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 September 30, 1997
OR
--- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-483
______________________________
MALLINCKRODT 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.)
675 McDonnell Boulevard
St. Louis, Missouri 63134
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 314-654-2000
______________________________
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.
72,934,630 shares excluding 14,181,659 treasury shares as of October
31, 1997.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
The accompanying interim condensed consolidated financial statements
of Mallinckrodt 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 1997
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 Notes 1, 2, 3 and 4 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Three Months Ended
September 30,
----------------------
1997 1996
--------- ---------
Net sales $ 498.1 $ 442.0
Operating costs and expenses:
Cost of goods sold 309.0 242.0
Selling, administrative and
general expenses 125.3 105.8
Purchased research and development 398.3
Research and development expenses 29.5 28.8
Other operating income, net (1.7) (.9)
--------- ---------
Total operating costs and expenses 860.4 375.7
--------- ---------
Operating earnings (loss) (362.3) 66.3
Interest income and other nonoperating
income, net 9.2 4.5
Interest expense (18.4) (12.7)
--------- ---------
Earnings (loss) from continuing
operations before income taxes (371.5) 58.1
Income tax provision 9.9 21.5
--------- ---------
Earnings (loss) from continuing
operations (381.4) 36.6
Discontinued operations (1.2)
--------- ---------
Net earnings (loss) (381.4) 35.4
Preferred stock dividends (.1) (.1)
--------- ---------
Available for common shareholders $(381.5) $ 35.3
========= =========
Earnings (loss) per common share:
Continuing operations $ (5.21) $ .48
Discontinued operations (.01)
--------- ---------
Net earnings $ (5.21) $ .47
========= =========
(See Notes to Condensed Consolidated Financial Statements on pages 5,
6 and 7.)
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share and per share amounts)
September 30, June 30,
1997 1997
-------------- --------------
Assets
Current assets:
Cash and cash equivalents $ 125.1 $ 808.5
Trade receivables, less
allowances of $14.7 at
September 30 and $8.4 at
June 30 474.2 356.0
Inventories 568.9 315.9
Deferred income taxes 58.3 36.8
Other current assets 82.4 99.6
--------- ---------
Total current assets 1,308.9 1,616.8
Investments and long-term
receivables, less allowances
of $1.5 at September 30 and
$8.1 at June 30 136.2 126.0
Property, plant and equipment, net 984.7 827.9
Intangible assets 1,624.4 416.2
Deferred income taxes 23.5 .8
--------- ---------
Total assets $4,077.7 $2,987.7
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt $1,126.5 $ 11.7
Accounts payable 192.7 169.3
Accrued liabilities 456.8 396.1
Income taxes payable 57.4 76.4
Deferred income taxes 21.7 .2
--------- ---------
Total current liabilities 1,855.1 653.7
Long-term debt, less current
maturities 550.6 545.2
Deferred income taxes 468.1 248.7
Postretirement benefits 165.2 161.9
Other noncurrent liabilities
and deferred credits 164.6 127.0
--------- ---------
Total liabilities 3,203.6 1,736.5
--------- ---------
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 87.1 87.1
Capital in excess of par value 312.8 305.9
Reinvested earnings 899.1 1,292.6
Foreign currency translation (53.5) (49.9)
Treasury stock, at cost (382.4) (395.5)
--------- ---------
Total shareholders' equity 874.1 1,251.2
--------- ---------
Total liabilities and
shareholders' equity $4,077.7 $2,987.7
========= =========
(See Notes to Condensed Consolidated Financial Statements on pages 5,
6 and 7.)
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended
September 30,
----------------------
1997 1996
--------- ---------
Cash Flows - Operating Activities
Net earnings (loss) $(381.4) $ 35.4
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 38.8 39.1
Postretirement benefits 3.3 2.8
Undistributed equity in earnings
of joint venture (5.6)
Losses on disposals of assets .1
Deferred income taxes (4.8) (3.7)
Write-off of purchased research
and development 398.3
Sale of inventory stepped up to
fair value at acquisition 18.8
--------- ---------
73.1 68.0
Changes in operating assets and
liabilities:
Trade receivables 33.8 15.5
Inventories (17.4) ( 7.4)
Other current assets 43.0 (.2)
Accounts payable, accrued
liabilities and income taxes
payable, net (172.6) (21.8)
Net current liabilities of
discontinued operations (.3)
Other noncurrent liabilities
and deferred credits 18.4 (16.8)
Other, net 1.1 21.3
--------- ---------
Net cash provided (used) by
operating activities (20.6) 58.3
--------- ---------
Cash Flows - Investing Activities
Capital expenditures (30.3) (22.9)
Acquisition spending (1,734.6) (4.1)
Proceeds from asset disposals 1.3 33.6
Other, net .7 1.9
--------- ---------
Net cash provided (used) by
investing activities (1,762.9) 8.5
--------- ---------
Cash Flows - Financing Activities
Increase in short-term debt 1,091.8 .4
Proceeds from long-term debt .4 1.6
Payments on long-term debt (1.9)
Issuance of Mallinckrodt common stock 29.7 9.5
Acquisition of treasury stock (9.7) (22.5)
Dividends paid (12.1) (11.7)
--------- ---------
Net cash provided (used) by
financing activities 1,100.1 (24.6)
--------- ---------
Increase (decrease) in cash and
cash equivalents (683.4) 42.2
Cash and cash equivalents at
beginning of period 808.5 496.1
--------- ---------
Cash and cash equivalents at end
of period $ 125.1 $ 538.3
========= =========
(See Notes to Condensed Consolidated Financial Statements on pages 5,
6 and 7.)
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In millions, except per share amounts)
1997 1996
--------- ---------
4 Percent cumulative preferred stock:
Balance at June 30 and September 30 $ 11.0 $ 11.0
Common stock:
Balance at June 30 and September 30 87.1 87.1
Capital in excess of par value:
Balance at June 30 305.9 283.5
Stock option exercises 6.9 1.9
--------- ---------
Balance at September 30 312.8 285.4
--------- ---------
Reinvested earnings:
Balance at June 30 1,292.6 1,150.7
Net earnings (loss) (381.4) 35.4
Dividends
4 Percent cumulative preferred
stock ($1.00 per share) (.1) (.1)
Common stock ($.165 per share in
1997 and $.155 per share in 1996) (12.0) (11.6)
--------- ---------
Balance at September 30 899.1 1,174.4
--------- ---------
Foreign currency translation:
Balance at June 30 (49.9) (15.3)
Translation adjustment (3.6) 2.8
--------- ---------
Balance at September 30 (53.5) (12.5)
--------- ---------
Treasury stock:
Balance at June 30 (395.5) (284.8)
Acquisition of treasury stock (9.7) (22.5)
Stock option exercises 8.7 7.6
Investment plan match 7.3
Restricted stock award 6.8
--------- ---------
Balance at September 30 (382.4) (299.7)
--------- ---------
Total shareholders' equity $ 874.1 $1,245.7
========= =========
(See Notes to Condensed Consolidated Financial Statements on pages 5,
6 and 7.)
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. On August 28, 1997, the Company acquired all the outstanding
shares of common stock of Nellcor Puritan Bennett Incorporated
(Nellcor) for approximately $1.9 billion in cash. Nellcor,
based in Pleasanton, California, is a developer and manufacturer
of products to diagnose, monitor and treat respiratory impaired
patients in all healthcare settings. The acquisition has been
accounted for by the purchase method and accordingly, the
results of Nellcor have been included in the Company's
consolidated statements from September 1, 1997. The purchase
price has been preliminarily allocated based upon the estimated
fair value of the assets acquired. This treatment resulted in
approximately $1,201.7 million of intangible assets that will be
amortized on a straight-line basis over their estimated period
of benefit of 10 to 30 years, with a weighted average life of 22
years. The Company also recorded a deferred tax liability of
approximately $234.6 million, representing the tax effect of
timing differences recorded as part of the acquisition.
Adjustments, which could be significant, will be recorded during
the allocation period based upon a detailed review of the fair
value of assets and liabilities acquired. During subsequent
quarters of the fiscal year, additional liabilities will be
recorded as part of purchase accounting and through non-recurring
charges to results of operations for costs typical in a
merging of operations, including rationalization of facilities,
work force reductions, asset write-downs and other integration
costs. The integration costs are not currently determinable,
but they are expected to be significant.
The following unaudited pro forma financial information presents
the combined results of operations of Mallinckrodt and Nellcor
as if the acquisition had occurred as of the beginning of fiscal
1998 and 1997, after giving effect to certain adjustments,
including amortization of goodwill, additional depreciation
expense, increased interest payments on debt related to the
acquisition, reduced interest income from cash utilized to
complete the acquisition and the related tax effects. The pro
forma financial information does not necessarily reflect the
results of operations that would have occurred had Mallinckrodt
and Nellcor operated as a combined entity during such periods.
For the Three Months
Ended September 30,
--------------------
(In millions, except
per share amounts) 1997 1996
------ ------
Net sales $599.2 $612.9
Net income $ 6.2 $ 25.7
Net income per share $ .08 $ .34
The pro forma financial information presented above does not
include non-cash charges for purchased research and development
and the sale of inventory stepped up to fair value at date of
acquisition. These charges are included in the actual results
for the quarter ended September 30, 1997. See Note 2 for
additional information.
The Company utilized cash and cash equivalents and borrowed
funds to complete the acquisition of Nellcor. The borrowing
was obtained through a $2.0 billion credit facility established
in July 1997, and then amended and restated in September 1997.
The credit facility consists of a $400 million term loan and a
$1.6 billion five-year revolving credit facility. Under this
agreement, interest rates on borrowing are based on the London
Interbank Offered Rate (LIBOR) plus a margin dependent on the
Company's senior debt rating.
2. Fiscal 1998 first quarter non-cash acquisition-related costs
include a one-time $398.3 million write-off of purchased
research and development. The purchased research and
development represents the value of medical devices still in the
development stage and not considered to have reached technical
feasibility. In addition, the sale of inventories stepped up to
fair value at acquisition resulted in a charge of $18.8 million,
$11.7 million net of taxes, for the month of September 1997. A
similar inventory-related charge will impact results for the
next three months based upon current expectations for sales of
the acquired inventory.
3. Included in earnings from continuing operations for the three
months ended September 30, 1996 is a one-time research and
development expense of $6.0 million, $3.8 million after taxes,
or $.05 per share resulting from a strategic alliance to develop
new magnetic resonance imaging technology.
4. Included in discontinued operations are the results of the
animal health segment which was divested June 30, 1997
and the results of Fries & Fries, Inc., a wholly owned
subsidiary which owned the Company's 50% interest in
Tastemaker, the flavors joint venture with Hercules
Incorporated, and which was divested March 31, 1997.
5. On October 6, 1994, Augustine Medical, Inc. (Augustine)
commenced a patent infringement litigation against Mallinckrodt
Group Inc. and Mallinckrodt Medical, Inc. (the Company) in the
U.S. District Court for the District of Minnesota.
Specifically, Augustine alleged that the Company's sale of all
five (5) models of its convective warming blankets infringe
certain claims of one or more of their patents. The Company
filed counterclaims against Augustine in connection with the
above actions alleging unfair competition, antitrust violations,
and invalidity of the asserted patents, among other things.
The liability phase of the case was tried to a jury in August
1997 and the verdict was that the Company's blankets infringe
certain Augustine patents under the doctrine of equivalents, but
do not literally infringe the patents. There was also a finding
of no willful infringement.
The Company's sales of the convective warming blankets in the
United States in fiscal 1997 were $8 million. On September 22,
1997, the jury awarded damages in the amount of $16.8 million
for the period ended September 30, 1997 and the judge put in
place an injunction which stopped the Company from manufacturing
and selling blankets in the United States. The Company appealed
the jury verdicts of liability and damages to the Court of
Appeals for the Federal Circuit (a special court for patent
appeals). The Court of Appeals lifted the injunction
temporarily, and the Company continues to sell and manufacture
blankets in the United States. With the advice of outside
counsel, the Company believes there was insufficient evidence of
equivalents presented and, consequently, for this and other
reasons the verdicts were in error. The Company will work
vigorously in the Appeals Court to overturn the verdicts. The
Company has not recorded a reserve for payment of the damages.
See Part II, Item 1 Legal Proceedings for additional
information.
6. Provisions for income taxes were based on estimated annual
effective tax rates for each fiscal year. Excluding the one-
time $398.3 million write-off of purchased research and
development discussed in Notes 1 and 2, the Company's effective
tax rate for the first three months was 36.9 percent, compared
to last year's 37.0 percent.
7. The Company is subject to various investigations, claims and
legal proceedings covering a wide range of matters that arise in
the ordinary course of its business activities. In addition, in
connection with laws and regulations pertaining to the
protection of the environment, the Company is a party to several
environmental remediation investigations and clean-ups and,
along with other companies, has been named a "potentially
responsible party" for certain waste disposal sites. Each of
these matters is subject to various uncertainties, and it is
possible that some of these matters will be decided unfavorably
against the Company. The Company has established accruals for
matters that are in its view probable and reasonably estimable.
Based on information presently available, management believes
that existing accruals are sufficient to satisfy any known
environmental liabilities. Further, any additional liability
that may ultimately result from the resolution of these matters
is not expected to have a material effect on Mallinckrodt's
business, financial condition or results of operations.
8. Earnings per common share were based on the weighted average
number of common and common equivalent shares outstanding
(73,166,456 and 75,501,070 for the three months ended September
30, 1997 and 1996, respectively).
In February 1997, the Financial Accounting Standards Board
issued Statement No. 128, Earnings per Share, which is required
to be adopted on December 31, 1997. At that time, the Company
will be required to change the method currently used to compute
earnings per share and to restate all prior periods. Under the
new requirements for calculating primary earnings per share, the
dilutive effect of stock options will be excluded. The impact
of Statement No. 128 on the calculation of primary and fully
diluted earnings is not material for the quarters ended
September 30, 1997 and 1996.
