurodollar
Borrowings outstanding hereunder at any time. For purposes of the foregoing,
Borrowings having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to paragraph (f) below,
each Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 12:00 (noon),
New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account in the
29
24
name of the Borrower designated by the Borrower in the applicable Borrowing
Request or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds (which determination
shall be conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Borrowing if the Interest Period requested
with respect thereto would end after the Revolving Credit Maturity Date.
(f) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.23(e) in respect of any L/C
Disbursement within the time specified in such Section, the Issuing Bank will
promptly notify the Administrative Agent of the amount of such L/C Disbursement
and the Administrative Agent will promptly notify each Revolving Credit Lender
of such amount and its Pro Rata Percentage thereof. Each Revolving Credit Lender
shall pay by wire transfer of immediately available funds to the Administrative
Agent not later than 2:00 p.m., New York City time, on such date (or, if such
Revolving Credit Lender shall have received such notice later than 12:00 (noon),
New York City time, on any day, not later than 11:00 a.m., New York City time,
on the immediately following Business Day), an amount equal to such Lender's Pro
Rata Percentage of such L/C Disbursement (it being understood that such amount
shall be deemed to constitute an ABR Revolving Loan of such Lender and such
payment shall be deemed to have reduced the L/C Exposure), and the
Administrative Agent will promptly pay to the Issuing Bank amounts so received
by it from the Revolving Credit Lenders. The Administrative Agent will promptly
pay to the Issuing Bank any amounts received by it from the Borrower pursuant to
Section 2.23(e) prior to the time that any Revolving Credit Lender makes any
payment pursuant to this paragraph (f); any such amounts received by the
Administrative Agent thereafter will be promptly remitted by the Administrative
Agent to the Revolving Credit Lenders that shall have made such payments and to
the Issuing Bank, as their interests may appear. If any Revolving Credit Lender
shall not have made its Pro Rata Percentage of such L/C Disbursement available
to the Administrative Agent as provided above, such Lender and the Borrower
severally agree to pay interest on such amount, for each day from and including
the date such amount is required to be paid in accordance with this paragraph to
but excluding the date such amount is paid, to the Administrative Agent for the
account of the Issuing Bank at (i) in the case of the Borrower, a rate per annum
equal to the interest rate
30
25
applicable to ABR Revolving Loans pursuant to Section 2.06(a), and (ii) in the
case of such Lender, for the first such day, the Federal Funds Effective Rate,
and for each day thereafter, the Alternate Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing
(other than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f),
as to which this Section 2.03 shall not apply), the Borrower shall hand deliver
or telecopy to the Administrative Agent a duly completed Borrowing Request (a)
in the case of a Eurodollar Borrowing, not later than 12:00 (noon), New York
City time, three Business Days before a proposed Borrowing, and (b) in the case
of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the
Business Day of a proposed Borrowing. Each Borrowing Request shall be
irrevocable, shall be signed by or on behalf of the Borrower and shall specify
the following information: (i) whether the Borrowing then being requested is to
be a Tranche A Term Borrowing, a Tranche B Term Borrowing or a Revolving Credit
Borrowing, and, subject to the second sentence of Section 2.02(b), whether such
Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of
such Borrowing (which shall be a Business Day), (iii) the number and location of
the account to which funds are to be disbursed (which shall be an account that
complies with the requirements of Section 2.02(c)); (iv) the amount of such
Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing, the
Interest Period with respect thereto; provided, however, that, notwithstanding
any contrary specification in any Borrowing Request, each requested Borrowing
shall comply with the requirements set forth in Section 2.02. If no election as
to the Type of Borrowing is specified in any such notice, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any
Eurodollar Borrowing is specified in any such notice, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration. The
Administrative Agent shall promptly advise the applicable Lenders of any notice
given pursuant to this Section 2.03 (and the contents thereof), and of each
Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender (i) the then unpaid principal amount of each Revolving
Loan on the Revolving Credit Maturity Date, (ii) the then unpaid principal
amount of each Swingline Loan on the last day of the Interest Period applicable
to such Loan or, if earlier, on the Revolving Credit Maturity Date and (iii) the
principal amount of each Term Loan of such Lender as provided in Section 2.11.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) above shall be prima facie evidence of the existence and amounts of
the obligations therein
31
26
recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in the event
any Lender shall request and receive a promissory note payable to such Lender
and its registered assigns, the interests represented by such note shall at all
times (including after any assignment of all or part of such interests pursuant
to Section 9.04) be represented by one or more promissory notes payable to the
payee named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender,
through the Administrative Agent, on the last business day of March, June,
September and December in each year and on the date on which the last of the
Commitments of such Lender shall expire or be terminated as provided herein, a
commitment fee (a "Commitment Fee") equal to the Applicable Percentage per annum
in effect from time to time on the average daily unused amount of the
Commitments of such Lender (other than the Swingline Commitment) during the
preceding quarter (or other period commencing with the date hereof or ending
with the date on which the last of the Commitments of such Lender shall expire
or be terminated). All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 365 days. The Commitment Fee due to
each Lender shall commence to accrue on the date hereof and shall cease to
accrue on the date on which the last of the Commitments of such Lender shall
expire or be terminated as provided herein. For purposes of calculating
Commitment Fees only, no portion of the Revolving Credit Commitments shall be
deemed utilized by virtue of any Swingline Loan being outstanding.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administrative fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "Administrative Agent Fees").
(c) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on the last business day of March, June,
September and December of each year and on the date on which the Revolving
Credit Commitment of such Lender shall be terminated as provided herein, a fee
(an "L/C Participation Fee") calculated on such Lender's Pro Rata Percentage of
the average daily aggregate L/C Exposure (excluding the portion thereof
attributable to unreimbursed L/C Disbursements) during the preceding quarter (or
shorter period commencing with the date hereof or ending with the Revolving
Credit Maturity Date or the date on which all Letters of Credit have been
canceled or have expired and the Revolving Credit Commitments of all Lenders
shall have been terminated) at a rate equal to the Applicable Percentage from
time to time used to determine the interest rate on Revolving Credit Borrowings
comprised of Eurodollar Loans pursuant to Section 2.06, and (ii) to the Issuing
Bank with respect to each Letter of Credit the standard fronting, issuance and
drawing fees specified from time to time by the Issuing Bank (the "Issuing Bank
Fees"). All L/C Participation Fees and Issuing Bank Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days.
All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly to
the Issuing Bank. Once paid, none of the Fees shall be refundable under any
circumstances; provided, however, that the foregoing shall in no event
constitute a waiver of or otherwise affect any claims the Borrower may have
against any other party to this Agreement.
32
27
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing, including each Swingline
Loan, shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, when the Alternate
Base Rate is determined by reference to the Prime Rate and over a year of 360
days at all other times) at a rate per annum equal to the Alternate Base Rate
plus (x) in the case of Revolving Loans and Tranche A Term Loans, the Applicable
Percentage in effect from time to time and (y) in the case of Tranche B Term
Loans, 2.25%.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus (x) in the case of Revolving Loans and Tranche A Term Loans, the Applicable
Percentage in effect from time to time and (y) in the case of Tranche B Term
Loans, 3.25%.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be determined
by the Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Loan Document,
the Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal,
at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus 2%
per annum and (b) in all other cases, at the rate per annum applicable at such
time to ABR Loans plus 2% per annum.
SECTION 2.08. Alternate Rate of Interest. In the event and on each
occasion that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not exceed
the cost to any Lender of making or maintaining its Eurodollar Loan during such
Interest Period, or that reasonable means do not exist for ascertaining the
Adjusted LIBO Rate, the Administrative Agent shall, as soon as practicable
thereafter, give written or telecopy notice of such determination to the
Borrower and the Lenders. In the event of any such determination, until the
Administrative Agent shall have advised the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, any request by the
Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall be
deemed to be a request for an ABR Borrowing. Each determination by the
Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Term
Loan Commitments shall automatically terminate at 5:00 p.m., New York City time,
on the Closing Date. The Revolving Credit Commitments, the Swingline Commitment
and the L/C Commitment shall automatically terminate at 5:00 p.m., New York City
time, on the Revolving Credit Maturity Date. Notwithstanding the foregoing, all
the Commitments shall
33
28
automatically terminate at 5:00 p.m., New York City time, on March 15, 1998, if
the initial Credit Event shall not have occurred by such time.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Tranche A Commitments, the Tranche B Commitments or the Revolving Credit
Commitments; provided, however, that (i) each partial reduction of the Tranche A
Commitments, the Tranche B Commitments or the Revolving Credit Commitments shall
be in an integral multiple of $1,000,000 and in a minimum amount of $1,000,000
and (ii) the Total Revolving Credit Commitment shall not be reduced to an amount
that is less than the sum of the Aggregate Revolving Credit Exposure at the
time.
(c) Each reduction in the Tranche A Commitments, the Tranche B
Commitments or the Revolving Credit Commitments hereunder shall be made ratably
among the Lenders in accordance with their respective applicable Commitments.
The Borrower shall pay to the Administrative Agent for the account of the
applicable Lenders, on the date of each termination or reduction, the Commitment
Fees on the amount of the Commitments so terminated or reduced accrued to but
excluding the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:00 (noon), New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 12:00 (noon), New York City time, three
Business Days prior to conversion or continuation, to convert any ABR Borrowing
(other than a Swingline Loan) into a Eurodollar Borrowing or to continue any
Eurodollar Borrowing as a Eurodollar Borrowing for an additional Interest
Period, and (c) not later than 12:00 (noon), New York City time, three Business
Days prior to conversion, to convert the Interest Period with respect to any
Eurodollar Borrowing to another permissible Interest Period, subject in each
case to the following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal amounts
of the Loans comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections 2.02(a)
and (b) regarding the principal amount and maximum number of Borrowings
of the relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the
new Loan of such Lender resulting from such conversion and reducing the
Loan (or portion thereof) of such Lender being converted by an
equivalent principal amount; accrued interest on any Eurodollar Loan
(or portion thereof) being converted shall be paid by the Borrower at
the time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time other
than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.16;
34
29
(v) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or continued as
a Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be
converted into or continued as a Eurodollar Borrowing by reason of the
immediately preceding clause shall be automatically converted at the
end of the Interest Period in effect for such Borrowing into an ABR
Borrowing;
(vii) no Interest Period may be selected for any Tranche A
Term Borrowing or Tranche B Term Borrowing that is a Eurodollar
Borrowing that would end later than a Term Loan Repayment Date
occurring on or after the first day of such Interest Period if, after
giving effect to such selection, the aggregate outstanding amount of
(A) the Tranche A Term Borrowings or Tranche B Term Borrowings, as the
case may be, that are Eurodollar Borrowings with Interest Periods
ending on or prior to such Term Loan Repayment Date and (B) the Tranche
A Term Borrowings or Tranche B Term Borrowings, as the case may be,
that are ABR Borrowings would not be at least equal to the principal
amount of Tranche A Term Borrowings or Tranche B Term Borrowings to be
paid on such Term Loan Repayment Date; and
(viii) upon notice to the Borrower from the Administrative
Agent given at the request of the Required Lenders, after the
occurrence and during the continuance of a Default or Event of Default,
no outstanding Loan may be converted into, or continued as, a
Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing or
an ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall advise the Lenders of any notice given
pursuant to this Section 2.10 and of each Lender's portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Borrowing into a subsequent Interest
Period (and shall not otherwise have given notice in accordance with this
Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the
Interest Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into a new Interest Period as an ABR Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) (i) The Borrower shall
pay to the Administrative Agent, for the accounts of the Lenders, on the dates
set forth below, or if any such date is not a Business Day, on the next
preceding Business Day (each such date being a "Tranche A Term Loan Repayment
Date"), a principal amount of the Tranche A Term Loans equal to the amount set
forth below for such date (subject to adjustment from time to time pursuant to
Sections 2.11(b), 2.12 and 2.13(h)), together in each case with accrued and
unpaid interest on the principal amount to be paid to but excluding the date of
such payment:
35
30
Date Amount
---- ------
September 30, 1998 $2,250,000
December 31, 1998 2,250,000
March 31, 1999 2,812,500
June 30, 1999 2,812,500
September 30, 1999 2,812,500
December 31, 1999 2,812,500
March 31, 2000 3,375,000
June 30, 2000 3,375,000
September 30, 2000 3,375,000
December 31, 2000 3,375,000
March 31, 2001 3,937,500
June 30, 2001 3,937,500
September 30, 2001 3,937,500
December 31, 2001 3,937,500
March 31, 2002 5,625,000
June 30, 2002 5,625,000
September 30, 2002 5,625,000
December 31, 2002 5,625,000
March 31, 2003 5,625,000
June 30, 2003 5,625,000
September 30, 2003 5,625,000
December 31, 2003 5,625,000
(ii) The Borrower shall pay to the Administrative Agent, for the
accounts of the Lenders, on the dates set forth below or, if any such date is
not a Business Day, on the next preceding Business Day (each such date being a
"Tranche B Term Loan Repayment Date"), a principal amount of the Tranche B Term
Loans equal to the amount set forth below for such date (subject to adjustment
from time to time pursuant to Sections 2.11(b), 2.12 and 2.13(h)), together in
each case with accrued and unpaid interest on the principal amount to be paid to
but excluding the date of such payment:
Date Amount
---- ------
March 31, 1998 $ 212,500
June 30, 1998 212,500
September 30, 1998 212,500
December 31, 1998 212,500
March 31, 1999 212,500
June 30, 1999 212,500
September 30, 1999 212,500
December 31, 1999 212,500
March 31, 2000 212,500
June 30, 2000 212,500
36
31
Date Amount
---- ------
September 30, 2000 212,500
December 31, 2000 212,500
March 31, 2001 212,500
June 30, 2001 212,500
September 30, 2001 212,500
December 31, 2001 212,500
March 31, 2002 212,500
June 30, 2002 212,500
September 30, 2002 212,500
December 31, 2002 212,500
March 31, 2003 212,500
June 30, 2003 212,500
September 30, 2003 212,500
December 31, 2003 212,500
March 31, 2004 9,987,500
June 30, 2004 9,987,500
September 30, 2004 9,987,500
December 31, 2004 9,987,500
March 31, 2005 9,987,500
June 30, 2005 9,987,500
September 30, 2005 9,987,500
December 31, 2005 9,987,500
(b) In the event and on each occasion that any Term Loan Commitments
shall be reduced or shall expire or terminate other than as a result of the
making of a Term Loan, the installments payable on each Term Loan Repayment Date
shall be reduced pro rata by an aggregate amount equal to the amount of such
reduction, expiration or termination.
