<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
<TABLE>
<S> <C>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
</TABLE>
COMMISSION FILE NUMBER 1-15525
------------------------
EDWARDS LIFESCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-4316614
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE EDWARDS WAY, IRVINE, CALIFORNIA 92614
(formerly 17221 Red Hill Avenue, Irvine, California) (Zip Code)
(Address of principal executive offices)
(949) 250-2500
(Registrant's telephone number,
including area code)
</TABLE>
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes ______ No __X*__
* Registrant's Registration Statement on Form 10, as amended, under the
Securities Exchange Act of 1934 was declared effective on March 21, 2000.
Prior thereto, the Registrant's business was reported as a division of
Baxter International Inc.
The number of shares of the registrant's Common Stock, par value $1.00 per
share, outstanding as of April 28, 2000, the latest practicable date, was
58,088,826 shares.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NUMBER
-----------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Combined Condensed Balance Sheets........................... 2
Combined Condensed Statements of Income..................... 3
Combined Condensed Statements of Cash Flows................. 4
Notes to Combined Condensed Financial Statements............ 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................... 21
Item 6. Exhibits and Reports on Form 8-K............................ 21
Signature............................................................. 22
Exhibits.............................................................. 23
</TABLE>
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
COMBINED CONDENSED BALANCE SHEETS
(UNAUDITED) (IN MILLIONS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash...................................................... $ 6 $ --
Accounts receivables, net................................. 132 155
Inventories............................................... 156 182
Short-term deferred income taxes.......................... 9 9
Prepaid expenses and other current assets................. 15 10
------ ------
Total current assets.................................... 318 356
Property, plant and equipment, net.......................... 205 226
Goodwill and other intangibles, net......................... 829 839
Other assets................................................ 29 16
------ ------
$1,381 $1,437
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities.................. $ 122 $ 156
Short-term debt........................................... 210 --
------ ------
Total current liabilities............................... 332 156
------ ------
Long-term debt.............................................. 319 --
Other....................................................... 47 57
Commitments and Contingencies
STOCKHOLDERS' EQUITY
Common stock, $1 par value, authorized 350,000,000 shares,
58,088,826 shares outstanding........................... 58 --
Additional contributed capital............................ 264 --
Retained earnings......................................... 392 418
Investment by Baxter International Inc., net.............. -- 833
Accumulated other comprehensive loss...................... (31) (27)
------ ------
Total stockholders' equity.............................. 683 1,224
------ ------
$1,381 $1,437
====== ======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE COMBINED
CONDENSED FINANCIAL STATEMENTS.
2
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
COMBINED CONDENSED STATEMENTS OF INCOME
(UNAUDITED) (IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
----------------------
2000 1999
-------- --------
<S> <C> <C>
Net sales................................................... $226 $221
Cost of goods sold.......................................... (118) (113)
---- ----
Gross profit................................................ 108 108
---- ----
Selling, general and administrative expenses.............. 60 58
Research and development expenses......................... 14 12
Goodwill amortization..................................... 9 9
Non-recurring spin-off expenses........................... 1 --
---- ----
84 79
---- ----
Operating income............................................ 24 29
Other (expense) income.................................... (1) 1
---- ----
Income before provision for income taxes.................... 23 30
Provision for income taxes.................................. (6) (8)
---- ----
Net income.................................................. $ 17 $ 22
==== ====
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE COMBINED
CONDENSED FINANCIAL STATEMENTS.
3
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
COMBINED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED) (IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
-------------------------
2000 1999
-------- --------
(BRACKETS DENOTE
CASH OUTFLOWS)
<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Net income................................................ $ 17 $22
Adjustments
Depreciation and amortization........................... 21 22
Other................................................... (4) --
Changes in operating assets and liabilities, net of effect
from de-consolidation (Note 1)
Accounts receivable..................................... 5 23
Inventories............................................. 5 (4)
Accounts payable and accrued liabilities................ (18) (7)
Other................................................... (11) (7)
---- ---
Net cash provided by operating activities................. 15 49
---- ---
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures...................................... (10) (11)
Purchase of convertible debentures........................ (13) --
Investment in unconsolidated affiliate.................... (4) --
---- ---
Net cash used in investing activities................... (27) (11)
---- ---
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of short-term debt................. 210 --
Proceeds from issuance of long-term debt.................. 319 --
Investment by Baxter International Inc.................... (511) (38)
---- ---
Net cash provided by (used in) financing activities..... 18 (38)
---- ---
Net increase in cash........................................ 6 --
Cash at beginning of period................................. -- --
---- ---
Cash at end of period....................................... $ 6 $--
==== ===
Supplemental disclosure of noncash activity
De-consolidation of Japan business (Note 1)............... $ 43
====
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE COMBINED
CONDENSED FINANCIAL STATEMENTS.
4
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
1. DESCRIPTION OF BUSINESS
Edwards Lifesciences Corporation (Edwards Lifesciences or the Company) was
incorporated under the original name of CVG Controlled Inc. in Delaware on
September 10, 1999, as a subsidiary of Baxter International Inc. (Baxter). On
March 31, 2000 (the Distribution Date), Baxter transferred its cardiovascular
business (the Edwards Lifesciences Business) to Edwards Lifesciences in
connection with a tax-free spin-off by Baxter of the Edwards Lifesciences
Business. The spin-off was effected on the Distribution Date through a
distribution of 58.1 million shares of Edwards Lifesciences Common Stock (the
Distribution) to Baxter stockholders of record on March 29, 2000, resulting in
Edwards Lifesciences operating as an independent entity commencing April 1, 2000
with publicly traded common stock. The Company has authorized the issuance of
50 million shares of preferred stock, par value $.01 per share. No shares of
preferred stock have been issued. No historical earnings per share data is
presented as the Edwards Lifesciences earnings were part of Baxter's earnings
through the close of business on March 31, 2000.
Baxter has no ownership interest in Edwards Lifesciences after March 31,
2000, but will perform certain services for Edwards Lifesciences pursuant to
various agreements that are outlined in Note 7. However, unless released by
third parties, Baxter may remain liable for certain lease and other obligations
and liabilities that are transferred to and assumed by Edwards Lifesciences.
Edwards Lifesciences is obligated to indemnify Baxter for liabilities related to
those transferred obligations and liabilities.
Subsequent to the Distribution, the cardiovascular business in Japan is
being operated pursuant to a joint venture under which a Japanese subsidiary of
Baxter retains ownership of the Japanese business assets, but a subsidiary of
Edwards Lifesciences holds a 90% profit interest. Edwards Lifesciences has an
option to purchase the Japanese business assets that may be exercised no earlier
than 28 months following the Distribution Date and no later than 60 months
following the Distribution Date. The Japanese operations are consolidated in the
accompanying historical combined condensed statement of income, consistent with
the treatment of the Company's operations while a part of Baxter. Subsequent to
the Distribution, Edwards Lifesciences recognizes as sales its shipments into
the joint venture and utilizes the equity method of accounting to record its
interest in the operations of the joint venture. Since the Distribution was
effective upon the close of business on March 31, 2000, all adjustments to
reflect the capitalization and operation of the Company as an independent entity
as of March 31, 2000 have been reflected in the historical combined condensed
balance sheet as of March 31, 2000.
Edwards Lifesciences is a global leader in providing the manufacturing,
marketing and selling of a comprehensive line of products and services to treat
late-stage cardiovascular disease. Edwards Lifesciences' sales are categorized
in four main product areas: (a) cardiac surgery, (b) critical care,
(c) vascular and (d) perfusion products and services. Edwards Lifesciences'
CARDIAC SURGERY portfolio is comprised of products relating to heart-valve
therapy, mechanical cardiac assist, and cannulae and cardioplegia products used
during open-heart surgery. Edwards Lifesciences is the world's leader in, and
has been a pioneer in the development and commercialization of, tissue valves
and repair products used to replace or repair a patient's diseased or defective
heart valve. In the CRITICAL CARE area, Edwards Lifesciences is a world leader
in hemodynamic monitoring systems that are used to measure a patient's heart
function, and central venous access products for fluid and drug delivery.
Edwards Lifesciences'
5
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
1. DESCRIPTION OF BUSINESS (CONTINUED)
VASCULAR product lines include a line of balloon catheter-based products,
surgical clips and inserts, angioscopy equipment, and artificial implantable
grafts, as well as an endovascular system that is used to treat less invasively
life-threatening abdominal aortic aneurysms. In the PERFUSION PRODUCTS AND
SERVICES category, Edwards Lifesciences designs, develops, manufactures and
markets a diverse line of disposable products used during cardiopulmonary bypass
procedures, including oxygenators, blood containers, filters and related
devices, as well as bypass equipment. Edwards Lifesciences also is the world's
leading provider of perfusion services, employing more than 400 certified
perfusionists who perform an aggregate of more than 50,000 perfusion cases for
open heart surgery per year.
2. FINANCIAL INFORMATION
The unaudited interim combined condensed financial statements of Edwards
Lifesciences use Baxter's historical bases in the assets, liabilities and
historical results of operations of the cardiovascular business, operated
primarily as a division of Baxter, and have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. These interim combined condensed financial statements
should be read in conjunction with the combined financial statements and notes
included in the Company's Registration Statement on Form 10, as amended with the
Securities and Exchange Commission on April 5, 2000 (the Form 10).
In the opinion of management, the interim combined condensed financial
statements reflect all adjustments necessary for a fair presentation of the
interim periods. All such adjustments are of a normal, recurring nature. The
results of operations for the interim periods are not necessarily indicative of
the results of operations to be expected for the full year.
3. PRO FORMA INFORMATION
The following unaudited pro forma combined condensed statement of income for
the three months ended March 31, 2000 presents the combined results of Edwards
Lifesciences assuming that the transactions contemplated by the Distribution had
been completed as of January 1, 2000. The unaudited pro forma information has
been prepared utilizing the historical combined condensed financial statements
of Edwards Lifesciences.
6
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
3. PRO FORMA INFORMATION (CONTINUED)
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 2000
------------------------------------------------------
PRO FORMA
ADJUSTMENTS
-----------------------
JAPAN ON
AN EQUITY
HISTORICAL BASIS OTHERS PRO FORMA
---------- --------- -------- ---------
<S> <C> <C> <C> <C>
Net sales............................................ $ 226 $(29)(a) $ 197
Cost of goods sold................................... (118) 12 (a) (106)
----- ---- ------
Gross profit......................................... 108 (17) 91
----- ---- ------
Selling, general and administrative expenses....... 60 (12)(a) $ 5 (b) 53
Research and development expenses.................. 14 (1)(a) 13
Goodwill amortization.............................. 9 9
Non-recurring spin-off expenses.................... 1 1
Other income....................................... -- (4)(a) (4)
----- ---- ---- ------
84 (17) 5 72
----- ---- ---- ------
Operating income..................................... 24 -- (5) 19
Interest expense................................... -- (7)(c) (7)
Other expense...................................... (1) (1)
----- ---- ---- ------
Income before income taxes........................... 23 -- (12) 11
Provision for income taxes........................... (6) 3 (d) (3)
----- ---- ---- ------
Net income........................................... $ 17 $ -- $ (9) $ 8
===== ==== ==== ======
Share information:
Pro forma net income per share
Basic............................................ $ 0.14
Diluted.......................................... $ 0.14
Weighted average number of common shares
outstanding
Basic............................................ 58.2(e)
Diluted.......................................... 58.2(e)
</TABLE>
- ------------------------
PRO FORMA ADJUSTMENTS
(a) To reflect the Edwards Lifesciences Japanese operations on an equity basis
(Note 1).
(b) To reflect estimated incremental costs associated with being an independent
public company, including costs associated with corporate administrative
services such as accounting, tax, treasury,
7
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
3. PRO FORMA INFORMATION (CONTINUED)
risk management, insurance, legal, stockholder relations and human
resources. The Company's historical combined condensed financial statements
include all costs incurred by Baxter on behalf of the Company. However,
there will be incremental and continuing costs directly attributable to the
spin-off, as there will be a loss of certain synergies and benefits of
economies of scale that existed while Edwards Lifesciences was part of
Baxter. Management estimated such incremental costs utilizing Baxter's
historical headcount and cost analysis, and the Company's organization
chart. The following is a summary of the estimated annual incremental costs
by significant function (in millions):
<TABLE>
<S> <C>
Accounting, tax and legal................................... $ 2
Insurance and risk management............................... 1
Human resources............................................. 1
Treasury, stockholder relations and other costs............. 1
---
Total..................................................... $ 5
===
</TABLE>
(c) To reflect the estimated interest expense which would have been incurred by
Edwards Lifesciences based on the incurrence of $529 million of debt at a
weighted-average interest rate of approximately 5%. An increase or decrease
of 0.2 points in the weighted-average interest rate would result in a per
annum increase or decrease in interest expense of approximately $1 million.
(d) To reflect the estimated tax impact at statutory rates, for pro forma
adjustments (b) and (c), as well as the estimated impact of different tax
rates available to Edwards Lifesciences as a stand-alone company.
(e) Pro forma net income per share is computed as if 58.2 million common shares
of Edwards Lifesciences had been outstanding for the three months ended
March 31, 2000 (comprised of 58.1 million common shares of Edwards
Lifesciences distributed to Baxter shareholders on the Distribution Date and
approximately 0.1 million common shares of Edwards Lifesciences to be
distributed to Edwards Lifesciences' hourly employees subsequent to the
Distribution Date).
4. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
(IN MILLIONS)
<S> <C> <C>
Raw materials......................................... $ 28 $ 29
Work in process....................................... 30 28
Finished products..................................... 98 125
---- ----
Total inventories..................................... $156 $182
==== ====
</TABLE>
8
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
5. CREDIT FACILITIES
During March 2000, Edwards Lifesciences entered into two unsecured revolving
credit agreements (the Credit Facilities), providing for up to an aggregate of
$650 million in borrowings in multiple currencies. Borrowings currently bear
interest at the London interbank offering rate (LIBOR) plus 1.25%, which
includes a facility fee. One of the credit agreements provides for short-term
borrowings up to an aggregate of $430 million and expires on March 30, 2005. The
other credit agreement provides for short-term borrowings up to an aggregate of
$220 million and expires on March 29, 2001. As of March 31, 2000, approximately
$319 million and $210 million were outstanding under the $430 million and the
$220 million credit agreements, respectively. The weighted average interest on
borrowings outstanding at March 31, 2000 was approximately 5%. Edwards
Lifesciences will pay a facility fee, regardless of available or outstanding
borrowings, currently at an annual rate of .20% for the $430 million credit
agreement, and .175% for the $220 million credit agreement. The Credit
Facilities contain various financial and other covenants of Edwards
Lifesciences, including a maximum leverage ratio and a minimum interest coverage
ratio. All amounts outstanding under the $430 million credit agreement have been
classified as long-term obligations, as these short-term borrowings will
continue to be refinanced pursuant to this credit agreement.
6. COMPREHENSIVE INCOME
The reconciliation of net income to comprehensive income is as follows:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
----------------------
2000 1999
-------- --------
(IN MILLIONS)
<S> <C> <C>
Net Income.................................................. $17 $22
Other comprehensive loss:
Currency translation adjustments.......................... (4) (3)
--- ---
Comprehensive income........................................ $13 $19
=== ===
</TABLE>
7. RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2000 and 1999, Baxter provided to
the Edwards Lifesciences Business certain legal, treasury, employee benefit,
insurance and administrative services. Charges for these services were based on
actual costs incurred by Baxter. The bases for the amounts charged to Edwards
Lifesciences varied depending on the nature of the service, but generally were
determined using headcount, sales, payroll, square footage or other appropriate
data, or were determined based on actual utilization of services. Management
believes that the bases used for allocating service charges are reasonable.
However, the terms of these transactions may differ from those that would result
from transactions with unrelated third parties or had Edwards Lifesciences
performed these functions on its own.
9
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
7. RELATED PARTY TRANSACTIONS (CONTINUED)
During the three months ended March 31, 2000 and 1999, Edwards Lifesciences
participated in a centralized cash management program administered by Baxter.
Short-term advances from Baxter or excess cash sent to Baxter have been treated
as an adjustment to the "Investment by Baxter International Inc., net" account
as of and through the respective balance sheet dates. No interest is charged on
this balance.
The following table summarizes the charges from Baxter for the
above-mentioned services, as recorded in Edwards Lifesciences Combined Condensed
Statements of Income:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
----------------------
2000 1999
-------- --------
(IN MILLIONS)
<S> <C> <C>
Cost of goods sold.......................................... $2 $2
Selling, general and administrative expenses................ 10 11
Research and development expenses........................... 1 1
</TABLE>
Effective on the Distribution Date, Baxter and Edwards Lifesciences entered
into a series of administrative services agreements pursuant to which Baxter and
Edwards Lifesciences will continue to provide, for a specified period of time,
certain administrative services that each entity historically has provided to
the other. These agreements require the parties to pay each other a fee that
approximates the actual costs of these services. Additionally, subsequent to
March 31, 2000, Edwards Lifesciences will have continuing relationships with
Baxter as a customer and supplier for certain products.
8. SUBSEQUENT EVENTS
As of March 31, 2000, Edwards Lifesciences held two interest bearing
convertible debentures totaling $12.5 million from Sangamo Biosciences, Inc.
(Sangamo). On April 6, 2000, in connection with the closing of Sangamo's initial
public offering, the entire outstanding principal amount of the debentures,
together with all accrued and unpaid interest thereon, were converted into
common stock of Sangamo at its initial public offering price in accordance with
the original terms of the convertible debentures. Edwards Lifesciences' equity
ownership in Sangamo does not result in it being able to exercise significant
influence over Sangamo's operations. Management of Edwards Lifesciences will
report its investment in Sangamo's common stock as available-for-sale
securities.
On April 3, 2000, the Company granted options to purchase shares of Edwards
Lifesciences Common Stock under the Edwards Lifesciences Long-Term Incentive
Stock Plan (the Plan). The Plan includes two stock option programs: Founders
Options and Edwards Conversion Options. The Founders Options were awarded to all
salaried employees of the Company, and permit the purchase of approximately
5.7 million shares at an exercise price of $13.875, the fair market value at the
date of grant. The Founders Options vest 30% after two years, the balance after
three years. The Edwards Conversion Options permit the purchase of approximately
2.4 million shares at an exercise price based upon an equitable conversion of
the exercise price under the Baxter stock option plan, with reference
10
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
8. SUBSEQUENT EVENTS (CONTINUED)
to the when-issued price of the Company's stock and the closing price of
Baxter's common stock on March 31, 2000. The Edwards Conversion Options retained
the vesting periods under the Baxter stock option plan, resulting in various
vesting periods through September 2001. On April 3, 2000, Edwards Lifesciences
also granted to certain hourly employees 125,000 shares of the Company's common
stock, valued at $1.7 million, which will be recorded as compensation expense in
the second quarter ended June 30, 2000.
9. LEGAL PROCEEDINGS
Upon the Distribution, Edwards Lifesciences assumed the defense of certain
Baxter litigation involving cases and claims related to the Edwards Lifesciences
business. Edwards Lifesciences has not been named as a defendant in such matters
but will be defending and indemnifying Baxter for all related expenses and
potential liabilities. It is possible that Edwards Lifesciences may be added as
a defendant in these cases and claims.
The cases and claims relate primarily to products and services currently or
formerly manufactured or performed, as applicable, by Edwards Lifesciences. Such
cases and claims raise difficult and complex factual and legal issues and are
subject to many uncertainties and complexities, including, but not limited to,
the facts and circumstances of each particular case or claim, the jurisdiction
in which each suit is brought, and differences in applicable law. Accordingly,
in certain cases, Edwards Lifesciences is not able to estimate the amount of its
liabilities with respect to such matters.
Upon resolution of any pending legal matters, Edwards Lifesciences may incur
charges in excess of presently established reserves. While such a charge could
have a material adverse impact on Edwards Lifesciences' net income or net cash
flows in the period in which it is recorded or paid, management believes that no
such charge would have a material adverse effect on Edwards Lifesciences'
combined financial position.
Furthermore, Edwards Lifesciences operates in an industry susceptible to
significant product liability claims. In recent years, there has been an
increased public interest in product liability claims for implanted or other
medical devices. These claims may be brought by individuals seeking relief for
themselves or, increasingly, by groups seeking to represent a class. In
addition, product liability claims may be asserted against Edwards Lifesciences
in the future arising out of events not known to management at the present time.
Management believes that Edwards Lifesciences' risk management practices,
including insurance coverage, are adequate to protect against potential product
and professional liability losses.
Edwards Lifesciences is also subject to various environmental laws and
regulations both within and outside of the United States. The operations of
Edwards Lifesciences, like those of other medical device companies, involve the
use of substances regulated under environmental laws, primarily in manufacturing
and sterilization processes. While it is difficult to quantify the potential
impact of compliance with environmental protection laws, management believes
that such compliance will not have a material impact on Edwards Lifesciences'
financial position, results of operations or liquidity.
11
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
(FORMERLY A DIVISION OF BAXTER INTERNATIONAL INC.)
NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
10. SEGMENT INFORMATION
The Company manages its business on the basis of one reportable segment.
Edwards Lifesciences' products and services share similar distribution channels
and customers and are sold principally to hospitals and physicians. Management
evaluates its various global product portfolios on a revenue basis, which is
presented below, and profitability is generally evaluated on an enterprise-wide
basis due to shared infrastructures. Edwards Lifesciences' principal markets are
the United States, Europe and Japan.
Geographic area data includes net sales based on product shipment
destination and long-lived asset data is presented based upon physical location.
<TABLE>
<CAPTION>
FOR THE
THREE MONTHS
ENDED MARCH 31,
----------------------
2000 1999
-------- --------
(IN MILLIONS)
<S> <C> <C>
NET SALES BY GEOGRAPHIC AREA
United States............................................... $125 $125
Japan....................................................... 46 43
Other countries............................................. 55 53
---- ----
Totals...................................................... $226 $221
==== ====
NET SALES BY MAJOR PRODUCT AND SERVICE AREA
Cardiac Surgery............................................. $ 79 $ 76
Critical Care............................................... 61 60
Vascular.................................................... 15 15
Perfusion Products and Services............................. 60 60
Other....................................................... 11 10
---- ----
Totals...................................................... $226 $221
==== ====
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
<S> <C> <C>
LONG-LIVED ASSETS BY GEOGRAPHIC AREA
United States............................................... $194 $196
Other countries............................................. 11 30
--------- ------------
Totals...................................................... $205 $226
========= ============
</TABLE>
Sales to Allegiance Corporation, a subsidiary of Cardinal Health, Inc.,
represented approximately 15% and 12% of the Company's total net sales in the
three months ended March 31, 2000 and 1999, respectively.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis presents the factors that had a
material effect on the results of operations of Edwards Lifesciences during the
three months ended March 31, 2000 and 1999. Also discussed is Edwards
Lifesciences' financial position as of March 31, 2000. You should read this
discussion in conjunction with the historical and pro forma combined condensed
financial statements and related notes thereto included elsewhere in this
Form 10-Q.
OVERVIEW
Edwards Lifesciences provides a comprehensive line of products and services
to treat late-stage cardiovascular disease. Edwards Lifesciences' sales are
categorized in four main product areas: cardiac surgery, critical care,
vascular, and perfusion products and services. In addition, Edwards Lifesciences
offers a diverse grouping of product lines comprised mostly of select
distributed products that are sold in international markets, and miscellaneous
pharmaceutical products. Edwards Lifesciences is headquartered in Irvine,
California, and supplies its products and services to customers in more than 80
countries, both through direct sales and distributor relationships. Edwards
Lifesciences' products are manufactured in locations throughout the world,
including Brazil, the Dominican Republic, Japan, The Netherlands, Puerto Rico,
Switzerland, and the United States.
Edwards Lifesciences' CARDIAC SURGERY portfolio is comprised of products
relating to heart-valve therapy, mechanical cardiac assist, and cannulae and
cardioplegia products used during open-heart surgery. Edwards Lifesciences is
the world's leader in, and has been a pioneer in the development and
commercialization of, tissue valves and repair products used to replace or
repair a patient's diseased or defective heart valve. In the CRITICAL CARE area,
Edwards Lifesciences is a world leader in hemodynamic monitoring systems used to
measure a patient's heart function, and central venous access products for fluid
and drug delivery. Edwards Lifesciences' VASCULAR product lines include a line
of balloon catheter-based products, surgical clips and inserts, angioscopy
equipment, and artificial implantable grafts, as well as an endovascular system
that is used to treat less invasively life-threatening abdominal aortic
aneurysms. In the PERFUSION PRODUCTS AND SERVICES category, Edwards Lifesciences
designs, develops, manufactures and markets a diverse line of disposable
products used during cardiopulmonary bypass procedures, including oxygenators,
blood containers, filters and related devices, as well as bypass equipment.
Edwards Lifesciences also is the world's leading provider of perfusion services,
employing more than 400 certified perfusionists who perform an aggregate of more
than 50,000 perfusion cases for open heart surgery per year.
Cardiovascular disease is the leading cause of death in the world. Edwards
Lifesciences believes that there is a continual and growing need for the
treatment of cardiovascular disease primarily due to the aging population, the
progressive nature of the disease, and the continued economic development of
countries around the world that allows for additional funds to be allocated for
the treatment of chronic health conditions. Edwards Lifesciences' business
strategy is to develop, manufacture and market products and services that result
in improved therapeutic outcomes for patients with late-stage cardiovascular
disease. Edwards Lifesciences plans to aggressively expand its leading product
offerings and develop new products and therapies that improve the quality of
patient care and reduce overall treatment costs.
The health-care marketplace continues to be competitive. There has been
consolidation in Edwards Lifesciences' customer base and among its competitors,
which has resulted in pricing and market share pressures. Edwards Lifesciences
has experienced increases in its labor and material costs, which are primarily
influenced by general inflationary trends. Competitive market conditions have
minimized inflation's impact on the selling prices of Edwards Lifesciences'
products and services. Management expects these trends to continue.
13
<PAGE>
RESULTS OF OPERATIONS
NET SALES TRENDS
The following is a summary of domestic and international net sales:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
-------------------------
2000 1999
-------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C>
United States.............................................. $125 $125
% INCREASE IN 2000....................................... 0%
International.............................................. 101 96
% INCREASE IN 2000....................................... 5.2%
---- ----
Total net sales............................................ $226 $221
==== ====
% INCREASE IN 2000....................................... 2.3%
</TABLE>
The increase in net sales was primarily due to an increase in sales of
cardiac surgery products. The international increase was driven by strong sales
within Japan, partially offset by weaker sales within Europe. Net sales within
product lines were impacted by fluctuations in foreign currency exchange rates,
primarily the movement of the U.S. dollar against the Euro and the Japanese yen.
The net impact of changes in foreign currency exchange rates did not have a
material effect on total net sales.
The impact of foreign currency exchange rate fluctuations on net sales would
not necessarily be indicative of the impact on net income due to the
corresponding effect of foreign currency exchange rate fluctuations on operating
costs and expenses and Edwards Lifesciences' hedging activities. For more
information, see "Currency Risk" below.
The following is a summary of net sales by product line:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
-----------------------
2000 1999
-------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Cardiac surgery............................................ $79.0 $75.6
% INCREASE IN 2000....................................... 4.5%
Critical care.............................................. 61.5 60.6
% INCREASE IN 2000....................................... 1.5%
Vascular................................................... 14.6 14.9
% DECREASE IN 2000....................................... (2.0%)
Perfusion products and services............................ 59.8 60.0
% DECREASE IN 2000....................................... (.3%)
Other...................................................... 11.1 9.9
% INCREASE IN 2000....................................... 12.1%
----- -----
Total net sales............................................ $ 226 $ 221
===== =====
% INCREASE IN 2000....................................... 2.3%
</TABLE>
CARDIAC SURGERY
Excluding the impact of foreign currency exchange rate fluctuations, net
sales of cardiac surgery products would have increased 6.4% for the three months
ended March 31, 2000. The growth in this product line resulted primarily from
double-digit growth in pericardial tissue valves and heart valve repair
products, offset primarily by a decline in porcine tissue valves. Management
expects that its
14
<PAGE>
heart-valve therapy products will continue to serve as a key driver of Edwards
Lifesciences' sales growth.
CRITICAL CARE
Excluding the impact of foreign currency exchange rate fluctuations, net
sales of critical care products would have increased .7% for the three months
ended March 31, 2000. The growth was due primarily to an increased demand for
Advanced Venous Access products and continued penetration of the hemofiltration
market. Critical Care products have been, and are expected to continue to be,
significant contributors to Edwards Lifesciences' total sales. Management
believes that future sales growth of Critical Care products could be negatively
impacted by global pricing pressures, including anticipated decreased
governmental reimbursement in Japan.
VASCULAR
Excluding the impact of foreign currency exchange rate fluctuations, net
sales of vascular products would have been flat for the three months ended
March 31, 2000.
Edwards Lifesciences has made a significant commitment to the development of
endovascular grafts, which are used to treat potentially life-threatening
abdominal aortic aneurysms (AAA) through a minimally invasive approach. In 1999,
Edwards Lifesciences commercially launched its Lifepath AAA Endovascular Graft
System in Europe and Australia, which is expected to add to future sales growth.
Edwards Lifesciences is conducting clinical trials in the United States and
expects to obtain FDA regulatory approval within the next two years. On
April 21, 2000, the Company announced that it temporarily suspended clinical
trials and sales of its Lifepath AAA Endovascular Graft System following the
discovery of cases in which the product's wireform had fractured. The Company
has undertaken a prompt review of all Lifepath AAA cases and is in the process
of determining if any further action is required.
PERFUSION PRODUCTS AND SERVICES
Excluding the impact of foreign currency exchange rate fluctuations, net
sales of perfusion products and services would have decreased 1% for the three
months ended March 31, 2000.
Management believes that the decrease in sales of perfusion products and
services was due primarily to a continued slowing in the number of coronary
artery bypass graft procedures on a worldwide basis as well as significant
continuing pricing pressures. Management believes that the slowdown in the
number of traditional coronary bypass graft procedure surgeries has been caused
by increased acceptance of newer, less-invasive procedures such as coronary
stenting, which often eliminates or defers the need for cardiac surgery.
Additionally, there has been an increase in the number of heart surgeries
performed "off-pump" (the surgery which is performed on a beating heart without
cardiopulmonary bypass) and this trend has reduced the need for perfusion
services and the use of many traditional perfusion products manufactured and
sold by Edwards Lifesciences.
OTHER
Other sales include a diverse grouping of product lines comprised primarily
of select distributed products that are sold in international regions, and
miscellaneous pharmaceutical products. This category of sales, which generally
represents less than ten percent of Edwards Lifesciences' total sales, has
fluctuated based on the timing of new or terminated distribution agreements,
foreign currency exchange rate fluctuations, and other factors and events.
15
<PAGE>
JOINT VENTURE IN JAPAN
Subsequent to the Distribution, the cardiovascular business in Japan is
being operated pursuant to a joint venture under which a Japanese subsidiary of
Baxter retains ownership of the Japanese business assets, but a subsidiary of
Edwards Lifesciences holds a 90% profit interest. Edwards Lifesciences will have
an option to purchase the Japanese business assets that may be exercised no
earlier than 28 months following the Distribution Date and no later than
60 months following the Distribution Date. The Japanese operations are
consolidated in the accompanying historical Combined Condensed Statements of
Income, consistent with the historical treatment of the Company's operations
while a part of Baxter. Subsequent to the Distribution, Edwards Lifesciences
recognizes as sales its shipments into the joint venture and utilizes the equity
method of accounting to record its interest in the operations of the joint
venture. On a pro forma basis, sales and other income statement amounts have
been adjusted to reflect the Japanese operations on this basis, resulting in pro
forma sales of $197 million for the three months ended March 31, 2000 and 1999
(see further pro forma information in Note 3 of Notes to Combined Condensed
Financial Statements).
GROSS MARGIN
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
------------------------
2000 1999
--------- --------
<S> <C> <C>
Gross margin percentage................................... 47.6% 49.0%
DECREASE IN 2000........................................ (1.4 pts.)
</TABLE>
Excluding the impact of foreign currency exchange rate fluctuations, the
gross margin percentage would have decreased .4 points for the three months
ended March 31, 2000. The decrease in the gross margin percentage was due
primarily to costs associated with the relocation of certain manufacturing
operations during the year 2000 and pricing pressures within the industry,
partially offset by increased sales of higher-margin cardiac surgery products.
Reflecting the Japanese operations on the equity method, the pro forma gross
margin percentage was 46.1% and 47.2% for the three months ended March 31, 2000
and 1999, respectively.
SELLING, GENERAL AND ADMINISTRATIVE (S, G + A) EXPENSES
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
-----------------------
2000 1999
-------- --------
<S> <C> <C>
S, G + A expenses as a percentage of sales.................. 26.4% 26.2%
INCREASE IN 2000.......................................... .2 pts.
</TABLE>
Excluding the impact of foreign currency exchange rate fluctuations, S,
G + A expenses as a percentage of sales would have been 26.7% and 26.2% for the
three months ended March 31, 2000 and 1999, respectively. This increase is due
primarily to additional personnel costs associated with the Company's operation
as an independent company commencing April 1, 2000.
Reflecting the Japanese operations on the equity method, the pro forma S,
G + A expenses as a percentage of sales would have been 24.7% and 24.5% for the
three months ended March 31, 2000 and 1999, respectively.
16
<PAGE>
RESEARCH AND DEVELOPMENT EXPENSES
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
-----------------------
2000 1999
-------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Research and development expenses.......................... $13.8 $12.6
% INCREASE IN 2000....................................... 10%
Research and development expenses as a percentage of
sales.................................................... 6.1% 5.7%
</TABLE>
Edwards Lifesciences is engaged in ongoing research and development to
introduce new products, to maximize the effectiveness, ease of use, safety and
reliability of its existing products and to expand the applications of its
products as appropriate. The increase in research and development expenses for
the three months ended March 31, 2000 reflects Edwards Lifesciences' strong
commitment to bolster its research and development activities in the future with
the goal of developing and commercializing new innovative products and therapies
that enhance performance and patient quality of life and address
cost-containment issues.
SPIN-OFF RELATED EXPENSES
In connection with the spin-off of Edwards Lifesciences from Baxter, certain
non-recurring costs totaling $1.4 million were incurred by Edwards Lifesciences
during the three months ended March 31, 2000. These costs primarily related to
(1) the coordination and implementation of the transaction and (2) the
recruitment of personnel to perform new corporate administrative functions.
Management expects to incur additional non-recurring spin-off related expenses
throughout 2000, estimated to be approximately $14-16 million. As an independent
stand-alone company, the Company may also be unable to obtain goods, services
and technology at prices and on terms as favorable as those it obtained prior to
the Distribution.
OTHER (EXPENSE) INCOME
The decrease in Other (Expense) Income results primarily from $2.7 million
of net insurance proceeds associated with hurricane damage at one of the
Company's manufacturing facilities during 1999.
INCOME TAXES
The effective income tax rate for Edwards Lifesciences was approximately 26%
for the three months ended March 31, 2000 and 1999. The Company expects this
rate will continue during the year 2000.
LIQUIDITY AND CAPITAL RESOURCES
Management will assess Edwards Lifesciences' liquidity in terms of its
overall ability to mobilize cash to support ongoing business levels and to fund
its growth. Historically, Edwards Lifesciences has generated sufficient cash to
satisfy its normal operating cash and capital requirements, and is expected to
continue to do so in the future.
Cash flows provided by operating activities for three months ended
March 31, 2000 decreased approximately $34 million due primarily to reduced
accounts receivable collections, increased payments to vendors, and lower
earnings. Included in cash flows provided by operating activities for 1999 was
approximately $25 million related to insurance proceeds associated with
hurricane damage at one of the Company's manufacturing facilities, and
approximately $8 million in additional proceeds relating to
17
<PAGE>
the sale of certain trade receivables in Japan to an independent financial
institution. An insignificant loss was recognized on the sale of receivables.
Uses of cash for investing activities included the purchase of convertible
debentures (see further information in Note 8 of Notes to Combined Condensed
Financial Statements) and an investment in an unconsolidated affiliate. Capital
expenditures have remained relatively constant.
As of the Distribution Date, Edwards Lifesciences had the Credit Facilities
in place for $650 million and had borrowed $529 million against the Credit
Facilities (see further information in Note 5 of Notes to Combined Condensed
Financial Statements). The proceeds of the Credit Facilities were used to repay
intercompany debt to Baxter, satisfy initial working capital requirements, and
execute asset transfers from Baxter. The Company incurred approximately
$3 million of fees during the three months ended March 31, 2000 associated with
obtaining the Credit Facilities.
In addition to the Credit Facilities, Management believes that it has
sufficient cash flows from operations and financial flexibility to attract
long-term capital to fund short-term and long-term growth objectives. However,
no assurances can be given that such long-term capital will be available to
Edwards Lifesciences on favorable terms, or at all.
EURO CONVERSION
On January 1, 1999, the European Economic and Monetary Union created and
introduced the Euro, the official single Eurocurrency for the eleven
participating member countries. A transition period is currently in effect which
began January 1, 1999 and will continue through December 31, 2001, during which
time transactions will be executed in both the Euro and the member countries'
individual currencies. Effective January 1, 2002, Euro bank notes will be
introduced and as of July 1, 2002, the Euro will be the sole legal tender of the
European Economic and Monetary Union countries.
Edwards Lifesciences has appointed a team of individuals to address all
issues associated with the conversion to the Euro and expects to be prepared for
such conversion as of the designated dates. At the time Edwards Lifesciences
switches to using the Euro as the sole functional currency for the affected
regions, certain modifications that are primarily related to information systems
will be required. The costs associated with preparing for the conversion and
continued use of the Euro will be expensed as incurred and are not expected to
be material to Edwards Lifesciences' financial position, results of operations
or cash flows. The ultimate impact on Edwards Lifesciences' business, including
the impact on the competitive environment in which Edwards Lifesciences
operates, is currently unknown.
NEW ACCOUNTING AND DISCLOSURE STANDARD
In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which is effective for all quarters of
fiscal years beginning after June 15, 2000. This Statement requires that all
derivatives be recorded in the balance sheet as either assets or liabilities and
be measured at fair value. The accounting for changes in the fair value of a
derivative depends on the intended use of the derivative and the resulting
designation. Management is in the process of evaluating this standard and has
not yet determined the future impact of this Statement on Edwards Lifesciences'
combined financial position or results of operations.
CURRENCY RISK
Edwards Lifesciences operates on a global basis and therefore is subject to
the exposure resulting from foreign currency exchange rate fluctuations. These
exposures arise from transactions denominated in foreign currencies, primarily
from translation of results of operations from outside the United States.
18
<PAGE>
Additionally, such exposures may change over time as changes occur in Edwards
Lifesciences' international operations.
For all periods presented, Edwards Lifesciences has been considered in
Baxter's overall risk management strategy. As part of this strategy, Baxter
managed its foreign currency exchange rate risk to an acceptable level based on
management's judgment of the appropriate trade-off between risk, opportunity and
costs. With respect to Edwards Lifesciences' currency risks, Baxter primarily
utilized options to hedge these exposures.
As a stand-alone company, Edwards Lifesciences manages its exposure to
foreign currency fluctuations to minimize earnings and cash flow volatility
associated with foreign exchange rate changes. In order to reduce the risk of
foreign currency exchange rate fluctuations, Edwards Lifesciences has
established a policy of hedging a substantial portion of its expected foreign
currency denominated cash flow from operations. The instruments that Edwards
Lifesciences uses for hedging are readily marketable traded forward contracts
and options with financial institutions. Edwards Lifesciences expects that the
changes in fair value of such contracts will have a high correlation to the
price changes in the related hedged cash flow. Edwards Lifesciences does not
expect that the risk of transaction gains or losses from changes in the fair
value of its foreign exchange position will be material because most
transactions will occur in either the functional currency or in a currency that
has a high correlation to the functional currency. The principal currencies that
Edwards Lifesciences will hedge are the Japanese Yen and the Euro, which present
the primary risk of loss. Any gains and losses on these hedge contracts are
expected to offset changes in the value of the related exposures. Edwards
Lifesciences will enter into foreign currency transactions only to the extent
that foreign currency exposure exists; it will not enter into foreign currency
transactions for speculative purposes.
FORWARD-LOOKING STATEMENTS
This Form 10-Q and other materials filed or to be filed by Edwards
Lifesciences with the SEC (as well as information included in oral statements or
other written statements made, or to be made, by Edwards Lifesciences) contain,
or will contain, disclosures that are "forward-looking statements."