9. The components of inventory included the following as of
September 30, 1997:
(In millions)
Raw materials and supplies $ 192.6
Work in process 68.9
Finished goods 307.4
--------
$ 568.9
========
10. As of September 30, 1997, 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:
September 30, June 30,
1997 1997
--------------- ---------------
Common stock 14,236,673 14,843,847
4 Percent cumulative
preferred stock 1,670 1,670
11. At September 30, 1997,
common shares reserved were:
Exercise of common stock purchase rights 81,971,675
Exercise of stock options and granting
of stock awards 9,092,049
------------
Total 91,063,724
============
12. Supplemental cash flow information for the three months ended
September 30 included:
(In millions)
1997 1996
------ ------
Interest paid $12.7 $22.2
Income taxes paid $4.8 $6.4
Non-cash investing and
financing activities:
Assumption of liabilities
related to an acquisition 488.5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. (1)
Results of Operations
General
- -------
The Company recorded a loss from continuing operations and a net loss
of $381.4 million, or $5.21 loss per share for the quarter ended
September 30, 1997. The loss includes certain non-cash charges
related to the acquisition of Nellcor which was completed at the end
of August 1997. The acquisition-related charges are a one-time
$398.3 million write-off of purchased research and development, which
had no offsetting tax benefits, and a cost of goods sold charge of
$18.8 million, $11.7 million net of taxes, related to the sale of
inventories stepped up to fair value. Excluding the non-cash charges
related to the acquisition, the Company had earnings from continuing
operations of $28.6 million, or 39 cents per share. Earnings from
- ------------------------
(1) "Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: With the exception of historical information,
the matters discussed in this report to stockholders are forward-
looking statements that involve risks and uncertainties, and actual
results could differ materially from those discussed. Among the
factors that could cause actual results to differ materially are the
following: the effect of business and economic conditions; the
impact of competitive products and continued pressure on prices
realized by the Company for its products; constraints on supplies of
raw materials used in manufacturing certain of the Company's
products; capacity constraints limiting the production of certain
products; difficulties or delays in the development, production,
testing, and marketing of products; difficulties or delays in
receiving required governmental or regulatory approvals; market
acceptance issues, including the failure of products to generate
anticipated sales levels; difficulties in rationalizing acquired
businesses and in realizing related cost savings and other benefits;
the effects of and changes in trade, monetary, and fiscal policies,
laws, and regulations; foreign exchange rates and fluctuations in
those rates; the costs and effects of legal and administrative
proceedings, including environmental proceedings and patent disputes
involving the Company; and the risk factors reported from time to
time in the Company's SEC reports.
<PAGE>
continuing operations for the first quarter of last year were $36.6
million, or 48 cents per share. Net earnings for the same quarter
last year were $35.4 million, or 47 cents per share, and included a
loss of $1.2 million from discontinued operations.
Net sales for the quarter were $498.1 million, up 13% from the $442.0
million in the same period last year. The first quarter results
include one month of sales of Nellcor, which were $70.7 million.
Excluding the sales of Nellcor, the Company's net sales would have
been 3% below the corresponding period of last year.
<PAGE>
A comparison of sales and operating earnings follows:
(In millions)
Three Months Ended
September 30,
----------------------
1997 1996
--------- ---------
Sales
- -----
Healthcare $ 411.1 $ 361.7
Specialty chemicals 87.0 80.5
Intersegment sales (.2)
--------- ---------
$ 498.1 $ 442.0
========= =========
Operating earnings (loss)
- -------------------------
Healthcare $(361.8) $ 67.4
Specialty chemicals 5.0 5.5
Corporate (5.5) (6.6)
--------- ---------
$(362.3) $ 66.3
========= =========
Business Segments
- -----------------
Healthcare
Net Sales Three Months Ended
(In millions) September 30,
----------------------
1997 1996
--------- ---------
Imaging agents $177.3 $198.6
Respiratory care 141.8 77.3
Pharmaceutical specialties 92.0 85.8
--------- ---------
$411.1 $361.7
========= =========
Healthcare reported an operating loss for the quarter of $361.8
million which includes Nellcor's results for one month. These
results include a $396.3 million dollar write-off of purchased
research and development, and an $18.6 million fair value step-up
charge related to the sale of inventories. Excluding the impact of
Nellcor non-cash acquisition-related charges, healthcare operating
earnings would have been $53.1 million which is 21% below the $67.4
million reported for the same period last fiscal year. The earnings
decline is primarily attributable to lower selling prices, especially
in U.S. imaging agents.
Net sales for the first quarter were $411.1 million, an increase of
14 percent over the $361.7 million reported in the same quarter of
last year. Excluding Nellcor, healthcare sales were $344.5 million,
or 5 percent below prior year. Imaging agent sales were $177.3
million, or 11 percent below the corresponding period last year.
This decline is due to continued pricing pressures in the United
States which were only partially offset by increased volume.
Respiratory care includes critical care products and Nellcor sales.
Excluding Nellcor sales for one month, this business had sales of
$75.2 million, which is 3 percent below prior year. However, the
year-to-year comparison of critical care sales is negatively affected
by the strong U.S. dollar (6 percent) and the lack of sales of the
blood gas and electrolyte business divested on September 30, 1996 (7
percent). Pharmaceutical specialties sales were $92.0 million, a 7
percent increase over prior year. This increase is attributable to
acetaminophen (APAP) volume and price improvement, and the
acquisition of D.M. Graham Laboratories in November 1996.
Specialty Chemicals
Net Sales Three Months Ended
(In millions) September 30,
------------------
1997 1996
------- -------
$87.0 $80.5
======= =======
Specialty chemicals operating earnings for the quarter declined 9
percent to $5.0 million from $5.5 million for the same period last
year. The current year results include one month of results of Aero
Systems, which is part of Nellcor. Excluding Aero Systems'
acquisition-related charges, the specialty chemicals segment had
operating earnings of $7.2 million or 31 percent above last year
primarily as a result of benefits derived from cost containment
programs in effect. Net sales for the quarter were up 8 percent.
After excluding sales of Aero Systems, specialty chemicals sales
improved 3 percent primarily due to volume increases in
microelectronics.
Corporate Matters
- -----------------
Corporate expenses were $5.5 million, or 17 percent below the $6.6
million reported for the same period last year. The Company's
effective tax rate was negatively impacted by the non-deductible
write-off of purchased research and development and goodwill
amortization directly associated with the August 28, 1997 acquisition
of Nellcor.
Financial Condition
The Company's financial resources are expected to continue to be
adequate to support existing businesses. Since June 30, 1997, cash
and cash equivalents decreased $683.4 million, primarily as a result
of the acquisition of Nellcor common shares outstanding. Operations
utilized $20.6 million of cash, while acquisition and capital
spending totaled $1,764.9 million. The Company's current ratio at
September 30, 1997 was .7:1. Debt as a percentage of invested
capital was 65.7 percent.
On August 28, 1997, the Company acquired all the outstanding shares
of common stock of Nellcor for approximately $1.9 billion. The
acquisition was completed utilizing cash and cash equivalents and
borrowed funds. The borrowing of approximately $1.1 billion,
reported as a current liability, was obtained through a $2.0 billion
credit facility established in July 1997, and then amended in
September 1997. The credit facility consists of a $400 million term
loan, and a $1.6 billion five-year revolving credit facility. Under
this agreement, interest rates on borrowings are based upon the
London Interbank Offered Rate, plus a margin dependent on the
Company's senior debt rating.
At September 30, 1997, the Company has a $550 million private
placement commercial paper program. The program is backed by $1.6
billion of U.S. lines of credit available until September 2002. At
September 30, 1997, no commercial paper borrowings were outstanding.
There was $705 million of borrowing outstanding under the U.S. lines
of credit at September 30, 1997. Non-U.S. lines of credit totaling
$147.7 million were also available and borrowings under these lines
amounted to $15.6 million at September 30, 1997. The non-U.S. lines
are cancelable at any time.
Estimated capital spending for the year ending June 30, 1998 is
approximately $200 million.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the
ordinary course of its business activities. In addition, in
connection with laws and regulations pertaining to the protection of
the environment, the Company is a party to several environmental
remediation investigations and clean-ups and, along with other
companies, has been named a "potentially responsible party" for
certain waste disposal sites. Each of these matters is subject to
various uncertainties, and it is possible that some of these matters
will be decided unfavorably against the Company. The Company has
established accruals for matters that are in its view probable and
reasonably estimable. Based on information presently available,
management believes that existing accruals are sufficient to satisfy
any known environmental liabilities. Further, any additional
liability that may ultimately result from the resolution of these
matters is not expected to have a material effect on Mallinckrodt's
business, financial condition or results of operations.
Previously Reported Matters
- ---------------------------
The following is a discussion of material developments in proceedings
previously reported in the Company's Form 10-K for its fiscal year
ended June 30, 1997:
Environmental Matters
- ----------------------
Orrington, ME--As previously reported, a draft Site Investigation
(SI) has been completed. Additional information has been provided to
the Environmental Protection Agency (EPA) and the State of Maine to
address issues they have raised. This information is being reviewed
by the EPA and Maine in order to finalize the SI.
Auburn Hills, MI--The Company completed additional work as requested
by the State of Michigan and incorporated the data into a Revised
Remedial Action Plan. The State has requested additional revisions
to the Plan which the Company is evaluating. A status conference was
held on October 31, 1997 to advise the Court of the progress toward
settlement. Meetings with the current site owner and other PRPs are
being scheduled to commence allocation discussions in an effort to
settle the matter without continuing litigation.
Pierce County, WA--The Company and Olin Corporation have completed a
remedial work plan for this site.
Other Litigation
- ----------------
Augustine Medical, Inc.--On September 26, 1997, the judge in this
previously reported proceeding ordered that the Company stop
manufacturing and selling its convective warming blankets which
infringe in the United States. Until January 1, 1998, the Company
can serve existing customers in the United States only with
Augustine's consent. Thereafter, the Company must completely cease
manufacture and sale of its blankets that infringe in the United
States.
On September 30, 1997, the Company asked the Court of Appeals for the
Federal Circuit for an emergency stay of the order, pending appeal.
On October 1, 1997, the Court of Appeals temporarily stayed the order
until the Court of Appeals determines if the stay should remain in
place until the appeal is decided. The Court of Appeals has not yet
rendered a decision as of the date of this filing.
Additional Matters
- ------------------
On May 3, 1996, Nellcor, which was acquired by the Company effective
August 28, 1997 and operates as a wholly-owned subsidiary of the
Company, and several of its officers and members of its Board of
Directors received notice that they had been named as defendants in a
class action lawsuit seeking unspecified damages based upon alleged
violations of California state securities and other laws. The
complaint, filed in the Superior Court of the State of California,
County of Alameda, alleged misrepresentations during the period from
September 29, 1995 through April 16, 1996 with respect to Nellcor's
business, particularly about the merger with Puritan-Bennett and the
integration of Nellcor and Puritan-Bennett. Nellcor filed a demurrer
to this action which was sustained on October 9, 1996 with leave to
amend. Plaintiffs filed an amended complaint on November 1, 1996.
On April 2, 1997, the Superior Court granted Nellcor's demurrer to
the amended complaint and dismissed the complaint with prejudice.
On April 14, 1997, another complaint containing essentially the same
allegations against Nellcor and the other defendants was filed in the
United States District Court for the Northern District of California.
On October 31, 1997, the Federal District Court granted Nellcor's
motion to dismiss the complaint with leave to amend. The Company
believes that the allegations are without merit and intends to defend
them vigorously.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
The following matters were voted upon at the Annual Meeting of
Shareholders held on October 15, 1997, and received the votes set
forth below:
1. All of the following persons nominated were elected to serve as
directors and received the number of votes set opposite
their names:
For Withheld
---------- --------
C. Ray Holman 63,251,963 467,738
Claudine B. Malone 63,131,916 587,785
Anthony Viscusi 63,187,953 531,748
2. A proposal to ratify the appointment of independent public
accountants received 63,434,918 votes FOR and 185,372
votes AGAINST, with 99,411 abstentions.
3. A proposal to approve the Directors' Stock Award Plan received
60,399,242 votes FOR and 2,846,018 votes AGAINST, with 474,441
abstentions.
4. A proposal to approve the Equity Incentive Plan received
59,930,958 votes FOR and 3,346,998 votes AGAINST, with
441,745 abstentions.
5. A proposal to approve the material terms of the performance
goals established under the Company's Long-Term Incentive
Compensation Plan for key employees for the three-year
period commencing July 1, 1997 and ending June 30,
2000 received 59,592,463 votes FOR and 3,669,141 votes AGAINST,
with 458,097 abstentions.
6. A stockholder proposal concerning the Company's Share Rights
Plan received 37,027,103 votes FOR and 21,450,411 votes AGAINST,
with 527,206 abstentions and 4,700,872 broker non-votes.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Incorporated Filed with
Exhibit Herein by Electronic
Number Description Reference to Submission
- ------- ------------------------ ------------------ ----------
2.6 Agreement and Plan of Nellcor's Current
Merger, dated as of Report on Form 8-K
July 23, 1997, among (File No. 0-14980)
Nellcor Puritan Bennett
Incorporated ("Nellcor"),
Mallinckrodt Inc. and NPB
Acquisition Corp.
10.24 Amended and Restated X
Credit Agreement, dated
as of September 12, 1997,
among Mallinckrodt, the
Banks listed therein,
Morgan Guaranty Trust
Company of New York, as
Administration Agent,
Goldman Sachs Credit
Partners L.P. and Citibank,
N.A., as Co-Syndication
Agents, and Citibank, N.A.,
Goldman Sachs Credit
Partners L.P., and
NationsBank, N.A., as
Co-Documentation Agents.
11.1 Primary earnings per share X
computation for the three
months ended September 30,
1997 and 1996.
11.2 Fully diluted earnings per X
share computation for the
three months ended
September 30, 1997 and 1996.
27 Financial Data Schedule. X
(b) Reports on Form 8-K.
Registered trademarks are indicated by an asterisk (*).
During the quarter and through the date of this report, the
following reports on Form 8-K were filed.
- Report dated July 7, 1997 under Item 5 regarding completion of
sale of veterinary business and plans to increase share
repurchase by $250 million.
- Report dated July 29, 1997 under Item 5 regarding announcement
of definitive agreement to acquire Nellcor Puritan Bennett
Incorporated.
- Report dated September 2, 1997 under Item 5 regarding
announcement of completion of tender offer for Nellcor
Puritan Bennett Incorporated.
- Report dated September 5, 1997 under Item 2 regarding
announcing completion of acquisition of Nellcor
Puritan Bennett Incorporated.
- Report dated September 25, 1997 under Item 5 regarding
updating investors on Nellcor Puritan Bennett acquisition,
first quarter prospects.
- Report dated October 7, 1997 under Item 5 regarding
Mallinckrodt can continue to sell Warm Touch(*) Blankets in
U.S., Appeals Court stays injunction.
- Report dated October 16, 1997 under Item 5 regarding Board
declares quarterly dividend; three directors elected at
Company's annual meeting.
- Report dated October 21, 1997 under Item 5 regarding selling
additive preblend business to Ciba Specialty Chemicals.