(c) To the extent not previously paid, all Tranche A Term Loans and
Tranche B Term Loans shall be due and payable on the Tranche A Maturity Date and
Tranche B Maturity Date, respectively, together with accrued and unpaid
interest on the principal amount to be paid to but excluding the date of
payment.
(d) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon at
least three Business Days' prior written or telecopy notice (or telephone notice
promptly confirmed by written or telecopy notice) to the Administrative Agent
before 11:00 a.m., New York City time; provided, however, that each partial
prepayment shall be in an amount that is an integral multiple of $1,000,000 and
not less than $1,000,000.
(b) Optional prepayments of Term Loans shall be allocated pro rata
between the then-outstanding Tranche A Term Loans and Tranche B Term Loans and
applied pro rata against the remaining scheduled installments of principal due
in respect of the Tranche A Term Loans and Tranche B Term Loans under Sections
2.11(a)(i) and (ii), respectively.
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All prepayments under this Section
2.12 shall be subject to Section 2.16 but
37
32
otherwise without premium or penalty. All prepayments under this Section 2.12
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
SECTION 2.13. Mandatory Prepayments. (a) In the event of any
termination of all the Revolving Credit Commitments, the Borrower shall repay or
prepay all its outstanding Revolving Credit Borrowings and all outstanding
Swingline Loans on the date of such termination. In the event of any partial
reduction of the Revolving Credit Commitments, then (i) at or prior to the
effective date of such reduction, the Administrative Agent shall notify the
Borrower and the Revolving Credit Lenders of the Aggregate Revolving Credit
Exposure after giving effect thereto and (ii) if the Aggregate Revolving Credit
Exposure would exceed the Total Revolving Credit Commitment after giving effect
to such reduction or termination, then the Borrower shall, on the date of such
reduction or termination, repay or prepay Revolving Credit Borrowings or
Swingline Loans (or a combination thereof) in an amount sufficient to eliminate
such excess.
(b) If on any date the Aggregate Revolving Credit Exposure shall exceed
the Borrowing Base, the Borrower shall on such date apply an amount equal to
such excess first, to prepay the then outstanding Revolving Loans (if any) and
Swingline Loans (if any) and second, to the extent of any remaining excess
(after the prepayment of Revolving Loans and Swingline Loans), to replace
outstanding Letters of Credit and deposit an amount in cash in a cash collateral
account established with the Collateral Agent for the benefit of the Secured
Parties.
(c) Not later than the third Business Day following the completion of
any Asset Sale, the Borrower shall apply 100% of the Net Cash Proceeds received
with respect thereto to prepay outstanding Term Loans in accordance with
paragraph (h) below.
(d) In the event that, at any time, (i) the Borrower does not use any
or all of the Net Cash Proceeds (deposited in an account with the Administrative
Agent pursuant to clause (iii) of the proviso contained in the definition of
"Asset Sale" in Section 1.01) from the sale of a brand name pharmaceutical
product line to purchase additional brand name pharmaceutical product lines
within six months of the date of closing of such sale or (ii) the aggregate
amount deposited in all such accounts exceeds $25,000,000 (any such amounts
described in clause (i) or (ii) above being called "Excess Proceeds"), the
Borrower shall apply 100% of the Excess Proceeds to prepay outstanding Term
Loans in accordance with paragraph (h) below.
(e) In the event and on each occasion that an Equity Issuance occurs,
the Borrower shall, substantially simultaneously with (and in any event not
later than the third Business Day next following) the occurrence of such Equity
Issuance, apply 75% of the Net Cash Proceeds therefrom to prepay outstanding
Term Loans in accordance with paragraph (h) below.
(f) Not later than the earlier of (i) 90 days after the end of each
fiscal year of the Borrower, commencing with the fiscal year ending December 31,
1998, and (ii) the date on which the financial statements with respect to such
fiscal year are delivered pursuant to Section 5.03(a), the Borrower shall prepay
outstanding Term Loans in accordance with paragraph (h) below in an aggregate
principal amount equal to 75% of Excess Cash Flow for such fiscal year.
38
33
(g) In the event that the Borrower or any Subsidiary shall receive Net
Cash Proceeds from the incurrence or disposition of any Indebtedness (other than
Indebtedness permitted under clauses (b), (c), (e) and (f) of Section 6.01), the
Borrower shall, substantially simultaneously with (and in any event not later
than the third Business Day next following) the receipt of such Net Cash
Proceeds, apply an amount equal to 100% of such Net Cash Proceeds to prepay
outstanding Term Loans in accordance with paragraph (h) below.
(h) Mandatory prepayments of outstanding Term Loans under this
Agreement shall, subject to paragraph (k) below, be allocated pro rata between
the then-outstanding Tranche A Term Loans and Tranche B Term Loans and applied
pro rata against the remaining scheduled installments of principal due in
respect of Tranche A Term Loans or Tranche B Term Loans under Section 2.11(a)(i)
and (ii), respectively.
(i) The Borrower shall deliver to the Administrative Agent, at the time
of each pre payment required under this Section 2.13, (i) a certificate signed
by a Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such pre payment and (ii) to the extent
practicable, at least three days prior written notice of such prepayment. Each
notice of prepayment shall specify the prepayment date, the Type of each Loan
being prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All prepayments of Borrowings under this Section 2.13 shall be subject
to Section 2.16, but shall otherwise be without premium or penalty.
(j) Amounts to be applied pursuant to this Section 2.13 to the
prepayment of Term Loans and Revolving Loans shall be applied first to reduce
outstanding ABR Term Loans or ABR Revolving Loans, as the case may be, and then
to prepay Eurodollar Term Loans or Eurodollar Revolving Loans, as the case may
be.
(k) Any Tranche B Lender may elect, by notice to the Administrative
Agent in writing (or by telephone or telecopy promptly confirmed in writing) at
least one Business Day prior to any prepayment of Tranche B Term Loans required
to be made by the Borrower for the account of such Lender pursuant to this
Section 2.13, to cause all or a portion of such prepayment to be applied instead
to prepay Tranche A Term Loans in accordance with paragraph (h) above; provided
that no Tranche B Lender shall be entitled to make such election if at the time
thereof no Tranche A Term Loans are outstanding.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or the Issuing
Bank of the principal of or interest on any Eurodollar Loan made by such Lender
or any Fees or other amounts payable hereunder (other than changes in respect of
taxes imposed on the overall net income of such Lender or the Issuing Bank by
the jurisdiction in which such Lender or the Issuing Bank has its principal
office or by any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or the Issuing Bank (except any such reserve requirement
which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or
the Issuing Bank or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein, and the result of any of the foregoing shall be to
increase the cost to
39
34
such Lender or the Issuing Bank of making or maintaining any Eurodollar Loan or
increase the cost to any Lender of issuing or maintaining any Letter of Credit
or purchasing or maintaining a participation therein or to reduce the amount of
any sum received or receivable by such Lender or the Issuing Bank hereunder
(whether of principal, interest or otherwise) by an amount deemed by such Lender
or the Issuing Bank to be material, then the Borrower will pay to such Lender or
the Issuing Bank, as the case may be, upon demand such additional amount or
amounts as will compensate such Lender or the Issuing Bank, as the case may be,
for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that the
adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the date hereof in any
such law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or the Issuing Bank or any Lender's or the
Issuing Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any Governmental Authority
has or would have the effect of reducing the rate of return on such Lender's or
the Issuing Bank's capital or on the capital of such Lender's or the Issuing
Bank's holding company, if any, as a consequence of this Agreement or the Loans
made or participations in Letters of Credit purchased by such Lender pursuant
hereto or the Letters of Credit issued by the Issuing Bank pursuant hereto to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such applicability,
adoption, change or compliance (taking into consideration such Lender's or the
Issuing Bank's policies and the policies of such Lender's or the Issuing Bank's
holding company with respect to capital adequacy) by an amount deemed by such
Lender or the Issuing Bank to be material, then from time to time the Borrower
shall pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank
or such Lender's or the Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as applicable, as specified in paragraph (a) or (b), together
with supporting documentation or computations, above shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Bank the amount shown as due on any such certificate
delivered by it within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation. The
protection of this Section shall be available to each Lender and the Issuing
Bank regardless of any possible contention of the invalidity or inapplicability
of the law, rule, regulation, agreement, guideline or other change or condition
that shall have occurred or been imposed.