Forward-looking statements include all statements that do not relate solely to
historical or current facts, and can generally be identified by the use of words
such as "may," "believe," "will," "expect," "project," "estimate," "anticipate,"
"plan," or "continue." These forward-looking statements address, among other
things, strategic objectives and the anticipated effects of the Distribution.
These forward-looking statements are based on the current plans and expectations
of management and are subject to a number of uncertainties and risks that could
significantly affect current plans and expectations and the future financial
condition and results of Edwards Lifesciences. These factors include, but are
not limited to:
- the highly competitive nature of the health care industry;
- the efforts of insurers, health care providers and others to contain
health care costs;
- possible changes in United States or foreign programs that may further
limit reimbursements to health care providers and insurers;
- changes in federal, state or local regulation affecting the health care
industry;
- the possible enactment of federal or state health care reform;
- the departure of key executive officers from Edwards Lifesciences;
- claims and legal actions relating to product liability;
- fluctuations in the market value of Edwards Lifesciences common stock;
- changes in accounting practices;
19
<PAGE>
- changes in general economic conditions and foreign currency fluctuations;
- product demand and risks associated with industry acceptance;
- new product development and commercialization; and
- other risk factors described above.
As a consequence, current plans, anticipated actions and future financial
conditions and results may materially differ from those expressed in any
forward-looking statements made by or on behalf of Edwards Lifesciences.
Shareholders are cautioned not to unduly rely on such forward-looking statements
when evaluating the information presented in this Form 10-Q.
20
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Upon the Distribution, Edwards Lifesciences assumed the defense of certain
Baxter litigation involving cases and claims related to the Edwards Lifesciences
Business. Edwards Lifesciences has not been named as a defendant in such matters
but will be defending and indemnifying Baxter for all related expenses and
potential liabilities. It is possible that Edwards Lifesciences may be added as
a defendant in these cases and claims.
The cases and claims relate primarily to products and services currently or
formerly manufactured or performed, as applicable, by Edwards Lifesciences. Such
cases and claims raise difficult and complex factual and legal issues and are
subject to many uncertainties and complexities, including, but not limited to,
the facts and circumstances of each particular case or claim, the jurisdiction
in which each suit is brought, and differences in applicable law. Accordingly,
in certain cases, Edwards Lifesciences is not able to estimate the amount of its
liabilities with respect to such matters.
Upon resolution of any pending legal matters, Edwards Lifesciences may incur
charges in excess of presently established reserves. While such a charge could
have a material adverse impact on Edwards Lifesciences' net income or net cash
flows in the period in which it is recorded or paid, management believes that no
such charge would have a material adverse effect on Edwards Lifesciences'
combined financial position.
Furthermore, Edwards Lifesciences operates in an industry susceptible to
significant product liability claims. In recent years, there has been an
increased public interest in product liability claims for implanted or other
medical devices. These claims may be brought by individuals seeking relief for
themselves or, increasingly, by groups seeking to represent a class. In
addition, product liability claims may be asserted against Edwards Lifesciences
in the future arising out of events not known to management at the present time.
Management believes that Edwards Lifesciences' risk management practices,
including insurance coverage, are adequate to protect against potential product
and professional liability losses.
Edwards Lifesciences is also subject to various environmental laws and
regulations both within and outside of the United States. The operations of
Edwards Lifesciences, like those of other medical device companies, involve the
use of substances regulated under environmental laws, primarily in manufacturing
and sterilization processes. While it is difficult to quantify the potential
impact of compliance with environmental protection laws, management believes
that such compliance will not have a material impact on Edwards Lifesciences'
financial position, results of operations or liquidity.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit
Index hereto.
21
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C> <C>
EDWARDS LIFESCIENCES CORPORATION
(Registrant)
Date: May 15, 2000 By: /s/ BRUCE J. BENTCOVER
------------------------------------------
Bruce J. Bentcover
CORPORATE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
</TABLE>
22
<PAGE>
EXHIBITS FILED WITH SECURITIES AND EXCHANGE COMMISSION
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<C> <S>
3.1* Amended and Restated Certificate of Incorporation of Edwards
Lifesciences Corporation
3.2* Amended and Restated Bylaws of Edwards Lifesciences
Corporation
3.3* Form of Certificate of Designation for Edwards Lifesciences
Corporation Series A Junior Participating Preferred Stock
(included as Exhibit A to Exhibit 10.9)
4.1* Specimen form of certificate representing Edwards
Lifesciences Corporation common stock
10.1* Agreement and Plan of Reorganization, dated March 31, 2000
between Edwards Lifesciences Corporation and Baxter
International Inc.
10.2* Tax Sharing Agreement, dated March 31, 2000 between Edwards
Lifesciences Corporation and Baxter International Inc.
10.3* Edwards Lifesciences Corporation Long-Term Stock Incentive
Compensation Program
10.4* Edwards Lifesciences Corporation Change in Control Severance
Agreement
10.5* Employment Agreement For Michael A. Mussallem
10.6* Edwards Lifesciences Corporation Employee Stock Purchase
Plan for United States Employees
10.7* Edwards Lifesciences Corporation Deferred Compensation Plan
10.8* Edwards Lifesciences Corporation Chief Executive Officer
Change in Control Severance Agreement
10.9* Rights Agreement between Edwards Lifesciences Corporation
and EquiServe Trust Company, N.A, as Rights Agent, dated as
of March 31, 2000
10.10* Services and Distribution Agreement between Edwards
Lifesciences LLC, as successor in interest to Baxter
Healthcare Corporation, and Allegiance Healthcare
Corporation, dated as of October 1, 1996. CONFIDENTIAL
INFORMATION APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
IN ACCORDANCE WITH SECTION 24(b) OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED AND RULE 24b-2 PROMULGATED
THEREUNDER. OMITTED INFORMATION HAS BEEN REPLACED WITH
ASTERISKS.
10.11* Form of Employment Agreement
10.12* Form of Consulting Agreement
10.13* Form of Outgoing Confidentiality Agreement
10.14* Edwards Lifesciences Corporation Nonemployee Directors and
Consultants Stock Incentive Program
10.15* Edwards Lifesciences Corporation Employee Stock Purchase
Plan for International Employees
10.16* Tokumei Kumiai Agreement by and between Baxter Limited and
Edwards Lifesciences Finance Limited, dated as of April 1,
2000
10.17* Option Agreement by and between Baxter Limited and Edwards
Lifesciences Limited, dated as of April 1, 2000
10.18* Japan Distribution Agreement by and between Baxter Limited
and Edwards Lifesciences LLC, dated as of April 1, 2000
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<C> <S>
10.19 Five Year Credit Agreement dated as of March 30, 2000, among
Edwards Lifesciences Corporation, a Delaware corporation;
the Swiss Borrowers; the Japanese Borrowers; the Lenders
from time to time party hereto, The Chase Manhattan Bank, as
Administrative Agent; Chase Manhattan International Limited,
as London Agent; The Fuji Bank, Limited, as the Tokyo Agent;
Bank One, N.A., as Syndication Agent; and Credit Suisse
First Boston, as Documentation Agent.
10.20 364-Day Credit Agreement dated as of March 30, 2000, among
Edwards Lifesciences Corporation, a Delaware corporation
(the "Company"); the Lenders from time to time party hereto;
The Chase Manhattan Bank, as Administrative Agent; Bank One,
N.A., as Syndication Agent; and Credit Suisse First Boston,
as Documentation Agent.
10.21 Edwards Lifesciences Corporation Severance Pay Plan
21.1* Subsidiaries of Edwards Lifesciences Corporation
27.1* Financial Data Schedule--December 31, 1999
27.2* Financial Data Schedule--December 31, 1998
27.3* Financial Data Schedule--December 31, 1997
27.4 Financial Data Schedule--March 31, 2000
</TABLE>
- ------------------------
* Incorporated by reference from Registrant's Registration Statement on Form
10, as amended, under the Securities Exchange Act of 1934.
24
<PAGE>
EXHIBIT 10.19
CONFORMED COPY
================================================================================
FIVE YEAR CREDIT AGREEMENT
dated as of
March 30, 2000
among
EDWARDS LIFESCIENCES CORPORATION
as Borrower
The Lenders Party Hereto
THE CHASE MANHATTAN BANK
as Administrative Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
as London Agent
THE FUJI BANK, LIMITED
as Tokyo Agent
BANK ONE, N.A.
as Syndication Agent
and
CREDIT SUISSE FIRST BOSTON
as Documentation Agent
---------------------------
CHASE SECURITIES INC.
as Arranger
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.............................................................................1
SECTION 1.02. Classification of Loans and Borrowings...................................................20
SECTION 1.03. Terms Generally..........................................................................20
SECTION 1.04. Accounting Terms; GAAP...................................................................20
SECTION 1.05. Exchange Rates...........................................................................21
SECTION 1.06. Redenomination of Certain Foreign Currencies.............................................21
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments..............................................................................22
SECTION 2.02. Loans and Borrowings.....................................................................22
SECTION 2.03. Requests for Revolving Borrowings........................................................24
SECTION 2.04. Competitive Bid Procedure................................................................25
SECTION 2.05. Letters of Credit........................................................................27
SECTION 2.06. Funding of Borrowings....................................................................32
SECTION 2.07. Repayment of Borrowings; Evidence of Debt................................................32
SECTION 2.08. Interest Elections.......................................................................33
SECTION 2.09. Termination and Reduction of Commitments.................................................35
SECTION 2.10. Increase in Commitments .................................................................35
SECTION 2.11. Prepayment of Loans......................................................................37
SECTION 2.12. Fees.....................................................................................38
SECTION 2.13. Interest.................................................................................39
SECTION 2.14. Alternate Rate of Interest...............................................................41
SECTION 2.15. Increased Costs..........................................................................41
SECTION 2.16. Break Funding Payments...................................................................42
SECTION 2.17. Taxes....................................................................................43
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs...............................44
SECTION 2.19. Mitigation Obligations; Replacement of Lenders...........................................46
SECTION 2.20. Designation of Swiss Borrowers and Japanese Borrowers....................................47
<PAGE>
2
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Corporate Existence and Standing.........................................................47
SECTION 3.02. Authorization; No Violation..............................................................47
SECTION 3.03. Governmental Consents....................................................................48
SECTION 3.04. Validity.................................................................................48
SECTION 3.05. Litigation...............................................................................48
SECTION 3.06. Financial Statements; No Material Adverse Change.........................................48
SECTION 3.07. Investment Company Act...................................................................48
SECTION 3.08. Regulation U.............................................................................48
SECTION 3.09. Environmental Matters....................................................................49
SECTION 3.10. Disclosure...............................................................................49
SECTION 3.11. Year 2000 Compliance.....................................................................49
SECTION 3.12. Subsidiary Guarantors....................................................................49
SECTION 3.13. Solvency.................................................................................49
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date...........................................................................50
SECTION 4.02. Each Credit Event........................................................................51
SECTION 4.03. Initial Credit Event for each Swiss Borrower and Japanese Borrower.......................51
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Payment of Taxes, Etc. ..................................................................52
SECTION 5.02. Maintenance of Insurance.................................................................52
SECTION 5.03. Preservation of Existence, Etc. .........................................................52
SECTION 5.04. Compliance with Laws, Etc. ..............................................................52
SECTION 5.05. Keeping of Books.........................................................................52
SECTION 5.06. Inspection...............................................................................52
SECTION 5.07. Reporting Requirements...................................................................52
SECTION 5.08. Use of Proceeds and Letters of Credit....................................................54
SECTION 5.09. Guarantee Requirement....................................................................54
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Subsidiary Debt..........................................................................54
SECTION 6.02. Liens, Etc. .............................................................................55
<PAGE>
3
SECTION 6.03. Sale and Leaseback Transactions..........................................................58
SECTION 6.04. Merger, Etc. ............................................................................58
SECTION 6.05. Change in Business.......................................................................58
SECTION 6.06. Certain Restrictive Agreements...........................................................58
SECTION 6.07. Leverage Ratio...........................................................................58
SECTION 6.08. Interest Coverage Ratio..................................................................59
SECTION 6.09. Spin-Off.................................................................................59
ARTICLE VII
Events of Default.......................................................................................59
ARTICLE VIII
The Agents..............................................................................................62
ARTICLE IX
Collection Allocation Mechanism.........................................................................64
ARTICLE X
Guarantee...............................................................................................65
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices.................................................................................67
SECTION 11.02. Waivers; Amendments.....................................................................67
SECTION 11.03. Expenses; Indemnity; Damage Waiver......................................................69
SECTION 11.04. Successors and Assigns..................................................................70
SECTION 11.05. Survival................................................................................72
SECTION 11.06. Counterparts; Integration; Effectiveness................................................72
SECTION 11.07. Severability............................................................................73
SECTION 11.08. Right of Setoff.........................................................................73
SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process..............................73
SECTION 11.10. Waiver of Jury Trial....................................................................74
SECTION 11.11. Headings................................................................................74
SECTION 11.12. Confidentiality.........................................................................74
SECTION 11.13. Conversion of Currencies................................................................75
SECTION 11.14. Termination of Covenants................................................................75
SCHEDULES:
Schedule 1.01 -- Subsidiary Guarantors
Schedule 2.01 -- Lenders and Commitments
<PAGE>
4
Schedule 2.17 -- Payment Instructions
Schedule 6.01 -- Debt of Material Subsidiaries
Schedule 6.02 -- Security Interests
EXHIBITS:
Exhibit A-1 -- Form of Borrowing Subsidiary Agreement
Exhibit A-2 -- Form of Borrowing Subsidiary Termination
Exhibit B -- Form of Assignment and Acceptance
Exhibit C -- Form of Subsidiary Guarantee Agreement
Exhibit D -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E-1 -- Form of Opinion of Counsel for the Company
Exhibit E-2 -- Form of Opinion of General Counsel of the Company
Exhibit F -- Form of Baxter Letter
</TABLE>
<PAGE>
FIVE YEAR CREDIT AGREEMENT dated as of March
30, 2000, among EDWARDS LIFESCIENCES CORPORATION, a
Delaware corporation (the "Company"); the SWISS
BORROWERS (as defined herein); the JAPANESE BORROWERS
(as defined herein) (the Company, the Swiss Borrowers
and the Japanese Borrowers being collectively called
the "Borrowers"); the LENDERS from time to time party
hereto; THE CHASE MANHATTAN BANK, as Administrative
Agent; CHASE MANHATTAN INTERNATIONAL LIMITED, as
London Agent; THE FUJI BANK, LIMITED, as the Tokyo
Agent; BANK ONE, N.A., as Syndication Agent; and
CREDIT SUISSE FIRST BOSTON, as Documentation Agent.
The Company has requested the Lenders (such term and each
other capitalized term used and not otherwise defined herein having the meaning
assigned to it in Article I) to extend credit in the form of (a) US Tranche
Commitments under which the Company may obtain Loans in US Dollars and one or
more Designated Foreign Currencies in an aggregate principal amount at any time
outstanding that will not result in the sum of the US Tranche Revolving
Exposures and the Competitive Loan Exposures exceeding $330,000,000, (b) Swiss
Tranche Commitments under which the Swiss Borrowers may obtain Loans in Swiss
Francs or Euros and the Company may obtain Loans in US Dollars in an aggregate
principal amount at any time outstanding that will not result in the Swiss
Tranche Exposure exceeding $50,000,000, (c) Japanese Tranche Commitments under
which the Japanese Borrowers may obtain Loans in Yen and the Company may obtain
Loans in US Dollars in an aggregate principal amount at any time outstanding
that will not result in the Japanese Tranche Exposure exceeding $50,000,000 and
(d) Letters of Credit in US Dollars in an aggregate stated amount at any time
outstanding up to $25,000,000. The Company has also requested the Lenders to
provide a procedure pursuant to which the Borrowers may invite the Lenders to
bid on an uncommitted basis on short-term Loans to the Borrowers. The proceeds
of borrowings hereunder and under the 364-Day Credit Agreement on the Initial
Borrowing Date in an aggregate amount of up to $550,000,000 are to be used to
pay Baxter for assets transferred to the Company in connection with the Spin-Off
or to repay intercompany debt owed to Baxter and outstanding immediately prior
to the Spin-Off; proceeds of the other borrowings hereunder, and the Letters of
Credit issued hereunder, are to be used for general corporate purposes of the
Borrowers and their subsidiaries.
The Lenders are willing to establish the credit facilities
referred to in the preceding paragraph upon 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 have the meanings specified below:
<PAGE>
2
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ADMINISTRATIVE AGENT" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"AGENTS" means, collectively, the Administrative Agent, the
London Agent and the Tokyo Agent.
"AGREEMENT CURRENCY" has the meaning assigned to such term in
Section 11.13(b).
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE AGENT" means (a) with respect to a Loan, Borrowing
or Letter of Credit denominated in US Dollars, and with respect to any payment
hereunder that does not relate to a particular Loan or Borrowing, the
Administrative Agent, (b) with respect to a Eurocurrency or Fixed Rate Loan or
Eurocurrency or Fixed Rate Borrowing denominated in any Designated Foreign
Currency, the London Agent and (c) with respect to a TIBOR or Yen Base Rate
Revolving Loan or Borrowing, the Tokyo Agent.
"APPLICABLE RATE" means, for any day, with respect to (i) any
Loan of any Type or (ii) the facility fees payable hereunder, as the case may
be, the applicable rate per annum set forth under the appropriate caption in the
table below, based upon the Leverage Ratio as of the most recent determination
date:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
=================== ========================== ================== ===================== ==================
LIBOR/TIBOR/
FACILITY YEN BASE RATE ABR SPREAD
LEVERAGE FEE (BASIS SPREAD (BASIS (BASIS POINTS
CATEGORY RATIO POINTS PER ANNUM) POINTS PER ANNUM) PER ANNUM)
=================== ========================== ================== ===================== ==================
Category 1 < 2.25 15.0 60.0 0
-
=================== ========================== ================== ===================== ==================
Category 2 > 2.25 and < 2.75 17.5 82.5 0
-
=================== ========================== ================== ===================== ==================
Category 3 > 2.75 and < 3.25 20.0 105.0 25.0
-
=================== ========================== ================== ===================== ==================
<PAGE>
3
Category 4 > 3.25 22.5 127.5 50.0
=================== ========================== ================== ===================== ==================
</TABLE>
Except as set forth below, the Leverage Ratio used on any date to determine the
Applicable Rate shall be that in effect at the end of the most recent fiscal
quarter for which financial statements shall have been delivered pursuant to
Section 5.07(a) or (b); PROVIDED that if any financial statements required to
have been delivered under Section 5.07(a) or (b) shall not at any time have been
delivered, the Applicable Rate shall, until such financial statements shall have
been delivered, be determined by reference to Category 4 in the Table above.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 11.04), and accepted by the Administrative Agent,
in the form of Exhibit B or any other form approved by the Administrative Agent.
"ATTRIBUTABLE DEBT" means, in connection with any Sale and
Leaseback Transaction, the present value (discounted in accordance with GAAP at
the discount rate implied in the lease) of the obligations of the lessee for
rental payments during the term of the lease.
"BAXTER" means Baxter International Inc., a Delaware
corporation and, prior to the Spin-Off, the owner of all the issued and
outstanding capital stock of the Company.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
"BORROWER" means the Company, any Swiss Borrower or any
Japanese Borrower.
"BORROWING" means Loans (including one or more Competitive
Loans) of the same Class, Type and currency, made, converted or continued on the
same date and, in the case of Eurocurrency Loans, TIBOR Loans or Fixed Rate
Loans, as to which a single Interest Period is in effect.
"BORROWING MINIMUM" means (a) in the case of a Borrowing
denominated in US Dollars, $5,000,000 and (b) in the case of a Borrowing
denominated in any Designated Foreign Currency, the smallest amount of such
Foreign Currency that (i) is an integral multiple of 1,000,000 units (or, in the
case of Sterling, 500,000 units) of such currency and (ii) has a US Dollar
Equivalent in excess of $5,000,000.
"BORROWING MULTIPLE" means (a) in the case of a Borrowing
denominated in US Dollars, $1,000,000 and (b) in the case of a Borrowing
denominated in any Foreign Currency, 1,000,000 units (or, in the case of
Sterling, 500,000 units) of such currency.
"BORROWING REQUEST" means a request by a Borrower for a
Revolving Borrowing in accordance with Section 2.03.
<PAGE>
4
"BORROWING SUBSIDIARY AGREEMENT" means a Borrowing Subsidiary
Agreement substantially in the form of Exhibit A-1.
"BORROWING SUBSIDIARY TERMINATION" means a Borrowing
Subsidiary Termination substantially in the form of Exhibit A-2.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; PROVIDED, that (a) when used in connection with a
Eurocurrency Loan or in connection with a Fixed Rate Loan denominated in a
Designated Foreign Currency, the term "BUSINESS DAY" shall also exclude any day
on which banks are not open for dealings in deposits in the applicable currency
in the London interbank market, (b) when used in connection with a TIBOR Loan, a
Yen Base Rate Loan or a Eurocurrency or Fixed Rate Loan denominated in a
Designated Foreign Currency, the term "BUSINESS DAY" shall also exclude any day
on which banks are not open for dealings in deposits in the applicable
Designated Foreign Currency in the principal financial center of the country of
such Designated Foreign Currency, and (c) when used in connection with a Loan
denominated in Euro, the term "BUSINESS DAY" shall also exclude any day on which
the TARGET payment system is not open for the settlement of payments in Euro.
"CALCULATION DATE" means the last Business Day of each
calendar month.
"CAM" shall mean the mechanism for the allocation and exchange
of interests in the Tranches and collections thereunder established under
Article IX.
"CAM EXCHANGE" shall mean the exchange of the Lender's
interests provided for in Article IX.
"CAM EXCHANGE DATE" shall mean the date on which any event
referred to in paragraph (g) of Article VII shall occur in respect of the
Company.
"CAM PERCENTAGE" shall mean, as to each Lender, a fraction,
expressed as a decimal, of which (a) the numerator shall be the aggregate US
Dollar Equivalent (determined on the basis of Exchange Rates prevailing on the
CAM Exchange Date) of the Specified Obligations owed to such Lender and such
Lender's participation in undrawn amounts of Letters of Credit immediately prior
to the CAM Exchange Date and (b) the denominator shall be the aggregate US
Dollar Equivalent (as so determined) of the Specified Obligations owed to all
the Lenders and the aggregate undrawn amount of outstanding Letters of Credit
immediately prior to such CAM Exchange Date.
"CHANGE IN CONTROL" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
of shares representing more than 30% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Company; or (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Company by
<PAGE>
5
Persons who were not (i) directors of the Company on the date hereof, (ii)
nominated by the board of directors of the Company or (iii) appointed by
directors so nominated.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank or by any lending office of such Lender or by such Lender's or
Issuing Bank's holding company with any request, guideline or directive (whether
or not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement.
"CHASE" means The Chase Manhattan Bank and its successors.
"CLASS", when used in reference to (a) any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are US
Tranche Revolving Loans, Competitive Loans, Swiss Tranche Revolving Loans or
Japanese Tranche Revolving Loans, and (b) any Commitment, refers to whether such
Commitment is a US Tranche Commitment, a Swiss Tranche Commitment or a Japanese
Tranche Commitment.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COMMITMENT" means a US Tranche Commitment, a Swiss Tranche
Commitment or a Japanese Tranche Commitment.
"COMPANY" has the meaning assigned to such term in the heading
of this Agreement.
"COMPETITIVE BID" means an offer by a Lender to make a
Competitive Loan in accordance with Section 2.04.
"COMPETITIVE BID RATE" means, with respect to any Competitive
Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making
such Competitive Bid.
"COMPETITIVE BID REQUEST" means a request for Competitive Bids
in accordance with Section 2.04.
"COMPETITIVE BORROWING" means a Borrowing comprised of
Competitive Loans.
"COMPETITIVE LOAN" means a Loan made pursuant to Section 2.04.
Each Competitive Loan shall be a Eurocurrency Loan or a Fixed Rate Loan.
"COMPETITIVE LOAN EXPOSURE" means, with respect to any Lender
at any time, the sum of (a) the aggregate principal amount of the outstanding
Competitive Loans of such Lender denominated in US Dollars and (b) the sum of
the US Dollar Equivalents of the aggregate
<PAGE>
6
principal amounts of the outstanding Competitive Loans of such Lender
denominated in Designated Foreign Currencies.
"CONFIDENTIAL INFORMATION MEMORANDUM" means the Confidential
Information Memorandum dated February 2000 distributed to the Lenders, together
with the appendices thereto, as amended through the date hereof.
"CONSOLIDATED EBITDA" means, for any period, the consolidated
net income of the Company and its consolidated Subsidiaries for such period
PLUS, to the extent deducted in computing such consolidated net income for such
period, the sum (without duplication) of (a) income tax expense, (b)
Consolidated Interest Expense and (c) depreciation and amortization expense,
MINUS, to the extent added in computing such consolidated net income for such
period, (a) consolidated interest income and (b) extraordinary gains. Anything
contained in this definition or elsewhere in this Agreement to the contrary
notwithstanding, in calculating Consolidated EBITDA for any four fiscal-quarter
period during which the Spin-Off shall have occurred, the Specified Charges
shall be excluded.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
interest expense of the Company and the consolidated Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP, including (a)
the amortization of debt discounts to the extent included in interest expense in
accordance with GAAP, (b) the amortization of all fees (including fees with
respect to interest rate protection agreements or other interest rate hedging
arrangements) payable in connection with the incurrence of Debt to the extent
included in interest expense in accordance with GAAP and (c) the portion of any
rents payable under capital leases allocable to interest expense in accordance
with GAAP.
"CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of
assets that would be included on a consolidated balance sheet of the Company and
the consolidated Subsidiaries (and which shall reflect the deduction of
applicable reserves) after deducting therefrom all current liabilities of the
Company and the consolidated Subsidiaries and all Intangible Assets.
"CONSOLIDATED TOTAL ASSETS" means the total amount of assets
that would be included on a consolidated balance sheet of the Company and the
consolidated Subsidiaries.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"DEBT" means, without duplication, (a) indebtedness for
borrowed money or for the deferred purchase price of property or services
carried as indebtedness on the consolidated balance sheet of the Company and the
consolidated Subsidiaries (b) obligations of the Company and the consolidated
Subsidiaries as lessee under leases that, in accordance with GAAP, are recorded
as capital leases, (c) obligations of the Company and the consolidated
Subsidiaries under direct or indirect guarantees in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of,
<PAGE>
7
indebtedness or obligations of others of the kinds referred to in clauses (a)
and (b) above (including actual or contingent liabilities in respect of letters
of credit issued to support such indebtedness or other obligations), (d)
indebtedness or obligations of the kinds referred to in clauses (a), (b) and (c)
above of the unconsolidated Subsidiaries and (e) solely for purposes of Article
VII hereof, obligations under interest rate, foreign exchange rate or other
hedging agreements. The term "Debt" shall not include the undrawn face amount of
any letter of credit issued for the account of the Company or any Subsidiary in
the ordinary course of the Company's or such Subsidiary's business (other than
any letter of credit referred to in clause (c) above), but shall include the
reimbursement obligation owing from time to time by the Company or any of the
consolidated Subsidiaries in respect of drawings made under any letter of credit
in the event reimbursement is not made immediately following the applicable
drawing. For purposes of Article VII, the "principal amount" of the obligations
of the Company or any Subsidiary in respect of any hedging agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that the Company or such Subsidiary would be required to pay if such hedging
agreement were terminated at such time.
"DEFAULT" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"DESIGNATED FOREIGN CURRENCY" means Euros, Sterling, Swiss
Francs, Yen and any other currency (other than US Dollars) approved in writing
by the US Tranche Lenders that shall be freely traded and exchangeable into US
Dollars in the London interbank market, and for which a LIBO Rate may be
determined, at the time of such approval.
"DESIGNATED AMOUNT" means, at any time, the sum of (a) the
aggregate outstanding principal amount at such time of Debt of Material
Subsidiaries (other than Subsidiary Guarantors) that is permitted under clause
(d) of Section 6.01, (b) the aggregate outstanding investment or claim held at
such time by purchasers, assignees or other transferees of (or of interests in)
Receivables sold under clause (iv) of Section 6.02(l), (c) the aggregate
outstanding principal amount at such time of Secured Debt permitted under the
last paragraph of Section 6.02 and (d) the aggregate amount at such time of the
Attributable Debt in respect of Sale and Leaseback Transactions permitted under
Section 6.03.
"EFFECTIVE DATE" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
11.02).
"EMU LEGISLATION" means the legislative measures of the
European Union for the introduction of, changeover to or operation of the Euro
in one or more member states.
"ENVIRONMENTAL LAWS" means all federal, state, local and
foreign laws, rules and regulations relating to the release, emission, disposal,
storage and related handling of waste materials, pollutants and hazardous
substances.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
<PAGE>
8
"EURO" or "E" means the single currency of the European Union
as constituted by the Treaty on European Union and as referred to in the EMU
Legislation.
"EUROCURRENCY", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the LIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in
Article VII.
"EXCHANGE RATE" means on any day, with respect to any
Designated Foreign Currency, the rate at which such Designated Foreign Currency
may be exchanged into US Dollars, as set forth at approximately 11:00 a.m.,
London time, on such day on the Reuters World Currency Page for such Designated
Foreign Currency. In the event that such rate does not appear on any Reuters
World Currency Page, the Exchange Rate shall be determined by reference to such
other publicly available service for displaying exchange rates as may be agreed
upon by the Administrative Agent and the Company, or, in the absence of such
agreement, such Exchange Rate shall instead be the arithmetic average of the
spot rates of exchange of the Administrative Agent in the market where its
foreign currency exchange operations in respect of such Designated Foreign
Currency are then being conducted, at or about 10:00 a.m., local time, on such
date for the purchase of US Dollars for delivery two Business Days later;
PROVIDED that if at the time of any such determination, for any reason, no such
spot rate is being quoted, the Administrative Agent, after consultation with the
Company, may use any reasonable method it deems appropriate to determine such
rate, and such determination shall be presumed correct absent manifest error.
"EXCLUDED TAXES" means, with respect to any Lender or the
Issuing Bank, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America (or any political subdivision thereof),
or by the jurisdiction under which such recipient is organized or in which its
principal office or any lending office from which it makes Loans hereunder is
located, (b) any branch profit taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction described in clause (a) above,
(c) in the case of a US Tranche Lender (other than a Lender that becomes a US
Tranche Lender by operation of the CAM), any withholding tax that is imposed by
the United States of America (or any political subdivision thereof) on payments
by the Company from an office within such jurisdiction to the extent such tax is
in effect and would apply as of the date such US Tranche Lender becomes a party
to this Agreement or relates to payments received by a new lending office
designated by such US Tranche Lender and is in effect and would apply at the
time such lending office is designated, (d) in the case of a Swiss Tranche
Lender (other than a Lender that becomes a Swiss Tranche Lender by operation of
the CAM), any withholding tax that is imposed (i) by Switzerland (or any
political subdivision thereof) on payments by a Swiss Borrower from an office
within such jurisdiction or (ii) by the United States of America (or any
political subdivision thereof) on payments by the Company from an office within
such jurisdiction, in either case to the extent such tax is in effect and would
apply as of the date such Swiss Tranche Lender becomes a party to this Agreement
or relates to payments received by a new lending office designated by such Swiss
Tranche Lender and is in effect and would apply at the time such
<PAGE>
9
lending office is designated, (e) in the case of a Japanese Tranche Lender
(other than a Lender that becomes a Japanese Tranche Lender by operation of the
CAM), any withholding tax that is imposed (i) by Japan (or any political
subdivision thereof) on payments by a Japanese Borrower from an office within
such jurisdiction or (ii) by the United States of America (or any political
subdivision thereof) on payments by the Company from an office within such
jurisdiction, in either case to the extent such tax is in effect and would apply
as of the date such Japanese Tranche Lender becomes a party to this Agreement or
relates to payments received by a new lending office designated by such Japanese
Tranche Lender and is in effect and would apply at the time such lending office
is designated or (f) any withholding tax that is attributable to such Lender's
failure to comply with Section 2.17(e), except, in the case of clause (c), (d)
or (e) above, to the extent that (i) such 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 applicable Borrower with respect to such
withholding tax pursuant to Section 2.17(a) or (ii) such withholding tax shall
have resulted from the making of any payment to a location other than the office
designated by the Applicable Agent or such Lender for the receipt of payments of
the applicable type from the applicable Borrower.
"EXPOSURE" means, with respect to any Lender, such Lender's US
Tranche Revolving Exposure, Competitive Loan Exposure, Swiss Tranche Exposure
and Japanese Tranche Exposure.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FIXED RATE" means, with respect to any Competitive Loan
(other than a Eurocurrency Competitive Loan), the fixed rate of interest per
annum specified by the Lender making such Competitive Loan in its related
Competitive Bid.
"FIXED RATE REVOLVING LOAN" means a Competitive Loan bearing
interest at a Fixed Rate.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not
incorporated under the laws of the United States or its territories or
possessions.
"FORM 10" means the Amended Form 10 filed by the Company with
the Securities and Exchange Commission on March 15, 2000.
"GAAP" means generally accepted accounting principles in the
United States of America.
<PAGE>
10
"GOVERNMENTAL AUTHORITY" means any nation or government, any
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government.
"GUARANTEE REQUIREMENT" means, at any time, that (a) the
Subsidiary Guarantee Agreement (or a supplement referred to in Section 15
thereof) shall have been executed by each Material Subsidiary (other than any
Foreign Subsidiary) existing at such time, shall have been delivered to the
Administrative Agent and shall be in full force and effect and (b) the
Indemnity, Subrogation and Contribution Agreement (or a supplement referred to
in Section 12 thereof) shall have been executed by the Company and each
Subsidiary Guarantor, shall have been delivered to the Administrative Agent and
shall be in full force and effect.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" means an
Indemnity, Subrogation and Contribution Agreement substantially in the form of
Exhibit D, made by the Company and the Subsidiary Guarantors in favor of the
Administrative Agent for the benefit of the Lenders.
"INITIAL BORROWING DATE" means the date of the initial
Borrowing hereunder.
"INTANGIBLE ASSETS" means all assets of the Company and the
consolidated Subsidiaries that would be treated as intangibles in conformity
with GAAP on a consolidated balance sheet of the Company and the consolidated
Subsidiaries.
"INTEREST COVERAGE RATIO" means, for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"INTEREST ELECTION REQUEST" means a request by the relevant
Borrower to convert or continue a Revolving Borrowing in accordance with Section
2.08.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR
Loan, the last day of each March, June, September and December, (b) with respect
to any Eurocurrency Loan, TIBOR Loan or Yen Base Rate Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurocurrency Borrowing or TIBOR Borrowing with an Interest Period
of more than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period and (c) with respect to any Fixed Rate Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Fixed Rate Borrowing with an Interest
Period of more than 90 days' duration (unless otherwise specified in the
applicable Competitive Bid Request), each day prior to the last day of such
Interest Period that occurs at intervals of 90 days' duration after the first
day of such Interest Period, and any other dates specified in the applicable
Competitive Bid Request as Interest Payment Dates with respect to such
Borrowing.
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11
"INTEREST PERIOD" means, (i) with respect to any Eurocurrency
Borrowing, Yen Base Rate Borrowing or TIBOR Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day in
the calendar month that is one, two, three or six months thereafter, as the
relevant Borrower may elect and (ii) with respect to any Fixed Rate Borrowing,
the period (which shall not be less than 7 days or more than 360 days)
commencing on the date of such Borrowing and ending on the date specified in the
applicable Competitive Bid Request; PROVIDED that (i) 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
Eurocurrency Borrowing or TIBOR 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 and (ii) any Interest Period
pertaining to a Eurocurrency Borrowing or TIBOR Borrowing that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made, and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
"ISSUING BANK" means the Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.05(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term "Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
"JAPANESE BORROWER" means any Japanese Subsidiary that has
been designated as such pursuant to Section 2.20 and that has not ceased to be a
Japanese Borrower as provided in such Section.
"JAPANESE SUBSIDIARY" means any Subsidiary that is
incorporated or otherwise organized in Japan.
"JAPANESE TRANCHE COMMITMENT" means, with respect to each
Japanese Tranche Lender, the commitment of such Japanese Tranche Lender to make
Japanese Tranche Revolving Loans pursuant to Section 2.01(c), expressed as an
amount representing the maximum aggregate amount of such Japanese Tranche
Lender's Japanese Tranche Exposure hereunder, as such commitment 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 11.04. The initial amount of each Japanese Tranche Lender's Japanese
Tranche Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which Japanese Tranche Lender shall have assumed its
Japanese Tranche Commitment, as applicable. The aggregate amount of the Japanese
Tranche Commitments on the date hereof is $50,000,000.
"JAPANESE TRANCHE EXPOSURE" means, with respect to any
Japanese Tranche Lender at any time, such Lender's Japanese Tranche Percentage
of the sum of the US Dollar Equivalents of the principal amounts of the
outstanding Japanese Tranche Revolving Loans.
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12
"JAPANESE TRANCHE LENDER" mean a Lender with a Japanese
Tranche Commitment.
"JAPANESE TRANCHE PERCENTAGE" means, with respect to any
Japanese Tranche Lender, the percentage of the total Japanese Tranche
Commitments represented by such Lender's Japanese Tranche Commitment. If the
Japanese Tranche Commitments have terminated or expired, the Japanese Tranche
Percentages shall be determined based upon the Japanese Tranche Commitments most
recently in effect, giving effect to any assignments.
"JAPANESE TRANCHE REVOLVING BORROWING" means a Borrowing
comprised of Japanese Tranche Revolving Loans.
"JAPANESE TRANCHE REVOLVING LOAN" means a Loan made by a
Japanese Tranche Lender pursuant to Section 2.01(c). Each Japanese Tranche
Revolving Loan made to the Company shall be denominated in US Dollars and shall
be a Eurocurrency Loan or an ABR Loan, and each Japanese Tranche Revolving Loan
made to a Japanese Borrower shall be denominated in Yen and shall be a TIBOR
Loan or a Yen Base Rate Loan.
"JUDGMENT CURRENCY" has the meaning assigned to such term in
Section 11.13(b).
"LC DISBURSEMENT" means a payment made by the Issuing Bank in
respect of a Letter of Credit.
"LC EXPOSURE" means at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time and (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Company or the applicable Subsidiary at such time. The LC
Exposure of any US Tranche Lender at any time shall be such Lender's US Tranche
Percentage of the aggregate LC Exposure.
"LENDERS" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance or as provided in Section 2.10, other than any such Person that shall
have ceased to be a party hereto pursuant to an Assignment and Acceptance.
"LETTER OF CREDIT" means any letter of credit issued pursuant
to this Agreement on behalf of Lenders holding US Tranche Commitments.
"LEVERAGE RATIO" means, at any time, the ratio of (a) Total
Debt at such time to (b) Consolidated EBITDA for the most recent period of four
consecutive fiscal quarters of the Company ended at or prior to such time.
"LIBO RATE" means, with respect to any Eurocurrency Borrowing
for any Interest Period, the rate per annum determined by the Applicable Agent
at approximately 11:00 a.m., London time, on the Quotation Day for such Interest
Period by reference to the British Bankers' Association Interest Settlement
Rates for deposits in the currency of such
<PAGE>
13
Borrowing (as reflected on the applicable Telerate screen), 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, "LIBO
Rate" shall mean the interest rate per annum determined by the Applicable Agent
to be the average of the rates per annum at which deposits in the currency of
such Borrowing are offered for such Interest Period to major banks in the London
interbank market by Chase at approximately 11:00 a.m., London time, on the
Quotation Day for such Interest Period.
"LOAN DOCUMENTS" means this Agreement, each Borrowing
Subsidiary Agreement, each Borrowing Subsidiary Termination, the Subsidiary
Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement and
each Letter of Credit and promissory note delivered pursuant to this Agreement.
"LOAN PARTIES" means the Borrowers and the Subsidiary
Guarantors.
"LOANS" means the loans made by the Lenders to the Borrowers
pursuant to this Agreement.
"LOCAL TIME" means (a) with respect to a Loan, Borrowing or
Letter of Credit denominated in US Dollars, New York City time, (b) with respect
to a Eurocurrency or Fixed Rate Loan or Eurocurrency or Fixed Rate Borrowing
denominated in any Designated Foreign Currency, London time and (c) with respect
to a TIBOR or Yen Base Rate Revolving Loan or Borrowing, Tokyo time.
"LONDON AGENT" means Chase Manhattan International Limited.
