<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF
___
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-483
______________________________
MALLINCKRODT GROUP INC.
(Exact name of registrant as specified in its charter)
New York 36-1263901
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7733 Forsyth Boulevard
St. Louis, Missouri 63105-1820
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 314-854-5200
______________________________
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 X. No .
Applicable Only To Issuers Involved In Bankruptcy
Proceedings During The Preceding Five Years:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the distribution
of securities under a plan confirmed by a court. Yes . No .
Applicable Only To Corporate Issuers: Indicate the number of
shares outstanding of each of the issuer's classes of common stock, as
of the latest practicable date. 76,633,149 shares excluding
10,483,140 treasury shares as of April 28, 1995.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED).
The accompanying interim condensed consolidated financial statements
of Mallinckrodt Group Inc. (the Company or Mallinckrodt) do not
include all disclosures normally provided in annual financial
statements. These financial statements, which should be read in
conjunction with the consolidated financial statements contained in
Mallinckrodt's 1994 Annual Report to Shareholders, are unaudited but
include all adjustments which Mallinckrodt's management considers
necessary for a fair presentation. These adjustments consist of
normal recurring accruals except as discussed in Note 1 of the Notes
to Condensed Consolidated Financial Statements. Interim results are
not necessarily indicative of the results for the fiscal year. All
references to years are to fiscal years ended June 30 unless otherwise
stated.
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions except per share amounts)
<CAPTION>
Quarter Ended Nine Months Ended
March 31,
March 31
1995 1994
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 569.1 $ 486.7 $1,573.1 $1,397.9
Operating costs and expenses:
Cost of goods sold 313.2 257.2 867.5 750.7
Selling, administrative and
general expenses 144.2 132.6 414.3 380.2
Research and development expenses 23.5 24.0 71.3 68.3
Other operating (income) expense, net .7 .4 (3.3) (.6)
-------- -------- --------- ---------
Total operating costs and expenses 481.6 414.2 1,349.8 1,198.6
-------- -------- --------- ---------
Operating earnings 87.5 72.5 223.3 199.3
Equity in pre-tax earnings of joint
venture 6.3 4.8 16.5 11.8
Interest and other nonoperating income
(expense), net (.2) .7 (1.0) .6
Interest expense (17.6) (10.3) (41.4) (28.3)
-------- -------- --------- ---------
Earnings from continuing
operations before income taxes 76.0 67.7 197.4 183.4
Income tax provision 27.9 24.8 74.0 68.5
-------- -------- --------- ---------
Earnings from continuing operations 48.1 42.9 123.4 114.9
Loss from discontinued operations (1.1) (.6) (2.7) (2.1)
-------- -------- --------- ---------
Net earnings 47.0 42.3 120.7 112.8
Preferred stock dividends (.1) (.1) (.3) (.3)
-------- -------- --------- ---------
Available for common shareholders $ 46.9 $ 42.2 $ 120.4 $ 112.5
======== ======== ========= =========
Earnings per common share
Continuing operations $.62 $.55 $1.59 $1.48
Discontinued operations (.01) (.01) (.03) (.03)
------- -------- ------- -------
Net earnings $.61 $.54 $1.56 $1.45
======= ======== ======= =======
(See Notes to Condensed Consolidated Financial Statements on page 5.)
</TABLE>
1
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions except share and per share amounts)
<CAPTION>
March 31, June 30,
1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 87.4 $ 87.9
Trade receivables, less allowances of $13.4
at March 31 and $11.1 at June 30 410.0 343.6
Inventories 448.3 376.9
Deferred income taxes 75.7 77.6
Other current assets 56.4 46.0
--------- ---------
Total current assets 1,077.8 932.0
Investments and long-term receivables,
less allowances of $13.6 at March 31
and $13.1 at June 30 158.7 147.0
Property, plant and equipment 1,555.6 1,396.0
Accumulated depreciation (570.7) (532.8)
--------- ---------
Net property, plant and equipment 984.9 863.2
Intangible assets 523.7 489.3
Deferred income taxes 2.5 2.0
--------- ---------
Total assets $2,747.6 $2,433.5
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 225.3 $ 147.8
Accounts payable 160.4 139.4
Accrued liabilities 349.4 356.0
Income taxes payable 31.5 25.4
Deferred income taxes 2.1 2.1
--------- ---------
Total current liabilities 768.7 670.7
Long-term debt, less current maturities 591.5 522.0
Deferred income taxes 54.5 36.6
Accrued postretirement benefits 140.1 124.7
Other noncurrent liabilities and deferred credits 80.3 63.6
--------- ---------
Total liabilities 1,635.1 1,417.6
Shareholders' equity:
4 Percent cumulative preferred stock 11.0 11.0
Common stock, par value $1, authorized
300,000,000 shares; issued 87,116,289
shares as of March 31 and June 30 87.1 87.1
Capital in excess of par value 269.0 268.2
Reinvested earnings 935.8 846.4
Marketable securities valuation allowance (2.2) (1.4)
Foreign currency translation (10.0) (32.8)
Treasury stock (178.2) (162.6)
--------- ---------
Total shareholders' equity 1,112.5 1,015.9
--------- ---------
Total liabilities and shareholders' equity $2,747.6 $2,433.5
========= =========
(See Notes to Condensed Consolidated Financial Statements on page 5.)
</TABLE>
2
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
(In millions) Nine months ended March 31, 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOW - OPERATING ACTIVITIES
Net earnings $ 120.7 $112.8
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 89.4 73.0
Postretirement benefits 8.7 5.3
Undistributed equity in earnings of
joint venture (11.9) (9.0)
Deferred income taxes 19.5 7.3
Gains on disposals of assets (.8)
Other, net (20.1) (9.0)
-------- -------
205.5 180.4
Changes in noncash operating working capital:
Accounts receivable (41.3) (12.3)
Inventories (33.1) (18.2)
Accounts payable, accrued
liabilities and income taxes, net (18.6) (37.5)
Other, net (4.3) 3.3
-------- -------
Net cash provided by operating activities 108.2 115.7
CASH FLOWS - INVESTING ACTIVITIES
Capital expenditures (112.4) (122.0)
Acquisition spending (99.2) (94.6)
IFL dividend receivable 51.9
Proceeds from asset disposals 17.6 5.3
Short-term investments (1.7)
Other, net (5.5) 4.7
-------- -------
Net cash used by investing activities (199.5) (156.4)
CASH FLOWS - FINANCING ACTIVITIES
Increase (decrease) in short-term debt 55.0 (7.4)
Proceeds from long-term debt 93.0 198.2
Payments on long-term debt (15.3) (100.7)
Issuance of Mallinckrodt common stock 4.1 8.5
Acquisition of treasury stock (14.7)
Dividends paid (31.3) (28.0)
-------- -------
Net cash provided by financing activities 90.8 70.6
-------- -------
Increase (decrease) in cash and cash equivalents (.5) 29.9
Cash and cash equivalents at beginning of period 87.9 51.3
-------- -------
Cash and cash equivalents at end of period $ 87.4 $81.2
======== =======
(See Notes to Condensed Consolidated Financial Statements on page 5.)
</TABLE>
3
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
(In millions except per share amounts)
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
4 Percent cumulative preferred stock
Balance at June 30 and March 31 $ 11.0 $ 11.0
Common stock
Balance at June 30 and March 31 87.1 87.1
Capital in excess of par value
Balance at June 30 268.2 262.4
Stock options exercised .8 2.2
Restricted stock awards 1.7
--------- ---------
Balance at March 31 269.0 266.3
Reinvested earnings
Balance at June 30 846.4 780.3
Net earnings 120.7 112.8
Dividends
4 Percent cumulative preferred stock
($3.00 per share) (.3) (.3)
Common stock ($.405 per share in 1995
and $.36 per share in 1994) (31.0) (27.7)
--------- ---------
Balance at March 31 935.8 865.1
Marketable securities valuation allowance
Balance at June 30 (1.4) (2.2)
Valuation adjustment (.8) 2.2
--------- ---------
Balance at March 31 (2.2)
Foreign currency translation
Balance at June 30 (32.8) (56.4)
Translation adjustment 22.8 (2.7)
--------- ---------
Balance at March 31 (10.0) (59.1)
Treasury stock
Balance at June 30 (162.6) (171.7)
Purchase of common stock (14.7)
Stock options exercised 3.3 6.3
Restricted stock awards (4.2) 2.0
--------- ---------
Balance at March 31 (178.2) (163.4)
--------- ---------
Total shareholders' equity $1,112.5 $1,007.0
========= =========
(See Notes to Condensed Consolidated Financial Statements on page 5.)
</TABLE>
4
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Provisions for income taxes were based on estimated annual
effective tax rates for each fiscal year. The income tax
provision for the first nine months of 1994 included a favorable
adjustment of $3.0 million, or $.04 a share resulting from tax
law changes. The Company's effective tax rate for the first nine
months was 37.5 percent, compared to last year's 39.0 percent
excluding the favorable adjustment discussed above. This
decrease reflects an earnings mix toward certain foreign
countries with lower statutory tax rates and utilization of
certain tax losses.
2. Earnings per common share were based on the weighted average
number of common and common equivalent shares outstanding
(77,389,344 and 77,614,829 for the nine months ended March 31,
1995 and 1994, and 77,276,374 and 77,890,468 for the quarters
ended March 31, 1995 and 1994, respectively).
3. The components of inventory include the following as of March 31,
1995:
(In millions)
Raw materials and supplies $113.4
Work in process 101.2
Finished goods 233.7
------
$448.3
======
4. As of March 31, 1995, the Company has authorized and issued
100,000 shares, par value $100, 4 Percent cumulative preferred
stock of which 98,330 shares are outstanding. Mallinckrodt also
has authorized 1,400,000 shares, par value $1, of Series
preferred stock, none of which is outstanding.
Shares included in treasury stock were:
March 31, June 30,
1995 1994
------------ ------------
Common stock 10,520,291 10,110,056
4 Percent cumulative preferred stock 1,670 1,670
5. At March 31, 1995, common shares reserved were:
Exercise of common stock purchase rights 87,730,876
Exercise of stock options and granting
of stock awards 11,134,878
------------
Total 98,865,754
============
<TABLE>
6. Supplemental cash flow information for the nine months ended
March 31 included:
(In millions)
<CAPTION> 1995 1994
------ ------
<S> <C> <C>
Interest paid $34.7 $23.9
Income taxes paid $40.8 $29.0
Noncash investing and financing activities:
Assumption of liabilities related to acquisitions $ 1.8 $12.6
Issuance of common stock for restricted stock awards $ 3.7
</TABLE>
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
General
- -------
Earnings from continuing operations for the third quarter ended March
31, 1995 were $48 million, or 62 cents per share. Excluding a
two-cent per share tax benefit in the third quarter of fiscal 1994,
this is a 17 percent increase over the comparable 53 cents per share
for the prior year. Net sales for the quarter were up 17 percent to
$569 million, compared to $487 million last year. Net earnings for
the third quarter were $47 million, or 61 cents per share, compared
with $42 million, or 54 cents per share, during the same period a year
ago.
For the nine months, earnings from continuing operations were $123
million, or $1.59 per share. Excluding tax benefits totaling 4 cents
per share from last year's first and third quarters, this is a 10
percent increase over the comparable $1.44 per share for the first
nine months of fiscal 1994. Net sales for the nine months were up 13
percent to $1.6 billion, compared to $1.4 billion last year. Net
earnings for the nine months were $121 million, or $1.56 per share,
compared with $113 million, or $1.45 per share, last year.
<TABLE>
A comparison of sales and operating earnings follows:
(In millions)
<CAPTION>
Quarter Ended Nine Months Ended
March 31, March 31,
1995 1994 1995 1994
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales
- -----
Mallinckrodt Chemical $159 $111 $ 392 $ 315
Mallinckrodt Medical 256 223 726 649
Mallinckrodt Veterinary 155 153 456 434
Intersegment sales (1) (1)
----- ----- ------- ------
$569 $487 $1,573 $1,398
===== ===== ======= ======
Operating earnings
- ------------------
Mallinckrodt Chemical $ 20 $ 18 $ 42 $ 37
Mallinckrodt Medical 58 47 160 141
Mallinckrodt Veterinary 16 15 41 42
Corporate (7) (8) (20) (21)
----- ----- ------- -------
$ 87 $ 72 $ 223 $ 199
===== ===== ======= =======
</TABLE>
Business Segments
- -----------------
Registered trademarks are indicated by an asterisk.
<TABLE>
<CAPTION>
MALLINCKRODT CHEMICAL
Net Sales
(In millions)
Quarter Ended Nine Months Ended
March 31, March 31,
1995 1994 1995 1994
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pharmaceutical Specialties $ 73 $ 59 $186 $170
Catalyst, Performance &
Lab Chemicals 86 52 206 145
---- ---- ---- ----
$159 $111 $392 $315
==== ==== ==== ====
</TABLE>
Mallinckrodt Chemical achieved earnings of $26.6 million for the third
quarter and $58.6 million for the nine months ended March 31, 1995,
representing increases of 19 percent and 20 percent, respectively,
over the prior year. These results include the equity-investment
share of earnings from Tastemaker, the flavors joint venture, of $6.3
million and $16.5 million for the quarter and nine months,
respectively. Net sales increased 43 percent and 24 percent compared
to the corresponding prior year quarter and nine months, respectively.
Pharmaceutical specialties sales increased 22
6
<PAGE>
percent for the quarter and 9 percent for the first nine months.
Continued strength in worldwide sales volume for medicinal narcotics
was the main contributor to the increases. Catalysts, performance and
lab chemicals sales improved 67 percent and 42 percent for the quarter
and nine months, respectively. Results benefited from the
acquisitions of J.T. Baker Inc. in 1995 and Catalyst Resources, Inc. in
1994, and the reclassification of a small specialty chemical business
to continuing operations.
<TABLE>
<CAPTION>
MALLINCKRODT MEDICAL
Net Sales
(In millions)
Quarter Ended Nine Months Ended
March 31, March 31,
1995 1994 1995 1994
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Imaging $119 $105 $349 $308
Anesthesiology & Critical Care 82 72 228 206
Nuclear Medicine 55 46 149 135
---- ---- ---- ----
$256 $223 $726 $649
==== ==== ==== ====
</TABLE>
Mallinckrodt Medical's operating earnings increased 22 percent for the
quarter, compared to last year, to $57.6 million and 13 percent for
the nine months to $159.9 million. Net sales improved 15 percent
and 12 percent for the same periods. Imaging sales for both the
quarter and nine months increased 13 percent, benefiting principally
from higher worldwide sales volume of the x-ray contrast medium
Optiray*. Anesthesiology and critical care sales were up 15 percent
and 11 percent for the quarter and nine months, respectively, boosted
by the 1994 acquisition of DAR S.p.A., higher tracheostomy tube sales
volume in Europe and Japan and increased sales volume of hemoglobin
and glucose testing products in the U.S. and Europe. Nuclear medicine
sales increased 17 percent for the quarter and 10 percent for the nine
months compared to last year. Higher U.S. sales reflected increased
TechneScan MAG3* volume and the introduction of OctreoScan*, while
Europe experienced broad based volume improvement.
<TABLE>
<CAPTION>
MALLINCKRODT VETERINARY
Net Sales
(In millions)
Quarter Ended Nine Months Ended
March 31, March 31,
1995 1994 1995 1994
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pharmaceuticals $ 65 $ 62 $192 $179
Biologicals 28 27 74 69
Feed Ingredients 40 41 124 123
Veterinary Specialties & Other 22 23 66 63
---- ---- ---- ----
$155 $153 $456 $434
==== ==== ==== ====
</TABLE>
Mallinckrodt Veterinary's third quarter operating earnings improved by
8 percent and net sales were up slightly compared to the same period
last year. Operating earnings for the nine months were flat, while
net sales were 5 percent higher. Currency favorably impacted
comparative results for both periods. Pharmaceutical sales increased
6 percent and 8 percent for the quarter and nine months, respectively,
compared to the same periods a year ago, from higher parasiticide and
antimicrobial sales volume. Biologicals sales improved 3 percent and
7 percent for the same periods, principally in Europe. Feed ingredients
sales decreased 3 percent for the quarter and were flat for the nine months.
Veterinary specialties sales decreased 4 percent for the quarter, but were 5
percent higher for the nine months. Results for the quarter were
adversely influenced by the exit of a non-strategic business.
7
<PAGE>
Corporate Matters
- -----------------
Corporate expense decreased $.8 million and $.9 million
for the third quarter and nine months, respectively, compared to last
year. These favorable variances reflected last year's corporate
headquarters' reorganization. The Company's effective tax
rate for the first nine months was 37.5 percent, compared to last
year's 39.0 percent excluding the favorable adjustments previously
discussed. This decrease reflects an earnings mix toward certain
foreign countries with lower statutory tax rates and the utilization
of certain tax losses.
FINANCIAL CONDITION
The Company's financial resources are expected to continue to be
adequate to support existing businesses and fund new opportunities.
Since June 30, 1994, cash and cash equivalents decreased $.5 million.
Operations provided $108.2 million of cash, while acquisition and
capital spending totaled $211.6 million. The Company's current ratio
at March 31, 1995, was 1.4. Debt as a percentage of invested capital
was 42.3 percent.
As of March 31, 1995, the Company had the authority to repurchase
approximately 13 million shares of its common stock under an
outstanding Board of Directors resolution.
The Company has a $450 million private-placement commercial paper
program. This program is backed by $550 million of U.S. lines of
credit available until November 1999. At March 31, 1995, commercial
paper borrowings amounted to $257.7 million. There were no
outstanding borrowings under the the U.S. lines of credit at March 31,
1995. At March 31, 1995 non-U.S. lines of credit totaling $277.2
million were also available and borrowings under these lines amounted
to $49.8 million. The non-U.S. lines are cancelable at any time.