SECTION 2.15. Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or
40
34
interpretation thereof shall make it unlawful for any Lender to make or maintain
any Eurodollar Loan or to give effect to its obligations as contemplated hereby
with respect to any Eurodollar Loan, then, by written notice to the Borrower and
to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such
Lender hereunder (or be continued for additional Interest Periods and
ABR Loans will not thereafter (for such duration) be converted into
Eurodollar Loans), whereupon any request for a Eurodollar Borrowing (or
to convert an ABR Borrowing to a Eurodollar Borrowing or to continue a
Eurodollar Borrowing for an additional Interest Period) shall, as to
such Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such for an additional Interest Period or to
convert a Eurodollar Loan into an ABR Loan, as the case may be), unless
such declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as of
the effective date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal of
any Eurodollar Loan prior to the end of the Interest Period in effect therefor,
(ii) the conversion of any Eurodollar Loan to an ABR Loan, or the conversion of
the Interest Period with respect to any Eurodollar Loan, in each case other than
on the last day of the Interest Period in effect therefor, or (iii) any
Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to be
made pursuant to a conversion or continuation under Section 2.10) not being made
after notice of such Loan shall have been given by the Borrower hereunder (any
of the events referred to in this clause (a) being called a "Breakage Event") or
(b) any default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender setting forth any amount or amounts which
such Lender
41
36
is entitled to receive pursuant to this Section 2.16, together with supporting
documentation or computations, shall be delivered to the Borrower and shall be
conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as provided below in this
Section 2.17 with respect to Swingline Loans and as required under Sections
2.13(k) and 2.15, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the Commitment
Fees, each reduction of the Term Loan Commitments or the Revolving Credit
Commitments and each conversion of any Borrowing to or continuation of any
Borrowing as a Borrowing of any Type shall be allocated pro rata among the
Lenders in accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). For purposes of
determining the available Revolving Credit Commitments of the Lenders at any
time, each outstanding Swingline Loan shall be deemed to have utilized the
Revolving Credit Commitments of the Lenders (including those Lenders which shall
not have made Swingline Loans) pro rata in accordance with such respective
Revolving Credit Commitments. Each Lender agrees that in computing such Lender's
portion of any Borrowing to be made hereunder, the Administrative Agent may, in
its discretion, round each Lender's percentage of such Borrowing to the next
higher or lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or L/C Disbursement as a result of which the unpaid principal
portion of its Tranche A Term Loans, Tranche B Term Loans and Revolving Loans
and participations in L/C Disbursements shall be proportionately less than the
unpaid principal portion of the Tranche A Term Loans, Tranche B Term Loans and
Revolving Loans and participations in L/C Disbursements of any other Lender, it
shall be deemed simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to such other Lender the purchase price for, a
participation in the Tranche A Term Loans, Tranche B Term Loans and Revolving
Loans and L/C Exposure, as the case may be, of such other Lender, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate unpaid principal amount of the Tranche A Term
Loans, Tranche B Term Loans and Revolving Loans and L/C Exposure and
participations in Tranche A Term Loans, Tranche B Term Loans and Revolving Loans
and L/C Exposure held by all the Lenders; provided, however, that (i) if any
such participations are purchased pursuant to this Section 2.18 and the payment
giving rise thereto shall thereafter be recovered, such participations shall be
rescinded to the extent of such recovery and the purchase price restored without
interest, and (ii) the provisions of this paragraph shall not be construed to
apply to any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in L/C Disbursements to any assignee or participant,
other than to the Borrower or any of the Subsidiaries or any Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in a Term Loan or Revolving Loan or L/C Disbursement
deemed to have been so purchased may exercise any and all rights of banker's
lien, setoff or
42
37
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason of such participation as fully as if such Lender had made a
Loan directly to the Borrower in the amount of such participation.
SECTION 2.19. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 1:00 p.m., New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent,
be deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. Each such payment (other than (i) Issuing Bank
Fees, which shall be paid directly to the Issuing Bank, (ii) principal of and
interest on Swingline Loans, which shall be paid directly to the Swingline
Lender except as otherwise provided in Section 2.22(e) and (iii) payments
pursuant to Sections 2.14, 2.16, 2.20 and 9.05 shall be made directly to the
persons entitled thereto and payments pursuant to other Loan Documents shall be
made to the persons specified therein) shall be made to the Administrative Agent
at its offices at Eleven Madison Avenue, New York, New York 10010, or as
otherwise directed.
(b) The Administrative Agent shall distribute any such payments
received by it for the account of any other person to the appropriate recipient
promptly following receipt thereof. Whenever any payment (including principal of
or interest on any Borrowing or any Fees or other amounts) hereunder or under
any other Loan Document shall become due, or otherwise would occur, on a day
that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
(c) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed L/C
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed L/C Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed
L/C Disbursements then due to such parties.
SECTION 2.20. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
43
38
(c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or the Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall, after having received from the
Borrower notice of the availability of such exemptions from or reductions of
withholding tax, as well as all such appropriate documentation prescribed by
applicable law, deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15 or (iii) the
Borrower is required to pay any amount to any Lender or the Issuing Bank or any
Governmental Authority on account of any Lender or the Issuing Bank pursuant to
Section 2.20, the Borrower may, at its sole expense and effort (including with
respect to the processing and recordation fee referred to in Section 9.04(b)),
upon notice to such Lender or the Issuing Bank and the Administrative Agent,
require such Lender or the Issuing Bank to transfer and assign, without recourse
(in accordance with and subject to the restrictions contained in Section 9.04),
all of its interests, rights and obligations under this Agreement to an assignee
that shall assume such assigned obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (w) such assignment
will result in a reduction in the claim for compensation under Section 2.14 or
in the withdrawal of the notice under Section 2.14 or in the reduction of
payments under Section 2.20, as the case may be, (x) such assignment shall not
conflict with any law, rule or regulation or order of any court or other
Governmental Authority having jurisdiction, (y) the Borrower shall have received
the prior written consent of the Administrative Agent (and, if a Revolving
Credit Commitment is being assigned, of the Issuing Bank and the Swingline
Lender), which consent shall not unreasonably be withheld, and (z) the Borrower
or such assignee shall have paid to the affected Lender or the Issuing Bank in
immediately available funds an amount equal to the sum of the principal of and
interest accrued to the date
44
39
of such payment on the outstanding Loans or L/C Disbursements of such Lender or
the Issuing Bank, respectively, plus all Fees and other amounts accrued for the
account of such Lender or the Issuing Bank hereunder (including any amounts
under Section 2.14 and Section 2.16); provided further that, if prior to any
such transfer and assignment the circumstances or event that resulted in such
Lender's or the Issuing Bank's claim for compensation under Section 2.14 or
notice under Section 2.15 or the amounts paid pursuant to Section 2.20, as the
case may be, cease to cause such Lender or the Issuing Bank to suffer increased
costs or reductions in amounts received or receivable or reduction in return on
capital, or cease to have the consequences specified in Section 2.15, or cease
to result in amounts being payable under Section 2.20, as the case may be
(including as a result of any action taken by such Lender or the Issuing Bank
pursuant to paragraph (b) below), or if such Lender or the Issuing Bank shall
waive its right to claim further compensation under Section 2.14 in respect of
such circumstances or event or shall withdraw its notice under Section 2.15 or
shall waive its right to further payments under Section 2.20 in respect of such
circumstances or event, as the case may be, then such Lender or the Issuing Bank
shall not thereafter be required to make any such transfer and assignment
hereunder.
(b) If (i) any Lender or the Issuing Bank shall request compensation
under Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.15 or (iii) the Borrower is required to pay any amount to
any Lender, the Issuing Bank or any Governmental Authority on account of any
Lender or the Issuing Bank, pursuant to Section 2.20, then such Lender or the
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Borrower or (y) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice pursuant to
Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as the
case may be, in the future. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender or the Issuing Bank in connection with
any such filing or assignment, delegation and transfer.
SECTION 2.22. Swingline Loans. (a) Swingline Commitment. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans to the Borrower at any time
and from time to time on and after the Closing Date and until the earlier of the
Revolving Credit Maturity Date and the termination of the Revolving Credit
Commitments in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of all Swingline Loans exceeding $5,000,000 or (ii) the
Aggregate Revolving Credit Exposure, after giving effect to any Swingline Loan,
exceeding the lesser of (x) the Total Revolving Credit Commitment and (y) the
Borrowing Base in effect at such time. Each Swingline Loan shall be in a
principal amount that is an integral multiple of $500,000. Within the foregoing
limits, the Borrower may borrow, pay or prepay and reborrow Swingline Loans
hereunder, subject to the terms, conditions and limitations set forth herein.
(b) Swingline Loans. The Borrower shall notify the Administrative Agent
by telecopy, or by telephone (confirmed by telecopy), not later than 10:00 a.m.,
New York City time, on the day of a proposed Swingline Loan. Such notice shall
be delivered on a Business Day, shall be irrevocable and shall refer to this
Agreement and shall specify the requested
45
40
date (which shall be a Business Day) and amount of such Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any notice
received from the Borrower pursuant to this paragraph (b). The Swingline Lender
shall make each Swingline Loan available to the Borrower by means of a credit to
the general deposit account of the Borrower with the Swingline Lender by 3:00
p.m., New York City time, on the day such Swingline Loan is so requested.
(c) Prepayment. The Borrower shall have the right at any time and from
time to time to prepay any Swingline Loan, in whole or in part, upon giving
written or telecopy notice (or telephone notice promptly confirmed by written,
or telecopy notice) to the Swingline Lender and to the Administrative Agent
before 12:00 (noon), New York City time, on the date of prepayment at the
Swingline Lender's address for notices specified on Schedule 2.01. All principal
payments of Swingline Loans shall be accompanied by accrued interest on the
principal amount being repaid to the date of payment.
(d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to
the provisions of Section 2.07, shall bear interest as provided in Section
2.06(a).
(e) Participations. The Swingline Lender may, by written notice given
to the Administrative Agent not later than 10:00 a.m., New York City time, on
any Business Day, require the Revolving Credit Lenders to acquire participations
on such Business Day in all or a portion of the Swingline Loans outstanding.
Such notice shall specify the aggregate amount of Swingline Loans in which
Revolving Credit Lenders will participate. The Administrative Agent will,
promptly upon receipt of such notice, give notice to each Revolving Credit
Lender, specifying in such notice such Lender's Pro Rata Percentage of such
Swingline Loan or Loans. In furtherance of the foregoing, each Revolving Credit
Lender hereby irrevocably, absolutely and unconditionally agrees, upon receipt
of notice as provided above, to pay to the Administrative Agent, for the account
of the Swingline Lender, such Revolving Credit Lender's Pro Rata Percentage of
such Swingline Loan or Loans. Each Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is irrevocable, absolute and unconditional and shall not be affected
by any circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default or the termination of the Revolving Credit
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Lender shall comply with
its obligation under this paragraph by wire transfer of immediately available
funds, in the same manner as provided in Section 2.02(c) with respect to Loans
made by such Lender (and Section 2.02(c) shall apply, mutatis mutandis, to the
payment obligations of the Lenders) and the Administrative Agent shall promptly
pay to the Swingline Lender the amounts so received by it from the Lenders. The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from the
Borrower in respect of a Swingline Loan after receipt by the Swingline Lender of
the proceeds of a sale of participations therein shall be promptly remitted to
the Administrative Agent; any such amounts received by the Administrative Agent
shall be promptly remitted by the Administrative Agent to the Lenders that shall
have made their payments pursuant to this paragraph and to the Swingline Lender,
as their interests may appear. The purchase of participations in a Swingline
Loan pursuant to this paragraph shall not relieve the Borrower of any default in
the payment thereof.
46
41
SECTION 2.23. Letters of Credit. (a) General. The Borrower may request
the issuance of a Letter of Credit for its own account or for the account of any
Wholly Owned Subsidiary, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time while the
Revolving Credit Commitments remain in effect. This Section shall not be
construed to impose an obligation upon the Issuing Bank to issue any Letter of
Credit that is inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance; Certain Conditions. In order to request the
issuance of a Letter of Credit, the Borrower shall hand deliver or telecopy to
the Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance) a notice requesting the issuance of a Letter of
Credit and setting forth the date of issuance, the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such Letter of Credit. A
Letter of Credit shall be issued only if, and upon issuance of each Letter of
Credit the Borrower shall be deemed to represent and warrant that, after giving
effect to such issuance (A) the L/C Exposure shall not exceed $5,000,000 and (B)
the Aggregate Revolving Credit Exposure shall not exceed the lesser of (x) the
Total Revolving Credit Commitment and (y) the Borrowing Base in effect at such
time.
(c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Revolving Credit Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date.