"MARGIN" means, with respect to any Competitive Loan bearing
interest at a rate based on the LIBO Rate, the marginal rate of interest, if
any, to be added to or subtracted from the LIBO Rate to determine the rate of
interest applicable to such Loan, as specified by the Lender making such Loan in
its related Competitive Bid.
"MATERIAL SUBSIDIARY" means (a) any Swiss Borrower or Japanese
Borrower, (b) any Subsidiary that directly or indirectly owns or Controls any
Material Subsidiary and (c) any other Subsidiary (i) the net revenues of which
for the most recent period of four fiscal quarters of the Company for which
audited financial statements have been delivered pursuant to Section 5.01 were
greater than 5% of the Company's consolidated net revenues for such period or
(ii) the net tangible assets of which as of the end of such period were greater
than 5% of Consolidated Net Tangible Assets as of such date; PROVIDED that if at
any time the aggregate amount of the net revenues or net tangible assets of all
Subsidiaries that are not Material Subsidiaries for or at the end of any period
of four fiscal quarters exceeds 5% of the Company's consolidated net revenues
for such period or 5% of Consolidated Net Tangible Assets as of the end of such
period, the Company (or, in the event the Company has failed to do so within 10
days, the Administrative Agent) shall designate sufficient Subsidiaries as
"Material Subsidiaries" to eliminate such excess, and such designated
Subsidiaries shall for all purposes of this Agreement constitute Material
Subsidiaries. For purposes of making the determinations required by this
definition, revenues and assets of Foreign Subsidiaries shall be converted into
US Dollars at the rates used in
<PAGE>
14
preparing the consolidated balance sheet of the Company included in the
applicable financial statements.
"MATURITY DATE" means March 30, 2005.
"OBLIGATIONS" means (a) the due and punctual payment of (i)
the principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans made to any Borrower, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by any Borrower under this Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide cash
collateral and (iii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Loan Parties under this
Agreement and the other Loan Documents, and (b) unless otherwise agreed upon in
writing by the applicable Lender party thereto, the due and punctual payment and
performance of all obligations of the Company or any Subsidiary, monetary or
otherwise, under each interest rate hedging Agreement relating to Obligations
referred to in the preceding clause (a) entered into with any counterparty that
was a Lender (or an Affiliate thereof) at the time such hedging agreement was
entered into.
"OTHER TAXES" means any and all present or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies arising from any payment made hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
"PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"QUOTATION DAY" means, with respect to any Eurocurrency
Borrowing and any Interest Period, the day on which it is market practice in the
relevant interbank market for prime banks to give quotations for deposits in the
currency of such Borrowing for delivery on the first day of such Interest
Period. If such quotations would normally be given by prime banks on more than
one day, the Quotation Day will be the last of such days.
"REGISTER" has the meaning set forth in Section 11.04.
<PAGE>
15
"RELATED FUND" means, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank loans and
is managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
trustees, agents and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing more than 50% of
the sum of the total Revolving Credit Exposures and unused Commitments at such
time; PROVIDED that, for purposes of declaring the Loans to be due and payable
pursuant to Article VII, and for all purposes after the Loans become due and
payable pursuant to Article VII or the Commitments expire or terminate, the
outstanding Competitive Loans of the Lenders shall be included in their
respective Revolving Credit Exposures in determining the Required Lenders.
"RESET DATE" has the meaning set forth in Section 1.05(a).
"REVOLVING AVAILABILITY PERIOD" means the period from and
including the Effective Date to but excluding the earlier of the Maturity Date
and the date of termination of the Commitments.
"REVOLVING BORROWING" means a Borrowing comprised of US
Tranche Revolving Loans, Swiss Tranche Revolving Loans or Japanese Tranche
Revolving Loans.
"REVOLVING CREDIT EXPOSURE" means a US Tranche Revolving
Exposure, a Swiss Tranche Exposure or a Japanese Tranche Exposure.
"REVOLVING LOAN" means any US Tranche Revolving Loan, Swiss
Tranche Revolving Loan or Japanese Tranche Revolving Loan.
"SALE AND LEASEBACK TRANSACTION" means any arrangement whereby
the Company or a Material Subsidiary, directly or indirectly, 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.
"SECURED DEBT" means Debt or any other obligation or liability
of the Company or any Material Subsidiary the payment of which is secured by a
Security Interest.
"SECURITY INTEREST" means any lien, security interest,
mortgage or other charge or encumbrance of any kind, title retention device,
pledge or any other type of preferential arrangement, upon or with respect to
any property of the Company or any Material Subsidiary, whether now owned or
hereafter acquired.
<PAGE>
16
"SPECIFIED CHARGES" means costs related to the Spin-Off and
related restructuring charges accrued during the fiscal quarter in which the
Spin-Off occurs or during the next seven succeeding fiscal quarters not to
exceed $100,000,000 (and the cash amount of which does not exceed $50,000,000).
"SPECIFIED OBLIGATIONS" means Obligations consisting of the
principal of and interest on Loans, reimbursement obligations in respect of LC
Disbursements, and fees.
"SPIN-OFF" means the distribution by Baxter, on or about April
1, 2000, of all the issued and outstanding capital stock of the Company to the
existing shareholders of Baxter on the terms and with the results described in
the Form 10.
"STATUTORY RESERVE RATE" means, with respect to any currency,
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, liquid asset or similar percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by any Governmental Authority of the United States or of the jurisdiction of
such currency or any jurisdiction in which Loans in such currency are made to
which banks in such jurisdiction are subject for any category of deposits or
liabilities customarily used to fund loans in such currency or by reference to
which interest rates applicable to Loans in such currency are determined. Such
reserve, liquid asset or similar percentages shall include those imposed
pursuant to Regulation D of the Board. Eurocurrency Loans and TIBOR Loans shall
be deemed 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 any applicable law, rule or regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"STERLING" or "L" means the lawful money of the United
Kingdom.
"SUBSIDIARY" means, with respect to any Person, any entity
with respect to which such Person alone owns, such Person or one or more of its
subsidiaries together own, or such Person and any Person Controlling such Person
together own, in each case directly or indirectly, capital stock or other equity
interests having ordinary voting power to elect a majority of the members of the
Board of Directors of such corporation or other entity or having a majority
interest in the capital or profits of such corporation or other entity.
"SUBSIDIARY" means any subsidiary of the Company.
"SUBSIDIARY GUARANTEE AGREEMENT" means a Subsidiary Guarantee
Agreement substantially in the form of Exhibit C, made by the Subsidiary
Guarantors in favor of the Administrative Agent for the benefit of the Lenders.
"SUBSIDIARY GUARANTORS" means each Person listed on Schedule
1.01 and each other Person that becomes party to a Subsidiary Guarantee
Agreement as a Subsidiary Guarantor, and the permitted successors and assigns of
each such Person.
<PAGE>
17
"SWISS BORROWER" means any Swiss Subsidiary that has been
designated as such pursuant to Section 2.20 and that has not ceased to be a
Swiss Borrower as provided in such Section.
"SWISS SUBSIDIARY" means any Subsidiary that is incorporated
or otherwise organized in Switzerland.
"SWISS FRANCS" or "SF" means the lawful money of Switzerland.
"SWISS TRANCHE COMMITMENT" means, with respect to each Swiss
Tranche Lender, the commitment of such Swiss Tranche Lender to make Swiss
Tranche Revolving Loans pursuant to Section 2.01(b), expressed as an amount
representing the maximum aggregate amount of such Swiss Tranche Lender's Swiss
Tranche Exposure hereunder, as such commitment 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 11.04. The
initial amount of each Swiss Tranche Lender's Swiss Tranche Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Swiss Tranche Lender shall have assumed its Swiss Tranche Commitment, as
applicable. The aggregate amount of the Swiss Tranche Commitments on the date
hereof is $50,000,000.
"SWISS TRANCHE EXPOSURE" means, with respect to any Swiss
Tranche Lender at any time, such Lender's Swiss Tranche Percentage of the sum of
the US Dollar Equivalents of the principal amounts of the outstanding Swiss
Tranche Revolving Loans.
"SWISS TRANCHE LENDER" mean a Lender with a Swiss Tranche
Commitment.
"SWISS TRANCHE PERCENTAGE" means, with respect to any Swiss
Tranche Lender, the percentage of the total Swiss Tranche Commitments
represented by such Lender's Swiss Tranche Commitment. If the Swiss Tranche
Commitments have terminated or expired, the Swiss Tranche Percentages shall be
determined based upon the Swiss Tranche Commitments most recently in effect,
giving effect to any assignments.
"SWISS TRANCHE REVOLVING BORROWING" means a Borrowing
comprised of Swiss Tranche Revolving Loans.
"SWISS TRANCHE REVOLVING LOAN" means a Loan made by a Swiss
Tranche Lender pursuant to Section 2.01(b). Each Swiss Tranche Revolving Loan
made to the Company shall be denominated in US Dollars and shall be a
Eurocurrency Loan or an ABR Loan, and each Swiss Tranche Revolving Loan made to
a Swiss Borrower shall be denominated in Swiss Francs and shall be a
Eurocurrency Loan.
"TAXES" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"364-DAY CREDIT AGREEMENT" means the 364-Day Credit Agreement
dated as of the date hereof among the Company, the Lenders from time to time
party thereto, the
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18
Administrative Agent and the Syndication Agent and Documentation Agent named in
the heading of this Agreement.
"TIBO RATE" means, with respect to any TIBOR Borrowing for any
Interest Period, the interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) for deposits for a maturity most nearly comparable to such
Interest Period in Yen appearing on Telerate Screen page 17097 (or on any
successor or substitute page of such service providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Tokyo Agent from time to time for purposes of providing
quotations of interest rates in the Tokyo interbank market) at approximately
11:00 a.m., Tokyo time, two Business Days prior to the commencement of such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "TIBO RATE" with respect to such TIBOR Borrowing for such
Interest Period shall be the rate at which deposits for a maturity most nearly
comparable to such Interest Period in Yen are offered by the principal Tokyo
office of the Tokyo Agent in immediately available funds in the Tokyo interbank
market at approximately 11:00 a.m., Tokyo time, two Business Days prior to the
commencement of such Interest Period.
"TIBOR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the TIBO Rate.
"TOKYO AGENT" means The Fuji Bank, Limited.
"TOTAL DEBT" means, at any date, all Debt of the Company and
its consolidated Subsidiaries at such date to the extent such Debt should be
reflected on a consolidated balance sheet of the Company at such date in
accordance with GAAP.
"TRANCHE" means a category of Commitments and extensions of
credit thereunder. For purposes hereof, each of the following comprise a
separate Tranche: (i) the US Tranche Commitments, the US Tranche Revolving Loans
and the Competitive Loans, (ii) the Swiss Tranche Commitments and the Swiss
Tranche Revolving Loans and (iii) the Japanese Tranche Commitments and the
Japanese Tranche Revolving Loans.
"TRANSACTIONS" means the execution, delivery and performance
by the Loan Parties of the Loan Documents, the borrowing of Loans and the use of
the proceeds thereof and the issuance of Letters of Credit hereunder.
"TRANSFER ASSETS" means (a) when referring to the Company, the
conveyance, transfer, lease or other disposition (whether in one transaction or
in a series of transactions) of all or substantially all of the assets of the
Company or of the Company and its Subsidiaries taken as a whole, and (b) when
referring to a Subsidiary, the conveyance, transfer, lease or other disposition
(whether in one transaction or in a series of transactions) of all or
substantially all of the assets of such Subsidiary.
"TYPE", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by
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19
reference to the LIBO Rate, the TIBO Rate, the Alternate Base Rate, the Yen Base
Rate or a Fixed Rate.
"UNFUNDED LIABILITIES" means, in the case of a single employer
pension benefit plan which is covered by Title IV of ERISA, the amount, if any,
by which the present value of all vested benefits accrued to the date of
determination under such plan exceeds the fair market value of all assets of
such plan allocable to such benefits as of such date, and, in the case of a
multiemployer pension plan, the withdrawal liability of the Company and the
Subsidiaries.
"US CORPORATION" means a corporation organized and existing
under the laws of the United States, any state thereof or the District of
Columbia.
"US DOLLAR EQUIVALENT" means, on any date of determination,
(a) with respect to any amount in US Dollars, such amount, and (b) with respect
to any amount in any Designated Foreign Currency, the equivalent in US Dollars
of such amount, determined by the Administrative Agent pursuant to Section 1.05
using the Exchange Rate with respect to such Designated Foreign Currency at the
time in effect under the provisions of such Section.
"US DOLLARS" or "$" means the lawful money of the United
States of America.
"US TRANCHE COMMITMENT" means, with respect to each US Tranche
Lender, the commitment of such US Tranche Lender to make US Tranche Revolving
Loans pursuant to Section 2.01(a), expressed as an amount representing the
maximum aggregate amount of such US Tranche Lender's US Tranche Revolving
Exposure hereunder, as such commitment 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 11.04. The initial
amount of each US Tranche Lender's US Tranche Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such US
Tranche Lender shall have assumed its US Tranche Commitment, as applicable.
The aggregate amount of the US Tranche Commitments on the date hereof is
$330,000,000.
"US TRANCHE LENDER" mean a Lender with a US Tranche
Commitment.
"US TRANCHE PERCENTAGE" means, with respect to any US Tranche
Lender, the percentage of the total US Tranche Commitments represented by such
Lender's US Tranche Commitment. If the US Tranche Commitments have terminated or
expired, the US Tranche Percentages shall be determined based upon the US
Tranche Commitments most recently in effect, giving effect to any assignments.
"US TRANCHE REVOLVING BORROWING" means a Borrowing comprised
of US Tranche Revolving Loans.
"US TRANCHE REVOLVING EXPOSURE" means, with respect to any US
Tranche Lender at any time, the sum at such time, without duplication, of (a)
such Lender's US Tranche Percentage of the sum of the US Dollar Equivalents of
the principal amounts of the outstanding US Tranche Revolving Loans, plus (b)
the aggregate amount of such Lender's LC Exposure.
<PAGE>
20
"US TRANCHE REVOLVING LOAN" means a Loan made by a US Tranche
Lender pursuant to Section 2.01(a). Each US Tranche Revolving Loan denominated
in US Dollars shall be a Eurocurrency Loan or an ABR Loan, and each US Tranche
Revolving Loan denominated in a Designated Foreign Currency shall be a
Eurocurrency Loan.
"YEN" or "Y" refers to the lawful money of Japan.
"YEN BASE RATE" means, with respect to any Yen Base Rate
Revolving Borrowing for any Interest Period, the rate of interest per annum
publicly announced from time to time by the Tokyo Agent as its short-term prime
rate in effect at its principal office in Tokyo; each change in the Yen Base
Rate shall be effective from and including the date such change is publicly
announced as being effective.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For
purposes of this Agreement, Loans may be classified and referred to by Class
(E.G., a "US Tranche Revolving Loan") or by Type (E.G., a "Eurocurrency Loan")
or by Class and Type (E.G., a "Eurocurrency US Tranche Revolving Loan").
Borrowings also may be classified and referred to by Class (E.G., a "US Tranche
Revolving Borrowing") or by Type (E.G., a "US Tranche Eurocurrency Borrowing")
or by Class and Type (E.G., a "Eurocurrency US Tranche Revolving Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder" and words of similar import shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP as in effect from time to time; PROVIDED
that if the Company notifies the Administrative Agent that the Company 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 Company
that the Required Lenders request an amendment to any provision hereof for such
purpose),
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21
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.
SECTION 1.05. EXCHANGE RATES. (a) Not later than 10:00 a.m.,
New York City time, on each Calculation Date, the Administrative Agent shall (i)
determine the Exchange Rate as of such Calculation Date with respect to each
Designated Foreign Currency and (ii) give written notice thereof to the Lenders
and the Company. The Exchange Rates so determined shall become effective on the
first Business Day immediately following the relevant Calculation Date (a "RESET
DATE"), shall remain effective until the next succeeding Reset Date, and shall
for all purposes of this Agreement (other than Section 11.13 or any other
provision expressly requiring the use of a current Exchange Rate) be the
Exchange Rates employed in converting any amounts between US Dollars and
Designated Foreign Currencies.
(b) Not later than 5:00 p.m., New York City time, on each
Reset Date and each date on which Revolving Loans denominated in any Designated
Foreign Currency are made, the Administrative Agent shall (i) determine the
aggregate amount of the US Dollar Equivalents of the principal amounts of the
Revolving Loans of each Class denominated in Designated Foreign Currencies
(after giving effect to any Revolving Loans made or repaid on such date) and
(ii) notify the Lenders and the Company of the results of such determination.
SECTION 1.06. REDENOMINATION OF CERTAIN FOREIGN CURRENCIES.
(a) Each obligation of any party to this Agreement to make a payment denominated
in the national currency unit of any member state of the European Union that
adopts the Euro as its lawful currency after the date hereof shall be
redenominated into Euro at the time of such adoption (in accordance with the EMU
Legislation). If, in relation to the currency of any such member state, the
basis of accrual of interest expressed in this Agreement in respect of that
currency shall be inconsistent with any convention or practice in the London
Interbank Market for the basis of accrual of interest in respect of the Euro,
such expressed basis shall be replaced by such convention or practice with
effect from the date on which such member state adopts the Euro as its lawful
currency; PROVIDED that if any Borrowing in the currency of such member state is
outstanding immediately prior to such date, such replacement shall take effect,
with respect to such Borrowing, at the end of the then current Interest Period.
(b) Each provision of this Agreement shall be subject to such
reasonable changes of construction as the Administrative Agent may from time to
time specify to be appropriate to reflect the adoption of the Euro by any member
state of the European Union and any relevant market conventions or practices
relating to the Euro.
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22
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. (a) Subject to the terms and
conditions set forth herein, each US Tranche Lender agrees to make US Tranche
Revolving Loans to the Company from time to time during the Revolving
Availability Period in US Dollars or any Designated Foreign Currency in an
aggregate principal amount at any time outstanding that will not result in (i)
such Lender's US Tranche Revolving Exposure exceeding its US Tranche Commitment
or (ii) the aggregate amount of the Lenders' US Tranche Revolving Exposures and
Competitive Loan Exposures exceeding the aggregate amount of the US Tranche
Commitments.
(b) Subject to the terms and conditions set forth herein, each
Swiss Tranche Lender agrees to make Swiss Tranche Revolving Loans to the Swiss
Borrowers in Swiss Francs or Euros and to the Company in US Dollars in an
aggregate principal amount at any time outstanding that will not result in (i)
such Lender's Swiss Tranche Exposure exceeding its Swiss Tranche Commitment or
(ii) the aggregate amount of the Lenders' Swiss Tranche Exposures exceeding the
aggregate amount of the Swiss Tranche Commitments.
(c) Subject to the terms and conditions set forth herein, each
Japanese Tranche Lender agrees to make Japanese Tranche Revolving Loans to the
Japanese Borrowers in Yen and to the Company in US Dollars in an aggregate
principal amount at any time outstanding that will not result in (i) such
Lender's Japanese Tranche Exposure exceeding its Japanese Tranche Commitment or
(ii) the aggregate amount of the Lenders' Japanese Tranche Exposures exceeding
the aggregate amount of the Japanese Tranche Commitments.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each US Tranche
Revolving Loan shall be made as part of a Borrowing consisting of US Tranche
Revolving Loans made by the US Tranche Lenders ratably in accordance with their
respective US Tranche Commitments. Each Swiss Tranche Revolving Loan shall be
made as part of a Borrowing consisting of Swiss Tranche Revolving Loans made by
the Swiss Tranche Lenders ratably in accordance with their respective Swiss
Tranche Commitments. Each Japanese Tranche Revolving Loan shall be made as part
of a Borrowing consisting of Japanese Tranche Revolving Loans made by the
Japanese Tranche Lenders ratably in accordance with their respective Japanese
Tranche Commitments. Each Competitive Loan shall be made in accordance with the
procedures set forth in Section 2.04. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; PROVIDED that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required hereunder.
(b) Subject to Section 2.14, (i) each US Tranche Revolving
Borrowing shall be comprised entirely of (A) in the case of a Borrowing
denominated in US Dollars, Eurocurrency Loans or ABR Loans and (B) in the case
of a Borrowing denominated in a Designated Foreign Currency, Eurocurrency Loans,
in each case as the Company may request in accordance herewith; (ii) each Swiss
Tranche Revolving Borrowing shall be comprised entirely of (A) in the case of a
Borrowing denominated in Swiss Francs or Euros, Eurocurrency Loans and, (B) in
the
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23
case of a Borrowing denominated in US Dollars, Eurocurrency Loans or ABR Loans,
in each case as the applicable Borrower may request in accordance herewith;
(iii) each Japanese Tranche Revolving Borrowing shall be comprised entirely of
(A) in the case of a Borrowing denominated in Yen, TIBOR Loans or Yen Base Rate
Loans and (B) in the case of a Borrowing denominated in US Dollars, Eurocurrency
Loans or ABR Loans, in each case as the applicable Borrower may request in
accordance herewith; and (iv) each Competitive Borrowing shall be comprised
entirely of Eurocurrency Loans or Fixed Rate Loans, in each case as the
applicable Borrower may request in accordance herewith. Each Lender at its
option may make any Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan (and in the case of an Affiliate, the
provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate
to the same extent as to such Lender); PROVIDED that any exercise of such option
shall not affect the obligation of the applicable Borrower to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Borrowing, such Borrowing shall be in an aggregate amount that is at least equal
to the Borrowing Minimum and an integral multiple of the Borrowing Multiple;
PROVIDED that (i) an ABR Revolving Borrowing may be made in an aggregate amount
that is equal to the aggregate available US Tranche Commitments, Swiss Tranche
Commitments or Japanese Tranche Commitments, as the case may be and (ii) a Yen
Base Rate Revolving Borrowing may be made in an aggregate amount that is equal
to the aggregate available Japanese Tranche Commitments. Borrowings of more than
one Type and Class may be outstanding at the same time; PROVIDED that there
shall not at any time be more than a total of (i) twelve US Tranche Eurocurrency
Revolving Borrowings outstanding, (ii) six Swiss Tranche Eurocurrency Revolving
Borrowings outstanding or (iii) six Japanese Tranche TIBOR or Eurocurrency
Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
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24
SECTION 2.03. REQUESTS FOR REVOLVING BORROWINGS. To request a
Revolving Borrowing, the applicable Borrower, or the Company on behalf of the
applicable Borrower, shall notify the Applicable Agent of such request by
telephone (a) in the case of a Eurocurrency Borrowing, not later than 12:00
noon, Local Time, three Business Days before the date of the proposed Borrowing,
(b) in the case of a TIBOR Borrowing, not later than 5:00 p.m., Local Time, four
Business Days before the date of the proposed Borrowing, (c) in the case of an
ABR Borrowing, not later than 12:00 noon, Local Time, one Business Day before
the date of the proposed Borrowing and (d) in the case of a Yen Base Rate
Revolving Borrowing, not later than 12:00 noon, Local Time, two Business Days
before the date of the proposed Borrowing; PROVIDED that any such notice of an
ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.05(e) may be given not later than 12:00 noon, Local
Time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Applicable Agent of a written Borrowing Request in a form
approved by the Applicable Agent and signed by the applicable Borrower, or by
the Company on behalf of the applicable Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the Borrower requesting such Borrowing (or on whose behalf
the Company is requesting such Borrowing);
(ii) whether the requested Borrowing is to be a US Tranche
Revolving Borrowing, a Swiss Tranche Revolving Borrowing or a Japanese
Tranche Revolving Borrowing;
(iii) the currency and aggregate principal amount of the
requested Borrowing;
(iv) the date of the requested Borrowing, which shall be a
Business Day;
(v) the Type of the requested Borrowing;
(vi) in the case of a Eurocurrency Borrowing, TIBOR Borrowing
or Yen Base Rate Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period";
(vii) the location and number of the relevant Borrower's
account to which funds are to be disbursed, which shall comply with the
requirements of Section 2.06; and
(ix) in the case of a Borrowing in a Foreign Currency, the
location from which payments of the principal and interest on such
Borrowing will be made.
If no currency is specified with respect to any requested Eurocurrency Revolving
Borrowing, then the relevant Borrower shall be deemed to have selected US
Dollars. If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be (i) in the case of a Borrowing denominated in US
Dollars, an ABR Borrowing, (ii) in the case of a Borrowing by a Swiss Borrower
denominated in Swiss Francs, a Eurocurrency Borrowing, (iii) in the case of a
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25
Borrowing by a Japanese Borrower denominated in Yen, a Yen Base Rate Revolving
Borrowing and (iv) in the case of any other Borrowing, a Eurocurrency Borrowing.
If no Interest Period is specified with respect to any requested Eurocurrency
Borrowing or TIBOR Borrowing, then the relevant Borrower shall be deemed to have
selected an Interest Period of one month's duration. Promptly following receipt
of a Borrowing Request in accordance with this Section, the Applicable Agent
shall advise each Lender that will make a Loan as part of the requested
Borrowing of the details thereof and of the amount of the Loan to be made by
such Lender as part of the requested Borrowing.
SECTION 2.04. COMPETITIVE BID PROCEDURE. (a) Subject to the
terms and conditions set forth herein, from time to time during the Revolving
Availability Period the Company may request Competitive Bids for Competitive
Loans in US Dollars or one or more Designated Foreign Currencies and may (but
shall not have any obligation to) accept Competitive Bids and borrow Competitive
Loans; PROVIDED that the sum of the US Tranche Revolving Exposures and
Competitive Loan Exposures at any time shall not exceed the aggregate amount of
the Lenders' US Tranche Commitments. To request Competitive Bids, the Company
shall notify the Applicable Agent of such request by telephone, (i) in the case
of a Eurocurrency Competitive Borrowing or a Fixed Rate Competitive Borrowing
denominated in a Designated Foreign Currency, not later than 12:00 noon, Local
Time, four Business Days before the date of the proposed Competitive Borrowing
and (ii) in the case of a Fixed Rate Revolving Borrowing denominated in US
Dollars, not later than 12:00 noon, Local Time, one Business Day before the date
of the proposed Competitive Borrowing. Not more than three Competitive Bid
Requests may be submitted on the same day, and a Competitive Bid Request shall
not be made within five Business Days after the date of any previous Competitive
Bid Request unless any and all such previous Competitive Bid Requests shall have
been withdrawn or all Competitive Bids received in response thereto rejected.
Each telephonic Competitive Bid Request shall be confirmed promptly by hand
delivery or telecopy to the Applicable Agent of a written Competitive Bid
Request in a form approved by the Applicable Agent and signed by the Company.
Each such telephonic and written Competitive Bid Request shall specify the
following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether the requested Borrowing is to be denominated in
US Dollars or a Designated Foreign Currency (specifying such Designated
Foreign Currency, if applicable);
(iv) whether such Borrowing is to be a Eurocurrency Borrowing
or a Fixed Rate Revolving Borrowing;
(v) the Interest Period to be applicable to such Borrowing,
which shall be a period contemplated by the definition of the term
"Interest Period";
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(vi) the location and number of the Company's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.06; and
(vii) in the case of any Borrowing in a Designated Foreign
Currency, the location from which payments of the principal of and
interest on such Borrowing will be made.
If no election as to the currency of a Borrowing is specified in any Competitive
Bid Request, then the Company shall be deemed to have requested a Borrowing in
US Dollars. Promptly following receipt of a Competitive Bid Request in
accordance with this Section, the Applicable Agent shall notify the Lenders of
the details thereof by telecopy, inviting the US Tranche Lenders to submit
Competitive Bids.
(b) Each US Tranche Lender may (but shall not have any
obligation to) make one or more Competitive Bids to the Company in response to a
Competitive Bid Request. Each Competitive Bid by a Lender must be in a form
approved by the Applicable Agent and must be received by the Applicable Agent by
telecopy, (i) in the case of a Eurocurrency Competitive Borrowing or a Fixed
Rate Competitive Borrowing denominated in a Designated Foreign Currency, not
later than 11:00 a.m., Local Time, three Business Days before the date of the
proposed Competitive Borrowing and (ii) in the case of a Fixed Rate Revolving
Borrowing denominated in US Dollars, not later than 9:30 a.m., Local Time, on
the date of the proposed Competitive Borrowing. Competitive Bids that do not
conform to the form approved by the Applicable Agent may be rejected by the
Applicable Agent, and the Applicable Agent shall notify the applicable Lender as
promptly as practicable. Each Competitive Bid shall specify (i) the principal
amount (which shall be in an amount that is at least equal to the Borrowing
Minimum and an integral multiple of the Borrowing Multiple, and which may equal
the entire principal amount of the Competitive Borrowing requested by the
Company) of the Competitive Loan or Loans that the Lender is willing to make,
(ii) the Competitive Bid Rate or Rates at which the Lender is prepared to make
such Loan or Loans (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places) and (iii) the Interest Period
applicable to each such Loan and the last day thereof.
(c) The Applicable Agent shall promptly notify the Company by
telecopy of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid and the identity of the US Tranche Lender that shall have made
such Competitive Bid.
(d) Subject only to the provisions of this paragraph, the
Company may accept or reject any Competitive Bid. The Company shall notify the
Applicable Agent by telephone, confirmed by telecopy in a form approved by the
Applicable Agent, whether and to what extent it has decided to accept or reject
each Competitive Bid, (i) in the case of a Eurocurrency Competitive Borrowing or
a Fixed Rate Competitive Borrowing denominated in a Designated Foreign Currency,
not later than 12:00 noon, Local Time, three Business Days before the date of
the proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Revolving Borrowing denominated in US Dollars, not later than 10:30 a.m., Local
Time, on the date of the proposed Competitive Borrowing; PROVIDED that (i) the
failure of the Company to give such notice shall be deemed to be a rejection of
each Competitive Bid, (ii) the Company shall not accept a Competitive Bid made
at a particular Competitive Bid Rate if such Borrower rejects a
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27
Competitive Bid made at a lower Competitive Bid Rate, (iii) the aggregate amount
of the Competitive Bids accepted by the Company shall not exceed the aggregate
amount of the requested Competitive Borrowing specified in the related
Competitive Bid Request, (iv) to the extent necessary to comply with clause
(iii) above, the Company may accept Competitive Bids at the same Competitive Bid
Rate in part, which acceptance, in the case of multiple Competitive Bids at such
Competitive Bid Rate, shall be made pro rata in accordance with the amount of
each such Competitive Bid, and (v) except pursuant to clause (iv) above, no
Competitive Bid shall be accepted for a Competitive Loan unless such Competitive
Loan is in a minimum principal amount of at least the Borrowing Minimum and an
integral multiple of the Borrowing Multiple; PROVIDED FURTHER that if a
Competitive Loan must be in an amount less than the Borrowing Minimum because of
the provisions of clause (iv) above, such Competitive Loan may be for a minimum
of $1,000,000 (or, in the case of an Designated Foreign Currency Competitive
Loan, the smallest amount of such Alternate Currency that (i) is an integral
multiple of 1,000,000 units (or, in the case of Sterling, 500,000 units) of such
currency and (ii) has a US Dollar Equivalent in excess of $1,000,000), and in
calculating the pro rata allocation of acceptances of portions of multiple
Competitive Bids at a particular Competitive Bid Rate pursuant to clause (iv)
the amounts shall be rounded to integral multiples of the Borrowing Multiple in
a manner determined by the Company. A notice given by the Company pursuant to
this paragraph shall be irrevocable.
(e) The Applicable Agent shall promptly notify each bidding US
Tranche Lender by telecopy whether or not its Competitive Bid has been accepted
(and, if so, the amount and Competitive Bid Rate so accepted), and each
successful bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect of which its
Competitive Bid has been accepted.
(f) If the Applicable Agent or one of its Affiliates shall
elect to submit a Competitive Bid in its capacity as a US Tranche Lender, it
shall submit such Competitive Bid directly to the Company at least one quarter
of an hour earlier than the time by which the other Lenders are required to
submit their Competitive Bids to the Applicable Agent pursuant to paragraph (b)
of this Section.
SECTION 2.05. LETTERS OF CREDIT. (a) GENERAL. Subject to the
terms and conditions set forth herein, the Company may request the issuance (or
the amendment, renewal or extension) of Letters of Credit denominated in US
Dollars, in any case in a form reasonably acceptable to the Administrative Agent
and the Issuing Bank, at any time and from time to time during the Revolving
Availability Period. In the event of any form of letter of credit application or
other agreement submitted by the Company or any other Borrower to, or entered
into by the Company or any other Borrower with, the Issuing Bank relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Company shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit,
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or identifying the Letter of Credit to be amended, renewed or extended, the date
of issuance, amendment, renewal or extension (which shall be a Business Day),
the date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If requested
by the Issuing Bank, the Company also shall submit a letter of credit
application on the Issuing Bank's standard form in connection with any request
for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Company or the applicable Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension the LC Exposure shall not exceed $25,000,000 and (ii) the
aggregate US Tranche Revolving Exposures will not exceed the aggregate US
Tranche Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the US Tranche Lenders,
the Issuing Bank hereby grants to each US Tranche Lender, and each US Tranche
Lender hereby acquires from the Issuing Bank, a participation in such Letter of
Credit equal to such US Tranche Lender's US Tranche Percentage of the aggregate
amount available to be drawn under such Letter of Credit. In consideration and
in furtherance of the foregoing, each US Tranche Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Lender's US Tranche Percentage of each LC Disbursement
made by the Issuing Bank and not reimbursed by the Company on the date due as
provided in paragraph (e) of this Section or of any reimbursement payment
required to be refunded to the Company for any reason. Each US Tranche Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the US Tranche
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Company shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement, not later than 1:00 p.m., New York City time, on the date that
such LC Disbursement is made, if the Company shall have received notice of such
LC Disbursement prior to 11:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Company prior to such time on such
date, then not later than 1:00 p.m., New York City time, on (A) the Business Day
that the Company receives such notice, if such notice is received prior to 11:00
a.m., New York City time, on the day of receipt, or (B) the Business Day
immediately following the day that the Company receives such notice, if such
notice is not received prior to such time on the day of receipt. If the Company
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29
fails to make such payment when due then, upon notice from the applicable
Issuing Bank to the Company and the Administrative Agent, the Administrative
Agent shall notify each US Tranche Lender of the applicable LC Disbursement, the
payment then due from the Company in respect thereof and such Lender's US
Tranche Percentage, thereof. Promptly following receipt of such notice, each US
Tranche Lender shall pay to the Administrative Agent its US Tranche Percentage
of the payment then due from the Company in the same manner as provided in
Section 2.06 with respect to Loans made by such US Tranche Lender (and Section
2.06 shall apply, MUTATIS MUTANDIS, to the payment obligations of the US Tranche
Lenders), and the Administrative Agent shall promptly pay to the applicable
Issuing Bank the amounts so received by it from the US Tranche Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Company
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that US Tranche Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
US Tranche Lenders and the Issuing Bank as their interests may appear. Any
payment made by a US Tranche Lender pursuant to this paragraph to reimburse the
Issuing Bank for any LC Disbursement shall not constitute a Loan and shall not
relieve the Company of its obligation to reimburse such LC Disbursement.
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30
(f) OBLIGATIONS ABSOLUTE. The Company's obligations to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement or any other Loan Document, or any term or
provision herein or therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect, (iii) payment
by the Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit, or
(iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section, constitute
a legal or equitable discharge of, or provide a right of set-off against, the
Company's obligations hereunder. None of the Administrative Agent, the US
Tranche Lenders or the Issuing Bank, or any of their Related Parties, shall have
any liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or any payment or failure to make any
payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; PROVIDED
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Company to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Company to the extent permitted by applicable law) suffered by the Company that
are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Company by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; PROVIDED that any failure to give or
delay in giving such notice shall not relieve the Company of its obligation to
reimburse the Issuing Bank and the US Tranche Lenders with respect to any such
LC Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank shall make any LC
Disbursement, then, unless the Company shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and
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31
including the date such LC Disbursement is made to but excluding the date that
the Company reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Revolving Loans; PROVIDED that, at all times after the Company
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, Section 2.13(g) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank, except that interest
accrued on and after the date of payment by any US Tranche Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such US Tranche Lender to the extent of such payment.
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be
replaced at any time by written agreement among the Company, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Company shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If the US Tranche Commitments
shall be terminated on the Business Day that the Company receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, US Tranche Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Company shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the US Tranche Lenders, an amount in cash equal to the LC
Exposure as of such date plus any accrued and unpaid interest thereon; PROVIDED
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Company described in clause (f) or (g) of Article VII. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Company under this Agreement. The
Administrative 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, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Company's risk
and expense, such deposits shall not bear interest. Interest or profits, if any,
on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Company for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of US Tranche Lenders with LC
Exposures representing greater than 50%
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32
of the total LC Exposure) be applied to satisfy other obligations of the Company
under this Agreement. If the Company 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 them within
three Business Days after all Events of Default have been cured or waived.
SECTION 2.06. FUNDING OF BORROWINGS. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds in the applicable currency by 11:00
a.m., Local Time, to the account of the Applicable Agent most recently
designated by it for such purpose for Loans of such Class and currency by notice
to the applicable Lenders. The Applicable Agent will make such Loans available
to the relevant Borrower by promptly crediting the amounts so received, in like
funds, to an account of such Borrower maintained by the Applicable Agent (i) in
New York City, in the case of Loans denominated in US Dollars (ii) in London, in
the case of Eurocurrency or Fixed Rate Loans denominated in any Designated
Foreign Currency and (iii) in Tokyo, in the case of TIBOR or Yen Base Rate
Revolving Loans; PROVIDED that US Tranche Revolving Loans made to finance the
reimbursement of an LC Disbursement shall be remitted by the Administrative
Agent to the Issuing Bank.
(b) Unless the Applicable Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Applicable Agent such Lender's share of such
Borrowing, the Applicable Agent may assume that such Lender has made such share
available on such date in accordance with paragraph (a) of this Section and may,
in reliance upon such assumption, make available to the relevant Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Applicable Agent, then the
applicable Lender and such Borrower severally agree to pay to the Applicable
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to such
Borrower to but excluding the date of payment to the Applicable Agent, at (i) in
the case of such Lender, the rate reasonably determined by the Applicable Agent
to be the cost to it of funding such amount or (ii) in the case of such
Borrower, the interest rate applicable to the subject Loan. If such Lender pays
such amount to the Applicable Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing and the Applicable Agent shall return
to such Borrower any amount (including interest) paid by such Borrower to the
Applicable Agent pursuant to this paragraph.
SECTION 2.07. REPAYMENT OF BORROWINGS; EVIDENCE OF DEBT. (a)
Each Borrower hereby unconditionally promises to pay to the Applicable Agent for
the accounts of the applicable Lenders (i) the then unpaid principal amount of
each Revolving Borrowing of such Borrower on the Maturity Date and (ii) the then
unpaid principal amount of each Competitive Loan on the last day of the Interest
Period applicable thereto. Each Borrower agrees to repay the principal amount of
each Loan made to such Borrower and the accrued interest thereon in the currency
of such Loan.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower
to such Lender resulting from each
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33
Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class, Type and
currency 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 each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
any Agent hereunder for the accounts of the Lenders and each Lender's share
thereof. Each of the London Agent and the Tokyo Agent shall furnish to the
Administrative Agent, promptly after the making of any Loan or Borrowing with
respect to which it is the Applicable Agent or the receipt of any payment of
principal or interest with respect to any such Loan or Borrowing, information
with respect thereto that will enable the Administrative Agent to maintain the
accounts referred to in the preceding sentence. The Administrative Agent shall
notify in writing the London Agent or the Tokyo Agent, as applicable, promptly
after the making of any Loan or Borrowing with respect to which it is the
Applicable Agent or the receipt of payment of any principal with respect to any
such Loan or Borrowing.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of any Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
to any Borrower be evidenced by a promissory note. In such event, each
applicable Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by each such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 11.04) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.08. INTEREST ELECTIONS. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurocurrency Borrowing or TIBOR Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
relevant Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurocurrency Borrowing or TIBOR
Borrowing, may elect Interest Periods therefor, all as provided in this Section
and on terms consistent with the other provisions of this Agreement. A Borrower
may elect different options with respect to different portions of an affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Revolving Borrowing.
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34
(b) To make an election pursuant to this Section, a Borrower,
or the Company on its behalf, shall notify the Applicable Agent of such election
by telephone by the time that a Borrowing Request would be required under
Section 2.03 if such Borrower were requesting a Revolving Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Applicable Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the relevant Borrower, or the Company on its behalf.