Estimated capital spending for the year ending June 30, 1995, is
approximately $200 million.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the previously reported matter involving a former drum recycling
facility in Auburn Hills, Michigan, the State of Michigan has made its
Remedial Investigation and Feasibility Study for the site available
for public comment. The remedy for the site will not become final
until the comment period ends. It remains impossible to estimate the
cleanup costs for this site.
The previously reported matter involving claims asserted by the
Whitehall Township Authority ("WTA") against Trimet Technical
Products, Inc., a subsidiary of the Company, has been settled. Trimet
has agreed to make total settlement payments to WTA of approximately
$676,500. Trimet also remains responsible for a groundwater
remediation project at the site. The Company does not believe that
future remediation costs will have a material adverse effect on its
financial condition or the results of the Company's operations. The
Company does not anticipate making any further reports on this matter.
Except as described above, there have not been any material
developments in the legal proceedings previously reported in the
Company's Annual Report on Form 10-K for the fiscal year ended June
30,1994, as supplemented by the Company's Quarterly Reports on Form
10-Q for the periods ended September 30, 1994 and December 31, 1994.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
8
<PAGE>
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
4.1 Indenture dated as of March 15, 1985 as amended and restated
as of February 15, 1995 between Mallinckrodt and First Trust of
New York, National Association. Incorporated herein by reference to
Exhibit 4.1 to Form S-3 Registration Statement No. 33-57821.
10.1 Credit Agreement dated March 16, 1995 between Coopers Animal
Health Inc. with Mallinckrodt as Guarantor and Morgan Guaranty Trust
Company of New York, as Agent ($100 million facility).
11.1 Primary earnings per share computation for the nine months
ended March 31, 1995 and 1994.
11.2 Fully diluted earnings per share computation for the nine
months ended March 31, 1995 and 1994.
11.3 Primary earnings per share computation for the quarters
ended March 31, 1995 and 1994.
11.4 Fully diluted earnings per share computation for the
quarters ended March 31, 1995 and 1994.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
During the quarter and through the date of this report, the
following reports on Form 8-K were filed.
- Report dated January 4, 1995, under Item 5 regarding the
purchase by Mallinckrodt Chemical of J.T. Baker Inc.
- Report dated March 1, 1995, under Item 5 regarding the
completion of the purchase by Mallinckrodt Chemical of
J.T. Baker Inc.
* * * * * * * * * * * * * * * *
9
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
Mallinckrodt Group Inc.
------------------------------
Registrant
By: MICHAEL A. ROCCA By: WILLIAM B. STONE
------------------------- -----------------------------
Michael A. Rocca William B. Stone
Senior Vice President and Vice President and Controller
Chief Financial Officer
Date: May 11, 1995
10
<PAGE>
<TABLE>
Exhibit 11.1
EARNINGS PER SHARE
PRIMARY COMPUTATION
($ in millions except share and per share amounts)
<CAPTION>
Nine Months Ended
March 31,
1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
Basis for computation of earnings per
common and common equivalent shares:
Earnings from continuing operations $ 123.4 $ 114.9
Deduct dividends on 4 Percent
cumulative preferred stock (.3) (.3)
-------- --------
Earnings from continuing operations
available to common shareholders 123.1 114.6
Loss from discontinued operations (2.7) (2.1)
-------- --------
Available for common shareholders $ 120.4 $ 112.5
======== ========
Number of shares:
Weighted average shares outstanding 76,681,341 76,750,855
Shares issuable upon exercise of
stock options, net of shares assumed
to be repurchased 708,003 863,974
---------- ----------
77,389,344 77,614,829
========== ==========
Earnings per common share:
Continuing operations $1.59 $1.48
Discontinued operations (.03) (.03)
------ ------
Net earnings $1.56 $1.45
====== ======
</TABLE>
<PAGE>
<TABLE>
Exhibit 11.2
EARNINGS PER SHARE
FULLY DILUTED COMPUTATION
($ in millions except share and per share amounts)
<CAPTION>
Nine Months Ended
March 31
1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
Basis for computation of earnings per
common and common equivalent shares:
Earnings from continuing operations $ 123.4 $ 114.9
Deduct dividends on 4 Percent
cumulative preferred stock (.3) (.3)
-------- --------
Earnings from continuing operations
available to common shareholders 123.1 114.6
Loss from discontinued operations (2.7) (2.1)
-------- --------
Available for common shareholders $ 120.4 $ 112.5
======== ========
Number of shares:
Weighted average shares outstanding 76,681,341 76,750,855
Shares issuable upon exercise of
stock options, net of shares
assumed to be repurchased 961,800 1,039,980
---------- ----------
76,643,141 77,790,835
========== ==========
Earnings per common share:
Continuing operations $1.59 $ 1.48
Discontinued operations (.04) (.03)
------ -------
Net earnings $1.55 $ 1.45
====== =======
</TABLE>
<PAGE>
<TABLE>
Exhibit 11.3
EARNINGS PER SHARE
PRIMARY COMPUTATION
($ in millions except share and per share amounts)
<CAPTION>
Quarter Ended
March 31,
1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
Basis for computation of earnings per
common and common equivalent shares:
Earnings from continuing operations $ 48.1 $ 42.9
Deduct dividends on 4 Percent
cumulative preferred stock (.1) (.1)
-------- --------
Earnings from continuing operations
available to common shareholders 48.0 42.8
Loss from discontinued operations (1.1) (.6)
-------- --------
Available for common shareholders $ 46.9 $ 42.2
======== ========
Number of shares:
Weighted average shares outstanding 76,528,138 76,909,643
Shares issuable upon exercise of
stock options, net of shares
assumed to be repurchased 748,236 980,825
---------- ----------
77,276,374 77,890,468
========== ==========
Earnings per common share:
Continuing operations $ .62 $ .55
Discontinued operations (.01) (.01)
------- -------
Net earnings $ .61 $ .54
======= =======
</TABLE>
<PAGE>
<TABLE>
Exhibit 11.4
EARNINGS PER SHARE
FULLY DILUTED COMPUTATION
($ in millions except share and per share amounts)
<CAPTION>
Quarter Ended
March 31,
1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
Basis for computation of earnings per
common and common equivalent shares:
Earnings from continuing operations $ 48.1 $ 42.9
Deduct dividends on 4 Percent
cumulative preferred stock (.1) (.1)
------- -------
Earnings from continuing operations
available to common shareholders 48.0 42.8
Loss from discontinued operations (1.1) (.6)
------- --------
Available for common shareholders $ 46.9 $ 42.2
Number of shares:
Weighted average shares outstanding 76,528,138 76,909,643
Shares issuable upon exercise of
stock options, net of shares
assumed to be repurchased 961,800 1,039,980
---------- ----------
77,489,938 77,949,623
========== ==========
Earnings per common share:
Continuing operations $ .62 $ .55
Discontinued operations (.01) (.01)
------ ------
Net earnings $ .61 $ .54
====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schdule contains summary information extracted from the balance
sheet and income statement, and is qualified in its entirety by
reference to such financial schedules.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 87
<SECURITIES> 0
<RECEIVABLES> 423
<ALLOWANCES> 13
<INVENTORY> 448
<CURRENT-ASSETS> 1,078
<PP&E> 1,556
<DEPRECIATION> 571
<TOTAL-ASSETS> 2,748
<CURRENT-LIABILITIES> 769
<BONDS> 592
<COMMON> 87
0
11
<OTHER-SE> 1,014
<TOTAL-LIABILITY-AND-EQUITY> 2,748
<SALES> 1,573
<TOTAL-REVENUES> 1,573
<CGS> 868
<TOTAL-COSTS> 1,350
<OTHER-EXPENSES> 1
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 41
<INCOME-PRETAX> 197
<INCOME-TAX> 74
<INCOME-CONTINUING> 123
<DISCONTINUED> (3)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 120
<EPS-PRIMARY> 1.56
<EPS-DILUTED> 1.55
</TABLE>
<PAGE>
EXHIBIT 10.1
[CONFORMED COPY]
$100,000,000
CREDIT AGREEMENT
dated as of
March 16, 1995
among
Coopers Animal Health Inc.
Mallinckrodt Group Inc.,
as Guarantor
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE>
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached, but is inserted for convenience of reference only.
Page
----
ARTICLE 1
DEFINITIONS
1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Accounting Terms and Determinations. . . . . . . . . . . . 13
1.3. Types of Borrowings. . . . . . . . . . . . . . . . . . . . 14
ARTICLE 2
THE CREDITS
2.1. Commitments to Lend. . . . . . . . . . . . . . . . . . . 14
2.2. Notice of Committed Borrowing. . . . . . . . . . . . . . 14
2.3. Money Market Borrowings. . . . . . . . . . . . . . . . . 15
2.4. Notice to Banks; Funding of Loans. . . . . . . . . . . . 18
2.5. Notes. . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.6. Maturity of Loans. . . . . . . . . . . . . . . . . . . . 20
2.7. Interest Rates . . . . . . . . . . . . . . . . . . . . . 20
2.8. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.9. Optional Termination or Reduction of Commitments . . . . 23
2.10. Method of Electing Interest Rates. . . . . . . . . . . . 23
2.11. Scheduled Termination of Commitments . . . . . . . . . . 25
2.12. Optional Prepayments . . . . . . . . . . . . . . . . . . 25
2.13. General Provisions as to Payments. . . . . . . . . . . . 26
2.14. Funding Losses . . . . . . . . . . . . . . . . . . . . . 26
2.15. Computation of Interest and Fees . . . . . . . . . . . . 27
2.16. Regulation D Compensation. . . . . . . . . . . . . . . . 27
ARTICLE 3
CONDITIONS
3.1. Closing. . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2. Borrowings . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Existence. . . . . . . . . . . . . . . . . . . 28
4.2. Financial Condition. . . . . . . . . . . . . . . . . . . 29
4.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . 29
4.4. No Breach. . . . . . . . . . . . . . . . . . . . . . . . 29
4.5. Action . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.6. Approvals. . . . . . . . . . . . . . . . . . . . . . . . 30
4.7. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.8. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.9. Investment Company Act . . . . . . . . . . . . . . . . . 31
4.10. Public Utility Holding Company Act . . . . . . . . . . . 31
4.11. True and Complete Disclosure . . . . . . . . . . . . . . 31
4.12. Environmental Matters. . . . . . . . . . . . . . . . . . 31
i
<PAGE>
Page
----
ARTICLE 5
COVENANTS
5.1. Financial Statements, Etc. . . . . . . . . . . . . . . . 32
5.2. Litigation . . . . . . . . . . . . . . . . . . . . . . . 34
5.3. Existence, Etc.. . . . . . . . . . . . . . . . . . . . . 34
5.4. Insurance. . . . . . . . . . . . . . . . . . . . . . . . 35
5.5. Limitation on Liens. . . . . . . . . . . . . . . . . . . 35
5.6. Mergers, Etc.. . . . . . . . . . . . . . . . . . . . . . 37
5.7. Change in Nature of Business . . . . . . . . . . . . . . 38
5.8. Total Debt to Total Capital Ratio. . . . . . . . . . . . 38
5.9. Indebtedness of Subsidiaries . . . . . . . . . . . . . . 38
5.10. Transactions with Affiliates . . . . . . . . . . . . . . 38
5.11. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . 38
5.12. Environmental Laws . . . . . . . . . . . . . . . . . . . 39
5.13. Most Favored Lender. . . . . . . . . . . . . . . . . . . 39
ARTICLE 6
DEFAULTS
6.1. Events of Default. . . . . . . . . . . . . . . . . . . . 40
6.2. Notice of Default. . . . . . . . . . . . . . . . . . . . 42
ARTICLE 7
THE AGENT AND THE CO-AGENT
7.1. Appointment and Authorization. . . . . . . . . . . . . . 43
7.2. Agent and Affiliates . . . . . . . . . . . . . . . . . . 43
7.4. Consultation with Experts. . . . . . . . . . . . . . . . 43
7.5. Liability of Agent . . . . . . . . . . . . . . . . . . . 43
7.6. Indemnification. . . . . . . . . . . . . . . . . . . . . 44
7.7. Credit Decision. . . . . . . . . . . . . . . . . . . . . 44
7.8. Successor Agent. . . . . . . . . . . . . . . . . . . . . 44
7.9. Agent's Fees . . . . . . . . . . . . . . . . . . . . . . 44
7.10. Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1. Basis for Determining Interest Rate Inadequate or Unfair 45
8.2. Illegality . . . . . . . . . . . . . . . . . . . . . . . 45
8.3. Increased Cost and Reduced Return. . . . . . . . . . . . 46
8.4. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.5. Base Rate Loans Substituted for Affected Fixed Rate
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.6. Substitution of Bank . . . . . . . . . . . . . . . . . . 50
ii
<PAGE>
Page
----
ARTICLE 9
GUARANTY
9.1 The Guaranty . . . . . . . . . . . . . . . . . . . . . . 50
9.2 Guaranty Unconditiional . . . . . . . . . . . . . . . . 50
9.3 Discharge Only Upon Payment in Full;
Reinstatement in Certain Circumstances . . . . . . . . 51
9.4 Waiver by the Guarantor . . . . . . . . . . . . . . . . 51
9.5 Subrogation . . . . . . . . . . . . . . . . . . . . . . 51
9.6 Stay of Acceleration . . . . . . . . . . . . . . . . . . 51
ARTICLE 10
MISCELLANEOUS
10.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 52
10.2. No Waivers . . . . . . . . . . . . . . . . . . . . . . . 52
10.3. Expenses; Indemnification. . . . . . . . . . . . . . . . 52
10.4. Sharing of Set-Offs. . . . . . . . . . . . . . . . . . . 53
10.5. Amendments and Waivers . . . . . . . . . . . . . . . . . 53
10.6. Successors and Assigns . . . . . . . . . . . . . . . . . 53
10.7. Collateral . . . . . . . . . . . . . . . . . . . . . . . 55
10.8. Governing Law; Submission to Jurisdiction. . . . . . . . 55
10.9. Counterparts; Integration; Effectiveness . . . . . . . . 55
10.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . 56
10.11. Confidentiality. . . . . . . . . . . . . . . . . . . . . 56
PRICING SCHEDULE
EXHIBIT A - Note. . . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT B - Money Market Quote Request. . . . . . . . . . . . . 1
EXHIBIT C - Invitation for Money Market Quotes. . . . . . . . . 1
EXHIBIT D - Money Market Quote. . . . . . . . . . . . . . . . . 1
EXHIBIT E - Opinion of Counsel for the Borrower . . . . . . . . 1
EXHIBIT F - Opinion of Special Counsel for the Agent. . . . . . 1
EXHIBIT G - Assignment and Assumption Agreement . . . . . . . . 1
iii
<PAGE>
CREDIT AGREEMENT
AGREEMENT dated as of March 16, 1995 among COOPERS ANIMAL HEALTH
INC., MALLINCKRODT GROUP INC., as Guarantor, the BANKS party hereto from
time to time, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used
herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section
2.3.
"Adjusted CD Rate" has the meaning set forth in Section
2.7(b).
"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire in the form prepared by the
Agent and submitted to the Agent (with a copy to the Borrower) duly
completed by such Bank.
"Affiliate" means any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the
Guarantor and, if such Person is an individual, any member of the
immediate family (including parents, spouse, children and siblings) of
such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any
Person who is controlled by any such member or trust. As used in this
definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise), provided that, in any event, any Person that owns directly
or indirectly securities having 15% or more of the voting power for
the election of directors or other governing body of a corporation or
15% or more of the partnership or other ownership interests of any
other Person (other than as a limited partner of such other Person)
will be deemed to control such corporation or other Person.
Notwithstanding the foregoing, (a) no individual shall be an Affiliate
solely by reason of his or her being a director, officer or employee
of the Guarantor or any of its Subsidiaries and (b) none of the
Subsidiaries of the Guarantor shall be Affiliates.
4
<PAGE>
"Agent" means Morgan Guaranty Trust Company of New York, in
its capacity as agent for the Banks hereunder, and its successors in
such capacity.
"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Domestic Loans, its Domestic Lending Office,
(ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending
Office and (iii) in the case of its Money Market Loans, its Money
Market Lending Office.
"Assessment Rate" has the meaning set forth in Section
2.7(b).
"Assignee" has the meaning set forth in Section 10.6(c).
"Bank" means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 10.6(c), and
their respective successors.
"Bankruptcy Code" means the Federal Bankruptcy Code of 1978,
as amended from time to time.
"Base Rate" means, for any day, a rate per annum equal to
the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2
of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Committed Loan which bears
interest at the Base Rate pursuant to the applicable Notice of
Committed Borrowing or Notice of Interest Rate Election or the
provisions of Article 8 or (ii) an overdue amount which was a Base
Rate Loan immediately before it became overdue.
"Borrower" means Coopers Animal Health Inc., a Delaware
corporation, and its successors.
"Borrowing" has the meaning set forth in Section 1.3.
"Capital Lease Obligations" means, for any Person, all
obligations of such Person to pay rent or other amounts under a lease
of (or other agreement conveying the right to use) Property to the
extent such obligations are required to be classified and accounted
for as a capital lease on a balance sheet of such Person under GAAP
(including Statement of Financial Accounting Standards No. 13 of the
Financial Accounting Standards Board), and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP (including such
Statement No. 13) (and including, without limitation in the case of
the Guarantor, the $41,000,000 (at the Effective Date) capital lease
between IMC Fertilizer Group, Inc. and American Cyanamid relating to
property located in Brewster, Florida).
2
<PAGE>
"CD Base Rate" has the meaning set forth in Section 2.7(b).
"CD Loan" means (i) a Committed Loan which bears interest at
a CD Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election or (ii) an overdue amount which was a
CD Loan immediately before it became overdue.
"CD Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
"CD Rate" means a rate of interest determined pursuant to
Section 2.7(b) on the basis of an Adjusted CD Rate.