(d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the applicable Issuing Bank, a participation in such Letter of
Credit equal to such Lender's Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit. In consideration and in furtherance of the foregoing,
each Revolving Credit Lender hereby irrevocably, absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lender's Pro Rata Percentage of each L/C Disbursement made by the Issuing
Bank and not reimbursed by the Borrower forthwith on the date due as provided in
Section 2.02(f). Each Revolving Credit Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is irrevocable, absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or an Event of Default or the termination of the
Revolving Credit Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, the Borrower shall pay to the Administrative
Agent an amount equal to such L/C Disbursement not later than two hours after
the Borrower shall have received notice from the Issuing Bank that payment of
such draft will be made, or, if the Borrower shall have received such notice
later than 10:00 a.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following Business Day.
47
42
(f) Obligations Absolute. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, setoff, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate thereof
or any other person may at any time have against the beneficiary under
any Letter of Credit, the Issuing Bank, the Administrative Agent or any
Lender or any other person, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; and
(vi) any other act, or omission to act, or delay of any kind
of the Issuing Bank, the Lenders, the Administrative Agent or any other
person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of the
Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept documents that
appear on their face to be in substantial compliance with the terms of a Letter
of Credit, without responsibility for further investigation, and make payment
under such Letter of Credit, unless, in the Issuing Bank's judgment, it has
received information that proves any such documents to be forged or fraudulent;
provided that the Issuing Bank shall not be liable in any respect for any error
made as a result of, or damages resulting from, the exercise of its judgment
with regard to any such documents if such judgment is made in good faith. The
parties hereto expressly agree that (i) the Issuing Bank's exclusive reliance on
the documents presented to it under such Letter of Credit as to any and all
matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to
48
43
the beneficiary thereunder equals the amount of such draft and whether or not
any document presented pursuant to such Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be in
substantial compliance with the term of a Letter of Credit, and whether or not
any other statement or any other document presented pursuant to such Letter of
Credit proves to be forged, fraudulent or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever and (ii) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute wilful misconduct or gross negligence of the Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by telecopy, to the Administrative Agent
and the Borrower of such demand for payment and whether the Issuing Bank has
made or will make an L/C Disbursement thereunder; provided that any failure to
give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Revolving Credit Lenders with
respect to any such L/C Disbursement. The Administrative Agent shall promptly
give each Revolving Credit Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of the Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of the
date of payment by the Borrower or the date on which interest shall commence to
accrue thereon as provided in Section 2.02(f), at the rate per annum that would
apply to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent and
the Lenders. Subject to the next succeeding paragraph, upon the acceptance of
any appointment as the Issuing Bank hereunder by a Lender that shall agree to
serve as a successor Issuing Bank, such successor shall succeed to and become
vested with all the interests, rights and obligations of the retiring Issuing
Bank and the retiring Issuing Bank shall be discharged from its obligations to
issue additional Letters of Credit hereunder. At the time such removal or
resignation shall become effective, the Borrower shall pay all accrued and
unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any appointment
as the Issuing Bank hereunder by a successor Lender shall be evidenced by an
agreement entered into by such successor, in a form satisfactory to the Borrower
and the Administrative Agent, and, from and after the effective date of such
agreement, (i) such successor Lender shall have all the rights and obligations
of the previous Issuing Bank under this Agreement and the other Loan Documents
and (ii) references herein and in the other Loan Documents to the term "Issuing
Bank" shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require. After the resignation or removal of the Issuing Bank hereunder, the
retiring Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement and the other
Loan Documents with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters of
Credit.
49
44
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date. Such deposit shall be held by the Collateral Agent as
collateral for the payment and performance of the Obligations. The Collateral
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits in Permitted Investments, which investments shall be
made at the option and sole discretion of the Collateral Agent, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) automatically be
applied by the Administrative Agent to reimburse the Issuing Bank for L/C
Disbursements for which it has not been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Borrower for the L/C
Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.
(k) Reporting Requirements of Issuing Bank. Within two Business Days
following the last day of each calendar month and on the last day of each March,
June, September and December, the Issuing Bank shall deliver to the
Administrative Agent a report detailing all activity during the preceding
calendar month with respect to any Letters of Credit issued by the Issuing Bank,
including the face amount, the account party, the beneficiary and the expiration
date of such Letters of Credit and any other information with respect thereto as
may be requested by the Administrative Agent.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders that:
SECTION 3.01. Organization; Powers. The Borrower and each of the
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan
50
45
Documents and each other agreement or instrument contemplated hereby to which it
is or will be a party and, in the case of the Borrower, to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
each Loan Party of each of the Loan Documents, the Borrowings hereunder and the
completion of the Acquisition (collectively, the "Transactions") (a) have been
duly authorized by all requisite corporate and, if required, stockholder action
and (b) will not (i) violate (A) any provision of law, statute, rule or
regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of the Borrower or any of the Subsidiaries,
(B) any order of any Governmental Authority or (C) any provision of any
indenture, agreement or other instrument to which the Borrower or any of the
Subsidiaries is a party or by which any of them or any of their property is or
may be bound, (ii) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under, or give rise to
any right to accelerate or to require the prepayment, repurchase or redemption
of any obligation under any such indenture, agreement or other instrument or
(iii) result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by the Borrower or any of
the Subsidiaries (other than any Lien created hereunder or under the Security
Documents).
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party thereto will constitute, a legal,
valid and binding obligation of the Borrower or such Loan Party enforceable
against the Borrower or such Loan Party in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of Uniform Commercial Code financing statements and filings with
the United States Patent and Trademark Office and the United States Copyright
Office, (b) recordation of the Mortgages and (c) such as have been made or
obtained and are in full force and effect.
SECTION 3.05. Financial Statements. The Borrower has heretofore
furnished to the Lenders its consolidated and consolidating balance sheets and
statements of income, stockholders' equity and cash flows (a) as of the end of
and for each fiscal year in the three-fiscal year period ended December 31,
1996, and (b) as of the end of and for the fiscal quarter and the portion of the
fiscal year ended September 30, 1997, each audited by and accompanied by the
opinion of Coopers & ▇▇▇▇▇▇▇, independent public accountants. Such financial
statements present fairly the financial condition and results of operations and
cash flows of the Borrower and its consolidated Subsidiaries as of such dates
and for such periods. Such balance sheets and the notes thereto disclose all
material liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis.
(b) The Borrower has heretofore delivered to the Lenders its unaudited
pro forma consolidated balance sheet and statements of income, stockholders'
equity and cash flows as of the end of and for the fiscal year ended December
31, 1997, prepared giving effect to the Transactions as if they had occurred on
such date. Such financial statements have been prepared in good faith by the
Borrower, based on the assumptions used to prepare the pro forma financial
information contained in the Confidential Information Memorandum (which
assumptions are believed by the Borrower on the date hereof and on the Closing
Date to be
51
46
reasonable), are based on the best information available to the Borrower as of
the date of delivery thereof, accurately reflect all adjustments required to be
made to give effect to the Transactions and present fairly on a pro forma basis
the estimated consolidated financial position of the Borrower and its
consolidated Subsidiaries as of such dates, assuming that the Transactions had
actually occurred at such dates.
SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, results of operations, financial
condition or prospects of the Borrower and the Subsidiaries including the assets
acquired by the Borrower as part of the Acquisition, taken as a whole, since
September 30, 1997.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) The
Borrower and each of the Subsidiaries has good and marketable title to, or valid
leasehold interests in, all its material properties and assets (including all
Mortgaged Properties), except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties and assets for their intended purposes. All such material
properties and assets are free and clear of Liens, other than Liens expressly
permitted by Section 6.02, and no material portion of any Mortgaged Property is
subject to any lease, license, sublease or other agreement granting to any
person any right to use, occupy or enjoy the same, except as set forth on
Schedule 3.07(a).
(b) The Borrower and each Subsidiary has complied with all obligations
under all material leases to which it is a party and all such leases are in full
force and effect. The Borrower and each Subsidiary enjoys peaceful and
undisturbed possession under all such material leases.
(c) Except as set forth on Schedule 3.07(c), the Borrower has not
received any notice of, and has no knowledge of, any pending or contemplated
condemnation proceeding affecting any Mortgaged Property or any sale or
disposition thereof in lieu of condemnation.
(d) Neither the Borrower nor any of the Subsidiaries is obligated under
any right of first refusal, option or other contractual right to sell, assign or
otherwise dispose of any Mortgaged Property or any interest therein.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing
Date a list of all Subsidiaries and the direct or indirect ownership interest of
the Borrower therein. The shares of capital stock or other ownership interests
so indicated on Schedule 3.08 are fully paid and non-assessable and are owned by
the Borrower, directly or indirectly, free and clear of all Liens.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth
on Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of the Subsidiaries or any business, property or rights of any such person (i)
that involve any Loan Document or the Transactions, (ii) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect, (iii) that could materially and adversely
effect the ability of the Borrower to fully and timely perform its obligations
under the documents executed in connection with the Transactions or the ability
of the parties to consummate the Transactions
52
47
or (iv) that have or would have, individually or in the aggregate, a reasonable
likelihood of restraining, preventing or imposing burdensome conditions on the
Transactions.
(b) The Borrower and each Subsidiary is in compliance with all laws,
regulations, consent decrees (including the Consent Decree of Permanent
Injunction entered into the United States District Court for the District of New
Jersey in Civil Action No. 93-3525 styled as United States of America ▇.
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company, a corporation, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇
▇▇▇▇, individuals) and orders of any Governmental Authority applicable to it
(including, without limitation, employee health and safety, margin regulations
and Environmental Laws) or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to comply,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No Default has occurred and is continuing.
(c) None of the Borrower or any of the Subsidiaries or any of their
respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permit) or any
restrictions of record or agreements affecting the Mortgaged Property, or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.
(d) Certificates of occupancy and permits are in effect for each
Mortgaged Property as currently constructed, and true and complete copies of
such certificates of occupancy have been delivered to the Collateral Agent as
mortgagee with respect to each Mortgaged Property.
SECTION 3.10. Agreements. (a) Neither the Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in default in
any manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, where such default could reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) Neither the Borrower nor
any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation G, U
or X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act. Neither the Borrower nor any of the Subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding
53
48
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of
the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of the Borrower and the Subsidiaries
has filed or caused to be filed all Federal, state, local and foreign tax
returns or materials required to have been filed by it and has paid or caused to
be paid all taxes due and payable by it and all assessments received by it,
except taxes that are being contested in good faith by appropriate proceedings
and for which the Borrower or such Subsidiary, as applicable, shall have set
aside on its books adequate reserves.
SECTION 3.15. No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto contained,
contains or will contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were, are or will be made,
not misleading; provided that to the extent any such information, report,
financial statement, exhibit or schedule was based upon or constitutes a
forecast or projection, the Borrower represents only that it acted in good faith
and utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and its
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrower or
any of its ERISA Affiliates. The present value of all benefit liabilities under
each Plan (based on those assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the last annual valuation
date applicable thereto, exceed the fair market value of the assets of such
Plan, and the present value of all benefit liabilities of all underfunded Plans
(based on those assumptions used to fund each such Plan) did not, as of the last
annual valuation dates applicable thereto, exceed the fair market value of the
assets of all such underfunded Plans.