Notwithstanding any contrary provision herein, this Section shall not be
construed to permit any Borrower to (i) change the currency of any Borrowing,
(ii) elect an Interest Period for Eurocurrency Loans or TIBOR Loans that does
not comply with Section 2.02(d) or (iii) convert any Borrowing to a Borrowing of
a Type not available under the Class of Commitments pursuant to which such
Borrowing was made.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) the Type of the resulting Borrowing; and
(iv) if the resulting Borrowing is to be a Eurocurrency
Borrowing or a TIBOR Borrowing, the Interest Period to be applicable
thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest Period".
If any such Interest Election Request requests a Eurocurrency Borrowing or a
TIBOR Borrowing but does not specify an Interest Period, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Applicable Agent shall advise each Lender holding a Loan to which
such request relates of the details thereof and of such Lender's portion of each
resulting Borrowing.
(e) If the relevant Borrower fails to deliver a timely
Interest Election Request with respect to a Eurocurrency Borrowing or TIBOR
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period, such Borrowing shall (i) in the case of a Borrowing denominated in US
Dollars, be converted to an ABR Borrowing, (ii) in the case of a Japanese
Tranche Revolving Borrowing denominated in Yen, be converted into a Yen Base
Rate Revolving Borrowing and
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35
(iii) in the case of any other Eurocurrency Borrowing, become due and payable on
the last day of such Interest Period.
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. (a)
Unless previously terminated, the Commitments shall terminate on the Maturity
Date; PROVIDED that the Commitments shall terminate at 5:00 p.m., New York City
time, on May 15, 2000, if the Initial Borrowing Date shall not have occurred
prior to such time.
(b) The Company may at any time terminate, or from time to
time reduce, the Commitments of any Class; PROVIDED that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral multiple
of the Borrowing Multiple and not less than the Borrowing Minimum, (ii) the
Company shall not terminate or reduce the US Tranche Commitments if, after
giving effect to any concurrent prepayment of the US Tranche Revolving Loans in
accordance with Section 2.11, the sum of the aggregate US Tranche Revolving
Exposures and the aggregate Competitive Loan Exposures would exceed the
aggregate US Tranche Commitments, (iii) the Company shall not terminate or
reduce the Swiss Tranche Commitments if, after giving effect to any concurrent
prepayment of the Swiss Tranche Revolving Loans in accordance with Section 2.11,
the aggregate Swiss Tranche Exposures would exceed the aggregate Swiss Tranche
Commitments and (iv) the Company shall not terminate or reduce the Japanese
Tranche Commitments if, after giving effect to any concurrent prepayment of the
Japanese Tranche Revolving Loans in accordance with Section 2.11, the aggregate
Japanese Tranche Exposures would exceed the aggregate Japanese Tranche
Commitments.
(c) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments of any Class under paragraph (b)
of this Section at least three Business Days prior to the effective date of such
termination or reduction, specifying the effective date of such election.
Promptly following receipt of any such notice, the Administrative Agent shall
advise the other Agents and the applicable Lenders of the contents thereof. Each
notice delivered by the Company pursuant to this Section shall be irrevocable;
PROVIDED that a notice of termination of the Commitments delivered by the
Company may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by the Company
(by notice to the Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied. Any termination or reduction of the
Commitments of any Class shall be permanent. Each reduction of the Commitments
of any Class shall be made ratably among the applicable Lenders in accordance
with their respective Commitments of such Class.
SECTION 2.10. INCREASE IN COMMITMENTS. (a) The Company may, by
written notice to the Administrative Agent (which shall promptly deliver a copy
to each of the Lenders), request that the total US Tranche Commitments, Swiss
Tranche Commitments or Japanese Tranche Commitments be increased by an amount
not less than $25,000,000 for any such increase; PROVIDED that after giving
effect to any such increase the sum of the total Commitments and the commitments
under the 364-Day Credit Agreement shall not exceed $1,000,000,000. Such notice
shall set forth the amount of the requested increase in the total US Tranche
Commitments, Swiss Tranche Commitments or Japanese Tranche Commitments, as the
case may be, and the date on which such increase is requested to become
effective (which shall be not less
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36
than 30 Business Days or more than 60 days after the date of such notice), and
shall offer each Lender the opportunity to increase its Commitment by its US
Tranche Percentage, Swiss Tranche Percentage or Japanese Tranche Percentage, as
the case may be, of the proposed increased amount. Each Lender shall, by notice
to the Company and the Administrative Agent given not more than 10 Business Days
after the date of the Company's notice, either agree to increase its applicable
Commitment by all or a portion of the offered amount (each Lender so agreeing
being an "INCREASING LENDER") or decline to increase its applicable Commitment
(and any Lender that does not deliver such a notice within such period of 10
Business Days shall be deemed to have declined to increase its Commitment) (each
Lender so declining or deemed to have declined being a "NON-INCREASING LENDER").
In the event that, on the 10th Business Day after the Company shall have
delivered a notice pursuant to the first sentence of this paragraph, the Lenders
shall have agreed pursuant to the preceding sentence to increase their
Commitments by an aggregate amount less than the increase in the total
Commitments requested by the Company, the Company may arrange for one or more
banks or other financial institutions (any such bank or other financial
institution being called an "AUGMENTING LENDER"), which may include any Lender,
to extend US Tranche Commitments, Swiss Tranche Commitments or Japanese Tranche
Commitments, as the case may be, or increase their existing US Tranche
Commitments, Swiss Tranche Commitments or Japanese Tranche Commitments, as the
case may be, in an aggregate amount equal to the unsubscribed amount; PROVIDED
that each Augmenting Lender, if not already a Lender hereunder, shall be subject
to the approval of the Administrative Agent (which approval shall not be
unreasonably withheld) and the Borrowers and each Augmenting Lender shall
execute all such documentation as the Administrative Agent shall reasonably
specify to evidence the Commitment of such Augmenting Lender and/or its status
as a Lender hereunder. Any increase in the total US Tranche Commitments, Swiss
Tranche Commitments or Japanese Tranche Commitments, as the case may be, may be
made in an amount which is less than the increase requested by the Company if
the Company is unable to arrange for, or chooses not to arrange for, Augmenting
Lenders.
(b) On the effective date (the "INCREASE EFFECTIVE DATE")
of any increase in the total US Tranche Commitments, Swiss Tranche
Commitments or Japanese Tranche Commitments pursuant to this Section 2.10
(the "COMMITMENT INCREASE"), (i) the aggregate principal amount of the US
Tranche Revolving Loans, Swiss Tranche Revolving Loans or Japanese Tranche
Revolving Loans, as the case may be, outstanding (the "INITIAL LOANS")
immediately prior to giving effect to the Commitment Increase on the Increase
Effective Date shall be deemed to be paid, (ii) each Increasing Lender and
each Augmenting Lender that shall have been a US Tranche Lender, Swiss
Tranche Lender or Japanese Tranche Lender, as the case may be, prior to the
Commitment Increase shall pay to the Administrative Agent or another Agent
designated by the Administrative Agent for such purpose in same day funds an
amount equal to the difference between (A) the product of (1) such Lender's
US Tranche Percentage, Swiss Tranche Percentage or Japanese Tranche
Percentage, as the case may be (calculated after giving effect to the
Commitment Increase), multiplied by (2) the amount of the Subsequent
Borrowings (as hereinafter defined) and (B) the product of (1) such Lender's
US Tranche Percentage, Swiss Tranche Percentage or Japanese Tranche
Percentage, as the case may be (calculated without giving effect to the
Commitment Increase), multiplied by (2) the amount of the Initial Loans,
(iii) each Augmenting Lender that shall not have been a Lender prior to the
Commitment Increase shall pay to the Administrative Agent or another Agent
designated by the
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37
Administrative Agent for such purpose in same day funds an amount equal to
the product of (1) such Augmenting Lender's US Tranche Percentage, Swiss
Tranche Percentage or Japanese Tranche Percentage (calculated after giving
effect to the Commitment Increase) multiplied by (2) the amount of the
Subsequent Borrowings, and (iv) after the Administrative Agent or other Agent
receives the funds specified in clauses (ii) and (iii) above, the
Administrative Agent or such other Agent shall pay to each Non-Increasing
Lender the portion of such funds that is equal to the difference between (A)
the product of (1) such Non-Increasing Lender's US Tranche Percentage, Swiss
Tranche Percentage or Japanese Tranche Percentage (calculated without giving
effect to the Commitment Increase) multiplied by (2) the amount of the
Initial Loans, and (B) the product of (1) such Non-Increasing Lender's US
Tranche Percentage, Swiss Tranche Percentage or Japanese Tranche Percentage
(calculated after giving effect to the Commitment Increase) multiplied by (2)
the amount of the Subsequent Borrowings, (v) after the effectiveness of the
Commitment Increase, the applicable Borrowers shall be deemed to have made
new Borrowings (the "SUBSEQUENT BORROWINGS") in an aggregate principal amount
equal to the aggregate principal amount of the Initial Loans and of the types
and for the Interest Periods specified in a Borrowing Request delivered to
the Administrative Agent in accordance with Section 2.04, (vi) each
Non-Increasing Lender, each Increasing Lender and each Augmenting Lender
shall be deemed to hold its US Tranche Percentage, Swiss Tranche Percentage
or Japanese Tranche Percentage, as the case may be, of each Subsequent
Borrowing (each calculated after giving effect to the Commitment Increase)
and (vii) the applicable Borrowers shall pay each Increasing Lender and each
Non-Increasing Lender any and all accrued but unpaid interest on the Initial
Loans. The deemed payments made pursuant to clause (i) above in respect of
each Eurocurrency Loan or TIBOR Loan shall be subject to indemnification by
the Borrowers pursuant to the provisions of Section 2.16 if the Increase
Effective Date occurs other than on the last day of the Interest Period
relating thereto and breakage costs result.
(c) Increases and new Commitments created pursuant to this
Section 2.10 shall become effective on the date specified in the notice
delivered by the Company pursuant to the first sentence of paragraph (a) above.
(d) Notwithstanding the foregoing, no increase in the
Commitments of any Class (or in any Commitment of any Lender) or addition of an
Augmenting Lender shall become effective under this Section unless, (i) on the
date of such increase, the conditions set forth in paragraphs (a) and (b) of
Section 4.02 shall be satisfied and the Administrative Agent shall have received
a certificate to that effect dated such date and executed by the chief financial
officer of the Company, and (ii) the Administrative Agent shall have received
(with sufficient copies for each of the Lenders) documents consistent with those
delivered on the Effective Date under clauses (b) and (c) of Section 4.01 as to
the corporate power and authority of the applicable Borrowers to borrow
hereunder after giving effect to such increase.
SECTION 2.11. PREPAYMENT OF LOANS. (a) Any Borrower shall have
the right at any time and from time to time to prepay any Borrowing of such
Borrower in whole or in part, subject to prior notice in accordance with
paragraph (d) of this Section; PROVIDED, that Competitive Loans may be prepaid
only with the consent of the Lenders making such Loans.
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38
(b) If the aggregate Exposures of any Class shall exceed the
aggregate Commitments of such Class (reduced, in the case of the US Tranche
Commitments, by the aggregate amount of the US Tranche Lenders' Competitive Loan
Exposures), then (i) on the last day of any Interest Period for any Eurocurrency
Revolving Borrowing or TIBOR Borrowing of such Class and (ii) on any other date
in the event ABR Revolving Borrowings or Yen Base Rate Revolving Borrowings
shall be outstanding under such Class, the applicable Borrowers shall prepay
Revolving Loans or Competitive Loans of such Class in an amount equal to the
lesser of (A) the amount necessary to eliminate such excess (after giving effect
to any other prepayment of Loans on such day) and (B) the amount of the
applicable Borrowings referred to in clause (i) or (ii), as applicable. If, on
any Reset Date, the aggregate amount of the Exposures of any Class shall exceed
105% of the aggregate Commitments of such Class (reduced, in the case of the US
Tranche Commitments, by the aggregate amount of the US Tranche Lenders'
Competitive Loan Exposures), then the applicable Borrowers shall, not later than
the next Business Day, prepay one or more Borrowings of such Class in an
aggregate principal amount sufficient to eliminate such excess.
(c) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the applicable Borrower shall select the Borrowing or
Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to paragraph (d) of this Section.
(d) The applicable Borrower, or the Company on behalf of the
applicable Borrower, shall notify the Applicable Agent by telephone (confirmed
by telecopy) of any prepayment of a Borrowing hereunder (i) in the case of a
Eurocurrency Borrowing, not later than 11:00 a.m., Local Time, three Business
Days before the date of such prepayment, (b) in the case of a TIBOR Borrowing,
not later than 5:00 p.m., Local Time, four Business Days before the date of such
prepayment, and (c) in the case of an ABR Borrowing or a Yen Base Rate Revolving
Borrowing, not later than 11:00 a.m., Local Time, one Business Day before the
date of such prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid; PROVIDED that, if a notice of optional prepayment is
given in connection with a conditional notice of termination of the Commitments
as contemplated by Section 2.09(c), then such notice of prepayment may be
revoked if such notice of termination is revoked in accordance with Section
2.09(c). Promptly following receipt of any such notice, the Applicable Agent
shall advise the applicable Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in the
case of an advance of a Borrowing of the same Type as provided in Section 2.02.
Each prepayment of a Borrowing shall be applied ratably to the Loans included in
the prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest
to the extent required by Section 2.13 and (ii) break funding payments pursuant
to Section 2.16.
SECTION 2.12. FEES. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Rate on the daily amount of the Commitments of such
Lender (whether used or unused) during the period from and including the date
hereof to but excluding the date on which the last of such Commitments
terminates; PROVIDED that, if such Lender continues to have any Exposure of any
Class after its Commitment of such Class terminates, then such facility fee
shall continue to accrue on the daily amount of such Lender's Exposure of such
Class to but excluding the date on
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39
which such Lender ceases to have any such Exposure. Accrued facility fees shall
be payable in arrears on the last day of March, June, September and December of
each year, commencing on the first such date to occur after the date hereof, and
on the date on which all the Commitments shall have terminated and the Lenders
shall have no further Exposures. All facility fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). For purposes of
computing facility fees with respect to US Tranche Commitments, a US Tranche
Commitment of a Lender shall be deemed to be used to the extent of the
outstanding US Tranche Revolving Loans and the LC Exposure of such Lender.
(b) The Company agrees to pay (i) to the Administrative Agent
for the account of each US Tranche Lender a participation fee with respect to
its participations in Letters of Credit, which shall accrue at the Applicable
Rate used to determine the interest rate applicable to US Tranche Eurocurrency
Revolving Loans on the daily amount of such US Tranche Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date hereof to but excluding the later
of the date on which such US Tranche Lender's US Tranche Commitment terminates
and the date on which such Lender ceases to have any LC Exposure, and (ii) to
the Issuing Bank a fronting fee, which shall accrue at the rate of .0625% per
annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the date hereof to but excluding the later of the date of
termination of the US Tranche Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank's standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
under this paragraph through and including the last day of March, June,
September and December of each year shall be payable on such last day,
commencing on the first such date to occur after the date hereof; PROVIDED that
all such fees shall be payable on the date on which the US Tranche Commitments
terminate and any such fees accruing after the date on which the US Tranche
Commitments terminate shall be payable on demand. Any other fees payable to the
Issuing Bank pursuant to this paragraph shall be payable within 10 days after
demand. All participation fees and fronting fees payable under this paragraph
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) The Company agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between the Company and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees, to the Lenders. Fees paid shall not be refundable under any
circumstances.
SECTION 2.13. INTEREST. (a) The Loans comprising each ABR
Borrowing shall bear interest at the Alternate Base Rate plus the Applicable
Rate.
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(b) The Loans comprising each Yen Base Rate Borrowing shall
bear interest at the Yen Base Rate plus the Applicable Rate.
(c) The Loans comprising each Eurocurrency Borrowing shall
bear interest (i) in the case of a Eurocurrency Revolving Borrowing, at the LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Rate, or (ii) in the case of a Eurocurrency Competitive Loan, at the LIBO Rate
for the Interest Period in effect for such Borrowing plus (or minus, as
applicable) the Margin applicable to such Loan.
(d) The Loans comprising each TIBOR Borrowing shall bear
interest at the TIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(e) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.
(f) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee payable by any Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% per
annum plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Revolving Loans as provided in paragraph (a)
above.
(g) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan; PROVIDED that (i) interest accrued
pursuant to paragraph (g) above shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Revolving Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurocurrency Revolving Loan or TIBOR Revolving Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.
(h) All interest hereunder shall be computed on the basis of a
year of 360 days, except that (i) interest on Borrowings denominated in Sterling
and Yen and (ii) interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Yen Base
Rate, LIBO Rate or TIBO Rate shall be determined by the Applicable Agent, and
such determination shall be conclusive absent manifest error.
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41
SECTION 2.14. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurocurrency Borrowing or TIBOR
Borrowing denominated in any currency:
(a) the Applicable Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the LIBO Rate or the TIBO Rate, as the
case may be, for such Interest Period; or
(b) the Applicable Agent is advised by a majority in interest
of the Lenders that would participate in such Borrowing that the LIBO
Rate or the TIBO Rate, as the case may be, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Loans included in such Borrowing for such
Interest Period;
then the Applicable Agent shall give notice thereof to the applicable Borrower
and the applicable Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Applicable Agent notifies the applicable Borrower and
the applicable Lenders that the circumstances giving rise to such notice no
longer exist, (i) any Interest Election Request that requests the conversion of
any Revolving Borrowing denominated in such currency to, or continuation of any
Revolving Borrowing denominated in such currency as, a Eurocurrency Borrowing or
TIBOR Borrowing, as the case may be, shall be ineffective, and any Eurocurrency
Borrowing or TIBOR Borrowing, as the case may be, denominated in such currency
that is requested to be continued shall be repaid on the last day of the then
current Interest Period applicable thereto, and (ii) any Borrowing Request for a
Eurocurrency Revolving Borrowing or TIBOR Borrowing, as the case may be,
denominated in such currency shall be ineffective.
SECTION 2.15. INCREASED COSTS. (a) If any Change in Law shall:
(i) 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;
or
(ii) impose on any Lender or the Issuing Bank or the London or
Tokyo interbank market any other condition affecting this Agreement or
Eurocurrency Loans or TIBOR Loans made by such Lender or any Letter of
Credit or participations therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan or TIBOR Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Company will pay or cause the other Borrowers to 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 for such additional
costs incurred or reduction suffered.
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42
(b) If any Lender or the Issuing Bank reasonably determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's or Issuing Bank's capital
or on the capital of such Lender's or Issuing Bank's holding company, if any, as
a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender's or Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Company will pay
or cause the other Borrowers to 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) Each Lender or the Issuing Bank shall determine the amount
or amounts necessary to compensate such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section using the methods customarily used by it
for such purpose (and if such Lender or the Issuing Bank uses more than one such
method, the method used hereunder shall be that which most accurately determines
such amount or amounts). 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 such Lender's or the Issuing Bank's holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section, and setting forth in
reasonable detail the calculations used by such Lender or the Issuing Bank to
determine such amount, shall be delivered to the Company and shall be conclusive
absent manifest error. The Company shall pay or cause the other Borrowers to pay
to such Lender or the Issuing Bank, as the case may be, the amount shown as due
on any such certificate within 15 Business Days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
PROVIDED that the Company shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and delivers a certificate with respect
thereto as provided in paragraph (c) above; PROVIDED FURTHER that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.16. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurocurrency Loan, TIBOR Loan or Fixed Rate Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan
or TIBOR Loan to a Loan of a different Type or Interest Period other than on the
last day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.11(d) and is revoked in accordance therewith), or (d) the
assignment or deemed assignment of any
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43
Eurocurrency Loan, TIBOR Loan or Fixed Rate Loan other than on the last day of
the Interest Period applicable thereto as a result of a request by the Company
pursuant to Section 2.19 or the CAM Exchange, then, in any such event, the
applicable Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurocurrency Loan or TIBOR Loan,
such loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest that would have accrued on the principal amount of such Loan had such
event not occurred, at the LIBO Rate or TIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest that would accrue on
such principal amount for such period at the interest rate such Lender would bid
were it to bid, at the commencement of such period, for deposits in the
applicable currency of a comparable amount and period from other banks in the
London or Tokyo interbank market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section, and setting forth in reasonable detail the calculations used by such
Lender to determine such amount or amounts, shall be delivered to the applicable
Borrower and shall be conclusive absent manifest error. The applicable Borrower
shall pay such Lender the amount shown as due on any such certificate within 15
Business Days after receipt thereof.
SECTION 2.17. TAXES. (a) Any and all payments by or on account
of any Borrower hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any Indemnified Taxes or Other Taxes;
PROVIDED that if any 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, the London Agent, the Tokyo Agent or the applicable 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) such Borrower shall make such
deductions and (iii) such Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) The relevant Borrower shall indemnify the Administrative
Agent, the London Agent, the Tokyo Agent and each Lender and the Issuing Bank,
within 15 Business Days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by such Agent or 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 any Borrower hereunder or under any other Loan
Document (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 setting forth in reasonable detail the
circumstances giving rise thereto and the calculations used by such Lender to
determine the amount thereof
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44
delivered to the Company by a Lender or the Issuing Bank, or by an 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 any Borrower to a Governmental Authority, such 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 Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (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 Company as will permit such payments to be
made without withholding or at a reduced rate; PROVIDED that such Lender has
received written notice from the Company advising it of the availability of such
exemption or reduction and containing all applicable documentation.
(f) Each Lender, on the date it becomes a Lender hereunder,
will designate lending offices for the Loans to be made by it such that, on such
date, it will not be liable for (i) in the case of a US Tranche Lender, any
withholding tax that is imposed by the United States of America (or any
political subdivision thereof) on payments by the Company from an office within
such jurisdiction, (ii) in the case of a Swiss Tranche Lender, any withholding
tax that is imposed (A) by Switzerland (or any political subdivision thereof) on
payments by a Swiss Borrower from an office within such jurisdiction or (B) by
the United States of America (or any political subdivision thereof) on payments
by the Company from an office within such jurisdiction, or (iii) in the case of
a Japanese Tranche Lender, any withholding tax that is imposed (A) by Japan (or
any political subdivision thereof) on payments by a Japanese Borrower from an
office within such jurisdiction or (B) by the United States of America (or any
political subdivision thereof) on payments by the Company from an office within
such jurisdiction.
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF SETOFFS. (a) Each Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to 12:00 noon, Local Time, on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Applicable Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Applicable Agent to the applicable account specified in
Schedule 2.17 or, in any such case, to such other account as the Applicable
Agent shall from time to time specify in a notice delivered to the Company;
PROVIDED that payments to be made directly to the Issuing Bank as expressly
provided herein and payments pursuant to Sections 2.15, 2.16, 2.17 and 11.03
shall be made directly to the Persons entitled thereto and payments pursuant to
other Loan Documents shall be made to the Persons specified therein (it being
agreed that the Borrowers will be deemed to have satisfied
<PAGE>
45
their obligations with respect to payments referred to in this proviso if they
shall make such payments to the persons entitled thereto in accordance with
instructions provided by the Administrative Agent; the Administrative Agent
agrees to provide such instructions upon request, and no Borrower will be deemed
to have failed to make such a payment if it shall transfer such payment to an
improper account or address as a result of the failure of the Administrative
Agent to provide proper instructions). The Applicable Agent shall distribute any
such payments received by it for the account of any Lender or other Person
promptly following receipt thereof at the appropriate lending office or other
address specified by such Lender or other Person. If any payment hereunder shall
be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments hereunder of principal or interest in respect of any
Loan or LC Disbursement shall be made in the currency of such Loan or LC
Disbursement; all other payments hereunder and under each other Loan Document
shall be made in US Dollars. Any payment required to be made by an Agent
hereunder shall be deemed to have been made by the time required if such Agent
shall, at or before such time, have taken the necessary steps to make such
payment in accordance with the regulations or operating procedures of the
clearing or settlement system used by such Agent to make such payment. Any
amount payable by any Agent to one or more Lenders in the national currency of a
member state of the European Union that has adopted the Euro as its lawful
currency shall be paid in Euro.
(b) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on its US Tranche Revolving Loans, Swiss Tranche Revolving Loans,
Japanese Tranche Revolving Loans or participations in LC Disbursements resulting
in such Lender receiving payment of a greater proportion of the aggregate amount
of its US Tranche Revolving Loans, Swiss Tranche Revolving Loans, Japanese
Tranche Revolving Loans and participations in LC Disbursements and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the US Tranche Revolving Loans, Swiss Tranche Revolving Loans,
Japanese Tranche Revolving Loans and participations in LC Disbursements of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
their respective US Tranche Revolving Loans, Swiss Tranche Revolving Loans,
Japanese Tranche Revolving Loans and participations in LC Disbursements and
accrued interest thereon; PROVIDED that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any 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 LC Disbursements to any assignee or participant, other than to the Company or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
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46
(c) Unless the Applicable Agent shall have received notice
from the relevant Borrower prior to the date on which any payment is due for the
account of all or certain of the Lenders or the Issuing Bank hereunder that such
Borrower will not make such payment, the Applicable Agent may assume that such
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the applicable Lenders or the
Issuing Bank, as the case may be, the amount due. In such event, if such
Borrower has not in fact made such payment, then each of the applicable Lenders
or the Issuing Bank, as the case may be, severally agrees to repay to the
Applicable Agent forthwith on demand the amount so distributed to such Lender or
Issuing Bank with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Applicable Agent, at a rate determined by the Applicable Agent in accordance
with banking industry practices on interbank compensation.
(d) If any Lender shall fail to make any payment required to
be made by it to any Agent pursuant to this Agreement, then the Agents may, in
their discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by them for the account of such Lender to satisfy
such Lender's obligations to the Agents until all such unsatisfied obligations
are fully paid.
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.15, or if any Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Company
hereby agrees to pay all reasonable, direct, out-of-pocket costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or
if any Loan Party is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 11.04), all its interests, rights and obligations under the Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); PROVIDED that (i) the
Company shall have received the prior written consent of the Administrative
Agent (and if a Revolving Commitment is being assigned, the Issuing Bank), which
consent shall not be unreasonably withheld and (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee or the Company.
A Lender shall not be required to make any such assignment and delegation if,
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47
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Company to require such assignment and delegation
cease to apply.
SECTION 2.20. DESIGNATION OF SWISS BORROWERS AND JAPANESE
BORROWERS. The Company may at any time and from time to time designate any Swiss
Subsidiary as a Swiss Borrower, or designate any Japanese Subsidiary as a
Japanese Borrower, by delivery to the Administrative Agent of a Borrowing
Subsidiary Agreement executed by such Subsidiary and the Company, and upon such
delivery such Subsidiary shall for all purposes of this Agreement be a Swiss
Borrower or a Japanese Borrower, as the case may be, and a party to this
Agreement until the Company shall have executed and delivered to the
Administrative Agent a Borrowing Subsidiary Termination with respect to such
Subsidiary, whereupon such Subsidiary shall cease to be a Swiss Borrower or a
Japanese Borrower, as the case may be, and a party to this Agreement.
Notwithstanding the preceding sentence, no Borrowing Subsidiary Termination will
become effective as to any Swiss Borrower or Japanese Borrower at a time when
any principal of or interest on any Loan to such Swiss Borrower or Japanese
Borrower shall be outstanding hereunder, PROVIDED that such Borrowing Subsidiary
Termination shall be effective to terminate the right of such Swiss Borrower or
Japanese Borrower, as the case may be, to make further Borrowings under this
Agreement. As soon as practicable upon receipt of a Borrowing Subsidiary
Agreement, the Administrative Agent shall send a copy thereof to each Lender.
SECTION 2.21. DESIGNATION OF ADDITIONAL BORROWERS. The Company
may, with the consent of the Required Lenders, add one or more Material
Subsidiaries which are not Foreign Subsidiaries as borrowers of U.S. Tranche
Revolving Loans on the same terms and conditions as the Company, PROVIDED that
the Company guarantees all Obligations of such additional borrowers on terms no
less favorable to the Lenders than the guarantee set forth in Article X of this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company and each other Borrower represents and warrants as
follows:
SECTION 3.01. CORPORATE EXISTENCE AND STANDING. The Company
and each Material Subsidiary is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, operations or condition (financial or otherwise) of the
Company.
SECTION 3.02. AUTHORIZATION; NO VIOLATION. The Transactions
are within each Loan Party's corporate or partnership powers, have been duly
authorized by all necessary corporate or partnership action, and do not
contravene (i) any Loan Party's charter, by-laws or other constitutive documents
or (ii) any law or any contractual restriction binding on or affecting any Loan
Party.
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SECTION 3.03. GOVERNMENTAL CONSENTS. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or regulatory body is required for the due execution, delivery and
performance by the Loan Parties of this Agreement or the other Loan Documents.
SECTION 3.04. VALIDITY. This Agreement is, and the other Loan
Documents when delivered will be, the legal, valid and binding obligations of
the Loan Parties party thereto, enforceable against such Loan Parties in
accordance with their respective terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
SECTION 3.05. LITIGATION. There is no pending or, to the best
of the knowledge of the Borrowers, threatened action or proceeding affecting the
Company or any of its Subsidiaries before any court, governmental agency or
arbitrator, which could reasonably be expected to have a material adverse effect
on the financial condition or operations of the Company and the Subsidiaries,
taken as a whole, or which purports to affect the legality, validity or
enforceability of this Agreement or any other Loan Document, other than any
actions or proceedings disclosed in the Form 10 (but only to the extent there
has been no worsening of such actions or proceedings which could reasonably be
expected to have a material adverse effect on the financial condition or
operations of the Company and the Subsidiaries, taken as a whole).
SECTION 3.06. FINANCIAL STATEMENTS; NO MATERIAL ADVERSE
CHANGE. (a) The consolidated balance sheet at December 31, 1999, and the related
consolidated statements of income and stockholder's equity for the fiscal year
then ended of the Company and its consolidated Subsidiaries, copies of which
have been furnished to each Lender, present fairly the financial position of the
Company and its consolidated Subsidiaries at December 31, 1999, and the results
of the operations and changes in financial position of the Company and its
consolidated Subsidiaries for the fiscal year then ended, in conformity with
GAAP consistently applied.
(b) As of the date hereof there has been, since December 31,
1999, no material adverse change in the business, operations or financial
condition of the Company and the Subsidiaries, taken as a whole (it being
understood that a change to the equity method in accounting for the assets,
liabilities and results of operations of the Company's Japanese Subsidiaries
will not constitute such a material adverse change).
SECTION 3.07. INVESTMENT COMPANY ACT. The Company is not (i)
an "investment company," (ii) a company "controlled" by an "investment company"
which is registered under the Investment Company Act of 1940, as amended, or
(iii) to the best knowledge of the Company, a company "controlled" by any other
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3.08. REGULATION U. Neither the Company nor any of the
Subsidiaries is engaged in the business of purchasing or carrying Margin Stock.
The value of the Margin Stock owned directly or indirectly by the Company or any
Subsidiary which is subject to any
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49
arrangement hereunder is less than an amount equal to 25% of the value of all
assets of the Company and/or such Subsidiary subject to such arrangement (as
described in the definition of "Indirectly Secured" in Section 221.2 of
Regulation U issued by the Board of Governors of the Federal Reserve System).
SECTION 3.09. ENVIRONMENTAL MATTERS. The operations of the
Company and each Material Subsidiary comply in all material respects with all
Environmental Laws, the noncompliance with which would materially adversely
affect the business of the Company or the ability of the Company to obtain
credit on commercially reasonable terms.
SECTION 3.10. DISCLOSURE. None of the Confidential Information
Memorandum, the Form 10 or any other written information prepared and furnished
by or on behalf of the Loan Parties to any Agent or Lender in connection with
the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains as of the date thereof
(or, in the case of any such information that is not dated, the earliest date on
which such information is furnished to the Administrative Agent or any Lender)
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED that, with respect to projected
financial information, the Company represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
SECTION 3.11. YEAR 2000 COMPLIANCE. There has not occurred,
and the Company does not expect that there will occur, any material disruption
in the operations or business systems of the Company and the Subsidiaries
resulting from the inability of computer systems of the Company and the
Subsidiaries or equipment containing embedded microchips to recognize or
properly process dates in or following the year 2000.
SECTION 3.12. SUBSIDIARY GUARANTORS. The Subsidiary Guarantors
include all the Material Subsidiaries, other than Foreign Subsidiaries.
SECTION 3.13. SOLVENCY. As of the Initial Borrowing Date,
after giving effect to the Borrowings hereunder on such date and the
distributions to Baxter and other transactions related to the Spin-Off, (a) the
fair value of the assets of the Company and the Subsidiaries, at a fair
valuation, will exceed their debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of the Company
and the Subsidiaries will be greater than the amount that will be required to
pay the probable liability in respect of their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) the Company and the Subsidiaries will be able
to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (d)the Company and
the Subsidiaries will not have unreasonably small capital with which to conduct
the businesses in which they are engaged as such businesses are now conducted
and are proposed to be conducted following the completion of the Spin-Off.
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50
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders
to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall
not become effective until the date on which each of the following conditions
has been satisfied (or waived in accordance with Section 11.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received favorable
written opinions (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of (i) Sidley & Austin, special counsel
for the Company, substantially in the form of Exhibit E-1, and (ii) the
General Counsel of the Company, substantially in the form of Exhibit
E-2. Each Loan Party hereby requests such counsel to deliver such
opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the formation, existence and good
standing of the Loan Parties and the authorization of the Transactions,
all in form and substance satisfactory to the Administrative Agent and
its counsel.
(d) The Administrative Agent shall have received (i) a
certificate, dated the Effective Date and signed by the chief financial
officer of the Company, confirming that all the conditions set forth in
this Section 4.01 and in paragraphs (a) and (b) of Section 4.02 have
been satisfied.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent an invoice with respect thereto shall have
been received by the Company not fewer than five Business Days (or such
lesser number of days as the Company shall agree) prior to the
Effective Date, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Company hereunder or under any
other Loan Document.
(f) The Guarantee Requirement shall be satisfied.
(g) The Administrative Agent shall have received a letter from
Baxter in the form of Exhibit F hereto.
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of
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51
the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 11.02) on or prior to May 15, 2000.
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender
to make a Loan on the occasion of each Borrowing, and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of the Loan Parties set
forth in the Loan Documents shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, other than
representations which are given as of a particular date, in which case
the representation shall be true and correct as of that date.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, and the application of the proceeds
thereof, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
SECTION 4.03. INITIAL CREDIT EVENT FOR EACH SWISS BORROWER AND
JAPANESE BORROWER. The obligation of each Lender to make Loans to any Swiss
Borrower or Japanese Borrower is subject to the satisfaction of the following
conditions:
(a) The Administrative Agent (or its counsel) shall have
received such Borrower's Borrowing Subsidiary Agreement duly executed
by all parties thereto.
(b) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the formation, existence and good
standing of such Borrower, the authorization of the Transactions
insofar as they relate to such Borrower and any other legal matters
relating to such Borrower, its Borrowing Subsidiary Agreement or such
Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each Borrower covenants and
agrees with the Lenders that it will:
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52
SECTION 5.01. PAYMENT OF TAXES, ETC. Pay and discharge, and
cause each Material Subsidiary to pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income, profit or property, and (ii) all lawful
claims which, if unpaid, might by law become a lien upon its property; PROVIDED,
HOWEVER, that neither the Company nor any Material Subsidiary shall be required
to pay or discharge any such tax, assessment, charge or claim which is being
contested in good faith and by proper proceedings and with respect to which the
Company shall have established appropriate reserves in accordance with GAAP.
SECTION 5.02. MAINTENANCE OF INSURANCE. Maintain, and cause
each Material Subsidiary to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
is usually carried by (or, as applicable, self-insure in a manner and to an
extent not inconsistent with conventions observed by) companies engaged in
similar businesses and owning similar properties in the same general areas in
which the Company or such Material Subsidiary operates.
SECTION 5.03. PRESERVATION OF EXISTENCE, ETC. Preserve and
maintain, and cause each Material Subsidiary to preserve and maintain, its
corporate, limited liability company or partnership existence, rights (charter
and statutory), and franchises, except as otherwise permitted by Section 6.04.
SECTION 5.04. COMPLIANCE WITH LAWS, ETC. Comply, and cause
each Material Subsidiary to comply, with the requirements of all applicable
laws, rules, regulations and orders of any Governmental Authority (including,
without limitation, all Environmental Laws), noncompliance with which would
materially adversely affect the business of the Company and the Subsidiaries or
the ability of the Company to obtain credit on commercially reasonable terms.
SECTION 5.05. KEEPING OF BOOKS. Keep, and cause each Material
Subsidiary to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets and
business of the Company and each Material Subsidiary in accordance with GAAP
consistently applied.
SECTION 5.06. INSPECTION. Permit, and cause each Material
Subsidiary to permit, the Administrative Agent, and its representatives and
agents, to inspect any of the properties, corporate books and financial records
of the Company and its Material Subsidiaries, to examine and make copies of the
books of account and other financial records of the Company and its Material
Subsidiaries, and to discuss the affairs, finances and accounts of the Company
and its Material Subsidiaries with, and to be advised as to the same by, their
respective officers or directors, at such reasonable times during normal
business hours and intervals as the Administrative Agent may reasonably
designate.
SECTION 5.07. REPORTING REQUIREMENTS. Furnish to the
Administrative Agent in sufficient copies for distribution to each Lender:
(a) As soon as available and in any event within 55 days after
the end of each of the first three quarters of each fiscal year of the
Company, a consolidated balance sheet
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53
of the Company and the consolidated Subsidiaries as of the end of such
quarter and a consolidated statement of income and changes in financial
position (or consolidated statement of cash flow, as the case may be)
of the Company and the consolidated Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter, certified by the chief financial officer of the
Company;
(b) As soon as available and in any event within 100 days
after the end of each fiscal year of the Company, a consolidated
balance sheet of the Company and the consolidated Subsidiaries as of
the end of such year and a consolidated statement of income and
stockholder's equity and changes in financial position of the Company
and the consolidated Subsidiaries for such fiscal year and accompanied
by (A) a report of PricewaterhouseCoopers LLC, independent public
accountants of the Company, or other independent public accountants of
nationally recognized standing, on the results of their examination of
the consolidated annual financial statements of the Company and the
consolidated Subsidiaries, which report shall be unqualified or shall
be otherwise reasonably acceptable to the Required Lenders; PROVIDED
that such report may set forth qualifications to the extent such
qualifications pertain solely to changes in GAAP from earlier
accounting periods, the implementation of which changes (with the
concurrence of such accountants) is reflected in the financial
statements accompanying such report, and (B) a certificate of such
accountants substantially in the form of Exhibit 5.07(b);
(c) Promptly after the sending or filing thereof, copies of
all reports which the Company files with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended,
including, without limitation, all such reports that disclose material
litigation pending against the Company or any Material Subsidiary or
any material noncompliance with any Environmental Law on the part of
the Company or any Material Subsidiary;
(d) Together with the financial statements required pursuant
to clauses (i) and (ii) above, a certificate signed by the chief
financial officer of the Company (A) stating that no Default exists or,
if any does exist, stating the nature and status thereof and describing
the action the Company proposes to take with respect thereto and (B)
demonstrating, in reasonable detail, the calculations used by such
officer to determine compliance with the financial covenants contained
in Sections 6.07 and 6.08;
(e) With respect to each fiscal year for which the Company
shall have an aggregate Unfunded Liability of $10,000,000 or more for
all of its single employer pension benefit plans covered by Title IV of
ERISA and all multiemployer pension benefit plans covered by Title IV
of ERISA to which the Company has an obligation to contribute, as soon
as available, and in any event within ten months after the end of such
fiscal year, a statement of Unfunded Liabilities of each such plan,
certified as correct by an actuary enrolled in accordance with
regulations under ERISA and a statement of estimated withdrawal
liability as of the most recent plan year end as customarily prepared
by the trustees under the multiemployer plans to which the Company has
an obligation to contribute;
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54
(f) As soon as possible, and in any event within 30 days after
the occurrence of each event the Company knows is or may be a
reportable event (as defined in Section 4043 of ERISA, but excluding
any reportable event with respect to which the 30 day reporting
requirement has been waived) with respect to any plan with an Unfunded
Liability in excess of $10,000,000, a statement signed by the chief
financial officer of the Company describing such reportable event and
the action which the Company proposes to take with respect thereto;
(g) As soon as possible, and in any event within five Business
Days after the Company shall become aware of the occurrence of each
Default, which Default is continuing on the date of such statement, a
statement of the chief financial officer of the Company setting forth
details of such Default or event and the action which the Company
proposes to take with respect thereto; and
(h) From time to time, such other information as to the
business and financial condition of the Company and the Subsidiaries
and their compliance with the Loan Documents as any Agent, or any
Lender through the Administrative Agent, may reasonably request.