- Report dated November 3, 1997 under Item 7 regarding pro forma
statements pertaining to tender offer for Nellcor Puritan
Bennett Incorporated.
* * * * * * * * * * * * * *
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
Mallinckrodt Inc.
------------------------
Registrant
By: MICHAEL A. ROCCA By: DOUGLAS A. MCKINNEY
------------------------ ------------------------
Michael A. Rocca Douglas A. McKinney
Senior Vice President and Vice President and
Chief Financial Officer Controller
Date: November 12, 1997
Exhibit 11.1
EARNINGS PER SHARE
PRIMARY COMPUTATION
($ in millions, except share and per share amounts)
Three Months Ended
September 30,
-----------------------
1997 1996
--------- ---------
Basis for computation of earnings per
common and common equivalent shares:
Earnings (loss) from continuing
operations $(381.4) $ 36.6
Deduct dividends on 4 Percent
cumulative preferred stock (.1) (.1)
--------- ---------
Earnings (loss) from continuing
operations available to common
shareholders (381.5) 36.5
Discontinued operations (1.2)
--------- ---------
Available for common shareholders $(381.5) $ 35.3
========= =========
Number of shares:
Weighted average shares outstanding 72,475,492 74,231,367
Shares issuable upon exercise of
stock options, net of shares assumed
to be repurchased 690,964 1,269,703
---------- ----------
73,166,456 75,501,070
========== ==========
Earnings (loss) per common share:
Continuing operations $(5.21) $.48
Discontinued operations (.01)
------- -------
Net earnings $(5.21) $.47
======= =======
Exhibit 11.2
EARNINGS PER SHARE
FULLY DILUTED COMPUTATION
($ in millions, except share and per share amounts)
Three Months Ended
September 30,
-----------------------
1997 1996
--------- ---------
Basis for computation of earnings per
common and common equivalent shares:
Earnings (loss) from continuing
operations $(381.4) $ 36.6
Deduct dividends on 4 Percent
cumulative preferred stock (.1) (.1)
--------- ---------
Earnings (loss) from continuing
operations available to common
shareholders (381.5) 36.5
Discontinued operations (1.2)
--------- ---------
Available for common shareholders $(381.5) $ 35.3
========= =========
Number of shares:
Weighted average shares outstanding 72,475,492 74,231,367
Shares issuable upon exercise of
stock options, net of shares assumed
to be repurchased 690,964 1,567,034
---------- ----------
73,166,456 75,798,401
========== ==========
Earnings (loss) per common share:
Continuing operations $(5.21) $.48
Discontinued operations (.01)
------- -------
Net earnings $(5.21) $.47
======= =======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial 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> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 125
<SECURITIES> 0
<RECEIVABLES> 489
<ALLOWANCES> 15
<INVENTORY> 569
<CURRENT-ASSETS> 1,309
<PP&E> 1,497
<DEPRECIATION> 513
<TOTAL-ASSETS> 4,078
<CURRENT-LIABILITIES> 1,855
<BONDS> 551
0
11
<COMMON> 87
<OTHER-SE> 776
<TOTAL-LIABILITY-AND-EQUITY> 4,078
<SALES> 498
<TOTAL-REVENUES> 498
<CGS> 309
<TOTAL-COSTS> 860
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18
<INCOME-PRETAX> (371)
<INCOME-TAX> 10
<INCOME-CONTINUING> (381)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (381)
<EPS-PRIMARY> (5.21)
<EPS-DILUTED> (5.21)
</TABLE>
EXHIBIT 10.24
$2,000,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
September 12, 1997
among
Mallinckrodt Inc.
The Lenders Listed Herein,
Morgan Guaranty Trust Company of New York,
as Administrative Agent,
Goldman Sachs Credit Partners L.P.
and Citibank, N.A.,
as Co-Syndication Agents
and
Citibank, N.A.,
Goldman Sachs Credit Partners L.P.,
and Nations Bank, N.A.,
as Co-Documentation Agents
------------------------------------
J.P. Morgan Securities Inc., Goldman Sachs Credit Partners L.P.
and Citicorp Securities, Inc.,
Co-Arrangers
<PAGE>
TABLE OF CONTENTS
-----------
PAGE
----
ARTICLE 1
---------
DEFINITIONS
-----------
SECTION 1.01. Definitions......................................1
SECTION 1.02. Accounting Terms and Determinations.............19
SECTION 1.03. Classes and Types of Loans and Borrowings.......19
ARTICLE 2
---------
THE CREDITS
-----------
SECTION 2.01. Commitments to Lend.............................20
SECTION 2.02. Notice of Committed Borrowing...................20
SECTION 2.03. Money Market Borrowings.........................21
SECTION 2.04. Notice to the Lenders; Funding of Loans.........25
SECTION 2.05. Notes...........................................26
SECTION 2.06. Maturity of Loans...............................26
SECTION 2.07. Interest Rates..................................27
SECTION 2.08. Facility Fees...................................30
SECTION 2.09. Optional Termination or Reduction
of Commitments................................30
SECTION 2.10. Method of Electing Interest Rates...............30
SECTION 2.11. Mandatory Reduction and Termination
of Commitments; Mandatory Prepayments.........32
SECTION 2.12. Optional Prepayments............................34
SECTION 2.13. General Provisions as to Payments...............34
SECTION 2.14. Funding Losses..................................35
SECTION 2.15. Computation of Interest and Fees................35
SECTION 2.16. Regulation D Compensation.......................36
ARTICLE 3
---------
CONDITIONS
----------
SECTION 3.01. Effectiveness...................................36
SECTION 3.02. Borrowings......................................37
ARTICLE 4
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 4.01. Corporate Existence.............................38
SECTION 4.02. Financial Condition.............................39
SECTION 4.03. Litigation......................................39
SECTION 4.04. No Breach.......................................39
SECTION 4.05. Action..........................................40
SECTION 4.06. Approvals.......................................40
SECTION 4.07. ERISA...........................................40
SECTION 4.08. Taxes...........................................40
SECTION 4.09. Investment Company Act..........................41
SECTION 4.10. Public Utility Holding Company Act..............41
SECTION 4.11. True and Complete Disclosure....................41
SECTION 4.12. Environmental Matters...........................41
ARTICLE 5
---------
COVENANTS
---------
SECTION 5.01. Financial Statements, Etc.......................42
SECTION 5.02. Litigation......................................44
SECTION 5.03. Existence, Etc..................................45
SECTION 5.04. Insurance.......................................45
SECTION 5.05. Limitation on Liens.............................45
SECTION 5.06. Mergers and Sales of Assets.....................48
SECTION 5.07. Change in Nature of Business....................48
SECTION 5.08. Financial Covenants.............................48
SECTION 5.09. Indebtedness of Subsidiaries....................49
SECTION 5.10. Transactions with Affiliates....................49
SECTION 5.11. Use of Proceeds.................................49
SECTION 5.12. Environmental Laws..............................49
SECTION 5.13. Most Favored Lender.............................50
ARTICLE 6
---------
DEFAULTS
---------
SECTION 6.01. Events of Default...............................50
SECTION 6.02. Notice of Default...............................53
ARTICLE 7
---------
THE AGENTS
----------
SECTION 7.01. Appointment and Authorization...................53
SECTION 7.02. Agent and Affiliates............................53
SECTION 7.03. Action by Agent.................................54
SECTION 7.04. Consultation with Experts.......................54
SECTION 7.05. Liability of Agent..............................54
SECTION 7.06. Indemnification.................................54
SECTION 7.07. Credit Decision.................................55
SECTION 7.08. Successor Administrative Agent..................55
SECTION 7.09. Co-Documentation Agents and
Co-Syndication Agents.........................55
ARTICLE 8
---------
CHANGE IN CIRCUMSTANCES
-----------------------
SECTION 8.01. Basis for Determining Interest
Rate Inadequate or Unfair.....................56
SECTION 8.02. Illegality......................................56
SECTION 8.03. Increased Cost and Reduced Return...............57
SECTION 8.04. Taxes...........................................59
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans.....................60
SECTION 8.06. Substitution of Lender..........................61
ARTICLE 9
---------
MISCELLANEOUS
-------------
SECTION 9.01. Notices.........................................61
SECTION 9.02. No Waivers......................................62
SECTION 9.03. Expenses; Indemnification.......................62
SECTION 9.04. Sharing of Set-offs.............................63
SECTION 9.05. Amendments and Waivers..........................63
SECTION 9.06. Successors and Assigns..........................64
SECTION 9.07. Collateral......................................65
SECTION 9.08. Governing Law; Submission to Jurisdiction.......65
SECTION 9.09. Counterparts; Integration.......................66
SECTION 9.10. Waiver of Jury Trial............................66
SECTION 9.11. Confidentiality.................................66
<PAGE>
PRICING SCHEDULE
COMMITMENT SCHEDULE
EXHIBIT A - Note
EXHIBIT B - Money Market Quote Request
EXHIBIT C - Invitation for Money Market Quotes
EXHIBIT D - Money Market Quote
EXHIBIT E - Opinion of Counsel for the Borrower
EXHIBIT F - Opinion of Special Counsel for the Agents
EXHIBIT G - Assignment and Assumption Agreement
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
AGREEMENT dated as of September 12, 1997 among MALLINCKRODT
INC., the LENDERS party hereto from time to time, MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Administrative Agent, GOLDMAN SACHS
CREDIT PARTNERS L.P. and CITIBANK, N.A., as Co-Syndication Agents and
Co-Documentation Agents, and NATIONSBANK, N.A., as Co-Documentation
Agent.
WHEREAS, the Borrower, the banks referred to therein, Morgan
Guaranty Trust Company of New York, as Administrative Agent, Goldman
Sachs Credit Partners L.P., as Syndication Agent, and Citibank, N.A.,
as Documentation Agent, are parties to a $2,000,000,000 Credit
Agreement dated as of July 23, 1997 (the "Original Agreement") under
which loans are available to the Borrower on the terms and conditions
set forth therein; and
WHEREAS, the parties hereto wish to modify the Original
Agreement in a number of respects, as more fully set forth below;
NOW, THEREFORE, the parties hereto hereby agree that, on and as
of the Effective Date, the Original Agreement is hereby amended and
restated in its entirety as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. 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
2.03.
"Acquisition" means the acquisition by the Borrower of Target as
contemplated by the Offer to Purchase and the Merger Agreement.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted Consolidated EBITDA" means, for any fiscal period,
Consolidated EBITDA for such period, adjusted to exclude therefrom
Excluded Items.
"Adjusted Consolidated Net Worth" means, for any fiscal period,
Consolidated Net Worth for such period, adjusted to exclude therefrom
Excluded Items (after adjustment for related tax effects).
"Adjustment Quarter" means any of the four consecutive fiscal
quarters most recently ended on or prior to the date on which Target
becomes a Subsidiary of the Borrower.
"Administrative Agent" means Morgan Guaranty Trust Company of
New York, in its capacity as administrative agent for the Lenders
hereunder, and its successors in such capacity.
"Administrative Questionnaire" means, with respect to each
Lender, an administrative questionnaire in the form prepared by the
Administrative Agent and submitted to the Administrative Agent (with
a copy to the Borrower) duly completed by such Lender.
"Affiliate" means any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the
Borrower 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 Borrower or any of its Subsidiaries and
(b) none of the Subsidiaries of the Borrower shall be Affiliates.
"Agent" means each of the Administrative Agent, the Co-
Syndication Agents and the Co-Documentation Agents.
"Agreement" means the Original Agreement as amended and restated
by this Amended and Restated Agreement and as the same may be further
amended from time to time in accordance with the terms hereof.
"Amended and Restated Agreement" means this Amended and Restated
Credit Agreement dated as of September 12, 1997 among the Borrower,
the Lenders and the Agents.
"Applicable Lending Office" means, with respect to any Lender,
(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 2.07(b).
"Asset Sale" means any sale or other disposition (including any
such transaction effected by way of merger or consolidation) by the
Borrower or any of its Subsidiaries of any asset (including without
limitation any capital stock held by the Borrower or such
Subsidiary), including without limitation any sale-leaseback
transaction, whether or not involving a capital lease, but excluding
(i) dispositions to the Borrower or a Subsidiary of the Borrower,
(ii) any sale, transfer or other disposition of inventory or obsolete
equipment or property in the ordinary course of business, (iii) any
sale, transfer or other disposition of cash, cash equivalents and
short term investments in the ordinary course of business and (iv)
any sale, transfer or other disposition of any "margin stock" (within
the meaning of the Margin Regulations) for fair value.
"Assignee" has the meaning set forth in Section 9.06(c).
"Bankruptcy Code" means the United States 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 Mallinckrodt Inc., a New York corporation, and
its successors.
"Borrowing" has the meaning set forth in Section 1.03.
"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).
"CD Base Rate" has the meaning set forth in Section 2.07(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 2.07(b) on the basis of an Adjusted CD Rate.
"CD Reference Lenders" means Citibank, N.A. and Morgan Guaranty
Trust Company of New York.
"Class" has the meaning set forth in Section 1.03.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Co-Documentation Agents" means Citibank, N.A., Goldman Sachs
Credit Partners L.P., and NationsBank, N.A., in their respective
capacities as co-documentation agents hereunder.
"Co-Syndication Agents" means Goldman Sachs Credit Partners L.P.
and Citibank, N.A., in their respective capacities as co-syndication
agents hereunder.
"Commitment" means any Term Loan Commitment or Revolving Credit
Commitment, and "Commitments" means any or all of the foregoing, as
the context may require.
"Commitment Schedule" means the Schedule attached hereto and
identified as such.
"Committed Loan" means a loan made by a Lender pursuant to
Section 2.01; 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 EBITDA" means, for any fiscal period, Consolidated
Net Income for such period plus, to the extent deducted in
determining such Consolidated Net Income for such period, the
aggregate amount of (i) Consolidated Interest Expense, (ii)
consolidated income tax expense and (iii) consolidated depreciation
and amortization expense.
"Consolidated Interest Expense" means, for any fiscal period,
the aggregate interest expense of the Borrower and its Subsidiaries
determined on a consolidated basis for such period.
"Consolidated Net Income" means, for any fiscal period, the net
income of the Borrower and its Subsidiaries, determined on a
consolidated basis for such period.
"Consolidated Net Worth" means, as at any date, the sum, for the
Borrower 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
(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 Lender, 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 Lender may hereafter
designate as its Domestic Lending Office by notice to the Borrower
and the Administrative Agent; provided that any Lender 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 Lender
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 2.07(b).
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 3.01.