SECTION 3.17. Environmental Matters. Except as set forth in Schedule
3.17:
(a) The properties owned, leased or operated by the Borrower and the
Subsidiaries (the "Properties") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation of,
(ii) require Remedial Action under, or (iii) could reasonably be expected to
give rise to liability under, Environmental Laws, which violations, Remedial
Actions and liabilities, in the aggregate, could result in a Material Adverse
Effect;
(b) The Properties and all operations of the Borrower and the
Subsidiaries are in compliance, and in the last five years have been in
compliance, with all Environmental Laws and all necessary Environmental Permits
have been obtained and are in effect, except to the
54
49
extent that such non-compliance or failure to obtain any necessary permits, in
the aggregate, could not result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases at, from, under
or proximate to the Properties or otherwise in connection with the operations of
the Borrower or the Subsidiaries, which Releases or threatened Releases, in the
aggregate, could result in a Material Adverse Effect;
(d) Neither the Borrower nor any of the Subsidiaries has received any
notice of an Environmental Claim in connection with the Properties or the
operations of the Borrower or the Subsidiaries or with regard to any person
whose liabilities for environmental matters the Borrower or the Subsidiaries has
retained or assumed, in whole or in part, contractually, by operation of law or
otherwise, which, in the aggregate, could result in a Material Adverse Effect,
nor do the Borrower or the Subsidiaries have reason to believe that any such
Environmental Claim is being threatened; and
(e) Hazardous Materials have not been transported from the Properties,
nor have Hazardous Materials been generated, treated, stored or disposed of at,
on or under any of the Properties in a manner that could give rise to liability
under any Environmental Law, nor have the Borrower or the Subsidiaries retained
or assumed any liability, contractually, by operation of law or otherwise, with
respect to the generation, treatment, storage or disposal of Hazardous
Materials, which transportation, generation, treatment, storage or disposal, or
retained or assumed liabilities, in the aggregate, could result in a Material
Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or by the
Borrower for the Subsidiaries as of the date hereof and the Closing Date. As of
each such date, such insurance is in full force and effect and all premiums have
been duly paid. The Borrower and the Subsidiaries have insurance in such amounts
and covering such risks and liabilities as are in accordance with normal
industry practice.
SECTION 3.19. Security Documents. (a) The Pledge Agreement is effective
to create in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement), and when the Collateral is
delivered to the Collateral Agent the Pledge Agreement will constitute a fully
perfected first priority Lien on and security interest in all right, title and
interest of each pledgor thereunder in such Collateral, in each case prior and
superior in right to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement), and when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate the Security
Agreement will constitute a fully perfected Lien on and security interest in all
right, title and interest of the grantors thereunder in such Collateral (other
than the Intellectual Property, as defined in the Security Agreement), in each
case prior and superior in right to any other person, other than with respect to
Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent
and Trademark Office and the United States Copyright Office, the Security
Agreement will constitute a fully
55
50
perfected Lien on, and security interest in, all right, title and interest of
the grantors thereunder in the Intellectual Property (as defined in the Security
Agreement), in each case prior and superior in right to any other person (it
being understood that subsequent recordings in the United States Patent and
Trademark Office and the United States Copyright Office may be necessary to
perfect a lien on registered trademarks, trademark applications and copyrights
acquired by the grantors after the date hereof).
(d) The Mortgages are effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the Loan Parties' right, title and interest in and to
the Mortgaged Properties and the proceeds thereof, and when the Mortgages are
filed in the offices specified on Schedule 3.19(d), the Mortgages shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Mortgaged Properties and the proceeds
thereof, in each case prior and superior in right to any other person, other
than with respect to the rights of persons pursuant to Liens expressly permitted
by Section 6.02.
SECTION 3.20. Location of Real Property and Leased Premises.
(a) Schedule 3.20(a) lists completely and correctly as of the Closing Date all
real property owned by the Borrower and the Subsidiaries and the addresses
thereof. The Borrower and the Subsidiaries own in fee all the real property set
forth on Schedule 3.20(a).
(b) Schedule 3.20(b) lists completely and correctly as of the Closing
Date all real property leased by the Borrower and the Subsidiaries and the
addresses thereof. The Borrower and the Subsidiaries have valid leases in all
the real property set forth on Schedule 3.20(b).
SECTION 3.21. Labor Matters As of the date hereof and the Closing Date,
there are no strikes, lockouts or slowdowns against the Borrower or any of the
Subsidiaries pending or, to the knowledge of the Borrower, threatened. The hours
worked by and payments made to employees of the Borrower and the Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters. All
payments due from the Borrower or any of the Subsidiaries, or for which any
claim may be made against the Borrower or any of the Subsidiaries, on account of
wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of the Borrower or the applicable
Subsidiary. The consummation of the Transactions will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any of the Subsidiaries
is bound.
SECTION 3.22. Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan made on the Closing Date and after giving effect to the application
of the proceeds of such Loans, (i) the fair value of the assets of each Loan
Party, at a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (ii) the present fair saleable value of the property of
each Loan Party will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(iii) each Loan Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (iv) each Loan Party will not have unreasonably small
capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted following the Closing
Date.
56
51
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing,
including each Borrowing of a Swingline Loan, and on the date of each issuance
of a Letter of Credit (each such event being called a "Credit Event"):
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) or, in the case of the issuance of a
Letter of Credit, the Issuing Bank and the Administrative Agent shall have
received a notice requesting the issuance of such Letter of Credit as required
by Section 2.23(b) or, in the case of the Borrowing of a Swingline Loan, the
Swingline Lender and the Administrative Agent shall have received a notice
requesting such Swingline Loan as required by Section 2.22(b).
(b) The representations and warranties set forth in Article III shall
be true and correct in all material respects on and as of the date of such
Credit Event with the same effect as though made on and as of such date, except
to the extent such representations and warranties expressly relate to an earlier
date.
(c) The Borrower and each other Loan Party shall be in compliance with
all the terms and provisions set forth herein and in each other Loan Document on
its part to be observed or performed, and at the time of and immediately after
such Credit Event, no Event of Default or Default shall have occurred and be
continuing.
Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Credit Event as to the satisfaction
of the conditions set forth in paragraphs (b) and (c) of this Section 4.01. In
the case of the Credit Events occurring on the Closing Date, the conditions set
forth in paragraphs (b) and (c) of this Section 4.01 shall be construed giving
effect to the Acquisition and to the acquisition by the Borrower of any
Subsidiaries acquired by it pursuant thereto.
SECTION 4.02. First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of
itself, the Lenders and the Issuing Bank, a favorable written opinion
of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, corporate counsel for the Borrower, substantially
to the effect set forth in Exhibit H- 1, (A) dated the Closing Date,
(B) addressed to the Issuing Bank, the Administrative Agent and the
Lenders, and (C) covering such other matters relating to the Loan
Documents and the Transactions as the Administrative Agent shall
reasonably request, and the Borrower hereby requests such counsel to
deliver such opinions.
57
52
(b) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Loan Party as of a recent date, from
such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of such Loan Party as in effect on the Closing Date and at all
times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Loan
Party authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party and, in the case of the
Borrower, the Borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect,
(C) that the certificate or articles of incorporation of such Loan
Party have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen signature
of each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of such Loan Party; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as
the Lenders, the Issuing Bank or Cravath, Swaine & ▇▇▇▇▇, counsel for
the Administrative Agent, may reasonably request.
(c) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer
of the Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.01.
(d) The Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder or under any other Loan Document.
(e) The Collateral Requirement shall have been satisfied.
(f) The Collateral Agent shall have received the results of a
search of the Uniform Commercial Code (or equivalent) filings made with
respect to the Loan Parties in the states (or other jurisdictions) in
which the chief executive office of each such person is located, any
offices of such persons in which records have been kept relating to
Accounts and the other jurisdictions in which Uniform Commercial Code
filings (or equivalent filings) are to be made pursuant to clause (b)
of the definition of "Collateral Requirement", together with copies of
the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence satisfactory to the Collateral
Agent that the Liens indicated in any such financing statement (or
similar document) would be permitted under Section 6.02 or have been
released.
(g) The Collateral Agent shall have received a Perfection
Certificate dated the Closing Date and duly executed by a Responsible
Officer of the Borrower.
(h) The Guarantee Requirement shall have been satisfied.
58
53
(i) The Administrative Agent shall have received a Borrowing
Base Certificate dated the Closing Date and executed by a Financial
Officer of the Borrower.
(j) The Administrative Agent shall have received a copy of, or
a certificate as to coverage under, the insurance policies required by
applicable provisions of the Security Documents, each of which shall be
endorsed or otherwise amended to include a "standard" or "New York"
lender's loss payable endorsement and to name the Collateral Agent as
additional insured, in form and substance satisfactory to the
Administrative Agent.
(k) The Administrative Agent shall have received an
environmental assessment report in form, scope and substance reasonably
satisfactory to the Lenders from NTH Consultants, Ltd. ("NTH"), with
respect to the property owned by the Borrower, after giving effect to
the Acquisition, in Rochester, Michigan, and ▇▇▇▇▇▇▇▇, Hampton &
Partners, with respect to the property owned by the Borrower in
Bristol, Tennessee, as to any environmental hazards, liabilities or
Remedial Action to which the Borrower or any of the Subsidiaries may be
subject and the Lenders shall be reasonably satisfied with the nature
and cost of any such hazards, liabilities or Remedial Action and with
the Borrower's plans with respect thereto.
(l) All requisite Governmental Authorities and other third
parties shall have approved or consented to the Transactions and the
other transactions contemplated in connection therewith to the extent
required, in each case to the extent failure to obtain such consent or
approval could have a Material Adverse Effect or could materially and
adversely affect the rights or remedies of the Lenders, the
Administrative Agent, the Issuing Bank or the Swingline Lender and
there shall be no action by any Governmental Authority, actual or
threatened, that has a reasonable likelihood of restraining, preventing
or imposing burdensome conditions on the Transactions or the other
transactions contemplated in connection therewith.
(m) The Administrative Agent shall be reasonably satisfied
with (i) the material terms and conditions of each agreement entered
into in connection with the Acquisition, including without limitation,
the indemnification provisions of the Asset Purchase Agreement, and
(ii) all material legal, tax and accounting matters related to the
Acquisition.
(n)The Acquisition shall have been, or substantially
simultaneously with the initial Credit Event shall be, consummated in
accordance with the Asset Purchase Agreement and applicable law,
without any amendment to or waiver of any material terms or conditions
of the Asset Purchase Agreement not approved by the Lenders. The
Lenders and the Issuing Bank shall have received executed copies of the
Asset Purchase Agreement and all certificates, opinions and other
documents delivered in connection therewith, all certified by a
Financial Officer as complete and correct.
(o) The Administrative Agent shall be reasonably satisfied
with the nature and scope of, and the potential liabilities allocated
with, or arising out of, the environmental matters (i) identified in
the phase I report prepared by NTH and (ii) investigated in connection
with the phase II report prepared by NTH; provided, however, that the
completion of such phase II report shall not be a condition to closing.
59
54
ARTICLE V
Affirmative Covenants
The Borrower covenants and agrees with each Lender that so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document shall have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, the Borrower will, and will cause
each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated;
comply in all material respects with all applicable laws, rules, regulations
(including any zoning, building, Environmental Law, ordinance, code or approval
or any building permits or any restrictions of record or agreements affecting
the Mortgaged Properties) and decrees and orders of any Governmental Authority,
whether now in effect or hereafter enacted; and at all times maintain and
preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition and from time to time
make, or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times.
SECTION 5.02. Obligations and Taxes. Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise that, if unpaid, might
give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
the Borrower shall have set aside on its books adequate reserves with respect
thereto in accordance with GAAP and such contest operates to suspend collection
of the contested obligation, tax, assessment or charge and enforcement of a
Lien and, in the case of a Mortgaged Property, there is no risk of forfeiture
of such property.