SECTION 5.08. USE OF PROCEEDS AND LETTERS OF CREDIT. Use the
proceeds of Borrowings hereunder and the Letters of Credit for the purposes
referred to in the recitals to this Agreement, and not for any purpose that
would entail a violation of any applicable law or regulation (including, without
limitation, Regulations U and X of the Board). With respect to any Borrowing the
proceeds of which shall be used to purchase or carry Margin Stock, the
applicable Borrower shall include in the Borrowing Request for such Borrowing
such information as shall enable the Lenders and the Borrowers to determine that
they are in compliance with such Regulations U and X.
SECTION 5.09. GUARANTEE REQUIREMENT. Cause the Guarantee
Requirement to be satisfied at all times.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each Borrower covenants and agrees
with the Lenders that it will not:
SECTION 6.01. SUBSIDIARY DEBT. Permit any Material Subsidiary
that is not a Subsidiary Guarantor to create, incur, assume or permit to exist
any Debt, except:
(a) Debt created hereunder;
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55
(b) Debt existing on the date hereof and set forth in Schedule
6.01 and extensions, renewals and replacements of any such Debt that do
not increase the outstanding principal amount thereof;
(c) Debt to the Company or any other Subsidiary; and
(d) other Debt; PROVIDED that the Designated Amount does not
at any time exceed 10% of Consolidated Total Assets.
SECTION 6.02. LIENS, ETC. Suffer to exist, create, assume or
incur, or permit any Material Subsidiary to suffer to exist, create, assume or
incur, any Security Interest, or assign, or permit any Material Subsidiary to
assign, any right to receive income, in each case to secure Debt or any other
obligation or liability, other than:
(a) any Security Interest to secure Debt or any other
obligation or liability of any Material Subsidiary to the Company;
(b) mechanics', materialmen's, carriers' or other like liens
arising in the ordinary course of business (including construction of
facilities) in respect of obligations which are not due or which are
being contested in good faith and for which reasonable reserves have
been established;
(c) any Security Interest arising by reason of deposits with,
or the giving of any form of security to, any governmental agency or
any body created or approved by law or governmental regulation which is
required by law or governmental regulation as a condition to the
transaction of any business, or the exercise of any privilege,
franchise or license;
(d) Security Interests for taxes, assessments or governmental
charges or levies not yet delinquent or Security Interests for taxes,
assessments or governmental charges or levies already delinquent but
the validity of which is being contested in good faith and for which
reasonable reserves have been established;
(e) Security Interests (including judgment liens) arising in
connection with legal proceedings so long as such proceedings are being
contested in good faith and, in the case of judgment liens, execution
thereon is stayed;
(f) landlords' liens on fixtures located on premises leased by
the Company or a Material Subsidiary in the ordinary course of
business;
(g) Security Interests arising in connection with contracts
and subcontracts with or made at the request of the United States of
America, any state thereof, or any department, agency or
instrumentality of the United States of America or any state thereof
for obligations not yet delinquent;
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56
(h) any Security Interest arising by reason of deposits to
qualify the Company or a Material Subsidiary to conduct business, to
maintain self-insurance, or to obtain the benefit of, or comply with,
laws;
(i) any purchase money Security Interest claimed by sellers of
goods on ordinary trade terms provided that no financing statement has
been filed to perfect such Security Interest;
(j) any Security Interest existing as of the date hereof and
set forth on Schedule 6.02, and the extension thereof to additions,
extensions, or improvements to the property subject to the Security
Interest which does not arise as a result of borrowing money or the
securing of Debt or other obligation or liability created, assumed or
incurred after such date;
(k) Security Interests on (i) property of a corporation or
firm existing at the time such corporation is merged or consolidated
with the Company or any Subsidiary or at the time of a sale, lease or
other disposition of the properties of a corporation or a firm as an
entirety (or the properties of a corporation or firm comprising a
product line or line of business, as an entirety) or substantially as
an entirety to the Company or a Subsidiary; or (ii) property comprising
machinery, equipment or real property acquired by the Company or any of
its Material Subsidiaries, which Security Interests shall have existed
at the time of such acquisition and secure obligations assumed by the
Company or such Material Subsidiary in connection with such
acquisition; PROVIDED that the Debt or other obligations or liabilities
secured by Security Interests of the type described in this paragraph
(k) shall not either (i) have been created in anticipation of such
merger, consolidation, sale, lease or other disposition or in
contemplation of such acquisition or (ii) at any time exceed an
aggregate amount equal to $30,000,000;
(l) Security Interests arising in connection with the sale,
assignment or other transfer by the Company or any Material Subsidiary
of accounts receivable, lease receivables or other payment obligations
(any of the foregoing being a "RECEIVABLE") owing to the Company or
such Material Subsidiary or any interest in any of the foregoing
(together in each case with any collections and other proceeds thereof
and any collateral, guarantees or other property or claims in favor of
the Company or such Material Subsidiary supporting or securing payment
by the obligor thereon of any such Receivables), in each case whether
such sale, assignment or other transfer constitutes a "true sale" or a
secured financing for accounting, tax or any other purpose; PROVIDED
that either (i) such sale, assignment or other transfer shall have been
made as part of a sale of the business out of which the applicable
Receivables arose, (ii) such sale, assignment or other transfer is made
in the ordinary course of business and is for the purpose of collection
only, (iii) such sale, assignment or other transfer is made in
connection with an agreement on the part of the assignee thereof to
render performance under the contract that has given rise to such
Receivable, or (iv) in the case of any other sale, assignment or
transfer, the Designated Amount does not at any time exceed 10% of
Consolidated Total Assets;
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57
(m) Security Interests securing non-recourse obligations in
connection with leveraged or single-investor lease transactions;
(n) Security Interests securing the performance of any
contract or undertaking made in the ordinary course of business (as
such business is currently conducted) other than for the payment of
Debt;
(o) any Security Interest granted by any Material Subsidiary;
PROVIDED, that (i) the principal business and assets of such Material
Subsidiary are located in Puerto Rico or are located outside of the
United States, its other territories and possessions, (ii) the property
of such Material Subsidiary which is subject to such Security Interest
is a parcel of real property, a manufacturing plant, manufacturing
equipment, a warehouse, or an office building hereafter acquired,
constructed, developed or improved by such Material Subsidiary, and
(iii) such Security Interest is created prior to or contemporaneously
with, or within 120 days after (x) in the case of acquisition of such
property, the completion of such acquisition and (y) in the case of the
construction, development or improvement of such property, the later to
occur of the completion of such construction, development or
improvement or the commencement of operations, use or commercial
production (exclusive of test and start-up periods) of such property,
and such Security Interest secures or provides for the payment of all
or any part of the acquisition cost of such property or the cost of
construction, development or improvement thereof, as the case may be;
(p) any Security Interest in deposits or cash equivalent
investments pledged with a financial institution for the sole purpose
of implementing a hedging or financing arrangement commonly known as a
"back-to-back" loan arrangement, provided in each case that neither the
assets subject to such Security Interest nor the Debt incurred in
connection therewith are reflected on the consolidated balance sheet of
the Company; or
(q) any extension, renewal or refunding (or successive
extensions, renewals or refundings) in whole or in part of any Debt or
any other obligation or liability secured by any Security Interest
referred to in the foregoing paragraphs (a) through (p), PROVIDED that
the principal amount of Debt or any other obligation or liability
secured by such Security Interest shall not exceed the principal amount
outstanding immediately prior to such extension, renewal or refunding,
and that the Security Interest securing such Debt or other obligation
or liability shall be limited to the property which, immediately prior
to such extension, renewal or refunding secured such Debt or other
obligation or liability and additions to such property; and PROVIDED
FURTHER that the principal amount of Debt or any other obligation or
liability secured by such Security Interest shall continue to be taken
into account for purposes of computing the amount of Debt or any other
obligation or liability that may be secured under any applicable basket
provided for in the foregoing paragraphs (a) through (p).
Notwithstanding the foregoing provisions of this Section, the
Company and the Material Subsidiaries may, at any time, suffer to exist, issue,
incur, assume and guarantee Secured Debt (in addition to Secured Debt permitted
to be secured under the foregoing
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58
paragraphs (a) through (k) and (m) through (q)); PROVIDED that the Designated
Amount does not at any time exceed 10% of Consolidated Total Assets.
SECTION 6.03. SALE AND LEASEBACK TRANSACTIONS. Enter into or
be party to, or permit any Material Subsidiary to enter into or be party to, any
Sale and Leaseback Transaction unless after giving effect thereto the Designated
Amount does not exceed 10% of Consolidated Total Assets.
SECTION 6.04. MERGER, ETC. (a) Permit the Company to merge or
consolidate with or into, or Transfer Assets (other than pursuant to the
transactions giving rise to the Specified Charges) to, any Person, except that
the Company may (i) merge or consolidate with any US Corporation, including any
Subsidiary that is a US Corporation, and (ii) Transfer Assets to any Subsidiary
which is a US Corporation; PROVIDED, in each case described in clause (i) and
(ii) above, that (A) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing and (B) in the case of any merger
or consolidation to which the Company shall be a party, the survivor of such
merger or consolidation shall be the Company.
(b) Permit any Material Subsidiary to merge or consolidate
with or into, or Transfer Assets (other than pursuant to the transactions giving
rise to the Specified Charges) to, any Person unless (i) immediately after
giving effect to such transaction, no Default shall have occurred and be
continuing and (ii) if either constituent corporation in such merger or
consolidation, or the transferor of such assets, is a Subsidiary Guarantor, the
surviving or resulting corporation or the transferee of such assets, as the case
may be, shall be a Subsidiary Guarantor.
SECTION 6.05. CHANGE IN BUSINESS. Permit the Company or any
Material Subsidiary to engage to any material extent in any business other than
the medical devices, supplies and services businesses (but excluding the
management of institutional health care providers such as hospitals, nursing
homes, and long-term care facilities).
SECTION 6.06. CERTAIN RESTRICTIVE AGREEMENTS. Permit the
Company or any Material Subsidiary to enter into any contract or other agreement
that would limit the ability of any Material Subsidiary to pay dividends or make
loans or advances to, or to repay loans or advances from, the Company or any
other Subsidiary; PROVIDED that nothing in this section shall prohibit (a)
covenants or agreements entered into in connection with the incurrence of
secured Debt permitted hereunder that restrict the transfer of collateral
securing such Debt or (b) agreements entered into in connection with sales of
Receivables that govern the application of proceeds of sold Receivables.
SECTION 6.07. LEVERAGE RATIO. Permit the Leverage Ratio at any
time to exceed set forth below opposite such period:
PERIOD RATIO
through 12/30/00 3.75:1.00
12/31/00 through 12/30/01 3.50:1.00
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12/31/01 through 12/30/02 3.25:1.00
12/31/02 and thereafter 3.00:1.00
SECTION 6.08. INTEREST COVERAGE RATIO. Permit the Interest
Coverage Ratio for any period of four consecutive fiscal quarters ending during
any period set forth below to be less than the ratio set forth below opposite
such period
PERIOD RATIO
through 12/30/00 4.00:1.00
12/31/00 through 12/30/01 4.25:1.00
12/31/01 through 12/30/02 4.50:1.00
12/31/02 and thereafter 4.75:1.00
SECTION 6.09. SPIN-OFF. Permit the Spin-Off to be completed
other than on terms and with results consistent in all material respects with
the information contained in the Form 10 and the Confidential Information
Memorandum (including the pro forma financial information and projections
contained therein).
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall
occur and be continuing:
(a) Any Borrower shall fail to (i) pay any interest or fee due
hereunder and such default continues for five days, or (ii) pay any amount of
principal of any Loan or any reimbursement obligation in respect of any LC
Disbursement when due hereunder; or
(b) Any representation or warranty made or deemed made by the
Company or any other Loan Party (or any of their respective officers) in
connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Company or any Material Subsidiary shall fail to
maintain its corporate, limited liability company or partnership existence as
required by Section 5.03, or the Company or any Material Subsidiary shall fail
to perform or observe any term, covenant or agreement contained in Article VI
(other than Section 6.02 insofar as such failure results from a nonconsensual
Security Interest) of this Agreement on its part to be performed or observed; or
(d) The Company or any Subsidiary shall (i) fail to perform or
observe any other term, covenant or agreement contained in this Agreement or any
other Loan Document on its part to be performed or observed (other than those
failures or breaches referred to in paragraphs (a),
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(b) and (c) above) and any such failure shall remain unremedied for 30 days
after written notice thereof has been given to the Company by the Administrative
Agent at the request of any Lender; or
(e) Either (i) the Company or any Material Subsidiary shall
fail to pay any amount of principal of, interest on or premium with respect to,
any Debt (other than the Loans) of the Company or such Subsidiary outstanding
under one or more instruments or agreements when due (whether at scheduled
maturity or by required prepayment, acceleration, demand or otherwise) and (A)
such Debt shall be in an aggregate principal amount not less than $10,000,000
and such failure shall continue beyond the greater of 15 days and the applicable
grace period, if any, specified in the agreement or instrument relating to such
Debt or (B) such Debt shall be in an aggregate principal amount not less than
$20,000,000 and such failure shall continue beyond the applicable grace period,
if any, specified in the agreement or instrument relating to such Debt; or (ii)
any other event shall occur or condition shall exist with respect to any Debt
(other than the Loans) of the Company or such Subsidiary outstanding under one
or more instruments or agreements if the effect of such event or condition is
(or will after the lapse of any grace period be) to cause, or to permit the
holder or holders of such debt (or any trustee or agent on their behalf) to
cause, such Debt to become due, or to require such Debt to be prepaid (other
than by a scheduled prepayment), prior to the stated maturity thereof and (A)
such Debt shall be in an aggregate principal amount not less than $10,000,000
and such failure shall continue beyond the greater of 15 days and the applicable
grace period, if any, specified in the agreement or instrument relating to such
Debt or (B) such Debt shall be in an aggregate principal amount not less than
$20,000,000 and such failure shall continue beyond the applicable grace period,
if any, specified in the agreement or instrument relating to such Debt; or
(f) The Company or any Material Subsidiary shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally; or
(g) The Company or any Material Subsidiary shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Company or such Material Subsidiary seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debt under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property; or the Company or any such Material
Subsidiary shall take corporate action to authorize any of the actions set forth
above in this paragraph (f); PROVIDED that, in the case of any such proceeding
filed or commenced against the Company or any Material Subsidiary, such event
shall not constitute an "Event of Default" hereunder unless either (i) the same
shall have remained undismissed or unstayed for a period of 60 days, (ii) an
order for relief shall have been entered against the Company or such Material
Subsidiary under the federal bankruptcy laws as now or hereafter in effect or
(iii) the Company or such Material Subsidiary shall have taken corporate action
consenting to, approving or acquiescing in the commencement or maintenance of
such proceeding; or
(h) Any judgment or order for the payment of money shall be
rendered against the Company or any Material Subsidiary and (i) either (A)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (B) there shall be any period of
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10 consecutive days, in the case of a judgment or order rendered or entered by a
court located in the United States, its territories and Puerto Rico, or 30
consecutive days, in the case of any other court, during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect, and (ii) the amount of such judgment or
order, when aggregated with the amount of all other such judgments and orders
described in this subsection (h), shall exceed $20,000,000;
(i) Either (i) the Pension Benefit Guaranty Corporation shall
terminate any single-employer plan (as defined in Section 4001(b)(2) of ERISA)
that provides benefits for employees of the Company or any Material Subsidiary
and such plan shall have an Unfunded Liability in an amount in excess of
$5,000,000 at such time or (ii) withdrawal liability shall be assessed against
the Company or any Material Subsidiary in connection with any multiemployer plan
(whether under Section 4203 or Section 4205 of ERISA) and such withdrawal
liability shall be an amount in excess of $5,000,000; or
(j) the guarantee of any Subsidiary Guarantor that is a
Material Subsidiary under the Subsidiary Guarantee Agreement or the Company's
guarantee under Article X shall not be (or shall be asserted by the Company or
any Subsidiary Guarantor not to be) valid or in full force and effect; or
(k) a Change of Control shall have occurred.
then, in any such event but subject to the next sentence, the Administrative
Agent shall at the request, or may with the consent, of the Required Lenders, by
notice to the Company, (i) declare the obligation of each Lender to make Loans
hereunder to be terminated, whereupon the same shall forthwith terminate and/or
(ii) declare the entire unpaid principal amount of the Loans, all interest
accrued and unpaid thereon and all other amounts payable under this Agreement to
be forthwith due and payable, whereupon the Loans, all such accrued interest and
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrowers; PROVIDED, that in the case of any
Competitive Bid Note, the unpaid principal amount thereof, and all interest
accrued and unpaid thereon, shall not be declared to be due and payable pursuant
to the foregoing clause (ii) without the consent of the holder of such
Competitive Bid Note. In the event of the occurrence of an Event of Default
under clause (f) or (g) of this Article VII, (A) the obligation of each Lender
to make Loans shall automatically be terminated and (B) the Loans, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Borrower.
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ARTICLE VIII
THE AGENTS
In order to expedite the transactions contemplated by this
Agreement, the Persons named in the heading of this Agreement are hereby
appointed to act as Administrative Agent, London Agent and Tokyo Agent on behalf
of the Lenders and the Issuing Bank. Each of the Lenders, each assignee of any
Lender and the Issuing Bank 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 delegated to the Agents by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. The Administrative Agent and, to the extent expressly provided herein,
the other Agents are 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 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 Company
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 Company or any other Loan Party pursuant to
this Agreement or the other Loan Documents as received by the Administrative
Agent. Without limiting the generality of the foregoing, the Administrative
Agent is hereby expressly authorized to release any Subsidiary Guarantor from
its obligations under the Subsidiary Guarantee Agreement in the event that all
the capital stock of such Guarantor shall be sold, transferred or otherwise
disposed of to a Person other than the Company or an Affiliate of the Company in
a transaction permitted by Section 6.04.
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 Company or any Subsidiary or
other Affiliate thereof as if it were not an Agent.
The Agents shall not have any duties or obligations except
those expressly set forth in the Loan Documents. Without limiting the generality
of the foregoing, (a) no Agent shall be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) no Agent shall have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that such Agent is required to exercise upon
receipt of notice in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.02), and (c) except as expressly set forth in the Loan
Documents, no Agent shall have any duty to disclose, and no Agent shall be
liable for the failure to disclose, any information relating to the Company or
any of its Subsidiaries that is communicated to or obtained by the institution
serving as Agent or any of its Affiliates in any capacity. No Agent shall be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall
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63
be necessary under the circumstances as provided in Section 11.02) or in the
absence of its own gross negligence or wilful misconduct. No Agent shall be
deemed to have knowledge of any Default unless and until written notice thereof
is given to such Agent by a Borrower (in which case such Agent shall give
written notice to each other Lender), and no Agent shall be responsible for or
have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for any
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Each Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by such
Agent. Each Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent
as provided in this paragraph, any Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Company. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Company, 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 and the Issuing Bank, appoint a successor Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Agent hereunder by a
successor, 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 11.03
shall continue in effect for the benefit of such retiring Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while it was acting as Agent.
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Each Lender agrees (a) to reimburse the Agents, on demand, in
the amount of its pro rata share (based on the amount of its Loans and available
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 Company or any other Loan Party and (b) to indemnify and hold
harmless each Agent and any of its Related Parties, 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 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 Company 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, taxes, 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 US Tranche 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, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
ARTICLE IX
COLLECTION ALLOCATION MECHANISM
On the CAM Exchange Date, (i) the Commitments shall
automatically and without further act be terminated as provided in Article VII
and (ii) the Lenders shall automatically and without further act be deemed to
have exchanged interests in the Specified Obligations under the Tranches (and
participations in the undrawn amounts of Letters of Credit) such that, in lieu
of the interest of each Lender in the Specified Obligations under each Tranche
in which it shall participate as of such date (including the principal,
reimbursement, interest and fee obligations of each Credit Party in respect of
each such Tranche) and, if such Lender shall be a US Tranche Lender, such
Lender's participation in undrawn Letters of Credit, such Lender shall own an
interest equal to such Lender's CAM Percentage in the Specified Obligations
under each of the Tranches (including the principal, reimbursement, interest and
fee obligations of each Credit Party in respect of each such Tranche) and hold a
participation in the undrawn amount of
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each outstanding Letter of Credit equal to its CAM Percentage thereof. Each
Lender, each person acquiring a participation from any Lender as contemplated by
Section 11.02 and each Borrower hereby consents and agrees to the CAM Exchange.
Each Borrower and each Lender agrees from time to time to execute and deliver to
the Administrative Agent all such promissory notes and other instruments and
documents as the Administrative Agent shall reasonably request to evidence and
confirm the respective interests and obligations of the Lenders after giving
effect to the CAM Exchange, and each Lender agrees to surrender any promissory
notes originally received by it in connection with its Loans hereunder to the
Administrative Agent against delivery of any promissory notes so executed and
delivered; PROVIDED, HOWEVER, that the failure of any Borrower to execute or
deliver or of any Lender to accept any such promissory note, instrument or
document shall not affect the validity or effectiveness of the CAM Exchange. On
the CAM Exchange Date, each Lender whose funded Exposures after giving effect to
the CAM Exchange shall exceed its funded Exposures before giving effect thereto
shall pay to the Administrative Agent the amount of such excess in the
applicable currency or currencies, and the Administrative Agent shall pay to
each of the other Lenders, out of the amount so received by it, the amount by
which such Lender's funded Exposures before giving effect to the CAM Exchange
exceeds such funded Exposures after giving effect thereto.
ARTICLE X
GUARANTEE
In order to induce the Lenders to extend credit to the other
Borrowers hereunder, the Company hereby irrevocably and unconditionally
guarantees, as a primary obligor and not merely as a surety, the payment when
and as due of the Obligations of such other Borrowers. The Company further
agrees that the due and punctual payment of such Obligations may be extended or
renewed, in whole or in part, without notice to or further assent from it, and
that it will remain bound upon its guarantee hereunder notwithstanding any such
extension or renewal of any such Obligation.
The Company waives presentment to, demand of payment from and
protest to any Borrower of any of the Obligations, and also waives notice of
acceptance of its obligations and notice of protest for nonpayment. The
obligations of the Company hereunder shall not be affected by (a) the failure of
any Agent or Lender to assert any claim or demand or to enforce any right or
remedy against any Loan Party under the provisions of this Agreement, any other
Loan Document or otherwise; (b) any extension or renewal of any of the
Obligations; (c) any rescission, waiver, amendment or modification of, or
release from, any of the terms or provisions of this Agreement, or any other
Loan Document or agreement; (d) any default, failure or delay, wilful or
otherwise, in the performance of any of the Obligations; or (e) any other act,
omission or delay to do any other act which may or might in any manner or to any
extent vary the risk of the Company or otherwise operate as a discharge of a
guarantor as a matter of law or equity or which would impair or eliminate any
right of the Company to subrogation.
The Company further agrees that its agreement hereunder
constitutes a guarantee of payment when due (whether or not any bankruptcy or
similar proceeding shall have stayed the
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accrual or collection of any of the Obligations or operated as a discharge
thereof) and not merely of collection, and waives any right to require that any
resort be had by any Agent or Lender to any balance of any deposit account or
credit on the books of any Agent or Lender in favor of any Borrower or any other
Person.
The obligations of the Company hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason, and
shall not be subject to any defense or set-off, counterclaim, recoupment or
termination whatsoever, by reason of the invalidity, illegality or
unenforceability of any of the Obligations, any impossibility in the performance
of any of the Obligations or otherwise.
The Company further agrees that its obligations hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by any Agent or Lender upon the bankruptcy or
reorganization of any Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Agent or Lender may have at law or in equity against the
Company by virtue hereof, upon the failure of any other Borrower to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Company hereby
promises to and will, upon receipt of written demand by any Agent or Lender,
forthwith pay, or cause to be paid, to the applicable Agent or Lender in cash an
amount equal to the unpaid principal amount of such Obligations then due,
together with accrued and unpaid interest thereon. The Company further agrees
that if payment in respect of any Obligation shall be due in a currency other
than US Dollars and/or at a place of payment other than New York and if, by
reason of any Change in Law, disruption of currency or foreign exchange markets,
war or civil disturbance or other event, payment of such Obligation in such
currency or at such place of payment shall be impossible or, in the reasonable
judgment of any Agent or Lender, not consistent with the protection of its
rights or interests, then, at the election of the Administrative Agent, the
Company shall make payment of such Obligation in US Dollars (based upon the
applicable Exchange Rate in effect on the date of payment) and/or in New York,
and shall indemnify each Agent and Lender against any losses or reasonable
out-of-pocket expenses that it shall sustain as a result of such alternative
payment.
Upon payment by the Company of any sums as provided above, all
rights of the Company against any Borrower arising as a result thereof by way of
right of subrogation or otherwise shall in all respects be subordinated and
junior in right of payment to the prior indefeasible payment in full of all the
Obligations owed by such Borrower to the Agents and the Lenders.
Nothing shall discharge or satisfy the liability of the
Company hereunder except the full performance and payment of the Obligations.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. NOTICES. Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Borrower, to 17221 Red Hill Avenue, Irvine,
California 92614, Attention of Daniel M. Gallagher (Telecopy No. (949)
250-2275);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
Floor, New York, New York 10081, Attention of Anne Bowles (Telecopy No.
(212) 552-7500), with a copy to The Chase Manhattan Bank, 270 Park
Avenue, New York, NY 10019, Attention of Steve Rochford (Telecopy No.
(212) 270-5135);
(c) if to the London Agent, to it at Chase Manhattan
International Limited, Trinity Tower, 9 Thomas More Street, London,
England E19YT Attention of Loans Agency Division (Telecopy No.
011-44-171-777-2360); with a copy to the Administrative Agent as
provided in paragraph (b) above;
(d) if to the Tokyo Agent, to it at The Fuji Bank, Limited,
International Business Division, 1-5-5 Otemachi, Chiyoda-k, Tokyo,
Japan, Attention of Shinya Tanno, (Telecopy No. 011-81-3-3201-1591);
with a copy to the Administrative Agent as provided in paragraph (b)
above
(e) if to the Issuing Bank, to it at the Chase Manhattan Bank,
One Chase Manhattan Plaza, New York, New York 10081 Attention of Victor
Quinones (Telecopy No. (212) 552-7500); and
(f) if to any Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 11.02. WAIVERS; AMENDMENTS. (a) No failure or delay by
any Agent, the Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be
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permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Company and the
Required Lenders or by the Company and the Administrative Agent with the consent
of the Required Lenders or, in the case of any other Loan Document, pursuant to
an agreement or agreements in writing entered into by the Administrative Agent
and the Loan Party or Loan Parties that are parties thereto, in each case with
the consent of the Required Lenders; PROVIDED that no such agreement shall (i)
increase any Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender adversely affected thereby, (iii)
postpone the date of any scheduled payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby without the
written consent of each Lender (it being understood that the addition of new
tranches of loans or commitments that may be extended under this Agreement shall
not be deemed to alter such pro rata sharing of payments), (v) change any of the
provisions of this Section or the definition of "Required Lenders" or any other
provision of any Loan Document specifying the number or percentage of Lenders
(or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as the case
may be) (except, in each case, to provide for new tranches of loans or
commitments that may be extended under this Agreement), (vi) release the Company
or all or substantially all the Subsidiary Guarantors from, or limit or
condition, its or their obligations under Article X or the Subsidiary Guarantee
Agreement, without the written consent of each Lender, (vii) change any
provisions of Article IX without the written consent of each Lender, or (viii)
change any provisions of any Loan Document in a manner that by its terms
adversely affects the rights in respect of payments due to Lenders holding Loans
of any Class differently than those of Lenders holding Loans of any other Class
without the written consent of Lenders holding a majority in interest of the
outstanding Loans and unused Commitments of each adversely affected Class;
PROVIDED FURTHER that (A) no such agreement shall amend, modify or otherwise
affect the rights or duties of any Agent or the Issuing Bank hereunder or under
any other Loan Document without the prior written consent of such Agent or the
Issuing Bank, as the case may be, and (B) any waiver, amendment or modification
of this Agreement that by its terms affects the rights or duties under this
Agreement of the US Tranche Lenders (but not the Swiss Tranche Lenders or the
Japanese Tranche Lenders), the Swiss Tranche Lenders (but not the Japanese
Tranche Lenders or the US Tranche Lenders), or the Japanese Tranche Lenders (but
not the US Tranche Lenders or the Swiss Tranche Lenders) may be effected by an
agreement or agreements in writing entered into by the Company and requisite
percentage in interest of the affected Class of Lenders. For
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avoidance of doubt, the addition of borrowers as provided in Section 2.21 shall
require the consent of the Required Lenders.
SECTION 11.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The
Company shall pay (i) all reasonable out-of-pocket expenses incurred by the
Agents and their Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Agents, in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of
this Agreement or the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated, (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred
by any Agent, the Issuing Bank or any Lender, including the reasonable fees,
charges and disbursements of any counsel, for any Agent, the Issuing Bank or any
Lender, in connection with the enforcement or protection of its rights in
connection with any Loan Document, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) The Company shall indemnify each Agent, the Issuing Bank
and each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an "INDEMNITEE") against, and hold each Indemnitee
harmless from, any and all losses, liabilities, reasonable out-of-pocket costs
or expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) any transaction or
proposed transaction (whether or not consummated) in which any proceeds of any
borrowing hereunder are applied or proposed to be applied, directly or
indirectly, by the Company or any Subsidiary, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit, or (iii) the execution, delivery or performance by the
Company and the Subsidiaries of the Loan Documents, or any actions or omissions
of the Company or any Subsidiary in connection therewith; PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, liabilities, costs or expenses shall have resulted from the gross
negligence or wilful misconduct of such Indemnitee or the violation by such
Indemnitee of any law or court order applicable to it.
(c) To the extent that the Company fails to pay any amount
required to be paid by it to any Agent or the Issuing Bank under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to such Agent or the
Issuing Bank, as the case may be, such Lender's pro rata share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; PROVIDED that the unreimbursed loss, liability,
cost or expense, as the case may be, was incurred by or asserted against such
Agent or the Issuing Bank in its capacity as such. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the sum
(without duplication) of the total Exposures and unused Commitments at the time.
<PAGE>
70
(d) To the extent permitted by applicable law, no Borrower
shall assert, and each Borrower hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable within
15 Business Days after receipt by the Company of a reasonably detailed invoice
therefor.
SECTION 11.04. SUCCESSORS AND ASSIGNS. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), except that
no Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by any Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), the Related Parties of each of the Agents, the Issuing Bank
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans or other amounts at the time owing to
it); PROVIDED that (i) except in the case of an assignment to a Lender, an
Affiliate of a Lender or a Related Fund of any Lender, each of the Company and
the Administrative Agent (and in the case of an assignment of all or a portion
of a US Tranche Commitment or any Lender's obligations in respect of its LC
Exposure, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender, an Affiliate of a Lender or a Related
Fund of any Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitments and outstanding Loans, the amount of the
Commitments and outstanding Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless each of the Company and the Administrative Agent
otherwise consent, (iii) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500 (provided, that if such assignment is
an assignment of commitments or Loans under the Japanese Tranche, the processing
and recordation fee shall be paid to the Tokyo Agent), and (iv) the assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; and PROVIDED FURTHER that any consent of the
Company otherwise required under this paragraph shall not be required if an
Event of Default referred to in clause (f) or (g) of Article VII has occurred
and is continuing. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have
<PAGE>
71
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 11.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of each Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive, and the Borrowers, the Administrative Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Borrower or the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "PARTICIPANT") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); PROVIDED that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; PROVIDED that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in clause (i), (ii), (iii) or
(vi) of the first proviso to Section 11.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, each Borrower agrees that each
Participant shall be entitled to the
<PAGE>
72
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant shall not be entitled to the
benefits of Section 2.17 unless the Company is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrowers, to comply with Section 2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank or, in the case of a Lender that is an
investment fund, to the trustee under the indenture to which such fund is a
party, and this Section shall not apply to any such pledge or assignment of a
security interest; PROVIDED that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 11.05. SURVIVAL. All covenants, agreements,
representations and warranties made by the Loan Parties herein or in any other
Loan Document or in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto or thereto
and shall survive the execution and delivery of this Agreement and any other
Loan Document and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that any Agent, the Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement or any other Loan Document
is outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not expired or terminated. The provisions of Sections 2.15,
2.16, 2.17, 11.03 and 11.12 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Commitments or the termination of this Agreement or any other
Loan Document or any provision hereof or thereof.
SECTION 11.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the
<PAGE>
73
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 successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 11.07. SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 11.08. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final and in whatever currency denominated) at
any time held and other obligations at any time owing by such Lender or
Affiliate to or for the credit or the account of any Borrower against any of and
all the obligations of such Borrower now or hereafter existing under this
Agreement held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 11.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement against any Borrower
or its properties in the courts of any jurisdiction.
(c) Each 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 any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the
<PAGE>
74
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 11.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 11.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 11.11. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 11.12. CONFIDENTIALITY. Each Agent, the Issuing Bank
and each Lender agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors, to Related Funds' directors and officers and
to any direct or indirect contractual counterparty in swap agreements (it being
understood that each Person to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) to the extent required or advisable in the judgment of counsel in connection
with any suit, action or proceeding relating to the enforcement of rights of the
Agents or the Lenders against the Borrowers under this Agreement or any other
Loan Document, (f) subject to an agreement containing provisions substantially
the same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Company or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section of which such Agent or Lender is aware or (ii) becomes
available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Company other than as a
result of a breach of this Section of which such Agent or Lender is aware. For
the purposes of this Section, "INFORMATION" means all information received from
the Company
<PAGE>
75
relating to the Company or its business, other than any such information that is
available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Company other than as a result
of a breach of this Section of which such Agent or Lender is aware. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 11.13. CONVERSION OF CURRENCIES. (a) If, for the
purpose of obtaining judgment in any court, it is necessary to convert a sum
owing hereunder in one currency into another currency, each party hereto agrees,
to the fullest extent that it may effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the first currency could be purchased with such other
currency on the Business Day immediately preceding the day on which final
judgment is given.
(b) The obligations of each Borrower in respect of any sum due
to any party hereto or any holder of the obligations owing hereunder (the
"APPLICABLE CREDITOR") shall, notwithstanding any judgment in a currency (the
"JUDGMENT CURRENCY") other than the currency in which such sum is stated to be
due hereunder (the "AGREEMENT CURRENCY"), be discharged only to the extent that,
on the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 11.13 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
SECTION 11.14. TERMINATION OF COVENANTS. Notwithstanding any
other provision in this Agreement, at any time when the Commitments shall have
terminated and no Loans shall be outstanding but Letters of Credit are still
outstanding, if the Borrowers shall post cash collateral in an amount equal to
the LC Exposure, the Borrowers shall no longer be required to comply with the
covenants set forth in Article V or Article VI of this Agreement.
<PAGE>
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.
EDWARDS LIFESCIENCES CORP.
by /s/ Michael A. Mussallem
----------------------------
Name: Michael A. Mussallem
Title: President
<PAGE>
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent and
Issuing Bank,
by /s/ Robert Anastasio
----------------------------
Name: Robert Anastasio
Title: Vice President
<PAGE>
CHASE MANHATTAN INTERNATIONAL
LIMITED, as London Agent,
by /s/ David Bell
-----------------------------
Name: David Bell
Title: Assistant Treasurer
<PAGE>
CREDIT SUISSE FIRST BOSTON
by /s/ William S. Lutkins
----------------------------
Name: William S. Lutkins
Title: Vice President
by /s/ Thomas G. Muoio
----------------------------
Name: Thomas G. Muoio
Title: Vice President
<PAGE>
THE FUJI BANK, LIMITED,
individually and as Tokyo
Agent,
by /s/ Y. Takeshima
----------------------------
Name: Y. Takeshima
Title: General Manager
THE FUJI BANK, LIMITED
by /s/ Takeyuki Kuroki
----------------------------
Name: Takeyuki Kuroki
Title: Vice President and
Senior Team Leader
<PAGE>
BANK OF TOKYO-MITSUBISHI
CHICAGO BRANCH,
by /s/ Hisashi Miyashiro
----------------------------
Name: Hisashi Miyashiro
Title: Deputy General
Manager
<PAGE>
BANK OF TOKYO-MITSUBISHI
ICHIGAYA BRANCH,
by /s/ Itaru Ando
----------------------------
Name: Itaru Ando
Title: General Manager,
Ichigaya Branch
<PAGE>
UBS AG, STAMFORD BRANCH
by /s/ Robert H. Riley III
-------------------------------------
Name: Robert H. Riley III
Title: Executive Director
by /s/ Wilfred Saint
-------------------------------------
Name: Wilfred Saint
Title: Associate Director,
Loan Portfolio Support, US
<PAGE>
UBS AG, ZURICH (Swiss Tranche
Lender)
by /s/ Wilfred Saint
-------------------------------------
Name: Wilfred Saint
Title: Associate Director,
Loan Portfolio Support, US
by /s/ Dorothy McKinley
-------------------------------------
Name: Dorothy McKinley
Title: Associate Director,
Loan Portfolio Support, US
<PAGE>
DEUTSCHE BANK AG, NEW YORK
BRANCH AND/ OR CAYMAN ISLANDS
BRANCH
by /s/ Iain Stewart
-------------------------------------
Name: Iain Stewart
Title: Vice President
by /s/ Annette Walter
-------------------------------------
Name: Annette Walter
Title: Associate
<PAGE>
FIRST UNION NATIONAL BANK,
by /s/ Ann M. Dodd
-------------------------------------
Name: Ann M. Dodd
Title: SVP
<PAGE>
NATIONAL AUSTRALIA BANK
LIMITED.,
by /s/ Susan R. Julien
-------------------------------------
Name: Susan R. Julien
Title: Vice President
<PAGE>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
by /s/ Robert Bottamedi
-------------------------------------
Name: Robert Bottamedi
Title: Vice President
<PAGE>
FLEET NATIONAL BANK,
by /s/ Walter J. Marullo
-------------------------------------
Name: Walter J. Marullo
Title: Vice President
BANK OF AMERICA, N.A.
by /s/ F. Scott Singhoff
-------------------------------------
Name: F. Scott Singhoff
Title: Managing Director
<PAGE>
GOLDMAN SACHS & CO.,
by /s/ Doug Hendersen
-------------------------------------
Name: Doug Hendersen
Title: Managing Director
<PAGE>
WACHOVIA BANK,
by /s/ Debra L. Coheley
-------------------------------------
Name: Debra L. Coheley
Title: Senior Vice
President
<PAGE>
BBV INTERNATIONAL INVESTMENT
CORPORATION
by /s/ Tomas Rosario
-------------------------------------
Name: Tomas Rosario
Title: Executive Vice
President
<PAGE>
BANK ONE, NA
by /s/ Joseph Perdenza
-------------------------------------
Name: Joseph Perdenza
Title: Assistant Vice
President
<PAGE>
BANK OF NOVA SCOTIA,
by /s/ R. P. Reynolds
-------------------------------------
Name: R. P. Reynolds
Title: Director
<PAGE>
ABN AMRO BANK,
by /s/ Paul K. Stimpfl
-------------------------------------
Name: Paul K. Stimpfl
Title: Group Vice
President
by /s/ Mitsoo Iravani
-------------------------------------
Name: Mitsoo Iravani
Title: Assistant Vice
President
<PAGE>
EXHIBIT 10.20
CONFORMED COPY
==============================================================================
364-DAY CREDIT AGREEMENT
dated as of
March 30, 2000
among
EDWARDS LIFESCIENCES CORPORATION
as Borrower
The Lenders Party Hereto
THE CHASE MANHATTAN BANK
as Administrative Agent
BANK ONE, N.A.
as Syndication Agent
and
CREDIT SUISSE FIRST BOSTON
as Documentation Agent
---------------------------
CHASE SECURITIES INC.
as Arranger
==============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS
<S> <C>
SECTION 1.01. Defined Terms.............................................................................1
SECTION 1.02. Classification of Loans and Borrowings...................................................13
SECTION 1.03. Terms Generally..........................................................................13
SECTION 1.04. Accounting Terms; GAAP...................................................................14
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments..............................................................................14
SECTION 2.02. Loans and Borrowings.....................................................................14
SECTION 2.03. Requests for Revolving Borrowings........................................................15
SECTION 2.04. Competitive Bid Procedure................................................................15
SECTION 2.05. Funding of Borrowings....................................................................18
SECTION 2.06. Repayment of Borrowings; Evidence of Debt................................................18
SECTION 2.07. Interest Elections.......................................................................19
SECTION 2.08. Termination, Reduction and Extension of Commitments......................................20
SECTION 2.09. Increase in Commitments .................................................................21
SECTION 2.10. Prepayment of Loans......................................................................23
SECTION 2.11. Fees.....................................................................................24
SECTION 2.12. Interest.................................................................................24
SECTION 2.13. Alternate Rate of Interest...............................................................25
SECTION 2.14. Increased Costs..........................................................................25
SECTION 2.15. Break Funding Payments...................................................................27
SECTION 2.16. Taxes....................................................................................27
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Setoffs...............................28
SECTION 2.18. Mitigation Obligations; Replacement of Lenders...........................................30
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Corporate Existence and Standing.........................................................30
SECTION 3.02. Authorization; No Violation..............................................................31
SECTION 3.03. Governmental Consents....................................................................31
SECTION 3.04. Validity.................................................................................31
SECTION 3.05. Litigation...............................................................................31
SECTION 3.06. Financial Statements; No Material Adverse Change.........................................31
<PAGE>
2
SECTION 3.07. Investment Company Act...................................................................31
SECTION 3.08. Regulation U.............................................................................32
SECTION 3.09. Environmental Matters....................................................................32
SECTION 3.10. Disclosure...............................................................................32
SECTION 3.11. Year 2000 Compliance.....................................................................32
SECTION 3.12 Subsidiary Guarantors....................................................................32
SECTION 3.13 Solvency.................................................................................32
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date...........................................................................33
SECTION 4.02. Each Credit Event........................................................................34
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Payment of Taxes, Etc. ..................................................................34
SECTION 5.02. Maintenance of Insurance.................................................................34
SECTION 5.03. Preservation of Existence, Etc. .........................................................35
SECTION 5.04. Compliance with Laws, Etc. ..............................................................35
SECTION 5.05. Keeping of Books.........................................................................35
SECTION 5.06. Inspection...............................................................................35
SECTION 5.07. Reporting Requirements...................................................................35
SECTION 5.08. Use of Proceeds..........................................................................37
SECTION 5.09. Guarantee Requirement....................................................................37
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Subsidiary Debt..........................................................................37
SECTION 6.02. Liens, Etc. .............................................................................37
SECTION 6.03. Sale and Leaseback Transactions..........................................................40
SECTION 6.04. Merger, Etc. ............................................................................40
SECTION 6.05. Change in Business.......................................................................41
SECTION 6.06. Certain Restrictive Agreements...........................................................41
SECTION 6.07. Leverage Ratio...........................................................................41
SECTION 6.08. Interest Coverage Ratio..................................................................41
SECTION 6.09 Spin-Off.................................................................................41
<PAGE>
3
ARTICLE VII
Events of Default.......................................................................................42
ARTICLE VIII
The Administrative Agent................................................................................44
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices..................................................................................47
SECTION 9.02. Waivers; Amendments......................................................................47
SECTION 9.03. Expenses; Indemnity; Damage Waiver.......................................................48
SECTION 9.04. Successors and Assigns...................................................................49
SECTION 9.05. Survival.................................................................................51
SECTION 9.06. Counterparts; Integration; Effectiveness.................................................52
SECTION 9.07. Severability.............................................................................52
SECTION 9.08. Right of Setoff..........................................................................52
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process...............................52
SECTION 9.10. Waiver of Jury Trial.....................................................................53
SECTION 9.11. Headings.................................................................................53
SECTION 9.12. Confidentiality..........................................................................53
SECTION 9.13. Conversion of Currencies.................................................................54
</TABLE>
SCHEDULES:
<TABLE>
<S> <C>
Schedule 1.01 -- Subsidiary Guarantors
Schedule 2.01 -- Lenders and Commitments
Schedule 2.17 -- Payment Instructions
Schedule 6.01 -- Debt of Material Subsidiaries
Schedule 6.02 -- Security Interests
</TABLE>
EXHIBITS:
<TABLE>
<S> <C>
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Subsidiary Guarantee Agreement
Exhibit C -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit D-1 -- Form of Opinion of Counsel for the Company
Exhibit D-2 -- Form of Opinion of General Counsel of the Company
Exhibit E -- Form of Side Letter from Baxter
</TABLE>
<PAGE>
364-DAY CREDIT AGREEMENT dated as of March
30, 2000, among EDWARDS LIFESCIENCES CORPORATION, a
Delaware corporation (the "Company"); the LENDERS
from time to time party hereto; THE CHASE MANHATTAN
BANK, as Administrative Agent; BANK ONE, N.A., as
Syndication Agent; and CREDIT SUISSE FIRST BOSTON, as
Documentation Agent.