"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
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 from time to time, or any successor statute, and any
rule or regulation thereunder.
"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 Borrower 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 Borrower
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 Lender, 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 Lender as it may hereafter
designate as its Euro-Dollar Lending Office by notice to the Borrower
and the Administrative Agent.
"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 2.07(c) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reference Lenders" means the principal London
offices of Citibank, N.A. 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 Lender to United States residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Excluded Items means, without duplication, (i) non-recurring
charges incurred during Fiscal Year 1998 in connection with the
Acquisition (without adjustment for related tax effects) to the
extent such amounts do not exceed $105,000,000, (ii) write downs of
capitalized research and development related to the Acquisition and
losses on dispositions of assets (without adjustment for related tax
effects) to the extent such write downs and losses do not exceed
$295,000,000 and are incurred within 30 months of the Acquisition and
(iii) restructuring charges incurred by Target during Fiscal Year
1997 to the extent such amounts do not exceed $9,677,000.
"Exposure" means, at any time as to any Lender, the sum of (i)
such Lender's Term Loan Commitment, if still in existence, or the
outstanding principal amount of such Lender's Term Loans, if its Term
Loan Commitment is no longer in existence, plus (ii) such Lender's
Revolving Credit Commitment, if still in existence, or the
outstanding principal amount of such Lender's Revolving Credit Loans
and Money Market Loans, if its Revolving Credit Commitment is no
longer in existence.
"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 Administrative
Agent.
"Fiscal Year" refers to a fiscal year of the Borrower,
identified by the calendar year in which such fiscal year ends.
"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 8.01) or any combination of the
foregoing.
"GAAP" means generally accepted accounting principles applied on
a basis consistent with those which, in accordance with Section 1.02
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 Lender is
converted to or made as a Base Rate Loan pursuant to Section 8.02 or
8.05, 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.
"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
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 Borrower and its
Subsidiaries shall not include obligations of the Borrower and its
Subsidiaries in respect of unfunded liabilities of the Borrower 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 9.03(b).
"Interest Coverage Ratio" means, at any date, the ratio of
(i) Adjusted Consolidated EBITDA to (ii) Consolidated Interest
Expense, in each case for the period of four consecutive fiscal
quarters most recently ended on or prior to such date. For purposes
of calculating the foregoing ratio at any date after September 30,
1997, (i) Consolidated EBITDA for any Adjustment Quarter shall be
calculated as if Target had been acquired at the beginning of such
Adjustment Quarter and (ii) Consolidated Interest Expense for any
Adjustment Quarter shall be deemed to be Consolidated Interest
Expense of the most recent quarter ending on or before such date.
"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 or, subject to Section 2.10(e), one year
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 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
clauses (c) and (d) below, end on the last Euro-Dollar Business
Day of a calendar month;
(c) no Interest Period for any Revolving Credit Loan shall
extend beyond the Revolving Credit Termination Date; and
(d) no Interest Period for any Term Loan shall extend
beyond the Term Loan Maturity 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) or (c) 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;
(b) no Interest Period for any Revolving Credit Loan shall
extend beyond the Revolving Credit Termination Date; and
(c) no Interest Period for any Term Loan shall extend
beyond the Term Loan Maturity 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 2.03; 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
Revolving Credit Termination Date shall end on the Revolving
Credit 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 2.03; 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; and
(b)any Interest Period which would otherwise end after the
Revolving Credit Termination Date shall end on the Revolving
Credit Termination Date.
"Lender" means each bank or other financial institution listed
on the signature pages hereof, each Assignee which becomes a Lender
pursuant to Section 9.06(c), and their respective successors.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank
Offered Rate pursuant to Section 2.03.
"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 2.07(c).
"Margin Regulations" means Regulations G and U of the Board of
Governors of the Federal Reserve System as in effect from time to
time.
"Material Adverse Effect" means a material adverse effect on (a)
the financial condition, operations or business taken as a whole of
the Borrower and its Subsidiaries, (b) the ability of the Borrower to
perform its 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 Lenders and the Agents hereunder and
under the Notes.
"Merger Agreement" means the Agreement and Plan of Merger dated
as of July 23, 1997, among Target, the Offeror and the Borrower, in
substantially the form of the draft of July 23, 1997 heretofore
furnished to each of the Lenders, with such changes (other than
changes to (i) the conditions set forth in Article 8 and Annex A
thereto in any respect material to the creditworthiness of the
Borrower or to the rights and obligations of the Lenders hereunder,
(ii) the price at which the Borrower will offer to purchase all the
outstanding shares of Common Stock, par value $.001 per share, of
Target, including the associated right to purchase Series A Junior
Participating Preferred Stock and (iii) the latest date upon which
any of the Borrower, the Offeror or Target may terminate the Merger
Agreement if the Acquisition has not been consummated) therein as may
be made by the parties thereto.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.03(d)(ii)(D).
"Money Market Absolute Rate Loan" means a loan to be made by a
Lender pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Lender, its
Domestic Lending Office or such other office, branch or affiliate of
such Lender as it may hereafter designate as its Money Market Lending
Office by notice to the Borrower and the Administrative Agent;
provided that any Lender may from time to time by notice to the
Borrower and the Administrative Agent designate separate Money Market
Lending Offices for its Money Market LIBOR Loans, on the one hand,
and its Money Market Absolute Rate Loans, on the other hand, in which
case all references herein to the Money Market Lending Office of such
Lender 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 Lender
pursuant to a LIBOR Auction (including such a loan bearing interest
at the Base Rate pursuant to Section 8.01).
"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
2.03(d)(ii)(C).
"Money Market Quote" means an offer by a Lender to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been made by
the Borrower or any ERISA Affiliate and which is covered by Title IV
of ERISA.
"Net Cash Proceeds" means, with respect to any Asset Sale, an
amount equal to the cash proceeds received by the Borrower or any of
its Subsidiaries from or in respect of such Asset Sale (including any
cash proceeds received as interest or similar income or other cash
proceeds of any noncash proceeds of any Asset Sale), less (a) any
fees, costs and expenses incurred by such Person in respect of such
Asset Sale, (b) the amount of any Debt secured by a Lien on any asset
disposed of in such Asset Sale and discharged from the proceeds
thereof, (c) any taxes actually paid or to be payable by such Person
(as estimated by a senior financial or accounting officer of the
Borrower, giving effect to the overall tax position of the Borrower)
in respect of such Asset Sale, (d) all payments made with respect to
liabilities associated with the assets which are the subject of the
Asset Sale, including, without limitation, trade payables and other
accrued liabilities, (e) appropriate amounts to be provided by such
Person or any Subsidiary thereof, as the case may be, as a reserve in
accordance with generally accepted accounting principles against any
liabilities associated with such assets and retained by such Person
or any Subsidiary thereof, as the case may be, after such Asset Sale,
including, without limitation, liabilities under any indemnification
obligations and severance and other employee termination costs
associated with such Asset Sale, until such time as such amounts are
no longer reserved or such reserve is no longer necessary (at which
time any remaining amounts will become Net Cash Proceeds); and (f)
all distributions and other payments required to be made (or made on
a pro rata basis) to minority interest holders in Subsidiaries of
such Person as a result of such Asset Sale.
"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 2.02) or a Notice of Money Market Borrowing (as
defined in Section 2.03(f)).
"Notice of Interest Rate Election" has the meaning set forth in
Section 2.10.
"Offer to Purchase" means the Offeror's offer to purchase for
cash all outstanding shares of common stock of Target, the terms and
conditions of which offer to purchase shall be reasonably
satisfactory in form and substance to the Required Lenders.
"Offeror" means NBP Acquisition Corp., a Delaware corporation
and a Wholly-Owned Subsidiary of the Borrower, and its successors.
"Operating Lease Amount" means, at any time, an amount equal to
seven times the amount by which (i) the minimum rental commitments
under non-cancelable operating leases of the Borrower and its
Subsidiaries for the fiscal year of the Borrower 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.
"Original Agreement" has the meaning set forth in the recitals
hereto.
"Parent" means, with respect to any Lender, any Person
controlling such Lender.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a limited liability
company, 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 Borrower 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 preceding Euro-Dollar Business Day.
"Reference Lenders" means the CD Reference Lenders or the
Euro-Dollar Reference Lenders, as the context may require, and
"Reference Lender" means any one of such Reference Lenders.
"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 Lenders" means at any time Lenders having at least 51%
of the aggregate amount of the Exposures at such time.
"Revolving Credit Commitment" means,
(i) with respect to each Revolving Credit Lender listed on
the signature pages hereof, the amount set forth opposite the
name of such Lender under the heading "Revolving Credit
Commitment" in the Commitment Schedule, or
(ii) with respect to each Assignee which becomes a
Revolving Credit Lender pursuant to Section 9.06(c), the amount
of the Revolving Credit Commitment thereby assumed by it,
in each case as such amount may be reduced from time to time pursuant
to Section 2.09 or 2.11 or increased or reduced by reason of an
assignment to or by such Lender in accordance with Section 9.06(c).
"Revolving Credit Lender" means each Lender identified in the
Commitment Schedule as having a Revolving Credit Commitment and each
Assignee which acquires a Revolving Credit Commitment and/or
Revolving Credit Loans pursuant to Section 9.06(c), and their
respective successors.
"Revolving Credit Loan" means a loan made by a Revolving Credit
Lender pursuant to Section 2.01(b).
"Revolving Credit Period" means the period from and including
the Effective Date to but not including the Revolving Credit
Termination Date.
"Revolving Credit Termination Date" means the fifth anniversary
of the Effective Date (or, if such fifth anniversary date is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case the Revolving Credit Termination Date shall be
the next preceding Euro-Dollar Business Day).
"S&P" means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.
"Subsidiary" means, as to any Person, any corporation, limited
liability company 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 Borrower.
"Target" means Nellcor Puritan Bennett Incorporated, a Delaware
corporation.
"Term Availability Period" means the period from and including
the Effective Date to and including December 31, 1997.
"Term Loan" means a loan made by a Term Loan Lender pursuant to
Section 2.01(a).
"Term Loan Commitment" means,
(i) with respect to each Term Loan Lender listed on the
signature pages hereof, the amount set forth opposite the name
of such Lender under the heading "Term Loan Commitment" in the
Commitment Schedule, or
(ii) with respect to each Assignee which becomes a Term
Loan Lender pursuant to Section 9.06(c), the amount of the Term
Loan Commitment thereby assumed by it,
in each case as such amount may be reduced from time to time pursuant
to Section 2.09 or 2.11 or increased or reduced by reason of an
assignment to or by such Lender in accordance with Section 9.06(c).
"Term Loan Lender" means each Lender identified in the
Commitment Schedule as having a Term Loan Commitment and each
Assignee which acquires a Term Loan Commitment or Term Loan pursuant
to Section 9.06(c), and their respective successors.
"Term Loan Maturity Date" means the second anniversary of the
Effective Date (or if such second anniversary date is not a Euro-
Dollar Business Day, the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business falls in another calendar month, in
which case the Term Loan Maturity Date shall be the next preceding
Euro-Dollar Business Day).
"Total Capital" means, at any time, Adjusted Consolidated Net
Worth plus Total Debt.
"Total Debt" means, at any time, the aggregate outstanding
principal amount of all Indebtedness of the Borrower and its
Subsidiaries at such time (determined on a consolidated basis without
duplication in accordance with GAAP).
"Type" has the meaning set forth in Section 1.03.
"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 Borrower.
"United States" means the United States of America, including
the States and the District of Columbia, but excluding its
territories and possessions.
SECTION 1.02. 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 Borrower's
independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Lenders; provided that, if
the Borrower notifies the Administrative Agent that the Borrower
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 Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Article 5 for
such purpose), then the Borrower's compliance with such 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 Borrower and the Required Lenders.
SECTION 1.03. Classes and Types of Loans and Borrowings. The
term "Borrowing" denotes the aggregation of Loans of one or more
Lenders to be made to the Borrower pursuant to Article 2 on the same
date, all of which Loans are of the same Class and Type (subject to
Article 8) and, except in the case of Base Rate Loans, have the same
initial Interest Period. Loans hereunder are distinguished by
"Class" and by "Type". The "Class" of a Loan (or of a Commitment to
make such a Loan or of a Borrowing comprised of such Loans) refers to
the determination whether such Loan is a Term Loan or Revolving
Credit Loan, each of which constitutes a Class. The "Type" of a Loan
refers to the determination whether such Loan is a Euro-Dollar Loan,
a CD Loan, a Base Rate Loan or a Money Market Loan, each of which
constitutes a "Type". Identification of a Loan (or a Borrowing) by
both Class and Type (e.g., a "Euro-Dollar Term Loan") indicates that
such Loan is both a Term Loan and a Euro-Dollar Loan (or that such
Borrowing is comprised of such Loans).
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend.(a) Term Loan Facility.
During the Term Availability Period each Term Loan Lender severally
agrees, on the terms and conditions set forth in this Agreement, to
make a single Term Loan to the Borrower on the Effective Date in an
amount not to exceed the amount of its Term Loan Commitment. The
Term Loan Commitments are not revolving in nature, and amounts repaid
or prepaid pursuant to Section 2.11 or Section 2.12 shall not be
reborrowed.
(b) Revolving Credit Facility. During the Revolving Credit
Period, each Revolving Credit Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make Revolving Credit
Loans to the Borrower from time to time in an aggregate amount at any
time outstanding not to exceed the amount of its Revolving Credit
Commitment. Within the limits specified in this Agreement, the
Borrower may borrow under this Section 2.01(b), prepay Revolving
Credit Loans to the extent permitted by Section 2.12 and reborrow at
any time during the Revolving Credit Period pursuant to this Section
2.01(b).
(c) Minimum Amount. Each Borrowing under this Section 2.01
shall be in the 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 of the unused Commitments of the relevant
Class) and shall be made from the several Lenders ratably in
proportion to their respective Commitments of the relevant Class.
SECTION 2.02. Notice of Committed Borrowing. The Borrower
shall give the Administrative 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:
(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) the Class and initial Type of Loans comprising such
Borrowing; 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 of Section
2.10(e); and
(B) certifying that each of the conditions precedent to such
Borrowing has been satisfied.