"CD Reference Banks" means The Chase Manhattan Bank N.A.,
The First National Bank of Chicago and Morgan Guaranty Trust Company
of New York.
"Closing Date" means the date on or after the Effective Date
on which the Agent shall have received the documents specified in or
pursuant to Section 3.1.
"Co-Agent" means The Chase Manhattan Bank N.A., in its
capacity as co-agent hereunder.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment" means, with respect to each Bank listed on the
signature pages hereof, the amount set forth opposite the name of such
Bank on the signature pages hereof, and with respect to any Bank which
becomes a party to this Agreement pursuant to Section 10.6(c), the
amount of the Commitment thereby assumed by such Bank, in each case as
such amount may be reduced from time to time pursuant to Sections 2.9
and 10.6(c) or increased pursuant to Section 10.6(c).
"Committed Loan" means a loan made by a Bank pursuant to
Section 2.1; provided that, if any such loan or loans (or portions
thereof) are combined or subdivided pursuant to a Notice of Interest
Rate Election, the term "Committed Loan" shall refer to the combined
principal amount resulting from such combination or to each of the
separate principal amounts resulting from such subdivision, as the
case may be.
"Consolidated Net Worth" means, as at any date, the sum, for
the Guarantor and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following:
(a) the amount of capital stock, plus
(b) the amount of capital in excess of par value, plus
3
<PAGE>
(c) the amount of reinvested earnings (or in the case of a
reinvested earnings deficit, minus the amount of such deficit), minus
(d) the cost of treasury stock.
"Covenant" means, with respect to any agreement or
instrument representing or governing Indebtedness, any covenant
(whether expressed as a covenant or an event of default) contained
therein.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time
or both would, unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all
obligations of such Person in respect of any rate swap transaction,
basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or
any other similar transaction (including any option with respect to
any of the foregoing transactions) or any combination of the foregoing
transactions.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic
Lending Office) or such other office as such Bank may hereafter
designate as its Domestic Lending Office by notice to the Borrower and
the Agent; provided that any Bank may so designate separate Domestic
Lending Offices for its Base Rate Loans, on the one hand, and its CD
Loans, on the other hand, in which case all references herein to the
Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.7(b).
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 10.9.
"Environmental Claim" means, with respect to any Person, (a)
any written or oral notice, claim, demand or other communication
(collectively, a "claim") by any other Person alleging or asserting
4
<PAGE>
such Person's liability for investigatory costs, cleanup costs,
governmental response costs, damages to natural resources or other
Property, personal injuries, fines or penalties arising out of, based
on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not
owned by such Person, or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, without limitation, any claim by any
governmental authority for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable
Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief resulting from the presence of Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the environment.
"Environmental Laws" means any and all present and future
Federal, state, local and foreign laws, rules or regulations, and any
orders or decrees, in each case as now or hereafter in effect,
relating to the regulation or protection of human health, safety or
the environment or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes into the indoor or outdoor environment,
including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Affiliate" means any corporation or trade or business
that is a member of any group of organizations (i) described in
Section 414(b) or (c) of the Code of which the Guarantor is a member
and (ii) solely for purposes of potential liability under Section
302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien
created under Section 302(f) of ERISA and Section 412(n) of the Code,
described in Section 414(m) or (o) of the Code of which the Guarantor
is a member.
"Euro-Dollar Business Day" means any Domestic Business Day
on which commercial banks are open for international business
(including dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or such other office,
branch or affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Borrower and the Agent.
5
<PAGE>
"Euro-Dollar Loan" means (i) a Committed Loan which bears
interest at a Euro-Dollar Rate pursuant to the applicable Notice of
Committed Borrowing or Notice of Interest Rate Election or (ii) an
overdue amount which was a Euro-Dollar Loan immediately before it
became overdue.
"Euro-Dollar Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined
pursuant to Section 2.7(c) on the basis of a London Interbank Offered
Rate.
"Euro-Dollar Reference Banks" means the principal London
offices of The Chase Manhattan Bank N.A., The First National Bank of
Chicago and Morgan Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement for a
member bank of the Federal Reserve System in New York City with
deposits exceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of liabilities which
includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States
office of any Bank to United States residents).
"Event of Default" has the meaning set forth in Section 6.1.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Domestic Business Day next succeeding such
day, provided that (i) if such day is not a Domestic Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no
such rate is so published on such next succeeding Domestic Business
Day, the Federal Funds Rate for such day shall be the average rate
quoted to Morgan Guaranty Trust Company of New York on such day on
such transactions as determined by the Agent.
6
<PAGE>
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or
Money Market Loans (excluding Money Market LIBOR Loans bearing
interest at the Base Rate pursuant to Section 8.1) or any combination
of the foregoing.
"GAAP" means generally accepted accounting principles
applied on a basis consistent with those which, in accordance with
Section 1.2 hereof, are to be used in making the calculations for
purposes of determining compliance with this Agreement.
"Group of Loans" means at any time a group of Loans
consisting of (i) all Committed Loans which are Base Rate Loans at
such time, (ii) all Euro-Dollar Loans having the same Interest Period
at such time or (iii) all CD Loans having the same interest period at
such time, provided that, if a Committed Loan of any particular Bank
is converted to or made as a Base Rate Loan pursuant to Section 8.2 or
8.5, such Loan shall be included in the same Group or Groups of Loans
from time to time as it would have been in if it had not been so
converted or made.
"Guarantee" means a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or
maintenance of, or otherwise directly or indirectly to be or become
contingently liable under or with respect to, the Indebtedness of any
Person, but excluding endorsements for collection or deposit in the
ordinary course of business. The terms "Guarantee" and "Guaranteed"
used as a verb shall have a correlative meaning.
"Guarantor" means Mallinckrodt Group Inc., a New York
corporation, and its successors.
"Hazardous Material" means collectively, (a) any petroleum
or petroleum products, flammable explosives, radioactive materials,
asbestos in any form that is or could become friable, urea
formaldehyde foam insulation, and transformers or other equipment that
contain dielectric fluid containing polychlorinated biphenyls (PCB's),
(b) any chemicals or other materials or substances which are now or
hereafter become defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words
of similar import under any Environmental Law and (c) any other
chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental
Law.
"Indebtedness" means, for any Person: (a) obligations
created, issued or incurred by such Person for borrowed money (whether
by loan, the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such
7
<PAGE>
Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of Property, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade
accounts payable are payable within one year of the date the
respective goods are delivered; (c) Indebtedness of others secured by
a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d)
obligations of such Person under any contract for the purchase of
materials, supplies or other Property or the rendering of services if
such contract (or any related document) requires that payment for such
materials, supplies or other Property or services shall be made
regardless of whether or not delivery of such materials, supplies or
other Property is ever made or tendered or such services are ever
rendered; (e) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and
other financial institutions for account of such Person (other than
commercial documentary letters of credit); (f) Capital Lease
Obligations of such Person; and (g) Indebtedness of others Guaranteed
by such Person; provided, that Indebtedness of the Guarantor and its
Subsidiaries shall not include obligations of the Guarantor and its
Subsidiaries in respect of (i) contingent (as opposed to matured)
obligations under the Guarantor's $100,000,000 "rabbi trust" letters of
credit (provided, however, that contingent obligations under the
Guarantor's "rabbi trust" letters of credit in excess of $100,000,000
shall be Indebtedness of the Guarantor); (ii) matured obligations under
the Guarantor's $100,000,000 "rabbi trust" letters of credit in respect
of drawings thereunder not in excess of $100,000,000 that are repaid
within one day of such drawing; and (iii) unfunded liabilities of the
Guarantor in respect of postretirement health and welfare benefits
under Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 106 ("Employers' Accounting for
Postretirement Benefits Other Than Pensions") not in excess of
$96,000,000 in the aggregate.
"Indemnitee" has the meaning set forth in Section 10.3(b).
"Interest Period" means: (1) with respect to each Euro-
Dollar Loan, the period commencing on the date of borrowing specified
in the applicable Notice of Borrowing or on the date specified in the
applicable Notice of Interest Rate Election and ending one, two, three
or six months thereafter, as the Borrower may elect in the applicable
notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
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Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(2) with respect to each CD Loan, the period commencing on the date
of borrowing specified in the applicable Notice of Borrowing or on the
date specified in the applicable Notice of Interest Rate Election and
ending 30, 60, 90 or 180 days thereafter, as the Borrower may elect in
the applicable notice; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise
end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(3) with respect to each Money Market LIBOR Loan, the period
commencing on the date of borrowing specified in the applicable Notice
of Borrowing and ending such whole number of months thereafter (but
not less than 1 month) as the Borrower may elect in accordance with
Section 2.3; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Dollar Business Day of a
calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date; and
(4) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of borrowing specified in the applicable Notice
of Borrowing and ending such number of days thereafter (but not less
than 7 days) as the Borrower may elect in accordance with Section 2.3;
provided that:
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(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank
Offered Rate pursuant to Section 2.3.
"Lien" means, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such Property. For purposes of this Agreement, a Person
shall be deemed to own subject to a Lien any Property that it has
acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement (other than an operating lease) relating to such Property.
"Loan" means a Domestic Loan, a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans, Euro-Dollar Loans or
Money Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.7(c).
"Margin Stock" means "margin stock" within the meaning of
Regulations U and X.
"Material Adverse Effect" means a material adverse effect on
(a) the financial condition, operations or business taken as a whole
of the Guarantor and its Subsidiaries, (b) the ability of the Borrower or
the Guarantor to perform its respective obligations hereunder and under the
Notes, (c) the validity or enforceability of this Agreement or of the Notes
or (d) the rights and remedies of the Banks and the Agent hereunder and
under the Notes.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.3(d).
"Money Market Absolute Rate Loan" means a loan to be made by
a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Money Market Lending
Office by notice to the Borrower and the Agent; provided that any Bank
may from time to time by notice to the Borrower and the Agent
designate separate Money Market Lending Offices for its Money Market
LIBOR Loans, on the one hand, and its Money Market Absolute Rate
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on the other hand, in which case all references herein to the
Money Market Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at
the Base Rate pursuant to Section 8.1).
"Money Market Loan" means a Money Market LIBOR Loan or a
Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section
2.3(d)(ii)(C).
"Money Market Quote" means an offer by a Bank to make a
Money Market Loan in accordance with Section 2.3.
"Multiemployer Plan" means a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been made
by the Guarantor or any ERISA Affiliate and which is covered by Title
IV of ERISA.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing the
obligation of the Borrower to repay the Loans, and "Note" means any
one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing
(as defined in Section 2.2) or a Notice of Money Market Borrowing (as
defined in Section 2.3(f)).
"Notice of Interest Rate Election" has the meaning set forth
in Section 2.10.
"Operating Lease Amount" means, at any time, an amount equal
to eight times the amount by which (i) the minimum rental commitments
under non-cancelable operating leases of the Guarantor and its
Subsidiaries for the fiscal year of the Guarantor and its Subsidiaries
following the most recent fiscal year for which audited financial
statements are available at such time, as reflected in the notes to
such financial statements, exceed (ii) $50,000,000.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 10.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
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"Person" means an individual, a corporation, a partnership,
an association, a trust or any other entity or organization, including
a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means an employee benefit or other plan established
or maintained by the Guarantor or any ERISA Affiliate and that is
covered by Title IV of ERISA, other than a Multiemployer Plan.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly announced
by Morgan Guaranty Trust Company of New York in New York City from
time to time as its Prime Rate.
"Property" means any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Quarterly Date" means the last day of March, June,
September and December in each year, the first of which shall be the
first such day after the date of this Agreement; provided that if any
such day is not a Euro-Dollar Business Day, then such Quarterly Date
shall be the next succeeding Euro-Dollar Business Day (unless such
Euro-Dollar Business Day falls in a subsequent calendar month, in
which event such Quarterly Date shall be the next preceding Euro-
Dollar Business Day).
"Reference Banks" means the CD Reference Banks or the
Euro-Dollar Reference Banks, as the context may require, and
"Reference Bank" means any one of such Reference Banks.
"Regulations U and X" mean, respectively, Regulations U and
X of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment, including,
without limitation, the movement of Hazardous Materials through
ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata.
"Required Banks" means at any time Banks having at least 51%
of the aggregate amount of the Commitments or, if the Commitments
shall have been terminated, holding Notes evidencing at least 51% of
the aggregate unpaid principal amount of the Loans.
"Revolving Credit Period" means the period from and
including the Effective Date to and excluding the Termination Date.
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"Subsidiary" means, as to any Person, any corporation,
partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof
ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions of such corporation,
partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or
classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such Person
and one or more Subsidiaries of such Person; unless otherwise
specified, "Subsidiary" means a Subsidiary of the Guarantor.
"Termination Date" means March 15, 1996, or, if such day
is not a Euro-Dollar Business Day, the next preceding Euro-Dollar
Business Day.
"Total Capital" means, at any time, Consolidated Net Worth
plus Total Debt.
"Total Debt" means, at any time, the aggregate outstanding
principal amount of all Indebtedness of the Guarantor and its
Subsidiaries at such time (determined on a consolidated basis without
duplication in accordance with GAAP).
"Wholly-Owned Subsidiary" means any Subsidiary all of the
shares of capital stock or other ownership interests of which (except
directors' qualifying shares) are at the time directly or indirectly
owned by the Guarantor.
"United States" means the United States of America,
including the States and the District of Columbia, but excluding its
territories and possessions.
SECTION 1.2. Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted accounting
principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Guarantor's
independent public accountants) with the most recent audited
consolidated financial statements of the Guarantor and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Guarantor
notifies the Agent that the Guarantor wishes to amend any covenant in
Article 5 to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or if the
Agent notifies the Guarantor that the Required Banks wish to amend
Article 5 for such purpose), then the Guarantor's compliance with such
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covenant shall be determined on the basis of generally accepted
accounting principles in effect immediately before the relevant change
in generally accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended in a
manner satisfactory to the Guarantor and the Required Banks.
SECTION 1.3 Types of Borrowings. The term "Borrowing"
denotes the aggregation of Loans of one or more Banks to be made to
the Borrower pursuant to Article 2 on the same date, all of which
Loans are of the same type (subject to Article 8) and, except in the
case of Base Rate Loans, have the same initial Interest Period.
Borrowings are classified for purposes of this Agreement either by
reference to the pricing of Loans comprising such Borrowing (e.g., a
"Fixed Rate Borrowing" is a Euro-Dollar Borrowing, a CD Borrowing or a
Money Market Borrowing (excluding any such Borrowing consisting of
Money Market LIBOR Loans bearing interest at the Base Rate pursuant to
Section 8.1), and a "Euro-Dollar Borrowing" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of Article 2 under
which participation therein is determined (i.e., a "Committed Borrowing" is
a Borrowing under Section 2.1 in which all Banks participate in
proportion to their Commitments, while a "Money Market Borrowing" is a
Borrowing under Section 2.3 in which the Bank participants are
determined on the basis of their bids in accordance therewith).
ARTICLE 2
THE CREDITS
SECTION 2.1. Commitments to Lend. During the Revolving
Credit Period, each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make loans to the Borrower pursuant to
this Section from time to time in amounts such that the aggregate
principal amount of Committed Loans by such Bank at any one time
outstanding shall not exceed the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate principal amount
of $10,000,000 or any larger multiple of $1,000,000 (except that any
such Borrowing may be in the aggregate amount available in accordance
with Section 3.2(c)) and shall be made from the several Banks ratably
in proportion to their respective Commitments. Within the foregoing
limits, the Borrower may borrow under this Section, prepay Loans to
the extent permitted by Section 2.12 and reborrow at any time during
the Revolving Credit Period under this Section.
SECTION 2.2. Notice of Committed Borrowing. The Borrower
shall give the Agent notice (a "Notice of Committed Borrowing") not
later than 10:30 A.M. (New York City time) on (x) the date of each
Base Rate Borrowing, (y) the second Domestic Business Day before each
CD Borrowing and (z) the third Euro-Dollar Business Day before each
Euro-Dollar Borrowing, (A) specifying:
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(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing or a
Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are
to bear interest initially at the Base Rate, a CD Rate or a
Euro-Dollar Rate; and
(iv) in the case of a Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period; and
(B) certifying that each of the conditions precedent to such Borrowing
has been satisfied.
SECTION 2.3. Money Market Borrowings. (a) The Money
Market Option. In addition to Committed Borrowings pursuant to
Section 2.1, the Borrower may, as set forth in this Section,
request the Banks during the Revolving Credit Period to make offers
to make Money Market Loans to the Borrower. The Banks may, but
shall have no obligation to, make such offers and the Borrower may,
but shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall
transmit to the Agent by telex or facsimile transmission a Money
Market Quote Request substantially in the form of Exhibit B hereto so
as to be received not later than 10:30 A.M. (New York City time) on
(x) the fifth Euro-Dollar Business Day prior to the date of Borrowing
proposed therein, in the case of a LIBOR Auction or (y) the Domestic
Business Day next preceding the date of Borrowing proposed therein, in
the case of an Absolute Rate Auction (or, in either case, such other
time or date as the Borrower and the Agent shall have mutually agreed
and shall have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be
a Euro-Dollar Business Day in the case of a LIBOR Auction or a
Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $10,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
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(iv) whether the Money Market Quotes requested are to
set forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for
more than one Interest Period in a single Money Market Quote Request.
No Money Market Quote Request shall be given within five Euro-Dollar
Business Days (or such other number of days as the Borrower and the
Agent may agree) of any other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon
receipt of a Money Market Quote Request, the Agent shall send to the
Banks by telex or facsimile transmission an Invitation for Money
Market Quotes substantially in the form of Exhibit C hereto, which
shall constitute an invitation by the Borrower to each Bank to submit
Money Market Quotes offering to make the Money Market Loans to which
such Money Market Quote Request relates in accordance with this
Section.