The Company has requested the Lenders (such term and each
other capitalized term used and not otherwise defined herein having the
meaning assigned to it in Article I) to extend credit in the form of a
revolving credit facility under which the Company may obtain Loans in US
Dollars in an aggregate principal amount at any time outstanding that will
not result in the sum of the Revolving Exposures and the Competitive Loan
Exposures exceeding $220,000,000. The Company has also requested the Lenders
to provide a procedure pursuant to which the Company may invite the Lenders
to bid on an uncommitted basis on short-term Loans to the Company. The
proceeds of borrowings hereunder and under the Five Year Credit Agreement on
the Initial Borrowing Date in an aggregate amount of up to $550,000,000 are
to be used to pay Baxter for assets transferred to the Company in connection
with the Spin-Off or to repay intercompany debt owed to Baxter and
outstanding immediately prior to the Spin-Off; proceeds of the other
borrowings hereunder are to be used for general corporate purposes of the
Company and their subsidiaries.
The Lenders are willing to establish the credit facility
referred to in the preceding paragraph upon 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 have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ADMINISTRATIVE AGENT" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"AGREEMENT CURRENCY" has the meaning assigned to such term in
Section 9.13(b).
<PAGE>
2
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE RATE" means, for any day, with respect to (i) any
Loan of any Type or (ii) the facility fees payable hereunder, as the case may
be, the applicable rate per annum set forth under the appropriate caption in the
table below, based upon the Leverage Ratio as of the most recent determination
date:
<TABLE>
<CAPTION>
=================== ========================== ================== ===================== ==================
FACILITY ABR SPREAD
LEVERAGE FEE (BASIS LIBOR SPREAD (BASIS (BASIS POINTS
CATEGORY RATIO POINTS PER ANNUM) POINTS PER ANNUM) PER ANNUM)
=================== ========================== ================== ===================== ==================
<S> <C> <C> <C> <C>
=================== ========================== ================== ===================== ==================
Category 1 < 2.25 12.5 62.5 0
=================== ========================== ================== ===================== ==================
Category 2 > 2.25 and < 2.75 15.0 85.0 0
=================== ========================== ================== ===================== ==================
Category 3 > 2.75 and < 3.25 17.5 107.5 25.0
=================== ========================== ================== ===================== ==================
Category 4 > 3.25 20.0 130.0 50.0
=================== ========================== ================== ===================== ==================
</TABLE>
Except as set forth below, the Leverage Ratio used on any date to determine the
Applicable Rate shall be that in effect at the end of the most recent fiscal
quarter for which financial statements shall have been delivered pursuant to
Section 5.07(a) or (b); PROVIDED that if any financial statements required to
have been delivered under Section 5.07(a) or (b) shall not at any time have been
delivered, the Applicable Rate shall, until such financial statements shall have
been delivered, be determined by reference to Category 4 in the Table above.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"ATTRIBUTABLE DEBT" means, in connection with any Sale and
Leaseback Transaction, the present value (discounted in accordance with GAAP at
the discount rate implied in the lease) of the obligations of the lessee for
rental payments during the term of the lease.
"BAXTER" means Baxter International Inc., a Delaware
corporation and, prior to the Spin-Off, the owner of all the issued and
outstanding capital stock of the Company.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
<PAGE>
3
"BORROWING" means Loans (including one or more Competitive
Loans) of the same Class and Type, made, converted or continued on the same date
and, in the case of Eurocurrency Loans or Fixed Rate Loans, as to which a single
Interest Period is in effect.
"BORROWING MINIMUM" means $5,000,000.
"BORROWING MULTIPLE" means $1,000,000.
"BORROWING REQUEST" means a request by a Borrower for a
Revolving Borrowing in accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; PROVIDED, that when used in connection with a
Eurocurrency Loan, the term "BUSINESS DAY" shall also exclude any day on which
banks are not open for dealings in deposits in US Dollars in the London
interbank market.
"CHANGE IN CONTROL" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
of shares representing more than 30% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Company; or (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Company by Persons who were not (i) directors of the Company on
the date hereof, (ii) nominated by the board of directors of the Company or
(iii) appointed by directors so nominated.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or by
any lending office of such Lender or by such Lender's holding company with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"CHASE" means The Chase Manhattan Bank and its successors.
"CLASS", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans or Competitive Loans.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans pursuant to Section 2.01,
expressed as an amount representing the maximum aggregate amount of such
Lender's Revolving Exposure hereunder, as such commitment may be (a) reduced
from time to time pursuant to Section 2.08 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to
<PAGE>
4
Section 9.04. The initial amount of each Lender's Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Commitment, as applicable. The aggregate amount of the
Commitments on the date hereof is $220,000,000.
"COMPANY" has the meaning assigned to such term in the heading
of this Agreement.
"COMPETITIVE BID" means an offer by a Lender to make a
Competitive Loan in accordance with Section 2.04.
"COMPETITIVE BID RATE" means, with respect to any Competitive
Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making
such Competitive Bid.
"COMPETITIVE BID REQUEST" means a request for Competitive Bids
in accordance with Section 2.04.
"COMPETITIVE BORROWING" means a Borrowing comprised of
Competitive Loans.
"COMPETITIVE LOAN" means a Loan made pursuant to Section 2.04.
Each Competitive Loan shall be a Eurocurrency Loan or a Fixed Rate Loan.
"COMPETITIVE LOAN EXPOSURE" means, with respect to any Lender
at any time, the aggregate principal amount of the outstanding Competitive Loans
of such Lender.
"CONFIDENTIAL INFORMATION MEMORANDUM" means the Confidential
Information Memorandum dated February 2000 distributed to the Lenders, together
with the appendices thereto, as amended through the date hereof.
"CONSOLIDATED EBITDA" means, for any period, the consolidated
net income of the Company and its consolidated Subsidiaries for such period
PLUS, to the extent deducted in computing such consolidated net income for such
period, the sum (without duplication) of (a) income tax expense, (b)
Consolidated Interest Expense and (c) depreciation and amortization expense,
MINUS, to the extent added in computing such consolidated net income for such
period, (a) consolidated interest income and (b) extraordinary gains. Anything
contained in this definition or elsewhere in this Agreement to the contrary
notwithstanding, in calculating Consolidated EBITDA for any four fiscal-quarter
period during which the Spin-Off shall have occurred, the Specified Charges
shall be excluded.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
interest expense of the Company and the consolidated Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP, including (a)
the amortization of debt discounts to the extent included in interest expense in
accordance with GAAP, (b) the amortization of all fees (including fees with
respect to interest rate protection agreements or other interest rate hedging
arrangements) payable in connection with the incurrence of Debt to the extent
included in interest expense in accordance with GAAP and (c) the portion of any
rents payable under capital leases allocable to interest expense in accordance
with GAAP.
<PAGE>
5
"CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of
assets that would be included on a consolidated balance sheet of the Company and
the consolidated Subsidiaries (and which shall reflect the deduction of
applicable reserves) after deducting therefrom all current liabilities of the
Company and the consolidated Subsidiaries and all Intangible Assets.
"CONSOLIDATED TOTAL ASSETS" means the total amount of assets
that would be included on a consolidated balance sheet of the Company and the
consolidated Subsidiaries.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"DEBT" means, without duplication, (a) indebtedness for
borrowed money or for the deferred purchase price of property or services
carried as indebtedness on the consolidated balance sheet of the Company and the
consolidated Subsidiaries (b) obligations of the Company and the consolidated
Subsidiaries as lessee under leases that, in accordance with GAAP, are recorded
as capital leases, (c) obligations of the Company and the consolidated
Subsidiaries under direct or indirect guarantees in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (a) and (b) above (including actual
or contingent liabilities in respect of letters of credit issued to support such
indebtedness or other obligations), (d) indebtedness or obligations of the kinds
referred to in clauses (a), (b) and (c) above of the unconsolidated Subsidiaries
and (e) solely for purposes of Article VII hereof, obligations under interest
rate, foreign exchange rate or other hedging agreements. The term "Debt" shall
not include the undrawn face amount of any letter of credit issued for the
account of the Company or any Subsidiary in the ordinary course of the Company's
or such Subsidiary's business (other than any letter of credit referred to in
clause (c) above), but shall include the reimbursement obligation owing from
time to time by the Company or any of the consolidated Subsidiaries in respect
of drawings made under any letter of credit in the event reimbursement is not
made immediately following the applicable drawing. For purposes of Article VII,
the "principal amount" of the obligations of the Company or any Subsidiary in
respect of any hedging agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Company or such
Subsidiary would be required to pay if such hedging agreement were terminated at
such time.
"DEFAULT" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"DESIGNATED AMOUNT" means, at any time, the sum of (a) the
aggregate outstanding principal amount at such time of Debt of Material
Subsidiaries (other than Subsidiary Guarantors) that is permitted under clause
(d) of Section 6.01, (b) the aggregate outstanding investment or claim held at
such time by purchasers, assignees or other transferees of (or of interests in)
Receivables sold under clause (iv) of Section 6.02(l), (c) the aggregate
outstanding
<PAGE>
6
principal amount at such time of Secured Debt permitted under the last
paragraph of Section 6.02 and (d) the aggregate amount at such time of the
Attributable Debt in respect of Sale and Leaseback Transactions permitted
under Section 6.03.
"EFFECTIVE DATE" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"ENVIRONMENTAL LAWS" means all federal, state, local and
foreign laws, rules and regulations relating to the release, emission,
disposal, storage and related handling of waste materials, pollutants and
hazardous substances.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"EUROCURRENCY", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the LIBO
Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in
Article VII.
"EXCLUDED TAXES" means, with respect to any Lender, (a)
income or franchise taxes imposed on (or measured by) its net income by the
United States of America (or any political subdivision thereof), or by the
jurisdiction under which such recipient is organized or in which its
principal office or any lending office from which it makes Loans hereunder is
located, (b) any branch profit taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction described in clause (a)
above, (c) any withholding tax that is imposed by the United States of
America (or any political subdivision thereof) on payments by the Company
from an office within such jurisdiction to the extent such tax is in effect
and would apply as of the date such Lender becomes a party to this Agreement
or relates to payments received by a new lending office designated by such
Lender and is in effect and would apply at the time such lending office is
designated, (d) any withholding tax that is attributable to such Lender's
failure to comply with Section 2.16(e), except, in the case of clause (c)
above, to the extent that (i) such 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 applicable Company with respect to
such withholding tax pursuant to Section 2.16(a) or (ii) such withholding tax
shall have resulted from the making of any payment to a location other than
the office designated by the Administrative Agent or such Lender for the
receipt of payments of the applicable type from the Company.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations
for such day for such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
<PAGE>
7
"FIVE-YEAR CREDIT AGREEMENT" means the Five-Year Credit
Agreement dated as of the date hereof among the Company, the Lenders from
time to time party thereto, the Administrative Agent, the London Agent, Tokyo
Agent and Zurich Agent named therein and the Syndication Agent and
Documentation Agent named in the heading of this Agreement.
"FIXED RATE" means, with respect to any Competitive Loan
(other than a Eurocurrency Competitive Loan), the fixed rate of interest per
annum specified by the Lender making such Competitive Loan in its related
Competitive Bid.
"FIXED RATE REVOLVING LOAN" means a Competitive Loan
bearing interest at a Fixed Rate.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not
incorporated under the laws of the United States or its territories or
possessions.
"FORM 10" means the Amended Form 10 filed by the Company
with the Securities and Exchange Commission on March 15, 2000.
"GAAP" means generally accepted accounting principles in
the United States of America.
"GOVERNMENTAL AUTHORITY" means any nation or government,
any federal, state, local or other political subdivision thereof and any
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government.
"GUARANTEE REQUIREMENT" means, at any time, that (a) the
Subsidiary Guarantee Agreement (or a supplement referred to in Section 15
thereof) shall have been executed by each Subsidiary (other than any Foreign
Subsidiary) existing at such time, shall have been delivered to the
Administrative Agent and shall be in full force and effect and (b) the
Indemnity, Subrogation and Contribution Agreement (or a supplement referred
to in Section 12 thereof) shall have been executed by the Company and each
Subsidiary Guarantor, shall have been delivered to the Administrative Agent
and shall be in full force and effect.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" means
an Indemnity, Subrogation and Contribution Agreement substantially in the
form of Exhibit C, made by the Company and the Subsidiary Guarantors in favor
of the Administrative Agent for the benefit of the Lenders.
"INITIAL BORROWING DATE" means the date of the initial
Borrowing hereunder.
"INTANGIBLE ASSETS" means all assets of the Company and the
consolidated Subsidiaries that would be treated as intangibles in conformity
with GAAP on a consolidated balance sheet of the Company and the consolidated
Subsidiaries.
<PAGE>
8
"INTEREST COVERAGE RATIO" means, for any period, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"INTEREST ELECTION REQUEST" means a request by the relevant
Company to convert or continue a Revolving Borrowing in accordance with
Section 2.07.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR
Loan, the last day of each March, June, September and December, (b) with
respect to any Eurocurrency Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of
a Eurocurrency Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs
at intervals of three months' duration after the first day of such Interest
Period and (c) with respect to any Fixed Rate Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and,
in the case of a Fixed Rate Borrowing with an Interest Period of more than 90
days' duration (unless otherwise specified in the applicable Competitive Bid
Request), each day prior to the last day of such Interest Period that occurs
at intervals of 90 days' duration after the first day of such Interest
Period, and any other dates specified in the applicable Competitive Bid
Request as Interest Payment Dates with respect to such Borrowing.
"INTEREST PERIOD" means, (i) with respect to any
Eurocurrency Borrowing, the period commencing on the date of such Borrowing
and ending on the numerically corresponding day in the calendar month that is
one, two, three or six months thereafter, as the relevant Company may elect
and (ii) with respect to any Fixed Rate Borrowing, the period (which shall
not be less than 7 days or more than 360 days) commencing on the date of such
Borrowing and ending on the date specified in the applicable Competitive Bid
Request; PROVIDED that (i) 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 Eurocurrency 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
and (ii) any Interest Period pertaining to a Eurocurrency Borrowing that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made, and thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.
"JUDGMENT CURRENCY" has the meaning assigned to such term
in Section 9.13(b).
"LENDERS" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment
and Acceptance or as provided in Section 2.09, other than any such Person
that shall have ceased to be a party hereto pursuant to an Assignment and
Acceptance.
<PAGE>
9
"LEVERAGE RATIO" means, at any time, the ratio of (a) Total
Debt at such time to (b) Consolidated EBITDA for the most recent period of
four consecutive fiscal quarters of the Company ended at or prior to such
time.
"LIBO RATE" means, with respect to any Eurocurrency
Borrowing for any Interest Period, the rate per annum determined by the
Applicable Agent at approximately 11:00 a.m., London time, on the Quotation
Day for such Interest Period by reference to the British Bankers' Association
Interest Settlement Rates for deposits in US Dollars (as reflected on the
applicable Telerate screen), 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, "LIBO Rate" shall
mean the interest rate per annum determined by the Administrative Agent to be
the average of the rates per annum at which deposits in US Dollars are
offered for such Interest Period to major banks in the London interbank
market by Chase at approximately 11:00 a.m., London time, on the Quotation
Day for such Interest Period.
"LOAN DOCUMENTS" means this Agreement, the Subsidiary
Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement
and each promissory note delivered pursuant to this Agreement.
"LOAN PARTIES" means the Company and the Subsidiary
Guarantors.
"LOANS" means the loans made by the Lenders to the Company
pursuant to this Agreement.
"MARGIN" means, with respect to any Competitive Loan
bearing interest at a rate based on the LIBO Rate, the marginal rate of
interest, if any, to be added to or subtracted from the LIBO Rate to
determine the rate of interest applicable to such Loan, as specified by the
Lender making such Loan in its related Competitive Bid.
"MATERIAL SUBSIDIARY" means (a) any Subsidiary that
directly or indirectly owns or Controls any Material Subsidiary and (b) any
other Subsidiary (i) the net revenues of which for the most recent period of
four fiscal quarters of the Company for which audited financial statements
have been delivered pursuant to Section 5.01 were greater than 5% of the
Company's consolidated net revenues for such period or (ii) the net tangible
assets of which as of the end of such period were greater than 5% of
Consolidated Net Tangible Assets as of such date; PROVIDED that if at any
time the aggregate amount of the net revenues or net tangible assets of all
Subsidiaries that are not Material Subsidiaries for or at the end of any
period of four fiscal quarters exceeds 5% of the Company's consolidated net
revenues for such period or 5% of Consolidated Net Tangible Assets as of the
end of such period, the Company (or, in the event the Company has failed to
do so within 10 days, the Administrative Agent) shall designate sufficient
Subsidiaries as "Material Subsidiaries" to eliminate such excess, and such
designated Subsidiaries shall for all purposes of this Agreement constitute
Material Subsidiaries. For purposes of making the determinations required by
this definition, revenues and assets of Foreign Subsidiaries shall be
converted into US Dollars at the rates used in preparing the consolidated
balance sheet of the Company included in the applicable financial statements.
<PAGE>
10
"MATURITY DATE" means the first anniversary of the
Termination Date.
"OBLIGATIONS" means (a) the due and punctual payment of (i)
the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans made to the Company, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding),
of the Loan Parties under this Agreement and the other Loan Documents, and
(b) unless otherwise agreed upon in writing by the applicable Lender party
thereto, the due and punctual payment and performance of all obligations of
the Company or any Subsidiary, monetary or otherwise, under each interest
rate hedging Agreement relating to Obligations referred to in the preceding
clause (a) entered into with any counterparty that was a Lender (or an
Affiliate thereof) at the time such hedging agreement was entered into.
"OTHER TAXES" means any and all present or future
recording, stamp, documentary, excise, transfer, sales, property or similar
taxes, charges or levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.
"PERCENTAGE" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment.
If the Commitments have terminated or expired, the Percentages shall be
determined based upon the Commitments most recently in effect, giving effect
to any assignments.
"PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime
Rate shall be effective from and including the date such change is publicly
announced as being effective.
"QUOTATION DAY" means, with respect to any Eurocurrency
Borrowing and any Interest Period, the day on which it is market practice in
the relevant interbank market for prime banks to give quotations for deposits
in US Dollars for delivery on the first day of such Interest Period. If such
quotations would normally be given by prime banks on more than one day, the
Quotation Day will be the last of such days.
"REGISTER" has the meaning set forth in Section 9.04.
"RELATED FUND" means, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank loans
and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
<PAGE>
11
"RELATED PARTIES" means, with respect to any specified
Person, such Person's Affiliates and the respective directors, officers,
employees, trustees, agents and advisors of such Person and such Person's
Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing more than 50%
of the sum of the total Revolving Credit Exposures and unused Commitments at
such time; PROVIDED that, for purposes of declaring the Loans to be due and
payable pursuant to Article VII, and for all purposes after the Loans become
due and payable pursuant to Article VII or the Commitments expire or
terminate, the outstanding Competitive Loans of the Lenders shall be included
in their respective Revolving Credit Exposures in determining the Required
Lenders.
"REVOLVING AVAILABILITY PERIOD" means the period from and
including the Effective Date to but excluding the earlier of the Termination
Date and the date of termination of the Commitments.
"REVOLVING BORROWING" means a Borrowing comprised of
Revolving Loans.
"REVOLVING EXPOSURE" means, with respect to any Lender at
any time, such Lender's Percentage of the aggregate principal amount of the
outstanding Revolving Loans.
"REVOLVING LOAN" means a Loan made by a Lender pursuant to
Section 2.01(a). Each Revolving Loan shall be a Eurocurrency Loan or an ABR
Loan.
"SALE AND LEASEBACK TRANSACTION" means any arrangement
whereby the Company or a Material Subsidiary, directly or indirectly, 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.
"SECURED DEBT" means Debt or any other obligation or
liability of the Company or any Material Subsidiary the payment of which is
secured by a Security Interest.
"SECURITY INTEREST" means any lien, security interest,
mortgage or other charge or encumbrance of any kind, title retention device,
pledge or any other type of preferential arrangement, upon or with respect to
any property of the Company or any Material Subsidiary, whether now owned or
hereafter acquired.
"SPECIFIED CHARGES" means costs related to the Spin-Off and
related restructuring charges accrued during the fiscal quarter in which the
Spin-Off occurs or the next succeeding seven fiscal quarters in an aggregate
amount not to exceed $100,000,000 (and the cash amount of which does not
exceed $50,000,000).
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12
"SPIN-OFF" means the distribution by Baxter, on or about
April 1, 2000, of all the issued and outstanding capital stock of the Company
to the existing shareholders of Baxter on the terms and with the results
described in the Form 10.
"STATUTORY RESERVE RATE" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve, liquid
asset or similar percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by any Governmental
Authority of the United States for any category of deposits or liabilities
customarily used to fund loans or by reference to which interest rates
applicable to Loans in such currency are determined. Such reserve, liquid
asset or similar percentages shall include those imposed pursuant to
Regulation D of the Board. Eurocurrency Loans shall be deemed 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 any applicable law, rule or regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change
in any reserve percentage.
"SUBSIDIARY" means, with respect to any Person, any entity
with respect to which such Person alone owns, such Person or one or more of
its subsidiaries together own, or such Person and any Person Controlling such
Person together own, in each case directly or indirectly, capital stock or
other equity interests having ordinary voting power to elect a majority of
the members of the Board of Directors of such corporation or other entity or
having a majority interest in the capital or profits of such corporation or
other entity.
"SUBSIDIARY" means any subsidiary of the Company.
"SUBSIDIARY GUARANTEE AGREEMENT" means a Subsidiary
Guarantee Agreement substantially in the form of Exhibit B, made by the
Subsidiary Guarantors in favor of the Administrative Agent for the benefit of
the Lenders.
"SUBSIDIARY GUARANTORS" means each Person listed on
Schedule 1.01 and each other Person that becomes party to a Subsidiary
Guarantee Agreement as a Subsidiary Guarantor, and the permitted successors
and assigns of each such Person.
"TAXES" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"TERMINATION DATE" means March 29, 2001, or the latest date
to which the Termination Date shall have been extended pursuant to Section
2.08(d).
"TOTAL DEBT" means, at any date, all Debt of the Company
and its consolidated Subsidiaries at such date to the extent such Debt should
be reflected on a consolidated balance sheet of the Company at such date in
accordance with GAAP.
"TRANSACTIONS" means the execution, delivery and
performance by the Loan Parties of the Loan Documents, the borrowing of Loans
and the use of the proceeds thereof.
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13
"TRANSFER ASSETS" means (a) when referring to the Company,
the conveyance, transfer, lease or other disposition (whether in one
transaction or in a series of transactions) of all or substantially all of
the assets of the Company or of the Company and its Subsidiaries taken as a
whole, and (b) when referring to a Subsidiary, the conveyance, transfer,
lease or other disposition (whether in one transaction or in a series of
transactions) of all or substantially all of the assets of such Subsidiary.
"TYPE", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans
comprising such Borrowing, is determined by reference to the LIBO Rate, the
Alternate Base Rate or a Fixed Rate.
"UNFUNDED LIABILITIES" means, in the case of a single
employer pension benefit plan which is covered by Title IV of ERISA, the
amount, if any, by which the present value of all vested benefits accrued to
the date of determination under such plan exceeds the fair market value of
all assets of such plan allocable to such benefits as of such date, and, in
the case of a multiemployer pension plan, the withdrawal liability of the
Company and the Subsidiaries.
"US CORPORATION" means a corporation organized and existing
under the laws of the United States, any state thereof or the District of
Columbia.
"US DOLLARS" or "$" means the lawful money of the United
States of America.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For
purposes of this Agreement, Loans may be classified and referred to by Class
(E.G., a "Revolving Loan") or by Type (E.G., a "Eurocurrency Loan") or by
Class and Type (E.G., a "Eurocurrency Revolving Loan"). Borrowings also may
be classified and referred to by Class (E.G., a "Revolving Borrowing") or by
Type (E.G., a "Eurocurrency Borrowing") or by Class and Type (E.G., a
"Eurocurrency Revolving Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument
or other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein", "hereof" and "hereunder" and words of similar import shall be
construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections
of, and Exhibits and Schedules to, this Agreement and (e) the words "asset"
and "property" shall be construed to have the same meaning
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14
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP as in effect from time to time; PROVIDED
that if the Company notifies the Administrative Agent that the Company 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 Company
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.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and
conditions set forth herein, each Lender agrees to make Revolving Loans to
the Company from time to time during the Revolving Availability Period in US
Dollars in an aggregate principal amount at any time outstanding that will
not result in (i) such Lender's Revolving Exposure exceeding its Commitment
or (ii) the aggregate amount of the Lenders' Revolving Exposures and
Competitive Loan Exposures exceeding the aggregate amount of the Commitments.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Revolving Loan
shall be made as part of a Borrowing consisting of Revolving Loans made by
the Lenders ratably in accordance with their respective Commitments. Each
Competitive Loan shall be made in accordance with the procedures set forth in
Section 2.04. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder;
PROVIDED that the Commitments of the Lenders are several and no Lender shall
be responsible for any other Lender's failure to make Loans as required
hereunder.
(b) Subject to Section 2.13, (i) each Revolving Borrowing
shall be comprised entirely of Eurocurrency Loans or ABR Loans and (ii) each
Competitive Borrowing shall be comprised entirely of Eurocurrency Loans or
Fixed Rate Loans, in each case as the Company may request in accordance
herewith. Each Lender at its option may make any Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan (and in the
case of an Affiliate, the provisions of Sections 2.13, 2.14, 2.15 and 2.16
shall apply to such Affiliate to the same extent as to such Lender); PROVIDED
that any exercise of such option shall not affect the obligation of the
Company to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Borrowing, such Borrowing shall be in an aggregate amount that is at least
equal to the Borrowing Minimum and
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15
an integral multiple of the Borrowing Multiple; PROVIDED that (i) an ABR
Revolving Borrowing may be made in an aggregate amount that is equal to the
aggregate available Commitments. Borrowings of more than one Type and Class
may be outstanding at the same time; PROVIDED that there shall not at any
time be more than a total of 12 Eurocurrency Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement,
the Company shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.
SECTION 2.03. REQUESTS FOR REVOLVING BORROWINGS. To request
a Revolving Borrowing, the Company shall notify the Administrative Agent of
such request by telephone (a) in the case of a Eurocurrency Borrowing, not
later than 12:00 noon, New York City time, three Business Days before the
date of the proposed Borrowing, and (b) in the case of an ABR Borrowing, not
later than 12:00 noon, New York City time, one Business Day before the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Company. Each such telephonic and
written Borrowing Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate principal amount of the requested
Borrowing;
(ii) the date of the requested Borrowing, which shall be a
Business Day;
(iii) the Type of the requested Borrowing;
(iv) in the case of a Eurocurrency Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Company's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurocurrency Borrowing, then the Company shall be
deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender that will make a Loan as part
of the requested Borrowing of the details thereof and of the amount of the
Loan to be made by such Lender as part of the requested Borrowing.
SECTION 2.04. COMPETITIVE BID PROCEDURE. (a) Subject to the
terms and conditions set forth herein, from time to time during the Revolving
Availability Period the Company may request Competitive Bids for Competitive
Loans in US Dollars and may (but shall not have any obligation to) accept
Competitive Bids and borrow Competitive Loans; PROVIDED
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16
that the sum of the Revolving Exposures and Competitive Loan Exposures at any
time shall not exceed the aggregate amount of the Lenders' Commitments. To
request Competitive Bids, the Company shall notify the Administrative Agent
of such request by telephone, (i) in the case of a Eurocurrency Competitive
Borrowing, not later than 12:00 noon, New York City time, four Business Days
before the date of the proposed Competitive Borrowing and (ii) in the case of
a Fixed Rate Revolving Borrowing, not later than 12:00 noon,New York City
time, one Business Day before the date of the proposed Competitive Borrowing.
Not more than three Competitive Bid Requests may be submitted on the same
day, and a Competitive Bid Request shall not be made within five Business
Days after the date of any previous Competitive Bid Request unless any and
all such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected. Each telephonic
Competitive Bid Request shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Competitive Bid Request in
a form approved by the Administrative Agent and signed by the Company. Each
such telephonic and written Competitive Bid Request shall specify the
following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be a Eurocurrency Borrowing
or a Fixed Rate Revolving Borrowing;
(iv) the Interest Period to be applicable to such Borrowing,
which shall be a period contemplated by the definition of the term
"Interest Period"; and
(v) the location and number of the Company's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.05.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to)
make one or more Competitive Bids to the Company in response to a Competitive
Bid Request. Each Competitive Bid by a Lender must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, (i) in the case of a Eurocurrency Competitive Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date of the
proposed Competitive Borrowing and (ii) in the case of a Fixed Rate Revolving
Borrowing, not later than 9:30 a.m., New York City time, on the date of the
proposed Competitive Borrowing. Competitive Bids that do not conform to the form
approved by the Administrative Agent may be rejected by the Administrative
Agent, and the Administrative Agent shall notify the applicable Lender as
promptly as practicable. Each Competitive Bid shall specify (i) the principal
amount (which shall be in an amount that is at least equal to the Borrowing
Minimum and an integral multiple of the Borrowing Multiple, and which may equal
the entire principal amount of the Competitive Borrowing requested by the
Company) of the Competitive Loan or
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17
Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or Rates
at which the Lender is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) and (iii) the Interest Period applicable to each such Loan and the last
day thereof.
(c) The Administrative Agent shall promptly notify the Company
by telecopy of the Competitive Bid Rate and the principal amount specified in
each Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, the
Company may accept or reject any Competitive Bid. The Company shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, (i) in the case of a Eurocurrency Competitive
Borrowing or a Fixed Rate Competitive Borrowing, not later than 12:00 noon, New
York City time, three Business Days before the date of the proposed Competitive
Borrowing and (ii) in the case of a Fixed Rate Revolving Borrowing, not later
than 10:30 a.m., New York City time, on the date of the proposed Competitive
Borrowing; PROVIDED that (i) the failure of the Company to give such notice
shall be deemed to be a rejection of each Competitive Bid, (ii) the Company
shall not accept a Competitive Bid made at a particular Competitive Bid Rate if
the Company rejects a Competitive Bid made at a lower Competitive Bid Rate,
(iii) the aggregate amount of the Competitive Bids accepted by the Company shall
not exceed the aggregate amount of the requested Competitive Borrowing specified
in the related Competitive Bid Request, (iv) to the extent necessary to comply
with clause (iii) above, the Company may accept Competitive Bids at the same
Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such Competitive Bid, and (v) except pursuant
to clause (iv) above, no Competitive Bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of at least
the Borrowing Minimum and an integral multiple of the Borrowing Multiple;
PROVIDED FURTHER that if a Competitive Loan must be in an amount less than the
Borrowing Minimum because of the provisions of clause (iv) above, such
Competitive Loan may be for a minimum of $1,000,000, and in calculating the pro
rata allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of the Borrowing Multiple in a manner determined
by the Company. A notice given by the Company pursuant to this paragraph shall
be irrevocable.
(e) The Administrative Agent shall promptly notify each
bidding Lender by telecopy whether or not its Competitive Bid has been accepted
(and, if so, the amount and Competitive Bid Rate so accepted), and each
successful bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect of which its
Competitive Bid has been accepted.
(f) If the Administrative Agent or one of its Affiliates shall
elect to submit a Competitive Bid in its capacity as a Lender, it shall submit
such Competitive Bid directly to the Company at least one quarter of an hour
earlier than the time by which the other Lenders are
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18
required to submit their Competitive Bids to the Administrative Agent pursuant
to paragraph (b) of this Section.
SECTION 2.05. FUNDING OF BORROWINGS. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds in the applicable currency by 11:00
a.m., New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose for Loans of such Class by notice to
the applicable Lenders. The Administrative Agent will make such Loans available
to the Company by promptly crediting the amounts so received, in like funds, to
an account of the Company maintained by the Administrative Agent in New York
City.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Company a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Company severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Company to but excluding the date of payment to the Administrative Agent, at (i)
in the case of such Lender, the rate reasonably determined by the Administrative
Agent to be the cost to it of funding such amount or (ii) in the case of the
Company, the interest rate applicable to the subject Loan. If such Lender pays
such amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing and the Administrative Agent shall
return to the Company any amount (including interest) paid by the Company to the
Administrative Agent pursuant to this paragraph.
SECTION 2.06. REPAYMENT OF BORROWINGS; EVIDENCE OF DEBT. (a)
The Company hereby unconditionally promises to pay to the Administrative Agent
for the accounts of the applicable Lenders (i) the then unpaid principal amount
of each Revolving Borrowing on the Maturity Date and (ii) the then unpaid
principal amount of each Competitive Loan on the last day of the Interest Period
applicable thereto.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Company to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Company to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the accounts of the Lenders and each Lender's
share thereof.
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19
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Company
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
to the Company be evidenced by a promissory note. In such event, the Company
shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and
its registered assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by each such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 9.04)
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.07. INTEREST ELECTIONS. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurocurrency Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the Company may elect
to convert such Borrowing to a different Type or to continue such Borrowing and,
in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor,
all as provided in this Section and on terms consistent with the other
provisions of this Agreement. The Company may elect different options with
respect to different portions of an affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Revolving Borrowing.
(b) To make an election pursuant to this Section, the Company
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Company
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Company. Notwithstanding any contrary provision herein, this Section shall not
be construed to permit the Company to elect an Interest Period for Eurocurrency
Loans that does not comply with Section 2.02(d).
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
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(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) the Type of the resulting Borrowing; and
(iv) if the resulting Borrowing is to be a Eurocurrency
Borrowing, the Interest Period to be applicable thereto after giving
effect to such election, which shall be a period contemplated by the
definition of the term "Interest Period".
If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Company shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender holding a Loan to
which such request relates of the details thereof and of such Lender's portion
of each resulting Borrowing.
(e) If the Company fails to deliver a timely Interest Election
Request with respect to a Eurocurrency Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period, such Borrowing shall be
converted to an ABR Borrowing.
SECTION 2.08. TERMINATION, REDUCTION AND EXTENSION OF
COMMITMENTS. (a) Unless previously terminated, the Commitments shall terminate
on the Termination Date; PROVIDED that the Commitments shall terminate at 5:00
p.m., New York City time, on May 15, 2000, if the Initial Borrowing Date shall
not have occurred prior to such time.
(b) The Company may at any time terminate, or from time to
time reduce, the Commitments; PROVIDED that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of the Borrowing
Multiple and not less than the Borrowing Minimum and (ii) the Company shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Revolving Loans in accordance with Section 2.10, the sum of
the aggregate Revolving Exposures and the aggregate Competitive Loan Exposures
would exceed the aggregate Commitments.
(c) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments of any Class under paragraph (b)
of this Section at least three Business Days prior to the effective date of such
termination or reduction, specifying the effective date of such election.
Promptly following receipt of any such notice, the Administrative Agent shall
advise the Lenders of the contents thereof. Each notice delivered by the Company
pursuant to this Section shall be irrevocable; PROVIDED that a notice of
termination of the Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent.
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Each reduction of the Commitments of any Class shall be made ratably among the
applicable Lenders in accordance with their respective Commitments.