SECTION 2.03. Money Market Borrowings. (a) The Money Market
Option. In addition to Revolving Credit Borrowings pursuant to
Section 2.01, but within the limitations of the Revolving Credit
Commitments as contemplated by Section 3.02(c), the Borrower may, as
set forth in this Section, request the Lenders during the Revolving
Credit Period to make offers to make Money Market Loans to the
Borrower. The Lenders 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 Administrative 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
Administrative Agent shall have mutually agreed and shall have
notified to the Lenders 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
(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
Administrative 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 Administrative Agent shall send
to the Lenders 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 Lender
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
Lender 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
Administrative Agent by telex or facsimile transmission at its
offices specified in or pursuant to Section 9.01 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 Administrative
Agent shall have mutually agreed and shall have notified to the
Lenders 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 Administrative Agent (or any affiliate of the
Administrative Agent) in the capacity of a Lender may be submitted,
and may only be submitted, if the Administrative 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 Lenders, in the case of a LIBOR Auction or (y) 15
minutes prior to the deadline for the other Lenders, 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 Administrative 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 of the
quoting Lender, (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 Lender may be accepted,
(C) 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 Lender.
A Money Market Quote may set forth up to five separate offers by
the quoting Lender 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 Administrative Agent shall promptly
notify the Borrower of the terms (x) of any Money Market Quote
submitted by a Lender 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
Lender with respect to the same Money Market Quote Request. Any such
subsequent Money Market Quote shall be disregarded by the
Administrative Agent unless such subsequent Money Market Quote is
submitted solely to correct a manifest error in such former Money
Market Quote. The Administrative 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 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 Administrative Agent shall have mutually agreed
and shall have notified to the Lenders 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 Administrative 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 Administrative Agent. If offers are made by
two or more Lenders 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 Administrative Agent among such Lenders as nearly
as possible (in multiples of $1,000,000, as the Administrative Agent
may deem appropriate) in proportion to the aggregate principal
amounts of such offers. Determinations by the Administrative Agent
of the amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
SECTION 2.04. Notice to the Lenders; Funding of Loans. (a)
Upon receipt of a Notice of Borrowing, the Administrative Agent shall
promptly notify each Lender of the contents thereof and of such
Lender'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 Lender participating therein shall make
available its share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Administrative Agent
at its address referred to in Section 9.01. Unless the
Administrative Agent determines that any applicable condition
specified in Article 3 has not been satisfied, the Administrative
Agent will make the funds so received from the Lenders available to
the Borrower at the Administrative Agent's aforesaid address.
(c) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender's
share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available to the Administrative Agent
on the date of such Borrowing in accordance with subsection (b) of
this Section and the Administrative 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 Lender shall
not have so made such share available to the Administrative Agent,
such Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such amount
is repaid to the Administrative Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the Federal Funds
Rate and the interest rate applicable thereto pursuant to Section
2.07 and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such
Lender's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.05. Notes. (a) The Loans of each Lender shall be
evidenced by a single Note payable to the order of such Lender for
the account of its Applicable Lending Office in an amount equal to
the aggregate unpaid principal amount of such Lender's Loans.
(b) Each Lender may, by notice to the Borrower and the
Administrative Agent, request that its Loans of a particular Class or
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 Class or Type. Each reference in this
Agreement to the "Note" of such Lender shall be deemed to refer to
and include any or all of such Notes, as the context may require.
(c) Upon receipt of each Lender's Note pursuant to Section
3.01(b), the Administrative Agent shall forward such Note to such
Lender. Each Lender shall record the date, amount, type and maturity
of each Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto, and may, if such
Lender 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 Lender
to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each
Lender 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 2.06. Maturity of Loans. (a) Each Term Loan shall
mature, and the principal amount thereof together with accrued
interest thereon shall be due and payable, on the Term Loan Maturity
Date.
(b) Each Revolving Credit Loan shall mature, and the principal
amount thereof together with accrued interest thereon shall be due
and payable, on the Revolving Credit Termination Date.
(c) Each Money Market Loan included in any Money Market
Borrowing shall mature, and the principal amount thereof together
with accrued interest thereon shall be due and payable, on the last
day of the Interest Period applicable to such Borrowing.
SECTION 2.07. 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 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 Administrative 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 Lender of its certificates of deposit in an amount
comparable to the principal amount of the CD Loan of such CD
Reference Lender 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 327.4(a) (or
any successor provision) to the Federal Deposit Insurance Corporation
(or 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
Lenders 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 Lender 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 8.01, 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 2.07(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 Lender making
such Loan in accordance with Section 2.03. 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
Lender making such Loan in accordance with Section 2.03. 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 paid at a rate per
annum equal to the sum of 2% plus the Base Rate for such day.
(f) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall
give prompt notice to the Borrower and the participating Lenders of
each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.
(g) Each Reference Lender agrees to use its best efforts to
furnish quotations to the Administrative Agent as contemplated by
this Section. If any Reference Lender does not furnish a timely
quotation, the Administrative Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished
by the remaining Reference Lender or Lenders or, if none of such
quotations is available on a timely basis, the provisions of Section
8.01 shall apply.
SECTION 2.08. Facility Fees. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders ratably in
accordance with their respective Exposures, a facility fee for each
day at a rate per annum equal to the Facility Fee Rate for such day
(determined in accordance with the Pricing Schedule), on the
aggregate amount of the Exposures on such day. Such facility fees
shall accrue for each day from and including the Effective Date to
but excluding the date on which no Lender has any Exposure (the
"Termination Date"). Accrued fees under this Section shall be
payable quarterly in arrears on each Quarterly Date and on the
Termination Date.
SECTION 2.09. Optional Termination or Reduction of Commitments.
The Borrower may, upon at least three Domestic Business Days' notice
to the Administrative Agent, (i) terminate the Commitments of any
Class at any time, if no Loans of such Class are outstanding at such
time or (ii) ratably reduce from time to time by an aggregate amount
of $10,000,000 or a larger multiple of $1,000,000, the aggregate
amount of the Commitments of any Class in excess of the aggregate
outstanding amount of the Loans of such Class (in each of cases (i)
and (ii), after giving effect to any mandatory or optional
prepayments to be made at such time and treating Money Market Loans
as part of the Class of Revolving Credit Loans for this purpose).
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:
(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 Administrative 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 Administrative 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
(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 and of Section 2.10(e).
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent
shall promptly notify each Lender 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 Administrative 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 3.02.
(e) If the Borrower wishes to select an Interest Period of one
year for any Group of Euro-Dollar Loans, the Borrower shall notify
the Administrative Agent of such proposed Interest Period and the
aggregate principal amount of the Loans to which it would apply, at
least six Euro-Dollar Business Days before such Interest Period is to
begin. The Administrative Agent will promptly notify each Lender of
the contents of such notice and each Lender will as promptly as
practicable thereafter notify the Administrative Agent as to whether
such Lender is willing to fund its share of such Group of Loans for
such proposed Interest Period. The Borrower shall not be entitled to
select such an Interest Period unless all the Lenders shall have
advised the Administrative Agent (which shall promptly so advise the
Borrower) that they are willing so to fund their respective shares of
such Group of Loans.
SECTION 2.11. Mandatory Reduction and Termination of
Commitments; Mandatory Prepayments. (a) The Term Loan Commitments
shall terminate at the close of business on the earlier of (i) the
date of the Term Loan Borrowing hereunder and (ii) the last day of
the Term Availability Period.
(b) The Revolving Credit Commitments shall terminate on the
Revolving Credit Termination Date.
(c) If an Asset Sale shall occur, an amount equal to the Net
Cash Proceeds thereof shall be applied as follows until such amount
has been fully applied:
First, to the reduction of the Term Loan Commitments
until such Commitments shall have been reduced to zero; and
Second, to the prepayment of Term Loans, until the Term
Loans shall have been prepaid in full.
Each such reduction and/or prepayment shall be made within five Euro-
Dollar Business Days of receipt by the Borrower or any of its
Subsidiaries, as the case may be, of such Net Cash Proceeds, provided
that
(i) if the Net Cash Proceeds in respect of any Asset Sale
are less than $5,000,000, such reduction and/or prepayment shall
be made within five Euro-Dollar Business Days of receipt of
proceeds such that, together with all other such amounts not
previously applied, the Net Cash Proceeds are equal to at least
$5,000,000; and
(ii) if any prepayment would otherwise require prepayment of
Fixed Rate Loans or portions thereof prior to the last day of
the then current Interest Period, then such prepayment shall,
unless the Administrative Agent otherwise notifies the Borrower
upon the instructions of the Required Lenders, be deferred to
the last day of such Interest Period.
(d) Unless at such time the Borrower's long-term debt is rated
BBB or higher by S&P and Baa2 or higher by Moody's, the aggregate
amount of the Revolving Credit Commitments shall on June 30, 2000 be
reduced to $1,400,000,000 and, if at such time the sum of the
aggregate outstanding principal amount of Revolving Credit Loans and
the aggregate outstanding principal amount of Money Market Loans
exceeds the aggregate amount of the Revolving Credit Commitments as
so reduced, the Borrower shall on such date prepay a principal amount
of such Loans equal to such excess.
(e) Each reduction of the Commitments and/or prepayment of Loans
shall be applied ratably to the respective Commitments and/or Loans
of the relevant Class of all Lenders. Each payment of principal of
the Loans of any Class shall be made together with interest accrued
and unpaid on the amount repaid to the date of payment. Each payment
of the Loans of any Class shall be applied to such Group or Groups of
Loans of such Class as the Borrower may designate (or, failing such
designation, as determined by the Administrative Agent).
(f) The Borrower shall give the Administrative Agent at least
five Euro-Dollar Business Days' notice of each prepayment required to
be made pursuant to subsection (c) or (d).
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 Administrative Agent,
prepay the Group of Base Rate Loans (or any Money Market Borrowing
bearing interest at the Base Rate pursuant to Section 8.01), upon at
least three Domestic Business Days' notice to the Administrative
Agent, prepay any Group of CD Loans, or upon at least three Euro-
Dollar Business Days' notice to the Administrative 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 Lenders 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 Administrative Agent shall promptly notify each Lender
of the contents thereof and of such Lender's ratable share (if any)
of such prepayment and such notice shall not thereafter be revocable
by the Borrower.
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 Administrative Agent
at its address referred to in Section 9.01. The Administrative Agent
will promptly distribute to each Lender its ratable share of each
such payment received by the Administrative Agent for the account of
the Lenders. 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 Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to
the Lenders hereunder that the Borrower will not make such payment in
full, the Administrative Agent may assume that the Borrower has made
such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to
be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent that the Borrower
shall not have so made such payment, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative 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 if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Lender in accordance with
Section 2.04(a) or 2.12(c), the Borrower shall reimburse each Lender
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 Lender
shall have 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
Lender 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 Lender to United States
residents), and as a result the cost to such Lender (or its
Applicable Lending Office) of making or maintaining its Euro-Dollar
Loans is increased, then such Lender 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
Lender at a rate per annum determined by such Lender 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 Lender wishing to require payment of such additional interest (x)
shall so notify the Borrower and the Administrative Agent, in which
case such additional interest on the Euro-Dollar Loans of such Lender
shall be payable to such Lender 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 Lender is then entitled under this Section 2.16 (which
shall be consistent with such Lender's good faith estimate of the
level at which the related reserves are maintained by it).
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. This Amended and Restated
Agreement shall become effective on the date that each of the
following conditions shall have been satisfied (or waived in
accordance with Section 9.05):
(a) receipt by the Administrative 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 Administrative 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);
(b) receipt by the Administrative Agent of a duly executed Note
for the account of each Lender dated on or before the Effective Date
complying with the provisions of Section 2.05.
(c) receipt by the Administrative Agent of an opinion of the
General Counsel of the Borrower, substantially in the form of Exhibit
E hereto;
(d) receipt by the Administrative Agent of an opinion of Davis
Polk & Wardwell, special counsel for the Agents, substantially in the
form of Exhibit F hereto;
(e) receipt by the Administrative Agent of evidence satisfactory
to it of the payment of all principal of and interest on any loans
outstanding under, and of all fees accrued under, the Original
Agreement up to but excluding the Effective Date; and
(f) receipt by the Administrative Agent of all documents the
Administrative Agent may reasonably request relating to the existence
of the Borrower, 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 Administrative Agent.
On the Effective Date the Original Agreement will be automatically
amended and restated in its entirety to read as set forth herein. On
and after the Effective Date the rights and obligations of the
parties hereto shall be governed by this Amended and Restated
Agreement; provided the rights and obligations of the parties hereto
that are parties to the Original Agreement shall continue to be
governed by the provisions of the Original Agreement with respect to
the period prior to the Effective Date. The Notes delivered to each
Lender under the Original Agreement shall be canceled and Notes under
this Amended and Restated Agreement shall be given in substitution
therefor. Each Lender shall promptly after the Effective Date
deliver to the Borrower for cancellation the Note delivered to such
Lender under the Original Agreement. The Administrative Agent shall
promptly notify the Borrower and each Lender of the effectiveness of
this Amended and Restated Agreement, and such notice shall be
conclusive and binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any Lender to make
a Loan on the occasion of any Borrowing is subject to the
satisfaction of the following conditions:
(a) the fact that the Effective Date shall have occurred on or
prior to September 15, 1997;
(b) receipt by the Administrative Agent of a Notice of Borrowing
as required by Section 2.02 or 2.03, as the case may be;
(c) in the case of a Revolving Credit Borrowing or a Money
Market Borrowing, the fact that, immediately after such Borrowing,
the sum of the aggregate outstanding principal amount of the
Revolving Credit Loans and the aggregate outstanding principal amount
of the Money Market Loans will not exceed the aggregate amount of the
Revolving Credit 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
Borrower contained in this Agreement (except, in the case of (i) any
Borrowing the proceeds of which are to be applied to finance the
Acquisition and (ii) any Borrowing made on a date at which the
Borrower's long-term debt securities are rated at least BBB, Baa2 or
BBB by any two of S&P, Moody's or Duff & Phelps, Inc., respectively,
and not lower than BBB-, Baa3 or BBB- by the third of such rating
agencies, those contained in Section 4.02(c), in Section 4.03(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 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 Borrower represents and warrants that:
SECTION 4.01. Corporate Existence. Each of the Borrower 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 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.
SECTION 4.02. Financial Condition. (a) The Borrower has
heretofore furnished to each of the Lenders the consolidated balance
sheet of the Borrower and its Subsidiaries as at June 30, 1996 and
the related consolidated statements of earnings, cash flows and
changes in shareholders' equity of the Borrower 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
Borrower 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 Borrower has heretofore furnished to each of the Lenders
the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as at March 31, 1997 and the related unaudited
consolidated statements of earnings, cash flows and changes in
shareholders' equity of the Borrower and its Subsidiaries for the
nine month period ended on said date. All such financial statements
fairly present, in all material aspects, the consolidated financial
condition of the Borrower and its Subsidiaries, as at said date, and
the consolidated results of their operations for the nine month
period ended on said date, all in accordance with GAAP.