(d) Submission and Contents of Money Market Quotes. (i) Each
Bank may submit a Money Market Quote containing an offer or offers to
make Money Market Loans in response to any Invitation for Money Market
Quotes. Each Money Market Quote must comply with the requirements of
this subsection (d) and must be submitted to the Agent by telex or
facsimile transmission at its offices specified in or pursuant to
Section 10.1 not later than (x) 2:00 P.M. (New York City time) on the
fourth Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New York
City time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as
the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective); provided that Money Market
Quotes submitted by the Agent (or any affiliate of the Agent) in the
capacity of a Bank may be submitted, and may only be submitted, if the
Agent or such affiliate notifies the Borrower of the terms of the
offer or offers contained therein not later than (x) one hour prior to
the deadline for the other Banks, in the case of a LIBOR Auction or
(y) 15 minutes prior to the deadline for the other Banks, in the case
of an Absolute Rate Auction. Subject to Articles 3 and 6, any Money
Market Quote so made shall be irrevocable except with the written
consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially
the form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which principal
amount (w) may be greater than or less than the Commitment
16
of the quoting Bank, (x) must be $5,000,000 or
a larger multiple of $1,000,000, (y) may not exceed the
principal amount of Money Market Loans for which offers
were requested, (z) may be subject to an aggregate
limitation as to the principal amount of Money Market
Loans for which offers being made by such quoting Bank
may be accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered
Rate (the "Money Market Margin") offered for each such
Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "Money Market Absolute Rate")
offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers
by the quoting Bank with respect to each Interest Period specified in the
related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit
D hereto or does not specify all of the information required
by subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money Market
Quotes; or
(D) arrives after the time set forth in subsection
(d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (x) of any Money Market Quote submitted by a
Bank that is in accordance with subsection (d) and (y) of any Money
Market Quote that amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with respect to the
same Money Market Quote Request. Any such subsequent Money Market
Quote shall be disregarded by the Agent unless such subsequent Money
Market Quote is submitted solely to correct a manifest error in such
former Money Market Quote. The Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Money Market Loans for
which offers have been received for each Interest Period specified in
the related Money Market Quote Request, (B) the respective principal
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amounts and Money Market Margins or Money Market Absolute Rates, as
the case may be, so offered and (C) if applicable, limitations on the
aggregate principal amount of Money Market Loans for which offers in
any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30
A.M. (New York City time) on (x) the third Euro-Dollar Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) the proposed date of Borrowing, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as
the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective), the Borrower shall notify the Agent
of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such notice (a
"Notice of Money Market Borrowing") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted.
The Borrower may accept any Money Market Quote in whole or in part;
provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set
forth in the related Money Market Quote Request;
(ii) the principal amount of each Money Market
Borrowing must be $10,000,000 or a larger multiple of
$1,000,000;
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market
Absolute Rates, as the case may be; and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to
comply with the requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or
more Banks with the same Money Market Margins or Money Market Absolute
Rates, as the case may be, for a greater aggregate principal amount
than the amount in respect of which such offers are accepted for the
related Interest Period, the principal amount of Money Market Loans in
respect of which such offers are accepted shall be allocated by the
Agent among such Banks as nearly as possible (in multiples of
$1,000,000, as the Agent may deem appropriate) in proportion to the
aggregate principal amounts of such offers. Determinations by the
Agent of the amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
SECTION 2.4. Notice to Banks; Funding of Loans. (a) Upon
receipt of a Notice of Borrowing, the Agent shall promptly notify each
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Bank of the contents thereof and of such Bank's share (if any) of such
Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the
date of each Borrowing, each Bank participating therein shall make
available its share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Agent at its address
referred to in Section 9.1. Unless the Agent determines that any
applicable condition specified in Article 3 has not been satisfied,
the Agent will make the funds so received from the Banks available to
the Borrower at the Agent's aforesaid address.
(c) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make
available to the Agent such Bank's share of such Borrowing, the Agent
may assume that such Bank has made such share available to the Agent
on the date of such Borrowing in accordance with subsection (b) of
this Section and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and
to the extent that such Bank shall not have so made such share
available to the Agent, such Bank and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid
to the Agent, at (i) in the case of the Borrower, a rate per annum
equal to the higher of the Federal Funds Rate and the interest rate
applicable thereto pursuant to Section 2.7 and (ii) in the case of
such Bank, the Federal Funds Rate. If such Bank shall repay to the
Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement.
SECTION 2.5. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the
account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate
Note in an amount equal to the aggregate unpaid principal amount of
such Loans. Each such Note shall be in substantially the form of
Exhibit A hereto with appropriate modifications to reflect the fact
that it evidences solely Loans of the relevant type. Each reference
in this Agreement to the "Note" of such Bank shall be deemed to refer
to and include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section
3.1(a), the Agent shall forward such Note to such Bank. Each Bank
shall record the date, amount, type and maturity of each Loan made by
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it and the date and amount of each payment of principal made by the
Borrower with respect thereto, and may, if such Bank so elects in
connection with any transfer or enforcement of its Note, endorse on
the schedule forming a part thereof appropriate notations to evidence
the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its Note and to
attach to and make a part of its Note a continuation of any such
schedule as and when required.
SECTION 2.6. Maturity of Loans. (a) Each Committed Loan
shall mature, and the principal amount thereof shall be due and
payable, on the Termination Date.
(b) Each Money Market Loan included in any Money Market
Borrowing shall mature, and the principal amount thereof shall be due
and payable, on the last day of the Interest Period applicable to such
Borrowing.
SECTION 2.7. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each
day from the date such Loan is made until it becomes due, at a rate
per annum equal to the Base Rate for such day. Such interest shall be
payable quarterly in arrears on each Quarterly Date and, with respect
to the principal amount of any Base Rate Loan converted to a CD Loan
or a Euro-Dollar Loan, on each date a Base Rate Loan is so converted.
Any overdue principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the rate otherwise applicable to
Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the CD
Margin for such day plus the Adjusted CD Rate applicable to such
Interest Period; provided that if any CD Loan or any portion thereof
shall, as a result of clause (2)(b) of the definition of Interest
Period, have an Interest Period of less than 30 days, such portion
shall bear interest during such Interest Period at the rate applicable
to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest
Period is longer than 90 days, at intervals of 90 days after the first
day thereof. Any overdue principal of or interest on any CD Loan
shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the rate applicable to Base
Rate Loans for such day, provided that until the end of the Interest
Period applicable to such CD Loan, any such overdue principal shall
bear interest at the higher of the foregoing rate and 2% plus the sum
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of the CD Margin plus the Adjusted CD Rate applicable to such Loan at
the date such payment was due.
The "Adjusted CD Rate" applicable to any Interest Period means
a rate per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the
rate of interest determined by the Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the
prevailing rates per annum bid at 10:00 A.M. (New York City time) (or
as soon thereafter as practicable) on the first day of such Interest
Period by two or more New York certificate of deposit dealers of
recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable
to the principal amount of the CD Loan of such CD Reference Bank to
which such Interest Period applies and having a maturity comparable to
such Interest Period.
"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency
reserves) for a member bank of the Federal Reserve System in New York
City with deposits exceeding five billion dollars in respect of new
non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of
$100,000 or more. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change in the
Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate
in effect on such day which is payable by a member of the Bank
Insurance Fund classified as adequately capitalized and within
supervisory subgroup "A" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Section 327.3(e) (or any
successor provision) to the Federal Deposit Insurance Corporation (or
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any successor) for such Corporation's (or such successor's) insuring
time deposits at offices of such institution in the United States.
The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during each
Interest Period applicable thereto, at a rate per annum equal to the
sum of the Euro-Dollar Margin for such day plus the London Interbank
Offered Rate applicable to such Interest Period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months
after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next
higher 1/16 of 1%) of the respective rates per annum at which deposits
in dollars are offered to each of the Euro-Dollar Reference Banks in
the London interbank market at approximately 11:00 A.M. (London time)
two Euro-Dollar Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such
Interest Period is to apply and for a period of time comparable to
such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 2% plus the rate applicable to
Base Rate Loans for such day, provided that until the end of the
Interest Period applicable to such Euro-Dollar Loan, any such overdue
principal shall bear interest at the higher of the foregoing rate and
the sum of 2% plus the Euro-Dollar Margin for such day plus the London
Interbank Offered Rate applicable to such Loan at the date such
payment was due.
(e) Subject to Section 8.1, each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal to
the sum of the London Interbank Offered Rate for such Interest Period
(determined in accordance with Section 2.7(c) as if the related Money
Market LIBOR Borrowing were a Committed Euro-Dollar Borrowing) plus
(or minus) the Money Market Margin quoted by the Bank making such Loan
in accordance with Section 2.3. Each Money Market Absolute Rate Loan
shall bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal to
the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.3. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period
is longer than three months, at intervals of three months after the
first day thereof. Any overdue principal of or interest on any Money
Market Loan shall bear interest, payable on demand, for each day until
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paid at a rate per annum equal to the sum of 2% plus the Base Rate for
such day.
(f) The Agent shall determine each interest rate applicable
to the Loans hereunder. The Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so
determined, and its determination thereof shall be conclusive in the
absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If
any Reference Bank does not furnish a timely quotation, the Agent
shall determine the relevant interest rate on the basis of the
quotation or quotations furnished by the remaining Reference Bank or
Banks or, if none of such quotations is available on a timely basis,
the provisions of Section 8.1 shall apply.
SECTION 2.8. Fees. (a) Facility Fee. The Borrower shall
pay to the Agent for the account of the Banks ratably a facility fee
at the Facility Fee Rate (determined daily in accordance with the
Pricing Schedule). Such facility fee shall accrue (i) from and
including the Effective Date to but excluding the date of termination
of the Commitments in their entirety, on the daily aggregate amount of
the Commitments (whether used or unused) and (ii) from and including
such date of termination to but excluding the date the Loans shall be
repaid in their entirety, on the daily aggregate outstanding principal
amount of the Loans.
(b) Payments. Accrued fees under this Section shall be
payable quarterly in arrears on each Quarterly Date until the date of
termination of the Commitments in their entirety (and, if later, the
date the Loans shall be repaid in their entirety).
SECTION 2.9. Optional Termination or Reduction of
Commitments. During the Revolving Credit Period, the Borrower may,
upon at least three Domestic Business Days' notice to the Agent, (i)
terminate the Commitments at any time, if no Loans are outstanding at
such time or (ii) ratably reduce from time to time by an aggregate
amount of $10,000,000 or any larger multiple of $1,000,000, the
aggregate amount of the Commitments in excess of the aggregate
outstanding principal amounts of the Loans.
SECTION 2.10. Method of Electing Interest Rates. (a) The
Loans included in each Committed Borrowing shall bear interest
initially at the type of rate specified by the Borrower in the
applicable Notice of Committed Borrowing. Thereafter, the Borrower
may from time to time elect to change or continue the type of interest
rate borne by each Group of Loans (subject in each case to the
provisions of Article 8), as follows:
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(i) if such Loans are Base Rate Loans, the Borrower
may elect to convert such Loans to CD Loans as of any
Domestic Business Day or to Euro-Dollar Loans as of any
Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or Euro-Dollar Loans
or elect to continue such Loans as CD Loans for an additional
Interest Period, subject to Section 2.14 in the case of any
such conversion or continuation effective on any day other
than the last day of the then current Interest Period
applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower
may elect to convert such Loans to Base Rate Loans or CD Loans
or elect to continue such Loans as Euro-Dollar Loans for an
additional Interest Period, subject to Section 2.14 in the
case of any such conversion or continuation effective on any
day other than the last day of the then current Interest
Period applicable to such Loans.
Each such election shall be made by delivering a notice
(a "Notice of Interest Rate Election") to the Agent not later than
10:30 A.M. (New York City time) on the third Euro-Dollar Business Day
before the conversion or continuation selected in such notice is to be
effective (unless the relevant Loans are to be converted to Domestic
Loans of the other type or are CD Rate Loans to be continued as CD
Rate Loans for an additional Interest Period, in which case such
notice shall be delivered to the Agent not later than 10:30 A.M. (New
York City time) on the second Domestic Business Day before such
conversion or continuation is to be effective). A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; provided
that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such Notice applies, and the
remaining portion to which it does not apply, are each $10,000,000 or
any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which
such notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply
with the applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if the Loans being
converted are to be Fixed Rate Loans, the duration of the next
succeeding Interest Period applicable thereto; and
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(iv) if such Loans are to be continued as CD Loans or
Euro-Dollar Loans for an additional Interest Period, the
duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate
Election shall comply with the provisions of the definition of
Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from
the Borrower pursuant to subsection (a) above, the Agent shall
promptly notify each Bank of the contents thereof and such notice
shall not thereafter be revocable by the Borrower. If the Borrower
fails to deliver a timely Notice of Interest Rate Election to the
Agent for any Group of Fixed Rate Loans, such Loans shall be converted
into Base Rate Loans on the last day of the then current Interest
Period applicable thereto.
(d) An election by the Borrower to change or continue the
rate of interest applicable to any Group of Loans pursuant to this
Section 2.10 shall not constitute a "Borrowing" subject to the
provisions of Section 3.2.
SECTION 2.11. Scheduled Termination of Commitments. The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and
payable on such date.
SECTION 2.12. Optional Prepayments. (a) Subject in the case
of any Fixed Rate Loans to Section 2.14, the Borrower may, upon at
least one Domestic Business Day's notice to the Agent, prepay the
Group of Base Rate Loans (or any Money Market Borrowing bearing
interest at the Base Rate pursuant to Section 8.1), upon at least
three Domestic Business Days' notice to the Agent, prepay any Group of
CD Loans, or upon at least three Euro-Dollar Business Days' notice to
the Agent, prepay any Group of Euro-Dollar Loans, in each case in
whole at any time, or from time to time in part in amounts aggregating
$10,000,000 or any larger multiple of $1,000,000, by paying the
principal amount to be prepaid together with accrued interest thereon
to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in
such Group or Borrowing.
(b) Except as provided in subsection (a) above the Borrower
may not prepay all or any portion of the principal amount of any Money
Market Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share (if any) of such prepayment
and such notice shall not thereafter be revocable by the Borrower.
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SECTION 2.13. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the
Loans and of fees hereunder, not later than 12:00 Noon (New York City
time) on the date when due, in Federal or other funds immediately
available in New York City, to the Agent at its address referred to in
Section 9.1. The Agent will promptly distribute to each Bank its
ratable share of each such payment received by the Agent for the
account of the Banks. Whenever any payment of principal of, or
interest on, the Domestic Loans or of fees shall be due on a day which is
not a Domestic Business Day, the date for payment thereof shall be extended
to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans or the Money
Market LIBOR Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business
Day. Whenever any payment of principal of, or interest on, the Money
Market Absolute Rate Loans shall be due on a day which is not a Euro-
Dollar Business Day, the date for payment thereof shall be extended to
the next succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Agent may assume that the Borrower has made such payment in full to
the Agent on such date and the Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent
that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays
such amount to the Agent, at the Federal Funds Rate.
SECTION 2.14. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan or any Fixed
Rate Loan is converted (pursuant to Article 2, 6, or 8 or otherwise)
on any day other than the last day of an Interest Period applicable
thereto, or the last day of an applicable period fixed pursuant to
Section 2.7(d), or if the Borrower fails to borrow or prepay any Fixed
Rate Loans after notice has been given to any Bank in accordance with
Section 2.4(a) or 2.12(c), the Borrower shall reimburse each Bank
within 15 days after demand for any resulting loss or expense incurred
by it (or by an existing or prospective Participant in the related
Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding
loss of margin for the period after any such payment or conversion or
failure to borrow or prepay, provided that such Bank shall have
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delivered to the Borrower a certificate as to the amount of such loss
or expense, which certificate shall be conclusive in the absence of
manifest error.
SECTION 2.15. Computation of Interest and Fees. Interest
based on the Prime Rate hereunder shall be computed on the basis of a
year of 365 days (or 366 days in a leap year) and paid for the actual
number of days elapsed (including the first day but excluding the last
day). All other interest and fees shall be computed on the
basis of a year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last day).
SECTION 2.16. Regulation D Compensation. For so long as any
Bank maintains reserves against "Eurocurrency liabilities" (or any
other category of liabilities which includes deposits by reference to
which the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which includes loans
by a non-United States office of such Bank to United States
residents), and as a result the cost to such Bank (or its Applicable
Lending Office) of making or maintaining its Euro-Dollar Loans is
increased, then such Bank may require the Borrower to pay,
contemporaneously with each payment of interest on the Euro-Dollar
Loans, additional interest on the related Euro-Dollar Loan of such
Bank at a rate per annum determined by such Bank up to but not
exceeding the excess of (i) (A) the applicable London Interbank
Offered Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered Rate.
Any Bank wishing to require payment of such additional interest (x)
shall so notify the Borrower and the Agent, in which case such
additional interest on the Euro-Dollar Loans of such Bank shall be
payable to such Bank at the place indicated in such notice with
respect to each Interest Period commencing at least three Euro-Dollar
Business Days after the giving of such notice and (y) shall furnish to
the Borrower at least five Euro-Dollar Business Days prior to each
date on which interest is payable on the Euro-Dollar Loans an
officer's certificate setting forth in reasonable detail the amount to
which such Bank is then entitled under this Section 2.16 (which shall
be consistent with such Bank's good faith estimate of the level at
which the related reserves are maintained by it).
ARTICLE 3
CONDITIONS
SECTION 3.1. Closing. The closing hereunder shall occur
upon receipt by the Agent of the following documents, each dated the
Closing Date unless otherwise indicated:
(a) a duly executed Note for the account of each Bank dated
on or before the Closing Date complying with the provisions of Section
2.5;
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(b) an opinion of the General Counsel of the Guarantor,
substantially in the form of Exhibit E hereto;
(c) an opinion of Davis Polk & Wardwell, special counsel for
the Agent, substantially in the form of Exhibit F hereto; and
(d) all documents the Agent may reasonably request relating
to the existence of the Borrower and the Guarantor, the corporate authority
for and the validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent.