(d) The Company may, by notice to the Administrative Agent
(which shall promptly deliver a copy to each of the Lenders) given not less than
60 days and not more than 75 days prior to the Termination Date at any time in
effect, request that the Lenders extend the Termination Date for an additional
period of not more than 364 days as specified in such notice. Each Lender shall,
by notice to the Company and the Administrative Agent given not earlier than the
30th day and not later than the 25th day prior to the Termination Date then in
effect, advise the Company whether or not it agrees to such extension on the
terms set forth in such notice. Any Lender that has not so advised the Company
and the Administrative Agent by such day shall be deemed to have declined to
agree to such extension. If the Company shall have requested and Lenders
representing at least more than 50% of the aggregate Commitments shall have
agreed to an extension of the Termination Date, then the Termination Date shall
be extended for the additional period and on the terms specified in the
Company's notice. The decision to agree or withhold agreement to any extension
of the Termination Date hereunder shall be at the sole discretion of each
Lender. The Commitment of any Lender that has declined to agree to any requested
extension of the Termination Date (a "Non-Extending Lender") shall terminate on
the Termination Date in effect prior to giving effect to any such extension (the
"Existing Termination Date"), and the principal amount of any outstanding Loans
made by such Lender, together with any accrued interest thereon, and any accrued
fees and other amounts payable to or for the account of such Lender hereunder,
shall be due and payable on the Existing Termination Date. Notwithstanding the
foregoing provisions of this paragraph, (i) the Company shall have the right,
pursuant to Section 2.18(b), to replace a Non-Extending Lender with a Lender or
other financial institution that will agree to an extension of the Termination
Date and (ii) the Company shall have the right, any time prior to the Existing
Termination Date, to withdraw its request for an extension under paragraph (b)
above by notice to the Administrative Agent (which shall promptly deliver a
notice to each Lender), in which case the Commitments of all the Lenders will
terminate on the Existing Termination Date and the Maturity Date applicable to
all the Loans (including Loans of Non-Extending Lenders) will be the first
anniversary of the Existing Termination Date.
SECTION 2.09. INCREASE IN COMMITMENTS. (a) The Company may, by
written notice to the Administrative Agent (which shall promptly deliver a copy
to each of the Lenders), request that the total Commitments be increased by an
amount not less than $25,000,000 for any such increase; PROVIDED that after
giving effect to any such increase the sum of the total Commitments and the
commitments under the Five-Year Credit Agreement shall not exceed
$1,000,000,000. Such notice shall set forth the amount of the requested increase
in the total Commitments and the date on which such increase is requested to
become effective (which shall be not less than 30 Business Days or more than 60
days after the date of such notice), and shall offer each Lender the opportunity
to increase its Commitment by its Percentage of the proposed increased amount.
Each Lender shall, by notice to the Company and the Administrative Agent given
not more than 10 Business Days after the date of the Company's notice, either
agree to increase its Commitment by all or a portion of the offered amount (each
Lender so agreeing being an "INCREASING LENDER") or decline to increase its
Commitment (and any Lender that does not deliver such a notice within such
period of 10 Business Days shall be deemed to have declined to increase its
Commitment) (each Lender so declining or deemed to have declined being a
"NON-
<PAGE>
22
INCREASING LENDER"). In the event that, on the 10th Business Day after the
Company shall have delivered a notice pursuant to the first sentence of this
paragraph, the Lenders shall have agreed pursuant to the preceding sentence to
increase their Commitments by an aggregate amount less than the increase in the
total Commitments requested by the Company, the Company may arrange for one or
more banks or other financial institutions (any such bank or other financial
institution being called an "AUGMENTING LENDER"), which may include any Lender,
to extend Commitments or increase their existing Commitments in an aggregate
amount equal to the unsubscribed amount; PROVIDED that each Augmenting Lender,
if not already a Lender hereunder, shall be subject to the approval of the
Administrative Agent (which approval shall not be unreasonably withheld) and the
Company and each Augmenting Lender shall execute all such documentation as the
Administrative Agent shall reasonably specify to evidence the Commitment of such
Augmenting Lender and/or its status as a Lender hereunder. Any increase in the
total Commitments may be made in an amount which is less than the increase
requested by the Company if the Company is unable to arrange for, or chooses not
to arrange for, Augmenting Lenders.
(b) On the effective date (the "INCREASE EFFECTIVE DATE") of
any increase in the total Commitments pursuant to this Section 2.09 (the
"COMMITMENT INCREASE"), (i) the aggregate principal amount of the Revolving
Loans outstanding (the "INITIAL LOANS") immediately prior to giving effect to
the Commitment Increase on the Increase Effective Date shall be deemed to be
paid, (ii) each Increasing Lender and each Augmenting Lender that shall have
been a Lender prior to the Commitment Increase shall pay to the Administrative
Agent or another Agent designated by the Adminstrative Agent for such purpose in
same day funds an amount equal to the difference between (A) the product of (1)
such Lender's Percentage (calculated after giving effect to the Commitment
Increase), multiplied by (2) the amount of the Subsequent Borrowings (as
hereinafter defined) and (B) the product of (1) such Lender's Percentage
(calculated without giving effect to the Commitment Increase), multiplied by (2)
the amount of the Initial Loans, (iii) each Augmenting Lender that shall not
have been a Lender prior to the Commitment Increase shall pay to the
Administrative Agent or another Agent designated by the Administrative Agent for
such purpose in same day funds an amount equal to the product of (1) such
Augmenting Lender's Percentage (calculated after giving effect to the Commitment
Increase) multiplied by (2) the amount of the Subsequent Borrowings, and (iv)
after the Administrative Agent or other Agent receives the funds specified in
clauses (ii) and (iii) above, the Administrative Agent or such other Agent shall
pay to each Non-Increasing Lender the portion of such funds that is equal to the
difference between (A) the product of (1) such Non-Increasing Lender's
Percentage (calculated without giving effect to the Commitment Increase)
multiplied by (2) the amount of the Initial Loans, and (B) the product of (1)
such Non-Increasing Lender's Percentage (calculated after giving effect to the
Commitment Increase) multiplied by (2) the amount of the Subsequent Borrowings,
(v) after the effectiveness of the Commitment Increase, the Company shall be
deemed to have made new Borrowings (the "SUBSEQUENT BORROWINGS") in an aggregate
principal amount equal to the aggregate principal amount of the Initial Loans
and of the types and for the Interest Periods specified in a Borrowing Request
delivered to the Administrative Agent in accordance with Section 2.04, (vi) each
Non-Increasing Lender, each Increasing Lender and each Augmenting Lender shall
be deemed to hold its Percentage of each Subsequent Borrowing (each calculated
after giving effect to the Commitment Increase) and (vii) the Company shall pay
each Increasing Lender and each Non-Increasing Lender any and all accrued but
unpaid interest on the
<PAGE>
23
Initial Loans. The deemed payments made pursuant to clause (i) above in respect
of each Eurocurrency Loan shall be subject to indemnification by the Company
pursuant to the provisions of Section 2.15 if the Increase Effective Date occurs
other than on the last day of the Interest Period relating thereto and breakage
costs result.
(c) Increases and new Commitments created pursuant to this
Section 2.09 shall become effective on the date specified in the notice
delivered by the Company pursuant to the first sentence of paragraph (a) above.
(d) Notwithstanding the foregoing, no increase in the
Commitments (or in any Commitment of any Lender) or addition of an Augmenting
Lender shall become effective under this Section unless, (i) on the date of such
increase, the conditions set forth in paragraphs (a) and (b) of Section 4.02
shall be satisfied and the Administrative Agent shall have received a
certificate to that effect dated such date and executed by the chief financial
officer of the Company, and (ii) the Administrative Agent shall have received
(with sufficient copies for each of the Lenders) documents consistent with those
delivered on the Effective Date under clauses (b) and (c) of Section 4.01 as to
the corporate power and authority of the Company to borrow hereunder after
giving effect to such increase.
SECTION 2.10. PREPAYMENT OF LOANS. (a) The Company shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to prior notice in accordance with paragraph (d) of this
Section; PROVIDED, that Competitive Loans may be prepaid only with the consent
of the Lenders making such Loans.
(b) If the aggregate Revolving Exposures shall exceed the
aggregate Commitments (reduced, in the case of the Commitments, by the aggregate
amount of the Lenders' Competitive Loan Exposures), then (i) on the last day of
any Interest Period for any Eurocurrency Revolving Borrowing and (ii) on any
other date in the event ABR Revolving Borrowings shall be outstanding, the
Company shall prepay Revolving Loans or Competitive Loans in an amount equal to
the lesser of (A) the amount necessary to eliminate such excess (after giving
effect to any other prepayment of Loans on such day) and (B) the amount of the
applicable Borrowings referred to in clause (i) or (ii), as applicable.
(c) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Company shall select the Borrowing or Borrowings to be
prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (d) of this Section.
(d) The Company shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment of a Borrowing hereunder (i)
in the case of a Eurocurrency Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of such prepayment and (b) in the
case of an ABR Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of such prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; PROVIDED that, if a notice of
optional prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.08(c), then such
notice of prepayment may be revoked if such notice of termination is
<PAGE>
24
revoked in accordance with Section 2.08(c). Promptly following receipt of any
such notice, the Administrative Agent shall advise the applicable Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount
that would be permitted in the case of an advance of a Borrowing of the same
Type as provided in Section 2.02. Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by (i) accrued interest to the extent required by Section
2.12 and (ii) break funding payments pursuant to Section 2.15.
SECTION 2.11. FEES. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Rate on the daily amount of the Commitment of such
Lender (whether used or unused) during the period from and including the date
hereof to but excluding the date on which the Commitment of such Lender
terminates; PROVIDED that, if such Lender continues to have any Revolving
Exposure after its Commitment terminates, then such facility fee shall continue
to accrue on the daily amount of such Lender's Revolving Exposure to but
excluding the date on which such Lender ceases to have any such Revolving
Exposure. Accrued facility fees shall be payable in arrears on the last day of
March, June, September and December of each year, commencing on the first such
date to occur after the date hereof, and on the date on which all the
Commitments shall have terminated and the Lenders shall have no further
Revolving Exposures. All facility fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Company agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between the Company and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.
SECTION 2.12. INTEREST. (a) The Loans comprising each ABR
Borrowing shall bear interest at the Alternate Base Rate plus the Applicable
Rate.
(b) The Loans comprising each Eurocurrency Borrowing shall
bear interest (i) in the case of a Eurocurrency Revolving Borrowing, at the LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Rate, or (ii) in the case of a Eurocurrency Competitive Loan, at the LIBO Rate
for the Interest Period in effect for such Borrowing plus (or minus, as
applicable) the Margin applicable to such Loan.
(c) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.
(d) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee payable by the Company hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% per
<PAGE>
25
annum plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Revolving Loans as provided in paragraph (a)
above.
(h) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan; PROVIDED that (i) interest accrued
pursuant to paragraph (g) above shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Revolving Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurocurrency Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.
(i) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.13. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurocurrency Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the LIBO Rate, as the case may be,
for such Interest Period; or
(b) the Administrative Agent is advised by a majority in
interest of the Lenders that would participate in such Borrowing that
the LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurocurrency Borrowing shall be
ineffective, and any Eurocurrency Borrowing shall be repaid on the last day of
the then current Interest Period applicable thereto, and (ii) any Borrowing
Request for a Eurocurrency Revolving Borrowing shall be ineffective.
SECTION 2.14. INCREASED COSTS. (a) If any Change in Law shall:
<PAGE>
26
(i) 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
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement or Eurocurrency Loans made by
such Lender or participations therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Company will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender reasonably determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender to a level below that which such Lender or such Lender's holding company
could have achieved but for such Change in Law (taking into consideration such
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy), then from time to time the Company will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) Each Lender shall determine the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section using the methods
customarily used by it for such purpose (and if such Lender uses more than one
such method, the method used hereunder shall be that which most accurately
determines such amount or amounts). A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in paragraph (a) or (b) of this Section, and
setting forth in reasonable detail the calculations used by such Lender to
determine such amount, shall be delivered to the Company and shall be conclusive
absent manifest error. The Company shall pay to such Lender the amount shown as
due on any such certificate within 15 Business Days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; PROVIDED that the Company shall not
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than 180 days prior to the date that such
Lender notifies the Company of the Change in Law giving rise to such increased
costs or reductions and delivers a certificate with respect thereto as provided
in paragraph (c) above; PROVIDED FURTHER that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
<PAGE>
27
SECTION 2.15. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurocurrency Loan or Fixed Rate Loan other than
on the last day of an Interest Period applicable thereto (including as a result
of an Event of Default), (b) the conversion of any Eurocurrency Loan to a Loan
of a different Type or Interest Period other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.10(d) and is
revoked in accordance therewith), or (d) the assignment or deemed assignment of
any Eurocurrency Loan or Fixed Rate Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the Company
pursuant to Section 2.18, then, in any such event, the Company shall compensate
each Lender for the loss, cost and expense attributable to such event. In the
case of a Eurocurrency Loan, such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest that would have accrued on the principal amount of
such Loan had such event not occurred, at the LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest that would accrue on
such principal amount for such period at the interest rate such Lender would bid
were it to bid, at the commencement of such period, for deposits in US Dollars
of a comparable amount and period from other banks in the London interbank
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section, and setting forth
in reasonable detail the calculations used by such Lender to determine such
amount or amounts, shall be delivered to the Company and shall be conclusive
absent manifest error. The Company shall pay such Lender the amount shown as due
on any such certificate within 15 Business Days after receipt thereof.
SECTION 2.16. TAXES. (a) Any and all payments by or on account
of the Company hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes;
PROVIDED that if the Company 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 or the applicable Lender, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Company shall make such deductions and (iii) the Company shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) The Company shall indemnify the Administrative Agent and
each Lender, within 15 Business Days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent
or such Lender on or with respect to any payment by or on account of any
obligation of the Company hereunder or under any other Loan Document (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
<PAGE>
28
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 setting forth in reasonable detail the circumstances giving rise
thereto and the calculations used by such Lender to determine the amount thereof
delivered to the Company by a Lender or by the Administrative Agent, on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Company to a Governmental Authority, the Company
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 Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Company is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (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 Company as will permit such payments to be
made without withholding or at a reduced rate; PROVIDED that such Lender has
received written notice from the Company advising it of the availability of such
exemption or reduction and containing all applicable documentation.
(f) Each Lender, on the date it becomes a Lender hereunder,
will designate lending offices for the Loans to be made by it such that, on such
date, it will not be liable for any withholding tax that is imposed by the
United States of America (or any political subdivision thereof) on payments by
the Company from an office within such jurisdiction.
SECTION 2.17. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF SETOFFS. (a) The Company shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or amounts payable under Section 2.14, 2.15 or 2.16, or otherwise) prior to
12:00 noon, New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent to
the applicable account specified in Schedule 2.17 or, in any such case, to such
other account as the Administrative Agent shall from time to time specify in a
notice delivered to the Company; PROVIDED that payments pursuant to Sections
2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto
and payments pursuant to other Loan Documents shall be made to the Persons
specified therein (it being agreed that the Company will be deemed to have
satisfied its obligations with respect to payments referred to in this proviso
if it shall make such payments to the persons entitled thereto in accordance
with instructions provided by the Administrative Agent; the Administrative Agent
agrees to provide such instructions upon request, and the Company will not be
deemed to have failed to make such a payment if it shall transfer such payment
to an improper account or address as a result of the failure of the
Administrative Agent to provide proper instructions). The Administrative Agent
shall distribute any such payments received by it for the account of any
<PAGE>
29
Lender or other Person promptly following receipt thereof at the appropriate
lending office or other address specified by such Lender or other Person. If any
payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in US Dollars.
Any payment required to be made by the Administrative Agent hereunder shall be
deemed to have been made by the time required if the Administrative Agent shall,
at or before such time, have taken the necessary steps to make such payment in
accordance with the regulations or operating procedures of the clearing or
settlement system used by it to make such payment.
(b) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on its Revolving Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of their respective Revolving Loans;
PROVIDED that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Company 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 to any assignee or participant, other than to the Company or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). The Company consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Company rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Company in the amount of
such participation.
(d) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due for the account
of all or certain of the Lenders hereunder that the Company will not make such
payment, the Administrative Agent may assume that the Company has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the applicable Lenders, as the case may be, the amount
due. In such event, if the Company has not in fact made such payment, then each
of the applicable Lenders severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at a rate
determined by the Administrative Agent in accordance with banking industry
practices on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it to any Agent pursuant to this Agreement, then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by it for
<PAGE>
30
the account of such Lender to satisfy such Lender's obligations to the
Administrative Agent until all such unsatisfied obligations are fully paid.
SECTION 2.18. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.14, or if the Company is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Company
hereby agrees to pay all reasonable, direct, out-of-pocket costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or
if any Loan Party is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, or if any
Lender fails to agree to an extension of the Termination Date as provided in
Section 2.08(d), then the Company may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under the Loan Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); PROVIDED that (i) the Company shall have received the prior written
consent of the Administrative Agent, which consent shall not be unreasonably be
withheld and (ii) such Lender shall have received payment of an amount equal to
the outstanding principal of its Loans, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee or the Company.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Company to require such assignment and delegation
cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants as follows:
SECTION 3.01. CORPORATE EXISTENCE AND STANDING. The Company
and each Material Subsidiary is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, operations or condition (financial or otherwise) of the
Company.
<PAGE>
31
SECTION 3.02. AUTHORIZATION; NO VIOLATION. The Transactions
are within each Loan Party's corporate or partnership powers, have been duly
authorized by all necessary corporate or partnership action, and do not
contravene (i) any Loan Party's charter, by-laws or other constitutive documents
or (ii) any law or any contractual restriction binding on or affecting any Loan
Party.
SECTION 3.03. GOVERNMENTAL CONSENTS. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or regulatory body is required for the due execution, delivery and
performance by the Loan Parties of this Agreement or the other Loan Documents.
SECTION 3.04. VALIDITY. This Agreement is, and the other Loan
Documents when delivered will be, the legal, valid and binding obligations of
the Loan Parties party thereto, enforceable against such Loan Parties in
accordance with their respective terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
SECTION 3.05. LITIGATION. There is no pending or, to the best
of the knowledge of the Company, threatened action or proceeding affecting the
Company or any of its Subsidiaries before any court, governmental agency or
arbitrator, which could reasonably be expected to have a material adverse effect
on the financial condition or operations of the Company and the Subsidiaries,
taken as a whole, or which purports to affect the legality, validity or
enforceability of this Agreement or any other Loan Document, other than any
actions or proceedings disclosed in the Form 10 (but only to the extent there
has been no worsening of such actions or proceedings which could reasonably be
expected to have a material adverse effect on the financial condition or
operations of the Company and the Subsidiaries, taken as a whole).
SECTION 3.06. FINANCIAL STATEMENTS; NO MATERIAL ADVERSE
CHANGE. (a) The consolidated balance sheet at December 31, 1999, and the related
consolidated statements of income and stockholder's equity for the fiscal year
then ended of the Company and its consolidated Subsidiaries, copies of which
have been furnished to each Lender, present fairly the financial position of the
Company and its consolidated Subsidiaries at December 31, 1999, and the results
of the operations and changes in financial position of the Company and its
consolidated Subsidiaries for the fiscal year then ended, in conformity with
GAAP consistently applied.
(b) As of the date hereof there has been, since December 31,
1999, no material adverse change in the business, operations or financial
condition of the Company and the Subsidiaries, taken as a whole (it being
understood that a change to the equity method in accounting for the assets,
liabilities and results of operations of the Company's Japanese Subsidiaries
will not constitute such a material adverse change).
SECTION 3.07. INVESTMENT COMPANY ACT. The Company is not (i)
an "investment company," (ii) a company "controlled" by an "investment company"
which is registered under the Investment Company Act of 1940, as amended, or
(iii) to the best knowledge
<PAGE>
32
of the Company, a company "controlled" by any other "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
SECTION 3.08. REGULATION U. Neither the Company nor any of the
Subsidiaries is engaged in the business of purchasing or carrying Margin Stock.
The value of the Margin Stock owned directly or indirectly by the Company or any
Subsidiary which is subject to any arrangement hereunder is less than an amount
equal to 25% of the value of all assets of the Company and/or such Subsidiary
subject to such arrangement (as described in the definition of "Indirectly
Secured" in Section 221.2 of Regulation U issued by the Board of Governors of
the Federal Reserve System).
SECTION 3.09. ENVIRONMENTAL MATTERS. The operations of the
Company and each Material Subsidiary comply in all material respects with all
Environmental Laws, the noncompliance with which would materially adversely
affect the business of the Company or the ability of the Company to obtain
credit on commercially reasonable terms.
SECTION 3.10. DISCLOSURE. None of the Confidential Information
Memorandum, the Form 10 or any other written information prepared and furnished
by or on behalf of the Loan Parties to any Agent or Lender in connection with
the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains as of the date thereof
(or, in the case of any such information that is not dated, the earliest date on
which such information is furnished to the Administrative Agent or any Lender)
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED that, with respect to projected
financial information, the Company represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
SECTION 3.11. YEAR 2000 COMPLIANCE. There has not occurred,
and the Company does not expect that there will occur, any material disruption
in the operations or business systems of the Company and the Subsidiaries
resulting from the inability of computer systems of the Company and the
Subsidiaries or equipment containing embedded microchips to recognize or
properly process dates in or following the year 2000.
SECTION 3.12. SUBSIDIARY GUARANTORS. The Subsidiary Guarantors
include all the Material Subsidiaries, other than Foreign Subsidiaries.
SECTION 3.13. SOLVENCY. As of the Initial Borrowing Date,
after giving effect to the Borrowings hereunder on such date and the
distributions to Baxter and other transactions related to the Spin-Off, (a) the
fair value of the assets of the Company and the Subsidiaries, at a fair
valuation, will exceed their debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of the Company
and the Subsidiaries will be greater than the amount that will be required to
pay the probable liability in respect of their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) the Company and the Subsidiaries will be able
to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute
<PAGE>
33
and matured; and (d)the Company and the Subsidiaries will not have unreasonably
small capital with which to conduct the businesses in which they are engaged as
such businesses are now conducted and are proposed to be conducted following the
completion of the Spin-Off.
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders
to make Loans hereunder shall not become effective until the date on which each
of the following conditions has been satisfied (or waived in accordance with
Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received favorable
written opinions (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of (i) Sidley & Austin, special counsel
for the Company, substantially in the form of Exhibit D-1, and (ii) the
General Counsel of the Company, substantially in the form of Exhibit
D-2. Each Loan Party hereby requests such counsel to deliver such
opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the formation, existence and good
standing of the Loan Parties and the authorization of the Transactions,
all in form and substance satisfactory to the Administrative Agent and
its counsel.
(d) The Administrative Agent shall have received (i) a
certificate, dated the Effective Date and signed by the chief financial
officer of the Company, confirming that all the conditions set forth in
this Section 4.01 and in paragraphs (a) and (b) of Section 4.02 have
been satisfied.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent an invoice with respect thereto shall have
been received by the Company not fewer than five Business Days (or such
lesser number of days as the Company shall agree) prior to the
Effective Date, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Company hereunder or under any
other Loan Document.
(f) The Guarantee Requirement shall be satisfied.
(g) The Administrative Agent shall have received a letter from
Baxter in the form of Exhibit E.
<PAGE>
34
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) on or prior to May 15, 2000.
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender
to make a Loan on the occasion of each Borrowing is subject to the satisfaction
of the following conditions:
(a) The representations and warranties of the Loan Parties set
forth in the Loan Documents shall be true and correct on and as of the
date of such Borrowing, other than representations which are given as
of a particular date, in which case the representation shall be true
and correct as of that date.
(b) At the time of and immediately after giving effect to such
Borrowing and the application of the proceeds thereof, no Default shall
have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Company on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Company covenants and agrees with the Lenders that it
will:
SECTION 5.01. PAYMENT OF TAXES, ETC. Pay and discharge, and
cause each Material Subsidiary to pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income, profit or property, and (ii) all lawful
claims which, if unpaid, might by law become a lien upon its property; PROVIDED,
HOWEVER, that neither the Company nor any Material Subsidiary shall be required
to pay or discharge any such tax, assessment, charge or claim which is being
contested in good faith and by proper proceedings and with respect to which the
Company shall have established appropriate reserves in accordance with GAAP.
SECTION 5.02. MAINTENANCE OF INSURANCE. Maintain, and cause
each Material Subsidiary to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
is usually carried by (or, as applicable, self-insure in a manner and to an
extent not inconsistent with conventions observed by) companies engaged in
similar businesses and owning similar properties in the same general areas in
which the Company or such Material Subsidiary operates.
<PAGE>
35
SECTION 5.03. PRESERVATION OF EXISTENCE, ETC. Preserve and
maintain, and cause each Material Subsidiary to preserve and maintain, its
corporate, limited liability company or partnership existence, rights (charter
and statutory), and franchises, except as otherwise permitted by Section 6.04.
SECTION 5.04. COMPLIANCE WITH LAWS, ETC. Comply, and cause
each Material Subsidiary to comply, with the requirements of all applicable
laws, rules, regulations and orders of any Governmental Authority (including,
without limitation, all Environmental Laws), noncompliance with which would
materially adversely affect the business of the Company and the Subsidiaries or
the ability of the Company to obtain credit on commercially reasonable terms.
SECTION 5.05. KEEPING OF BOOKS. Keep, and cause each Material
Subsidiary to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets and
business of the Company and each Material Subsidiary in accordance with GAAP
consistently applied.
SECTION 5.06. INSPECTION. Permit, and cause each Material
Subsidiary to permit, the Administrative Agent, and its representatives and
agents, to inspect any of the properties, corporate books and financial records
of the Company and its Material Subsidiaries, to examine and make copies of the
books of account and other financial records of the Company and its Material
Subsidiaries, and to discuss the affairs, finances and accounts of the Company
and its Material Subsidiaries with, and to be advised as to the same by, their
respective officers or directors, at such reasonable times during normal
business hours and intervals as the Administrative Agent may reasonably
designate.
SECTION 5.07. REPORTING REQUIREMENTS. Furnish to the
Administrative Agent in sufficient copies for distribution to each Lender:
(a) As soon as available and in any event within 55 days after
the end of each of the first three quarters of each fiscal year of the
Company, a consolidated balance sheet of the Company and the
consolidated Subsidiaries as of the end of such quarter and a
consolidated statement of income and changes in financial position (or
consolidated statement of cash flow, as the case may be) of the Company
and the consolidated Subsidiaries for the period commencing at the end
of the previous fiscal year and ending with the end of such quarter,
certified by the chief financial officer of the Company;
(b) As soon as available and in any event within 100 days
after the end of each fiscal year of the Company, a consolidated
balance sheet of the Company and the consolidated Subsidiaries as of
the end of such year and a consolidated statement of income and
stockholder's equity and changes in financial position of the Company
and the consolidated Subsidiaries for such fiscal year and accompanied
by (A) a report of PricewaterhouseCoopers LLC, independent public
accountants of the Company, or other independent public accountants of
nationally recognized standing, on the results of their examination of
the consolidated annual financial statements of the Company and the
consolidated Subsidiaries, which report shall be unqualified or shall
be otherwise reasonably acceptable to the Required Lenders; PROVIDED
that such report may set forth
<PAGE>
36
qualifications to the extent such qualifications pertain solely to
changes in GAAP from earlier accounting periods, the implementation of
which changes (with the concurrence of such accountants) is reflected
in the financial statements accompanying such report, and (B) a
certificate of such accountants substantially in the form of Exhibit
5.07(b);
(c) Promptly after the sending or filing thereof, copies of
all reports which the Company files with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended,
including, without limitation, all such reports that disclose material
litigation pending against the Company or any Material Subsidiary or
any material noncompliance with any Environmental Law on the part of
the Company or any Material Subsidiary;
(d) Together with the financial statements required pursuant
to clauses (i) and (ii) above, a certificate signed by the chief
financial officer of the Company (A) stating that no Default exists or,
if any does exist, stating the nature and status thereof and describing
the action the Company proposes to take with respect thereto and (B)
demonstrating, in reasonable detail, the calculations used by such
officer to determine compliance with the financial covenants contained
in Sections 6.07 and 6.08;
(e) With respect to each fiscal year for which the Company
shall have an aggregate Unfunded Liability of $10,000,000 or more for
all of its single employer pension benefit plans covered by Title IV of
ERISA and all multiemployer pension benefit plans covered by Title IV
of ERISA to which the Company has an obligation to contribute, as soon
as available, and in any event within ten months after the end of such
fiscal year, a statement of Unfunded Liabilities of each such plan,
certified as correct by an actuary enrolled in accordance with
regulations under ERISA and a statement of estimated withdrawal
liability as of the most recent plan year end as customarily prepared
by the trustees under the multiemployer plans to which the Company has
an obligation to contribute;
(f) As soon as possible, and in any event within 30 days after
the occurrence of each event the Company knows is or may be a
reportable event (as defined in Section 4043 of ERISA, but excluding
any reportable event with respect to which the 30 day reporting
requirement has been waived) with respect to any plan with an Unfunded
Liability in excess of $10,000,000, a statement signed by the chief
financial officer of the Company describing such reportable event and
the action which the Company proposes to take with respect thereto;
(g) As soon as possible, and in any event within five Business
Days after the Company shall become aware of the occurrence of each
Default, which Default is continuing on the date of such statement, a
statement of the chief financial officer of the Company setting forth
details of such Default or event and the action which the Company
proposes to take with respect thereto; and
(h) From time to time, such other information as to the
business and financial condition of the Company and the Subsidiaries
and their compliance with the Loan
<PAGE>
37
Documents as any Agent, or any Lender through the Administrative
Agent, may reasonably request.
SECTION 5.08. USE OF PROCEEDS. Use the proceeds of Borrowings
hereunder for the purposes referred to in the recitals to this Agreement, and
not for any purpose that would entail a violation of any applicable law or
regulation (including, without limitation, Regulations U and X of the Board).
With respect to any Borrowing the proceeds of which shall be used to purchase or
carry Margin Stock, the Company shall include in the Borrowing Request for such
Borrowing such information as shall enable the Lenders and the Company to
determine that they are in compliance with such Regulations U and X.
SECTION 5.09. GUARANTEE REQUIREMENT. Cause the Guarantee
Requirement to be satisfied at all times.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, the Company covenants and agrees with the Lenders that it will
not:
SECTION 6.01. SUBSIDIARY DEBT. Permit any Material Subsidiary
that is not a Subsidiary Guarantor to create, incur, assume or permit to exist
any Debt, except:
(a) Debt created hereunder;
(b) Debt existing on the date hereof and set forth in Schedule
6.01 and extensions, renewals and replacements of any such Debt that do
not increase the outstanding principal amount thereof;
(c) Debt to the Company or any other Subsidiary; and
(d) other Debt; PROVIDED that the Designated Amount does not
at any time exceed 10% of Consolidated Total Assets.
SECTION 6.02. LIENS, ETC. Suffer to exist, create, assume or
incur, or permit any Material Subsidiary to suffer to exist, create, assume or
incur, any Security Interest, or assign, or permit any Material Subsidiary to
assign, any right to receive income, in each case to secure Debt or any other
obligation or liability, other than:
(a) any Security Interest to secure Debt or any other
obligation or liability of any Material Subsidiary to the Company;
<PAGE>
38
(b) mechanics', materialmen's, carriers' or other like liens
arising in the ordinary course of business (including construction of
facilities) in respect of obligations which are not due or which are
being contested in good faith and for which reasonable reserves have
been established;
(c) any Security Interest arising by reason of deposits with,
or the giving of any form of security to, any governmental agency or
any body created or approved by law or governmental regulation which is
required by law or governmental regulation as a condition to the
transaction of any business, or the exercise of any privilege,
franchise or license;
(d) Security Interests for taxes, assessments or governmental
charges or levies not yet delinquent or Security Interests for taxes,
assessments or governmental charges or levies already delinquent but
the validity of which is being contested in good faith and for which
reasonable reserves have been established;
(e) Security Interests (including judgment liens) arising in
connection with legal proceedings so long as such proceedings are being
contested in good faith and, in the case of judgment liens, execution
thereon is stayed;
(f) landlords' liens on fixtures located on premises leased by
the Company or a Material Subsidiary in the ordinary course of
business;
(g) Security Interests arising in connection with contracts
and subcontracts with or made at the request of the United States of
America, any state thereof, or any department, agency or
instrumentality of the United States of America or any state thereof
for obligations not yet delinquent;
(h) any Security Interest arising by reason of deposits to
qualify the Company or a Material Subsidiary to conduct business, to
maintain self-insurance, or to obtain the benefit of, or comply with,
laws;
(i) any purchase money Security Interest claimed by sellers of
goods on ordinary trade terms provided that no financing statement has
been filed to perfect such Security Interest;
(j) any Security Interest existing as of the date hereof and
set forth on Schedule 6.02, and the extension thereof to additions,
extensions, or improvements to the property subject to the Security
Interest which does not arise as a result of borrowing money or the
securing of Debt or other obligation or liability created, assumed or
incurred after such date;
(k) Security Interests on (i) property of a corporation or
firm existing at the time such corporation is merged or consolidated
with the Company or any Subsidiary or at the time of a sale, lease or
other disposition of the properties of a corporation or a firm as an
entirety (or the properties of a corporation or firm comprising a
product line or line of
<PAGE>
39
business, as an entirety) or substantially as an entirety to the
Company or a Subsidiary; or (ii) property comprising machinery,
equipment or real property acquired by the Company or any of its
Material Subsidiaries, which Security Interests shall have existed at
the time of such acquisition and secure obligations assumed by the
Company or such Material Subsidiary in connection with such
acquisition; PROVIDED that the Debt or other obligations or liabilities
secured by Security Interests of the type described in this paragraph
(k) shall not either (i) have been created in anticipation of such
merger, consolidation, sale, lease or other disposition or in
contemplation of such acquisition or (ii) at any time exceed an
aggregate amount equal to $30,000,000;
(l) Security Interests arising in connection with the sale,
assignment or other transfer by the Company or any Material Subsidiary
of accounts receivable, lease receivables or other payment obligations
(any of the foregoing being a "RECEIVABLE") owing to the Company or
such Material Subsidiary or any interest in any of the foregoing
(together in each case with any collections and other proceeds thereof
and any collateral, guarantees or other property or claims in favor of
the Company or such Material Subsidiary supporting or securing payment
by the obligor thereon of any such Receivables), in each case whether
such sale, assignment or other transfer constitutes a "true sale" or a
secured financing for accounting, tax or any other purpose; PROVIDED
that either (i) such sale, assignment or other transfer shall have been
made as part of a sale of the business out of which the applicable
Receivables arose, (ii) such sale, assignment or other transfer is made
in the ordinary course of business and is for the purpose of collection
only, (iii) such sale, assignment or other transfer is made in
connection with an agreement on the part of the assignee thereof to
render performance under the contract that has given rise to such
Receivable, or (iv) in the case of any other sale, assignment or
transfer, the Designated Amount does not at any time exceed 10% of
Consolidated Total Assets;
(m) Security Interests securing non-recourse obligations in
connection with leveraged or single-investor lease transactions;
(n) Security Interests securing the performance of any
contract or undertaking made in the ordinary course of business (as
such business is currently conducted) other than for the payment of
Debt;
(o) any Security Interest granted by any Material Subsidiary;
PROVIDED, that (i) the principal business and assets of such Material
Subsidiary are located in Puerto Rico or are located outside of the
United States, its other territories and possessions, (ii) the property
of such Material Subsidiary which is subject to such Security Interest
is a parcel of real property, a manufacturing plant, manufacturing
equipment, a warehouse, or an office building hereafter acquired,
constructed, developed or improved by such Material Subsidiary, and
(iii) such Security Interest is created prior to or contemporaneously
with, or within 120 days after (x) in the case of acquisition of such
property, the completion of such acquisition and (y) in the case of the
construction, development or improvement of such property, the later to
occur of the completion of such construction, development or
improvement or the commencement of operations, use
<PAGE>
40
or commercial production (exclusive of test and start-up periods) of
such property, and such Security Interest secures or provides for the
payment of all or any part of the acquisition cost of such property or
the cost of construction, development or improvement thereof, as the
case may be;
(p) any Security Interest in deposits or cash equivalent
investments pledged with a financial institution for the sole purpose
of implementing a hedging or financing arrangement commonly known as a
"back-to-back" loan arrangement, provided in each case that neither the
assets subject to such Security Interest nor the Debt incurred in
connection therewith are reflected on the consolidated balance sheet of
the Company; or
(q) any extension, renewal or refunding (or successive
extensions, renewals or refundings) in whole or in part of any Debt or
any other obligation or liability secured by any Security Interest
referred to in the foregoing paragraphs (a) through (p), PROVIDED that
the principal amount of Debt or any other obligation or liability
secured by such Security Interest shall not exceed the principal amount
outstanding immediately prior to such extension, renewal or refunding,
and that the Security Interest securing such Debt or other obligation
or liability shall be limited to the property which, immediately prior
to such extension, renewal or refunding secured such Debt or other
obligation or liability and additions to such property; and PROVIDED
FURTHER that the principal amount of Debt or any other obligation or
liability secured by such Security Interest shall continue to be taken
into account for purposes of computing the amount of Debt or any other
obligation or liability that may be secured under any applicable basket
provided for in the foregoing paragraphs (a) through (p).
Notwithstanding the foregoing provisions of this Section, the
Company and the Material Subsidiaries may, at any time, suffer to exist, issue,
incur, assume and guarantee Secured Debt (in addition to Secured Debt permitted
to be secured under the foregoing paragraphs (a) through (k) and (m) through
(q)); PROVIDED that the Designated Amount does not at any time exceed 10% of
Consolidated Total Assets.
SECTION 6.03. SALE AND LEASEBACK TRANSACTIONS. Enter into or
be party to, or permit any Material Subsidiary to enter into or be party to, any
Sale and Leaseback Transaction unless after giving effect thereto the Designated
Amount does not exceed 10% of Consolidated Total Assets.
SECTION 6.04. MERGER, ETC. (a) Permit the Company to merge or
consolidate with or into, or Transfer Assets (other than pursuant to the
transactions giving rise to the Specified Charges) to, any Person, except that
the Company may (i) merge or consolidate with any US Corporation, including any
Subsidiary that is a US Corporation, and (ii) Transfer Assets to any Subsidiary
which is a US Corporation; PROVIDED, in each case described in clause (i) and
(ii) above, that (A) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing and (B) in the case of any merger
or consolidation to which the Company shall be a party, the survivor of such
merger or consolidation shall be the Company.
<PAGE>
41
(b) Permit any Material Subsidiary to merge or consolidate
with or into, or Transfer Assets (other than pursuant to the transactions giving
rise to the Specified Charges) to, any Person unless (i) immediately after
giving effect to such transaction, no Default shall have occurred and be
continuing and (ii) if either constituent corporation in such merger or
consolidation, or the transferor of such assets, is a Subsidiary Guarantor, the
surviving or resulting corporation or the transferee of such assets, as the case
may be, shall be a Subsidiary Guarantor.
SECTION 6.05. CHANGE IN BUSINESS. Permit the Company or any
Material Subsidiary to engage to any material extent in any business other than
the medical devices, supplies and services businesses (but excluding the
management of institutional health care providers such as hospitals, nursing
homes, and long-term care facilities).
SECTION 6.06. CERTAIN RESTRICTIVE AGREEMENTS. Permit the
Company or any Material Subsidiary to enter into any contract or other agreement
that would limit the ability of any Material Subsidiary to pay dividends or make
loans or advances to, or to repay loans or advances from, the Company or any
other Subsidiary; PROVIDED that nothing in this section shall prohibit (a)
covenants or agreements entered into in connection with the incurrence of
secured Debt permitted hereunder that restrict the transfer of collateral
securing such Debt or (b) agreements entered into in connection with sales of
Receivables that govern the application of proceeds of sold Receivables.
SECTION 6.07. LEVERAGE RATIO. Permit the Leverage Ratio at any
time to exceed set forth below opposite such period:
Period Ratio
------ -----
through 12/30/00 3.75:1.00
12/31/00 through 12/30/01 3.50:1.00
12/31/01 through 12/30/02 3.25:1.00
12/31/02 and thereafter 3.00:1.00
SECTION 6.08. INTEREST COVERAGE RATIO. Permit the Interest
Coverage Ratio for any period of four consecutive fiscal quarters ending during
any period set forth below to be less than the ratio set forth below opposite
such period
Period Ratio
------ -----
through 12/30/00 4.00:1.00
12/31/00 through 12/30/01 4.25:1.00
12/31/01 through 12/30/02 4.50:1.00
12/31/02 and thereafter 4.75:1.00
SECTION 6.09. SPIN-OFF. Permit the Spin-Off to be completed
other than on terms and with results consistent in all material respects with
the information contained in the
<PAGE>
42
Form 10 and the Confidential Information Memorandum (including the pro forma
financial information and projections contained therein).
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall
occur and be continuing:
(a) The Company shall fail to (i) pay any interest or facility
fee due hereunder and such default continues for five days, or (ii) pay any
amount of principal of any Loan when due hereunder; or
(b) Any representation or warranty made or deemed made by the
Company or any other Loan Party (or any of their respective officers) in
connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Company or any Material Subsidiary shall fail to
maintain its corporate, limited liability company or partnership existence as
required by Section 5.03, or the Company or any Material Subsidiary shall fail
to perform or observe any term, covenant or agreement contained in Article VI
(other than Section 6.02 insofar as such failure results from a nonconsensual
Security Interest) of this Agreement on its part to be performed or observed; or
(d) The Company or any Subsidiary shall (i) fail to perform or
observe any other term, covenant or agreement contained in this Agreement or any
other Loan Document on its part to be performed or observed (other than those
failures or breaches referred to in paragraphs (a), (b) and (c) above) and any
such failure shall remain unremedied for 30 days after written notice thereof
has been given to the Company by the Administrative Agent at the request of any
Lender; or
(e) Either (i) the Company or any Material Subsidiary shall
fail to pay any amount of principal of, interest on or premium with respect to,
any Debt (other than the Loans) of the Company or such Subsidiary outstanding
under one or more instruments or agreements when due (whether at scheduled
maturity or by required prepayment, acceleration, demand or otherwise) and (A)
such Debt shall be in an aggregate principal amount not less than $10,000,000
and such failure shall continue beyond the greater of 15 days and the applicable
grace period, if any, specified in the agreement or instrument relating to such
Debt or (B) such Debt shall be in an aggregate principal amount not less than
$20,000,000 and such failure shall continue beyond the applicable grace period,
if any, specified in the agreement or instrument relating to such Debt; or (ii)
any other event shall occur or condition shall exist with respect to any Debt
(other than the Loans) of the Company or such Subsidiary outstanding under one
or more instruments or agreements if the effect of such event or condition is
(or will after the lapse of any grace period be) to cause, or to permit the
holder or holders of such debt (or any trustee or agent on their
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43
behalf) to cause, such Debt to become due, or to require such Debt to be prepaid
(other than by a scheduled prepayment), prior to the stated maturity thereof and
(A) such Debt shall be in an aggregate principal amount not less than
$10,000,000 and such failure shall continue beyond the greater of 15 days and
the applicable grace period, if any, specified in the agreement or instrument
relating to such Debt or (B) such Debt shall be in an aggregate principal amount
not less than $20,000,000 and such failure shall continue beyond the applicable
grace period, if any, specified in the agreement or instrument relating to such
Debt; or
(f) The Company or any Material Subsidiary shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally; or
(g) The Company or any Material Subsidiary shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Company or such Material Subsidiary seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debt under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property; or the Company or any such Material
Subsidiary shall take corporate action to authorize any of the actions set forth
above in this paragraph (f); PROVIDED that, in the case of any such proceeding
filed or commenced against the Company or any Material Subsidiary, such event
shall not constitute an "Event of Default" hereunder unless either (i) the same
shall have remained undismissed or unstayed for a period of 60 days, (ii) an
order for relief shall have been entered against the Company or such Material
Subsidiary under the federal bankruptcy laws as now or hereafter in effect or
(iii) the Company or such Material Subsidiary shall have taken corporate action
consenting to, approving or acquiescing in the commencement or maintenance of
such proceeding; or
(h) Any judgment or order for the payment of money shall be
rendered against the Company or any Material Subsidiary and (i) either (A)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (B) there shall be any period of 10 consecutive days, in
the case of a judgment or order rendered or entered by a court located in the
United States, its territories and Puerto Rico, or 30 consecutive days, in the
case of any other court, during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect, and
(ii) the amount of such judgment or order, when aggregated with the amount of
all other such judgments and orders described in this subsection (h), shall
exceed $20,000,000;
(i) Either (i) the Pension Benefit Guaranty Corporation shall
terminate any single-employer plan (as defined in Section 4001(b)(2) of ERISA)
that provides benefits for employees of the Company or any Material Subsidiary
and such plan shall have an Unfunded Liability in an amount in excess of
$5,000,000 at such time or (ii) withdrawal liability shall be assessed against
the Company or any Material Subsidiary in connection with any multiemployer plan
(whether under Section 4203 or Section 4205 of ERISA) and such withdrawal
liability shall be an amount in excess of $5,000,000; or
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44
(j) the guarantee of any Subsidiary Guarantor that is a
Material Subsidiary under the Subsidiary Guarantee Agreement shall not be (or
shall be asserted by the Company or any Subsidiary Guarantor not to be) valid or
in full force and effect; or
(k) a Change of Control shall have occurred.
then, in any such event but subject to the next sentence, the Administrative
Agent shall at the request, or may with the consent, of the Required Lenders, by
notice to the Company, (i) declare the obligation of each Lender to make Loans
hereunder to be terminated, whereupon the same shall forthwith terminate and/or
(ii) declare the entire unpaid principal amount of the Loans, all interest
accrued and unpaid thereon and all other amounts payable under this Agreement to
be forthwith due and payable, whereupon the Loans, all such accrued interest and
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Company; PROVIDED, that in the case of any
Competitive Bid Note, the unpaid principal amount thereof, and all interest
accrued and unpaid thereon, shall not be declared to be due and payable pursuant
to the foregoing clause (ii) without the consent of the holder of such
Competitive Bid Note. In the event of the occurrence of an Event of Default
under clause (f) or (g) of this Article VII, (A) the obligation of each Lender
to make Loans shall automatically be terminated and (B) the Loans, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Company.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this
Agreement, the Person named in the heading of this Agreement is hereby appointed
to act as Administrative Agent on behalf of the Lenders. Each of the Lenders,
including each assignee of any Lender, hereby irrevocably authorizes the Agent
to take such actions on behalf of such Lender or assignee and to exercise such
powers as are delegated to the Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto. The
Administrative Agent is hereby expressly authorized by the Lenders, without
hereby limiting any implied authority, (a) to receive on behalf of the Lenders
all payments of principal of and interest on the Loans and all other amounts due
to the Lenders hereunder, and promptly to distribute to each Lender its proper
share of each payment so received; (b) to give notice on behalf of each of the
Lenders to the Company 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 Company or
any other Loan Party pursuant to this Agreement or the other Loan Documents as
received by the Administrative Agent. Without limiting the generality of the
foregoing, the Administrative Agent is hereby expressly authorized to release
any Subsidiary Guarantor from its obligations under the Subsidiary Guarantee
Agreement in the event that all the capital stock of
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45
such Guarantor shall be sold, transferred or otherwise disposed of to a Person
other than the Company or an Affiliate of the Company in a transaction permitted
by Section 6.04.
With respect to the Loans made by it hereunder,the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers as any other Lender and may exercise the
same as though it were not the Administrative Agent, and the Administrative
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall have
no duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated by the Loan
Documents that the Administrative Agent is required to exercise upon receipt of
notice in writing by the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
9.02), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall have no duty to disclose, and shall not be liable for
the failure to disclose, any information relating to the Company or any of its
Subsidiaries that is communicated to or obtained by the institution serving as
the Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall not be deemed to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Company (in which case the Agent shall give written
notice to each other Lender), and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii)
the contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Company), independent accountants
and other experts selected by it, and shall not
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46
be liable for any action taken or not taken by it in accordance with the advice
of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Company. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Company, 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 Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender agrees (a) to reimburse the Administrative Agent,
on demand, in the amount of its pro rata share (based on the amount of its Loans
and available Commitments hereunder) of any expenses incurred for the benefit of
the Lenders by the Administrative Agent, 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 Company or any other Loan Party and
(b) to indemnify and hold harmless the Administrative Agent and any of its
Related Parties, 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 Administrative Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or 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 Company or any other
Loan Party; PROVIDED that no Lender shall be liable to the Administrative Agent
or any such other indemnified Person for any portion of such liabilities, taxes,
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 the Administrative Agent or any of its
directors, officers, employees or agents.
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47
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Company, to 17221 Red Hill Avenue, Irvine,
California 92614, Attention of the Daniel M. Gallagher (Telecopy No.
(949) 250-2275);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
Floor, New York, New York 10081, Attention of Anne Bowles (Telecopy No.
(212) 552-7500), with a copy to The Chase Manhattan Bank, 270 Park
Avenue, New York, NY 10019, Attention of Steve Rochford (Telecopy No.
(212) 270-5135);
(c) if to any Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the
date of receipt.
SECTION 9.02. WAIVERS; AMENDMENTS. (a) No failure or delay
by the Administrative Agent or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall
be
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48
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any other Loan Document nor
any provision hereof or thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Company
and the Required Lenders or by the Company and the Administrative Agent with
the consent of the Required Lenders or, in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by
the Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; PROVIDED that
no such agreement shall (i) increase any Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan
or reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender adversely affected thereby, (iii)
postpone the date of any scheduled payment of the principal amount of any
Loan, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby without the written
consent of each Lender (it being understood that the addition of new tranches
of loans or commitments that may be extended under this Agreement shall not be
deemed to alter such pro rata sharing of payments), (v) change any of the
provisions of this Section or the definition of "Required Lenders" or any
other provision of any Loan Document specifying the number or percentage of
Lenders required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (except, in each case, to provide for new commitments that may be
extended under this Agreement), or (vi) release the Company or all or
substantially all the Subsidiary Guarantors from, or limit or condition, its
or their obligations under Article X or the Subsidiary Guarantee Agreement,
without the written consent of each Lender; PROVIDED FURTHER that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder or under any other Loan Document without the
prior written consent of the Administrative Agent.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The
Company shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of this Agreement or the other Loan
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby
shall be consummated) and (ii) all reasonable out-of-pocket expenses incurred
by the Administrative Agent or any Lender, including the reasonable fees,
charges and disbursements of any counsel for the Administrative Agent orany
Lender, in connection with the enforcement or protection of its rights in
connection with any Loan Document, including its rights under this Section, or
in connection with the Loans made
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49
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.
(b) The Company shall indemnify the Administrative Agent and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "INDEMNITEE") against, and hold each Indemnitee
harmless from, any and all losses, liabilities, reasonable out-of-pocket costs
or expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) any transaction or
proposed transaction (whether or not consummated) in which any proceeds of any
borrowing hereunder are applied or proposed to be applied, directly or
indirectly, by the Company or any Subsidiary or (ii) the execution, delivery
or performance by the Company and the Subsidiaries of the Loan Documents, or
any actions or omissions of the Company or any Subsidiary in connection
therewith; PROVIDED that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, liabilities, costs or expenses shall
have resulted from the gross negligence or wilful misconduct of such
Indemnitee or the violation by such Indemnitee of any law or court order
applicable to it.
(c) To the extent that the Company fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or
(b) of this Section, each Lender severally agrees to pay to the Administrative
Agent such Lender's pro rata share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; PROVIDED that the unreimbursed loss, liability, cost or expense, as
the case may be, was incurred by or asserted against the Administrative Agent
in its capacity as such. For purposes hereof, a Lender's "pro rata share"
shall be determined based upon its share of the sum (without duplication) of
the total Revolving Exposures and unused Commitments at the time.
(d) To the extent permitted by applicable law, the Company
shall not assert, and the Company hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of,
in connection with, or as a result of, this Agreement, any other Loan
Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable
within 15 Business Days after receipt by the Company of a reasonably detailed
invoice therefor.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except
that the Company may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and
any attempted assignment or transfer by the Company without such consent shall
be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent
expressly contemplated hereby, the Related Parties of the Administrative Agent
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
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50
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans or other amounts at the time owing to
it); PROVIDED that (i) except in the case of an assignment to a Lender, an
Affiliate of a Lender or a Related Fund of any Lender, each of the Company and
the Administrative Agent must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender, an Affiliate of a Lender or a Related
Fund of any Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitments and outstanding Loans, the amount of the
Commitments and outstanding Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Company and the Administrative
Agent otherwise consent, (iii) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500, and (iv) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; and PROVIDED FURTHER that any consent of the
Company otherwise required under this paragraph shall not be required if an
Event of Default referred to in clause (f) or (g) of Article VII has occurred
and is continuing. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Company, 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 Companys, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by the Company and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and
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51
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Company or
the Administrative Agent, sell participations to one or more banks or other
entities (a "PARTICIPANT") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); PROVIDED that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations and (iii) the Company, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; PROVIDED that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in clause (i), (ii),
(iii) or (vi) of the first proviso to Section 9.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Company agrees that
each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and
2.16 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any
greater payment under Section 2.14 or 2.16 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Company's prior written consent. A Participant shall not be entitled
to the benefits of Section 2.16 unless the Company is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Company, to comply with Section 2.16(e) as though it were a
Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank or, in the case of a Lender that is an
investment fund, to the trustee under the indenture to which such fund is a
party, and this Section shall not apply to any such pledge or assignment of a
security interest; PROVIDED that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. SURVIVAL. All covenants, agreements,
representations and warranties made by the Loan Parties herein or in any other
Loan Document or in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto or thereto
and shall survive the execution and delivery of this Agreement and any other
Loan Document and the making of any Loans, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have
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52
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement or any other Loan
Document is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.14, 2.15, 2.16, 9.03 and
9.12 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans and the Commitments or the termination of this
Agreement or any other Loan Document or any provision hereof or thereof.
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof 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 successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.07. SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of the Company against any of and all the obligations of such
Company now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under
this Agreement and although such obligations may be unmatured. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO
SERVICE OF PROCESS. (a) This Agreement shall be construed in accordance with
and governed by the law of the State of New York.
<PAGE>
53
(b) The Company hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of
or relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement or any other
Loan Document shall affect any right that the Administrative Agent or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement against the Company or its properties in the courts of any
jurisdiction.
(c) The Company 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 any
other Loan Document in any court referred to in paragraph (b) of this Section.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. CONFIDENTIALITY. The Administrative Agent and
each Lender agrees to maintain the confidentiality of the Information (as
defined below), except that
<PAGE>
54
Information may be disclosed (a) to its and its Affiliates' directors,
officers, employees and agents, including accountants, legal counsel and other
advisors, to Related Funds' directors and officers and to any direct or
indirect contractual counterparty in swap agreements (it being understood that
each Person to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) to the extent required or advisable in the judgment of counsel
in connection with any suit, action or proceeding relating to the enforcement
of rights of the Administrative Agent, the Lenders or the Company under this
Agreement or any other Loan Document, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement, (g) with the consent of the
Company or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section of which the Administrative
Agent or such Lender is aware or (ii) becomes available to the Administrative
Agent or any Lender on a nonconfidential basis from a source other than the
Company other than as a result of a breach of this Section of which the
Administrative Agent or such Lender is aware. For the purposes of this
Section, "INFORMATION" means all information received from the Company
relating to the Company or its business, other than any such information that
is available to the Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by the Company other than as a result of a breach of
this Section of which the Administrative Agent or such Lender is aware. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. CONVERSION OF CURRENCIES. (a) If, for the
purpose of obtaining judgment in any court, it is necessary to convert a sum
owing hereunder in one currency into another currency, each party hereto
agrees, to the fullest extent that it may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the first currency could be purchased
with such other currency on the Business Day immediately preceding the day on
which final judgment is given.
(b) The obligations of the Company in respect of any sum due
to any party hereto or any holder of the obligations owing hereunder (the
"APPLICABLE CREDITOR") shall, notwithstanding any judgment in a currency (the
"JUDGMENT CURRENCY") other than the currency in which such sum is stated to be
due hereunder (the "AGREEMENT CURRENCY"), be discharged only to the extent
that, on the Business Day following receipt by the Applicable Creditor of any
sum adjudged to be so due in the Judgment Currency, the Applicable Creditor
may in accordance with normal banking procedures in the relevant jurisdiction
purchase the Agreement Currency with the Judgment Currency; if the amount of
the Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, the Company agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Company
contained in this Section 9.13 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
<PAGE>
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.
EDWARDS LIFESCIENCES CORP.
by /s/ Michael A. Mussallem
-----------------------------
Name: Michael A. Mussalem
Title: President
<PAGE>
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
by /s/ Robert Anastasio
-----------------------------
Name: Robert Anastasio
Title: Vice President
<PAGE>
CREDIT SUISSE FIRST BOSTON,
by /s/ William S. Lutkins
-----------------------------
Name: William S. Lutkins
Title: Vice President
by /s/ Thomas G. Muoio
-----------------------------
Name: Thomas G. Muoio
Title: Vice President
<PAGE>
THE FUJI BANK, LIMITED,
by /s/ Takeyuki Kuroki
-----------------------------
Name: Takeyuki Kuroki
Title: Vice President and
Senior Team Leader
<PAGE>
BANK OF TOKYO-MITSUBISHI,
LTD. CHICAGO BRANCH,
by /s/ Hisashi Miyashiro
-----------------------------
Name: Hisashi Miyashiro
Title: Deputy General
Manager
<PAGE>
UBS AG STAMFORD BRANCH,
by /s/ Robert H. Riley, III
-----------------------------
Name: Robert H. Riley, III
Title: Executive Director
by /s/ Wilfred Saint
-----------------------------
Name: Wilfred Saint
Title: Associate Director,
Loan Portfolio Support, US
<PAGE>
DEUTSCHE BANK AG, NEW YORK
BRANCH AND/OR CAYMAN ISLANDS
BRANCH
by /s/ Iain Stewart
-----------------------------
Name: Iain Stewart
Title: Vice President
by /s/ Annette Walter
-----------------------------
Name: Annette Walter
Title: Associate
<PAGE>
FIRST UNION NATIONAL BANK,
by /s/ Ann M. Dodd
-----------------------------
Name: Ann M. Dodd
Title: SVP
<PAGE>
NATIONAL AUSTRALIA BANK
LIMITED.,
by /s/ Susan R. Julien
-----------------------------
Name: Susan R. Julien
Title: Vice President
<PAGE>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
by /s/ Robert Bottamedi
-----------------------------
Name: Robert Bottamedi
Title: Vice President
<PAGE>
FLEET NATIONAL BANK,
by /s/ Walter J. Marullo
-----------------------------
Name: Walter J. Marullo
Title: Vice President
<PAGE>
BANK OF AMERICA, N.A.
by /s/ F. Scott Singhoff
-----------------------------
Name: F. Scott Singhoff
Title: Managing Director
<PAGE>
GOLDMAN SACHS & CO.,
by /s/ Doug Hendersen
-----------------------------
Name: Doug Hendersen
Title: Managing Director
<PAGE>
WACHOVIA BANK,
by /s/ Debra L. Coheley
-----------------------------
Name: Debra L. Coheley
Title: Senior Vice President
<PAGE>
BBV INTERNATIONAL INVESTMENT
CORPORATION
by /s/ Tomas Rosario
-----------------------------
Name: Tomas Rosario
Title: Executive Vice President
<PAGE>
BANK ONE, NA
by /s/ Joseph Perdenza
-----------------------------
Name: Joseph Perdenza
Title: Assistanct Vice President
<PAGE>
THE BANK OF NOVA SCOTIA,
by /s/ R. P. Reynolds
-----------------------------
Name: R. P. Reynolds
Title: Director
<PAGE>
ABN AMRO BANK,
by /s/ Paul K. Stimpfl
-----------------------------
Name: Paul K. Stimpfl
Title: Group Vice President
by /s/ Mitsoo Iravani
-----------------------------
Name: Mitsoo Iravani
Title: Assistant Vice President
<PAGE>
EXHIBIT 10.21
EDWARDS LIFESCIENCES CORPORATION
SEVERANCE PAY PLAN
(Effective April 1, 2000)
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
SEVERANCE PAY PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I PURPOSE........................................................1
ARTICLE II DEFINITIONS...................................................1
Section 2.1. Definitions................................................1
(a) Company...........................................................1
(b) Effective Date....................................................1
(c) Eligible Employee.................................................1
(d) Employer..........................................................2
(e) Excluded Division or Facility.....................................2
(f) 401k Earnings.....................................................2
(g) Monthly Compensation..............................................2
(h) Months of Service.................................................3
(i) Plan..............................................................3
(j) Plan Administrator................................................3
(k) Plan Year.........................................................3
(l) Severance Benefits................................................3
(m) Severance Pay.....................................................3
(n) Termination.......................................................3
Section 2.2. Gender and Number..........................................4
ARTICLE III METHOD OF FUNDING............................................4
ARTICLE IV PAYMENT OF SEVERANCE PAY AND BENEFITS...........................5
Section 4.1. Qualification for Severance Pay............................5
Section 4.2. Severance Pay for Eligible Employees.......................5
Section 4.3. Payment of Severance Pay...................................6
Section 4.4. Severance Benefits.........................................6
(a) Vacation..........................................................6
(b) Floating Holidays.................................................7
(c) Bonuses and Variable Pay..........................................7
Section 4.5. Forfeiture of Severance Pay for Cause......................7
ARTICLE V ADMINISTRATION OF PLAN.........................................7
Section 5.1. General....................................................7
Section 5.2. Regulations................................................7
Section 5.3. Claims Procedure...........................................7
ARTICLE VI AMENDMENT OR TERMINATION OF PLAN..............................8
ARTICLE VII MISCELLANEOUS................................................9
Section 7.1. Limitation on Rights.......................................9
Section 7.2. Headings...................................................9
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Section 7.3. Severability...............................................9
Section 7.4. Governing Law..............................................9
Section 7.5. Successors and Assigns.....................................9
Section 7.6. Administration.............................................9
EXHIBIT A...............................................................10
</TABLE>
iii
<PAGE>
EDWARDS LIFESCIENCES CORPORATION
SEVERANCE PAY PLAN
Edwards Lifesciences Corporation hereby adopts this Plan, to be known as the
"Edwards Lifesciences Corporation Severance Pay Plan."
ARTICLE I
PURPOSE
The purpose of this Plan is to provide qualifying Eligible Employees with
Severance Pay in accordance with the provisions set forth below. This Plan
supersedes and replaces all previous severance or separation pay plans,
policies, or arrangements maintained by any Employer, other than as set forth
herein.
ARTICLE II
DEFINITIONS
SECTION 2.1. DEFINITIONS. When used in this Plan, the words and phrases below
have the following meanings unless the context clearly otherwise requires:
(a) "COMPANY" shall mean Edwards Lifesciences Corporation, or any
successor or successors;
(b) "EFFECTIVE DATE" shall mean April 1, 2000;
(c) "ELIGIBLE EMPLOYEE" shall mean any individual employed in a
domestic facility who is either:
(1) a regular full-time employee of an Employer; or
(2) a part-time employee of an Employer who is scheduled to work
at least 20 hours per week for such Employer; but excluding:
(i) any employee who is not on the U.S. payroll of an
Employer;
(ii) any employee covered by a collective bargaining
agreement (unless participation in the Plan is provided
for in such collective bargaining agreement);
(iii) any leased or temporary employee;
1
<PAGE>
(iv) any employee who refuses to accept another position
either within the Company or with a successor employer;
(v) any employee whose job is outsourced to an employer who
is not a member of the controlled group; provided such
employee is offered a position with such employer,
regardless of the terms and conditions of such offer;
(vi) sunset employees (employee who are hired for a specific
period of time); and
(vi) employees who fail to return from a leave of absence in
a timely manner (including but not limited to those
employees who are on medical or disability leave and
fail to return to work in a timely manner after they
have been determined to no longer be disabled).
(d) "EMPLOYER" shall mean the Company (but only with respect to
employees who are not employed by an Excluded Division or
Facility), and each affiliated domestic corporation.
(e) "EXCLUDED DIVISION OR FACILITY" shall mean the divisions and/or
facilities of the Company to which the Plan does not apply and
which are listed on Schedule A hereto. This Schedule A may be
updated from time to time to reflect a listing of Excluded
Divisions or Facilities or special adoption dates for previously
Excluded Divisions or Facilities that become Employers.
(f) "401k EARNINGS" shall mean eligible compensation as defined by
the Edwards Lifesciences Corporation 401(k) Savings and
Investment Plan.
(g) "MONTHLY COMPENSATION" shall mean the Eligible Employee's monthly
base salary as in effect on the date that the individual's
employment as an active employee ceases. For purposes of the
preceding sentence, "monthly base compensation" shall mean:
(1) in the case of a salaried Eligible Employee, such employee's
monthly base salary;
(2) in the case of an hourly Eligible Employee, such employee's
hourly rate (plus any shift differential) multiplied by the
number of regularly scheduled hours in a normal work week
multiplied by 4.3;
(3) in the case of a commissioned sales representative, the
greater of:
(i) such employee's prior year's 401k Earnings, divided by
12; or
(ii) such employee's Year-to-Date 401k Earnings, annualized
and divided by twelve; and
(4) in the case of a Perfusionist and Perfusion Service
Managers,
2
<PAGE>
(i) such employee's year to date eligible earnings (salary
and other regular pay, including manager pay and
procedure based pay), annualized and divided by twelve.
Year-to-Date 401k Earnings shall be calculated no
greater than 30 days prior to the employee's date of
Termination.
(h) "MONTHS OF SERVICE" shall mean the most recent period of
consecutive, continuous employment ending on the Eligible
Employee's Termination date during which the Eligible Employee
is:
(i) entitled to payment by the Employer for the performance
of duties;
(ii) entitled to payment by the Employer for a period of
time during which the Eligible Employee does not
perform duties due to vacation, holiday, jury duty, a
leave of absence of not more than six months for
medical purposes or disability, or any other approved
leave of absence; or
(iii) on an unpaid leave of absence approved by the
Employer, including a leave of absence for military
duty.
Only full months of employment are counted in determining Months
of Service. Months will not be prorated. For purposes of the
above, months of service with the Company's predecessor
corporation, Baxter International Inc. and its eligible
affiliates, shall be included in the determination if the
Eligible Employee was an employee of the predecessor corporation
on March 31, 2000 and transferred to the Employer pursuant to the
spin-off of the Employer from the predecessor corporation.
(i) "PLAN" shall mean the "Edwards Lifesciences Corporation Severance
Pay Plan."
(j) "PLAN ADMINISTRATOR" shall mean the Company or the Plan
Administrative Committee of the Company, if the Company's board
of directors has delegated to such Committee the authority to
serve as Plan Administrator, who shall be responsible for the
general administration of the Plan.
(k) "PLAN YEAR" shall mean calendar year.
(l) "SEVERANCE BENEFITS" shall mean continued coverage under certain
of the Employer's employee benefit plans and employment policies
as set forth in Section 4.4 herein.
(m) "SEVERANCE PAY" shall mean the sums payable as set forth in
Article IV herein.
(n) "TERMINATION" for purposes of this Plan shall mean the dismissal
of an Eligible Employee from active employment by an Employer
following the Effective Date by reason of:
(1) a decision by an Employer to eliminate such Eligible
Employee's employment position; or
(2) a decision by an Employer to reduce the size of the
Employer's work force.
3
<PAGE>
Termination, for purposes of this Plan, shall not mean
termination of employment with an Employer for any reason other
than as set forth in (1) and (2) above, including, but not
limited to:
(i) the Eligible Employee's voluntary termination of
employment with the Employer, including termination due
to retirement;
(ii) the Eligible Employee's termination of employment with
the Employer upon the sale, assignment, transfer,
conveyance or other disposition of the Employer's
business and/or all or a part of its assets if the
employee is offered employment by a purchaser or
successor after the transaction is consummated;
(iii) the dismissal of the Eligible Employee by an Employer
for any action which, in the sole judgment of the
Employer, is for cause including, but not limited to,
violation of the Employer's policies and procedures, an
act of fraud or dishonesty affecting or involving the
Employer, or breach of a material provision of such
Employee's employment agreement or other similar
agreement with the Employer;
(iv) the transfer of the Eligible Employee from employment
by an Employer to comparable employment, as determined
in the sole judgment of the Employer, by another
Employer or a subsidiary or other affiliate thereof;
(v) the death of the Eligible Employee while an employee of
an Employer;
(vi) layoff, meaning involuntary dismissal by an Employer
for a period of time that the Employer, in its sole
judgment, expects to be less than six-months in
duration; or such other time period as set forth in an
applicable recall policy not to exceed six months.
(vii) a decision by an Employer that an Eligible Employee
does not meet the performance requirements of his or
her job assignment.
SECTION 2.2. GENDER AND NUMBER. The masculine gender whenever used herein shall
be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
ARTICLE III
METHOD OF FUNDING
An Employer shall pay Severance Pay from current operating funds. No property of
an Employer is or shall be, by reason of this Plan, held in trust for any
employee of an Employer, nor shall any person have any interest in or any lien
or prior claim upon any property of an Employer, by reason of the Plan, or an
Employer's obligation to make payments hereunder.
4
<PAGE>
ARTICLE IV
PAYMENT OF SEVERANCE PAY AND BENEFITS
SECTION 4.1. QUALIFICATION FOR SEVERANCE PAY. An Eligible Employee for whom a
Termination occurs shall qualify for Severance Pay as provided in Section 4.2.
SECTION 4.2. SEVERANCE PAY FOR ELIGIBLE EMPLOYEES.
(a) HOURLY, SALARIED NONEXEMPT EMPLOYEES OR EXEMPT EMPLOYEES WITH PAY
GROUPING E OR BELOW (INCLUDING COMMISSIONED SALES REPRESENTATIVES).
Severance Pay for a qualifying Eligible Employee who is an hourly,
salaried nonexempt employee or exempt employee With Pay Grouping E or
Below (including commissioned salespersons) as of the date the
Eligible Employee's severance benefit is calculated shall be an amount
equal to:
(1) Monthly Compensation multiplied by 1.0; plus
(2) 2% of his or her Monthly Compensation multiplied by;
(3) the number of full Months of Service which such Eligible Employee
has completed as of the date of Termination.
(b) EXEMPT EMPLOYEES PAY GROUPING F AND G. Severance Pay for a qualifying
Eligible Employee who is an exempt employee Pay Grouping F and G as of
the date the Eligible Employee's severance benefit is calculated shall
be an amount equal to:
(1) Monthly Compensation multiplied by 1.5; plus
(2) 4% of his or her Monthly Compensation multiplied by the number of
full Months of Service which such Eligible Employee has completed
as of the date of Termination.
(c) Eligible Employee's age 40 and over shall be granted an additional age
factor allowance. The additional age factor formula is equal to 2%
multiplied by each year the Eligible Employee is age 40 and over. The
formula is then multiplied by the Eligible Employee's Severance Pay as
determined pursuant to Section 4.2(a) or Section 4.2(b), as
appropriate, to calculate the additional age factor allowance. This
allowance shall be added to the Eligible Employee's Severance Pay as
provided in this Section 4.2.
(d) LIMITATION ON SEVERANCE PAY. Notwithstanding anything in this Plan to
the contrary, an Eligible Employee's Severance Pay shall not exceed
two times such employee's annual compensation during the twelve-month
period immediately preceding the employee's Termination date. For
purposes of the preceding sentence, "annual compensation" shall mean
W-2 compensation the total of all compensation, including, but not
limited to, wages, salary and any other benefit of monetary value,
whether paid in the form of cash or otherwise, which was paid as
consideration for such Eligible Employee's service for an Employer
during such twelve-month period which constitute "wages" for federal
income tax purposes properly reported on the Eligible Employee's
Federal Income Tax Withholding Statement (Form W-2), or which would
have been so paid at such Eligible Employee's rate of compensation if
he or she had worked a full year.
5
<PAGE>
SECTION 4.3. PAYMENT OF SEVERANCE PAY Subject to Section 4.5., an Eligible
Employee's Severance Pay shall be paid in installments commencing as soon as
administratively practicable following the Eligible Employee's Termination.
Severance Pay installments shall be completed with the 24 months following the
Eligible Employees Termination. The installment is calculated by taking the
amount of the Eligible Employees Severance Pay and dividing it by the amount of
pay they would receive in their regular pay cycle. Severance Pay shall be
reduced by withholdings and deductions required under all applicable federal,
state and local or other laws or regulations and by other applicable reductions.
In the case of any person who while receiving Severance Pay becomes hired by an
Employer or a non-participating affiliate of an Employer, Severance Pay shall be
suspended as of the first pay period for which such person is scheduled to work.
In the case of any person who:
(a) previously terminated employment with an Employer under circumstances
entitling him or her to Severance Pay;
(b) is hired by an Employer as a regular employee during the one-year
period beginning on such person's Termination date; and
(c) becomes entitled to Severance Pay again as a result of such person's
subsequent termination of employment with an Employer.
Such Eligible Employee's Severance Pay shall be determined based on
his or her original date of hire by the Employer (adjusted for any
period of time during which such person was not employed by an
Employer) and shall be reduced by the amount of any Severance Pay
already received by such Eligible Employee. For purposes of this
paragraph "Employer" includes an Excluded Division or Facility.
In the case of any person who:
(a) previously terminated employment with an Employer under circumstances
entitling him or her to Severance Pay;
(b) is hired by an Employer as a regular employee after the one-year
period beginning on such person's Termination date; and
(c) becomes entitled to Severance Pay again as a result of such person's
subsequent termination of employment with an Employer.
Such Eligible Employee's Severance Pay shall be determined taking into
account only Months of Service since the date as of which he or she
became rehired by an Employer. For purposes of this paragraph
"Employer" includes an Excluded Division or Facility.
SECTION 4.4. SEVERANCE BENEFITS. Any Eligible Employee for whom a Termination
occurs shall receive Severance Benefits following the date of his or her
Termination as follows:
(a) VACATION. An Eligible Employee shall be paid for all unused vacation
time as of the date of Termination.
6
<PAGE>
(b) FLOATING HOLIDAYS. An Eligible Employee shall forfeit any unused
floating holidays as of the date of Termination.
(c) OTHER BENEFITS. An Eligible Employee may receive other benefits in
accordance with the provisions of the applicable benefit program.
SECTION 4.5. FORFEITURE OF SEVERANCE PAY FOR CAUSE. If, after an Eligible
Employee's Termination qualifying the Employee for Severance Pay as provided in
Section 4.2., the Employer discovers that the Eligible Employee engaged in
conduct during his or her employment with the Employer which, if previously
known to the Employer, would have provided a basis for a dismissal of the
Eligible Employee for "cause" (as defined in Section 2.1. (n)(iii)), all
installment payments of Severance Pay shall cease without prior notice to the
Eligible Employee, and the Eligible Employee shall forfeit his or her right to
further payments under the Plan.
ARTICLE V
ADMINISTRATION OF PLAN
SECTION 5.1. GENERAL. The Plan shall be administered by the Plan Administrator.
The Plan Administrator may delegate any of his or her administrative duties,
including, without limitation, duties with respect to the processing, review,
investigation, approval and payment of Severance Pay and provision of Severance
Benefits, to designated individuals or committees. The Company shall be the
"administrator" and a "named fiduciary" under the Plan for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
SECTION 5.2. REGULATIONS. The Plan Administrator shall promulgate any rules and
regulations which he or she deems necessary in order to carry out the purposes
of the Plan or to interpret the terms and conditions of the Plan; provided,
however, that no rule, regulation or interpretation shall be contrary to the
provisions of the Plan. The rules, regulations and interpretations made by the
Plan Administrator shall be final and binding on any employee or former employee
of an Employer or any successor in interest of either.
SECTION 5.3. CLAIMS PROCEDURE. The Plan Administrator shall determine the rights
of any employee or former employee of an Employer to any Severance Pay and
Severance Benefits hereunder. The Plan Administrator has the sole and absolute
power and authority to interpret and apply the provisions of this Plan to a
particular circumstance, make all factual and legal determinations, construe
uncertain or disputed terms and make eligibility and benefit determinations
(including, without limitation, determining whether a Termination under the Plan
has occurred) in such manner and to such extent as the Plan Administrator in his
or her sole discretion may determine. Any employee or former employee of an
Employer who believes that he or she is entitled to receive Severance Pay and
Severance Benefits under the Plan, including Severance Pay and Severance
Benefits other than those initially determined by the Plan Administrator, may
file a claim in writing with the Plan Administrator. No later than 90 days after
the receipt of the claim the Plan Administrator shall either allow or deny the
claim in writing.
A denial of a claim, in whole or in part, shall be written in a manner
calculated to be understood by the claimant and shall include:
(a) the specific reason or reasons for the denial;
7
<PAGE>
(b) specific reference to pertinent Plan provisions on which the denial is
based;
(c) a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
(d) an explanation of the claim review procedure.
A claimant whose claim is denied (or his or her duly authorized representative)
may within 60 days after receipt of the denial of his or her claim:
(a) request a review upon written application to the Administrative
Committee or its designee;
(b) review pertinent documents; and
(c) submit issues and comments in writing.
The Administrative Committee, or its designee, shall notify the claimant of his
or her decision on review within 60 days after receipt of a request for review
unless special circumstances require an extension of time for processing, in
which case a decision shall be rendered as soon as possible, but not later than
120 days after receipt of a request for review. Notice of the decision on review
shall be in writing. The Administrative Committee decision on review shall be
final and binding on any claimant or any successor in interest.
ARTICLE VI
AMENDMENT OR TERMINATION OF PLAN
Notwithstanding anything in the Plan to the contrary, the Company's Corporate
Vice President of Human Resources or other designated officer of the Company
shall have the right at any time, and without prior or other approval of any
employee or former employee, and without prior notice, to change, modify, amend
or terminate the Plan in any particular or particulars whatsoever. This right
shall be unlimited, even if exercised in anticipation of specific action taken
by the Company or a specific event upon which benefits would otherwise be
provided under the Plan. All such changes, modifications, amendments or
terminations may be retroactive to any date up to and including the Effective
Date of this Plan, and shall be retroactive to such Effective Date unless other
provisions are specifically made; provided, however, that no such amendment,
modification, change or termination shall adversely affect any Severance Pay or
Severance Benefit under the Plan previously paid, or payable to an Eligible
Employee following a Termination that occurred prior to such amendment,
modification, change or termination.
8
<PAGE>
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. LIMITATION ON RIGHTS. The Plan is strictly a voluntary undertaking
on the part of the Employers and shall not be deemed to constitute a contract
between any Employer and any Eligible Employee. Participation in the Plan shall
not give any Eligible Employee the right to be retained in the service of the
Employer or any rights to any benefits whatsoever, except to the extent
specifically set forth herein.
SECTION 7.2. HEADINGS. Headings of Articles and Sections in this instrument are
for convenience only, and do not constitute any part of the Plan.
SECTION 7.3. SEVERABILITY. If any provision of this Plan or the rules and
regulations made pursuant to the Plan are held to be invalid or illegal for any
reason, such illegality or invalidity shall not affect the remaining portions of
this Plan.
SECTION 7.4. GOVERNING LAW. The Plan shall be construed and enforced in
accordance with ERISA and the laws of the State of California to the extent such
laws are not preempted by ERISA.
SECTION 7.5. SUCCESSORS AND ASSIGNS. This Plan shall be binding upon and inure
to the benefit of the Employers and their successors and assigns and shall be
binding upon and inure to the benefit of an Eligible Employee and his or her
legal representatives, heirs and assigns. No rights, obligations or liabilities
of an Eligible Employee hereunder shall be assignable without the prior written
consent of the Employer. In the event of the death of an Eligible Employee after
Termination and prior to receipt of Severance Pay to which he or she is entitled
hereunder, such Severance Pay shall be paid to his or her estate.
SECTION 7.6. ADMINISTRATION: The Plan shall be administrated on a Plan Year
basis.
Executed this 1st day of April, 2000.
EDWARDS LIFESCIENCES CORPORATION
By: /s/ Robert C. Reindl
------------------------------------
Its: Corporate Vice President
-----------------------------------
Human Resources
9
<PAGE>
EXHIBIT A
EXCLUDED DIVISIONS OR FACILITIES
SPECIAL ADOPTION DATES
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM EDWARDS
LIFESCIENCES CORP. COMBINED CONDENSED BALANCE SHEET AT MARCH 31, 2000, COMBINED
CONDENSED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
COMBINED CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31,
2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001099800
<NAME> EDWARDS LIFESCIENCES CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 6
<SECURITIES> 0
<RECEIVABLES> 132
<ALLOWANCES> 0
<INVENTORY> 156
<CURRENT-ASSETS> 318
<PP&E> 205
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,381
<CURRENT-LIABILITIES> 332
<BONDS> 0
0
0
<COMMON> 58
<OTHER-SE> 625
<TOTAL-LIABILITY-AND-EQUITY> 1,381
<SALES> 226
<TOTAL-REVENUES> 226
<CGS> 118
<TOTAL-COSTS> 202
<OTHER-EXPENSES> 1
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 23
<INCOME-TAX> 6
<INCOME-CONTINUING> 17
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17
<EPS-BASIC> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>PRO FORMA EPS BASIC AND DILUTED ARE $0.14
</FN>
</TABLE>