(c) Since March 31, 1997, there has been no material adverse
change in the ability of the Borrower to perform its obligations
hereunder or in the rights and obligations of the Lenders hereunder.
SECTION 4.03. 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 Lenders), 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 Borrower) threatened against the Borrower 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 4.04. No Breach. None of the execution and delivery of
this Agreement and the Notes, the consummation of the transactions
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 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 Borrower 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 4.05. Action. 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 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 the Borrower and constitutes, and each of the Notes when
executed and delivered for value will constitute, its legal, valid
and binding obligation, enforceable against the Borrower in
accordance with their 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 4.06. 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 Borrower
of this Agreement or the Notes or for the legality, validity or
enforceability hereof.
SECTION 4.07. ERISA. Each Plan, and, to the knowledge of the
Borrower, 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 Borrower would be under an
obligation to furnish a report to the Lenders under Section 5.01(e)
hereof.
SECTION 4.08. Taxes. The Borrower and its Subsidiaries are
members of an affiliated group of corporations filing consolidated
returns for Federal income tax purposes, of which the Borrower is the
"common parent" (within the meaning of Section 1504 of the Code) of
such group. The Borrower 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 Borrower
or any of its Subsidiaries. The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of taxes
and other governmental charges are, in the opinion of the Borrower,
adequate. The Borrower 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 4.09. Investment Company Act. Neither 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.
SECTION 4.10. Public Utility Holding Company Act. Neither the
Borrower 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 Borrower to either Agent or any Lender
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 Borrower and its Subsidiaries to the
Administrative Agent or any Lender 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
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 Lenders
for use in connection with the transactions contemplated hereby.
SECTION 4.12. Environmental Matters. In the ordinary course of
its business, the Borrower conducts an ongoing review of the effect
of Environmental Laws on the business, operations and properties of
the Borrower and its Subsidiaries, in accordance with customary
industry practice. On the basis of this review, the Borrower has
reasonably concluded that the costs of compliance with Environmental
Laws are unlikely to have a Material Adverse Effect.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Lender has any
Commitment hereunder or any amount payable under any Note remains
unpaid:
SECTION 5.01. Financial Statements, Etc. The Borrower will
deliver to each of the Lenders:
(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 Borrower, consolidated statements of earnings,
cash flows and changes in shareholders' equity of the Borrower 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 Borrower 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 Borrower, 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 Borrower 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 Borrower, consolidated statements
of earnings, cash flows and changes in shareholders' equity of the
Borrower and its Subsidiaries for such fiscal year and the related
consolidated balance sheet of the Borrower 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 Borrower 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 Borrower 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
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(e) as soon as possible, and in any event within ten days after
the Borrower 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 Borrower setting forth details respecting such event
or condition and the action, if any, that the Borrower 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
Borrower 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 Borrower 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 Borrower
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 Borrower 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 Borrower 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 Borrower or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days; and
(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 Borrower or an ERISA Affiliate fails
to timely provide security to the Plan in accordance with the
provisions of said Sections;
(f) promptly after the 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
Borrower 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
Borrower 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 Lender or the Agent may
reasonably request.
The Borrower will furnish to each Lender, 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
Borrower (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 Borrower has taken or proposes to take with respect thereto)
and (ii) setting forth in reasonable detail the computations
necessary to determine whether the Borrower is in compliance with
Sections 5.08 and 5.09 hereof as of the end of the respective
quarterly fiscal period or fiscal year.
SECTION 5.02. Litigation. The Borrower will promptly give to
each Lender 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 Borrower 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 Borrower will give to each Lender notice of the
assertion of any Environmental Claim by any Person against, or with
respect to the activities of, the Borrower 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 5.03. Existence, Etc. The Borrower 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
nothing in this Section 5.03 shall prohibit any transaction expressly
permitted under Sections 5.06 and 5.07 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 9.11 hereof, permit representatives of
any Lender, 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 Lender.
SECTION 5.04. Insurance. The Borrower 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 5.05. Limitation on Liens. The Borrower 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 July 23, 1997 securing Indebtedness
outstanding on July 23, 1997 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, adequate reserves with respect thereto are maintained on
the books of the Borrower 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 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 Borrower or any of its Subsidiaries;
(g) Liens on Property of any corporation which becomes a
Subsidiary of the Borrower after the date of this Agreement; provided
that such Liens are in existence at the time such corporation becomes
a Subsidiary of the Borrower, 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
Borrower 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 Borrower or such Subsidiary
other than the Property so acquired and improvements thereon;
(i) 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;
(j) Liens arising from judgments, decrees or attachments
(including Liens securing appeal or other bonds therefor) not in
excess of $25,000,000 in the aggregate and in circumstances not
constituting an Event of Default under Section 6.01(h) hereof;
(k) leases or subleases granted to others otherwise permitted by
this Agreement;
(l) UCC financing statements and other similar filings regarding
leases and other Liens otherwise permitted by this Agreement;
(m) rights to receive income in connection with consignment
arrangements or licensing agreements in the ordinary course of the
Borrower's or such Subsidiary's business, as the case may be;
(n) 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;
(o) 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); and
(p) Liens on "margin stock" (as defined in the Margin
Regulations), if and to the extent that the value of such margin
stock exceeds 25% of the total assets of the Borrower and its
Subsidiaries subject to this Section.
Notwithstanding the foregoing, nothing in this Section shall
restrict the ability of the Borrower or any of its Subsidiaries to
sell or assign its accounts receivable.
SECTION 5.06. Mergers and Sales of Assets. The Borrower will
not, nor will it permit any of its Subsidiaries to, merge or
consolidate with or into, or acquire all or substantially all of the
assets of, any Person, except that (i) any Subsidiary of the Borrower
may merge or consolidate with or into, or transfer assets to, or
acquire assets of, any other Subsidiary of the Borrower, (ii) any
Subsidiary of the Borrower may merge or consolidate with or into, or
transfer assets to, the Borrower and (iii) the Borrower may merge
with or consolidate into, or acquire assets of, and any Subsidiary of
the Borrower may merge or consolidate 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
Borrower is a party, the Borrower is the surviving corporation. The
Borrower will not, and will not permit any Subsidiary to, consummate
any Asset Sale unless (i) the aggregate book value of assets disposed
of subsequent to the date hereof pursuant to Asset Sales does not
exceed the greater of (x) $1,200,000,000 or (y) 30% of the total
assets of the Borrower and its Subsidiaries at such time and (ii)
such Asset Sale is for fair market value (in the reasonable
determination of the Borrower) and for consideration consisting of at
least 80% cash payable at the closing of such Asset Sale.
SECTION 5.07. Change in Nature of Business. The Borrower will
not (i) make any material change in the nature of the business of the
Borrower and its Subsidiaries taken as a whole as carried on as of
the date hereof, or (ii) except as contemplated by the Offer to
Purchase, acquire, or permit any of its Subsidiaries to acquire,
businesses which result in any material change in the nature of the
business of the Borrower and its Subsidiaries taken as a whole as
carried on as of the date hereof; provided, however, that the
Borrower 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 5.08. Financial Covenants. (a) The Borrower will not
permit the ratio of (i) the sum of (x) Total Debt plus (y) the
Operating Lease Amount at any time to (ii) the sum of (x) Total
Capital at such time plus (y) the Operating Lease Amount at such time
to exceed: (A) to but excluding the last day of Fiscal Year 1999,
68%, (B) thereafter, to but excluding the last day of Fiscal Year
2000, 63% and (C) thereafter, 60%.
(b) The Borrower will not permit the Interest Coverage Ratio at
the last day of any fiscal quarter to be less than (i) to but
excluding the last day of Fiscal Year 1999, 2.70, (ii) thereafter, to
but excluding the last day of Fiscal Year 2000, 2.90 and (iii)
thereafter, 3.50; provided that this Section 5.08(b) shall not apply
at (x) any date at which the Borrower's long-term debt is rated BBB+
or higher by S&P and Baal or higher by Moody's and (y) the last day
of the fiscal quarter ending on or closest to September 30, 1997.
SECTION 5.09. Indebtedness of Subsidiaries. The Borrower will
not permit the aggregate Indebtedness of all of its Subsidiaries
(exclusive of Indebtedness owing to the Borrower or a Wholly-Owned
Subsidiary) to exceed at any time 10% of Total Capital.
SECTION 5.10. Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Borrower 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 Borrower 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), including, without limitation, to refinance loans made
under the Original Agreement to finance the Acquisition; provided
that neither Agent nor any Lender 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 in violation of the Margin
Regulations.
SECTION 5.12. Environmental Laws. The Borrower 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 Borrower 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 Borrower shall, and
shall cause each of its Subsidiaries to, promptly undertake and
diligently pursue to completion any remedial clean-up action required
of the Borrower or any Subsidiary under applicable Environmental Laws
in the event of any release of Hazardous Materials.
SECTION 5.13. Most Favored Lender. The Borrower 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 Borrower 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
Lenders 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 Lenders by this Agreement, unless the Borrower or such
Subsidiary, as the case may be, concurrently (x) notifies the Lenders
and the Administrative Agent thereof and (y) incorporates herein such
additional, altered or revised Covenant. If the Administrative Agent
at the time so elects by notice to the Borrower and the Lenders, 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 Administrative Agent does not elect to effect such an automatic
incorporation, the Administrative Agent shall promptly tender to the
Borrower for execution by it an amendment (executed by the
Administrative Agent) incorporating such additional Covenant and
shall promptly deliver a copy of such amendment to the Lenders.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be
continuing:
(a) The Borrower 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 Borrower 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) outstanding in an amount 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
Borrower, or any certificate furnished to any Lender or the
Administrative 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 Borrower shall default in the performance of any of its
obligations under any of Sections 5.01(f), 5.05 through 5.09
(inclusive), or 5.13 hereof; or the Borrower 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 Administrative Agent at the
request of any Lender; or
(e) The Borrower 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 Borrower 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, (iv) 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 Borrower 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
Borrower or such Subsidiary or of all or any substantial part of its
Property, or (iii) similar relief in respect of the Borrower 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 Borrower 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 Borrower 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 Borrower 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 5.01(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 Borrower or any ERISA Affiliate shall
incur or in the opinion of the Required Lenders 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 Lenders, 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
Borrower (or other securities convertible into such securities)
representing 40% or more of the combined voting power of the
Borrower's 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);
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 6.01 with respect to
the Borrower, (A) the Administrative Agent, upon request of the
Lenders 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
Administrative Agent, upon request of Lenders 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 6.01 with respect to 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 6.02. Notice of Default. The Administrative Agent
shall give notice to the Borrower under Section 6.01(d) promptly upon
being requested to do so by any Lender and shall thereupon notify all
the Lenders thereof.
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each Lender
irrevocably appoints and authorizes the Administrative Agent to take
such action as administrative agent on its behalf and to exercise
such powers under this Agreement and the Notes as are delegated to
Administrative Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust
Company of New York, Goldman Sachs Credit Partners L.P., Citibank,
N.A. and NationsBank, N.A. shall each have the same rights and powers
under this Agreement as any other Lender and may exercise or refrain
from exercising the same as though it were not an Agent, and Morgan
Guaranty Trust Company of New York, Goldman Sachs Credit Partners
L.P., Citibank, N.A. and NationsBank, N.A. and their respective
affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with the Borrower or any Subsidiary or
affiliate of the Borrower as if it were not an Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of each Agent
hereunder are only those expressly set forth herein. Without
limiting the generality of the foregoing, no Agent shall be required
to take any action with respect to any Default, except as expressly
provided in Article 6.
SECTION 7.04. Consultation with Experts. Each Agent may
consult with legal counsel (who may be counsel for 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 7.05. Liability of Agent. No Agent nor any of its
affiliates nor any of their respective directors, officers, agents or
employees of the foregoing 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 Lenders (or such other number or percentage
of the Lenders as may be specified herein for the particular purpose)
or (ii) in the absence of its own gross negligence or willful
misconduct. No Agent nor any of the affiliates nor any of the
respective directors, officers, agents or employees of the foregoing
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 Borrower; (iii) the satisfaction of any condition specified in
Article 3, except in the case of the Administrative Agent receipt of
items required to be delivered to such Agent; or (iv) the validity,
effectiveness or genuineness of this Agreement, the Notes or any
other instrument or writing furnished in connection herewith. No
Agent shall 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.
SECTION 7.06. Indemnification. Each Lender shall, ratably in
accordance with its Commitment, indemnify each Agent, its affiliates
and the respective directors, officers, agents and employees of the
foregoing (to the extent not reimbursed by the Borrower) 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 7.07. Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement.
SECTION 7.08. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor
Administrative Agent reasonably acceptable to the Borrower. If no
successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent gives notice of
resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative 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 Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties
of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder.
After any retiring Administrative Agent's resignation hereunder as
Administrative 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 Administrative Agent.
SECTION 7.09. Co-Documentation Agents and Co-Syndication
Agents. Nothing in this Agreement shall impose upon the Co-
Documentation Agents or the Co-Syndication Agents, in their
respective capacities as such, any duty or obligation whatsoever.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. 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 Administrative Agent is advised by the Reference Lenders
that deposits in dollars (in the applicable amounts) are not being
offered to the Reference Lenders in the relevant market for such
Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Lenders having
50% or more of the aggregate principal amount of the affected Loans
advise the Administrative Agent that the Adjusted CD Rate or the
London Interbank Offered Rate, as the case may be, as determined by
the Administrative Agent will not adequately and fairly reflect the
cost to such Lenders of funding their CD Loans or Euro-Dollar Loans,
as the case may be, for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders, whereupon until the Administrative Agent
notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, (i) the obligations of the Lenders 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
Administrative 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 8.02. 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 Lender
(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 Lender (or its Euro-Dollar Lending Office) to
make, maintain or fund its Euro-Dollar Loans and such Lender shall so
notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Lenders and the Borrower,
whereupon until such Lender notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Lender to make
Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar
Loans, shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Lender 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 Lender, be otherwise disadvantageous to such Lender.
If such notice is given, each Euro-Dollar Loan of such Lender 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 Lender may lawfully continue to maintain and fund
such Loan to such day or (b) immediately if such Lender shall
determine that it may not lawfully continue to maintain and fund such
Loan to such day.
SECTION 8.03. 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 Lender
(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 Lender 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 Lender (or its Applicable
Lending Office) or shall impose on any Lender (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 Lender (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 Lender (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto,
by an amount deemed by such Lender to be material, then, within 15
days after demand by such Lender (with a copy to the Administrative
Agent), the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender for such increased cost or
reduction.