The Agent shall promptly notify the Borrower and the Banks of
the Closing Date, and such notice shall be conclusive and binding on
all parties hereto.
SECTION 3.2. Borrowings. The obligation of any Bank to make
a Loan on the occasion of any Borrowing is subject to the satisfaction
of the following conditions:
(a) the fact that the Closing Date shall have occurred on or
prior to March 31, 1995;
(b) receipt by the Agent of a Notice of Borrowing as required
by Section 2.2 or 2.3, as the case may be;
(c) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed
the aggregate amount of the Commitments;
(d) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing; and
(e) the fact that the representations and warranties of the
Guarantor and the Borrower contained in this Agreement (except those
contained in Section 4.2(c), in Section 4.3(i) and in the last sentence of
Section 4.12 hereof) shall be true on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower and the Guarantor on the date of such Borrowing as
to the facts specified in clauses (c), (d) and (e) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Guarantor and the Borrower represent and warrant that:
SECTION 4.1. Corporate Existence. Each of the Guarantor and
its Subsidiaries: (a) is a corporation, partnership or other entity
duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization; (b) has all requisite corporate or
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other power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its
business as now being or as proposed to be conducted; and (c) is qualified
to do business and is in good standing in all jurisdictions in which the
nature of the business conducted by it makes such qualification necessary
and where failure so to qualify could have a Material Adverse Effect. The
Borrower is a Wholly-Owned Subsidiary of the Guarantor.
SECTION 4.2. Financial Condition. (a) The Guarantor has
heretofore furnished to each of the Banks the consolidated balance
sheet of the Guarantor and its Subsidiaries as at June 30, 1994 and the
related consolidated statements of earnings, cash flows and changes in
shareholders' equity of the Guarantor and its Subsidiaries for the
fiscal year ended on said date, with the opinion thereon of Ernst &
Young LLP. All such financial statements fairly present, in all
material aspects, the consolidated financial condition of the Guarantor
and its Subsidiaries, as at said date, and the consolidated results of
their operations for the fiscal year ended on said date, all in
accordance with GAAP.
(b) The Guarantor has heretofore furnished to each of the Banks the
unaudited consolidated balance sheet of the Guarantor and its Subsidiaries
as at December 31, 1994 and the related unaudited consolidated statements
of earnings, cash flows and changes in shareholders' equity of the
Guarantor and its Subsidiaries for the six month period ended on said date.
All such financial statements fairly present, in all material aspects, the
consolidated financial condition of the Guarantor and its subsidiaries, as
at said date, and the consolidated results of their operations for the six
month period ended on said date, all in accordance with GAAP.
(c) Since December 31, 1994, there has been no material
adverse change, and nothing has occurred that is reasonably likely to
result in any material adverse change, in the consolidated financial
condition, operations or business taken as a whole of the Guarantor and
its Subsidiaries from that set forth in the financial statements referred
to in clause (b) above as at the date referred to therein.
SECTION 4.3. Litigation. Except as may be disclosed in
regular periodic reports filed with the Securities and Exchange
Commission prior to the date of this Agreement (copies of which
reports have heretofore been furnished to the Banks), there are no
legal or arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to the
knowledge of the Guarantor) threatened against the Guarantor or any of
its Subsidiaries (i) which, if adversely determined, is reasonably
likely to have a Material Adverse Effect or (ii) which in any manner
draws into question the validity of this Agreement or the Notes.
SECTION 4.4. No Breach. None of the execution and delivery
of this Agreement and the Notes, the consummation of the transactions
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herein contemplated or compliance with the terms and provisions hereof
will conflict with or result in a breach of, or require any consent
under, the charter or by-laws of the Borrower or the Guarantor, or any
applicable law or regulation, or any order, writ, injunction or decree of
any court or governmental authority or agency, or any agreement or
instrument to which the Guarantor or any of its Subsidiaries is a party or
by which any of them or any of their Property is bound or to which any of
them is subject, or constitute a default under any such agreement or
instrument.
SECTION 4.5. Action. Each of the Guarantor and the Borrower has
all necessary corporate power, authority and legal right to execute,
deliver and perform its obligations under this Agreement and the Notes; the
execution, delivery and performance by each of the Guarantor and the
Borrower of this Agreement and the Notes have been duly authorized by all
necessary corporate action on its part (including, without limitation, any
required shareholder approvals); and this Agreement has been duly and
validly executed and delivered by each of the Guarantor and the Borrower
and constitutes, and each of the Notes (in the case of the Borrower) when
executed and delivered for value will constitute, its legal, valid and
binding obligation, enforceable against each of the Guarantor and the
Borrower (as) applicable) in accordance with its respective terms, except
as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 4.6. Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any governmental or
regulatory authority or agency, or any securities exchange, are
necessary for the execution, delivery or performance by the Guarantor and
the Borrower of this Agreement or (in the case of the Borrower) the Notes
or for the legality, validity or enforceability hereof.
SECTION 4.7. ERISA. Each Plan, and, to the knowledge of the
Guarantor, each Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in
compliance with, the applicable provisions of ERISA, the Code and any
other Federal or State law, and no event or condition has occurred and
is continuing as to which the Guarantor would be under an obligation to
furnish a report to the Banks under Section 5.1(e) hereof.
SECTION 4.8. Taxes. The Guarantor and its Subsidiaries are
members of an affiliated group of corporations filing consolidated
returns for Federal income tax purposes, of which the Guarantor is the
"common parent" (within the meaning of Section 1504 of the Code) of
such group. The Guarantor and its Subsidiaries have filed all Federal
income tax returns and all other material tax returns that are
required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Guarantor or
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any of its Subsidiaries. The charges, accruals and reserves on the
books of the Guarantor and its Subsidiaries in respect of taxes and
other governmental charges are, in the opinion of the Borrower,
adequate. The Guarantor has not given or been requested to give a
waiver of the statute of limitations relating to the payment of
Federal, state, local and foreign taxes or other impositions, the
payment of which is reasonably likely to have a Material Adverse
Effect.
SECTION 4.9. Investment Company Act. Neither the Guarantor
nor any of its Subsidiaries is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.10. Public Utility Holding Company Act. Neither the
Guarantor nor any of its Subsidiaries is a "holding company", or an
"affiliate" of a "holding company," or a "subsidiary company" of a
"holding company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 4.11. True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished in
writing by or on behalf of the Gurantor or the Borrower to the Agent or any
Bank in connection with the negotiation, preparation or delivery of this
Agreement or included herein or delivered pursuant hereto, when taken
as a whole do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements
herein or therein, in light of the circumstances under which they were
made, not misleading. All written information furnished after the
date hereof by the Guarantor and its Subsidiaries to the Agent and any
Bank in connection with this Agreement and the transactions
contemplated hereby will be true, complete and accurate in every
material respect, or (in the case of projections) based on reasonable
estimates, on the date as of which such information is stated or
certified. There is no fact known to the Guarantor or the Borrower that
could have a Material Adverse Effect that has not been disclosed herein or
in a report, financial statement, exhibit, schedule, disclosure letter or
other writing furnished to the Banks for use in connection with the
transactions contemplated hereby.
SECTION 4.12. Environmental Matters. In the ordinary course
of its business, the Guarantor conducts an ongoing review of the effect
of Environmental Laws on the business, operations and properties of
the Guarantor and its Subsidiaries, in accordance with customary
industry practice. On the basis of this review, the Guarantor has
reasonably concluded that the costs of compliance with Environmental
Laws are unlikely to have a Material Adverse Effect.
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ARTICLE 5
COVENANTS
The Guarantor and the Borrower agree that, so long as any Bank has
any Commitment hereunder or any amount payable under any Note remains
unpaid:
SECTION 5.1. Financial Statements, Etc. The Guarantor will
deliver to each of the Banks:
(a) as soon as available and in any event within 60 days
after the end of each of the first three quarterly fiscal periods of
each fiscal year of the Guarantor, consolidated statements of earnings,
cash flows and changes in shareholders' equity of the Guarantor and its
Subsidiaries for such period and for the period from the beginning of
the respective fiscal year to the end of such period, and the related
consolidated balance sheet of the Guarantor and its Subsidiaries as at
the end of such period, setting forth in each case in comparative form
the corresponding consolidated figures for the corresponding period in
the preceding fiscal year, accompanied by a certificate of a senior
financial officer of the Guarantor, which certificate shall state that
said consolidated financial statements fairly present, in all material
respects, the consolidated financial condition and results of
operations of the Guarantor and its Subsidiaries, in accordance with
generally accepted accounting principles, consistently applied, as at
the end of, and for, such period (subject to normal year-end audit
adjustments);
(b) as soon as available and in any event within 120 days
after the end of each fiscal year of the Guarantor, consolidated
statements of earnings, cash flows and changes in shareholders' equity
of the Guarantor and its Subsidiaries for such fiscal year and the
related consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form the corresponding consolidated figures for
the preceding fiscal year, and accompanied by an opinion thereon of
independent certified public accountants of recognized national
standing, which opinion shall state that said consolidated financial
statements fairly present, in all material respects, the consolidated
financial condition and results of operations of the Guarantor and its
Subsidiaries as at the end of, and for, such fiscal year in accordance
with generally accepted accounting principles;
(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which
the Guarantor shall have filed with the Securities and Exchange
Commission (or any governmental agency substituted therefor) or any
national securities exchange;
(d) promptly upon the mailing thereof to the shareholders of
the Guarantor generally, copies of all financial statements, reports
and proxy statements so mailed;
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(e) as soon as possible, and in any event within ten days
after the Guarantor knows or has reason to believe that any of the
events or conditions specified below with respect to any Plan or
Multiemployer Plan has occurred or exists, a statement signed by a
senior financial officer of the Guarantor setting forth details
respecting such event or condition and the action, if any, that the
Guarantor or its ERISA Affiliate proposes to take with respect thereto
(and a copy of any report or notice required to be filed with or given
to PBGC by the Guarantor or an ERISA Affiliate with respect to such
event or condition):
(i) any reportable event, as defined in Section
4043(b) of ERISA and the regulations issued thereunder, with
respect to a Plan, as to which PBGC has not by regulation
waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event
(provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA, including, without
limitation, the failure to make on or before its due date a
required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code); and any request for a waiver
under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of
a notice of intent to terminate any Plan or any action taken
by the Guarantor or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Guarantor or any ERISA Affiliate of a notice
from a Multiemployer Plan that such action has been taken by
PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Guarantor or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by the Guarantor
or any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of
any Multiemployer Plan against the Guarantor or any ERISA
Affiliate to enforce Section 515 of ERISA, which proceeding is
not dismissed within 30 days; and
33
(vi) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if the Guarantor or an ERISA
Affiliate fails to timely provide security to the Plan in
accordance with the provisions of said Sections;
(f) promptly after the Guarantor or Borrower knows or has reason to
believe that any Default has occurred, a notice of such Default
describing the same in reasonable detail and, together with such
notice or as soon thereafter as possible, a description of the action
that the Guarantor has taken or proposes to take with respect thereto;
and
(g) from time to time such other information regarding the
financial condition, operations, business or prospects of the Guarantor
or any of its Subsidiaries (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required to be
filed under ERISA) as any Bank or the Agent may reasonably request.
The Guarantor will furnish to each Bank, at the time it
furnishes each set of financial statements pursuant to paragraph (a)
or (b) above, a certificate of a senior financial officer of the
Guarantor (i) to the effect that no Default has occurred and is
continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action
that the Guarantor has taken or proposes to take with respect thereto)
and (ii) setting forth in reasonable detail the computations necessary
to determine whether the Guarantor is in compliance with Sections 5.8
and 5.9 hereof as of the end of the respective quarterly fiscal period
or fiscal year.
SECTION 5.2. Litigation. The Guarantor will promptly give to
each Bank notice of all legal or arbitral proceedings, and of all
proceedings by or before any governmental or regulatory authority or
agency, and any material development in respect of such legal or other
proceedings, affecting the Guarantor or any of its Subsidiaries, except
proceedings which, if adversely determined, would not have a Material
Adverse Effect. Without limiting the generality of the foregoing, the
Guarantor will give to each Bank notice of the assertion of any
Environmental Claim by any Person against, or with respect to the
activities of, the Guarantor or any of its Subsidiaries and notice of
any alleged violation of or non-compliance with any Environmental Laws
or any permits, licenses or authorizations, other than any
Environmental Claim or alleged violation which, if adversely
determined, would not have a Material Adverse Effect.
SECTION 5.3. Existence, Etc. The Guarantor will, and will
cause each of its Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (provided that
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nothing in this Section 5.3 shall prohibit any transaction
expressly permitted under Sections 5.6 and 5.7 hereof);
(b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory
authorities if failure to comply with such requirements could have
a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or
profits or on any of its Property prior to the date on which
penalties attach thereto, except for any such tax, assessment,
charge or levy the payment of which is being contested in good
faith and by proper proceedings and against which adequate reserves
are being maintained;
(d) maintain all of its Properties used or useful in its
business in good working order and condition, ordinary wear and tear
excepted;
(e) keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP; and
(f) subject to Section 10.11 hereof, permit representatives
of any Bank or the Agent, during normal business hours, to examine,
copy and make extracts from its books and records, to inspect any
of its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Bank or
the Agent (as the case may be).
SECTION 5.4. Insurance. The Guarantor will, and will cause
each of its Subsidiaries to, keep insured by financially sound and
reputable insurers all Property of a character usually insured by
corporations engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the amounts
customarily insured against by such corporations and carry such other
insurance as is usually carried by such corporations.
SECTION 5.5. Limitation on Liens. The Guarantor will not,
nor will it permit any of its Subsidiaries to, create, incur, assume
or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except:
(a) Liens in existence on the date hereof securing
Indebtedness outstanding on the date hereof in an aggregate principal
amount not exceeding $50,000,000;
(b) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or which are being contested in
good faith and by appropriate proceedings if, unless the amount
thereof is not material with respect to it or its financial condition,
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adequate reserves with respect thereto are maintained on the books of
the Guarantor or the affected Subsidiaries, as the case may be, in
accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith and by appropriate
proceedings;
(d) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto which, in the aggregate, are not material in amount, and which
do not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business
of the Guarantor or any of its Subsidiaries;
(g) Liens on Property of any corporation which becomes a
Subsidiary of the Guarantor after the date of this Agreement; provided
that such Liens are in existence at the time such corporation becomes
a Subsidiary of the Guarantor, were not created in anticipation thereof
and do not at any time secure any Indebtedness other than Indebtedness
which was secured by such Liens at the time such corporation became a
Subsidiary;
(h) Liens upon real and/or tangible personal Property
acquired after the date hereof (by purchase, construction or
otherwise) by the Guarantor or any of its Subsidiaries, each of which
Liens either (A) existed on such Property before the time of its
acquisition and was not created in anticipation thereof, or (B) was
created solely for the purpose of securing Indebtedness representing,
or incurred to finance, refinance or refund, the cost (including the
cost of construction) of such Property; provided that no such Lien
shall extend to or cover any Property of the Guarantor or such
Subsidiary other than the Property so acquired and improvements
thereon;
(i) Liens related to or arising from the refinancing of the
$41,000,000 (at the Effective Date) capital lease between IMC
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Fertilizer Group, Inc. and American Cyanamid relating to property
located in Brewster, Florida;
(j) Liens incidental to the conduct of its business or the
ownership of its Property which were not incurred in connection with
the borrowing of money, the obtaining of credit or Derivatives
Obligations, and which do not in the aggregate materially detract from
the value of its Property or materially impair the use thereof in the
operation of its business;
(k) Liens arising from judgments, decrees or attachments not
in excess of $25,000,000 in the aggregate and in circumstances not
constituting an Event of Default under Section 6.1(h) hereof;
(l) leases or subleases granted to others otherwise permitted
by this Agreement;
(m) UCC financing statements and other similar filings
regarding leases and other Liens otherwise permitted by this
Agreement;
(n) rights to receive income in connection with consignment
arrangements or licensing agreements in the ordinary course of the
Guarantor's or such Subsidiary's business, as the case may be;
(o) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $50,000,000;
and
(p) any extension, renewal or replacement of the foregoing,
provided, however, that the Liens permitted hereunder shall not be
spread to cover any additional Indebtedness or Property (other than a
substitution of like Property).
Notwithstanding the foregoing, nothing in this Section 5.5
shall restrict the ability of the Guarantor or any of its Subsidiaries
to sell or assign its accounts receivable.
SECTION 5.6. Mergers, Etc. The Guarantor will not, nor will
it permit any of its Subsidiaries to, merge or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to, or
acquire all or substantially all of the assets of, any Person, except
that (i) any Subsidiary of the Guarantor may merge or consolidate with
or into, or transfer assets to, or acquire assets of, any other
Subsidiary of the Guarantor, (ii) any Subsidiary of the Guarantor may
merge or consolidate with or into, or transfer assets to, the Guarantor
and (iii) the Guarantor may merge with or consolidate into, or acquire
assets of, and any Subsidiary of the Guarantor may merge or consolidate
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with or into, or acquire assets of, any other Person, provided in each
case that, immediately after giving effect to such proposed
transaction, no Default would exist and in the case of any such
proposed transaction to which the Guarantor is a party, the Guarantor is
the surviving corporation.