60
55
SECTION 5.03. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year, its
consolidated and consolidating balance sheets and related statements
of operations, stockholders' equity and cash flows showing the
financial condition of the Borrower and its consolidated Subsidiaries
as of the close of such fiscal year and the results of its operations
and the operations of such Subsidiaries during such year, all audited
by Coopers & ▇▇▇▇▇▇▇ or other independent public accountants of
recognized national standing acceptable to the Required Lenders and
accompanied by an opinion of such accountants (which shall not be
qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial
condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated and
consolidating balance sheets and related statements of operations,
stockholders' equity and cash flows showing the financial condition of
the Borrower and its consolidated Subsidiaries as of the close of such
fiscal quarter and the results of its operations and the operations of
such Subsidiaries during such fiscal quarter and the then elapsed
portion of the fiscal year, all certified by one of its Financial
Officers as fairly presenting the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements
under sub-paragraph (a) or (b) above, a certificate of the accounting
firm or Financial Officer opining on or certifying such statements
(which certificate, when furnished by an accounting firm, may be
limited to accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that no Event of Default or Default
has occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (ii) setting
forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenants
contained in Sections 6.10, 6.11, 6.12 and 6.13;
(d) on or prior to each date of delivery of the Borrower's
year-end financial statements pursuant to Section 5.03(a), the
Borrower shall provide to each Lender a business plan for the
following five years, in a form satisfactory to the Administrative
Agent;
(e) within 10 days after the end of each calendar month a
certificate in the form of Exhibit I (a "Borrowing Base Certificate")
showing the Borrowing Base as of the close of business on the last day
of such calendar month, each such Certificate to be certified as
complete and correct on behalf of the Borrower by a Financial Officer
of the Borrower;
(f) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other
materials filed by the Borrower or any of the Subsidiaries with the
Securities and Exchange Commission, or any Govern-
61
56
mental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed
to its shareholders, as the case may be; and
(g) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Borrower or any of the Subsidiaries, or compliance with the terms
of any Loan Document, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.04. Litigation and Other Notices. Furnish to the
Administrative Agent, the Issuing Bank and each Lender prompt written notice of
the following:
(a) any Event of Default or Default, specifying the nature
and extent thereof and the corrective action (if any) taken or
proposed to be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Affiliate thereof
that could reasonably be expected to result in a Material Adverse
Effect; and
(c) any other development that has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect.
SECTION 5.05. Employee Benefits. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent as soon as possible after, and in any event within 10 days
after any Responsible Officer of the Borrower or any ERISA Affiliate knows or
has reason to know that, any ERISA Event has occurred that, alone or together
with any other ERISA Events that have occurred could reasonably be expected to
result in liability of the Borrower and/or the Subsidiaries in an aggregate
amount exceeding $1,000,000 or requiring payments exceeding $500,000 in any
year, a statement of a Financial Officer of the Borrower setting forth details
as to such ERISA Event and the action, if any, that the Borrower proposes to
take with respect thereto.
SECTION 5.06. Maintaining Records; Access to Properties and
Inspections. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities.
Subject to the provisions of Section 9.16, each Loan Party will, and will cause
each of the Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender to visit and inspect the financial records
and the properties of the Borrower or any of the Subsidiaries at reasonable
times and as often as reasonably requested and to make extracts from and copies
of such financial records, and permit any representatives designated by the
Administrative Agent or any Lender to discuss the affairs, finances and
condition of the Borrower or any of the Subsidiaries with the officers thereof
and independent accountants therefor.
SECTION 5.07. Use of Proceeds. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in
the preamble to this Agreement.
62
57
SECTION 5.08. Compliance with Environmental Laws. Comply, and cause
all lessees and other persons occupying its Properties to comply, in all
material respects with all Environmental Laws and Environmental Permits
applicable to its operations and Properties; obtain and renew all Environmental
Permits necessary for its operations and Properties; and conduct any Remedial
Action in accordance with Environmental Laws; provided, however, that neither
the Borrower nor any of the Subsidiaries shall be required to undertake any
Remedial Action to the extent that its obligation to do so is being contested
in good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
SECTION 5.09. Preparation of Environmental Reports. If a Default
caused by reason of a breach of Section 3.17 or 5.08 shall have occurred and be
continuing, at the request of the Required Lenders through the Administrative
Agent, provide to the Lenders within 45 days after such request, at the expense
of the Borrower, an environmental site assessment report for the Properties
which are the subject of such default prepared by an environmental consulting
firm acceptable to the Administrative Agent and indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance or
Remedial Action in connection with such Properties.
SECTION 5.10. Audits. (a) Upon the request of the Collateral Agent or
the Required Lenders through the Administrative Agent, but in no event more
frequently than on an annual basis unless an Event of Default shall have
occurred and be continuing and then at any time, permit the Collateral Agent or
the Lenders or professionals (including investment bankers, consultants,
accountants, lawyers and appraisers) retained by the Collateral Agent or the
Lenders to conduct evaluations and appraisals of (i) the Borrower's practices
in the computation of the Borrowing Base and (ii) the assets included in the
Borrowing Base, and pay the reasonable fees and expenses of such professionals.
(b) In connection with any evaluation and appraisal relating to the
computation of the Borrowing Base, agree to maintain such additional reserves
(for purposes of computing the Borrowing Base) in respect of Eligible Accounts
Receivable and Eligible Inventory and make such other adjustments to its
parameters for including Eligible Accounts Receivable and Eligible Inventory in
the Borrowing Base as the Collateral Agent or the Required Lenders through the
Administrative Agent shall require based upon the results of such evaluation
and appraisal.
SECTION 5.11. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to cause the Guarantee Requirement and
the Collateral Requirement to be satisfied at all times.
SECTION 5.12. Real Estate. Within 90 days following the Closing Date,
(i) each of the Security Documents, in form and substance satisfactory to the
Lenders, relating to each of the Mortgaged Properties shall have been duly
executed by the parties thereto and delivered to the Collateral Agent and shall
be in full force and effect, (ii) each of such Mortgaged Properties shall not
be subject to any Lien other than those permitted under Section 6.02, (iii)
each of such Security Documents shall have been filed and recorded in the
recording office as specified on Schedule 3.19(d) (or a lender's title
insurance policy, in form and substance acceptable to the Collateral Agent,
insuring such Security Document as a first
63
58
lien on such Mortgaged Property (subject to any Lien permitted by Section 6.02)
shall have been received by the Collateral Agent) and, in connection therewith,
the Collateral Agent shall have received evidence satisfactory to it of each
such filing and recordation, (iv) the Collateral Agent shall have received such
other documents, including a policy or policies of title insurance issued by a
nationally recognized title insurance company, together with such endorsements,
coinsurance and reinsurance as may be requested by the Collateral Agent and the
Lenders, insuring the Mortgages as valid first liens on the Mortgaged
Properties, free of Liens other than those permitted under Section 6.02,
together with such surveys, abstracts, appraisals and legal opinions required
to be furnished pursuant to the terms of the Mortgages or as reasonably
requested by the Collateral Agent or the Lenders, (v) the Administrative Agent
shall have received, on behalf of itself, the Lenders and the Issuing Bank, a
favorable written opinion of local counsel in each jurisdiction in which any
Mortgaged Property is located, substantially to the effect set forth in Exhibit
H-2, in each case addressed to the Issuing Bank, the Administrative Agent and
the Lenders, (vi) the Administrative Agent shall have received endorsements or
other amendments to each of the insurance policies required by the applicable
provisions of the Security Documents to include a "standard" or "New York"
lender's loss payable endorsement and to name the Collateral Agent as
additional insured, in form and substance satisfactory to the Administrative
Agent.
ARTICLE VI
Negative Covenants
The Borrower covenants and agrees with each Lender that, so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document have been paid in
full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, the Borrower will not, and will not
cause or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date
hereof and set forth in Schedule 6.01, but not any extensions,
renewals or replacements of such Indebtedness;
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) Indebtedness of the Borrower to any Wholly Owned
Subsidiary and of any Wholly Owned Subsidiary to the Borrower or any
other Wholly Owned Subsidiary;
(d) Guarantees by the Borrower of the Indebtedness of any
Wholly Owned Subsidiary and by any Wholly Owned Subsidiary of the
Borrower or any other Wholly Owned Subsidiary;
(e) Indebtedness consisting of purchase money Indebtedness or
Capital Lease Obligations incurred in the ordinary course of business
after Closing Date to finance
64
59
Capital Expenditures; provided that the aggregate principal amount of
any Indebtedness or Capital Lease Obligations incurred pursuant to
this clause (e) at any time shall not exceed $3,000,000; and
(f) other Indebtedness in an aggregate principal amount not
exceeding $1,000,000; provided that all such Indebtedness shall be
unsecured; and
(g) Indebtedness of the Borrower created under Hedging
Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities and
not for speculative purposes.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any
income or revenues or rights in respect thereof, or assign or transfer any such
income or revenues or rights in respect thereof except:
(a) Liens on property or assets of the Borrower and the
Subsidiaries existing on the date hereof and set forth in Schedule
6.02; provided that such Liens shall extend only to those assets to
which they extend on the date hereof and shall secure only those
obligations which they secure on the date hereof;
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any of the Subsidiaries;
provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition, (ii) such Lien does not apply to any
other property or assets of the Borrower or any of the Subsidiaries
and (iii) such Lien does not (A) materially interfere with the use,
occupancy and operation of any asset or property subject thereto, (B)
materially reduce the fair market value of such asset or property but
for such Lien or (C) result in any material increase in the cost of
operating, occupying or owning or leasing such asset or property;
(d) Liens for taxes not yet due or which are being contested
in compliance with Section 5.02;
(e) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations that are not due and payable or that
are being contested in compliance with Section 5.02;
(f) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
(g) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital
Lease Obligations), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
65
60
(h) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of the Subsidiaries;
and
(i) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by the Borrower or any of the
Subsidiaries; provided that (i) such security interests secure
Indebtedness permitted by Section 6.01, (ii) such security interests
are incurred, and the Indebtedness secured thereby is created, within
90 days after such acquisition (or construction), (iii) the
Indebtedness secured thereby does not exceed 80% of the lesser of the
cost or the fair market value of such real property, improvements or
equipment at the time of such acquisition (or construction) and (iv)
such security interests do not apply to any other property or assets
of the Borrower or any of the Subsidiaries.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred; provided,
however, that the Borrower may enter into any such arrangement to the extent
that the aggregate fair market value of the property thereafter rented or
leased shall not exceed $500,000.
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist
any investment or any other interest in, any other person, except:
(a) investments by the Borrower existing on the date hereof
as set forth on Schedule 6.04(a) or resulting from the Acquisition in
the capital stock of Subsidiaries;
(b) loans by the Borrower to the King Pharmaceuticals
Benevolent Fund, Inc., a Virginia corporation and an Affiliate of the
Borrower, existing on the date hereof and set forth on Schedule
6.04(b); and
(c) Permitted Investments.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any substantial part of its assets (whether now owned or hereafter acquired) or
any capital stock of any Subsidiary, or purchase, lease or otherwise acquire
(in one transaction or a series of transactions) all or any substantial part of
the assets of any other person, except that (a) the Borrower and any of the
Subsidiaries may purchase and sell inventory in the ordinary course of
business, (b) the Borrower or any of the Subsidiaries may purchase brand name
pharmaceutical product lines from any third party pursuant to clause (iii) of
the proviso contained in the definition of "Asset Sale" in Section 1.01
pursuant
66
61
to the conditions set forth therein and (c) if at the time thereof and
immediately after giving effect thereto no Event of Default or Default shall
have occurred and be continuing (i) any Wholly Owned Subsidiary may merge into
the Borrower in a transaction in which the Borrower is the surviving
corporation and (ii) any Wholly Owned Subsidiary may merge into or consolidate
with any other Wholly Owned Subsidiary in a transaction in which the surviving
entity is a Wholly Owned Subsidiary and no person other than the Borrower or a
Wholly Owned Subsidiary receives any consideration.
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends. (a) Declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, with respect to
any shares of its capital stock or directly or indirectly redeem, purchase,
retire or otherwise acquire for value (or permit any Subsidiary to purchase or
acquire) any shares of any class of its capital stock or set aside any amount
for any such purpose; provided, however, that (i) (x) any Subsidiary may
declare and pay dividends or make other distributions on its capital stock and
(y) the Borrower may declare and pay dividends or make other distributions on
its capital stock in an aggregate amount up to $1,000,000; provided that no
Event of Default shall have occurred and be continuing, and (ii) the Borrower
may grant options, and distribute shares of capital stock upon the exercise
thereof, pursuant to the terms of the 1997 Incentive and Nonqualified Stock
Option Plan for Employees of King Pharmaceuticals, Inc. and the 1998
Non-Employee Director Stock Option Plan.