(b) If any Lender shall have determined that, after the
Effective Date, 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 Lender (or its Parent)
as a consequence of such Lender's obligations hereunder to a level
below that which such Lender (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 Lender to be material, then from time to time,
within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender (or its
Parent) for such reduction.
(c) Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge,
occurring after the Effective Date, which will entitle such Lender to
compensation pursuant to this Section but in any event within 45
days, after such Lender obtains actual knowledge thereof; provided
that (i) if any Lender fails to give such notice within 45 days after
it obtains actual knowledge of such an event, such Lender shall, with
respect to compensation payable pursuant to this Section 8.03 in
respect of any costs resulting from such event, only be entitled to
payment under this Section 8.03 for costs incurred from and after the
date 45 days prior to the date that such Lender does give such notice
and (ii) each Lender 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
Lender, be otherwise disadvantageous to such Lender. A certificate
of any Lender 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 Lender shall use reasonable
averaging and attribution methods.
SECTION 8.04. Taxes. (a) For the purposes of this Section
8.04, 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 pursuant to this Agreement or under any
Note, and all liabilities with respect thereto, excluding (i) in the
case of each Lender 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 Lender or such Agent (as the case may be) is
organized or in which its principal executive office is located or,
in the case of each Lender, in which its Applicable Lending Office is
located and (ii) in the case of each Lender, any United States
withholding tax imposed on such payments but only to the extent that
such payments to such Lender are subject to United States withholding
tax at the time such Lender 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 to or for the account
of any Lender or the Administrative Agent hereunder or under any Note
shall be made without deduction for any Taxes or Other Taxes;
provided that, if the Borrower 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 8.04) such Lender or such 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 shall
make such deductions, (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to
the Administrative Agent, at its address referred to in Section 9.01,
the original or a certified copy of a receipt evidencing payment
thereof.
(c) The Borrower agrees to indemnify each Lender and each 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 8.04) paid by such
Lender or such 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 Lender or the Agent (as the case may be) makes demand
therefor.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution
and delivery of this Amended and Restated Agreement in the case of
each Lender listed on the signature pages hereof and on or prior to
the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by
the Borrower (but only so long as such Lender 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 Lender is
entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Lender from United States
withholding tax or reduces the rate of withholding tax on payments of
interest for the account of such Lender or certifying that the income
receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States.
(e) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form pursuant to Section
8.04(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 Lender shall not be
entitled to indemnification under Section 8.04(b) or (c) with respect
to Taxes imposed by the United States; provided that if a Lender,
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 Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 8.04, then
such Lender will change the jurisdiction of its Applicable Lending
Office if, in the judgment of such Lender, such change (i) will
eliminate or reduce any such additional payment which may thereafter
accrue and (ii) is not otherwise disadvantageous to such Lender.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed
Rate Loans. If (i) the obligation of any Lender to make, or convert
outstanding Loans to, Euro-Dollar Loans has been suspended pursuant
to Section 8.02 or (ii) any Lender has demanded compensation under
Section 8.03 or 8.04 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 Lender through the Administrative Agent,
have elected that the provisions of this Section shall apply to such
Lender, then, unless and until such Lender 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 Lender 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 Lenders); 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 Lender 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 Lenders.
SECTION 8.06. Substitution of Lender. Provided that no Default
shall have occurred and be continuing, if (i) the obligation of any
Lender to make Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Lender has demanded compensation under
Section 8.03 or 8.04, the Borrower shall have the right to designate
an Assignee which is not the Borrower, any Subsidiary or an Affiliate
to purchase for cash, pursuant to an Assignment and Assumption
Agreement substantially in the form of Exhibit G hereto, the
outstanding Loans and Commitment(s) of such Lender and to assume all
of such Lender's other rights and obligations hereunder without
recourse to or warranty by such Lender, for a purchase price equal to
the principal amount of all of such Lender's outstanding Loans plus
any accrued but unpaid interest thereon and the accrued but unpaid
facility fees in respect of any Lender's Commitment(s) hereunder plus
such amount, if any, as would be payable pursuant to Section 2.14 if
the outstanding Loans of such Lender were prepaid in their entirety
on the date of consummation of such assignment, plus the compensation
then due and payable pursuant to Sections 8.03 and 8.04.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
bank wire, telex, facsimile transmission or similar writing) and
shall be given to such party: (x) in the case of the Borrower or any
Agent, at its address, facsimile number or telex number set forth on
the signature pages hereof, (y) in the case of any Lender, at its
address, facsimile number or telex number set forth in its
Administrative Questionnaire or (z) 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 Administrative
Agent 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
Administrative Agent under Article 2 or Article 8 shall not be
effective until received.
SECTION 9.02. No Waivers. No failure or delay by any Agent or
Lender 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 9.03. Expenses; Indemnification. (a) The Borrower shall
pay (i) all out-of-pocket expenses of each Agent, including fees and
disbursements of special counsel for the Agents, 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 each Agent and
each Lender, 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 agrees to indemnify each Agent and each Lender,
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
indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent
jurisdiction.
SECTION 9.04. Sharing of Set-offs. Each Lender 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 then due with respect to any Note held by it
which is greater than the proportion received by any other Lender in
respect of the aggregate amount of principal and interest then due
with respect to any Note held by such other Lender, the Lender
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Lenders, 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 Lenders shall be shared by the Lenders pro rata; provided that
nothing in this Section shall impair the right of any Lender 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 other than its indebtedness hereunder.
The Borrower 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 in the amount of
such participation.
SECTION 9.05. 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 and
the Required Lenders (and, if the rights or duties of any Agent are
affected thereby, by such Agent); provided that no such amendment or
waiver shall, unless signed by all the Lenders,(i) increase or
decrease the Commitment of any Lender (except for a ratable decrease
in the Commitments of all Lenders) or subject any Lender 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 or for reduction pursuant to
Section 2.11(d) 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 Lenders, which shall be required for the
Lenders 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 Administrative 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
Administrative Agent and the Borrower.
SECTION 9.06. 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
that the Borrower may not assign or otherwise transfer any of its
rights under this Agreement without the prior written consent of all
Lenders.
(b) Any Lender may at any time grant to one or more banks or
other institutions (each a "Participant") participating interests in
any or all of its Commitments or Loans. In the event of any such
grant by a Lender of a participating interest to a Participant,
whether or not upon notice to the Borrower and the Administrative
Agent, such Lender shall remain responsible for the performance of
its obligations hereunder, and the Borrower and the Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement. Any agreement pursuant to which any Lender may grant such
a participating interest shall provide that such Lender 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 Lender will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii)
or (iii) of Section 9.05 without the consent of the Participant. The
Borrower 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 Lender may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part
(equivalent to an Exposure of not less than $10,000,000, unless a
lower amount is agreed to by the Borrower and the Administrative
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 Lender, with (and subject to) the subscribed
consent of the Borrower, which shall not be unreasonably withheld,
and the Administrative Agent; provided that if an Assignee is an
affiliate of such transferor Lender, no such consent shall be
required; and provided further that such assignment may, but need
not, include rights of the transferor Lender in respect of
outstanding Money Market Loans. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Lender of
an amount equal to the purchase price agreed between such transferor
Lender and such Assignee, such Assignee shall be a Lender party to
this Agreement and shall have all the rights and obligations of a
Lender with Commitment(s) and Loans as set forth in such instrument
of assumption, and the transferor Lender 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 to this subsection (c), the
transferor Lender, the Administrative 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 Lender shall pay to the Administrative Agent an
administrative fee for processing such assignment in the amount of
$1,500. 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 Administrative Agent certification as to exemption
from deduction or withholding of any United States federal income
taxes in accordance with Section 8.04.
(d) Any Lender 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 Lender from its
obligations hereunder.
(e) No Assignee, Participant or other transferee of any Lender's
rights shall be entitled to receive any greater payment under Section
8.03 or 8.04 than such Lender 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 8.02, 8.03 or 8.04 requiring such Lender 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 9.07. Collateral. Each of the Lenders represents to
each of the Agents and each of the other Lenders that it in good
faith is not relying upon any "margin stock" (as defined in the
Margin Regulations) as collateral in the extension or maintenance of
the credit provided for in this Agreement.
SECTION 9.08. 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
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 irrevocably waives,
to the fullest extent permitted by law, any objection which it 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 9.09. Counterparts; Integration. 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, oral or
written, relating to the subject matter hereof; provided that the
obligations of the Borrower under the Commitment Letter, the Joint
Fee Letter and the Administrative Agency Fee Letter agreement, each
dated July 21, 1997, among the initial parties to the Original
Agreement shall remain in effect in accordance with their terms.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENTS AND THE LENDERS 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 9.11. Confidentiality. The Agents and each Lender
agree to keep any information delivered or made available by the
Borrower 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 Lender from disclosing such information (a) to any other
Lender or to an 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 an Agent or Lender prohibited by this Agreement, (f) in
connection with any litigation to which an Agent or Lender or its
subsidiaries or affiliates or Parent may be a party, (g) to the
extent necessary in connection with the exercise of any remedy
hereunder, (h) to such Lender's or the Agents' 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.
<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.
MALLINCKRODT INC.
By /s/ Douglas A. McKinney
---------------------------------
Title: Treasurer
Address: 7733 Forsyth Boulevard
Clayton, Missouri 63105
Facsimile: (314) 854-5380
LENDERS AND CO-ARRANGERS
- ------------------------
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ John H. Chaplin
---------------------------------
Title: Associate
CITIBANK, N.A.
By /s/ Nancy Rochford
---------------------------------
Title: Managing Director
GOLDMAN SACHS CREDIT PARTNERS L.P.
By /s/ Stephen B. King
---------------------------------
Title: Authorized Signatory
LENDER AND CO-DOCUMENTATION AGENT
- ---------------------------------
NATIONSBANK, N.A.
By /s/ Kenneth J. Schult
---------------------------------
Title: Vice President
LENDERS AND CO-AGENTS
- ---------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Michael G. Healy
---------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Ashby
---------------------------------
Title: Senior Manager Loan Operations
THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
By /s/ Hajime Watanabe
---------------------------------
Title: Deputy General Manager
THE CHASE MANHATTAN BANK
By /s/ Robert T. Sacks
---------------------------------
Title: Managing Director
CIBC INC.
By /s/ Timothy E. Doyle
---------------------------------
Title: Managing Director, CIBC Wood
Gundy Securities Corp.,
as Agent
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCH
By /s/ Gordon K. Johnson
---------------------------------
Title: Managing Director
By /s/ Susan L. Pearson
---------------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Deborah E. Stevens
---------------------------------
Title: Authorized Agent
THE FUJI BANK, LIMITED
By /s/ Peter L. Chinnici
---------------------------------
Title: Joint General Manager
OTHER LENDERS
- -------------
BANQUE PARIBAS
By /s/ Karen E. Coons
---------------------------------
Title: Vice President
By /s/ Nicholas C. Mast
---------------------------------
Title: Director
BANK OF IRELAND
By /s/ Derek F. Collins
---------------------------------
Title: Assistant Director
BANK OF MONTREAL
By /s/ Irene M. Geller
---------------------------------
Title: Director
THE BANK OF NEW YORK
By /s/ John C. Lambert
---------------------------------
Title: Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/ David Bouhl,
---------------------------------
Title: First Vice President, Head of
Corporate Banking, Chicago
THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Seiichiro Ino
---------------------------------
Title: Vice President & Department
Head
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By /s/ Walter R. Wolff
---------------------------------
Title: Senior Vice President and
Deputy General Manager
MELLON BANK, N.A.
By /s/ M. James Barry, III
---------------------------------
Title: Vice President
THE NORTHERN TRUST COMPANY
By /s/ James F.T. Monhart
---------------------------------
Title: Vice President
THE SAKURA BANK, LIMITED
By /s/ Shunji Sakurai
---------------------------------
Title: Joint General Manager
THE SUMITOMO BANK, LTD.
By /s/ John H. Kemper
---------------------------------
Title: Senior Vice President
WACHOVIA BANK, N.A.
By /s/ Walter R. Gillikin
---------------------------------
Title: Vice President
ALLIED IRISH BANKS, P.L.C.
By /s/ Alan Kelly
---------------------------------
Title: Senior Manager
THE ASAHI BANK, LTD.
By /s/ Tatsuo Kase
---------------------------------
Title: Senior Manager
BANCA MONTE DEI PASCHI DI SIENA SpA
By /s/ G. Natalicchi
---------------------------------
Title: Senior Vice President &
General Manager
By /s/ Brian R. Landy
---------------------------------
Title: Vice President
BANQUE NATIONALE DE PARIS
By /s/ Arnaud Collin du Bocage
---------------------------------
Title: Executive Vice President and
General Manager
ISTITUTO BANCARIO SAN PAOLO DI
TORINO S.p.A.
By /s/ Carlo Persico
---------------------------------
Title: Deputy General Manager
By /s/ William J. DeAngelo
---------------------------------
Title: First Vice President
KREDIETBANK, N.V.
By /s/ Robert Snauffer
---------------------------------
Title: Vice President
By /s/ Tod R. Angus
---------------------------------
Title: Vice President
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/ Masaaki Yamagishi
---------------------------------
Title: Chief Manager
REPUBLIC NATIONAL BANK OF NEW YORK
By /s/ Robert Cohen
---------------------------------
Title: Vice Chairman
By /s/ Meir Levy
---------------------------------
Title: Vice President
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Administrative Agent
By /s/ John H. Chaplin
---------------------------------
Title: Associate
Address: 60 Wall Street
New York, New York 10260
Telex number: 177615 MGT UT
Facsimile number: (212) 648-5336
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Co-Syndication Agent and
Co-Documentation Agent
By /s/ Stephen B. King
---------------------------------
Title: Authorized Signatory
Address: 85 Broad Street
New York, NY 10004
Facsimile number: (212) 902-2417
CITIBANK, N.A.,
as Co-Syndication Agent and
Co-Documentation Agent
By /s/ Nancy Rochford
---------------------------------
Title: Managing Director
Address: 399 Park Avenue
New York, New York 10043
Facsimile number: (212) 826-2371
NATIONSBANK, N.A.,
as Co-Documentation Agent
By /s/ Kenneth J. Schult
---------------------------------
Title: Vice President
Address: 800 Market Street
St Louis, MO 63101
Facsimile number: (314) 466-7783
<PAGE>
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:
Level I Level II Level III Level IV
------- -------- --------- --------
CD Margin 30.00 31.00 34.00 36.25
- ----------------------------------------------------------------
Euro-Dollar
Margin 17.50 18.50 21.50 23.75
- ----------------------------------------------------------------
Facility Fee
Rate 7.50 9.00 11.00 13.75
- ----------------------------------------------------------------
Level V Level VI Level VII Level VIII
------- -------- --------- ----------
CD Margin 42.50 50.00 62.50 87.50
- ----------------------------------------------------------------
Euro-Dollar
Margin 30.00 37.50 50.00 75.00
- ----------------------------------------------------------------
Facility Fee
Rate 15.00 22.50 25.00 25.00
- ----------------------------------------------------------------
For purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Pricing" applies at any date if, at such date, (i) the
Borrower's long-term debt is rated A- or higher by S&P or A3 or
higher by Moody's.