SECTION 5.7. Change in Nature of Business. The Guarantor
will not (i) make any material change in the nature of the business of
the Guarantor and its Subsidiaries taken as a whole as carried on as of
the date hereof, or (ii) acquire, or permit any of its Subsidiaries to
acquire, businesses which result in any material change in the nature
of the business of the Guarantor and its Subsidiaries taken as a whole
as carried on as of the date hereof; provided, however, that the
Guarantor or any of its Subsidiaries may engage in or acquire a
business of a nature substantially related to the nature of its
business as carried on as of the date hereof, and provided, further,
in each case that, immediately after giving effect to such proposed
transaction, no Default would exist.
SECTION 5.8. Total Debt to Total Capital Ratio. The Guarantor
will not permit the ratio of (a) the sum of (x) Total Debt (excluding,
for purposes of this Section 5.8 only, Capital Lease Obligations under
the $41,000,000 (at the Effective Date) capital lease between IMC
Fertilizer Group, Inc. and American Cyanamid relating to property
located in Brewster, Florida) plus (y) the Operating Lease Amount at
any time to (b) Total Capital at such time to exceed 0.60 to 1.
SECTION 5.9. Indebtedness of Subsidiaries. The Guarantor
will not permit the aggregate Indebtedness of all of its Subsidiaries
(exclusive of Indebtedness owing to the Guarantor or a Wholly-Owned
Subsidiary) to exceed at any time (i) 25% of Total Capital, if the
ratio of Total Debt to Total Capital is equal to or less than 0.50 to
1 at such time; and (ii) 20% of Total Capital, if the ratio of Total
Debt to Total Capital is greater than 0.50 to 1 at such time.
SECTION 5.10. Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Guarantor will not, nor will
it permit any of its Subsidiaries to, directly or indirectly enter
into transactions with any Affiliates unless the monetary or business
consideration arising therefrom would be substantially as advantageous
to the Guarantor and its Subsidiaries as the monetary or business
consideration which would obtain in a comparable transaction with a
Person not an Affiliate.
SECTION 5.11. Use of Proceeds. The Borrower will use the
proceeds of the Loans hereunder solely for general corporate purposes
(in compliance with all applicable legal and regulatory requirements);
provided that neither the Agent nor any Bank shall have any
responsibility as to the use of any of such proceeds. No part of the
proceeds of any extension of credit hereunder will be used to buy or
carry any Margin Stock.
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SECTION 5.12. Environmental Laws. The Guarantor will, and
will cause each of its Subsidiaries to, comply in all material
respects with the requirements of all applicable Environmental Laws
and all ordinances and regulatory and administrative authorities with
respect thereto, and shall not permit or suffer any of its
Subsidiaries to, generate, manufacture, refine, transport, treat,
store, handle, dispose, transfer, produce or process Hazardous
Materials other than in the ordinary course of business and in
compliance in all material respects with applicable Environmental
Laws, and shall not, and shall not permit or suffer any of its
Subsidiaries to, cause or permit, as a result of any intentional or
unintentional act or omission on the part of the Guarantor or any
Subsidiary thereof, the installation or placement of Hazardous
Materials in violation of or actionable under in any material respect
applicable Environmental Laws onto any of its Property or suffer the
presence of Hazardous Materials in violation of or actionable under in
any material respect applicable Environmental Laws on any of its
Property. The Guarantor shall, and shall cause each of its
Subsidiaries to, promptly undertake and diligently pursue to
completion any remedial clean-up action required of the Guarantor or
any Subsidiary under applicable Environmental Laws in the event of any
release of Hazardous Materials.
SECTION 5.13. Most Favored Lender. The Guarantor will not and
will not permit any Subsidiary to (a) enter into any indenture, agreement
or other instrument under which any Indebtedness for borrowed money in
excess of $15,000,000 for any such indenture, agreement or instrument
(or series of related agreements or instruments) of the Guarantor or of
any Subsidiary may be issued (a "Restricted Agreement"), or (b) agree to
any amendment, waiver, consent, modification, refunding, refinancing
or replacement of any Restricted Agreement, in either case, with terms
the effect of which is to (i) include a Covenant which imposes a
restriction, limitation or obligation in favor of another lender not
imposed in favor of the Banks by this Agreement, or (ii) revise or
alter any Covenant contained therein the effect of which is to impose
a restriction, limitation or obligation in favor of another lender not
imposed in favor of the Banks by this Agreement, unless the Guarantor
or such Subsidiary, as the case may be, concurrently (x) notifies the
Banks and the Agent thereof and (y) incorporates herein such
additional, altered or revised Covenant. If the Agent at the time so
elects by notice to the Guarantor and the Banks, the incorporation of
each such additional Covenant shall be deemed to occur automatically
without any further action or the execution of any additional document
by any of the parties to this Agreement. If the Agent does not elect
to effect such an automatic incorporation, the Agent shall promptly
tender to the Guarantor and the Borrower for execution by them an amendment
(executed by the Agent) incorporating such additional Covenant.
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ARTICLE 6
DEFAULTS
SECTION 6.1. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be
continuing:
(a) The Borrower and the Guarantor shall: (i) default in the
payment of any principal of any Loan when due (whether at stated maturity
or at mandatory or optional prepayment); or (ii)default in the payment of
any interest on any Loan, any fee or any other amount payable by it
hereunder when due and such default shall have continued unremedied
for five days; or
(b) The Guarantor or any of its Subsidiaries shall default
beyond any applicable grace period, or, in the case of any Derivatives
Obligations for which no grace period is otherwise provided, beyond
five days, in the payment when due of any principal of or interest on
any Indebtedness (other than the Indebtedness hereunder or under the
Notes) aggregating $15,000,000 or more, or in the payment when due of
amounts exceeding $15,000,000 in the aggregate for the payment or
collateralization of Derivatives Obligations; or any event specified
in any note, agreement, indenture or other document evidencing or
relating to any such Indebtedness or any event specified in any
instrument or agreement governing such Derivatives Obligations shall
occur if the effect of such event is (or, with the giving of notice or
the passage of time or both, would be) to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness to
become due, or to be prepaid in full (whether by redemption, purchase,
offer to purchase or otherwise), prior to its stated maturity or to
have the interest rate thereon reset to a level so that securities
evidencing such Indebtedness trade at a level specified in relation to
the par value thereof or, in the case of an instrument or agreement
governing such Derivatives Obligations, to permit the payments owing
under such instrument or agreement to be liquidated; or
(c) Any representation, warranty or certification made or deemed
made herein (or in any modification or supplement hereto) by the Guarantor
or the Borrower, or any certificate furnished to any Bank or the Agent
pursuant to the provisions hereof, shall prove to have been false or
misleading as of the time made or furnished in any material respect;
or
(d) The Guarantor shall default in the performance of any of
its obligations under any of Sections 5.1(f), 5.5 through 5.9
(inclusive), or 5.13 hereof; or either of the Borrower or the Guarantor
shall default in the performance of any of its other obligations in this
Agreement and such default shall continue unremedied for a period of 30
days after notice thereof to the Borrower by the Agent at the request of
any Bank; or
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(e) The Guarantor or any of its Subsidiaries shall admit in
writing its inability to, or be generally unable to, pay its debts as
such debts become due; or
(f) The Guarantor or any of its Subsidiaries shall (i) apply
for or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee, examiner or liquidator of itself or of
all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, file a petition seeking to
take advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up,
or composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the Bankruptcy
Code or (vi) take any corporate action for the purpose of effecting any of
the foregoing; or
(g) A proceeding or case shall be commenced, without the
application or consent of the Guarantor or any of its Subsidiaries, in
any court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of the
Guarantor or such Subsidiary or of all or any substantial part of its
Property, or (iii) similar relief in respect of the Guarantor or such
Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and
such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 or
more days; or an order for relief against the Guarantor or such
Subsidiary shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in
excess of $15,000,000 in the aggregate shall be rendered by one or
more courts, administrative tribunals or other bodies having
jurisdiction against the Guarantor or any of its Subsidiaries and the
same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured,
within 30 days from the date of entry thereof and the Guarantor or the
relevant Subsidiary shall not, within said period of 30 days, or such
longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal; or
(i) An event or condition specified in Section 5.1(e) hereof
shall occur or exist with respect to any Plan or Multiemployer Plan
and, as a result of such event or condition, together with all other
such events or conditions, the Guarantor or any ERISA Affiliate shall
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incur or in the opinion of the Required Banks shall be reasonably
likely to incur a liability to a Plan, a Multiemployer Plan or PBGC
(or any combination of the foregoing) which would constitute, in the
determination of the Required Banks, a Material Adverse Effect; or
(j) Any Person or two or more Persons acting in concert shall
have acquired, in one transaction or in a series of related
transactions, beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of securities of the
Guarantor (or other securities convertible into such securities)
representing 40% or more of the combined voting power of the
Guarantor then outstanding securities entitled to vote in the
election of directors (other than securities having such power only by
reason of the happening of a contingency) or there shall have been a
drawing under the Guarantor's "rabbi trust" letters of credit due to a
"change of control" thereunder or;
(k) at any time any oblication of the Guarantor under Article 9
shall for any reason cease to be in full force and effect, or the Guarantor
shall so assert in writing; or
(l) The Borrower shall for any reason fail to constitute a Wholly-
Owned Subsidiary of the Guarantor;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 6.1 with respect to
the Guarantor or the Borrower, (A) the Agent, upon request of the Banks
having at least 51% of the aggregate amount of the Commitments, shall, by
notice to the Borrower, terminate the Commitments and they shall thereupon
terminate, and (B) the Agent, upon request of Banks holding at least
51% of the aggregate unpaid principal amount of the Loans, shall, by
notice to the Borrower, declare the principal amount then outstanding
of, and the accrued interest on, the Loans and all other amounts
payable by the Borrower hereunder and under the Notes to be forthwith
due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by the Borrower;
and (2) in the case of the occurrence of an Event of Default referred
to in clause (f) or (g) of this Section 6.1 with respect to the Guarantor
or the Borrower, the Commitments shall automatically be terminated and the
principal amount then outstanding of, and the accrued interest on, the
Loans and all other amounts payable by the Borrower hereunder and
under the Notes shall automatically become immediately due and payable
without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrower.
SECTION 6.2. Notice of Default. The Agent shall give notice
to the Borrower under Section 6.1(d) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
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ARTICLE 7
THE AGENT AND THE CO-AGENT
SECTION 7.1. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement
and the Notes as are delegated to the Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental
thereto.
SECTION 7.2 Agent and Affiliates. Morgan Guaranty Trust
Company of New York shall have the same rights and powers under this
Agreement as any other Bank and may exercise or refrain from
exercising the same as though it were not the Agent, and Morgan
Guaranty Trust Company of New York and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of
business with the Guarantor or any Subsidiary or affiliate of the
Guarantor as if it were not the Agent hereunder.
SECTION 7.3. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting
the generality of the foregoing, the Agent shall not be required to
take any action with respect to any Default, except as expressly
provided in Article 6.
SECTION 7.4. Consultation with Experts. The Agent may
consult with legal counsel (who may be counsel for the Guarantor or the
Borrower), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it
in good faith in accordance with the advice of such counsel,
accountants or experts.
SECTION 7.5. Liability of Agent. Neither the Agent nor any
of its affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or not taken
by it in connection herewith (i) with the consent or at the request of
the Required Banks or (ii) in the absence of its own gross negligence
or willful misconduct. Neither the Agent nor any of its affiliates
nor any of their respective directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the
Guarantor or the Borrower; (iii) the satisfaction of any condition
specified in Article 3, except receipt of items required to be delivered to
the Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or
similar writing) believed by it to be genuine or to be signed by the
proper party or parties.
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SECTION 7.6. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates
and their respective directors, officers, agents and employees (to the
extent not reimbursed by the Borrower or the Guarantor) against any cost,
expense (including counsel fees and disbursements), claim, demand, action,
loss or liability (except such as result from such indemnitees' gross
negligence or willful misconduct) that such indemnitees may suffer or
incur in connection with this Agreement or any action taken or omitted
by such indemnitees hereunder.
SECTION 7.7. Credit Decision. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other
Bank, 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 Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank,
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement.
SECTION 7.8. Successor Agent. The Agent may resign at any
time by giving notice thereof to the Banks and the Borrower. Upon any
such resignation, the Required Banks shall have the right to appoint a
successor Agent reasonably acceptable to the Borrower. If no
successor Agent shall have been so appointed by the Required Banks,
and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be
a commercial bank organized or licensed under the laws of the United
States of America or of any State thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of
its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all
the rights and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After
any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent.
SECTION 7.9. Agent's Fees. The Borrower shall pay to the
Agent for its own account fees in the amounts and at the times
previously agreed upon between the Borrower and the Agent.
SECTION 7.10. Co-Agent. Nothing in this Agreement shall
impose upon the Co-Agent, in its capacity as such, any duty or
obligation whatsoever.
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ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1. Basis for Determining Interest Rate Inadequate
or Unfair. If on or prior to the first day of any Interest Period for
any CD Loan, Euro-Dollar Loan or Money Market LIBOR Loan:
(a) the Agent is advised by the Reference Banks that deposits
in dollars (in the applicable amounts) are not being offered to the
Reference Banks in the relevant market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks
having 50% or more of the aggregate principal amount of the affected
Loans advise the Agent that the Adjusted CD Rate or the London
Interbank Offered Rate, as the case may be, as determined by the Agent
will not adequately and fairly reflect the cost to such Banks of
funding their CD Loans or Euro-Dollar Loans, as the case may be, for
such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make CD Loans or Euro-Dollar Loans, as the
case may be, or to continue or convert outstanding Loans as or into CD
Loans or Euro-Dollar Loans, as the case may be, shall be suspended and
(ii) each outstanding CD Loan or Euro-Dollar Loan, as the case may be,
shall be converted into a Base Rate Loan on the last day of the then
current Interest Period applicable thereto. Unless the Borrower
notifies the Agent at least two Domestic Business Days before the date
of any Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date, (i)
if such Fixed Rate Borrowing is a Committed Borrowing, such Borrowing
shall instead be made as a Base Rate Borrowing and (ii) if such Fixed
Rate Borrowing is a Money Market LIBOR Borrowing, the Money Market
LIBOR Loans comprising such Borrowing shall bear interest for each day
from and including the first day to but excluding the last day of the
Interest Period applicable thereto at the Base Rate for such day.
SECTION 8.2 Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank
(or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible
for any Bank (or its Euro-Dollar Lending Office) to make, maintain or
fund its Euro-Dollar Loans and such Bank shall so notify the Agent,
the Agent shall forthwith give notice thereof to the other Banks and
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the Borrower, whereupon until such Bank notifies the Borrower and the
Agent that the circumstances giving rise to such suspension no longer
exist, the obligation of such Bank to make Euro-Dollar Loans, or to
convert outstanding Loans into Euro-Dollar Loans, shall be suspended.
Before giving any notice to the Agent pursuant to this Section, such
Bank shall designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not,
in the judgment of such Bank, be otherwise disadvantageous to such
Bank. If such notice is given, each Euro-Dollar Loan of such Bank
then outstanding shall be converted to a Base Rate Loan either (a) on
the last day of the then current Interest Period applicable to such
Euro-Dollar Loan if such Bank may lawfully continue to maintain and
fund such Loan to such day or (b) immediately if such Bank shall
determine that it may not lawfully continue to maintain and fund such
Loan to such day.
SECTION 8.3. Increased Cost and Reduced Return. (a) If on
or after (x) the date hereof, in the case of any Committed Loan or any
obligation to make Committed Loans or (y) the date of the related
Money Market Quote, in the case of any Money Market Loan, the adoption
of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank
(or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) of any such authority,
central bank or comparable agency shall impose, modify or deem
applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve Percentage and
(ii) with respect to any Euro-Dollar Loan any such requirement with
respect to which such Bank is entitled to compensation during the
relevant Interest Period under Section 2.16), special deposit,
insurance assessment (excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending Office) or
shall impose on any Bank (or its Applicable Lending Office) or on the
United States market for certificates of deposit or the London
interbank market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans and the result of
any of the foregoing is to increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any Fixed Rate
Loan, or to reduce the amount of any sum received or receivable by
such Bank (or its Applicable Lending Office) under this Agreement or
under its Note with respect thereto, by an amount deemed by such Bank
to be material, then, within 15 days after demand by such Bank (with a
copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
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(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change in any such law, rule or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate
of return on capital of such Bank (or its Parent) as a consequence of
such Bank's obligations hereunder to a level below that which such
Bank (or its Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Bank to
be material, then from time to time, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank
(or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent
of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Bank to compensation pursuant to this
Section but in any event within 45 days, after such Bank obtains
actual knowledge thereof; provided that (i) if any Bank fails to give
such notice within 45 days after it obtains actual knowledge of such
an event, such Bank shall, with respect to compensation payable
pursuant to this Section 8.3 in respect of any costs resulting from
such event, only be entitled to payment under this Section 8.3 for
costs incurred from and after the date 45 days prior to the date that
such Bank does give such notice and (ii) each Bank will designate a
different Applicable Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in
the judgment of such Bank, be otherwise disadvantageous to such Bank.
A certificate of any Bank claiming compensation under this Section and
setting forth in reasonable detail the additional amount or amounts to
be paid to it hereunder shall be conclusive in the absence of manifest
error. In determining such amount, such Bank shall use reasonable
averaging and attribution methods.
SECTION 8.4. Taxes. (a) For the purposes of this Section
8.4, the following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to
any payment by the Borrower or the Guarantor pursuant to this Agreement or
under any Note, and all liabilities with respect thereto, excluding (i) in
the case of each Bank and the Agent, taxes imposed on its income, and
franchise or similar taxes imposed on it, by a jurisdiction under the
laws of which such Bank or the Agent (as the case may be) is organized
or in which its principal executive office is located or, in the case
of each Bank, in which its Applicable Lending Office is located and
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(ii) in the case of each Bank, any United States withholding tax
imposed on such payments but only to the extent that such Bank is
subject to United States withholding tax at the time such Bank first
becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to this Agreement
or under any Note or from the execution or delivery of, or otherwise
with respect to, this Agreement or any Note.
(b) Any and all payments by the Borrower and the Guarantor to or
for the account of any Bank or the Agent hereunder or under any Note shall
be made without deduction for any Taxes or Other Taxes; provided that, if
the Borrower or the Guarantor (as the case my be) shall be required by law
to deduct any Taxes or Other Taxes from any such payments, (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 8.4) such Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower or Guarantor (as applicable) shall
make such deductions, (iii) the Borrower or Guarantor (as applicable) shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law and (iv) the Borrower or
Guarantor (as applicable) shall furnish to the Agent, at its address
referred to in Section 10.1, the original or a certified copy of a receipt
evidencing payment thereof.
(c) Each of the Borrower and the Guarantor agrees to indemnify each
Bank and the Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 8.4) paid by such
Bank or the Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be paid within 15 days after such
Bank or the Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution
and delivery of this Agreement in the case of each Bank listed on the
signature pages hereof and on or prior to the date on which it becomes
a Bank in the case of each other Bank, and from time to time
thereafter if requested in writing by the Borrower (but only so long
as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which exempts
the Bank from United States withholding tax or reduces the rate of
withholding tax on payments of interest for the account of such Bank
or certifying that the income receivable pursuant to this Agreement is
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effectively connected with the conduct of a trade or business in the
United States.
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to Section
8.4(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form
originally was required to be provided), such Bank shall not be
entitled to indemnification under Section 8.4(b) or (c) with respect
to Taxes imposed by the United States; provided that if a Bank, which
is otherwise exempt from or subject to a reduced rate of withholding
tax, becomes subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such Bank
shall reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Bank pursuant to this Section 8.4, then such
Bank will change the jurisdiction of its Applicable Lending Office if,
in the judgment of such Bank, such change (i) will eliminate or reduce
any such additional payment which may thereafter accrue and (ii) is
not otherwise disadvantageous to such Bank.
SECTION 8.5. Base Rate Loans Substituted for Affected Fixed
Rate Loans. If (i) the obligation of any Bank to make, or convert
outstanding Loans to, Euro-Dollar Loans has been suspended pursuant to
Section 8.2 or (ii) any Bank has demanded compensation under Section
8.3 or 8.4 with respect to its CD Loans or Euro-Dollar Loans and the
Borrower shall, by at least five Euro-Dollar Business Days' prior
notice to such Bank through the Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and
until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as
(or continued as or converted into) CD Loans or Euro-Dollar Loans, as
the case may be, shall instead be Base Rate Loans (on which interest
and principal shall be payable contemporaneously with the related
Fixed Rate Loans of the other Banks); and
(b) after each of its CD Loans or Euro-Dollar Loans, as the
case may be, has been repaid (or converted to a Base Rate Loan), all
payments of principal which would otherwise be applied to repay such
Fixed Rate Loans shall be applied to repay its Base Rate Loans
instead.
If such Bank notifies the Borrower that the circumstances giving rise
to such notice no longer apply, the principal amount of each such Base
Rate Loan shall be converted into a CD Loan or Euro-Dollar Loan, as
the case may be, on the first day of the next succeeding Interest
Period applicable to the related CD Loans or Euro-Dollar Loans of the
other Banks.
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SECTION 8.6. Substitution of Bank. Provided that no Default
shall have occurred and be continuing, if (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant to Section
8.2 or (ii) any Bank has demanded compensation under Section 8.3 or
8.4 the Borrower shall have the right to seek a substitute bank or
banks satisfactory to the Agent (which may be one or more of the
Banks) to purchase the Note and assume the Commitment of such Bank.
ARTICLE 9
GUARANTY
SECTION 9.1. The Guaranty. The Guarantor hereby unconditionally
guarantees the full and punctual payment (whether at stted maturity, upon
acceleration or otherwise) of the principal of and interest on each Note
issued by the Borrower pursuant to this Agreement, and the full and
punctual payment of allother amounts payable by the Borrower under this
Agreement. Upon failure by the Borrower to pay punctually any such amount,
the Guarantor shall forthwith on demand pay the amount not so paid at the
place and in the manner specified in this Agreement.
Section 9.2. Guaranty Unconditional. The obligations of the
Guarantor hereunder shall be unconditiional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged
or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver
or release in respect of any obligation of the Borrower under this
Agreement or any Note, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to this
Agreement or any Note;
(iii) any release, impairment, non-perfection or invalidity
of any direct or indirect security for any obligation of the
Borrower under this Agreement or any Note;
(iv) any change in the corporate existence, structure or
ownership of the Borrower, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower
or its assets or any resulting release or discharge of any
obligation of the Borrower contained in this Agreement or any Note;
(v) the existence of any claim, set-off or other rights
which the Guarantor may have at any time against the Borrower, the
Agent, any Bank or any other Person, whether in connection herewith
or any unrelated transactions, provided that nothing herein shall
prevent the assertiion of any such claim by separate suit or
compulsory counterclaim;
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(vi) any invalidity or unenforceability relating to or
against the Borrower for any reason of this Agreement or any Note,
or any provision of applicable law or regulation purporting to
prohibit the payment by the Borrower of the principal of or interest
on any Note or any other amount payable by the Borrower under this
Agreement; or
(vii) any other act or omission to act or delay of any kind
by the Borrower, the Agent, any Bank or any other Person or any
other circumstance whatsoever which might, but for the provisions of
this paragraph constitute a legal or equitable discharge of or
defense to the Guarantor's obligations hereunder.
SECTION 9.3. Discharge Only Upon Payment In Full; Reinstatement in
Certain Circumstances. The Guarantor's obligations hereunder shall remain
in full force and effect until the Commitments shall have terminated and
the principal of and interest on the Notes and all other amounts payable by
the Borrower under this Agreement shall have been paid in full. If at any
time any payment of the principal of or interest on any Note or any other
amount payable by the Borrower under this Agreement is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, the Guarantor's obligations
hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.
SECTION 9.4 Waiver by the Guarantor. The Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any action
be taken by any Person against any Borrower or any other Person.
SECTION 9.5. Subrogation. Upon making any payment with respect to
any Borrower hereunder, the Guarantor shall be subrogated to the rights of
the payee against the Borrower with respect to such payment; provided that
the Guarantor shall not enforce any payment by way of subrogation until all
amounts of principal of and interest on the Notes and all other amounts
payable by the Borrower under this Agreement have been paid in full.
SECTION 9.6. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under this Agreement or the
Notes is stayed upon the sinolvency, bankruptcy or reorganization of the
Borrower, all such amounts otherwise subject to acceleration under the
terms of this Agreement shall nonetheless be payable by the Guarantor
hereunder forthwith on demand by the Agent made at the request of the
requisite proportion of the Banks specified in Article 6 of this Agreement.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
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bank wire, telex, facsimile transmission or similar writing) and shall
be given to such party: (a) in the case of the Borrower, the Guarantor or the
Agent, at its address, facsimile number or telex number set forth on the
signature pages hereof, (b) in the case of any Bank, at its address,
facsimile number or telex number set forth in its Administrative
Questionnaire or (c) in the case of any party, such other address,
facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Agent, the Guarantor and the Borrower.
Each such notice, request or other communication shall be effective (i) if
given by telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answerback is received, (ii)
if given by facsimile transmission, when transmitted to the facsimile
number specified in this Section and confirmation of receipt is
received, (iii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as
aforesaid or (iv) if given by any other means, when delivered at the
address specified in this Section; provided that notices to the Agent
under Article 2 or Article 8 shall not be effective until received.
SECTION 10.2. No Waivers. No failure or delay by the Agent
or any Bank in exercising any right, power or privilege hereunder or
under any Note shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 10.3. Expenses; Indemnification. The Borrower shall
pay (i) all out-of-pocket expenses of the Agent, including fees and
disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or
consent hereunder or any amendment hereof or any Default or alleged
Default hereunder and (ii) if an Event of Default occurs and is
continuing, all out-of-pocket expenses incurred by the Agent and each
Bank, including (without duplication) the fees and disbursements of
outside counsel and the allocated cost of inside counsel, in
connection with collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower and the Guarantor jointly and severally agree to
indemnify the Agent and each Bank, their respective affiliates and the
respective directors, officers, agents and employees of the foregoing (each
an "Indemnitee") and hold each Indemnitee harmless from and against any and
all liabilities, losses, damages, costs and expenses of any kind,
including, without limitation, the reasonable fees and disbursements of
counsel and settlement costs, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party
thereto) brought or threatened relating to or arising out of this
Agreement or any actual or proposed use of proceeds of Loans
hereunder; provided that no Indemnitee shall have the right to be
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indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
SECTION 10.4. Sharing of Set-Offs. Each Bank agrees that if
it shall, by exercising any right of set-off or counterclaim or
otherwise, receive payment of a proportion of the aggregate amount of
principal and interest due with respect to any Note held by it which
is greater than the proportion received by any other Bank in respect
of the aggregate amount of principal and interest due with respect to
any Note held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in
the Notes held by the other Banks, and such other adjustments shall be
made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared
by the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower or the Guarantor
other than its indebtedness hereunder. Each of the Borrower and the
Guarantor agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights of
set-off or counterclaim and other rights with respect to such participation
as fully as if such holder of a participation were a direct creditor of the
Borrower or the Guarantor (as the case may be)in the amount of such
participation.
SECTION 10.5. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower, the
Guarantor and the Required Banks (and, if the rights or duties of the
Agent are affected thereby, by the Agent); provided that no such amendment
or waiver shall, unless signed by all the Banks, (i) increase or decrease
the Commitment of any Bank (except for a ratable decrease in the
Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any
Loan, or any fees hereunder (iii) postpone the date fixed for any
payment of principal of or interest on any Loan, or any fees hereunder
or for termination of any Commitment or (iv) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the
Notes, or the number of Banks, which shall be required for the Banks
or any of them to take any action under this Section or any other
provision of this Agreement; and provided further that, at the option
of the Agent, an additional, altered or revised Covenant shall be
incorporated herein pursuant to Section 5.13 either (i) automatically
or (ii) by an amendment signed solely by the Agent, the Guarantor and the
Borrower.
SECTION 10.6. 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, except
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that the Borrower may not assign or otherwise transfer any of its
rights under this Agreement without the prior written consent of all
Banks.
(b) Any Bank may at any time grant to one or more banks or
other institutions (each a "Participant") participating interests in
its Commitment or any or all of its Loans. In the event of any such
grant by a Bank of a participating interest to a Participant, whether
or not upon notice to the Borrower and the Agent, such Bank shall
remain responsible for the performance of its obligations hereunder,
and the Borrower and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any
Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in
clause (i), (ii) or (iii) of Section 10.5 without the consent of the
Participant. Each of the Borrower and the Guarantor agrees that each
Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Section 2.16 and Article 8 with respect to
its participating interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part
(equivalent to an initial Commitment of not less than $10,000,000,
unless a lower amount is agreed to by the Borrower and the Agent) of
all, of its rights and obligations under this Agreement and the Notes,
and such Assignee shall assume such rights and obligations, pursuant
to an Assignment and Assumption Agreement in substantially the form of
Exhibit G hereto executed by such Assignee and such transferor Bank,
with (and subject to) the subscribed consent of the Borrower, which
shall not be unreasonably withheld, and the Agent; provided that if an
Assignee is an affiliate of such transferor Bank, no such consent
shall be required; and provided further that such assignment may, but
need not, include rights of the transferor Bank in respect of
outstanding Money Market Loans. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank
and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with
a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party
shall be required. Upon the consummation of any assignment pursuant
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to this subsection (c), the transferor Bank, the Agent and the
Borrower shall make appropriate arrangements so that, if required, a
new Note is issued to the Assignee. In connection with any such
assignment, the transferor Bank shall pay to the Agent an
administrative fee for processing such assignment in the amount of
$2,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the
Borrower and the Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance
with Section 8.4.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank.
No such assignment shall release the transferor Bank from its
obligations hereunder.
(e) No Assignee, Participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under
Section 8.3 or 8.4 than such Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made
with the Borrower's prior written consent or by reason of the
provisions of Section 8.2, 8.3 or 8.4 requiring such Bank to designate
a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment
did not exist.
SECTION 10.7. Collateral. Each of the Banks represents to
the Agent and each of the other Banks that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as
collateral in the extension or maintenance of the credit provided for
in this Agreement.
SECTION 10.8 Governing Law; Submission to Jurisdiction.
This Agreement and each Note shall be governed by and construed in
accordance with the laws of the State of New York. The Borrower and the
Guarantor hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New
York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower and the Guarantor
irrevocably waive, to the fullest extent permitted by law, any objection
which they may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
SECTION 10.9 Counterparts; Integration; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement
constitutes the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings,
55
<PAGE>
oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Agent of
counterparts hereof signed by each of the parties hereto (or, in the
case of any party as to which an executed counterpart shall not have
been received, receipt by the Agent in form satisfactory to it of
telegraphic, telex, facsimile or other written confirmation from such
party of execution of a counterpart hereof by such party).
SECTION 10.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
GUARANTOR, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 10.11. Confidentiality. The Agent and each Bank agree
to keep any information delivered or made available by the Borrower or the
Guarantor pursuant to this Agreement confidential from anyone other than
persons employed or retained by it who are engaged in evaluating,
approving, structuring or administering the credit facility contemplated
hereby; provided that nothing herein shall prevent any Bank from disclosing
such information (a) to any other Bank or to the Agent, (b) to any
other Person if reasonably incidental to the administration of the
credit facility contemplated hereby, (c) upon the order of any court
or administrative agency, (d) upon the request or demand of any
regulatory agency or authority, (e) which had been publicly disclosed
other than as a result of a disclosure by the Agent or Bank prohibited
by this Agreement, (f) in connection with any litigation to which the
Agent or Bank or its subsidiaries or Parent may be a party, (g) to the
extent necessary in connection with the exercise of any remedy
hereunder, (h) to such Bank's or the Agent's legal counsel and
independent auditors and (i) subject to provisions substantially
similar to those contained in this Section, to any actual or proposed
Participant or Assignee.
56
<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.
COOPERS ANIMAL HEALTH INC.
By /s/ Paul D. Cottone
------------------------------
Name: Paul D. Cottone
Title: President
Address: 428 E. Hawley Street
Mundelein,IL 60060
Facsimile: (708) 949-3756
MALLINCKRODT GROUP INC.,
as Guarantor
By /s/ Michael A. Rocca
------------------------------
Name: Michael A. Rocca
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
Address: 7733 Forsyth Boulevard
Clayton, Missouri 63105
Facsimile: (314) 854-5380
Commitments:
- ------------
$20,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Patricia Merritt
-------------------------------
Name: Patricia Merritt
Title: Vice President
57
<PAGE>
$16,000,000 BANK OF AMERICA ILLINOIS
By /s/ Paul B. Higdon
-------------------------------
Name: Paul B. Higdon
Title: Managing Director
$16,000,000 THE BOATMEN'S NATIONAL BANK OF
ST. LOUIS
By /s/ Robert S. Holmes, Jr.
-------------------------------
Name: Robert S. Holmes, Jr.
Title: Vice President
$16,000,000 THE CHASE MANHATTAN BANK N.A.
By /s/ Peter Dedousis
-------------------------------
Name: Peter Dedousis
Title: Managing Director
$16,000,000 CITIBANK, N.A.
By /s/ Mary W. Corkran
-------------------------------
Name: Mary W. Corkran
Title: Vice President
$16,000,000 THE FIRST NATIONAL BANK OF
CHICAGO
By /s/ Robert R. Bourke
-------------------------------
Name: Robert R. Bourke
Title: Vice President
_________________
Total Commitments
$100,000,000
=================
58
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent
By /s/ Patricia Merritt
---------------------------------
Name: Patricia Merritt
Title: Vice President
Address: 60 Wall Street
New York, New York 10260
Telex number: 177615 MGT UT
Facsimile number: (212) 648-5018
59
<PAGE>
<TABLE>
PRICING SCHEDULE
Each of "CD Margin", "Euro-Dollar Margin" and "Facility Fee
Rate" means, for any day, the rates set forth below (in basis points
per annum) in the row opposite such term and in the column
corresponding to the "Pricing Level" that exists on such day:
<CAPTION>
Level I Level II Level III Level IV
<S> <C> <C> <C> <C>
CD Margin 31.00 34.00 40.00 42.50
Euro-dollar
Margin 18.50 21.50 27.50 30.00
Facility Fee 6.50 8.50 10.00 15.00
Rate
<CAPTION>
Level V Level VI Level VII
<S> <C> <C> <C>
CD Margin 58.75 62.50 75.00
Euro-dollar
Margin 46.25 50.00 62.50
Facility Fee 18.75 25.00 37.50
Rate
</TABLE>
For purposes of this Schedule, the following terms have the
following meanings:
"Level I Pricing" applies at any date if, at such date, the
Guarantor's long-term debt is rated A+ or higher by S&P or A1 or higher
by Moody's (subject to the paragraph on split ratings below).
"Level II Pricing" applies at any date if, at such date, (i)
the Guarantor's long-term debt is rated A- or higher by S&P or A3 or
higher by Moody's (subject to the paragraph on split ratings below)
and (ii) Level I Pricing does not apply.
1
<PAGE>
"Level III Pricing" applies at any date if, at such date, (i)
the Guarantor's long-term debt is rated BBB+ or higher by S&P or Baa1
or higher by Moody's (subject to the paragraph on split ratings below)
and (ii) neither Level I Pricing nor Level II Pricing applies.
"Level IV Pricing" applies at any date if, at such date, (i)
the Guarantor's long-term debt is rated BBB or higher by S&P and Baa2
or higher by Moody's and (ii) none of Level I Pricing, Level II
Pricing and Level III Pricing applies.
"Level V Pricing" applies at any date if, at such date, (i)
the Guarantor's long-term debt is rated BBB- or higher by S&P and Baa3
or higher by Moody's, and (ii) none of Level I Pricing, Level II
Pricing, Level III Pricing, and Level IV Pricing applies.
"Level VI Pricing" applies at any date if, at such date, (i)
the Guarantor's long-term debt is rated BB+ or higher by S&P and Ba1 or
higher by Moody's, and (ii) none of Level I Pricing, Level II Pricing,
Level III Pricing, Level IV Pricing, and Level V Pricing applies.
"Level VII Pricing" applies at any date if, at such date, no
other Pricing Level applies.
"Moody's" means Moody's Investors Service, Inc.
"Pricing Level" refers to the determination of which of Level
I, Level II, Level III, Level IV, Level V, Level VI or Level VII
applies at any date.
"S&P" means Standard & Poor's Ratings Group.
"Usage" means at any date the percentage equivalent of a
fraction (i) the numerator of which is the aggregate outstanding
principal amount of the Loans at such date, after giving effect to any
borrowing or payment on such date, and (ii) the denominator of which
is the aggregate amount of the Commitments at such date, after giving
effect to any reduction of the Commitments on such date. For purposes
of this Schedule, if for any reason any Loans remain outstanding after
termination of the Commitments, the Usage for each date on or after
the date of such termination shall be deemed to be greater than 50%.
The credit ratings to be utilized for purposes of this
Schedule are those assigned to the senior unsecured long-term debt
securities of the Guarantor without third-party credit enhancement, and
any rating assigned to any other debt security of the Guarantor
shall be disregarded. The rating in effect at any date is that in
effect at the close of business on such date.
For purposes of determining eligibility for Level I Pricing,
Level II Pricing or Level III Pricing, so long as the Guarantor
2
<PAGE>
qualifies for at least Level IV Pricing, split ratings will be dealt
with as follows: If the Guarantor is split-rated and the ratings
differential is one level, the higher rating will apply. If the
Guarantor is split-rated and the ratings differential is two levels or
more, the rating at the midpoint will apply. If there is no midpoint
rating, the higher of the two intermediate ratings will apply.
3
<PAGE>
EXHIBIT A - Note
NOTE
New York, New York
___________, _____
For value received, Coopers Animal Health Inc. (the "Borrower"),
promises to pay to the order of (the "Bank"), for the account of its
Applicable Lending Office, the unpaid principal amount of each Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below
on the maturity date provided for in the Credit Agreement. The Borrower
promises to pay interest on the unpaid principal amount of each such Loan
on the dates and at the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available
funds at the office of Morgan Guaranty Trust Company of New York, 60
Wall Street, New York, New York.
All Loans made by the Bank, the respective types and
maturities thereof and all repayments of the principal thereof shall
be recorded by the Bank and, if the Bank so elects in connection with
any transfer or enforcement hereof, appropriate notations to evidence
the foregoing information with respect to each such Loan then
outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the $100,000,000
Credit Agreement dated as of March 16, 1995 among the Borrower,
Mallinckrodt Group Inc., as Guarantor, the banks party thereto from time to
time, and Morgan Guaranty Trust Company of New York, as Agent (as the same
may be amended from time to time, the "Credit Agreement"). Terms defined
in the Credit Agreement are used herein with the same meanings. Reference
is made to the Credit Agreement for provisions for the prepayment hereof
and the acceleration of the maturity hereof.
COOPERS ANIMAL HEALTH INC.
By____________________
Name:
Title:
1
<PAGE>
<TABLE>
LOANS AND PAYMENTS OF PRINCIPAL
_____________________________________________________________________
<CAPTION
Amount Type Amount of
of of Maturity Principal Notation
Date Loan Loan Date Repaid Made By
_____________________________________________________________________
<S> <C> <C> <C> <C> <C>
</TABLE>
2
<PAGE>
EXHIBIT B - Money Market Quote Request
Form of Money Market Quote Request
----------------------------------
[Date]
To: Morgan Guaranty Trust Company of New York
From: Coopers Animal Health Inc.
Re: $100,000,000 Credit Agreement (the "Credit Agreement")
dated as of March 16, 1995 among Coopers Animal Health
Inc., Mallinckrodt Group Inc., as Guarantor, the Banks
party thereto from time to time, and Morgan Guaranty
Trust Company of New York, as Agent
We hereby give notice pursuant to Section 2.3 of the Credit
Agreement that we request Money Market Quotes for the following
proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount (2) Interest Period (3)
- -------------------- -------------------
$
(2) Amount must be $10,000,000 or a larger multiple of $1,000,000.
(3) Not less than one month (LIBOR Auction) or not less than 7 days
(Absolute Rate Auction), subject to the provsions of the definition of
Interest Period.
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank
Offered Rate.]
Terms used herein have the meanings assigned to them in the
Credit Agreement.
COOPERS ANIMAL HEALTH INC.
By________________________
Name:
Title:
1
<PAGE>
EXHIBIT C - Invitation for Money Market Quotes
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Coopers Animal Health Inc.
(the "Borrower")
Pursuant to Section 2.3 of the $100,000,000 Credit Agreement
dated as of March 16, 1995 among Coopers Animal Health Inc., Mallinckrodt
Group Inc., as Guarantor, the Banks party thereto from time to time, and
the undersigned, as Agent, we are pleased on behalf of the Borrower to
invite you to submit Money Market Quotes to the Borrower for the following
proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
- ---------------- ----------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank
Offered Rate.]
Please respond to this invitation by no later than [2:00 P.M.]
[9:30 A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
1
<PAGE>
EXHIBIT D - Money Market Quote
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York, as Agent
Re: Money Market Quote to Coopers Animall Health Inc. (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote
on the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at
the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
- --------- ---------- ------------- ---------------------
$
$
[Provided, that the aggregate principal amount of Money Market
Loans for which the above offers may be accepted shall not exceed
$____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not
(notes continued on following page)
1
<PAGE>
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the
$100,000,000 Credit Agreement dated as of March 16, 1995 among Coopers
Animal Health Inc., Mallinckrodt Group Inc., as Guarantor, the Banks party
thereto from time to time, and yourselves, as Agent, irrevocably obligates us
to make the Money Market Loan(s) for which any offer(s) are accepted, in
whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
exceed principal amount requested. Specify aggregate limitation if
the sum of the individual offers exceeds the amount the Bank is
willing to lend. Bids must be made for $5,000,000 or a larger
multiple of $1,000,000.
*** Not less than one month or not less than 7 days, as specified in
the related Invitation. No more than five bids are permitted for each
Interest Period.
**** Margin over or under the London Interbank Offered Rate determined
for the applicable Interest Period. Specify percentage (to the
nearest 1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of
1%).
2
<PAGE>
EXHIBIT E - Opinion of Counsel for the Borrower
(Closing Date)
Each of the Banks and the Agent party
to the Credit Agreement
referred to below
Morgan Guaranty Trust Company
of New York,
as Agent for said Banks
60 Wall Street
New York, NY 10260
Ladies and Gentlemen:
I am the General Counsel of Mallinckrodt Group Inc., a
corporation organized under the laws of the State of New York (the
"Guarantor") and am furnishing this opinion in connection with the
Credit Agreement dated as of March 16, 1995 (the "Credit
Agreement") between the Borrower, the Guarantor, the banks party thereto
from time to time, and Morgan Guaranty Trust Company of New York, as Agent,
providing for, among other things, the making of loans by the Banks in
an aggregate principal amount not exceeding $100,000,000. All
capitalized terms used but not defined herein have the respective
meanings given to such terms in the Credit Agreement.
In rendering the opinions expressed below, I have examined:
(i) the Credit Agreement;
(ii) the Notes (collectively with the Credit Agreement, the
"Credit Documents"); and
(iii) such corporate records, agreements and instruments of
the Borrower and the Guarantor and such other documents and records as I
have deemed necessary as a basis for the opinions expressed below.
In my examination, I have assumed the genuineness of all signatures
(except those of officers of the Borrower and the Guarantor), the
authenticity of all documents submitted to me as originals and the
conformity with authentic original documents of all documents submitted to
me as copies. When relevant facts were not independently established, I
have relied upon representations made in or pursuant to the Credit
Documents and certificates of appropriate representatives of the
Borrower and the Guarantor.
In rendering the opinions expressed below, I have assumed,
with respect to all of the documents referred to in this opinion
1
<PAGE>
letter, that (except, to the extent set forth in the opinions
expressed below, as to the Borrower and the Guarantor):
(i) such documents have been duly authorized by, have been
duly executed and delivered by, and constitute legal,
valid, binding and enforceable obligations of, all of the
parties to such documents;
(ii) all signatories to such documents have been duly
authorized; and
(iii) all of the parties to such documents are duly organized
and validly existing and have the power and authority
(corporate or other) to execute, deliver and perform such
documents.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered
such questions of law as I have deemed necessary as a basis for the
opinions expressed below, I am of the opinion that:
1. The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
York and the Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
2. The Borrower has all requisite corporate power to execute
and deliver, and to perform its obligations under, each Credit
Document and has all requisite corporate power to borrow under the
Credit Agreement. The Guarantor has all requisite corporate power to
executive and deliver, and to perform its obligations under, the
Credit Agreement.
3. The execution, delivery and performance by the Borrower
of the Credit Documents and the borrowings by the Borrower under
the Credit Agreement have been duly authorized by all necessary
corporate action on the part of the Borrower. The execution, delivery,
and performance by the Guarantor of the Credit Agreement have been
duly authorized by all necessary cororate action on the part of the
Guarantor.
4. Each Credit Document has been duly executed and delivered
by the Borrower. Each Credit Agreement has been duly executed and
delivered by the Guarantor.
5. Under Missouri conflict of laws principles, the stated
choice of New York Law to govern the Credit Documents will be
honored by the courts of the State of Missouri and the Credit
Documents will be construed in accordance with, and will be treated
as being governed by, the law of the State of New York. However,
if the Credit Documents were stated to be governed by and construed
in accordance with the law of the State of Missouri, or if a court
2
<PAGE>
were to apply the law of the State of Missouri to the Credit
Documents, (i) each Credit Document (assuming, in the case of the
Notes, execution and delivery thereof for value) would constitute
the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, and
(ii) the Credit Agreement would constitute the legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms, except in each case, as the foregoing
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the
rights of creditors generally and except as the enforceability of
the Credit Documents is subject to the application of general
principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation, (a)
the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing.
6. No authorization, approval or consent of, and no filing
or registration with, any governmental or regulatory authority or
agency is required on the part of either the Borrower or the Guarantor
for (i) the execution, delivery or performance by the Borrower of, or
for the legality, validity or enforceability of, the Credit Agreement or
(ii) the execution, delivery or performance by the Guarantor of, or for
the legality, validity or enforceability of, the Credit Agreement.
for any borrowing by the Borrower under the Credit Agreement.
7. The execution, delivery and performance by each of the
Borrower and the Guarantor of the Credit Agreement and, in the case of
the Borrower, the Notes, and borrowings by the Borrower under the
Credit Agreement, do not and will not (a) violate any provision of
the charter or by-laws of the Borrower or Guarantor, (b) violate any
applicable law, rule or regulation, (c) violate any order, writ,
injunction or decree of any court or governmental authority or agency or
any arbitral award applicable to the Borrower or the Guarantor of which I
have knowledge (after due inquiry) or (d) result in a breach of,
constitute a default under, require any consent under, or result in the
acceleration or required prepayment of any indebtedness pursuant to
the terms of, any agreement or instrument of which I have knowledge
(after due inquiry) to which the Borrower or Guarantor is a party or by
which the Borrower or Guarantor is bound or to which the Borrower or
Guarantor is subject.
8. Except as may be disclosed in regular periodic reports
filed with the Securities and Exchange Commission prior to the date
of the Credit Agreement (copies of which reports have heretofore
been furnished to the Banks), I have no knowledge (after due
inquiry) of any legal or arbitral proceeding by or before any
governmental or regulatory authority or agency, now pending or
threatened against the Guarantor or any of its Subsidiaries or any
of their respective Properties that, if adversely determined, is
reasonably likely to have a Material Adverse Effect.
3
<PAGE>
9. Neither the Guarantor, the Borrower nor any of its Subsidiaries
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940,
as amended.
10. Neither the Guarantor, the Borrower nor any of the Guarantor's
other Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
The foregoing opinions are subject to the following comments
and qualifications:
A. The enforceability of Section 10.3 of the Credit Agreement
may be limited by laws rendering unenforceable indemnification
contrary to Federal or State securities laws and the public policy
underlying such laws.
B. The enforceability of provisions in the Credit Documents
to the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances.
C. I express no opinion as to (i) the effect of the laws of
any jurisdiction in which any Bank is located (other than the State
of Missouri) that limit the interest, fees, or other charges such
Bank may impose, and (ii) the second sentence of Section 10.8 of the
Credit Agreement, insofar as such sentence relates to the subject
matter jurisdiction of the United States District Court for the
Southern District of New York to adjudicate any controversy related
to the Credit Documents.
The foregoing opinions are limited to matters involving the
Federal law of the United States of America, the law of the State of
Missouri and (with respect to my opinions in paragraphs 1 through 4
above) the Business Corporation Law of the State of New York and the
General Corporation Law of the State of Delaware, and I do
not express any opinion as to any other laws.
At the request of my client, this opinion letter is, pursuant
to Section 3.1(b) of the Credit Agreement, provided to you by me in my
capacity as General Counsel of the Guarantor and may not be relied upon
by any Person for any purpose other than in connection with the
transactions contemplated by the Credit Agreement without, in each
instance, my prior written consent.
Very truly yours,
4
<PAGE>
EXHIBIT F - Opinion of Special Counsel for the Agent
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
---------------------------------------
[Closing Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
We have participated in the preparation of the $100,000,000
Credit Agreement (the "Credit Agreement") dated as of March 16, 1995
among Coopers Animal Health Inc., (the "Borrower"), Mallinckrodt Group
Inc., as Guarantor (the "Guarantor), the banks party thereto from time to
time (the "Banks"), and Morgan Guaranty Trust Company of New York, as
Agent, and have acted as special counsel for the Agent for the purpose of
rendering this opinion pursuant to Section 3.1(c) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have
conducted such other investigations of fact and law as we have deemed
necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower and the
Guarantor of the Credit Agreement and by the Borrower of the Notes are
within the Guarantor's or the Borrower's, as applicable, corporate
powers and have been duly authorized by all necessary corporate
action.
2. The Credit Agreement constitutes a valid and binding
agreement of each of the Borrower and the Guarantor and each Note
constitutes a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms except as the same may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
1
<PAGE>
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the
State of Delaware and the federal laws of the United States of America. In
giving the foregoing opinion, we express no opinion as to the effect (if
any) of any law of any jurisdiction (except the State of New York) in which
any Bank is located which limits the rate of interest that such Bank
may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any
other purpose or relied upon by any other person without our prior
written consent.
Very truly yours,
2
<PAGE>
EXHIBIT G - Assignment and Assumption Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), COOPERS ANIMAL HEALTH INC. (the
"Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent
(the "Agent").
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the $100,000,000 Credit Agreement dated as of
March 16, 1995 among the Borrower, Mallinckrodt Group Inc., as Guarantor,
the Assignor and the other Banks party thereto from time to time, as Banks,
and Morgan Guaranty Trust Company of New York, as Agent (the "Credit
Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor
has a Commitment to make Loans to the Borrower in an aggregate
principal amount at any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of
$__________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Credit Agreement in respect of
a portion of its Commitment thereunder in an amount equal to
$__________ (the "Assigned Amount"), together with a corresponding
portion of its outstanding Committed Loans, and the Assignee proposes
to accept assignment of such rights and assume the corresponding
obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as
follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the
Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells
to the Assignee all of the rights of the Assignor under the Credit
Agreement to the extent of the Assigned Amount, and the Assignee
hereby accepts such assignment from the Assignor and assumes all of
the obligations of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, including the purchase from the
Assignor of the corresponding portion of the principal amount of the
Committed Loans made by the Assignor outstanding at the date hereof.
Upon the execution and delivery hereof by the Assignor, the Assignee,
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[the Borrower and the Agent] and the payment of the amounts specified
in Section 3 required to be paid on the date hereof (i) the Assignee
shall, as of the date hereof, succeed to the rights and be obligated
to perform the obligations of a Bank under the Credit Agreement with a
Commitment in an amount equal to the Assigned Amount, and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by
a like amount and the Assignor released from its obligations under the
Credit Agreement to the extent such obligations have been assumed by
the Assignee. The assignment provided for herein shall be without
recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the
Assignor on the date hereof in Federal funds in the amount heretofore
mutually agreed between them. It is understood that facility fees in
respect of the Assigned Amount accrued to the date hereof are for the
account of the Assignor and such fees accruing from and including the
date hereof are for the account of the Assignee. Each of the Assignor
and the Assignee hereby agrees that if it receives any amount under
the Credit Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such other party
to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
[SECTION 4. Consent of the Borrower and the Agent. This
Agreement is conditioned upon the consent of the Borrower and the
Agent pursuant to Section 10.6(c) of the Credit Agreement. The
execution of this Agreement by the Borrower and the Agent is evidence
of this consent. Pursuant to Section 10.6(c), the Borrower agrees to
execute and deliver a Note payable to the order of the Assignee to
evidence the assignment and assumption provided for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of the Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit Agreement or any
Note. The Assignee acknowledges that it has, independently and
without reliance on the Assignor, any other Bank or the Agent and
based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement
and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the
Borrower.
SECTION 6. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the
date first above written.
[ASSIGNOR]
By_________________________
Name:
Title:
[ASSIGNEE]
By__________________________
Name:
Title:
COOPERS ANIMAL HEALTH INC.
By__________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Name:
Title:
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