(b) Permit any Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (i) pay any dividends or
make any other distributions on its capital stock or any other equity interest
or (ii) make or repay any loans or advances to the Borrower or to any other
Subsidiary.
SECTION 6.07. Transactions with Affiliates. Sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates (other
than the Borrower or any Subsidiary), except that the Borrower or any
Subsidiary may engage in any of the foregoing transactions in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties.
SECTION 6.08. Business of Borrower and Subsidiaries. Engage at any
time in any business or business activity other than the business currently
conducted by it and business activities reasonably incidental thereto.
SECTION 6.09. Fiscal Year. Change the end of its fiscal year from
December 31 to any other date.
SECTION 6.10. Leverage Ratio. Permit the Leverage Ratio at any time
during any of the periods set forth below to be in excess of the ratio set
forth below opposite such period:
Period Ratio
------ -----
Closing Date to March 31, 1998 N/A
April 1, 1998 to June 30, 1998 6.00 to 1.00
67
62
July 1, 1998 to September 30, 1998 4.25 to 1.00
October 1, 1998 to December 31, 1998 4.00 to 1.00
January 1, 1999 to March 31, 1999 3.75 to 1.00
April 1, 1999 to September 30, 1999 3.50 to 1.00
Thereafter 3.00 to 1.00
For purposes of calculating the Leverage Ratio, the Borrower's Consolidated
EBITDA for the four-fiscal-quarter periods ending on March 31, 1998, June 30,
1998 and September 30, 1998, shall be deemed to equal the Borrower's
Consolidated EBITDA for the period commencing on January 1, 1998 and ending on
(i) March 31, 1998, multiplied by 4, (ii) June 30, 1998, multiplied by 2, and
(iii) September 30, 1998, multiplied by 4/3, as applicable.
SECTION 6.11. Consolidated Interest Expense Coverage Ratio. Permit the
Consolidated Interest Expense Coverage Ratio for any four-fiscal-quarter period
(or such lesser number of fiscal quarters as shall have elapsed since December
31, 1997) ending on any date set forth below to be less than the ratio set
forth below opposite such date.
Period Ratio
------ -----
March 31, 1998 2.00 to 1.00
June 30, 1998 2.00 to 1.00
September 30, 1998 2.50 to 1.00
December 31, 1998 3.00 to 1.00
March 31, 1999 3.00 to 1.00
June 30, 1999 3.00 to 1.00
September 30, 1999 3.25 to 1.00
December 31, 1999 3.50 to 1.00
Thereafter 4.00 to 1.00
SECTION 6.12. Consolidated Net Worth. Permit Consolidated Net Worth on
the last day of any fiscal quarter ending after March 31, 1998, to be less than
the sum of (i) $25,000,000 plus (ii) 75% of the cumulative Consolidated Net
Income for each fiscal quarter ending after March 31, 1998 (excluding any
fiscal quarter for which Consolidated Net Income is negative).
SECTION 6.13. Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any four fiscal-quarter period (or
such lesser number of fiscal quarters as shall have elapsed since December 31,
1997), beginning with the period ending on June 30, 1998, to be less than 1.10
to 1.00.
SECTION 6.14 Amendment of Material Documents. Amend, modify or waive
any of its rights under (a) the Asset Purchase Agreement or (b) any other
material agreements or instruments of the Borrower or the Subsidiaries,
including any agreements or instruments evidencing or governing Indebtedness,
if any such amendment, modification or waiver could reasonably be expected to
result in a Material Adverse Effect or to be adverse to the rights or interests
of the Lenders.
SECTION 6.15 Prepayments, Redemptions and Repurchases of Debt. Make
any payment, whether in cash, property, securities or a combination thereof,
other than scheduled (or with respect to senior indebtedness held by a person
that is not an Affiliate of the obligor, mandatory) payments of principal and
interest as and when due (to the extent not prohibited
68
63
by applicable subordination provisions), in respect of, or pay, or offer or
commit to pay, or otherwise directly or indirectly redeem, repurchase, retire
or otherwise acquire for consideration or defease, or set apart any sum for the
aforesaid purposes, any Indebtedness for borrowed money (other than
Indebtedness under the Loan Documents and intercompany Indebtedness) of the
Borrower or any of the Subsidiaries.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or
in connection with any Loan Document or the Borrowings or issuances of
Letters of Credit hereunder, or any representation, warranty,
statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with
or pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or
furnished;
(b) default shall be made in the payment of any principal of
any Loan or any reimbursement with respect to any L/C Disbursement
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or L/C Disbursement or any other amount (other
than an amount referred to in (b) above) due under any Loan Document,
when and as the same shall become due and payable, and such default
shall continue unremedied for a period of three Business Days;
(d) default shall be made in the due observance or
performance by the Borrower or any of the Subsidiaries of any
covenant, condition or agreement contained in Section 5.01(a), 5.04,
5.06 or 5.07 or in Article VI;
(e) default shall be made in the due observance or
performance by the Borrower or any of the Subsidiaries of any
covenant, condition or agreement contained in any Loan Document (other
than those specified in (b), (c) or (d) above) and such default shall
continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent or any Lender to the Borrower;
(f) (i) the Borrower or any of the Subsidiaries shall fail to
pay any principal or interest, regardless of amount, due in respect of
any Indebtedness in a principal amount in excess of $1,000,000, when
and as the same shall become due and payable, or (ii) the Borrower or
any of the Subsidiaries shall fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness, or any other
event or condition shall occur, if the effect of any failure or other
event or condition referred to in this clause (ii) is to cause, or to
permit the holder or holders of such Indebtedness or a trustee on its
or their behalf (with or without the giving of notice,
69
64
the lapse of time or both) to cause, such Indebtedness to become due
or to be required to be repurchased or redeemed prior to its stated
maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any of
the Subsidiaries, or of a substantial part of the property or assets
of the Borrower or a Subsidiary, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of the
Subsidiaries or for a substantial part of the property or assets of
the Borrower or a Subsidiary or (iii) the winding-up or liquidation of
the Borrower or any of the Subsidiaries; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(h) the Borrower or any of the Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or any of the Subsidiaries or for a substantial part of the
property or assets of the Borrower or any of the Subsidiaries, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for
the benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $1,000,000 shall be rendered against the
Borrower, any of the Subsidiaries or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon assets or
properties of the Borrower or any of the Subsidiaries to enforce any
such judgment;
(j) an ERISA Event shall have occurred that, in the opinion
of the Required Lenders, when taken together with all other such ERISA
Events, could reasonably be expected to result in liability of the
Borrower and its ERISA Affiliates in an aggregate amount exceeding
$2,500,000 or to require payments exceeding $1,000,000 in any year;
(k) any Guarantee purported to be created by the Guarantee
Agreement shall cease to be, or shall be asserted by the Borrower or
any other Loan Party not to be, a valid and enforceable Guarantee of
the Obligations, or any security interest purported to be created by
any Security Document shall cease to be, or shall be asserted by the
Borrower or any other Loan Party not to be, a valid, perfected, first
priority (except as otherwise expressly provided in this Agreement or
such Security Document) security interest in the securities, assets or
properties covered thereby, except to the extent that any such loss of
perfection or priority results from the failure
70
65
of the Collateral Agent to maintain possession of certificates
representing securities pledged under the Pledge Agreement and except
to the extent that such loss is covered by a lender's title insurance
policy and the related insurer promptly after such loss shall have
acknowledged in writing that such loss is covered by such title
insurance policy; or
(l) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding.
ARTICLE VIII
The Administrative Agent and the Collateral Agent
In order to expedite the transactions contemplated by this Agreement,
Credit Suisse First Boston is hereby appointed to act as Administrative Agent
and Collateral Agent on behalf of the Lenders and the Issuing Bank (for
purposes of this Article VIII, the Administrative Agent and the Collateral
Agent are referred to collectively as the "Agents"). Each of the Lenders and
each assignee of any such Lender, hereby irrevocably authorizes the Agents to
take such actions on behalf of such Lender or assignee or the Issuing Bank and
to exercise such powers as are specifically delegated to the Agents by the
terms and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders and the Issuing Bank,
without hereby limiting any implied authority, (a) to receive on behalf of the
Lenders and the Issuing Bank all payments of principal of and interest on the
Loans, all payments in respect of L/C Disbursements and all other amounts due
to the Lenders hereunder, and promptly to distribute to each Lender or the
Issuing Bank its proper share of each payment so received; (b) to give notice
on behalf of each of the Lenders to the Borrower of any Event of Default
specified in this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by the Borrower or any other Loan Party pursuant to this
Agreement or the other Loan Documents as received by the Administrative Agent.
Without
71
66
limiting the generality of the foregoing, the Agents are hereby expressly
authorized to execute any and all documents (including releases) with respect
to the Collateral and the rights of the Secured Parties with respect thereto,
as contemplated by and in accordance with the provisions of this Agreement and
the Security Documents.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by
the Borrower or any other Loan Party of any of the terms, conditions, covenants
or agreements contained in any Loan Document. The Agents shall not be
responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement or any other Loan Documents,
instruments or agreements. The Agents shall in all cases be fully protected in
acting, or refraining from acting, in accordance with written instructions
signed by the Required Lenders and, except as otherwise specifically provided
herein, such instructions and any action or inaction pursuant thereto shall be
binding on all the Lenders. Each Agent shall, in the absence of knowledge to
the contrary, be entitled to rely on any instrument or document believed by it
in good faith to be genuine and correct and to have been signed or sent by the
proper person or persons. Neither the Agents nor any of their respective
directors, officers, employees or agents shall have any responsibility to the
Borrower or any other Loan Party on account of the failure of or delay in
performance or breach by any Lender or the Issuing Bank of any of its
obligations hereunder or to any Lender or the Issuing Bank on account of the
failure of or delay in performance or breach by any other Lender or the Issuing
Bank or the Borrower or any other Loan Party of any of their respective
obligations hereunder or under any other Loan Document or in connection
herewith or therewith. Each of the Agents may execute any and all duties
hereunder by or through agents or employees and shall be entitled to rely upon
the advice of legal counsel selected by it with respect to all matters arising
hereunder and shall not be liable for any action taken or suffered in good
faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be under any
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be requested in writing to do
so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders
and the Borrower. Upon any such resignation, the Required Lenders shall have
the right to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a
bank with an office in New York, New York, having a combined capital and
surplus of at least $500,000,000 or an Affiliate of any such bank. Upon the
acceptance of any appointment as Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder. After the Agent's
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as Agent.
72
67
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any of the
Subsidiaries or other Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the
amount of its pro rata share (based on its Commitments hereunder) of any
expenses incurred for the benefit of the Lenders by the Agents, including
counsel fees and compensation of agents and employees paid for services
rendered on behalf of the Lenders, that shall not have been reimbursed by the
Borrower and (b) to indemnify and hold harmless each Agent and any of its
directors, officers, employees or agents, on demand, in the amount of such pro
rata share, from and against any and all liabilities, taxes, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by or asserted against it in its capacity as Agent or any of them in any way
relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted by it or any of them under this Agreement or any other
Loan Document, to the extent the same shall not have been reimbursed by the
Borrower or any other Loan Party; provided that no Lender shall be liable to an
Agent or any such other indemnified person for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or wilful misconduct of such Agent or any of its directors,
officers, employees or agents. Each Revolving Credit Lender agrees to reimburse
each of the Issuing Bank and its directors, officers, employees and agents, in
each case, to the same extent and subject to the same limitations as provided
above for the Agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender
and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for
herein and in the other Loan Documents shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇),
with a copy to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ at the above address (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to Credit Suisse First
Boston, Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇
▇▇▇▇ (Telecopy No.
73
68
(▇▇▇) ▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ at the above address
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to a Lender, to it at its address (or telecopy number)
set forth on Schedule 2.01 or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the
Issuing Bank or on their behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any Fee or any
other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not been terminated. The provisions of Sections 2.14,
2.16, 2.20 and 9.05 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank.
SECTION 9.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective permitted successors and assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the permitted successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, the Administrative
Agent, the Issuing Bank or the Lenders that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion
of its interests, rights and obligations under this Agreement (including all or
a portion of any or all of its Commitments and the Loans at the time owing to
it); provided, however, that (i) except in the case of an assignment to another
Lender or an Affiliate or Related Fund of the assigning
74
69
Lender or another Lender, (x) the Borrower, unless an Event of Default shall
have occurred and be continuing, and the Administrative Agent (and, in the case
of any assignment of a Revolving Credit Commitment, the Issuing Bank and the
Swingline Lender) must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld) and (y) the amount of the
Revolving Credit Commitment and the Term Loan Commitment or outstanding Term
Loans of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 in the
aggregate (or, if less, the entire remaining amount of such Lender's Commitment
or outstanding Term Loans) and (ii) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire and
any tax form as required by the Internal Revenue Service. Upon acceptance and
recording pursuant to paragraph (e) of this Section 9.04, and payment from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution
thereof, (A) the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
an assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued
for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and
that its Term Loan Commitment and Revolving Credit Commitment, and the
outstanding balances of its Term Loans and Revolving Loans, in each case
without giving effect to assignments thereof which have not become effective,
are as set forth in such Assignment and Acceptance, (ii) except as set forth in
(i) above, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto, or the financial condition of the Borrower or any of
the Subsidiaries or the performance or observance by the Borrower or any of the
Subsidiaries of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05(a) or delivered pursuant to
Section 5.03 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (vi) such assignee
appoints and authorizes the Administrative Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent
75
70
and the Collateral Agent, respectively, by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which
by the terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Issuing Bank, the
Collateral Agent and the Lenders may treat each person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register and any Assignments and Acceptances delivered to the Administrative
Agent pursuant to this Section 9.04(d) shall be available for inspection by the
Borrower, the Issuing Bank, the Collateral Agent and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder) and any tax form required by the Internal
Revenue Service, a processing and recordation fee of $3,500 and, if required,
the written consent of the Borrower, the Swingline Lender, the Issuing Bank and
the Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower,
Lenders, the Issuing Bank and the Swingline Lender. No assignment shall be
effective unless it has been recorded in the Register as provided in this
paragraph (e).
(f) Each Lender may without the consent of the Borrower, the Swingline
Lender, the Issuing Bank or the Administrative Agent sell participations to one
or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.14, 2.16 and 2.20 to the same extent as if they were Lenders and (iv) the
Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to
the Loans or L/C Disbursements and to approve any amendment, modification or
waiver of any provision of this Agreement (other than amendments, modifications
or waivers decreasing any fees payable hereunder or the amount of principal of
or the rate at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans,
increasing or extending the Commitments or releasing all or substantially all
the Guarantors or the Collateral).
(g) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to
76
71
the Borrower furnished to such Lender by or on behalf of the Borrower; provided
that, prior to any such disclosure of information designated by the Borrower as
confidential, each such assignee or participant or proposed assignee or
participant shall execute an agreement whereby such assignee or participant
shall agree (subject to customary exceptions) to preserve the confidentiality
of such confidential information on terms no less restrictive than those
applicable to the Lenders pursuant to Section 9.16 and, in the case of any
assignee, the Administrative Agent shall provide the Borrower with an execution
copy of such agreement.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank to secure extensions of credit
by such Federal Reserve Bank to such Lender; provided that no such assignment
shall release a Lender from any of its obligations hereunder or substitute any
such Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, the Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to the Borrower by the assigning Lender
hereunder.
(i) The Borrower shall not assign or delegate any of its rights or
duties hereunder without the prior written consent of the Administrative Agent,
the Issuing Bank and each Lender, and any attempted assignment without such
consent shall be null and void.
(j) In the event that S&P, ▇▇▇▇▇'▇ and ▇▇▇▇▇▇▇▇'▇ BankWatch (or
InsuranceWatch Ratings Service, in the case of Lenders that are insurance
companies (or Best's Insurance Reports, if such insurance company is not rated
by Insurance Watch Ratings Service)) shall, after the date that any Lender
becomes a Revolving Credit Lender, downgrade the long-term certificate deposit
ratings of such Lender, and the resulting ratings shall be below BBB-, Baa3 and
C (or BB, in the case of a Lender that is an insurance company (or B, in the
case of an insurance company not rated by InsuranceWatch Ratings Service)),
then the Issuing Bank shall have the right, but not the obligation, at its own
expense, upon notice to such Lender and the Administrative Agent, to replace
(or to request the Borrower to use its reasonable efforts to replace) such
Lender with an assignee (in accordance with and subject to the restrictions
contained in paragraph (b) above), and such Lender hereby agrees to transfer
and assign without recourse (in accordance with and subject to the restrictions
contained in paragraph (b) above) all its interests, rights and obligations in
respect of its Revolving Credit Commitment to such assignee; provided, however,
that (i) no such assignment shall conflict with any law, rule and regulation or
order of any Governmental Authority and (ii) the Issuing Bank or such assignee,
as the case may be, shall pay to such Lender in immediately available funds on
the date of such assignment the principal of and interest accrued to the date
of payment on the Loans made by such Lender hereunder and all other amounts
accrued for such Lender's account or owed to it hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Swingline Lender in connection with the
syndication of the credit facilities provided for herein and the preparation
and administration of this Agreement and the other Loan Documents or in
connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Administrative Agent, the
Collateral Agent or any Lender in connection with the enforcement or protection
of its rights in connection with this Agreement and the other Loan Documents or
in connection with the Loans made or Letters of Credit issued hereunder,
including the fees, charges and disbursements of Cravath,
77
72
Swaine & ▇▇▇▇▇, counsel for the Administrative Agent and the Collateral Agent,
local real estate counsel retained by the Collateral Agent in connection with
the Mortgages and, in connection with any such enforcement or protection, the
fees, charges and disbursements of any other counsel for the Administrative
Agent, the Collateral Agent or any Lender.
(b) The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, each Lender and the Issuing Bank, each Affiliate of any of
the foregoing persons and each of their respective directors, officers,
employees, agents and controlling persons (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby, (ii) the use of
the proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) any actual or alleged
presence or Release of Hazardous Materials on any property owned, leased or
operated by the Borrower or any of the Subsidiaries, or any Environmental Claim
related in any way to the Borrower or the Subsidiaries; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the
expiration of any Letter of Credit, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank. All amounts due under this Section 9.05
shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, except to the extent prohibited by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement and
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER
LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN
78
73
SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM
CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL
CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Borrower, the Administrative Agent, the Collateral Agent, any Lender or the
Issuing Bank in exercising any power or right hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Borrower, the Administrative Agent, the Collateral Agent, the Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or any other Loan Document or consent
to any departure by the Borrower or any other Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement,
or waive or excuse any such payment or any part thereof, or decrease the rate
of interest on any Loan or L/C Disbursement, without the prior written consent
of each Lender affected thereby, (ii) change or extend the Commitment or
decrease or extend the date for payment of the Commitment Fees of any Lender
without the prior written consent of such Lender, (iii) amend or modify the
provisions of Section 2.17 or 9.04(i), the provisions of this Section, the
definition of the term "Borrowing Base", the definition of the term "Required
Lenders" or release all or substantially all the Guarantors or all or any
substantial part of the Collateral without the prior written consent of each
Lender, (iv) waive or change the allocation between Tranche A Term Loans and
Tranche B Term Loans of any prepayment pursuant to Section 2.12 or 2.13 without
the prior written consent of (A) Lenders holding at least 66-2/3% of the
aggregate outstanding principal amount of the Tranche A Term Loans and (B)
Lenders holding at least 66-2/3% of the aggregate outstanding principal amount
of the Tranche B Term Loans or (v) amend Section 2.13(k) without the prior
written consent of the Lenders holding a majority of the aggregate outstanding
principal amount of the Tranche B Term Loans; provided further that (i) no such
agreement that by its terms adversely affects the rights of the Revolving
Credit Lenders, the Tranche A Lenders or the Tranche B Lenders in a manner
different from its effect on the other classes of Lenders shall not become
effective unless approved by a majority in interest of the class or classes of
Lenders so adversely affected (voting as a single group) and (ii) no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender hereunder or under any other Loan Document without the prior written
consent of the Administrative Agent, the Collateral Agent, the Issuing Bank or
the Swingline Lender.
79
74
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan
or participation in any L/C Disbursement, together with all fees, charges and
other amounts which are treated as interest on such Loan or participation in
such L/C Disbursement under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted
for, charged, taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable law, the rate of interest payable
in respect of such Loan or participation hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan or participation but were not payable as a result of the operation
of this Section 9.09 shall be cumulated and the interest and Charges payable to
such Lender in respect of other Loans or participations or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by such Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any
party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together
shall constitute a single contract, and shall
80
75
become effective as provided in Section 9.03. Delivery of an executed signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or the other Loan Documents against the Borrower or its properties in the
courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Confidentiality. The Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders agrees to keep
confidential (and to use its best efforts to cause its respective agents and
representatives to keep confidential) the Information (as defined below) and
all copies thereof, extracts therefrom and analyses or other materials based
thereon, except that the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender shall be permitted to disclose Information (a) to
such of its respective officers, directors, employees, agents, affiliates and
representatives as need to know such Information, (b) to the extent requested
by any regulatory authority, including the National Association of Insurance
Commissioners or any successor entity thereto, (c) to the extent otherwise
required by applicable laws and regulations or by any subpoena or similar legal
process, (d) in connection with any suit, action or proceeding (i) relating to
the enforcement of its rights hereunder or under the other Loan Documents or
(ii) for purposes of establishing a "due diligence" defense or (e) to the
extent such Information (i) becomes publicly available other than as a result
of a breach of this Section 9.16 or (ii) becomes available to the
Administrative Agent, the Issuing Bank, any Lender or the Collateral Agent on a
nonconfidential basis from a source other than the Borrower; provided, however,
that the
81
76
Administrative Agent, the Collateral Agent, the Issuing Bank and/or any Lender,
as the case may be, shall provide the Borrower, to the extent practicable, with
advance notice of any disclosure of information referred to in clauses (c) and
(d) above. For the purposes of this Section, "Information" shall mean all
financial statements, certificates, reports, agreements and information
(including all analyses, compilations and studies prepared by the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
based on any of the foregoing) that are received from the Borrower and related
to the Borrower, any shareholder of the Borrower or any employee, customer or
supplier of the Borrower, other than any of the foregoing that were available
to the Administrative Agent, the Collateral Agent, the Issuing Bank or any
Lender on a nonconfidential basis prior to its
82
disclosure thereto by the Borrower, and that are in the case of Information
provided after the date hereof, clearly identified at the time of delivery as
confidential. The provisions of this Section 9.16 shall remain operative and in
full force and effect regardless of the expiration and term of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
KING PHARMACEUTICALS, INC.,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
CREDIT SUISSE FIRST BOSTON, individually
and as Administrative Agent, Collateral
Agent and Swingline Lender,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
WACHOVIA BANK, N.A.,
individually and as Issuing Bank,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice
President
BANK POLSKA KASA OPIEKI S.A., -PEKAO S.A.
GROUP, NEW YORK BRANCH,
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
83
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Community Bank
President
FIRST UNION NATIONAL BANK,
by /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
THE GCB INVESTMENT PORTFOLIO,
by Citibank, N.A.,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC,
by /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President &
Portfolio Manager
METROPOLITAN LIFE INSURANCE
COMPANY,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
84
OSPREY INVESTMENTS PORTFOLIO,
by Citibank, N.A., as Manager,
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
SOCIETE GENERALE, SOUTHWEST
AGENCY,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President, Manager
TORONTO DOMINION (TEXAS), INC.,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.,
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL
PRIME RATE INCOME TRUST,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
and Director