"Level II Pricing" applies at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB+ or higher by S&P or Baa1 or
higher by Moody's and (ii) Level I Pricing does not apply.
"Level III Pricing" applies at any date if, at such date, (i)
the Borrower's long-term debt is rated BBB or higher by S&P or Baa2
or higher by Moody's and (ii) neither Level I Pricing nor Level II
Pricing applies.
"Level IV Pricing" applies at any date if, at such date, (i) the
Borrower'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
and Level III Pricing applies.
"Level V Pricing" applies at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB- or higher by S&P or 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
Borrower'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, (i)
the Borrower's long-term debt is rated BB+ or higher by S&P or Ba1 or
higher by Moody's and (ii) none of Level I Pricing, Level II Pricing,
Level III Pricing, Level IV Pricing, Level V Pricing and Level VI
Pricing applies.
"Level VIII Pricing" applies at any date if, at such date, no
other Pricing Level applies.
"Pricing Level" refers to the determination of which of Level I,
Level II, Level III, Level IV, Level V, Level VI, Level VII or Level
VIII applies at any date.
The credit ratings to be utilized for purposes of this Schedule
are those assigned to the senior unsecured long-term debt securities
of the Borrower without third-party credit enhancement, and any
rating assigned to any other debt security of the Borrower shall be
disregarded. The rating in effect at any date is that in effect at
the close of business on such date; provided that prior to the first
date subsequent to the Acquisition (and after giving effect thereto)
on which the senior unsecured long-term debt securities of the
Borrower are rated, the Pricing Level shall be Level V.
<PAGE>
COMMITMENT SCHEDULE
Term Loan Revolving Credit
Lender Commitment Commitment
- -------------------------- ---------- ----------------
Morgan Guaranty Trust
Company of New York $22,000,000 $88,000,000
Citibank, N.A. $22,000,000 $88,000,000
Goldman Sachs Credit
Partners L.P. $22,000,000 $88,000,000
NationsBank, N.A. $20,200,000 $80,800,000
Bank of America $18,600,000 $74,400,000
The Bank of Nova Scotia $18,600,000 $74,400,000
The Bank of Tokyo-Mitsubishi,
Ltd., Chicago Branch $18,600,000 $74,400,000
The Chase Manhattan Bank $18,600,000 $74,400,000
CIBC Inc. $18,600,000 $74,400,000
Deutsche Bank AG,
New York and/or Cayman
Islands Branch $18,600,000 $74,400,000
The First National Bank
of Chicago $18,600,000 $74,400,000
The Fuji Bank, Limited $18,600,000 $74,400,000
Banque Paribas $15,000,000 $60,000,000
Bank of Ireland $10,000,000 $40,000,000
Bank of Montreal $10,000,000 $40,000,000
The Bank of New York $10,000,000 $40,000,000
Caisse Nationale de
Credit Agricole $10,000,000 $40,000,000
The Dai-Ichi Kangyo
Bank, Ltd. $10,000,000 $40,000,000
The Industrial Bank of
Japan, Limited $10,000,000 $40,000,000
Mellon Bank, N.A. $10,000,000 $40,000,000
The Northern Trust Company $10,000,000 $40,000,000
The Sakura Bank, Limited $10,000,000 $40,000,000
The Sumitomo Bank, Ltd. $10,000,000 $40,000,000
Wachovia Bank, N.A. $10,000,000 $40,000,000
Allied Irish Banks, P.L.C. $5,000,000 $20,000,000
The Asahi Bank, Ltd. $5,000,000 $20,000,000
Banca Monte dei Paschi
di Siena SpA $5,000,000 $20,000,000
Banque Nationale de Paris $5,000,000 $20,000,000
Istituto Bancario San Paolo
di Torino S.p.A. $5,000,000 $20,000,000
Kredietbank, N.V. $5,000,000 $20,000,000
The Mitsubishi Trust and
Banking Corporation $5,000,000 $20,000,000
Republic National Bank of
New York $5,000,000 $20,000,000
------------- --------------
Totals $400,000,000 $1,600,000,000
============= ==============
<PAGE>
EXHIBIT A - Note
NOTE
New York, New York
________ __, ____
For value received, Mallinckrodt Inc., a New York corporation
(the "Borrower"), promises to pay to the order of
_________________________ (the "Lender"), for the account of its
Applicable Lending Office, the unpaid principal amount of each Loan
made by the Lender 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 Lender, the respective types and
maturities thereof and all repayments of the principal thereof shall
be recorded by the Lender and, if the Lender 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 Lender 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 Lender 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 $2,000,000,000
Amended and Restated Credit Agreement dated as of September __,
1997 among the Borrower, the Lenders party thereto from time to time,
and Morgan Guaranty Trust Company of New York, as Administrative
Agent, Goldman Sachs Credit Partners L.P. and Citibank, N.A., as Co-
Syndication Agents and Co-Documentation Agents, and NationsBank,
N.A., as Co-Documentation 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.
MALLINCKRODT INC.
By
------------------------------
Name:
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
- ----------------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
<PAGE>
EXHIBIT B - Money Market Quote Request
Form of Money Market Quote Request
----------------------------------
(Date)
To: Morgan Guaranty Trust Company of New York
From: Mallinckrodt Inc.
Re: $2,000,000,000 Amended and Restated Credit Agreement (the
"Credit Agreement") dated as of September __, 1997 among
Mallinckrodt Inc., the Lenders party thereto from time to
time, Morgan Guaranty Trust Company of New York, as
Administrative Agent, Goldman Sachs Credit Partners L.P. and
Citibank, N.A., as Co-Syndication Agents and Co-Documentation
Agents, and NationsBank, N.A., as Co-Documentation Agent.
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following
proposed Money Market Borrowing(s):
Date of Borrowing:
---------------------
Principal Amount(1) Interest Period(2)
- ---------------- ---------------
$
- ----------------------
(1) Amount must be $10,000,000 or a larger multiple of
$1,000,000.
(2) Not less than one month (LIBOR Auction) or not less
than 7 days (Absolute Rate Auction), subject to the provisions
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.
MALLINCKRODT INC.
By:-----------------------------
Name:
Title:
<PAGE>
EXHIBIT C - Invitation for Money Market Quotes
Form of Invitation for Money Market Quotes
------------------------------------------
To: (Name of Lender)
Re: Invitation for Money Market Quotes to Mallinckrodt Inc. (the
"Borrower")
Pursuant to Section 2.03 of the $2,000,000,000 Amended and
Restated Credit Agreement dated as of September __, 1997 among
Mallinckrodt Inc., the Lenders party thereto from time to time,
Goldman Sachs Credit Partners L.P. and Citibank, N.A., as Co-
Syndication Agents and Co-Documentation Agents, NationsBank, N.A., as
Co-Documentation Agent, and the undersigned, as Administrative 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
<PAGE>
EXHIBIT D - Money Market Quote
Form of Money Market Quote
--------------------------
To: Morgan Guaranty Trust Company of New York,
as Administrative Agent
Re: Money Market Quote to Mallinckrodt Inc. (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, ____, we hereby make the following Money Market Quote
on the following terms:
1. Quoting Lender: ________________________________
2. Person to contact at Quoting Lender:
_____________________________
3. Date of Borrowing: ____________________(1)
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:
- ----------------------
(1) As specified in the related Invitation.
Principal Interest Money Market
Amount(2) Period(3) (Margin(4))(Absolute Rate(5))
- --------- --------- ----------------------------
$
$
(Provided, that the aggregate principal amount of Money Market
Loans for which the above offers may be accepted shall not
exceed $____________.)(2)
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in
the $2,000,000,000 Amended and Restated Credit Agreement dated as of
September __, 1997 among Mallinckrodt Inc., the Lenders party thereto
from time to time, Goldman Sachs Credit Partners L.P. and Citibank,
N.A. as Co-Syndication Agents and Co-Documentation Agents,
NationsBank, N.A., as Co-Documentation Agent, and yourselves, as
Administrative 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
- ------------------
(2) Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the sum
of the individual offers exceeds the amount the Lender is willing to
lend. Bids must be made for $5,000,000 or a larger multiple of
$1,000,000.
(3) 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.
(4) 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".
(5) Specify rate of interest per annum (to the nearest 1/10,000th of
1%).
<PAGE>
EXHIBIT E - Opinion of Counsel for the Borrower
(Effective Date)
Each of the Lenders and each of the Agents party
to the Credit Agreement referred to below
c/o Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, NY 10260
Ladies and Gentlemen:
I am the General Counsel of Mallinckrodt Inc., a corporation
organized under the laws of the State of New York (the "Borrower")
and I am furnishing this opinion in connection with the Amended and
Restated Credit Agreement dated as of September __, 1997 (the "Credit
Agreement") among the Borrower, the Lenders party thereto from time
to time, Goldman Sachs Credit Partners and Citibank, N.A., as Co-
Syndication Agents and Co-Document Agents, NationsBank, N.A., as Co-
Document Agent, and Morgan Guaranty Trust Company of New York, as
Administrative Agent, providing for, among other things, the making
of loans by the Lenders in an aggregate principal amount not
exceeding $2,000,000,000. 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 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), 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.
In rendering the opinions expressed below, I have assumed, with
respect to all of the documents referred to in this opinion letter,
that (except, to the extent set forth in the opinions expressed
below, as to the Borrower):
(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 Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
York.
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.
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.
4. Each Credit Document has been duly executed and delivered
by the Borrower.
5. Neither the execution, delivery nor performance by the
Borrower of the Credit Documents nor the application of any
proceeds of any Loans to the acquisition by the Borrower or any
of its Subsidiaries of any shares of common stock of Target
pursuant to the Offer to Purchase will contravene any provision
of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System as in effect on the date hereof.
6. 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 were to apply the law of the State of
Missouri to the Credit Documents, 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, except as 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.
7. 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 the Borrower for the
execution, delivery or performance by the Borrower of, or for
the legality, validity or enforceability of, the Credit
Documents or for any borrowing by the Borrower under the Credit
Agreement.
8. The execution, delivery and performance by the Borrower
of the Credit Documents, 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, (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 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 is a party or by which the
Borrower is bound or to which the Borrower is subject.
9. 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 Lenders), 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 Borrower or any of its
Subsidiaries or any of their respective Properties that, if
adversely determined, is reasonably likely to have a Material
Adverse Effect.
10. Neither 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.
11. Neither the Borrower 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.
The foregoing opinions are subject to the following comments and
qualifications:
A. The enforceability of Section 9.03 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 Lender is located (other than the
State of Missouri) that limit the interest, fees, or other
charges such Lender may impose, and (ii) the second sentence of
Section 9.08 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 I
do not express any opinion as to any other laws.
At the request of my client, this opinion letter is, pursuant to
Section 3.01(c) of the Credit Agreement, provided to you by me in my
capacity as General Counsel of the Borrower 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,
<PAGE>
EXHIBIT F - Opinion of Special Counsel for the Agents
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENTS
--------------
(Effective Date)
To the Lenders and the Agents
Referred to Below
c/o Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, NY 10260
Dear Sirs:
We have participated in the preparation of the $2,000,000,000
Amended and Restated Credit Agreement (the "Credit Agreement") dated
as of September __, 1997 among Mallinckrodt Inc., a New York
corporation (the "Borrower"), the Lenders party thereto from time to
time (the "Lenders"), Goldman Sachs Credit Partners L.P. and
Citibank, N.A., as Co-Syndication Agents and Co-Documentation Agents,
and NationsBank, N.A., as Co-Document Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent, and have acted as
special counsel for the Agents for the purpose of rendering this
opinion pursuant to Section 3.01(d) 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
of the Credit Agreement and the Notes are within the Borrower's
corporate powers and have been duly authorized by all necessary
corporate action.
2. The Credit Agreement constitutes a valid and binding
agreement of the Borrower 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.
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 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 Lender is located which limits the rate of interest that such
Lender 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,
<PAGE>
EXHIBIT G - Assignment and Assumption Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, ____ among (ASSIGNOR) (the
"Assignor"), (ASSIGNEE) (the "Assignee"), MALLINCKRODT INC. (the
"Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Administrative Agent (the "Agent").
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the $2,000,000,000 Amended and Restated
Credit Agreement dated as of September __, 1997 among the Borrower,
the Assignor and the other Lenders party thereto from time to time,
as Lenders, Goldman Sachs Credit Partners L.P. and Citibank, N.A., as
Co-Syndication Agents and Co-Documentation Agents, NationsBank, N.A.,
as Co-Documentation Agent, and Morgan Guaranty Trust Company of New
York, as Administrative Agent (as amended from time to time, the
"Credit Agreement");
(WHEREAS, as provided under the Credit Agreement, the Assignor
has a (Term) (Revolving Credit) Commitment to make Loans to the
Borrower in an aggregate principal amount at any time outstanding not
to exceed $__________;)
WHEREAS, (Term) (Revolving Credit) 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 (Term) (Revolving Credit) Commitment thereunder in an
amount equal to $__________ (the "Assigned Amount"), together with a
corresponding portion of its outstanding (Term) (Revolving Credit)
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
(Term) (Revolving Credit) Loans made by the Assignor outstanding at
the date hereof. (Upon the execution and delivery hereof by the
Assignor, the Assignee, (the Borrower and the Administrative 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 Lender under the Credit Agreement with a (Term)
(Revolving Credit) Commitment in an amount equal to the Assigned
Amount, and (ii) the (Term) (Revolving Credit) 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 Administrative
Agent. This Agreement is conditioned upon the consent of the
Borrower and the Administrative Agent pursuant to Section 9.06(c) the
Credit Agreement. The execution of this Agreement by the Borrower
and the Administrative Agent is evidence of this consent. Pursuant
to Section 9.06(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 Lender or either 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.
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:
MALLINCKRODT INC.
By
------------------------------
Name:
Title:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
as Administrative Agent
By
------------------------------
Name:
Title:
