Document:

Exhibit 10.6

 

 

August 31, 2006

VIA FAX AND FEDERAL EXPRESS 

David L. Snitman, Ph.D.

Chief Operating Officer

Array BioPharma, Inc.

3200
Walnut Street Boulder, CO 80301

	
  RE:

  	
   

  	
  Drug Discovery Collaboration Agreement dated
  September 13, 2002 — Exercise of Option to Extend Funding of Research FTEs

  

 

Dear
Dr. Snitman:

As you know, InterMune, Inc. (“InterMune”) and Array BioPharma
Inc. (“Array”) are parties to that certain Drug Discovery Collaboration
Agreement dated September 13, 2002, as amended by Amendment No.1 dated May 8,
2003, Amendment No.2 dated January 7, 2004, Amendment No.3 dated September 10,
2004, Amendment No.4 dated December 7, 2004, Amendment No.5 dated June 30, 2005,
Amendment No.6 dated February 3, 2006 and effective January 1, 2006, and
Amendment No. 7 dated June 28, 2006 (collectively, the “Agreement”). Any
capitalized term contained herein and not otherwise defined herein shall have
the meaning ascribed to such term in the Agreement.

Section 5.1.1 of the
Agreement provides that the Research FTEs will be funded by InterMune through
August 31, 2006 but that InterMune has an option to extend such funding for an
additional six (6) month period. 
InterMune is hereby notifying Array that it is exercising its option
such that the funding of the Research FTEs will now be funded through February
28, 2007.  In addition, the Parties
hereby acknowledge and agree that Array shall make available and InterMune
shall fund a total of three (3) Research FTEs (as opposed to the two (2) Research
FTEs currently provided for in Section 5.1.1 of the Agreement) from September
31, 2006 through February 28, 2007 (“Research FTE Extension Term”).  During the Research FTE Extension Term, the
three (3) Research FTEs will perform the tasks outlined in that certain
document entitled “Process Research Activities for the InterMune-Array
Collaboration” that is currently in the process of being approved as part of
the Research Plan and will be implemented by the Joint Research Committee.

Please acknowledge your
agreement to the foregoing by having an authorized Array representative
countersign both enclosed copies of this letter where indicated below, and
returning one original to the attention of Lucinda Y. Quan, Director, Legal
Affairs at InterMune. We would be happy to proceed based on receipt of a
facsimile copy while awaiting the original.

 

If you have any questions on
the foregoing, please do not hesitate to contact me.

Sincerely,

 

Robin Steele

Senior
Vice President, General Counsel

	
  cc:

  	
  General Counsel, Array

  
	
   

  	
  Mr. Larry Kahn, InterMune

  
	
   

  	
  Lawrence Blatt, PhD, InterMune

  

Acknowledged and Agreed:

ARRAY BIOPHARMA INC.

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:Exhibit 10.1

 

 

CREDIT AGREEMENT

Dated as of November
3, 2006

among

WATSON
PHARMACEUTICALS, INC.,

as Borrower,

THE LENDERS FROM
TIME TO TIME PARTIES HERETO,

CANADIAN IMPERIAL
BANK OF COMMERCE,

acting through its New York agency,

as Administrative
Agent,

WACHOVIA CAPITAL
MARKETS, LLC

as Syndication
Agent,

and

WELLS FARGO BANK,
NATIONAL ASSOCIATION UNION BANK OF CALIFORNIA, N.A. and

SUMITOMO MITSUI BANKING CORPORATION

as Documentation
Agents

Senior Credit
Facility

CIBC WORLD MARKETS
CORP. and WACHOVIA CAPITAL MARKETS, LLC

as Joint
Bookrunners and Co-Lead Arrangers

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
   

  
	
  DEFINITIONS

  
	
   

  
	
  1.01

  	
   

  	
  Certain Defined
  Terms

  	
   

  	
  1

  
	
  1.02

  	
   

  	
  Computation of
  Time Periods

  	
   

  	
  19

  
	
  1.03

  	
   

  	
  Accounting Terms

  	
   

  	
  19

  
	
  1.04

  	
   

  	
  Calculation
  of Financial Covenants

  	
   

  	
  19

  
	
  1.05

  	
   

  	
  Other
  Terms

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  AMOUNTS AND
  TERMS OF LOANS

  
	
   

  
	
  2.01

  	
   

  	
  Term Commitments

  	
   

  	
  20

  
	
  2.02

  	
   

  	
  Revolving Loan
  Facility

  	
   

  	
  21

  
	
  2.03

  	
   

  	
  Swing
  Loans

  	
   

  	
  22

  
	
  2.04

  	
   

  	
  Letters of
  Credit

  	
   

  	
  23

  
	
  2.05

  	
   

  	
  Promise to
  Pay; Evidence of Debt

  	
   

  	
  28

  
	
  2.06

  	
   

  	
  Use of
  Proceeds of Loans

  	
   

  	
  28

  
	
  2.07

  	
   

  	
  Authorized
  Officers, Employees and Administrative Agents

  	
   

  	
  28

  
	
  2.08

  	
   

  	
  Increase in
  Commitments

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  PAYMENTS AND
  PREPAYMENTS

  
	
   

  
	
  3.01

  	
   

  	
  Voluntary
  Prepayments; Reductions in Revolving Loan Commitments

  	
   

  	
  30

  
	
  3.02

  	
   

  	
  Mandatory
  Prepayments

  	
   

  	
  31

  
	
  3.03

  	
   

  	
  Payments

  	
   

  	
  31

  
	
  3.04

  	
   

  	
  Taxes

  	
   

  	
  32

  
	
  3.05

  	
   

  	
  Increased Capital

  	
   

  	
  34

  
	
  3.06

  	
   

  	
  Mitigation;
  Replacement of Lenders

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  INTEREST AND
  FEES

  
	
   

  
	
  4.01

  	
   

  	
  Interest on
  the Loans and other Obligations

  	
   

  	
  36

  
	
  4.02

  	
   

  	
  Special
  Provisions Governing Eurodollar Rate Loans

  	
   

  	
  38

  
	
  4.03

  	
   

  	
  Fees

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  CONDITIONS TO
  LOANS

  
	
   

  
	
  5.01

  	
   

  	
  Conditions
  Precedent to Closing and to Initial Loans

  	
   

  	
  41

  
	
  5.02

  	
   

  	
  Conditions
  Precedent to All Loans

  	
   

  	
  44

  

 i
 

 

 

	
  

  	
   

  	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  REPRESENTATIONS
  AND WARRANTIES

  
	
   

  
	
  6.01

  	
   

  	
  Representations
  and Warranties of the Borrower

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  REPORTING
  COVENANTS

  
	
   

  
	
  7.01

  	
   

  	
  Financial Statements

  	
   

  	
  49

  
	
  7.02

  	
   

  	
  Management Reports

  	
   

  	
  50

  
	
  7.03

  	
   

  	
  Other
  Financial Information

  	
   

  	
  50

  
	
  7.04

  	
   

  	
  Defaults and
  Other Events

  	
   

  	
  50

  
	
  7.05

  	
   

  	
  Lawsuits

  	
   

  	
  50

  
	
  7.06

  	
   

  	
  ERISA
  Notices

  	
   

  	
  50

  
	
  7.07

  	
   

  	
  Environmental
  Notices

  	
   

  	
  51

  
	
  7.08

  	
   

  	
  FDA
  Notices

  	
   

  	
  51

  
	
  7.09

  	
   

  	
  Labor
  Matters

  	
   

  	
  52

  
	
  7.10

  	
   

  	
  Other Information

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  
	
  AFFIRMATIVE
  COVENANTS

  
	
   

  
	
  8.01

  	
   

  	
  Existence,
  etc.

  	
   

  	
  52

  
	
  8.02

  	
   

  	
  Powers; Conduct
  of Business

  	
   

  	
  52

  
	
  8.03

  	
   

  	
  Compliance with
  Laws, etc.

  	
   

  	
  52

  
	
  8.04

  	
   

  	
  Payment of
  Taxes and Claims

  	
   

  	
  52

  
	
  8.05

  	
   

  	
  Insurance

  	
   

  	
  53

  
	
  8.06

  	
   

  	
  Inspection
  of Property; Books and Records; Discussions

  	
   

  	
  53

  
	
  8.07

  	
   

  	
  ERISA Compliance

  	
   

  	
  53

  
	
  8.08

  	
   

  	
  Maintenance of
  Property

  	
   

  	
  53

  
	
  8.09

  	
   

  	
  Maintenance
  of Licenses, Permits, etc.

  	
   

  	
  53

  
	
  8.10

  	
   

  	
  Loan
  Party

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  
	
  NEGATIVE
  COVENANTS

  
	
   

  
	
  9.01

  	
   

  	
  Indebtedness

  	
   

  	
  54

  
	
  9.02

  	
   

  	
  Sales
  of Assets

  	
   

  	
  55

  
	
  9.03

  	
   

  	
  Liens

  	
   

  	
  56

  
	
  9.04

  	
   

  	
  Investments

  	
   

  	
  56

  
	
  9.05

  	
   

  	
  Accommodation
  Obligations

  	
   

  	
  56

  
	
  9.06

  	
   

  	
  Restricted Payments

  	
   

  	
  57

  
	
  9.07

  	
   

  	
  Change in
  Nature of Business

  	
   

  	
  57

  
	
  9.08

  	
   

  	
  Transactions
  with Affiliates

  	
   

  	
  57

  
	
  9.09

  	
   

  	
  Restriction
  on Fundamental Changes

  	
   

  	
  57

  
	
  9.10

  	
   

  	
  Sales and Leasebacks

  	
   

  	
  58

  
	
  9.11

  	
   

  	
  Margin Regulations

  	
   

  	
  58

  
	
  9.12

  	
   

  	
  ERISA

  	
   

  	
  58

  
	
  9.13

  	
   

  	
  Capital Expenditures

  	
   

  	
  58

  
	
  9.14

  	
   

  	
  Amendment
  of Governing Documents

  	
   

  	
  59

  
	
  9.15

  	
   

  	
  Environmental
  Liabilities

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 ii
 

 

 

	
  

  	
   

  	
  

  	
   

  	
  Page

  
	
  ARTICLE X

  
	
   

  
	
  FINANCIAL
  COVENANTS

  
	
   

  
	
  10.01

  	
   

  	
  Minimum Net Worth

  	
   

  	
  59

  
	
  10.02

  	
   

  	
  Minimum Interest
  Coverage Ratio

  	
   

  	
  59

  
	
  10.03

  	
   

  	
  Maximum Leverage
  Ratio

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  
	
   

  
	
  EVENTS OF
  DEFAULT; RIGHTS AND REMEDIES

  
	
   

  
	
  11.01

  	
   

  	
  Events of Default

  	
   

  	
  59

  
	
  11.02

  	
   

  	
  Rights and Remedies

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  
	
   

  
	
  THE
  ADMINISTRATIVE AGENT

  
	
   

  
	
  12.01

  	
   

  	
  Appointment

  	
   

  	
  62

  
	
  12.02

  	
   

  	
  Nature of Duties

  	
   

  	
  62

  
	
  12.03

  	
   

  	
  Rights,
  Exculpation, etc.

  	
   

  	
  63

  
	
  12.04

  	
   

  	
  Reliance

  	
   

  	
  63

  
	
  12.05

  	
   

  	
  Indemnification

  	
   

  	
  64

  
	
  12.06

  	
   

  	
  The
  Administrative Agent Individually

  	
   

  	
  64

  
	
  12.07

  	
   

  	
  Successor
  Administrative Agents

  	
   

  	
  64

  
	
  12.08

  	
   

  	
  Relations Among
  Lenders

  	
   

  	
  64

  
	
  12.09

  	
   

  	
  Concerning
  the Loan Documents

  	
   

  	
  65

  
	
  12.10

  	
   

  	
  Other
  Agents

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII

  
	
   

  
	
  MISCELLANEOUS

  
	
   

  
	
  13.01

  	
   

  	
  Assignments
  and Participations

  	
   

  	
  65

  
	
  13.02

  	
   

  	
  Relations Among
  Lenders

  	
   

  	
  67

  
	
  13.03

  	
   

  	
  Replacement of
  Lender

  	
   

  	
  67

  
	
  13.04

  	
   

  	
  Expenses

  	
   

  	
  67

  
	
  13.05

  	
   

  	
  Indemnity

  	
   

  	
  68

  
	
  13.06

  	
   

  	
  Change in
  Accounting Principles

  	
   

  	
  68

  
	
  13.07

  	
   

  	
  Setoff

  	
   

  	
  69

  
	
  13.08

  	
   

  	
  Ratable Sharing

  	
   

  	
  69

  
	
  13.09

  	
   

  	
  Amendments and
  Waivers

  	
   

  	
  69

  
	
  13.10

  	
   

  	
  Notices

  	
   

  	
  70

  
	
  13.11

  	
   

  	
  Survival of
  Warranties and Agreements

  	
   

  	
  71

  
	
  13.12

  	
   

  	
  Failure or
  Indulgence Not Waiver; Remedies Cumulative

  	
   

  	
  71

  
	
  13.13

  	
   

  	
  Marshalling;
  Payments Set Aside

  	
   

  	
  71

  
	
  13.14

  	
   

  	
  Independence of
  Covenants

  	
   

  	
  71

  
	
  13.15

  	
   

  	
  Severability

  	
   

  	
  71

  
	
  13.16

  	
   

  	
  Headings

  	
   

  	
  71

  
	
  13.17

  	
   

  	
  Governing
  Law

  	
   

  	
  71

  
	
  13.18

  	
   

  	
  Limitation of
  Liability

  	
   

  	
  71

  
	
  13.19

  	
   

  	
  Successors and
  Assigns

  	
   

  	
  71

  
	
  13.20

  	
   

  	
  Certain
  Consents and Waivers

  	
   

  	
  72

  
	
  13.21

  	
   

  	
  Counterparts;
  Effectiveness; Inconsistencies

  	
   

  	
  73

  

 iii
 

 

 

	
  

  	
   

  	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.22

  	
   

  	
  Entire Agreement

  	
   

  	
  73

  
	
  13.23

  	
   

  	
  Confidentiality

  	
   

  	
  73

  
	
  13.24

  	
   

  	
  Patriot Act
  Information

  	
   

  	
  73

  

 

ANNEXES

	
  Annex I

  	
   

  	
  —

  	
   

  	
  Addresses for
  Notices

  
	
  Annex II

  	
   

  	
  —

  	
   

  	
  Pricing
  Grid

  
	
  Annex III

  	
   

  	
  —

  	
   

  	
  EBITDA Table

  
	
  Annex IV

  	
   

  	
  —

  	
   

  	
  Schedule
  of Guarantors

  

 

EXHIBITS

	
  Exhibit A

  	
   

  	
  —

  	
   

  	
  Form of Assignment and Acceptance

  
	
  Exhibit B-1

  	
   

  	
  —

  	
   

  	
  Form of Term Loan Note

  
	
  Exhibit B-2

  	
   

  	
  —

  	
   

  	
  Form of Revolving Loan Note

  
	
  Exhibit B-3

  	
   

  	
  —

  	
   

  	
  Form of Swing Loan Note

  
	
  Exhibit C

  	
   

  	
  —

  	
   

  	
  Form of Notice of Borrowing

  
	
  Exhibit D

  	
   

  	
  —

  	
   

  	
  Form of Notice of Continuation/Conversion

  
	
  Exhibit E

  	
   

  	
  —

  	
   

  	
  Form of Notice of Prepayment

  
	
  Exhibit F

  	
   

  	
  —

  	
   

  	
  List of Closing Documents

  
	
  Exhibit G

  	
   

  	
  —

  	
   

  	
  Form of Officer’s Certificate

  
	
  Exhibit H

  	
   

  	
  —

  	
   

  	
  Form of Compliance Certificate

  
	
  Exhibit I

  	
   

  	
  —

  	
   

  	
  Form of Lender Addendum

  
	
   Exhibit J

  	
   

  	
  —

  	
   

  	
  Form of Acknowledgement of New Loan Party

  
	
   Exhibit K

  	
   

  	
  —

  	
   

  	
  Form of Letter of Credit Application

  
	
   Exhibit L

  	
   

  	
  —

  	
   

  	
  Form of Guaranty

  

 

 iv

 

CREDIT AGREEMENT

This CREDIT AGREEMENT dated as of November 3, 2006 (as amended,
supplemented or modified from time to time, this “Agreement”) is entered
into among WATSON PHARMACEUTICALS, INC., a Nevada Corporation (the “Borrower”),
the financial institutions from time to time party hereto, whether by execution
of this Agreement, a Lender Addendum or an Assignment and Acceptance (the “Lenders”),
CANADIAN IMPERIAL BANK OF COMMERCE, acting through its New York agency, (“CIBC”),
in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), WACHOVIA CAPITAL MARKETS, LLC, as syndication agent for the
Lenders (in such capacity, the “Syndication Agent”), and WELLS FARGO
BANK, NATIONAL ASSOCIATION, UNION BANK OF CALIFORNIA, N.A. and SUMITOMO MITSUI
BANKING CORPORATION, each in its capacity as documentation agent for the
Lenders (together, in such capacity, the “Documentation Agents,” and
each, a “Documentation Agent”).

ARTICLE I

DEFINITIONS

1.01         Certain Defined Terms. 
The following terms used in this Agreement shall have the following
meanings, applicable both to the singular and the plural forms of the terms
defined:

“Accommodation Obligation” means any
Contractual Obligation, contingent or otherwise, of any Person with respect to
any Indebtedness of another, if the primary purpose or intent thereof by the
Person incurring the Accommodation Obligation is to provide assurance to the
obligee of such Indebtedness of another Person that such Indebtedness will be
paid or discharged, or that the holders thereof will be protected (in whole or
in part) against loss in respect thereof including, without limitation, direct
and indirect guarantees, endorsements (except for collection or deposit in the
ordinary course of business), notes co-made or discounted, recourse agreements,
take-or-pay agreements, keep-well agreements, agreements to purchase or
repurchase such Indebtedness or to provide any security therefor or to provide
funds for the payment or discharge thereof, agreements to maintain solvency,
assets, level of income, or other financial condition, and agreements to make
payment other than for value received.

“Account Designation Letter” means a letter
from the Borrower to the Administrative Agent, duly completed and signed by the
Borrower’s Chief Financial Officer and in form and substance reasonably
satisfactory to the Administrative Agent, listing any one or more accounts to
which the Borrower may from time to time request the Administrative Agent to
forward the proceeds of any Loans made hereunder.

“Acknowledgment of New Loan Party” means an
instrument in the form attached hereto as Exhibit I.

“Acquisition” means the acquisition of Andrx by
the Borrower pursuant to the Merger Agreement.

“Acquisition Documents” means the Merger
Agreement and all other agreements, instruments and documents delivered in
connection with the Acquisition.

“Administrative Agent” has the meaning ascribed
to such term in the preamble hereto.

“Administrative Agent’s Account” means the
Administrative Agent’s account, maintained at the
bank of New York, specified in writing
to the Borrower and the Lenders, or such other account as the Administrative
Agent may from time to time specify in writing to the Borrower and the Lenders.

“Affiliate” means, as applied to any specified
Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such specified Person.  For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlling”, “controlled by” and “under
common control with”), as applied to any specified Person, means the possession,
directly or indirectly, of the power to vote ten percent (10%) or more of the
Securities having voting power for the election of directors of such specified
Person or otherwise 

 

to direct or cause the direction of the management and
policies of such specified Person, whether through the ownership of voting
Securities or by contract or otherwise.

“Agents” means, collectively, the
Administrative Agent, the Syndication Agent, the Documentation Agents and the
Arrangers.

“Agreement” has the meaning ascribed to such
term in the preamble hereto.

“Agreement Accounting Principles” means GAAP,
applied in a manner consistent with that used in preparing the financial
statements referred to in Section 6.01(h).

“Andrx” means Andrx Corporation, a Delaware
corporation.

“Applicable Base Rate Margin” means, as of any
date, a percentage per annum determined by reference to the Debt Rating in
effect on such date determined in accordance with the grid set forth in Annex
II attached hereto.

“Applicable Eurodollar Rate Margin” means, as
of any date, a percentage per annum determined by reference to the Debt Rating
in effect on such date determined in accordance with the grid set forth in
Annex II attached hereto.

“Applicable Fee” means, a percentage determined
by reference to the Debt Rating in effect on such date determined in accordance
with the pricing grid set forth in Annex II attached hereto.

“Applicable Lending Office” means, with respect
to a particular Lender, its Eurodollar Lending Office in respect of provisions
relating to Eurodollar Rate Loans and its Domestic Lending Office in respect of
provisions relating to Base Rate Loans.

“Applicable Margin” shall mean, for any day,
with respect to any Revolving Loan or Term Loan, as the case may be, the
applicable percentage set forth in Annex II under the appropriate
caption.

“Approved Fund” means, with respect to any
Lender, any fund that regularly invests in bank loans, has sufficient cash to
support a Loan Commitment and is managed by such Lender.

“Arrangers” means CIBC World Market Corp. and
Wachovia Capital Markets, LLC.

“Assignment and Acceptance” means an Assignment
and Acceptance substantially in the form of Exhibit A attached hereto
and made a part hereof delivered to the Administrative Agent in connection with
an assignment of a Lender’s interest under this Agreement in accordance with
the provisions of Section 13.01.

“Attributable Debt” means with respect to a
Sale and Leaseback Transaction, at the time of determination, the present value
(discounted at the rate of interest implicit in such transaction, determined in
accordance with GAAP) of the obligation of the lessee for net rental payments
during the remaining term of the lease included in such Sale and Leaseback
Transaction (including any period for which such lease has been extended or
may, at the option of the lessor, be extended).

“Availability” means, at any particular time,
the amount by which the Maximum Revolving Credit Amount at such time exceeds
the Revolving Credit Obligations at such time.

“Base Rate” means, on any date, a fluctuating
interest rate per annum equal to the higher of:

(a)           the
rate of interest then most recently established by CIBC in New York, New York
as its prime commercial lending rate for Dollars loaned in the United States in
effect on such date; and

(b)           the
Federal Funds Rate in effect on such date plus 1/2 of 1%.

 2
 

 

The Base Rate is not necessarily intended to be the
lowest rate of interest determined by CIBC in connection with the extensions of
credit.

“Base Rate Loans” means all Loans which bear
interest at a rate determined by reference to the Base Rate as provided in Section
4.01(a).

“Bankruptcy Code” means Title 11 of the United
States Code (11 U.S.C. §§ 101 et seq.),
as amended from time to time, and any successor statute.

“Benefit Plan” means a defined benefit plan as
defined in Section 3(35) of ERISA (other than a Multiemployer Plan) which is
subject to Title IV of ERISA or Section 412 of the Code in respect of which any
Loan Party or any ERISA Affiliate is, or within the immediately preceding six
(6) years was, an “employer” as defined in Section 3(5) of ERISA.

“Board of Directors” means the board of
directors or equivalent governing body of a Person (or the general partner of
such Person, as the case may be), or any committee thereof duly authorized to
act on behalf of such board of directors or equivalent governing body.

“Borrower” has the meaning ascribed to such
term in the preamble hereto.

“Borrowing” means a borrowing consisting of
Loans of the same Type made on the same day by the Lenders.

“Business” means those businesses in which the
Borrower and its Subsidiaries are engaged on the Closing Date and businesses
reasonably ancillary or related thereto.

“Business Day” means a day, in the applicable
local time, which is not a Saturday or Sunday or a legal holiday and on which
banks are not required or permitted by law or other governmental action to
close in any of (i) New York, New York, (ii) in the case of Eurodollar Rate
Loans, London, England and (iii) in the case of Letter of Credit transactions
for the Issuing Bank, the place where its office for issuance and
administration of the pertinent Letter of Credit is located.

“Capital Expenditures” means, for any period
being measured hereunder, the aggregate of all expenditures (whether paid in
cash or other assets or accrued as a liability (but without duplication))
during such period that, in conformity with GAAP, are required to be included
in or reflected by a Loan Party’s fixed asset account as reflected in its
balance sheet; provided, however, that Capital Expenditures shall
include, whether or not such a designation would be in conformity with GAAP,
(A) that portion of Capital Leases which is capitalized on the balance sheet of
such Loan Party and incurred in such period and (B) expenditures for Equipment
which is purchased simultaneously with the trade-in of existing Equipment owned
by such Loan Party to the extent that the gross purchase price of the purchased
Equipment exceeds the fair value of the Equipment being traded in at such time.

“Capital Lease” means, as applied to any
Person, any lease of any property (whether real, personal or mixed) by that
Person as lessee which, in conformity with GAAP, is accounted for as a capital
lease on the balance sheet of that Person.

“Capital Stock” means, with respect to any
Person, any capital stock of such Person, regardless of class or designation,
and all warrants, options, purchase rights, conversion or exchange rights,
voting rights, calls or claims of any character with respect thereto.

 “Cash
Equivalents” shall mean (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by an
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year after the date of acquisition thereof;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody’s (or, if at any time
neither 

 3
 

 

S&P nor Moody’s shall be rating such obligations,
then from other nationally recognized rating services) and not listed in Credit
Watch published by S&P; (iii) commercial paper, other than commercial paper
issued by the Borrower or any of its Affiliates, maturing no more than ninety
(90) days after the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 or P-1 from either S&P or Moody’s (or, if
at any time neither S&P nor Moody’s shall be rating such obligations, then
the highest rating from other nationally recognized rating services) (iv)
domestic and eurodollar certificates of deposit or time deposits or bankers’
acceptances maturing within ninety (90) days after the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or European
Economic Community or Canada having combined capital and surplus of not less
than $250,000,000; (v) bankers’ acceptances maturing no more than ninety (90)
days after the date of creation thereof and, at the time of acquisition, having
a rating of at least A-1 or P-1 from either S&P or Moody’s (or, if at any
time neither S&P nor Moody’s shall be rating such obligation, then the
highest rating from other nationally recognized rating services); (vi) corporate
securities maturing no more than one (1) year after the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P of Moody’s (or, if at any time neither S&P
nor Moody’s shall be rating such obligations, then one of the two highest
ratings from other nationally recognized rating services); (vii) repurchase
agreements with respect to United States government securities, with contract
periods not to exceed thirty (30) days; and (viii) money market mutual funds
that invest primarily in the instruments set forth in the foregoing clauses of
this definition.

“CERCLA” means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq., any amendments thereto, any successor
statutes, and any regulations promulgated thereunder.

“Change of Control” means the occurrence of one
or more of the following events:

(a)           the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act) is or becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act), directly or indirectly, of more than 35% of the total voting
power of the Equity Interests of the Borrower;

(b)           any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of the Borrower
and its Subsidiaries taken as a whole to any “person” or group of “persons” for
purposes of Section 13(d) of the Securities Exchange Act (other than to any
Wholly Owned Subsidiary of the Borrower); or

(c)           the
adoption of a plan of liquidation of the Borrower.

“Chief Financial Officer” means the chief
financial officer, chief accounting officer, vice president — corporate
controller or vice president of finance of the Borrower.

“Claim” means any claim or demand, by any
Person, of whatsoever kind or nature for any alleged Liabilities and Costs,
whether based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute, Permit, ordinance or regulation, common law or
otherwise.

“Closing Date” means the date on which all of
the conditions precedent in Section 5.01 (and, in the event any Loans
are made on such date, Section 5.02) have been satisfied or waived
pursuant to Section 13.09.

“Code” means the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute and any regulations or
guidelines promulgated thereunder.

“Commercial Letter of Credit” means any
documentary letter of credit issued by an Issuing Bank pursuant to Section
2.03 for the account of the Borrower or any of its Subsidiaries, which is
drawable upon presentation of documents evidencing the sale or shipment of
goods purchased by the Borrower or any of its Subsidiaries in the ordinary
course of their business.

 4
 

 

“Commission” means the Securities and Exchange
Commission and any Person succeeding to the functions thereof.

“Commitments” shall mean, with respect to any
Lender, such Lender’s Revolving Loan Commitment, Term Loan Commitment and any
Commitment to make Term Loans or Revolving Loans of a new class extended by
such Lender as provided in Section 2.08.

“Compliance Certificate” has the meaning
ascribed to such term in Section 7.01(c).

“Contaminant” means any waste, pollutant (as
that term is defined in 42 U.S.C. 9601(33) or in 33 U.S.C. 1362(13)), hazardous
substance (as that term is defined in 42 U.S.C. 9601(14)), hazardous chemical
(as that term is defined by 29 CFR Section 1910.1200(c)), toxic substance,
hazardous waste (as that term is defined in 42 U.S.C. 6901), radioactive
material, special waste, petroleum, including crude oil or any petroleum-derived
substance, waste, or breakdown or decomposition product thereof, or any
constituent of any such substance or waste, including, but not limited to
polychlorinated biphenyls, and asbestos.

“Contractual Obligation” means, as applied to
any Person, any provision of any Securities issued by that Person or any
indenture, mortgage, deed of trust, security agreement, pledge agreement,
guaranty, contract, undertaking, agreement or instrument to which that Person
is a party or by which it or any of its properties is bound, or to which it or
any of its properties is subject.

 “Convertible
Contingent Senior Debenture Indenture” means the Indenture, dated March 7,
2003, between the Borrower and Wells Fargo Bank Minnesota, National
Association, as Trustee, for the issuance of the Borrower’s Convertible
Contingent Senior Debentures.

“Convertible Contingent Senior Debentures”
means the 1.75% Convertible Contingent Senior Debentures issued by the Borrower
pursuant to the Convertible Contingent Senior Debenture Indenture.

 “Customary
Permitted Liens” means

(a)           Liens
(other than Environmental Liens and any Lien in favor of the PBGC) with respect
to the payment of taxes, assessments or governmental charges or claims, in all
cases which are not yet due or are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;

(b)           statutory
Liens of landlords and Liens of suppliers, vendors, mechanics, carriers, materialmen,
warehousemen or workmen and other Liens imposed by law and created in the
ordinary course of business in all cases for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP;

(c)           Liens
(other than Environmental Liens and any Lien in favor of the PBGC) incurred or
deposits made in the ordinary course of business in connection with worker’s compensation,
unemployment insurance or other types of social security benefits or to secure
the performance of bids, tenders, sales, leases, contracts (other than for the
repayment of borrowed money), surety, appeal and performance bonds, in all
cases for amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP; and

(d)           zoning
restrictions, easements, licenses, reservations, covenants, rights-of-way,
utility easements, building restrictions and other similar charges or
encumbrances or irregularities of title (including leasehold title) on the use
of real property which do not materially interfere with the ordinary conduct of
the business of the Loan Parties and which do not materially adversely affect
the value of the real property.

 5
 

 

“DEA” means the
Drug Enforcement Administration.

“Debt” means, as applied to any Person at any
time, all indebtedness, obligations or other liabilities of such Person (i) for
borrowed money or evidenced by debt securities, debentures, acceptances, notes
or other similar instruments, (ii) reimbursement obligations with respect to
letters of credit issued for such Person’s account (to the extent not accounted
for in clause (i) above), (iii) to pay the deferred purchase price of property
or services, except accounts payable and accrued expenses arising in the
ordinary course of business, or (iv) in respect of Capital Leases.

“Debt Rating” means, as of any date, the rating
that has been most recently announced by S&P and Moody’s for this credit
facility.  For purposes of the foregoing,
(a) if any such rating established by S&P or Moody’s shall be changed, such
change shall be effective as of the date on which such change is first announced
publicly by the rating agency making such change and (b) if S&P or Moody’s
shall change the basis on which ratings are established, each reference herein
to ratings announced by S&P or Moody’s, as the case may be, shall refer to
the then equivalent rating by S&P or Moody’s, as the case may be.

“Default” means an event which, with the giving
of notice or the lapse of time, or both, would constitute an Event of Default.

“Disclosure Letter” means the Disclosure Letter
dated of even date herewith from the Borrower to the Administrative Agent and
the Lenders.

“DOL” means the United States Department of
Labor and any Person succeeding to the functions thereof.

“Dollars” and “$” mean the lawful money
of the United States.

“Domestic Lending Office” means, with respect
to any Lender, such Lender’s office, located in the United States, specified as
the “Domestic Lending Office” of such Lender on Annex I hereto or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrower and the Administrative Agent.

“EBITDA” means, for any Financial Covenant
Period, (i) Net Income, plus the following amounts (without duplication) to the
extent deducted in calculating such Net Income: 
(A) depreciation and amortization expense (including, without
limitation, amortization of intangibles, such as goodwill and organization
costs), (B) interest expense, amortization or writeoff of Debt and discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Debt (including the Loans and Receivables Facility Financing
Costs), (C) the provision for income taxes (including federal, state, local and
foreign income taxes), (D) extraordinary or unusual losses, (E) non-cash
portion of nonrecurring losses and charges, (F) other non-operating, non-cash
losses, (G) minority interest expense in respect of equity holdings in
Affiliates, (H) any non-cash expenses relating to stock-based compensation
expense and (I) any one-time expenses, whether cash or non-cash, incurred by
the Borrower or its Subsidiaries or Andrx related to the Acquisition or
anticipated at the closing of the Acquisition, whether occurring before or
after the Closing Date, including, without limitation, severance and retention
expenses; minus (ii) the following amounts (without duplication) for such
Financial Covenant Period to the extent included in the calculation of such Net
Income:  (A) the amount of extraordinary
gains, (B) interest income and (C) other non-operating, non-cash income; each
item in clauses (i) and (ii) calculated pursuant to GAAP for such period, provided
that for any Financial Covenant Period that includes fiscal quarters ending
prior to September 30, 2006, EBITDA for such fiscal quarter shall be as
set forth on Annex III attached hereto.

“Eligible Assignee” means (A) any of the
following Persons that, immediately before and after giving effect to any
assignment of Loans, Term Loan Commitments or Revolving Loan Commitments
hereunder, has an unimpaired capital and surplus of not less than $100,000,000,
approved by the Administrative Agent and, unless a Default or Event of Default
has occurred and is continuing, the Borrower, each such approval not to be
unreasonably withheld or delayed:  (i) a
commercial bank organized under the laws of the United States or any state
thereof; (ii) a savings and loan association or savings bank organized under
the laws of the United States or any state thereof; (iii) a commercial
bank organized under the laws of any other country or a political subdivision
thereof; provided  

 6
 

 

that (x) such bank is acting through a branch or
agency located in the United States or (y) such bank is organized under the
laws of a country that is a member of the Organization for Economic Cooperation
and Development or a political subdivision of such a country; and (iv) any
other entity which is an “accredited investor” (as defined in Regulation D
under the Securities Act) which extends credit or buys loans in the ordinary
course of its businesses, including, but not limited to, insurance companies,
mutual funds and lease financing companies; (B) any Lender and (C) any Affiliate
or Approved Fund of any Lender; provided that no Affiliate of the
Borrower and no member of the pharmaceutical industry or other competitor of
the Borrower or any of its Subsidiaries shall be an Eligible Assignee.

“Environmental, Health or Safety Requirement of Law”
means Requirements of Law derived from or relating to federal, state and local
laws, regulations, ordinances or orders relating to or addressing the
environment, health or safety, including but not limited to any law,
regulation, ordinance or order relating to the use, handling, or disposal of
any Contaminant, any law, regulation, ordinance or order relating to Remedial
Action, and any law, regulation, ordinance or order relating to workplace or
worker safety and health, as such Requirements of Law are promulgated by the specifically
authorized agency responsible for administering such Requirements of Law.

“Environmental Lien” means a Lien in favor of
any Governmental Authority for (i) any liability under any applicable
Environmental, Health or Safety Requirement of Law or (ii) damages arising
from, or costs incurred by such Governmental Authority in response to, a
Release or threatened Release of a Contaminant into the indoor or outdoor
environment.

“Environmental Property Transfer Act” means any
applicable Requirement of Law triggered by the transfer, sale, lease, mortgage
or closure of any Property, that conditions, restricts, prohibits or requires
any notification or disclosure for environmental reasons.

“Equipment” means a Person’s present and future
(i) equipment and fixtures, including, without limitation, machinery,
manufacturing, distribution, selling, computer system, data processing and
office equipment, assembly systems, tools, molds, dies, fixtures, appliances,
furniture, furnishings, vehicles, vessels, aircraft, aircraft engines, and
trade fixtures, (ii) other tangible personal property, and (iii) any and all
accessions, parts and appurtenances attached to any of the foregoing or used in
connection therewith, and any substitutions therefor and replacements, products
and proceeds thereof.

“Equity Interests” means, with respect to any
Person, any Capital Stock issued by such Person, regardless of class or
designation, any limited or general partnership interest in such Person, or any
limited liability membership interest in such Person, regardless of
designation.

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and any successor statute.

“ERISA Affiliate” means any (i) corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as any Loan Party, (ii) partnership,
trade or business (whether or not incorporated) which is under common control
(within the meaning of Section 414(c) of the Code) with any Loan Party, and
(iii) “affiliated service group” (as defined in Section 414(m) of the Code).

“Eurodollar Affiliate” means, with respect to
each Lender, the Affiliate of such Lender (if any) set forth below such Lender’s
name under the heading “Eurodollar Affiliate” on Annex II hereto or on
the Assignment and Acceptance by which it became a Lender or such Affiliate of
a Lender as it may from time to time specify by written notice to the Borrower
and the Administrative Agent.

“Eurodollar Interest Payment Date” means (i)
with respect to any Eurodollar Rate Loan, the last day of each Eurodollar
Interest Period applicable to such Loan and (ii) with respect to any Eurodollar
Rate Loan having a Eurodollar Interest Period of six months or longer, if
applicable, each three-month anniversary of the first day of such Eurodollar
Interest Period.

“Eurodollar Interest Period” has the meaning
set forth in Section 4.02(b).

 7
 

 

“Eurodollar Lending Office” means, with respect
to any Lender, the office or offices of such Lender (if any) set forth below
such Lender’s name under the heading “Eurodollar Lending Office” on Annex II
hereto or on the Assignment and Acceptance by which it became a Lender or such
office or offices of such Lender as it may from time to time specify by written
notice to the Borrower and the Administrative Agent.

“Eurodollar Rate” means, with respect to any
Eurodollar Interest Period applicable to a Borrowing of Eurodollar Rate Loans,
an interest rate per annum obtained by dividing (i) the rate per annum
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in U.S. dollars at approximately 11:00 a.m. (London
time) on the Interest Rate Determination Date for such Eurodollar Interest
Period for a period equal to such Eurodollar Interest Period (provided
that, if for any reason such rate is not available, the term “Eurodollar Rate”
shall mean, for any Interest Period for all Eurodollar Rate Advances comprising
part of the same Borrowing, the rate per annum appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page,
the applicable rate shall be the arithmetic mean of all such rates), by (ii) a
percentage equal to 100% minus the Eurodollar Reserve Percentage.  The Eurodollar Rate shall be adjusted automatically
on and as of the effective date of any change in the Eurodollar Reserve
Percentage.

“Eurodollar Rate Loans” means those Loans
outstanding which bear interest at a rate determined by reference to the
Eurodollar Rate as provided in Section 4.01(a).

“Eurodollar Reserve Percentage” means, for any
day, that percentage which is in effect on such day, as prescribed by the
Federal Reserve Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in New
York, New York 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 Eurodollar Rate Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any bank to United States
residents).

“Event of Default” means any of the occurrences
set forth in Section 11.01 after the expiration of any applicable grace
period and the giving of any applicable notice, in each case as expressly
provided in Section 11.01.

“Existing Letters of Credit” means letter of
credit No. SM209393, issued by Wachovia for the
account of the Borrower, in favor of certain beneficiaries named therein in the
face amount of $385,000; letter of credit No. SM208653, issued by Wachovia for
the account of the Borrower, in favor of certain beneficiaries named therein in
the face amount of $2,090,000; letter of credit No. SM422382, issued by
Wachovia for the account of the Borrower, in favor of certain beneficiaries
named therein in the face amount of $463,000; letter of credit No. SM203628,
issued by Wachovia for the account of the Borrower, in favor of certain
beneficiaries named therein in the face amount of $2,600,000; and letter of
credit No. SM216341, issued by Wachovia for the account of Andrx, in favor of
certain beneficiaries named therein in the face amount of $980,000.

“FDA” shall mean the Food and Drug
Administration.

“FDA OAI Matter” means the
Borrower’s FDA Official Action Indicated (OAI) status and the FDA inspections
relating to the Borrower’s Davie, Florida manufacturing facilities and matters
relating thereto.

“Federal Funds Rate” means, for any period, a
fluctuating interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day in New York, New
York, for the next preceding Business Day) in New York, New York by the Federal
Reserve Bank of New York, or if such rate is not so published for any day which
is a Business Day in New York, New York, the average of the quotations for such
day on such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by the Administrative
Agent.

“Federal Reserve Board” means the Board of
Governors of the Federal Reserve System or any Governmental Authority
succeeding to its functions.

“Fee Letter” means the fee letter dated July 6,
2006 by and among CIBC, CIBC World Markets Corp., Wachovia Bank, National
Association, Wachovia Capital Markets, LLC and the Borrower, as such agreement
may be further amended, supplemented or otherwise modified from time to time.

 

 8

 

 

“Final Maturity Date” shall mean the latest of
the Revolving Loan Maturity Date, the Term Loan Maturity Date and any
Incremental Term Loan Maturity Date applicable to existing Incremental Term
Loans, as of any date of determination.

“Financial Covenant Period” means, in
determining compliance with the financial covenants hereunder, with respect to
each fiscal quarter, the financial information for the immediately preceding
four fiscal quarters ending on the last day of such fiscal quarter.

“Fiscal Year” means the fiscal year of the
Borrower and its Subsidiaries ending on December 31 of each calendar year.

“Forfeiture Proceeding” means any action,
proceeding or investigation affecting any of the Loan Parties before any court,
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or the receipt of notice by any such party that any of
them is a suspect in or a target of any governmental inquiry or investigation,
which may result in an indictment of any of them or the seizure or forfeiture
of any of their property.

“Funded Debt” means, as to any Person, without
duplication:  (a) all Indebtedness of
such Person for borrowed money, all Receivables Facility Attributed
Indebtedness, and Indebtedness which has been incurred in connection with the
acquisition of assets (excluding letters of credit and bankers’ acceptances)
and (b) all capital lease obligations (including synthetic lease obligations)
of such Person.

“Funding Date” means the date of the funding of
a Loan.

“GAAP” means generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession as in effect from time to time.

“Governing Documents” means, (a) with respect
to any corporation, (i) the articles/certificate of incorporation (or the
equivalent organizational documents) of such corporation, (ii) the by-laws (or
the equivalent governing documents) of the corporation and (iii) any document
setting forth the designation, amount and/or relative rights, limitations and
preferences of any class or series of such corporation’s Capital Stock; (b)
with respect to any general partnership, (i) the partnership agreement (or the
equivalent organizational documents) of such partnership and (ii) any document
setting forth the designation, amount and/or relative rights, limitations and
preferences of any of the partnership interests; (c) with respect to any
limited partnership, (i) the partnership agreement (or the equivalent
organizational documents) of such partnership, (ii) a certificate of limited partnership
(or the equivalent organizational documents) and (iii) any document setting
forth the designation, amount and/or relative rights, limitations and
preferences of any of the partnership interests; and (d) with respect to any
limited liability company, (i) the certificate of limited liability (or
equivalent filings) of such limited liability company, (ii) the operating
agreement (or the equivalent organizational documents) of such limited
liability company, and (iii) any document setting forth the designation, amount
and/or relative rights, limitations and preferences of any of such company’s
membership interests.

“Governmental Authority” means any nation or
government, any federal, state, local or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

“Guaranties” means, collectively, the
Guaranties, substantially in the form of the Guaranties referred to in the List
of Closing Documents, now or hereafter executed by the Guarantors in favor of
the Administrative Agent and the Lenders, as such Guaranties may be amended,
supplemented or otherwise modified from time to time.

“Guarantors” means, collectively, (i) each domestic
Subsidiary that, as of the Closing Date, accounts for at least 5% of the
Borrower’s EBITDA on a consolidated basis (calculated at the end of the Fiscal
Year ended December 31, 2005), provided that domestic Subsidiaries
that account for less than 5% of such EBITDA shall be included as well to the
extent necessary such that the aggregate EBITDA of the Borrower and the
Guarantors do not constitute less than 

 9
 

 

 

90% of the aggregate EBITDA of the Borrower and its domestic
Subsidiaries (calculated at the end of the Fiscal Year ended December 31,
2005) and (ii) each domestic Subsidiary that executes a Guaranty and an
Acknowledgment of New Loan Party from time to time hereafter in accordance with
Section 8.10.

“Holder” means any Person entitled to enforce
any of the Obligations, whether or not such Person holds any evidence of
Indebtedness, including, without limitation, the Administrative Agent and each
Lender.

“Increase Effective Date” shall have the
meaning assigned to such term in Section 2.08(a).

“Increase Joinder” shall have the meaning
assigned to such term in Section 2.08(c).

“Incremental Term Loan” shall have the meaning
assigned to such term in Section 2.08(c).

“Incremental Term Loan Commitment” shall have
the meaning assigned to such term in Section 2.08(a).

“Incremental Term Loan Maturity Date” shall
have the meaning assigned to such term in Section 2.08(c).

“Indebtedness” means, as applied to any Person
at any time and without duplication, (a) all indebtedness, obligations or other
liabilities of such Person (i) for borrowed money or evidenced by debt
securities, debentures, acceptances, notes or other similar instruments, and
any accrued interest, fees and charges relating thereto, (ii) with respect to
letters of credit issued for such Person’s account, (iii) to pay the deferred
purchase price of property or services, except accounts payable and accrued
expenses arising in the ordinary course of business, (iv) in respect of Capital
Leases or (v) which are Accommodation Obligations of the type referred to in
clauses (i) through (iv) above; (b) all indebtedness, obligations or other
liabilities of such Person or others secured by a Lien (other than a Customary
Permitted Lien) on any property of such Person, whether or not such
indebtedness, obligations or liabilities are assumed by such Person (but only
to the extent of the fair market value of such property in the case of
indebtedness, obligations or liabilities that are not assumed by such Person),
all as of such time; (c) all indebtedness, obligations or other liabilities of
such Person in respect of Interest Rate Contracts and foreign exchange
contracts, net of liabilities owed to such Person by the counterparties
thereon; (d) all preferred stock subject (upon the occurrence of any contingency
or otherwise) to mandatory redemption at any time prior to the later of the 91st day following the Term Loan Maturity date or
the 91st day following the Revolving Loan Maturity Date; (e) all Receivables
Facility Attributed Indebtedness; and (f) all contingent Contractual
Obligations with respect to any of the foregoing.  For the avoidance of doubt, Indebtedness
shall not include any guarantees that are not for other Indebtedness,
including, without limitation, performance guarantees.

“Indemnified Matters” has the meaning ascribed
to such term in Section 13.05.

“Indemnitees” has the meaning ascribed to such
term in Section 13.05.

“Interest Coverage Ratio” means, with respect
to any Financial Covenant Period, the ratio of (i) EBITDA for such period to
(ii) Interest Expense for such period.

“Interest Expense” means, for any period being
measured hereunder, total interest expense for such period, whether paid or
accrued (including the interest component of Capital Leases and Receivables
Facility Financing Costs) of the Borrower and its Subsidiaries on a
consolidated basis, as determined in conformity with GAAP, provided that
for any prior measurement period that includes quarters ending prior to the
Closing Date, Interest Expense shall include interest expense on Funded Debt on
an annualized basis.

“Interest Rate Contracts” means interest rate
exchange, swap, collar, cap, hedging or similar agreements.

“Interest Rate Determination Date” has the
meaning ascribed to such term in Section 4.02(c).

“Investment” means, with respect to any Person,
(i) any purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, issued by any other Person, (ii) any
purchase by that Person of all or substantially all of the assets of a business
conducted by another Person, and (iii) any direct or indirect loan, advance 

 10
 

 

 

(other than prepaid expenses, accounts receivable,
advances to employees and similar items made or incurred in the ordinary course
of business) or capital contribution by that Person to any other Person, including
all Indebtedness to such Person arising from a sale of property by such Person
other than in the ordinary course of its business.  The amount of any Investment shall be the
original cost of such Investment, plus the cost of all additions thereto less the
amount of any return of capital or principal to the extent such return is in
cash with respect to such Investment without any adjustments for increases or
decreases in value or write-ups, write-downs or write-offs with respect to such
Investment.

“IRS” means the Internal Revenue Service and
any Person succeeding to the functions thereof.

“Issue” means, with respect to any Letter of
Credit, either issue, or extend the expiry of, or renew, or increase the amount
of, such Letter of Credit, and the term “Issued” or “Issuance” shall have a
corresponding meaning.

“Issuing Bank” means Wachovia Bank, National
Association, in its capacity as issuer of Letters of Credit and any successor
or assignee thereof in such capacity, or CIBC in its capacity as issuer of Standby
Letters of Credit and any successor or assignee thereof in such capacity.

“Lender” has the meaning ascribed to such term
in the preamble hereto.

“Lender Addendum” means with respect to any
Lender on the Closing Date, a lender addendum in the form of Exhibit I,
to be executed and delivered by such Lender on the Closing Date.

“Letter of Credit” means any Commercial Letter
of Credit or Standby Letter of Credit.

“Letter of Credit Exposure” shall mean at any
time the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time plus
(b) the aggregate principal amount of all Reimbursement Obligations outstanding
at such time.  The Letter of Credit
Exposure of any Revolving Lender at any time shall mean its Pro Rata Share of
the aggregate Letter of Credit Exposure at such time.

“Letter of Credit Fee” means the fees described
in Section 4.03(b).

“Letter of Credit Obligations” means, at any
particular time, the sum of (i) all outstanding Reimbursement Obligations, plus
(ii) the aggregate undrawn face amount of all outstanding Letters of Credit.

“Letter of Credit Reimbursement Agreement”
means, with respect to a Letter of Credit, such form of application therefor
and form of reimbursement agreement therefor (whether in a single or several
documents, taken together) as the Issuing Bank from which the Letter of Credit
is requested may employ in the ordinary course of business for its own account,
with such modifications thereto as may be agreed upon by the Issuing Bank and
the Borrower or the applicable Subsidiary and as are not materially adverse (in
the reasonable judgment of the Issuing Bank) to the interests of the Lenders; provided,
however, in the event of any conflict between the terms hereof and of
any Letter of Credit Reimbursement Agreement, the terms hereof shall control.

“Leverage Ratio” means, for any Financial
Covenant Period, the ratio of (i) the outstanding principal amount of Funded
Debt for the Borrower and its Subsidiaries at the end of such period, to (ii)
EBITDA for such period.

“Liabilities and Costs” means all liabilities,
obligations, responsibilities, losses, damages, personal injury, death costs,
punitive damages, economic damages, consequential damages, treble damages,
intentional, willful or wanton injury, damage or threat to the environment,
natural resources or public health or welfare, costs and expenses (including,
without limitation, attorney, expert and consulting fees and costs of
investigation, feasibility studies or Remedial Action), fines, penalties and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.

 11
 

 

 

“Lien” means any mortgage, deed of trust,
pledge, hypothecation, assignment, conditional sale agreement, deposit
arrangement, security interest, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever in respect of any property of a Person, whether
granted voluntarily or imposed by law, and includes the interest of a lessor
under a Capital Lease or under any financing lease having substantially the
same economic effect as any of the foregoing and the filing of any financing
statement or similar notice (other than a financing statement filed by a “true”
lessor pursuant to § 9-505 of the Uniform Commercial Code), naming the owner of
such property as debtor, under the Uniform Commercial Code or other comparable
law of any jurisdiction.

“List of Closing Documents” shall mean the List
of Closing Documents attached hereto and made a part hereof as Exhibit F.

“Loan Documents” means this Agreement, the
Notes, the Fee Letter, the Guaranties, the Letter of Credit Reimbursement
Agreements and all other instruments, agreements and written Contractual
Obligations between any Loan Party and the Administrative Agent, the Issuing
Bank or any Lender delivered to either the Administrative Agent, the Issuing
Bank or such Lender pursuant to or in connection with the transactions contemplated
hereby, in each case currently existing or hereafter entered into and as
further amended, supplemented or otherwise modified from time to time, but
specifically excluding any Interest Rate Contracts or foreign exchange
contracts to which any Lender or any Affiliate of a Lender is a party.

“Loan Party” means the Borrower and each of the
Guarantors.

“Loans” means all Term Loans, Revolving Loans
and Swing Loans.

“Margin Stock” means “margin stock” as such
term is defined in Regulation U.

“Material Adverse Effect” means (i) a material
adverse effect upon the condition (financial or otherwise), operations, assets,
business or properties of the Borrower and its Subsidiaries, taken as a whole,
(ii) a material adverse effect on the ability of the Loan Parties to perform
their respective payment obligations under the Loan Documents, or (iii) a
material adverse effect on the ability of the Lenders or the Administrative
Agent to enforce the Loan Documents other than as a result of any action on the
part of the Administrative Agent or any Lender.

“Material Guarantor” means any Guarantor that
accounts for at least 15% of the Borrower’s EBITDA on a consolidated basis, as
determined at the end of the immediately preceding Fiscal Year.

“Maximum Revolving Credit Amount” means, at any
particular time, the Revolving Loan Commitments at such time.

“Merger Agreement” means the agreement and plan
of merger dated March 12, 2006, as amended on July 7, 2006, by and among
Andrx, the Borrower and Water Delaware, Inc., and all related schedules and
exhibits.

“Moody’s” means Moody’s Investors Services,
Inc.

“Multiemployer Plan” means an employee benefit
plan as defined in Section 4001(a)(3) of ERISA which is, or within the
immediately preceding six (6) years was, contributed to by either the Borrower
or any ERISA Affiliate.

“Net Income” means, for any period being
measured hereunder, the net earnings (or loss) after taxes of the Borrower and
its Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP.

“Net Worth” means, as at any time of
determination, the total assets of the Borrower and its Subsidiaries on a
consolidated basis less total liabilities of the Borrower and its Subsidiaries
on a consolidated basis, each determined in accordance with GAAP.

 12
 

 

 

“Notes” means any notes evidencing the Term
Loans, Revolving Loan Notes or Swing Loan Notes issued pursuant to this
Agreement, if any, substantially in the form of Exhibit B-1, B-2
or B-3.

“Notice of Borrowing” means a notice
substantially in the form of Exhibit C attached hereto and made a part
hereof.

“Notice of Continuation/Conversion” means a
notice substantially in the form of Exhibit D attached hereto and made a
part hereof.

“Obligations” means all Loans, advances, debts,
liabilities, obligations, covenants and duties owing by any Loan Party to any
of the Agents, the Issuing Bank, any Lender, any Affiliate of any of the
Agents, the Issuing Bank or any Lender, or any Person entitled to
indemnification pursuant to Section 13.05 of this Agreement, of any kind
or nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, whether arising by reason of an extension of credit, opening
or amendment of a Letter of Credit or payment of a draft drawn thereunder,
arising under this Agreement, the Notes or any other Loan Document, whether or
not for the payment of money, whether arising by reason of an extension of
credit, loan, guaranty, indemnification or in any other manner, whether direct
or indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising and however acquired,
and including all obligations of any Loan Party under or in connection with any
Interest Rate Contract or foreign exchange contract with any Lender or
Affiliate of any Lender.  The term “Obligations”
includes, without limitation, all interest, charges, expenses, fees, attorneys’
fees and disbursements and any other sum chargeable to the Loan Parties under
this Agreement, the Notes or any other Loan Document or any Interest Rate
Contract or foreign exchange contract with any Lender or Affiliate of any
Lender.

“Officer’s Certificate” means, with respect to
any Person, a certificate executed on behalf of such Person by (i) the chairman
or vice-chairman of such Person’s Board of Directors or (ii) such Person’s
president, any of its vice-presidents, its chief financial officer, chief
accounting officer, vice president of finance or its treasurer.

“Originators” means the Borrower and/or any of
its Subsidiaries in their respective capacities as parties to any Receivables
Purchase Documents, as sellers or transferors of any Receivables and Related
Security in connection with a Permitted Receivables Transfer.

“Other Taxes” has the meaning ascribed to such
term in Section 3.04(b).

“Patriot Act” has the meaning ascribed to such
term in Section 13.24.

“PBGC” means the Pension Benefit Guaranty
Corporation or any Person succeeding to the functions thereof.

“Permits” means any permit, approval,
authorization, license, variance, or permission required from a Governmental
Authority under an applicable Requirement of Law.

“Permitted Existing Indebtedness” means the
Indebtedness identified as such in Section 1.01(A) of the Disclosure Letter.

“Permitted Existing Liens” means the Liens on
assets of any Loan Party identified as such in Section 1.01(B) of the
Disclosure Letter.

“Permitted Receivables Transfer” means (i) a
sale or other transfer by an Originator to a SPV or any other Person of
Receivables and Related Security for fair market value and without recourse
(except for limited recourse typical of such structured finance transactions),
and/or (ii) a sale or other transfer by an Originator or a SPV to (a)
purchasers of or other investors in such Receivables and Related Security or
(b) any other Person (including a SPV) in a transaction in which purchasers or
other investors purchase or are otherwise transferred such Receivables and
Related Security, in each case pursuant to and in accordance with the terms of
the Receivables Purchase Documents.

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“Person” means any natural person, corporation,
limited partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust,
limited liability company or other organization, whether or not a legal entity,
and any Governmental Authority.

“Plan” means an employee benefit plan defined
in Section 3(3) of ERISA (other than a Multiemployer Plan) in respect of which
the Borrower or any ERISA Affiliate is, or within the immediately preceding six
(6) years was, an “employer” as defined in Section 3(5) of ERISA.

“Post-Increase Revolving Lenders” shall have
the meaning assigned to such term in Section 2.08(d).

“Pre-Increase Revolving Lenders” shall have the
meaning assigned to such term in Section 2.08(d).

“Pro Forma Basis” means, for purposes of
calculating compliance with each of the applicable financial covenants set
forth in Article X to give effect to a transaction or proposed
transaction, that such transaction or proposed transaction shall be deemed to
have occurred as of the first day of the Financial Covenant Period ended as of
the last day of the most recently ended fiscal quarter preceding the date of
determination for which the Administrative Agent and the Lenders have received
certified financial statements and a Compliance Certificate pursuant to Section
7.1.  As used in this definition, “transaction”
means (i) any acquisition of a product, business line or division, all or
substantially all of the assets of a business or of another Person, or all of
the equity interests of another Person, (ii) any disposition of a product, business
line or division, all or substantially all of the assets of a business, or all
of the equity interests of a Subsidiary, and (iii) any repurchase, redemption,
retirement or other acquisition by the Borrower of its common stock under Section
9.06.  In connection with any
calculation of the applicable financial covenants set forth in Article X, upon
giving effect to a transaction on a Pro Forma Basis:

(a)           for
purposes of any such calculation in respect of an acquisition or any Restricted
Payment, any Indebtedness incurred or assumed by any Loan Party (including the
Person acquired, if applicable) in connection with such acquisition or
Restricted Payment (x) shall be deemed to have been incurred as of the first
day of the applicable Financial Covenant Period and (y) if such Indebtedness
has a floating or formula rate, shall have an implied rate of interest for the
applicable Financial Covenant Period for purposes of this definition,
determined by utilizing the rate that is or would be in effect with respect to
such Indebtedness as of the relevant date of determination;

(b)           for
purposes of any such calculation in respect of an acquisition, (1) income
statement items (whether positive or negative) attributable to the Person or
property acquired shall be included beginning as of the first day of the
applicable Financial Covenant Period and (2) pro forma adjustments may be
included to the extent that such adjustments would give effect to events that
are (x) directly attributable to such transaction, (y) expected to have a
continuing impact on the Loan Parties and (z) factually supportable;

(c)           for
purposes of any such calculation in respect of a disposition, (1) any
Indebtedness that is retired in connection with such disposition shall be
excluded and deemed to have been retired as of the first day of the applicable
Financial Covenant Period and (2) income statement items (whether positive or
negative) attributable to the Person or property disposed of shall be excluded;
and

(d)           for
purposes of any such calculation in respect of making Loans on the Closing
Date, any Indebtedness that is retired in connection with the Refinancing shall
be excluded and deemed to have been retired, and Loans made on the Closing Date
shall be deemed to have been made, as of the first day of the applicable Financial
Covenant Period.

“Pro Rata Share” means, as the case may be, (i)
with respect to any Lender of Revolving Loans, the percentage obtained by dividing
such Lender’s Revolving Loan Commitment (or, if after the Revolving Loan Commitment
Termination Date, the outstanding balance of such Lender’s Revolving Loans and
such Lender’s participation percentages in outstanding Swing Loans and Letter
of Credit Obligations) by the aggregate amount of all Lenders’ Revolving
Loan Commitments (or, if after the Revolving Loan Commitment Termination Date,
the outstanding balance of all Revolving Loans, Swing Loans and Letter of
Credit Obligations) or (ii) with respect to any Term 

 14
 

 

 

Lender, the percentage obtained by dividing
such Term Lender’s Term Loan Commitment by the aggregate amount of all
Term Lenders’ Term Loan Commitments.

“Process Agent” has the meaning ascribed to
such term in Section 13.20(a).

“Property” means any and all interests in any
kind of property or asset, whether real, personal or mixed, whether tangible or
intangible.

“RCRA” means the Resource Conservation and
Recovery Act of 1986, 42 U.S.C. §§ 6901 et
seq., any amendments thereto, any successor statutes, and any regulations
promulgated thereunder.

“Receivable(s)” means and includes all of
applicable Originator’s or SPV’s presently existing and hereafter arising or
acquired accounts, accounts receivable, and all present and future rights of
such Originator or SPV, as applicable, to payment for goods sold or leased or
for services rendered (except those evidenced by instruments or chattel paper),
whether or not they have been earned by performance, and all rights in any
merchandise or goods which any of the same may represent, and all rights,
title, security and guaranties with respect to each of the foregoing,
including, without limitation, any right of stoppage in transit.

“Receivables and Related Security” means the
Receivables and the related security and collections with respect thereto which
are sold or transferred by any Originator or SPV in connection with any
Permitted Receivables Transfer.

“Receivables Facility Attributed Indebtedness”
means the amount of obligations outstanding under a receivables purchase
facility on any date of determination that would be characterized as principal
if such facility were structured as a secured lending transaction rather than
as a purchase.

“Receivables Facility Financing Costs” means
such portion of the cash fees, service charges, and other costs, as well as all
collections or other amounts retained by purchasers of receivables pursuant to
a receivables purchase facility, which are in excess of amounts paid to the
Borrower and its consolidated Subsidiaries under any receivables purchase
facility for the purchase of receivables pursuant to such facility and are the
equivalent of the interest component of the financing if the transaction were
characterized as an on-balance sheet transaction.

“Receivables Purchase Documents” means any
series of receivables purchase or sale agreements generally consistent with
terms contained in comparable structured finance transactions pursuant to which
an Originator or Originators sell or transfer to SPVs all of their respective
right, title and interest in and to certain Receivables and Related Security
for further sale or transfer to other purchasers of or investors in such assets
(and the other documents, instruments and agreements executed in connection
therewith), as any such agreements may be amended, restated, supplemented or
otherwise modified from time to time, or any replacement or substitution therefor.

“Receivables Purchase Facility” means the
securitization facility made available to the Borrower, pursuant to which the
Receivables and Related Security of the Originators are transferred to one or
more SPVs, and thereafter to certain investors, pursuant to the terms and
conditions of the Receivables Purchase Documents.

“Refinancing” means the repayment in full and
the termination of any commitment (including the cancellation of the Borrower’s
existing revolving credit facility dated as of May 30, 2003 by and among the
Borrower, the lenders party thereto from time to time, and Wachovia Bank,
National Association as administrative agent) to make extensions of credit
under all of the outstanding indebtedness listed in Section 1.01(c) of the
Disclosure Letter of the Borrower or any of its Subsidiaries.

“Register” has the meaning ascribed to such
term in Section 13.01(c).

“Regulation U” means Regulation U of the
Federal Reserve Board as in effect from time to time.

“Regulation X” means Regulation X of the
Federal Reserve Board as in effect from time to time.

 15
 

 

 

“Reimbursement Date” has the meaning ascribed
to such term in Section 2.03(d)(i)(A).

“Reimbursement Obligations” means, as to the
Borrower, the aggregate reimbursement or repayment obligations of the Borrower
with respect to amounts drawn under Letters of Credit.

“Release” means release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment or into or out of any
Property, including the movement of Contaminants through or in the air, soil,
surface water, groundwater or Property.

“Remedial Action” means any action required to
(i) clean up, remove, treat or in any other way address Contaminants in the
indoor or outdoor environment; (ii) prevent the Release or threat of Release or
minimize the further Release of Contaminants so they do not migrate or endanger
or threaten to endanger public health or welfare or the indoor or outdoor
environment; or (iii) perform pre-remedial studies and investigations and
post-remedial monitoring and care.

“Replaced Lender” has the meaning ascribed to
such term in Section 3.06.

“Replacement Effective Date” has the meaning
ascribed to such term in Section 3.06.

“Replacement Event” means, with respect to any
Lender, the appointment of, or the taking of possession by, a receiver,
custodian, conservator, trustee or liquidator of such Lender, or the
declaration by the appropriate regulatory authority that such Lender is
insolvent.

“Replacement Lender” means a financial
institution which is an Eligible Assignee or is otherwise reasonably acceptable
to the Administrative Agent and the Borrower and which is not a Loan Party or
an Affiliate of a Loan Party.

“Reportable Event” has the meaning ascribed to
such term in Section 4043 of ERISA or regulations promulgated thereunder, other
than an event which is not subject to the thirty (30) day notice requirement of
such regulations.

“Requirements of Law” means, as to any Person,
the charter and by-laws or other organizational or governing documents of such
Person, and any law, rule or regulation, or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject including, without limitation, the Securities Act, the
Securities Exchange Act, Regulations U and X, ERISA, the Fair Labor Standards
Act and any certificate of occupancy, zoning ordinance, building, environmental
or land use requirement or Permit or environmental, labor, employment, occupational
safety or healthcare law, rule or regulation.

“Requisite Lenders” means Lenders whose Pro
Rata Shares, in the aggregate, are greater than 50.0%.

“Restricted Junior Payment” means (i) any
dividend or other distribution, direct or indirect, on account of any shares of
any class of capital stock of, partnership interest of or other equity interest
of, a Loan Party now or hereafter outstanding, except a dividend payable solely
in shares of that class of stock or in any junior class of stock to the holders
of that class, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of capital stock of, partnership interest of or other
equity interest of, a Loan Party now or hereafter outstanding and (iii) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of capital stock of, partnership interest of or other
equity interest of, a Loan Party now or hereafter outstanding.

“Restricted Payment” means any Restricted
Junior Payment or Restricted Senior Payment.

“Restricted Senior Payment” means any voluntary
or optional payment or prepayment of, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with respect
to, 

 16
 

 

 

principal of and premium, if any, on the Convertible
Contingent Senior Debentures; provided, however, that so long as
no Default exists or would result therefrom, the term “Restricted Senior
Payment” shall not include any refinancing of the Convertible Contingent Senior
Debentures that is permitted under Section 9.01, or any payment of principal
and accrued interest due on the Convertible Contingent Senior Debentures if the
holders thereof exercise their right to require the Borrower to repurchase the
securities as provided in the Convertible Contingent Senior Debenture Indenture
on or after March 15, 2010.

“Revolving Credit Obligations” means, at any
particular time, the sum of (i) the outstanding principal amount of the Swing
Loans at such time, plus (ii) the outstanding principal amount of the Revolving
Loans at such time, plus (iii) Letter of Credit Obligations outstanding at such
time.

“Revolving Loan” has the meaning ascribed to
such term in Section 2.01(a).

“Revolving Loan Commitment” means, as to any
Lender, the obligation of such Lender, if any, to make Revolving Loans and
participate in Swing Loans and Letters of Credit in an aggregate principal
and/or face amount not to exceed the amount set forth opposite the heading “Revolving
Loan Commitment” on Schedule 1 to the Lender Addendum delivered by such
Lender, or, as the case may be, in the Assignment and Assumption pursuant to
which such Lender became a party hereto, as the same may be changed from time
to time pursuant to the terms hereof.  The initial aggregate amount of the
Revolving Loan Commitment is $500,000,000

“Revolving Loan Commitment Termination Date” means
the day which is the earliest of (A) the fifth anniversary of the Closing Date,
(B) the termination of the Revolving Loan Commitments pursuant to Section
11.02 and (C) the date of termination in whole of the Revolving Loan
Commitments pursuant to Section 3.01(b).

“Revolving Lender” shall mean a Lender with a
Revolving Loan Commitment.

“Revolving Loan Maturity Date” means November 3,
2011.

“Revolving Loan Notes” has the meaning ascribed
to such term in Section 2.04(a).

“S&P” means Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc.

“Sale and Leaseback Transaction” has the
meaning ascribed to such term in Section 9.10.

“Securities” means any stock, shares, voting
trust certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or any
certificates of interest, shares, or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence of
the Obligations.

“Securities Act” means the Securities Act of
1933, as amended from time to time, and any successor statute.

“Securities Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time, and any successor statute.

“Solvent”, when
used with respect to any Person, means that at the time of determination:

(a)           the
fair market value of its assets is in excess of the total amount of its
liabilities (including, without limitation, contingent liabilities); and

(b)           the
present fair saleable value of its assets is greater than its probable
liability on its existing debts as such debts become absolute and matured; and

(c)           it
is then able and expects to be able to pay its debts (including, without
limitation, contingent debts and other commitments) as they mature; and

 17
 

 

 

(d)           it
has capital sufficient to carry on its business as conducted and as proposed to
be conducted.

“SPV” means any special purpose entity established
for the purpose of purchasing receivables in connection with a receivables
securitization transaction permitted under the terms of this Agreement.

“Standby Letter of Credit” means any letter of
credit issued by an Issuing Bank pursuant to Section 2.03 for the account
of the Borrower or any of its Subsidiaries, which is not a Commercial Letter of
Credit.

“Strategic Partner” means one or more Persons
with whom a Person has any agreement or arrangement to develop, license,
manufacture, market, sell or distribute products in lines of businesses that do
not violate Section 9.07 (excluding, however, any such agreement or
arrangement that would be treated under GAAP as an acquisition of any product
reasonably related to the Business of the Borrower or its Subsidiaries).

“Subsidiary” means any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the Board of Directors or other persons performing
similar functions are at the time directly or indirectly owned or controlled by
such Person, one or more of the other subsidiaries of such Person or any
combination thereof.  When used without
reference to a parent entity, the term “Subsidiary” shall be deemed to refer to
a Subsidiary of the Borrower.

“Swing Loan” has the meaning ascribed to such
term in Section 2.03(a).

“Swing Loan Lender” means CIBC Inc. in its
individual capacity.

“Swing Loan Note” has the meaning ascribed to
such term in Section 2.04(b).

“Taxes” has the meaning ascribed to such term
in Section 3.04(a).

“Term Lender” means each Lender that has a Term
Loan Commitment or that holds a Term Loan.

“Term Loan” means the term loan to be made to
the Borrower by the Term Lenders pursuant to Section 2.01.

“Term Loan Commitment” means, as to any Lender,
the obligation of such Lender to make a portion of the Term Loan to the account
of the Borrower hereunder on the Closing Date in an aggregate principal amount
not to exceed the amount set forth opposite the heading “Term Loan Commitment”
on Schedule 1 to the Lender Addendum delivered by such Lender, or, as
the case may be, in the Assignment and Assumption pursuant to which such Lender
became a party hereto, as such amount may be reduced or otherwise modified at
any time or from time to time pursuant to the terms hereof.  The initial aggregate amount of the Term Loan
Commitment on the Closing Date shall be $650,000,000.

“Term Loan Maturity Date” means November 3,
2011.

“Term Note” means a promissory note made by the
Borrower in favor of a Term Lender evidencing the portion of the Term Loan made
by such Lender, substantially in the form of Exhibit B-1, and any
amendments, supplements and modifications thereto, any substitutes therefor,
and any replacements, restatements, renewals or extension thereof, in whole or
in part.

“Termination Event” means (i) any Reportable
Event with respect to any Benefit Plan, (ii) the withdrawal of the Borrower or
an ERISA Affiliate from a Benefit Plan during a plan year in which it was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA, (iii) the occurrence of an
obligation arising under Section 4041 of ERISA of the Borrower or an ERISA
Affiliate to provide affected parties with a written notice of an intent to terminate
a Benefit Plan in a distress termination described in Section 4041(c) of ERISA,
(iv) the institution by the PBGC of proceedings to terminate any Benefit Plan,
(v) any event or condition which constitutes grounds under 

 18
 

 

 

Section 4042 of ERISA for the appointment of a Trustee
to administer a Benefit Plan, or (vi) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan.

“Transactions” means, collectively, the
transactions to occur on or prior to the Closing Date pursuant to the
Transaction Documents, including (a) the consummation of the Acquisition;
(b) the execution, delivery and performance of the Loan Documents and the
initial borrowings hereunder; (c) the Refinancing and (d) the payment
of all fees and expenses to be paid on or prior to the Closing Date and owing
in connection with the foregoing.

“Transaction Documents” shall mean the
Acquisition Documents and the Loan Documents.

“Type” means, with respect to any Loan, its
nature as a Eurodollar Rate Loan or a Base Rate Loan.

“Uniform Commercial Code” means the Uniform
Commercial Code as enacted in the State of New York, as it may be amended from
time to time.

“Voting Securities” means with respect to any
Person, Securities with respect to any class or classes of capital stock of
such Person entitling the holders thereof ordinarily to vote in the election of
the members of the Board of Directors of such Person.

 “Wholly
Owned Subsidiary” means a Subsidiary of the Borrower all the Equity
Interests of which are owned by the Borrower or another Wholly Owned
Subsidiary.

1.02         Computation of Time Periods.  In this Agreement, in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but
excluding.” Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed.  Any period determined hereunder by reference
to a month or months or year or years shall end on the day in the relevant
calendar month in the relevant year, if applicable, immediately preceding the
date numerically corresponding to the first day of such period, provided
that if such period commences on the last day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month
during which such period is to end), such period shall, unless otherwise
expressly required by the other provisions of this Agreement, end on the last
day of the calendar month.

1.03         Accounting Terms. 
For purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to them in conformity with
GAAP.

1.04         Calculation of Financial Covenants.  To the extent any transactions shall have occurred
that would necessitate the calculation of any financial covenant on a Pro Forma
Basis (as set forth in the definition of Pro Forma Basis), all calculations of
the financial covenant contained in Section 10.01 (Minimum Net Worth)
for purposes of determining compliance with this Agreement (other than
quarterly and annual covenant compliance calculations set forth in a Compliance
Certificate delivered pursuant to Section 7.01(c)) shall be made on a
Pro Forma Basis, and all calculations of the financial covenants contained in Sections
10.02 (Minimum Interest Coverage Ratio) and 10.03 (Maximum
Leverage Ratio) for purposes of determining compliance with this Agreement
shall be made on a Pro Forma Basis.

1.05         Other Terms. 
Terms not otherwise defined herein which are defined in, or used in,
Article 9 of the Uniform Commercial Code shall have the respective meanings
assigned to such terms in Article 9 of the Uniform Commercial Code.

 

 19

 

 

ARTICLE II

AMOUNTS AND TERMS OF
LOANS

2.01         Term Commitments.

(a)           Availability.  Subject to the terms and conditions hereof,
each Term Lender with a Term Loan Commitment severally agrees to make a Term
Loan to the Borrower on the Closing Date in an amount in Dollars equal to the
amount of the Term Loan Commitment of such Term Lender.  The Term Loans may from time to time be
Eurodollar Rate Loans or Base Rate Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 2.01
and 4.01(c).

(b)           Notice
of Borrowing.  The Borrower shall
give the Administrative Agent irrevocable notice by delivery of a Notice of
Borrowing to the Administrative Agent which Notice of Borrowing must be
received by the Administrative Agent prior to 12:00 noon, New York City time,
one Business Day prior to the anticipated Closing Date requesting that the Term
Lenders make the Term Loans to be made on the Closing Date.  Upon receipt of such Notice of Borrowing the
Administrative Agent shall promptly notify each Term Lender with a Term Loan
Commitment thereof.  Not later than 12:00
noon, New York City time, on the Closing Date each Term Lender with a Term Loan
Commitment shall make available to the Administrative Agent an amount in immediately
available funds equal to the Term Loans to be made by such Term Lender.  On the Closing Date, the Administrative Agent
shall credit the account of the Borrower specified by the Borrower with the
aggregate of the amounts made available to the Administrative Agent by the Term
Lenders in immediately available funds.

(c)           Repayment
of Term Loans.  Borrower shall pay to
the Administrative Agent, for the account of the Lenders, on the dates set
forth below, or if any such date is not a Business Day, on the immediately
preceding Business Day, a principal amount of the Terms Loans equal to the
amount set forth below for such date, together in each case with accrued and
unpaid interest on the principal amount to be paid to but excluding the date of
such payment.  To the extent not
previously paid, all Term Loans shall be due and payable on the Term Loan
Maturity Date:

	
  Date

  	
   

  	
   

  	
   

  	
  Amount of 

  Term Loans To Be Repaid

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  0

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  0

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  0

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  0

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  Term Loan Maturity Date

  	
   

  	
  All outstanding Term Loans

  	
   

  

 

 20
 

 

 

2.02         Revolving Loan Facility.

(a)           Availability.  Subject to the terms and conditions set forth
in this Agreement, each Lender hereby severally agrees to make revolving loans
(each individually, a “Revolving Loan” and, collectively, the “Revolving
Loans”) to the Borrower from time to time during the period from the
Closing Date to the Business Day immediately preceding the Revolving Loan Commitment
Termination Date, in an amount not to exceed such Lender’s Pro Rata Share of
the Availability at such time.  Each
Borrowing of Base Rate Loans or Eurodollar Rate Loans shall be for a minimum
amount of $5,000,000 and in integral multiples of $1,000,000 in excess of that
amount.  All Revolving Loans comprising
the same Borrowing under this Agreement shall be made by the Lenders
simultaneously and proportionately to their then respective Revolving Loan
Commitments, it being understood that no Lender shall be responsible for any
failure by any other Lender to perform its obligation to make a Revolving Loan
hereunder nor shall the Revolving Loan Commitment of any Lender be increased or
decreased as a result of any such failure. 
Subject to the provisions of this Agreement, the Borrower may repay any
outstanding Revolving Loan made to it on any day which is a Business Day and
any amounts so repaid may be reborrowed in accordance with the provisions of
this Section 2.02(a).

(b)           Notice
of Borrowing.  When the Borrower
desires to borrow under this Section 2.02, the Borrower shall deliver to
the Administrative Agent a Notice of Borrowing, signed by it, no later than
12:00 p.m. (New York City time) (i) on the proposed Funding Date, in the case
of a Borrowing of Base Rate Loans, and (ii) at least three (3) Business Days in
advance of the proposed Funding Date, in the case of a Borrowing of Eurodollar
Rate Loans; Such Notice of Borrowing shall specify (i) the proposed Funding
Date (which shall be a Business Day), (ii) the amount of the proposed
Borrowing, (iii) whether the proposed Borrowing will be of Base Rate Loans or
Eurodollar Rate Loans, and (iv) in the case of Eurodollar Rate Loans, the
requested Eurodollar Interest Period. 
Any Notice of Borrowing given pursuant to this Section 2.02(b)
shall be irrevocable.

(c)           Making
of Revolving Loans.

(i)      Promptly
after receipt of a Notice of Borrowing under Section 2.02(b), the
Administrative Agent shall notify each Lender by facsimile, or other similar
form of transmission, of the proposed Borrowing.  Each Lender shall deposit an amount equal to
its Pro Rata Share of the amount requested by the Borrower to be made as
Revolving Loans in the Administrative Agent’s Account at its office in New
York, New York, in immediately available funds, not later than 2:00 p.m. (New
York City time) on any Funding Date applicable thereto.  Subject to the fulfillment of the conditions
precedent set forth in Section 5.02 (and, in the event of the initial
Borrowing under this Agreement, Section 5.01), the Administrative Agent
shall make the proceeds of such amounts received by it available to the
Borrower at the Administrative Agent’s office in New York, New York on such
Funding Date (or on the date received if later than such Funding Date).  The failure of any Lender to deposit the
amount described above with the Administrative Agent on the applicable Funding
Date shall not relieve any other Lender of its obligations hereunder to make
its Revolving Loan on such Funding Date.

(ii)     Unless
the Administrative Agent shall have been notified by any Lender no later than
2:00 p.m. (New York City time) on the applicable Funding Date in respect of any
Borrowing of Revolving Loans that such Lender does not intend to fund its
Revolving Loan requested to be made on such Funding Date, the Administrative
Agent may assume that such Lender has funded its Revolving Loan and is depositing
the proceeds thereof with the Administrative Agent on the Funding Date, and the
Administrative Agent in its sole discretion may, but shall not be obligated to,
disburse a corresponding amount to the Borrower on the Funding Date.  If the Revolving Loan proceeds corresponding
to that amount are advanced to the Borrower by the Administrative Agent but are
not in fact deposited with the Administrative Agent by such Lender on or prior
to the applicable Funding Date, such Lender agrees to pay, and in addition the
Borrower agrees 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 disbursed to or for the benefit of the Borrower until the
date such amount is paid or repaid to the Administrative Agent, (A) in the case
of the Borrower, at the interest rate applicable to such Borrowing and (B) in
the case of such Lender, at the Federal Funds rate for the first three Business
Days, and thereafter at the interest rate applicable to such Borrowing.  If such Lender shall pay to the
Administrative Agent the corresponding amount, the amount so paid shall
constitute such Lender’s Revolving Loan, and if both such Lender and the
Borrower shall pay and repay such corresponding amount, the Administrative
Agent shall promptly pay to the Borrower such corresponding amount plus any
administrative 

 21
 

 

 

costs.  This Section
2.02(c)(ii) does not relieve any Lender of its obligation to make its
Revolving Loan on any Funding Date; nor does this Section 2.02(c)(ii)
relieve the Borrower of its obligation to pay or repay any Lender funding its
Revolving Loan pursuant to this Section 2.02(c)(ii) interest on such
Revolving Loan from such Funding Date until the date on which such Revolving
Loan is repaid in full.

(d)           Repayment
of Revolving Loans.  The Revolving
Loan Commitments shall terminate, and all outstanding Revolving Loans shall be
paid in full, on the Revolving Loan Commitment Termination Date.

2.03         Swing Loans.

(a)           Swing
Loans.  Subject to the terms and
conditions set forth herein, the Swing Loan Lender may, in its sole discretion,
make loans (the “Swing Loans”) to the Borrower, from time to time after
the Closing Date and prior to the Revolving Loan Commitment Termination Date,
up to an aggregate principal amount at any one time outstanding which shall not
exceed an amount equal to $5,000,000. 
The Swing Loan Lender shall have no duty to make or to continue to make
Swing Loans.  All Swing Loans shall be
payable on demand with accrued interest thereon and shall otherwise be subject
to all the terms and conditions applicable to Revolving Loans, except that
(x) Swing Loans shall have a minimum amount requirement of $100,000 and
must be in multiples of $50,000 and (y) all interest on the Swing Loans
made by the Swing Loan Lender shall be payable to the Swing Loan Lender solely
for its own account.  The Swing Loan
Lender shall not make any Swing Loan that, after giving effect thereto, would
result in the Revolving Credit Obligations being in excess of the Maximum
Revolving Credit Amount.

(b)           Notice
of Borrowing.  When the Borrower
desires to borrow under this Section 2.03, it shall deliver to the
Administrative Agent an irrevocable Notice of Borrowing, signed by it, no later
than 1:00 p.m. (New York City time) on the day of the proposed Borrowing of a
Swing Loan.  Such Notice of Borrowing
shall specify (i) the date of the proposed Borrowing (which shall be a
Business Day), (ii) the amount of the proposed Borrowing and (iii) instructions
for the disbursement of the proceeds of the proposed Borrowing.  All Swing Loans shall be Base Rate Loans.

(c)           Making
of Swing Loans.  The Swing Loan
Lender shall deposit the amount it intends to fund, if any, in respect of the
Swing Loans requested by the Borrower with the Administrative Agent at its
office in New York, New York not later than 2:00 p.m. (New York City time) in
immediately available funds on the date of the proposed Borrowing applicable
thereto.  The Swing Loan Lender shall not
make any Swing Loan during the period commencing on the first Business Day
after it receives written notice from the Requisite Lenders that one or more of
the conditions precedent contained in Section 5.02 shall not on such
date be satisfied, and ending when such conditions are satisfied, and the Swing
Loan Lender shall not otherwise be required to determine that, or take notice
whether, the conditions precedent set forth in Section 5.02 hereof have
been satisfied in connection with the making of any Swing Loan.  Subject to the preceding sentence, the
Administrative Agent shall make such proceeds available to the Borrower at the
Administrative Agent’s office in New York, New York on the date of the proposed
Borrowing and shall disburse such proceeds to the Borrower in accordance with
the Borrower’s disbursement instructions set forth in the applicable Notice of
Borrowing.

(d)           Repayment
of Swing Loans.  The Borrower shall
repay the outstanding Swing Loans owing to the Swing Loan Lender (i) upon
demand by the Swing Loan Lender and (ii) on the Revolving Loan Commitment Termination
Date.  In the event that the Borrower
fails to repay any Swing Loans, together with interest thereon, as set forth in
the first sentence of this paragraph, then, upon the request of the Swing Loan
Lender, each Lender shall make Revolving Loans to the Borrower (irrespective of
the satisfaction of the conditions in Section 5.02 or the requirement to
deliver a Notice of Borrowing in Section 2.01(b), which conditions and
requirement such Lenders irrevocably waive) in an amount equal to such Lender’s
Pro Rata Share of the aggregate amount of the Swing Loans then outstanding (net
of that portion of such Swing Loan, if any, owing to such Lender in its
capacity as a Swing Loan Lender) after giving effect to any prepayments and
repayments made by the Borrower, and the Borrower hereby authorizes the
Administrative Agent to apply the proceeds of such Revolving Loans to the repayment
of such Swing Loans.  To the extent the
Administrative Agent receives any amounts in prepayment or repayment of outstanding
Revolving Loans prior to such request, the Administrative Agent shall apply
such amounts when received to the repayment of the Swing Loans then
outstanding.  The failure of any Lender
to make available to the Administrative Agent its Pro Rata Share of such
Revolving Loans shall not relieve any other Lender of its obligation hereunder 

 22
 

 

 

to make available to the Administrative Agent such other Lender’s Pro
Rata Share of such Revolving Loans on the date of such request.

2.04         Letters of Credit.  Subject to the terms and conditions set forth
herein, the Issuing Bank hereby agrees to Issue for the account of
the Borrower or any of its Subsidiaries one or more Letters of Credit during
the period from the Closing Date to the date which is the fifth Business Day
prior to the Revolving Loan Maturity Date, subject to the following provisions:

(a)           Types
and Amounts.  The Issuing Bank shall
not have any obligation to Issue, and shall not Issue any Letter of Credit at
any time:

(i)      if the aggregate Letter of Credit Obligations with respect to
the Issuing Bank, after giving effect to the Issuance of the Letter of Credit
requested hereunder, shall exceed $50,000,000 or any limit imposed by law or regulation upon the Issuing
Bank;

(ii)     if the Issuing Bank receives written notice (A) from the
Administrative Agent at or before 3:00 p.m. (New York City time) on the date of
the proposed Issuance of such Letter of Credit that immediately after giving
effect to the Issuance of such Letter of Credit, (1) the Letter of Credit
Obligations at such time would exceed $50,000,000 or (2) the Revolving Credit Obligations at such time would
exceed the Maximum Revolving Credit Amount at such time, or (B) from the
Requisite Lenders at or before 1:00 p.m. (New York City time) on the date of
the proposed Issuance of such Letter of Credit that one or more of the
conditions precedent contained in Article V, as applicable, would not on
such date be satisfied (or waived pursuant to Section 13.09), unless
such conditions are thereafter satisfied or waived and written notice of such
satisfaction or waiver is given to the Issuing Bank by the Administrative Agent
(and the Issuing Bank shall not otherwise be required to determine that, or
take notice whether, the conditions precedent set forth in Article V, as
applicable, have been satisfied or waived); or

(iii)    if the Letter of Credit requested would have an expiration date
later than the earlier of (A) the date which occurs one year following the date
of Issuance with respect to a Commercial Letter of Credit or the date which
occurs one year following the date of Issuance with respect to a Standby Letter
of Credit or (B) five Business Days immediately preceding the Revolving Loan
Maturity Date; provided that any Letter of Credit with a one-year tenor
may, by its terms, be renewable or automatically renew for successive periods
of up to one year so long as such Letter of Credit expires on or prior to the
date referred to in clause (B) above; or

(iv)    which is in a currency other than Dollars.

(b)           Conditions.  In addition to being subject to the
satisfaction of the conditions precedent contained in Article V, as
applicable, the obligation of the Issuing Bank to Issue any Letter of Credit is
subject to the satisfaction in full of the following conditions:

(i)      if the Issuing Bank so requests, the Borrower or the applicable
Subsidiary shall have executed and delivered to such Issuing Bank and the
Administrative Agent a Letter of Credit Reimbursement Agreement and such other
documents and materials as are customarily required for the issuance of similar
Letters of Credit by the Issuing Bank;

(ii)     the terms of the proposed Letter of Credit shall be satisfactory
to the Issuing Bank in its reasonable credit judgment; and

(iii)    no order, judgment or decree of any court, arbitrator or
Governmental Authority shall purport by its terms to enjoin or restrain the
Issuing Bank from Issuing the Letter of Credit and no law, rule or regulation
applicable to the Issuing Bank and no request or directive (whether or not
having the force of law and whether or not the failure to comply therewith
would be unlawful) from a Governmental Authority with jurisdiction over the
Issuing Bank shall prohibit or request 

 23
 

 

 

that the Issuing Bank refrain from the
Issuance of letters of credit generally or the Issuance of such Letter of
Credit.

(c)           Issuance
of Letters of Credit.  The Borrower
shall give the Issuing Bank and the Administrative Agent written notice that it
is, on behalf of itself or one of its Subsidiaries is requesting that the
Issuing Bank Issue a Letter of Credit not later than 3:00 p.m. (New York City
time) on the third Business Day preceding the requested date for Issuance
thereof, or such shorter notice as may be reasonably acceptable to such Issuing
Bank and the Administrative Agent.  Such
notice shall be irrevocable unless and until such request is denied by the applicable
Issuing Bank pursuant to the terms hereof and shall specify (A) the stated
amount of the Letter of Credit requested, (B) the effective date (which shall
be a Business Day) of Issuance of such Letter of Credit, (C) the date on which
such Letter of Credit is to expire, (D) the Person for whose benefit such
Letter of Credit is to be Issued, and (E) other relevant terms of such Letter
of Credit.  In connection with such
notice, the Borrower must also fill out a Letter of Credit application in the
form of Exhibit K attached hereto (the “Letter of Credit Application”).  Such Issuing Bank shall notify the
Administrative Agent, who shall in turn promptly notify the participating
Lenders, immediately upon receipt of a written notice and Letter of Credit Application
from the Borrower requesting that a Letter of Credit be Issued and, upon the
Administrative Agent’s request therefor, send a copy of such notice and Letter
of Credit Application to the Administrative Agent.  The Issuing Bank shall give the Administrative
Agent written notice, or telephonic notice confirmed promptly thereafter in
writing, of the Issuance of a Letter of Credit (which notice the Administrative
Agent shall promptly transmit by facsimile or similar transmission to each
Lender).

(d)           Reimbursement
Obligations; Duties of Issuing Bank.

(i)      Notwithstanding any provisions to the
contrary in any Letter of Credit Reimbursement Agreement:

(A)          the Borrower shall reimburse the
Issuing Bank for amounts drawn by the Borrower or any of its Subsidiaries under
each Letter of Credit, no later than the same day (the “Reimbursement Date”)
the Borrower or the applicable Subsidiary receives notice from the Issuing Bank
that a draft has been presented under such Letter of Credit, provided
that, anything contained in this Agreement to the contrary notwithstanding,
(i) unless the Borrower shall have notified Administrative Agent and such
Issuing Bank prior to 12:00 P.M. (New York City time) on the date such drawing
is honored that Borrower intends to reimburse such Issuing Bank for the
applicable Reimbursement Obligations with funds other than the proceeds of
Revolving Loans, Borrower shall be deemed to have given a timely Notice of
Borrowing to Administrative Agent requesting Revolving Lenders to make
Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount
in Dollars equal to the applicable Reimbursement Obligations (and Administrative
Agent shall promptly give notice thereof to each Revolving Lender) and
(ii) Revolving Lenders shall, on the Reimbursement Date, make Revolving
Loans that are Base Rate Loans in an amount equal to the applicable
Reimbursement Obligations, the proceeds of which shall be applied directly by
Administrative Agent to reimburse such Issuing Bank in an amount equal to the
applicable Reimbursement Obligations; and provided, further, that
if for any reason proceeds of Revolving Loans are not received by
Administrative Agent on the Reimbursement Date in an amount equal to the
applicable Reimbursement Obligations, Borrower shall reimburse Administrative
Agent, on demand, in an amount in same day funds equal to the excess of
(x) the applicable Reimbursement Obligations over (y) the aggregate
amount of such Revolving Loans, if any, which are so received.  Nothing in this subsection (A) shall be
deemed to relieve any Revolving Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and the Borrower
or the applicable Subsidiary shall retain any and all rights it may have against
any Revolving Lender resulting from the failure of such Revolving Lender to
make such Revolving Loans under this subsection (A).  The Issuing Bank may honor or dishonor any
drawing in accordance with the terms of any Letter of Credit without regard to
any instruction of the Borrower or the applicable Subsidiary; and

(B)           all Reimbursement Obligations with
respect to any Letter of Credit shall bear interest at the rate applicable to
Base Rate Loans in accordance with Section 4.01(a) from the date of 

 24
 

 

 

the relevant
drawing under such Letter of Credit until the Reimbursement Date and thereafter
at the rate applicable in accordance with Section 4.01(d).

(ii)     The Issuing Bank shall give the
Administrative Agent written notice of all drawings under a Letter of Credit
and the payment (or the failure to pay when due) by the Borrower on account of
a Reimbursement Obligation (which notice the Administrative Agent shall
promptly transmit by facsimile or similar transmission to each Lender).

(iii)    No action taken or omitted, in good faith
and without gross negligence or willful misconduct, by the Issuing Bank under
or in connection with any Letter of Credit shall put the Issuing Bank under any
resulting liability to any Lender or the Borrower or any of its Subsidiaries or,
so long as such Letter of Credit is not Issued in violation of Section
2.04(a), relieve any Lender of its obligations hereunder to the Issuing
Bank.  Solely as between the Issuing Bank
and the Lenders, in determining whether to pay under any Letter of Credit, the
Issuing Bank shall have no obligation to the Lenders other than to confirm that
any documents required to be delivered under a respective Letter of Credit
appear to have been delivered and that they appear on their face to comply with
the requirements of such Letter of Credit.

(e)           Participations.

(i)      Immediately upon Issuance by the Issuing
Bank of any Letter of Credit in accordance with the procedures set forth in
this Section 2.04, each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation in such Letter of Credit to the extent of
such Lender’s Pro Rata Share, including, without limitation, all obligations of
the Borrower or the applicable Subsidiary with respect thereto (other than
amounts owing to the Issuing Bank under Section 2.04(g)) and any
security therefor and guaranty pertaining thereto.

(ii)     If the Issuing Bank makes any payment under
any Letter of Credit and the Borrower or the applicable Subsidiary does not
repay such amount to the Issuing Bank on the Reimbursement Date, the Issuing
Bank shall promptly notify the Administrative Agent, which shall promptly
notify each Lender, and each Lender shall promptly and unconditionally pay to
the Administrative Agent for the account of the Issuing Bank, in immediately
available funds, the amount of such Lender’s Pro Rata Share of such payment
(net of that portion of such payment, if any, made by such Lender in its
capacity as the Issuing Bank), and the Administrative Agent shall promptly pay
to the Issuing Bank such amounts received by it, and any other amounts received
by the Administrative Agent for the Issuing Bank’s account, pursuant to this Section
2.04(e).  All such payments shall
constitute Revolving Loans made to the Borrower or the applicable Subsidiary
pursuant to Section 2.02 (irrespective of the satisfaction of the
conditions in Section 5.02 or the requirement in Section 2.02(b)
to deliver a Notice of Borrowing, which conditions and requirement, for the
purpose of refunding any Reimbursement Obligation owing to the Issuing Bank,
the Lenders irrevocably waive).  If a
Lender does not make its Pro Rata Share of the amount of such payment available
to the Administrative Agent, such Lender agrees to pay to the Administrative
Agent for the account of the Issuing Bank, forthwith on demand, such amount
together with interest thereon, for the first Business Day after the date such
payment was first due at the Federal Funds Rate, and thereafter at the interest
rate then applicable to a Base Rate Loan in accordance with Section 4.01(a).  The failure of any such Lender to make
available to the Administrative Agent for the account of an Issuing Bank its
Pro Rata Share of any such payment shall neither relieve any other Lender of
its obligation hereunder to make available to the Administrative Agent for the
account of the Issuing Bank such other Lender’s Pro Rata Share of any payment
on the date such payment is to be made nor increase the obligation of any other
Lender to make such payment to the Administrative Agent.  This Section 2.04(e)(ii) does not
relieve the Borrower or the applicable Subsidiary of its obligation to pay or repay
any Lender funding its Pro Rata Share of such payment pursuant to this Section
2.04(e)(ii) interest on the amount of such payment from such date such
payment is to be made until the date on which payment is repaid in full.

(iii)    Whenever the Issuing Bank receives a payment
on account of a Reimbursement Obligation, including any interest thereon, as to
which any Lender has made a Revolving Loan pursuant to clause (ii) of this Section 2.04(e), the Issuing Bank shall
promptly pay to the Administrative Agent such payment 

 25
 

 

 

for
distribution to the Lenders in accordance with Section 3.03.  Each such payment shall be made by the
Issuing Bank or the Administrative Agent, as the case may be, on the Business
Day on which such Person receives the funds paid to such Person pursuant to the
preceding sentence, if received prior to 11:00 a.m. (New York City time) on
such Business Day, and otherwise on the next succeeding Business Day.

(iv)    The obligations of the Borrower or the
applicable Subsidiary to reimburse the Issuing Bank pursuant to Section
2.04(d) and of a Lender to make payments to the Administrative Agent for
the account of the Issuing Bank with respect to a Letter of Credit shall be
irrevocable, shall not be subject to any qualification or exception whatsoever
except willful misconduct or gross negligence of the Issuing Bank, and shall be
honored in accordance with this Article II (irrespective of the
satisfaction of the conditions described in Article V, as applicable,
which conditions, for the purposes of refunding any Reimbursement Obligation
owed to the Issuing Bank, such Lenders irrevocably waive) under all
circumstances, including, without limitation, any of the following circumstances:

(A)          any lack of validity or enforceability
hereof or of any of the other Loan Documents;

(B)           the existence of any claim, setoff,
defense or other right which the Borrower or the applicable Subsidiary may have
at any time against a beneficiary named in a Letter of Credit or any transferee
of a beneficiary named in a Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the Issuing Bank, any
Lender, or any other Person, whether in connection herewith, with any Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the account party and
beneficiary named in any Letter of Credit);

(C)           any draft, certificate or any other
document presented under the Letter of Credit having been determined to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;

(D)          the surrender or impairment of any
security for the performance or observance of any of the terms of any of the
Loan Documents;

(E)           any failure by the Issuing Bank to
make any reports required pursuant to Section 2.04(h) or the inaccuracy
of any such report; or

(F)           the occurrence of any Event of
Default or Default.

(f)            Payment
of Reimbursement Obligations.

(i)      The Borrower or the applicable Subsidiary
unconditionally agrees to pay to the Issuing Bank, in Dollars, the amount of
all Reimbursement Obligations, interest and other reasonable amounts payable to
the Issuing Bank under or in connection with the Letters of Credit when such
amounts are due and payable, irrespective of any claim, setoff, defense or
other right which the Borrower or the applicable Subsidiary may have at any
time against the Issuing Bank or any other Person.

(ii)     In the event any payment by the Borrower or
the applicable Subsidiary received by the Issuing Bank with respect to a Letter
of Credit and distributed by the Administrative Agent to the Lenders on account
of their participation is thereafter set aside, avoided or recovered from the
Issuing Bank in connection with any receivership, liquidation or bankruptcy
proceeding, each such Lender which received such distribution shall, upon
demand by the Issuing Bank, contribute such Lender’s Pro Rata Share of the
amount set aside, avoided or recovered together with interest at the rate
required to be paid by the Issuing Bank upon the amount required to be repaid
by it.

(g)           Issuing
Bank Charges.  The Borrower or the
applicable Subsidiary shall pay to the Issuing Bank, solely for its own
account, the standard charges assessed by the Issuing Bank in connection with 

 26
 

 

 

the issuance, administration, amendment and
payment or cancellation of Letters of Credit and such compensation in respect
of such Letters of Credit for the Borrower’s or the applicable Subsidiary’s
account as may be agreed upon by the Borrower or the applicable Subsidiary and
the Issuing Bank from time to time.

(h)           Issuing
Bank Reporting Requirements.  The
Issuing Bank shall, on a daily basis, provide to the Administrative Agent and
the Borrower or the applicable Subsidiary a daily notification schedule for
Letters of Credit issued by it, in form and substance reasonably satisfactory
to the Administrative Agent and the Borrower or the applicable Subsidiary,
setting forth the aggregate Letter of Credit Obligations outstanding and any
information requested by the Administrative Agent or the Borrower or the
applicable Subsidiary relating to the date of issue, account party, amount,
expiration date and reference number of each Letter of Credit issued by it.

(i)            Indemnification;
Exoneration.

(A)          In
addition to all other amounts payable to the Issuing Bank, the Borrower or the
applicable Subsidiary hereby agrees to defend, indemnify, and save the
Administrative Agent, the Issuing Bank and each Lender harmless from and
against any and all claims, demands, liabilities, penalties, damages, losses
(other than loss of profits), costs, charges and expenses (including reasonable
attorneys’ fees but excluding taxes) which the Administrative Agent, the
Issuing Bank or such Lender may incur or be subject to as a consequence, direct
or indirect, of (i) the Issuance of any Letter of Credit other than as a result
of the gross negligence or willful misconduct of the Issuing Bank, as
determined by a court of competent jurisdiction, or (ii) the failure of the Issuing
Bank issuing a Letter of Credit to honor a drawing under such Letter of Credit
as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental
Authority.

(B)           As
between the Borrower or the applicable Subsidiary on the one hand and the
Administrative Agent, the Lenders and the Issuing Bank on the other hand, the
Borrower or the applicable Subsidiary assumes all risks of the acts and
omissions of, or misuse of Letters of Credit by, the respective beneficiaries
of the Letters of Credit.  In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit Reimbursement Agreements, the Administrative Agent, the Issuing Bank
and the Lenders shall not be responsible for (except to the extent resulting
from their gross negligence or willful misconduct, as determined by a court of
competent jurisdiction):  (i) the form,
validity, legality, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
Issuance of the Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
the validity, legality or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) failure of the
beneficiary of a Letter of Credit to comply duly with conditions required in
order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, facsimile,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) the misapplication
by the beneficiary of a Letter of Credit of the proceeds of any drawing under
such Letter of Credit; (viii) any litigation, proceeding or charges with
respect to such Letter of Credit; and (ix) any consequences arising from causes
beyond the control of the Administrative Agent, the Issuing Bank or the
Lenders.

(j)            Existing
Letters of Credit.  The parties
hereto agree that, as of the Closing Date, the Issuing Bank shall be deemed to
have issued the Existing Letters of Credit pursuant to this Agreement (provided
that the actual dates of issuance and expiry thereof shall not be deemed
modified hereby) and the Existing Letters of Credit shall be deemed to be a
Letters of Credit for all purposes hereunder and under the other Loan
Documents.  Specifically, and without
limitation of the foregoing or the other provisions of this Section 2.04,
(i) the undrawn face amount of the Existing Letters of Credit, for so long as
the same shall be outstanding, shall be included in calculating (x) the limits
set forth in clauses (i) and (ii) of Section 2.04(a) and (y) the
aggregate Letter of Credit Obligations, (ii) each Lender hereby absolutely and
unconditionally agrees to pay to the Issuing Bank, in accordance with Section
2.04(e)(ii), such Lender’s Pro Rata Share of 

 27
 

 

 

each payment made by the Issuing Bank under
the Existing Letters of Credit, together with interest in accordance with Section
2.04(e)(ii), and (iii) with respect to the Existing Letters of Credit, the
Issuing Bank shall have the benefit of all agreements, covenants and
indemnities of the Issuing Bank set forth in this Agreement and shall comply
with all agreements and obligations set forth herein that bind the Issuing
Bank, insofar as the same apply to Letters of Credit generally.

2.05         Promise to Pay; Evidence of Debt.

(a)           Term
Loans.  The Borrower agrees to pay
when due the principal amount of each Term Loan which is made to the Borrower,
and further agrees to pay all unpaid interest accrued thereon, in accordance
with the terms of this Agreement and the promissory notes evidencing the Term
Loans owing to the Lenders.  The Borrower
shall execute and deliver to each Lender a promissory note to evidence the Term
Loans owing to such Lender and agrees to execute and deliver to such Lender and
any assignee of such Lender such promissory notes as are necessary after giving
effect to any assignment thereof pursuant to Section 13.01, each
substantially in the form of Exhibit B-1 attached hereto and made a part
hereof (all such promissory notes and all amendments thereto, replacements
thereof and substitutions therefor being collectively referred to as the “Term
Loan Notes”; and “Term Loan Note” means any one of the Term Loan
Notes, in each case as amended, supplemented or otherwise modified from time to
time). Amounts paid or prepaid on account of the Term Loans may not be reborrowed.

(b)           Revolving
Loans.  The Borrower agrees to pay
when due the principal amount of each Revolving Loan which is made to the
Borrower, and further agrees to pay all unpaid interest accrued thereon, in
accordance with the terms of this Agreement and the promissory notes evidencing
the Revolving Loans owing to the Lenders. 
The Borrower shall execute and deliver to each Lender a promissory note
to evidence the Revolving Loans owing to such Lender and agrees to execute and
deliver to such Lender and any assignee of such Lender such promissory notes as
are necessary after giving effect to any assignment thereof pursuant to Section
13.01, each substantially in the form of Exhibit B-2 attached hereto
and made a part hereof (all such promissory notes and all amendments thereto, replacements
thereof and substitutions therefor being collectively referred to as the “Revolving
Loan Notes”; and “Revolving Loan Note” means any one of the
Revolving Loan Notes, in each case as amended, supplemented or otherwise
modified from time to time).

(c)           Swing
Loans.  The Borrower agrees to pay
when due the principal amount of each Swing Loan which is made to the Borrower,
and further agrees to pay all unpaid interest accrued thereon, in accordance
with the terms of this Agreement and the promissory notes evidencing the Swing
Loans owing to the Swing Loan Lender. 
The Borrower shall execute and deliver to the Swing Loan Lender a
promissory note to evidence the Swing Loans owing to the Swing Loan Lender and
agrees to execute and deliver to the Swing Loan Lender and any assignee of the
Swing Loan Lender such promissory notes as are necessary after giving effect to
any assignment thereof pursuant to Section 13.01, each substantially in
the form of Exhibit B-3 attached hereto and made a part hereof (all such
promissory notes and all amendments thereto, replacements thereof and
substitutions therefor being collectively referred to as the “Swing Loan
Notes”; and “Swing Loan Note” means any one of the Swing Loan Notes,
in each case as amended, supplemented or otherwise modified from time to time).

2.06         Use of Proceeds of Loans.  The proceeds of the Term Loans shall be used
to finance the Transactions and to pay related fees and expenses
on the Closing Date.  The proceeds of the
Revolving Loans shall be used to finance a portion of the Transactions and to
provide for the working capital and general corporate requirements of the
Borrower and its Subsidiaries, including, without limitation, acquisitions and
the repayment, repurchase or other redemption of Indebtedness permitted under
this Agreement.

2.07         Authorized Officers, Employees and
Administrative Agents.  On the
Closing Date and from time to time thereafter, the Borrower
shall deliver to the Administrative Agent an Officer’s Certificate in substantially
the form of Exhibit G attached hereto setting forth the names of the
officers, employees and agents of the Borrower, in each case who are authorized
to request Revolving Loans and Swing Loans on behalf of the Borrower and containing
a specimen signature of each such officer, employee or agent.  The officers, employees and agents so
authorized shall also be authorized to act for the Borrower in respect of all
other matters relating to the Loan Documents. 
The Administrative Agent shall be entitled to rely conclusively on each
such officer’s, employee’s or agent’s authority to request such Revolving Loan
or Swing Loan until the Administrative Agent receives written notice to the contrary.  In addition, the Administrative Agent shall
be entitled to rely conclusively on any written notice sent to it by telecopy.  

 28
 

 

 

The Administrative Agent
shall have no duty to verify the authenticity of the signature appearing on, or
any telecopy or facsimile of, any written Notice of Borrowing or any other
document.  Neither the Administrative
Agent nor any Lender shall incur any liability to the Borrower or any other
Person in acting upon any facsimile or telephonic notice referred to above
which the Administrative Agent believes in good faith to have been given by a
duly authorized officer or other person authorized to borrow on behalf of the
Borrower.  The Borrower hereby authorizes
the Administrative Agent to disburse the proceeds of each Borrowing in
accordance with the terms of any written instructions from any of such
authorized officers, provided that the Administrative Agent shall not be
obligated under any circumstances to forward amounts to any account not listed
in an Account Designation Letter.  The Borrower
may at any time deliver to the Administrative Agent an Account Designation
Letter listing any additional accounts or deleting any accounts listed in a
previous Account Designation Letter.

2.08               Increase
in Commitments.

(a)           Borrower
Request.  Borrower may by written
notice to the Administrative Agent elect to request (x) prior to the Revolving
Loan Maturity Date, an increase to the existing Revolving Loan Commitments
and/or (y) the establishment of one or more new Term Loan Commitments (each, an
“Incremental Term Loan Commitment”) by an amount not in excess of
$250,000,000 in the aggregate and not less than $50,000,000 for any such
individual request.  Each such notice
shall specify (i) the date (each, an “Increase Effective Date”) on
which the Borrower proposes that the increased or new Commitments shall be
effective, which shall be a date not less than 10 Business Days after the date
on which such notice is delivered to the Administrative Agent and (ii) the
identity of each Eligible Assignee to whom the Borrower proposes any portion of
such increased or new Commitments be allocated and the amounts of such
allocations; provided
that any existing Lender approached to provide all or a portion of the increased
or new Commitments may elect or decline, in its sole discretion, to provide
such increased or new Commitment.

(b)           Conditions.  The increased or new Commitments shall become
effective, as of such Increase Effective Date; provided that:

(i)      each of the conditions set forth in Section
5.02 shall be satisfied;

(ii)     no Default shall have occurred and be
continuing or would result from the borrowings to be made on the Increase
Effective Date;

(iii)    after giving pro forma effect to the
borrowings to be made on the Increase Effective Date and to any change in
EBITDA concurrently with such borrowings as of the date of the most recent financial
statements delivered pursuant to Section 7.01(a) or (b), Borrower
shall be in compliance with each of the covenants set forth in Sections
10.01, 10.02 and 10.03;

(iv)    Borrower shall deliver or cause to be
delivered any legal opinions or other documents reasonably requested by the
Administrative Agent in connection with any such transaction.

(c)           Terms
of New Loans and Commitments.  The
terms and provisions of Loans made pursuant to the new Commitments shall be as
follows:

(i)      terms and provisions of Loans made
pursuant to Incremental Term Loan Commitments (“Incremental Term Loans”)
shall be, except for amortization, pricing and maturity, identical to the Term
Loans as they exist immediately prior to the Increase Effective Date;

(ii)     the terms and provisions of Revolving Loans
made pursuant to new Commitments shall be identical to the Revolving Loans;

(iii)    the weighted average life to maturity of all
new Term Loans shall be no shorter than the weighted average life to maturity
of the Revolving Loans and the existing Term Loans; and

 

 29

 

 

(iv)    the maturity date of Incremental Term Loans
(the “Incremental Term Loan Maturity Date”) shall not be earlier than
the Final Maturity Date.

The increased or new Commitments shall be effected by
a joinder agreement (the “Increase Joinder”) executed by Borrower, the
Administrative Agent and each Lender making such increased or new Commitment,
in form and substance satisfactory to each of them.  The Increase Joinder may, without the consent
of any other Lenders, effect such amendments to this Agreement and the other
Loan Documents as may be necessary or appropriate, in the opinion of the
Administrative Agent, to effect the provisions of this Section 2.08.  In addition, unless otherwise specifically
provided herein, all references in Loan Documents to Revolving Loans shall be
deemed, unless the context otherwise requires, to include references to
Revolving Loans made pursuant to new Commitments and Incremental Term Loans
that are, respectively, made pursuant to this Agreement.

(d)           Adjustment
of Revolving Loans.  To the extent
the Commitments being increased on the relevant Increase Effective Date are
Revolving Loan Commitments, then each of the Revolving Lenders having a
Revolving Loan Commitment prior to such Increase Effective Date (the “Pre-Increase
Revolving Lenders”) shall assign
to any Revolving Lender which is acquiring a new or additional Revolving Loan
Commitment on the Increase Effective Date (the “Post-Increase Revolving
Lenders”), and such Post-Increase Revolving Lenders shall purchase from
each Pre-Increase Revolving Lender, at the principal amount thereof, such
interests in the Revolving Loans and participation interests in Letter of
Credit Exposure and Swing Loans outstanding on such Increase Effective Date as
shall be necessary in order that, after giving effect to all such assignments
and purchases, such Revolving Loans and participation interests in Letter of
Credit Exposure and Swing Loans will be held by Pre-Increase Revolving Lenders
and Post-Increase Revolving Lenders ratably in accordance with their Revolving
Loan Commitments after giving effect to such increased Revolving Loan
Commitments.

(e)           Making
of New Term Loans.  On any Increase
Effective Date on which new Commitments for Term Loans are effective, subject
to the satisfaction of the foregoing terms and conditions, each Lender of such
new Commitment shall make a Term Loan to the Borrower in an amount equal to its
new Commitment.

ARTICLE III

PAYMENTS AND PREPAYMENTS

3.01         Voluntary Prepayments; Reductions in
Revolving Loan Commitments.

(a)           Voluntary
Prepayments.  The Borrower may, at
any time and from time to time, prepay the Loans in whole or in part upon at
least one (1) Business Day’s (with respect to Base Rate Loans) or three (3)
Business Days’ (with respect to Eurodollar Loans) prior written notice to the
Administrative Agent (which the Administrative Agent shall promptly transmit to
each Lender, it being agreed that the failure of the Administrative Agent to
give such notice shall not affect the Borrower’s right to prepay any Loan); provided,
however, that (i) any partial prepayment shall be in minimum amounts of
$5,000,000 and in multiples of $1,000,000 in excess thereof (except if such
prepayment prepays the entire outstanding amount of the applicable Borrowing of
Loans) and no partial prepayment of Eurodollar Rate Loans made pursuant to any
single Borrowing shall reduce the aggregate outstanding principal amount of the
remaining Loans under such Borrowing to less than $5,000,000 or to any greater
amount not a multiple of $1,000,000 in excess thereof (except if such
prepayment prepays the entire outstanding amount of such Borrowing) and (ii)
Eurodollar Rate Loans may only be prepaid, in whole or in part, (A) on the expiration
date of the then applicable Eurodollar Interest Period or (B) otherwise upon
payment of the amounts described in Section 4.02(f).  Any notice of prepayment given to the
Administrative Agent under this Section 3.01(a) shall specify the Loans
to be prepaid, the date (which shall be a Business Day) of prepayment, and the
aggregate principal amount of the prepayment. 
When notice of prepayment is delivered as provided herein, the principal
amount of the Loans specified in such notice shall become due and payable on
the prepayment date specified in such notice. 
Any optional prepayment of Term Loans shall be applied first, to
reduce the next four scheduled amortization payments (based on the scheduled
amortization payments under paragraph (a) above) and second, on a pro
rata basis to the remaining scheduled amortization payments in respect
of the Term Loans.

(b)           Voluntary
Reductions in Revolving Loan Commitments. 
The Borrower, upon at least three (3) Business Days’ prior notice to the
Administrative Agent (which the Administrative Agent shall promptly transmit to

 30
 

 

 

each Lender), shall have the right, at any time and from time to time,
to terminate in whole or permanently reduce ratably in part the unused portions
of the Revolving Loan Commitments, provided that the Borrower shall have
made whatever payment may be required to reduce the Revolving Credit
Obligations to an amount less than or equal to the Revolving Loan Commitments
as reduced or terminated on the date of such reduction.  Any such partial reduction shall be in an
aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in
excess of that amount, and shall reduce the Revolving Loan Commitment of each
Lender proportionately in accordance with such Lender’s Pro Rata Share.  Any notice of termination or reduction given
to the Administrative Agent under this Section 3.01(b) shall specify the
date (which shall be a Business Day) of such termination or reduction and, with
respect to a partial reduction, the aggregate principal amount thereof.  When notice of termination or reduction is
delivered as provided herein, the principal amount of any payment required
under this Section 3.01(b) shall become due and payable on the
termination or reduction date specified in such notice.

(c)           The
prepayments and payments in respect of reductions and terminations described in
subsections (a) and (b) of this Section 3.01 may be made pursuant to
such subsections at any time and from time to time without premium or penalty
(except as provided in Section 4.02(f)).

3.02         Mandatory Prepayments.  In the event that, on any date, the aggregate
Revolving Credit Obligations at such time exceed the aggregate
Revolving Loan Commitments at such time (after giving effect to any concurrent
termination or reduction thereof) (the “Excess Amount”), the Borrower
will on such date, and solely to the extent of the Excess Amount, prepay the
outstanding principal amount of the Swing Loans and, if after having so prepaid
such Swing Line Loans, if any, there remains an Excess Amount, then solely to
the extent of such remaining Excess Amount, the Borrower will prepay the
outstanding principal amount of the Revolving Loans; provided that, to
the extent the Excess Amount is greater than the aggregate principal amount of
Swing Loans and Revolving Loans outstanding immediately prior to the application
of such prepayment, the amount so prepaid (up to the Excess Amount) shall
instead be retained by the Administrative Agent and held as cash collateral for
Letter of Credit Obligations in an account to be established by the
Administrative Agent, and thereupon such cash shall be deemed to reduce the
aggregate Letter of Credit Obligations by an equivalent amount and shall be
promptly released by the Administrative Agent to the Borrower in such amounts
as such Excess Amount may be reduced from time to time.

3.03         Payments.

(a)           Manner
and Time of Payment.  All payments of
principal, interest, fees and other Obligations which are payable to the
Administrative Agent or any Lender shall be made without condition or deduction
for any counterclaim, defense, recoupment or set-off, in Dollars and in
immediately available funds, delivered to the Administrative Agent not later
than 1:00 p.m. (New York City time) on the date due, by deposit of such funds
to the Administrative Agent’s Account. 
The Administrative Agent shall thereafter cause to be distributed to the
Lenders their respective Pro Rata Shares of such payments in accordance with
the provisions of Section 3.03(b) if received prior to 1:00 p.m. (New
York City time), and on the next succeeding Business Day, if received
thereafter, by the Administrative Agent.

(b)           Apportionment
of Payments.

(i)      Subject
to the provisions of Section 3.03(b)(ii) all payments of principal and
interest in respect of outstanding Term Loans and Revolving Loans, as
applicable, shall be applied by the Administrative Agent to the ratable payment
of the Term Loans and Revolving Loans, as applicable, owing to the Lenders in
accordance with their respective Pro Rata Shares thereof.

(ii)     After
the occurrence of an Event of Default and while the same is continuing, the
Administrative Agent shall apply all payments and prepayments of any
Obligations in the following order:

(A)          first,
to pay principal of and interest on any Revolving Loans which the
Administrative Agent may have advanced on behalf of any Lender pursuant to Section
2.02(c)(ii) for which the Administrative Agent has not been reimbursed by
such Lender or the Borrower;

 31
 

 

 

(B)           second,
to pay Obligations in respect of any fees, expense reimbursements or indemnities
then due to the Agents (solely in their capacity as Agents);

(C)           third,
to pay obligations in respect of any expense reimbursements or indemnities then
due to any Lender; and

(D)          fourth,
to pay interest on the Loans and Reimbursement Obligations ratably among the
parties entitled thereto;

(E)           fifth,
to pay the principal amount of the Loans and Reimbursement Obligations then outstanding
in accordance with each Lender’s Pro Rata Share;

(F)           sixth,
to pay all other Obligations in such order as the Administrative Agent may determine
in its sole discretion.

The order of priority set forth in this Section
3.03(b)(ii) and the related provisions of this Agreement are set forth
solely to determine the rights and priorities of the Administrative Agent and
the Lenders as among themselves.  If sufficient
funds are not available to fund all Obligations described in any of the
foregoing clauses (A) through (F), the available funds shall be allocated to
the Obligations described in such clause ratably.

(c)           Payments
on Non-Business Days.  Whenever any payment
to be made by the Borrower hereunder or under the Notes is stated to be due on
a day which is not a Business Day, the payment shall instead be due on the next
succeeding Business Day, and any such extension of time shall be included in
the computation of the payment of interest and fees hereunder.

3.04         Taxes.

(a)           Payments
Free and Clear of Taxes.  Any and all
payments by the Borrower hereunder, under the Notes or under any other Loan
Document shall be made free and clear of and without deduction or withholding
for any and all present or future taxes, levies, imposts, duties, fees,
deductions, charges or withholdings, and all interest, penalties, additions to
tax and liabilities with respect thereto, excluding, in the case of each Lender
and the Administrative Agent (i) taxes imposed on its income, capital, profits
or gains and franchise taxes imposed on it, in each case by (A) the United
States except withholding taxes contemplated pursuant to Section
3.04(e)(ii)(C), (B) the Governmental Authority of the jurisdiction in which
such Lender’s office is located or (C) the Governmental Authority in which such
Person is organized, managed, controlled or doing business, in each case
including all political subdivisions thereof, and (ii) taxes (including income
taxes and branch profits taxes) imposed on or measured by the Administrative
Agent’s or each Lender’s overall net income and franchise taxes imposed as a
result of a present or former connection between the Administrative Agent or
such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision thereof or taxing authority thereof or therein
(other than any such connection arising solely from the Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, the Notes or any other Loan Document) (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”).  If the Borrower shall be required by law to
withhold or deduct any Taxes from or in respect of any sum payable hereunder,
under the Notes or under any other Loan Document to any Lender or the
Administrative Agent, (x) such sum payable shall be increased as may be necessary
so that after making all required withholdings or deductions (including
withholdings or deductions applicable to additional sums payable under this Section
3.04) such Lender or the Administrative Agent (as the case may be) receives
an amount equal to the sum it would have received had no such withholdings or
deductions been made, (y) the Borrower shall make such withholdings or deductions,
and (z) the Borrower shall pay the full amount withheld or deducted to the
relevant taxation authority or other authority in accordance with applicable
law.

(b)           Other
Taxes.  In addition, the Borrower
agrees to pay any present or future stamp, value-added or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
and which relate directly to (i) any payment made under any Loan Document or
(ii) the execution, delivery or registration of, or otherwise 

 32
 

 

 

with respect to, this Agreement, the Notes or any other Loan Document
(hereinafter referred to as “Other Taxes”).

(c)           Indemnification.  The Borrower will indemnify each Lender and
the Administrative Agent against, and reimburse each on demand for, the full
amount of all Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any Governmental Authority on amounts payable under
this Section 3.04 and any additional income or franchise taxes resulting
therefrom, subject to the provisions of Section 3.04(g)) incurred or
paid by such Lender or the Administrative Agent (as the case may be) or any Affiliate
of such Lender and any liability (including penalties, interest, and
out-of-pocket expenses paid to third parties) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or lawfully
payable.  A certificate as to any amount
payable to any Person under this Section 3.04 submitted by such Person
to the Borrower shall, absent manifest error, be final, conclusive and binding
upon all parties hereto.  This
indemnification shall be made within thirty (30) days from the date such Person
makes written demand therefor and within thirty (30) days after the receipt of
any refund of the Taxes or Other Taxes following final determination that the
Taxes or Other Taxes which gave rise to the indemnification were not required
to be paid, such Person shall repay the amount of such paid indemnity to the Borrower;
provided, however, that the Borrower shall not be obligated to
make payment to any Lender or the Administrative Agent (as the case may be)
pursuant to this Section 3.04 in respect of penalties, interest and
other liabilities attributable to any Taxes or Other Taxes, to the extent such
penalties, interest and other liabilities are attributable to the gross
negligence or willful misconduct of such Lender or the Administrative Agent or
any of their Affiliates.  After any
Lender or the Administrative Agent (as the case may be) receives written notice
of the imposition of the Taxes or Other Taxes which are subject to this Section
3.04, such Lender and the Administrative Agent will act in good faith to
promptly notify the Borrower of its obligations hereunder.

(d)           Receipts.  Within thirty (30) days after the date of any
payment of Taxes or Other Taxes by the Borrower, the Borrower will furnish to
the Administrative Agent, at its address referred to in Section 13.10,
the original or a certified copy of a receipt or other documentation reasonably
satisfactory to the Administrative Agent evidencing payment thereof.  The Borrower will furnish to the
Administrative Agent upon the Administrative Agent’s request from time to time
an Officer’s Certificate stating that all Taxes and Other Taxes of which it is
aware that are due have been paid and that no additional Taxes or Other Taxes
of which it is aware are due.

(e)           Foreign Bank Certifications.

(i)      Each
Lender that is not created or organized under the laws of the United States or
a political subdivision thereof shall deliver to the Borrower and the
Administrative Agent on or before the Closing Date or the date on which such
Lender becomes a Lender pursuant to Section 13.01 hereof a true and
accurate original certificate executed by a duly authorized officer of such
Lender to the effect that such Lender is eligible to receive payments hereunder
and under the Notes without deduction or withholding of United States federal
income tax (A) under the provisions of an applicable tax treaty concluded by
the United States (in which case the certificate shall be accompanied by one
duly completed copy of IRS Form W-8BEN (or any successor or substitute form)),
(B) under Sections 1442(c)(1) and 1442(a) of the Code (in which case the
certificate shall be accompanied by one duly completed copy of IRS Form W-8ECI
(or any successor or substitute form)) or (C) under Section 871(h) or 881(c) of
the Code (in which case the certificate shall be accompanied by one duly
completed copy of IRS Form W-8BEN (or any successor or substitute form)).

(ii)     Each
such Lender further agrees to deliver to the Borrower and the Administrative
Agent from time to time, a true and accurate original certificate executed by a
duly authorized officer of such Lender before or promptly upon the occurrence
of any event requiring a change in the most recent certificate previously
delivered by it to the Borrower and the Administrative Agent pursuant to this Section
3.04(e).  Each certificate required
to be delivered pursuant to this Section 3.04(e)(ii) shall certify as to
one of the following:

(A)          that
such Lender can continue to receive payments hereunder and under the Notes without
deduction or withholding of United States federal income tax;

(B)           that
such Lender cannot continue to receive payments hereunder and under the Notes
without deduction or withholding of United States federal income tax as
specified therein but does not require 

 33
 

 

 

additional payments pursuant to Section 3.04(a) because it is
entitled to recover the full amount of any such deduction or withholding from a
source other than the Borrower;

(C)           that
such Lender is no longer capable of receiving payments hereunder and under the
Notes without deduction or withholding of United States federal income tax as
specified therein by reason of the adoption or implementation of, or any change
in, or in the interpretation or administration of, any law or regulation
(including the Code, regulations thereunder or any applicable tax treaty) or
any guideline or request from any Governmental Authority or quasi-governmental
authority after the later of the Closing Date or the date on which a Lender
became a Lender pursuant to Section 13.01 and that it is not capable of
recovering the full amount of the same from a source other than the Borrower;
or

(D)          that
such Lender is no longer capable of receiving payments hereunder without
deduction or withholding of United States federal income tax as specified
therein other than by reason of the adoption or implementation of, or any
change in, or in the interpretation or administration of, any law or regulation
(including the Code, regulations thereunder or any applicable tax treaty) or
any guideline or request from any Governmental Authority or quasi-governmental
authority after the later of the Closing Date or the date on which a Lender
became a Lender pursuant to Section 13.01.

(f)            Upon
the request of the Administrative Agent, each Lender that is a “United States
person” within the meaning of Section 7701(a)(30) of the Code, other than a
Lender that may be treated as an exempt recipient based on the indicators described
in Treasury Regulation Section 1.6049-4(c)(1)(ii), shall, to the extent that it
may lawfully do so, deliver to the Administrative Agent two duly signed
completed originals of IRS Form W-9.  If
such Lender fails to deliver such forms, then the Administrative Agent may
withhold from any interest payment to such Lender an amount equivalent to the
applicable back-up withholding tax imposed by the Code, without reduction.

Any notice given by any Lender or other Person under
this Section 3.04 shall be effective only if given within one year after
such Lender or other Person becomes aware or should have become aware of the
events giving rise to such notice.

(g)           Forms.  The Borrower shall not be required to pay any
Taxes or Other Taxes pursuant to this Section 3.04 in respect of U.S.
federal income taxes if the obligation to withhold with respect to such Taxes
or Other Taxes results from, or would not have occurred but for, the failure of
any Lender to deliver the forms described in Section 3.04(e) in the
manner and at the times specified therein; provided, however,
that the Borrower shall be required to pay any Taxes or Other Taxes
contemplated pursuant to Section 3.04(e)(ii)(C).

(h)           Credits.  If and to the extent that any Lender is able,
in its sole discretion and without any obligation to do so, to apply or
otherwise take advantage of any offsetting tax credit or other similar tax
benefit arising out of or in conjunction with any deduction or withholding
which gives rise to an obligation on the Borrower to pay any Taxes or Other
Taxes pursuant to this Section 3.04 then such Lender shall, to the
extent that in its sole opinion it can do so without prejudice to the retention
of the amount of such credit or benefit and without any other adverse tax
consequences for such Lender, reimburse to the Borrower at such time as such
tax credit or benefit shall have actually been received by such Lender such
amount as such Lender shall have determined to be attributable to the relevant
deduction or withholding and as will leave such Lender in no better or worse
position than it would have been in if the payment of such Taxes or Other Taxes
had not been required.  Nothing in this
subsection shall require any Lender to disclose any information regarding its
tax affairs generally or its calculation of Taxes (including any tax returns).

(i)            Conduit
Arrangements.  Notwithstanding
anything to the contrary contained in this Section 3.04, if a Lender is
a conduit entity participating in a conduit financing arrangement (as defined
in Section 7701(1) of the Code and the Treasury Regulations issued thereunder)
with respect to any payments made by the Borrower under this Agreement, the
Notes or any Loan Document, the Borrower shall not be obligated to pay additional
amounts to such Lender pursuant to this Section 3.04 to the extent that
the amount of Taxes exceeds the amount that would have been otherwise payable
had such Lender not been a conduit entity participating in a conduit financing
arrangement.

3.05         Increased Capital. 
If any Lender determines that (i) the adoption or implementation after
the date hereof of or any change after the date hereof in or in the
interpretation or administration of any law or regulation or 

 34
 

 

 

any guideline or request
after the date hereof from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over
such Lender or banks or financial institutions generally (whether or not having
the force of law), compliance with which affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and (ii) the amount of such capital is increased by or
based upon the making or maintenance by any Lender of its Loans, any Lender’s
participation in or obligation to participate in the Loans or Letters of Credit
or other advances made hereunder or under the Notes or the existence of any
Lender’s obligation to make Loans, then, in any such case, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), the Borrower
agrees to pay to the Administrative Agent for the account of such Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation therefor, provided such
Lender is also generally charging its customers therefor.  Such demand shall be accompanied by a
statement as to the amount of such compensation and include a brief summary of
the basis for such demand.  Such
statement shall be conclusive and binding for all purposes, absent manifest
error.  Any notice given by any Lender
under this Section 3.05 shall be effective only if given within one year
after such Lender becomes aware or should have become aware of the events giving
rise to such notice.

3.06         Mitigation; Replacement of Lenders.  Any Lender claiming any amounts pursuant to Section
3.04, 3.05 or 4.01(f) shall use reasonable efforts
(consistent with legal and regulatory restrictions) to avoid any costs, reductions,
Taxes or Other Taxes in respect of which such amounts are claimed, including
the filing of any certificate or document reasonably requested by the Borrower
or the changing of the jurisdiction of its Eurodollar Lending Office if such
efforts would avoid the need for or reduce the amount of any such amounts which
would thereafter accrue and would not, in the sole determination of such
Lender, result in any additional unreimbursed costs, expenses or risks to such
Lender or would be otherwise materially disadvantageous to such Lender.  The Borrower may, at any time and so long as
no Event of Default has then occurred and is continuing, and at its sole
expense (including with respect to the processing fee referred to in Section
13.01(b)), replace any Lender (i) that has requested compensation from the
Borrower under Section 3.04, Section 3.05 or Section 4.01(f),
(ii) the obligation of which to make or maintain Eurodollar Rate Loans has been
suspended under Section 4.02(e) or (iii) defaults in the making of any Revolving
Loan required to be made by it hereunder, in any case under clauses (i), (ii)
or (iii) above by written notice to such Lender and the Administrative Agent
identifying one or more Replacement Lenders to replace such Lender (the “Replaced
Lender”), provided that (i) the notice from the Borrower to the
Replaced Lender and the Administrative Agent provided for hereinabove shall
specify an effective date for such replacement (the “Replacement Effective
Date”), which shall be at least five (5) Business Days after such notice is
given, (ii) as of the relevant Replacement Effective Date, each Replacement
Lender shall enter into an Assignment and Acceptance with the Replaced Lender
pursuant to Section 13.01(b), pursuant to which such Replacement Lenders
collectively shall acquire, in such proportion among them as they may agree
with the Borrower and the Administrative Agent (which agreement shall not be
unreasonably withheld), all (but not less than all) of the Term Loan Commitment
or Revolving Loan Commitment, as applicable, and outstanding Term Loans or
Revolving Loans, as applicable, of the Replaced Lender, and, in connection
therewith, shall pay (x) to the Replaced Lender, as the purchase price in
respect thereof, an amount equal to the sum as of the Replacement Effective
Date (without duplication) of (1) the unpaid principal amount of, and all accrued
but unpaid interest on, all outstanding Revolving Loans and Term Loans of the
Replaced Lender and (2) the Replaced Lender’s ratable share of all accrued but
unpaid fees owing to the Replaced Lender hereunder, (y) to the Administrative
Agent, for its own account, any amounts owing to the Administrative Agent by
the Replaced Lender under Section 2.02(c)(ii), and (z) to the Administrative
Agent, for the account of the Swing Loan Lender, any amounts owing to the Swing
Loan Lender under Section 2.03, and (iii) all other obligations of the
Borrower owing to the Replaced Lender (other than those specifically described
in clause (ii) above in respect of which the assignment purchase price has
been, or is concurrently being, paid), including, without limitation, amounts
payable under Sections 3.04, 3.05 and 4.01(f) that give
rise to the replacement of such Replaced Lender and amounts payable under Section
4.02(f) as a result of the actions required to be taken under this Section
3.06, shall be paid in full by the Borrower to the Replaced Lender on or
prior to the Replacement Effective Date.

 35
 

 

 

ARTICLE IV

INTEREST AND FEES

4.01         Interest on the Loans and other
Obligations.

(a)           Rate
of Interest.

(i)      All
Loans and the outstanding amount of all other Obligations (other than Swing Loans)
shall bear interest on the unpaid amount thereof from the date such Loans are
made and such other Obligations are due and payable until paid in full, except
as otherwise provided in Section 4.01(d), as follows:

(A)          If
a Base Rate Loan or such other Obligation, at a rate per annum equal to the sum
of (I) the Base Rate as in effect from time to time as interest accrues, plus
(II) the Applicable Base Rate Margin in effect at such time; and

(B)           If
a Eurodollar Rate Loan, at a rate per annum equal to the sum of (I) the Eurodollar
Rate determined for the applicable Eurodollar Interest Period, plus (II)
the Applicable Eurodollar Rate Margin in effect from time to time during such
Eurodollar Interest Period.

(ii)     All
Swing Loans shall bear interest on the unpaid amount thereof from the date such
Loans are made until paid in full, except as otherwise provided in Section
4.01(d), at a rate per annum equal to the sum of (I) the Base Rate as in
effect from time to time as interest accrues, plus (II) the Applicable Base
Rate Margin in effect at such time.

(iii)    The
applicable basis for determining the rate of interest on the Loans shall be
selected by the Borrower at the time a Notice of Borrowing or a Notice of
Conversion/Continuation is delivered by the Borrower to the Administrative
Agent; provided, however, the Borrower may not select the
Eurodollar Rate as the applicable basis for determining the rate of interest on
such a Loan if (x) such Loan is to be made on the Closing Date unless the
Borrower provides the Lenders with a funding indemnification in a form
acceptable to the Administrative Agent, or (y) at the time of such selection an
Event of Default or Default has occurred and is continuing.  If on any day any Loan is outstanding with
respect to which notice has not been timely delivered to the Administrative
Agent in accordance with the terms hereof specifying the basis for determining
the rate of interest on that day, then for that day interest on that Loan shall
be determined by reference to the Base Rate.

(b)           Interest
Payments.

(i)      Interest
accrued on each Base Rate Loan shall be payable in arrears (A) on the last
Business Day of each calendar quarter, commencing on the first such day
following the making of such Base Rate Loan and (B) on the Revolving Loan Maturity
Date or Term Loan Maturity Date, as applicable, or such other date on which
such Loans become due and payable and on any other date of prepayment or
repayment of any principal portion thereof (but only as to the principal amount
so prepaid or repaid).

(ii)     Interest
accrued on each Eurodollar Rate Loan shall be payable in arrears (A) on each
Eurodollar Interest Payment Date applicable to such Loan and (B) on the
Revolving Loan Maturity Date or Term Loan Maturity Date, as applicable, or such
other date on which such Loans become due and payable and on any other date
such Loans are repaid or prepaid in full.

(iii)    Interest,
if any, accrued on the principal balance of all other Obligations shall be
payable in arrears (A) on the last Business Day of each calendar month,
commencing on the first such day following the incurrence of such Obligation
and (B) on the Revolving Loan Maturity Date or Term Loan Maturity Date, as
applicable, or such other date on which such Obligations become due and
payable.

 36
 

 

 

(c)           Conversion or Continuation.

(i)      The
Borrower shall have the option (A) to convert at any time all or any part of
the outstanding Base Rate Loans (other than Swing Loans) to Eurodollar Rate
Loans; (B) to convert all or any part of outstanding Eurodollar Rate Loans
having Eurodollar Interest Periods which expire on the same date to Base Rate
Loans on such expiration date; or (C) to continue all or any part of
outstanding Eurodollar Rate Loans having Eurodollar Interest Periods which
expire on the same date as Eurodollar Rate Loans, and the succeeding Eurodollar
Interest Period of such continued Loans shall commence on such expiration date;
provided, however, no such outstanding Loan may be continued as,
or be converted into, a Eurodollar Rate Loan (i) if the continuation of, or the
conversion into, would violate any of the provisions of Section 4.02 or
(ii) if an Event of Default or Default would occur or has occurred and is
continuing.  Any conversion into or
continuation of Eurodollar Rate Loans under this Section 4.01(c) shall
be in a minimum amount of $5,000,000 and in integral multiples of $1,000,000 in
excess of that amount except if such lesser amount represents the total amount
of such Type of Loans outstanding, and no partial conversion of Eurodollar Rate
Loans made pursuant to any single Borrowing shall reduce the aggregate
outstanding principal amount of the remaining Eurodollar Rate Loans under such
Borrowing to less than $5,000,000 or to any greater amount not a multiple of
$1,000,000 in excess thereof.  Any
conversion into Base Rate Loans under this Section 4.01(c) shall be in a
minimum amount of $5,000,000 and in integral multiples of $1,000,000 in excess
of that amount except if such lesser amount represents the total amount of such
Type of Loans outstanding.

(ii)     To
convert or continue Loans under Section 4.01(c)(i), the Borrower shall
deliver a Notice of Conversion/Continuation to the Administrative Agent no
later than 1:00 p.m. (New York City time) at least three (3) Business Days in
advance of the proposed conversion/continuation date.  A Notice of Conversion/Continuation shall
specify (A) the proposed conversion/continuation date (which shall be a Business
Day), (B) the aggregate principal amount of the Loans to be
converted/continued, (C) whether such Loans shall be converted and/or continued
and (D) in the case of a conversion to, or continuation of, Eurodollar Rate
Loans, the requested Eurodollar Interest Period.  Promptly after receipt of a Notice of
Conversion/Continuation under this Section 4.01(c)(ii), the Administrative
Agent shall notify each Lender by facsimile, or other similar form of
transmission, of the proposed conversion/continuation.  Any Notice of Conversion/Continuation for
conversion to, or continuation of, Loans (or telephonic notice in lieu thereof)
shall be irrevocable, and the Borrower shall be bound to convert or continue in
accordance therewith.

(d)           Default
Interest.  Notwithstanding the rates
of interest specified in Section 4.01(a) or elsewhere herein, (i) upon
the occurrence of any Event of Default specified in Section 11.01(a) and
for as long thereafter as such Event of Default shall be continuing, the
principal balance of all Loans and (to the maximum extent permitted by law) of
all other Obligations shall bear interest at a rate which is 2.0% per annum
(after as well as before judgment) in excess of the rate of interest applicable
to such Obligations from time to time, and (ii) upon the occurrence of any
other Event of Default and for as long thereafter as such Event of Default
shall be continuing, the Requisite Lenders may elect that the principal balance
of all Loans and (to the maximum extent permitted by law) of all other
Obligations bear interest during such period at a rate which is 2.0% per annum
in excess of the rate of interest applicable to such Obligations from time to
time, and in each case under clauses (i) and (ii), such default interest shall
be payable on demand.

(e)           Computation
of Interest.  Interest on (i) Base
Rate Loans and all other Obligations shall be computed on the basis of the
actual number of days elapsed in the period during which interest accrues and a
year of 365/366 days and (ii) Eurodollar Rate Loans shall be computed on the
basis of the actual number of days elapsed in the period during which interest
accrues and a year of 360 days.  In
computing interest on any Loan, the date of the making of the Loan shall be
included and the date of payment made in accordance with Section 3.03
shall be excluded; provided, however, if a Loan is repaid on the
same day on which it is made, one (1) day’s interest shall be paid on such
Loan.

(f)            Changes;
Legal Restrictions.  If after the
date hereof any Lender determines that the adoption or implementation of or any
change in or in the interpretation or administration of any law or regulation
or any guideline or request from any central bank or other Governmental
Authority or quasi-governmental authority exercising jurisdiction, power or
control over any Lender or over banks or financial institutions generally (whether
or not having the force of law), compliance with which, in each case after the
date hereof:

 37
 

 

 

(i)      (x) subjects a Lender (or its Applicable
Lending Office) to charges (other than Taxes) of any kind which is applicable
to Lenders’ ability to make Eurodollar Rate Loans, or (y) changes the basis of
taxation of, or subjects to tax, payments to a Lender of principal, fees,
interest, or any other amount payable hereunder with respect to any Loans; or

(ii)     imposes, modifies, or holds applicable, any
reserve (other than reserves taken into account in calculating the Eurodollar
Rate), special deposit, compulsory loan, FDIC insurance or similar requirement
against assets held by, or deposits or other liabilities (including those
pertaining to Letters of Credit) in or for the account of, advances or loans
by, commitments made, or other credit extended by, or any other acquisition of
funds by, a Lender or any Applicable Lending Office or Eurodollar Affiliate of
that Lender;

and the result of any of the foregoing is to increase
the cost to that Lender of making, renewing or maintaining the Loans or its
Revolving Loan Commitments or to reduce any amount receivable thereunder; then,
in any such case, within thirty (30) days after written demand by such Lender
(with a copy of such demand to the Administrative Agent), the Borrower shall
pay to the Administrative Agent for the account of such Lender, from time to
time as specified by such Lender, such amount or amounts as may be necessary to
compensate such Lender or its Eurodollar Affiliate for any such additional cost
incurred or reduced amount received. 
Such demand shall be accompanied by a statement as to the amount of such
compensation and include a summary of the basis for such demand.  Such statement shall be conclusive and
binding for all purposes, absent manifest error.  Any notice given by any Lender under this Section
4.01(f) shall be effective only if given within one year after such Lender
becomes aware or should have become aware of the events giving rise to such
notice.

(g)           Confirmation
of Eurodollar Rate.  Upon the request
of the Borrower from time to time, the Administrative Agent shall promptly
provide to the Borrower such information with respect to the applicable Eurodollar
Rate as may be reasonably requested.

4.02         Special Provisions Governing
Eurodollar Rate Loans.  With respect to Eurodollar
Rate Loans:

(a)           Amount
of Advance.  Each Borrowing of
Eurodollar Rate Loans shall be for a minimum amount of $5,000,000 and in
integral multiples of 1,000,000 in excess of that amount.

(b)           Determination
of Eurodollar Interest Period.  By
giving notice as set forth in Section 2.01(b) (with respect to a
Borrowing of Eurodollar Rate Loans) or Section 4.01(c) (with respect to
a conversion into or continuation of Eurodollar Rate Loans), the Borrower shall
have the option, subject to the other provisions of this Section 4.02,
to select an interest period (a “Eurodollar Interest Period”) to apply
to the Loans described in such notice, subject to the following provisions:

(i)      The Borrower may only select, as to a particular Borrowing of
Eurodollar Rate Loans, a Eurodollar Interest Period of either one, two, three,
six, or if available to all Lenders, nine and twelve months (as selected by the
Borrower) in duration;

(ii)     In the case of immediately successive Eurodollar Interest
Periods applicable to a Borrowing of Eurodollar Rate Loans, each successive
Eurodollar Interest Period shall commence on the day on which the next
preceding Eurodollar Interest Period expires;

(iii)    If any Eurodollar Interest Period would otherwise expire on a day
which is not a Business Day, such Eurodollar Interest Period shall be extended
to expire on the next succeeding Business Day if the next succeeding Business
Day occurs in the same calendar month, and if there shall be no succeeding Business
Day in such calendar month, such Eurodollar Interest Period shall expire on the
immediately preceding Business Day;

(iv)    The Borrower may not select a Eurodollar Interest Period as to
any Term Loan or Revolving Loan if such Eurodollar Interest Period terminates
later than the Term Loan Maturity Date or Revolving Loan Maturity Date,
respectively;

 

 38

 

 

(v)     There shall be no more than six (6) Eurodollar Interest Periods in effect at any one time; and

(vi)    Any Eurodollar Interest Period pertaining to a Borrowing of
Eurodollar Rate Loans that commences on the last Business Day of a calendar
month (or a day for which there is no numerically corresponding day in the last
calendar month of such Eurodollar Interest Period) shall end on the last
Business Day of the last calendar month of such Eurodollar Interest Period.

(c)           Determination
of Interest Rate.  As soon as
practicable on the second Business Day prior to the first day of each
Eurodollar Interest Period (the “Interest Rate Determination Date”), the
Administrative Agent shall determine (pursuant to the procedures set forth in
the definition of “Eurodollar Rate”) the interest rate which shall apply
to Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Eurodollar Interest Period, and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to the Borrower and
to each Lender.  The Administrative Agent’s
determination shall be presumed to be correct, absent manifest error, and shall
be binding upon the Borrower.

(d)           Interest
Rate Unascertainable, Inadequate or Unfair. 
In the event that at least one (1) Business Day before the Interest Rate
Determination Date:

(i)      the Administrative Agent reasonably determines that adequate
and fair means do not exist for ascertaining the applicable interest rates by
reference to which the Eurodollar Rate then being determined is to be fixed;

(ii)     the Requisite Lenders advise the Administrative Agent that
Dollar deposits in the principal amounts of the Eurodollar Rate Loans
comprising such Borrowing are not generally available in the London interbank
market for a period equal to such Eurodollar Interest Period; or

(iii)    the Requisite Lenders advise the Administrative Agent that the
Eurodollar Rate as determined by the Administrative Agent, after taking into
account the adjustments for reserves and increased costs provided for in Section
4.01(f), will not adequately and fairly reflect the cost to such Lenders of
funding Loans of such Type;

then the Administrative
Agent shall forthwith give notice thereof to the Borrower, whereupon (until the
Administrative Agent notifies the Borrower that the circumstances giving rise
to such suspension no longer exist) the right of the Borrower to elect to have
Loans bear interest based upon the Eurodollar Rate shall be suspended and each
outstanding Loan of such Types shall be converted into a Base Rate Loan on the
last day of the then current Eurodollar Interest Period therefor, and any
Notice of Borrowing for which Revolving Loans have not then been made shall be
deemed to be a request for Base Rate Loans, notwithstanding any prior election
by the Borrower to the contrary.

(e)           Illegality.

(i)      If at any time any Lender determines
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any Eurodollar
Rate Loan has become unlawful or impermissible by compliance by that Lender
with any law, governmental rule, regulation or order of any Governmental
Authority (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful or would result in costs or penalties),
then, and in any such event, such Lender may give notice of that determination,
in writing, to the Borrower and the Administrative Agent, and the
Administrative Agent shall promptly transmit the notice to each other Lender.

(ii)     When notice is given by a Lender under Section
4.02(e)(i), (A) the Borrower’s right to request from such Lender and such
Lender’s obligation, if any, to make Eurodollar Rate Loans shall be immediately
suspended, and such Lender shall make a Base Rate Loan as part of any requested
Borrowing of Eurodollar Rate Loans and (B) if the affected Eurodollar Rate Loan
or Loans are then outstanding, the 

 39
 

 

 

Borrower shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one (1) Business Day’s prior written notice to the
Administrative Agent and the affected Lender, convert each such Loan into a
Base Rate Loan.

(iii)    If at any time after a Lender gives notice
under Section 4.02(e)(i) such Lender determines that it may lawfully
make Eurodollar Rate Loans, such Lender shall promptly give notice of that
determination, in writing, to the Borrower and the Administrative Agent, and
the Administrative Agent shall promptly transmit the notice to each other
Lender.  The Borrower’s right to request,
and such Lender’s obligation, if any, to make Eurodollar Rate Loans shall
thereupon be restored.

(f)            Compensation.  In addition to all amounts required to be
paid by the Borrower pursuant to Section 4.01, the Borrower shall
compensate each Lender, upon demand, for all losses, expenses and liabilities
(including, without limitation, any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund or maintain such Lender’s Eurodollar Rate Loans to the Borrower but
excluding any loss of the Applicable Eurodollar Rate Margin on the relevant
Loans) which that Lender may sustain (i) if for any reason a Borrowing,
conversion into or continuation of Eurodollar Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing or a Notice of Conversion/
Continuation given by the Borrower or in a telephonic request by it for
borrowing or conversion/continuation or a successive Eurodollar Interest Period
does not commence after notice therefor is given pursuant to Section 4.01(c),
including, without limitation, pursuant to Section 4.02(d),
(ii) from the assignment of any Eurodollar Rate Loan other than on the
last day of a Eurodollar Interest Period therefor as a result of a request by
the Borrower pursuant to Section 3.06 or pursuant to Section 2.08(d),
(iii) if for any reason any Eurodollar Rate Loan is paid or prepaid
(including, without limitation, mandatorily pursuant to Section 3.02) on
a date which is not the last day of the applicable Eurodollar Interest Period,
(iv) as a consequence of a required conversion of a Eurodollar Rate Loan
to a Base Rate Loan as a result of any of the events indicated in Section
4.02(d) or 4.02(e) or (v) as a consequence of any failure by
the Borrower to repay Eurodollar Rate Loans when required by the terms
hereof.  The Lender making demand for
such compensation shall deliver to the Borrower concurrently with such demand a
written statement in reasonable detail as to such losses, expenses and
liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender, absent manifest error.

(g)           Affiliates
Not Obligated.  No Eurodollar
Affiliate or other Affiliate of any Lender shall be deemed a party hereto or
shall have any liability or obligation hereunder.

4.03         Fees.

(a)           Unused
Commitment Fee.  The Borrower agrees
to pay to the Administrative Agent, for the account of the Lenders in
accordance with their Pro Rata Shares of the aggregate Revolving Loan
Commitments, during the period commencing on the Closing Date and ending on the
Revolving Loan Commitment Termination Date, a fee equal to the Applicable Fee
per annum on the average amount by which the Revolving Loan Commitments exceed
the Revolving Credit Obligations minus the outstanding principal amount of the
Swing Loans, such fee being payable quarterly, in arrears, on the last Business
Day of each calendar quarter and on the Revolving Loan Commitment Termination
Date, in each case in respect of the quarter (or portion thereof) immediately
preceding the date such payment is required.

(b)           Letter
of Credit Fee.  In addition to any
charges paid pursuant to Section 2.04(g), the Borrower or the applicable
Subsidiary shall pay to the Administrative Agent, for the account of the
Lenders in accordance with their respective Pro Rata Shares, with respect to
each Letter of Credit Issued by the Issuing Bank, to the Borrower or any of its
Subsidiaries a fee at a per annum rate equal to the Applicable Eurodollar Rate
Margin on the undrawn face amount of such Letter of Credit, payable quarterly
in arrears on the last Business Day of each calendar quarter.

(c)           Issuing
Bank Fee.  The Borrower or the
applicable Subsidiary shall pay to the Issuing Bank, solely for its own
account, with respect to each Letter of Credit issued by the Issuing Bank, to
the Borrower or any of its Subsidiaries an additional fee in an amount equal to
0.125% per annum on the undrawn face amount of such Letter of Credit, payable quarterly
in arrears on the last Business Day of each calendar quarter.

 40
 

 

 

(d)           Computation
of Fees.  All of the above fees
payable on a per annum basis shall be computed on the basis of the actual
number of days elapsed in a year of 360 days. 
All such fees shall be payable in addition to, and not in lieu of,
interest, compensation, expense reimbursements, indemnification and other
Obligations.

ARTICLE V

CONDITIONS TO LOANS

5.01         Conditions Precedent to Closing and
to Initial Loans.  The occurrence of the Closing Date and the
obligation of each Lender to make the initial Loans requested to be made by it
hereunder (whether on or at any time after the Closing Date) shall be subject
to the satisfaction of all of the following conditions precedent:

(a)           Documents.  The Administrative Agent (on behalf of itself
and the Lenders) shall have received on or before the Closing Date all of the
following:

(i)      this Agreement, the Notes, the Guaranties, an Account
Designation Letter and all other agreements, documents, instruments,
certificates, opinions and corporate resolutions described in the List of
Closing Documents, each duly executed where appropriate and in form and
substance satisfactory to the Lenders and in sufficient copies for each of the
Lenders; and

(ii)     such additional documentation as the Administrative Agent or the
Requisite Lenders may reasonably request.

(b)           Consents
and Approvals; No Adverse Action. 
All approvals, permits and consents of any Governmental Authorities or
other Persons required in connection with the execution and delivery of this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby and thereby shall have been obtained, without the
imposition of conditions that are not reasonably acceptable to the
Administrative Agent, and all related filings, if any, shall have been made,
and all such approvals, permits, consents and filings shall be in full force
and effect and the Administrative Agent shall have received such copies thereof
as it shall have reasonably requested; all applicable waiting periods shall
have expired without any adverse action being taken or threatened by any
Governmental Authority having jurisdiction; and no action, proceeding,
investigation, regulation or legislation shall have been instituted, threatened
or proposed before, and no order, injunction or decree shall have been entered
by, any court or other Governmental Authority, in each case to enjoin, restrain
or prohibit, to obtain substantial damages in respect of, or to impose materially
adverse conditions upon, this Agreement, any of the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby, or that, in
the reasonable opinion of the Administrative Agent, could be expected to have a
Material Adverse Effect.

(c)           Searches.  The Administrative Agent shall have received
certified reports from an independent search service satisfactory to it listing
any judgment or tax lien filing or Uniform Commercial Code financing statement
that names the Borrower or any Guarantor as debtor in any of such jurisdictions
as may be selected by the Administrative Agent, and the results thereof shall
be reasonably satisfactory to the Administrative Agent.

(d)           No
Change in Condition.  (1)  There not occurring any event, change,
development or occurrence that, either individually or in the aggregate with
all other events, changes, developments or occurrences, since December 31,
2005, which would have, or would reasonably be expected to have a Material
Adverse Effect on (x) the properties, assets, liabilities, business,
financial condition, or results of operations of Andrx and its Subsidiaries,
taken as a whole, or the Borrower and its Subsidiaries (including Andrx and its
Subsidiaries), taken as a whole, but excluding any such event, change,
development or occurrence resulting from or arising out of:  (i) changes in the financial markets
generally in the United States or that are the result of acts of war or
terrorism; (ii) general national, international or regional economic,
financial, political or business conditions (including changes in Law or GAAP
or the interpretation thereof) affecting generally the generic pharmaceutical
industry or the pharmaceutical industry, which do not have a materially
disproportionate effect (relative to other industry participants) on Andrx and
its Subsidiaries, taken as a whole, or the Borrower and its Subsidiaries
(including Andrx and its Subsidiaries), taken as a whole; 

 41
 

 

 

(iii) the execution, announcement and
performance of the Merger Agreement, or any actions taken, delayed or omitted
to be taken by Andrx pursuant to the Merger Agreement or at the request of the
Borrower; (iv) decrease in revenues from Andrx’s generic products related
to price reductions or reduced market share in the ordinary course of business
as a result of competition from current or future competitors; (v) any adverse
determination in connection with any litigation under Paragraph IV of the Drug
Price Competition and Patent Term Restoration Act of 1984, and (vi) the FDA OAI
Matter, or (y) the ability of Andrx or the Borrower to consummate the
Acquisition.  For avoidance of doubt, (i)
the continuation of Andrx’s FDA Official Action Indicated (OAI) status relating
to its Davie, Florida manufacturing facilities shall not constitute, and shall
not be considered in determining the existence of, a material adverse effect
pursuant to this clause (d)(1), and (ii) no matter arising out of or resulting
from the FDA OAI Matter (other than solely a matter described in the immediately
succeeding sentence hereof) shall constitute, or shall be considered in determining
the existence of, a material adverse effect pursuant to this clause
(d)(1).  With regard to matters arising out of the FDA OAI Matter, only
the actual occurrence prior to the Closing Date of the following shall
constitute a material adverse effect pursuant to this clause (d)(1):  any actual seizure or recall of or reduction
in manufacturing or distribution activities for Cartia XT, Taztia XT, Altoprev
or Metformin XT or any fine or criminal or civil penalty, in any of the
foregoing cases imposed by a governmental entity (or, in the case of a recall
or reduction in manufacturing or distribution activities, voluntarily
undertaken by Andrx), which has had, individually or in the aggregate, a
material adverse effect, pursuant to this clause (d)(1), on the properties,
assets, liabilities, business, results of operations or financial condition of
Andrx and its Subsidiaries, taken as a whole.

(2)           There
not occurring or becoming known to the Administrative Agent or the Arrangers
(a) any event, development or circumstance since December 31, 2005, which any
of them reasonably determines has had or could reasonably be expected to have a
Material Adverse Effect on the assets, liabilities, business, financial
condition, or results of operations of the Borrower and its Subsidiaries
(including Andrx and its Subsidiaries), taken as a whole, but excluding any
such event, change, development or occurrence resulting from or arising out of:  (A) changes in the financial markets
generally in the United States or that are the result of acts of war or
terrorism; (B) general national, international or regional economic, financial,
political or business conditions (including changes in law or GAAP or the
interpretation thereof) affecting generally the generic pharmaceutical industry
or the pharmaceutical industry, which do not have a materially disproportionate
effect (relative to other industry participants) on the Borrower and its
subsidiaries (including Andrx and its Subsidiaries), taken as a whole, (C) the
execution, announcement and performance of the Merger Agreement.

(e)           Compliance
Certificate.  The Administrative
Agent shall have received a Compliance Certificate, duly completed and signed
by the Borrower’s Chief Financial Officer, demonstrating the Borrower’s
compliance with the financial covenants set forth in Article X,
determined on a Pro Forma Basis as of June 30, 2006 after giving effect to the
making of Loans hereunder on the Closing Date, if any, and the application of
the proceeds thereof.

(f)            No
Default.  No Default or Event of
Default shall have occurred and be continuing or would result from the making
of any Loans on the Closing Date.

(g)           Representations
and Warranties.  All of the representations
and warranties contained in Section 6.01 and in the other Loan Documents
shall be true and complete in all material respects on and as of the Closing
Date.

(h)           Fees
and Expenses Paid.  There shall have
been paid to the Administrative Agent, for the account of the Agents and the
Lenders and Affiliates of each, all fees due and payable on or before the
Closing Date, and all expenses (including, without limitation, legal fees and
expenses) due and payable on or before the Closing Date.

(i)            Financial
Information.  The Administrative
Agent shall have received, with copies for each Lender, (i) each of the
financial statements referred to in Section 6.01(h), (ii) an opening
consolidated pro forma balance sheet and income statement of the Borrower and
its Subsidiaries, as of June 30, 2006, giving effect to the consummation
of the transactions contemplated by this Agreement (and the making of 

 42
 

 

 

any Loans hereunder on the Closing Date and
the application of the proceeds thereof) and (iii) five-year projected
consolidated balance sheets of the Borrower and its Subsidiaries for the fiscal
years 2006 through 2010, and related consolidated statements of income and cash
flow, prepared on a quarterly basis for the first year included in the
projections and annually for all other periods included in the projections,
each in form and substance reasonably satisfactory to the Administrative Agent
and the Lenders.

(j)            Financings
and Other Transactions, etc.

(i)      On the Closing Date, the Transactions
shall have been consummated pursuant to the Merger Agreement, and no material
provision thereof shall have been waived, amended, supplemented or otherwise
modified without the consent of the Co-Lead Arrangers not to be unreasonably
withheld or delayed.  On the Closing Date,
the Acquisition shall have been consummated for aggregate cash consideration to
the sellers not exceeding $1,900,000,000.

(ii)     On the Closing Date, the Refinancing shall
have been consummated in full to the satisfaction of the Lenders; the Administrative
Agent shall have received a “pay-off” letter in form and substance reasonably
satisfactory to the Administrative Agent with respect to all debt being
refinanced in the Refinancing.

(iii)    No more than $225.0 million of Revolving
Loans shall have been made.

(k)           HSR
Approval.  All filing and waiting
periods (including the extensions thereof) applicable to the consummation of
the Transactions under the Hart-Scott-Rodino Antitrust Improvements Act shall
have been expired or been terminated.

(l)            Leverage
Ratio.  The ratio of (x) Funded Debt
(net of cash and Cash Equivalents) of the Borrower as of the Closing Date after
giving effect to the Acquisition to (y) pro forma EBITDA of the Borrower and
its Subsidiaries for the latest twelve month period after giving effect to the
Acquisition shall be no greater than 2.75 to 1.00.

(m)          Ratings.  The Borrower shall have received credit
ratings for the Credit Facilities from each of S&P and Moody’s.

(n)           Opinions.  The Administrative Agent shall have received
such legal opinions addressed to the Administrative Agent, Issuing Bank and
Lenders (including opinions (i) from counsel to the Borrower and its
subsidiaries, and (ii) from such special and local counsel as may be reasonably
required by the Administrative Agent), documents and other instruments as are
customary for transactions of this type or as the Administrative Agent may reasonably
request.

(o)           Litigation.  There shall not be pending any suit, action
or proceeding under the antitrust laws by any U.S. governmental entity in any
court of competent jurisdiction seeking to prohibit the consummation of the
Acquisition or that would otherwise have a material adverse effect on the
properties, assets, liabilities, business, results of operations, or financial
condition of the Borrower and its subsidiaries, taken as a whole.

(p)           Bank
Regulatory Information.  The
Administrative Agent and Lenders shall have received, at least five Business
Days in advance of the Closing Date, all requested documentation and other
information required by bank regulatory authorities under applicable “know-your-customer”
and anti-money laundering rules and regulations, including, without limitation,
the U.S.A. Patriot Act.

(q)           Acquisition
Documents.  The Co-Lead Arrangers
shall have reviewed, and be reasonably satisfied with, the final terms and
conditions and the documentation relating to the Acquisition, including the
Merger Agreement, it being understood that the Merger Agreement dated as of
March 12, 2006, as amended on July 7, 2006, is acceptable to the Co-Lead
Arrangers.

(r)            Sources
and Uses.  Sources and uses of funds
and the assumptions relating thereto shall be substantially as described in Section
2.06.

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5.02         Conditions Precedent to All Loans.  The obligation of each
Lender to make any Loan and each Issuing Bank to issue a Letter of Credit
requested to be made by it on any Funding Date on or after the Closing Date is
subject to the following conditions precedent as of each such date:

(a)           Representations
and Warranties.  As of such date,
both before and after giving effect to the Loans to be made, all of the
representations and warranties contained in Section 6.01 and in the
other Loan Documents shall be true and complete in all material respects
(except to the extent that such representations or warranties are made as of an
earlier date, in which case they shall be true and complete in all material
respects as of such earlier date).

(b)           No
Defaults.  As of such date, no
Default or Event of Default shall have occurred and be continuing or would
result from the making of the requested Loan or the application of the proceeds
therefrom.

Each request by the Borrower for a Loan, each
submission by the Borrower of a Notice of Borrowing, and each acceptance by the
Borrower of the proceeds of each Loan made hereunder, shall constitute a
representation and warranty by the Borrower as of the Funding Date in respect
of such Loan that all the conditions contained in this Section 5.02 have
been satisfied.

ARTICLE
VI

REPRESENTATIONS
AND WARRANTIES

6.01         Representations and Warranties of
the Borrower.  In order to induce the Lenders to enter into
this Agreement and to make the Loans, the Borrower hereby represents and
warrants as follows:

(a)           Organization;
Powers.  Each Loan Party (i) is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, (ii) is qualified to conduct business as a
foreign corporation and is in good standing in every jurisdiction in which such
qualification is required, except where the failure to so qualify is not
reasonably likely to result in a Material Adverse Effect, and (iii) has all
requisite power and authority to own, operate and encumber its assets and to
conduct its business as presently contemplated.

(b)           Authority.

(i)      Each Loan Party has the requisite power
and authority to execute, deliver and perform each of the Loan Documents to
which it is a party.

(ii)     No other action or proceeding on the part
of any Loan Party is necessary to execute, deliver and perform each of the Loan
Documents to which it is a party thereto or to consummate the transactions
contemplated thereby.

(iii)    Each of the Loan Documents to which any Loan
Party is a party has been duly executed and delivered by such Loan Party and
constitutes the legal, valid and binding obligation of such Loan Party,
enforceable against such Loan Party in accordance with its terms, except as
such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and (ii) general principles of equity relating to
enforceability (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

(c)           Ownership.  Section 6.01(C) of the Disclosure Letter sets
forth the ownership of the Borrower’s 
Subsidiaries as of the date hereof and separately indicates each
Subsidiary that is required to be a Guarantor as of the Closing Date.  Each Loan Party has delivered to the Administrative
Agent true and complete copies of the Governing Documents for such Loan Party
in effect as of the date hereof.

 44
 

 

 

(d)           No
Conflict.  The execution, delivery
and performance by each Loan Party of each Loan Document to which it is a party
and the consummation of the transactions contemplated thereby do not and will
not (i) conflict with the Governing Documents of such Loan Party, (ii) violate
any Requirements of Law (including Regulation U) or any material Contractual
Obligation of such Loan Party, or (iii) result in or require the creation or
imposition of any Lien whatsoever upon any of the property or assets of such
Loan Party.

(e)           Compliance with Laws; Permits.

(i)      Except as set forth in
the Disclosure Letter or as would not have, either individually or in the
aggregate, a Material Adverse Effect, the operations and assets of the Loan
Parties and each of their Subsidiaries are in compliance with all laws
applicable to the Loans Parties and their Subsidiaries, including without
limitation (i) the laws enforced and regulations issued by the DEA, the Department
of Health and Human Services and its constituent agencies, the FDA, the Centers
for Medicare & Medicaid Services, and Office of Inspector General,
(including, without limitation, the federal Food Drug and Cosmetic Act (21
U.S.C. § 321 et seq.), the Controlled
Substances Act (21 U.S.C. § 801 et seq.),
the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the Stark Law (42
U.S.C. § 1395nn), the administrative simplification provisions of the Health
Insurance Portability and Accountability Act of 1996 (42 U.S.C. § 1320d et seq.), the exclusion laws (42 U.S.C. §
1320a-7), the regulations promulgated pursuant to the foregoing laws, and the
Federal Acquisition Regulations (48 C.F.R. Parts 1-53)), (ii) the drug price
reporting requirements of titles XVIII and XIX of the Social Security Act,
(iii) the laws precluding off-label marketing of drugs, and (iv) comparable
state laws.  Neither the Loan Parties nor
any of their Subsidiaries is excluded or debarred under the Generic Drug
Enforcement Act of 1992 or any government health care program, including,
without limitation, Medicare and Medicaid, and to the Borrower’s knowledge,
neither the Loan Parties nor any of their Subsidiaries employs or uses the
services of any individual who is excluded or debarred.  Except as set forth in the Disclosure Letter
and as would not have, either individually or in the aggregate, a Material
Adverse Effect, neither the Loan Parties nor any of their Subsidiaries (i) is
subject to any action, claim, proceeding or investigation with respect to any
violation of any applicable law or Permits, or (ii) has been threatened in
writing to be charged with or received notice of any violation of any applicable
Law or Permit.  Except for OAI FDA Matter
or as would not, individually or
in the aggregate, have a Material Adverse Effect, to the Borrower’s knowledge,
there are no facts or circumstances which would reasonably be expected to
result in any such violation, action, claim, proceeding, investigation, charge,
or notice.

(ii)     Except as set forth in
the Disclosure Letter or as would not have, either individually or in the
aggregate, a Material Adverse Effect, (i) the Loan Parties and each of their
Subsidiaries have and maintain in full force and effect, and are in compliance
with, all Permits necessary for the Loan Parties and each of their Subsidiaries
to carry on their respective businesses as currently conducted; and (ii) neither
the Loan Parties nor any of their Subsidiaries have received written notice
that the Governmental Authority or the Person issuing or authorizing any such
Permit intends to terminate, refuse to renew or reissue or otherwise adversely
restrict any such Permit.

(iii)    Except as set forth in
the Disclosure Letter or as would not have, either individually or in the aggregate,
a Material Adverse Effect, (i) the Loan Parties and each of their Subsidiaries,
meet all of the requirements of participation and payment of Medicare,
Medicaid, any other state or federal government health care programs, and any
other public or private third party payor programs (collectively, “Programs”)
that the Loan Parties and/or any of their Subsidiaries, as applicable,
participate in or receive payment from, and (ii) there is no investigation,
audit, claim review, or other action pending or, to the knowledge of any of the
Loan Parties, threatened which could result in any of the Loan Parties or any
of their Subsidiaries’ exclusion from any Program and neither the Loan parties
nor any of their Subsidiaries have received notice of any such investigation,
audit, claim review or other action.

(f)            Governmental
Regulation.  No Loan Party is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, or the Investment Company Act of 1940,
or any other federal or state statute or regulation which limits its ability to
incur indebtedness or its ability to consummate the transactions contemplated
by the Loan Documents.

 

 45

 

 

(g)           Subsidiaries.  As of the Closing Date, the Borrower has no
Subsidiaries or interests in any joint venture or partnership of any other
Person other than the Subsidiaries and material joint ventures and partnerships
set forth on Section 6.01(C) of the Disclosure Letter.

(h)           Financial
Position of the Borrower and Andrx. 
True and complete copies of (i) unaudited financial statements of
the Borrower and its Subsidiaries for the most recent fiscal quarter ended 45
days prior to the Closing Date, and the related consolidated statements of
income and cash flow for the Borrower and its Subsidiaries and for Andrx and
its Subsidiaries, and (ii) the audited consolidated balance sheets as at
the end of the fiscal years ended December 31, 2005, 2004 and 2003, and the
related consolidated statements of income and cash flow for the Borrower and
its Subsidiaries and for Andrx and its Subsidiaries, each of which have been
delivered to the Administrative Agent and the Lenders.  The foregoing financial statements were prepared
in conformity with GAAP and fairly present in all material respects the
financial position and the results of operations and cash flows of the Borrower
and its Subsidiaries or Andrx and its Subsidiaries, as the case may be, for
each of the periods covered thereby as at the respective dates thereof.  As of the Closing Date, no Loan Party has any
Accommodation Obligation, contingent liability or liability for any Taxes,
long-term leases or commitments, not reflected in the foregoing financial
statements which will have or is reasonably likely to have a Material Adverse Effect.

(i)            Projections.  The Borrower has delivered to the
Administrative Agent and each Lender pursuant to Section 5.01(i) certain
projected financial statements of the Borrower and its Subsidiaries which have
been prepared in good faith and using accounting principles consistently
applied.

(j)            Litigation;
Adverse Effects.  Except as set forth
in Sections 6.01(J) and 6.01(O) of the Disclosure Letter, there is no action,
suit, proceeding, investigation or arbitration before or by any Governmental
Authority or private arbitrator pending or, to the knowledge of each Loan
Party, overtly threatened against such Loan Party or any of its assets (i)
challenging the validity or the enforceability of any of the Loan Documents or
transactions contemplated thereby or (ii) in which there is a reasonable
possibility of an adverse determination and which, if adversely determined,
will or is reasonably likely to result in any Material Adverse Effect.  There is no material loss contingency within
the meaning of GAAP which has not been reflected in the financial statements of
the Borrower and its Subsidiaries and which will or is reasonably likely to
result in any Material Adverse Effect. 
No Loan Party is (A) in violation of any applicable Requirements of Law
which violation will have or is reasonably likely to have a Material Adverse
Effect or (B) subject to, or in default with respect to, any final judgment,
writ, injunction, restraining order or order of any nature, decree, rule or
regulation of any court or Governmental Authority which will have or is reasonably
likely to have a Material Adverse Effect.

(k)           No
Material Adverse Effect.  Since
December 31, 2005, there has occurred no event which has had or is reasonably
likely to have a Material Adverse Effect.

(l)            Payment
of Taxes.  All tax returns and
material reports required to be filed by the Borrower have been timely filed,
and all taxes, assessments, fees and other governmental charges shown on such
returns have been paid when due and payable, except such taxes, if any, as are
reserved against in accordance with GAAP and are being contested in good faith
by appropriate proceedings.

(m)          Disclosure.  The representations and warranties of each
Loan Party contained in the Loan Documents and all certificates and other
documents delivered pursuant to the terms thereof, do not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading in any material respect.

(n)           Requirements
of Law.  Each Loan Party is in
compliance in all material respects with all Requirements of Law applicable to
it and its business.

(o)           Environmental
Matters.  To each Loan Party’s
knowledge, upon inquiry and investigation completed by such Loan Party as
diligently and as thoroughly as would reasonably be required to determine any
facts relevant to the representations set forth herein, and except as set forth
in Section 6.01(O) of 

 46
 

 

 

the Disclosure Letter hereto, (i) such Loan
Party and its operations and real property comply in all respects with all
applicable Environmental, Health or Safety Requirements of Law, except where
noncompliance has not resulted in or would not be reasonably likely to have a
Material Adverse Effect; (ii) such Loan Party has obtained all environmental,
health and safety Permits necessary for its operations and Property and all
such Permits are in good standing and such Loan Party is in compliance with all
terms and conditions of such Permits except such as has not resulted in or
would not be reasonably likely to have a Material Adverse Effect; (iii) no Loan
Party nor its operations is subject to any order from or written agreement with
any Governmental Authority or private party or any judicial or administrative
proceeding or investigation respecting any Environmental, Health or Safety
Requirements of Law or any Release or threatened Release of a Contaminant into
the indoor or outdoor environment except such as has not resulted in or would
not be reasonably likely to have a Material Adverse Effect; (iv) no Loan Party
nor its operations is subject to any Remedial Action or other Liabilities and
Costs arising from the Release or threatened Release of a Contaminant into the
indoor or outdoor environment except such as has not resulted in or would not
be reasonably likely to have a Material Adverse Effect; (v) no Loan Party has
filed any notice under any Requirement of Law indicating treatment, storage or
disposal of a hazardous waste, as that term is defined under 40 CFR Part 261 or
any applicable state equivalent except such as has not resulted in or would not
be reasonably likely to have a Material Adverse Effect; (vi) no Loan Party has
filed any notice under applicable Requirement of Law reporting any unresolved
Release of a Contaminant into the indoor or outdoor environment except such as
has not resulted in or would not be reasonably likely to have a Material
Adverse Effect; (vii) no Environmental Liens have attached to any Property of
any Loan Party securing obligations, individually or in the aggregate, in an
amount of $25,000,000 or more; (viii) no Loan Party has received any written
notice or claim to the effect that it is or may be liable to any Person as a
result of the Release or threatened Release of a Contaminant into the indoor or
outdoor environment except such as has not resulted in or would not be
reasonably likely to have a Material Adverse Effect; and (ix) no transaction
contemplated by this Agreement is subject to any Environmental Property
Transfer Act.

(p)           ERISA.  Each Plan which is intended to be qualified
under Section 401(a) of the Code as currently in effect has been determined by
the IRS to be so qualified, and each trust related to any such Plan has been so
determined to be exempt from federal income tax under Section 501(a) of the
Code as currently in effect, except for changes for which the remedial
amendment period has not expired. 
Neither the Borrower nor any ERISA Affiliate maintains or contributes to
any employee welfare benefit plan within the meaning of Section 3(1) of ERISA,
other than a Multiemployer Plan, which provides benefits to employees after
termination of employment other than as required under Part 6 of Title I of
ERISA or any applicable state law.  Each
of the Borrower and its Subsidiaries is in compliance in all material respects
with the responsibilities, obligations or duties imposed on it by ERISA or
regulations promulgated thereunder with respect to all Plans.  No accumulated funding deficiency (as defined
in Section 302(a)(2) of ERISA and Section 412(a) of the Internal Revenue Code)
exists in respect to any Benefit Plan. 
Except as set forth on Section 6.01(P) of the Disclosure Letter, neither
the Borrower nor any ERISA Affiliate nor any fiduciary of any Plan (i) has
engaged in a nonexempt “prohibited transaction” described in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code or (ii) has taken any action
which would constitute or result in a Termination Event with respect to any
Plan which would result in a material liability to the Borrower or an ERISA
Affiliate.  Neither the Borrower nor any
ERISA Affiliate has incurred any material liability to the PBGC which has not
been paid within the applicable period permitted by law.  Schedule B to the most recent annual report
filed with the IRS with respect to each Benefit Plan and furnished to the
Administrative Agent is complete and accurate in all material respects.  Since the date of each such Schedule B, there
has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B which would result in
a Material Adverse Effect.  Neither the
Borrower nor any ERISA Affiliate has failed to make any required installment
under subsection (m) of Section 412 of the Code and any other payment required
under Section 412 of the Code on or before the due date for such installment or
other payment which could reasonably be expected to result in a lien under
Section 412 of the Code.  Neither the
Borrower nor any ERISA Affiliate is required to provide security to a Benefit
Plan under Section 401(a)(29) of the Internal Revenue Code due to a Plan
amendment that results in an increase in current liability for the plan
year.  The Borrower and its Subsidiaries
and its ERISA Affiliates are current with respect to all obligations they may
have relating to any Multiemployer Plan to which they are or have been
obligated to contribute.  Neither the
Borrower nor any ERISA Affiliate has or is likely to incur any withdrawal
liability with respect to any Multiemployer Plan which would have a Material
Adverse Effect.

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(q)           Labor
Matters.  No Loan Party is a party to
any labor contract as of the Closing Date. 
As of the Closing Date, there are no strikes, lockouts or other disputes
relating to any collective bargaining or similar agreement to which such Loan
Party is a party which would have or is reasonably likely to have a Material
Adverse Effect.

(r)            Securities
Activities.  No Loan Party is engaged
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock.

(s)           Solvency.  After giving effect to the receipt and
application of the Loans in accordance with the terms of this Agreement, each
Loan Party is Solvent.

(t)            Patents,
Trademarks, Permits, etc.; Government Approvals.

(i)      Each Loan Party owns, is licensed or, to
the Borrower’s knowledge, otherwise has the lawful right to use the permits and
other governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes necessary for the conduct of its business as
currently conducted which are material to its condition (financial or
otherwise), operations and performance, except where the failure to do so will
not or is not reasonably likely to result in a Material Adverse Effect.  There are no claims pending or, to such Loan
Party’s knowledge, overtly threatened that such Loan Party is infringing or
otherwise adversely affecting the rights of any Person with respect to such
permits and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes, except for such claims and
infringements as do not, in the aggregate, give rise to any liability on the
part of such Loan Party which has or is reasonably likely to have a Material
Adverse Effect.

(ii)     The consummation of the transactions
contemplated by the Loan Documents will not impair such Loan Party’s ownership
of or rights under (or the license or other right to use, as the case may be)
any permits and governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how or processes in any manner which has or is
reasonably likely to have a Material Adverse Effect.

(u)           Assets
and Properties.  Each Loan Party has
good and marketable or merchantable title to all of its owned assets and
property (tangible and intangible), and all such assets and property are free
and clear of all Liens except Liens permitted under Section 9.03.  Substantially all of the assets and property
owned by, leased to or used by such Loan Party are in good operating condition
and repair, ordinary wear and tear excepted, are free and clear of any known
defects except such defects as do not substantially interfere with the
continued use thereof in the conduct of normal operations, and are able to
serve the function for which they are currently being used, except in each case
where the failure of such asset to meet such requirements would not have or is
not reasonably likely to have a Material Adverse Effect.  Neither this Agreement nor any other Loan
Document, nor any transaction contemplated under any Loan Document, will affect
any right, title or interest of such Loan Party in and to any of such assets in
a manner that would have or is reasonably likely to have a Material Adverse
Effect.

(v)           Insurance.  Section 6.01(V) of the Disclosure Letter
accurately sets forth all insurance policies and programs currently in effect
as of the Closing Date with respect to the respective property and assets and
business of the Borrower and its Subsidiaries, specifying for each such policy
and program, (i) the amount thereof and the amount of the deductible relating
thereto, (ii) the risks insured against thereby, (iii) the name of the insurer
and each insured party thereunder, (iv) the policy or other identification number
thereof, (v) the expiration date thereof, (vi) the annual premium with respect
thereto and (vii) the current rating of such insurer by A.M.  Best or an established rating agency
reasonably satisfactory to the Administration Agent.

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ARTICLE VII

REPORTING COVENANTS

The Borrower covenants and agrees so long as any Term
Loan Commitment or Revolving Loan Commitment is outstanding and thereafter
until payment in full of the Obligations:

7.01         Financial Statements. 
Each Loan Party shall maintain a system of accounting established and administered
in accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP, and each of the financial statements
described below shall be prepared from such system and records.  The Borrower shall deliver or cause to be
delivered to the Administrative Agent:

(a)           Quarterly
Reports.  As soon as practicable, and
in any event within forty-five (45) days after the end of each of the first
three fiscal quarters in each Fiscal Year, consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such period and the related
consolidated statements of income and cash flow of the Borrower and its
Subsidiaries for such fiscal quarter, certified by the Chief Financial Officer
of the Borrower as fairly presenting the financial position of the Borrower as
at the dates indicated and the results of its operations and cash flow for the
fiscal quarter indicated in accordance with GAAP, subject to normal year-end
adjustments and the absence of complete footnote disclosure, provided
that, so long as the Borrower files quarterly reports on Form 10-Q with the
Commission, the delivery of such Form 10-Q for such fiscal quarter shall
satisfy the requirements of this Section 7.01(a).

(b)           Annual
Reports.  As soon as practicable, and
in any case within ninety (90) days after the end of such Fiscal Year, (i) the
audited consolidated (and unaudited consolidating) balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and the related
audited consolidated (and unaudited consolidating) statements of income and
audited consolidated statement of cash flow of the Borrower and its
Subsidiaries for such Fiscal Year, provided that, so long as the
Borrower files an annual report on Form 10-K with the Commission, the delivery
of such Form 10-K for such annual period accompanied by unaudited consolidating
balance sheets and statements of income of the Borrower and its Subsidiaries
shall satisfy the requirements of this Section 7.01(b)(i), and (ii) a
report thereon of PricewaterhouseCoopers, LLP or any of KPMG LLP, Ernst &
Young LLP, or Deloitte & Touche LLP, which report shall be unqualified and
shall state that such financial statements fairly present the financial
position of the Borrower as at the dates indicated and the results of its
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (or containing disclosure of the
effect on the financial condition or results of operations of any change in the
application of accounting practices during such year) and that the examination
by such accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards.

(c)           Officer’s
Certificate; Compliance Certificate. 
Together with each delivery of any financial statement pursuant to
subsections (a) and (b) of this Section 7.01, (i) an Officer’s
Certificate substantially in the form of Exhibit G attached hereto and
made a part hereof, stating that such officer has reviewed the terms of the
Loan Documents and has made, or caused to be made under his supervision, a review
in reasonable detail of the transactions and consolidated financial condition
of the Borrower during the accounting period covered by such financial
statements, that such review has not disclosed the existence during or at the
end of such accounting period, and that such officer does not have knowledge of
the existence as at the date of such Officer’s Certificate, of any condition or
event which constitutes an Event of Default or Default, or, if any such
condition or event existed or exists, specifying the nature and period of
existence thereof and what action the Borrower has taken, is taking and
proposes to take with respect thereto and (ii) a certificate substantially in
the form of Exhibit H attached hereto and made a part hereof (the “Compliance
Certificate”), signed by the Borrower’s Chief Financial Officer, setting
forth calculations (with such specificity as the Lenders may reasonably
request) for the period then ended which demonstrate compliance, when
applicable, with the provisions of Article IX and Article X.

(d)           Budgets;
Business Plans; Financial Projections. 
As soon as practicable and in any event not later than the 60th day
following the beginning of each Fiscal Year, (i) a quarterly budget of the Borrower
and its Subsidiaries 

 49
 

 

 

for such Fiscal Year; (ii) an annual business
plan of the Borrower and its Subsidiaries for such Fiscal Year, accompanied by
a report explaining the changes and departures from the business plan delivered
to the Administrative Agent and the Lenders for the preceding Fiscal Year; and
(iii) a plan and financial forecast, prepared in accordance with the Borrower’s
normal accounting procedures applied on a consistent basis, for such Fiscal
Year and for the two (2) succeeding Fiscal Years of the Borrower, including, without
limitation, (A) a forecasted balance sheet of the Borrower as at the end of
such Fiscal Year and (B) forecasted statements of income and cash flow of the
Borrower for such Fiscal Year.

7.02         Management Reports. 
The Borrower shall deliver or cause to be delivered to the
Administrative Agent copies of any management reports delivered to any Loan
Party or to any officer or employee thereof by the independent, certified
public accountants in connection with the financial statements delivered
pursuant to Section 7.01.

7.03         Other Financial Information.

(a)           To
the extent not readily obtainable through public filings, the Borrower shall
deliver or cause to be delivered to the Administrative Agent, such other
information, reports, contracts, schedules, lists, documents, agreements and
instruments with respect to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any Loan Party as any
Lender may, from time to time, reasonably request  through the Administrative Agent.

(b)           The
Borrower shall deliver or cause to be delivered to the Administrative Agent
copies of all financial statements, reports and notices, if any, sent or made
available generally by the Borrower to the holders of its publicly-held
Securities or to a trustee under any indenture or filed by the Borrower with
the Commission, and of all press releases made available generally by the
Borrower to the public concerning material developments in the Borrower’s
business.

7.04         Defaults and Other Events.  Promptly
upon any Loan Party obtaining knowledge (i) of any condition or event which
constitutes a Default or an Event of Default, (ii) that any Person has given
any notice to any Loan Party or taken any other action with respect to a
claimed default or event or condition of the type referred to in Section
11.01(e) or (iii) of any condition or event which has or is reasonably
likely to have a Material Adverse Effect, such Loan Party shall deliver to the
Administrative Agent and the Lenders an Officer’s Certificate specifying (A)
the nature and period of existence of any such claimed default, Event of
Default, Default, condition or event, (B) the notice given or action taken by
such Person in connection therewith and (C) what action the Borrower and such
Loan Party have taken, are taking and propose to take with respect thereto.

7.05         Lawsuits. 
Promptly upon any Loan Party obtaining knowledge of the institution of
(i) any action, suit, proceeding or arbitration against or affecting such Loan
Party or any asset of such Loan Party (which action, suit, proceeding or
arbitration is reasonably likely to result in a Material Adverse Effect) not
previously disclosed pursuant to Section 6.01(J) or 6.01(O) of the Disclosure
Letter or required to be publicly disclosed, the Borrower or such Loan Party
shall give written notice thereof to the Administrative Agent and the Lenders
and provide such other information as may be reasonably available to enable
each Lender and the Administrative Agent to evaluate such matters except, in
each case, where the same is fully covered by insurance (other than applicable
deductible); and (ii) in addition to the requirements set forth in clause (i)
of this Section 7.05, the Borrower upon request of the Administrative
Agent or the Requisite Lenders shall promptly give written notice of the status
of any action, suit, proceeding, governmental investigation or arbitration
covered by a report delivered pursuant to clause (i) above and provide such
other information as may be reasonably available to it to enable each Lender
and the Administrative Agent to evaluate such matters.

7.06         ERISA Notices. 
The Borrower shall deliver or cause to be delivered to the Administrative
Agent:

(i)      As soon as possible, and in any event
within ten (10) days after either the Borrower or an ERISA Affiliate knows or
has reason to know that a Termination Event has occurred, a written statement
of the Chief Financial Officer of the Borrower describing such Termination
Event and the action, if any, which the Borrower or such ERISA Affiliate has
taken, is taking or proposes to take, with respect thereto, and, when known,
any action taken or threatened by the IRS, the DOL or the PBGC with respect
thereto;

 50
 

 

 

(ii)     as soon as possible, and in any event
within ten (10) days, after either the Borrower or an ERISA Affiliate knows or
has reason to know that a non-exempt prohibited transaction (defined in Section
406 of ERISA and Section 4975 of the Code) that would result in a material
liability to the Borrower or an ERISA Affiliate has occurred, a statement of
the Chief Financial Officer of the Borrower describing such transaction;

(iii)    within ten (10) days after the filing
thereof with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by either the Borrower or
an ERISA Affiliate with respect to such request;

(iv)    promptly upon, and in any event within ten
(10) days after, receipt by either the Borrower or an ERISA Affiliate of a
notice of the PBGC’s intention to terminate a Benefit Plan or to have a trustee
appointed to administer a Benefit Plan, copies of each such notice;

(v)     promptly upon, and in any event within ten
(10) days after, receipt by either the Borrower or an ERISA Affiliate of an
unfavorable determination letter from the IRS regarding the qualification of a
Plan under Section 401(a) of the Code, a copy of said determination letter, if
such disqualification would result in a material liability to the Borrower or
any of its Subsidiaries;

(vi)    promptly upon, and in any event within ten
(10) days after receipt by the Borrower of a notice from a Multiemployer Plan
regarding the imposition of material withdrawal liability, a copy of said
notice; and

(vii)   promptly upon, and in any event within ten
(10) days after, the Borrower or any of its Subsidiaries fails to make a
required installment under subsection (m) of Section 412 of the Code or any
other payment required under Section 412 of the Code on or before the due date
for such installment or payment, a notification of such failure, if such
failure could result in either the imposition of a Lien under said Section 412
or otherwise have a Material Adverse Effect on the Borrower or any of its
Subsidiaries.

7.07         Environmental Notices. 
The Borrower shall notify the Administrative Agent, in writing,
promptly, and in any event within ten (10) days after any Loan Party’s learning
thereof, of any of the following (subject to the last sentence of this Section
7.07):  (i) written notice or claim
to the effect that such Loan Party is or may be liable to any Person as a
result of the Release or threatened Release of any Contaminant into the indoor
or outdoor environment; (ii) written notice that such Loan Party is subject to
investigation by any Governmental Authority evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any
Contaminant into the indoor or outdoor environment; (iii) written notice that
any Property of such Loan Party is subject to an Environmental Lien; (iv)
written notice of violation to such Loan Party or awareness by the Borrower or
such Loan Party of a condition which might reasonably result in a notice of
violation to such Loan Party of any Environmental, Health or Safety Requirement
of Law, which could have a Material Adverse Effect on the Borrower or such Loan
Party; (v) commencement or written threat of any judicial or administrative
proceeding alleging a violation of any Environmental, Health or Safety
Requirement of Law; (vi) new or proposed changes to any existing Environmental,
Health or Safety Requirement of Law that could have a Material Adverse Effect
on the operations of the Borrower or such Loan Party; or (vii) any proposed
acquisition of stock, assets, real estate or leasing of property, or any other action
by the Borrower or such Loan Party that could subject the Borrower or such Loan
Party to Environmental, Health or Safety Liabilities and Costs that could have
a Material Adverse Effect.  For purposes
of clauses (i), (ii) and (iii), written notice shall include other non-written
communications given to an agent or employee of the Borrower or such Loan Party
with direct or indirect supervisory responsibility with respect to the
activity, if any, which is the subject of such communication, if such activity
could have a Material Adverse Effect. 
With respect to clauses (i) through (vii) above, such notice shall be
required only if (A) the liability or potential liability, or with respect to
clause (vi), the cost or potential cost of compliance, which is the subject
matter of the notice is likely to exceed $35,000,000, or if (B) such liability
or potential liability or cost of compliance when added to other liabilities of
the Borrower and its Subsidiaries of the kind referred to in clauses (i)
through (vii) above is likely to exceed $75,000,000.

7.08         FDA Notices.  The
Borrower shall provide to the Administrative Agent (to the extent not otherwise
required to be provided pursuant to Section 7.05):

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(a)           promptly
after the same become available to the Borrower, with respect to each manufacturing
facility of the Borrower or its Subsidiaries, all warning letters alleging
violations of FDA regulatory requirements at such manufacturing facility that
would be required to be publicly disclosed by the Borrower in a filing with the
Commission as determined by the Borrower;

(b)           promptly
after the same become available to the Borrower, with respect to each manufacturing
facility of the Borrower or its Subsidiaries, all inspectional observations
recorded on a Form FD 483 and issued by the FDA at the conclusion of any FDA
inspections of such facility (other than pre-approval inspections and
post-approval inspections) that would be required to be publicly disclosed by
the Borrower in a filing with the Commission as determined by the Borrower; and

(c)           all
written responses to the FDA by or on behalf of the Borrower or its
Subsidiaries concerning alleged violations of FDA regulatory requirements
contained in warning letters or Form FD 483s referred to in subsections (a) or
(b) of this Section 7.08.

7.09         Labor Matters. 
The Borrower shall notify the Administrative Agent in writing, promptly,
but in any event within ten (10) days after learning thereof, of (i) any
material labor dispute to which any Loan Party may become a party, any strikes,
lockouts or other disputes relating to any Loan Party’s plants and other
facilities and (ii) any material liability incurred with respect to the closing
of any plant or other facility of any Loan Party.

7.10         Other Information. 
Promptly upon receiving a request therefor from the Administrative Agent
or the Requisite Lenders, the Borrower and its Subsidiaries shall prepare and
deliver to the Administrative Agent such other information with respect to any
Loan Party as from time to time may be reasonably requested by the Administrative
Agent or the Requisite Lenders.

ARTICLE VIII

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees so long as any Term
Loan Commitment or Revolving Loan Commitment is outstanding and thereafter
until payment in full of the Obligations and the expiration of all Letters of
Credit:

8.01         Existence, etc. 
Each Loan Party shall at all times maintain its existence and preserve
and keep, or cause to be preserved and kept, in full force and effect its
rights and franchises material to its businesses except where the loss or
termination of such rights and franchises does not have or is not likely,
individually or in the aggregate, to have a Material Adverse Effect.

8.02         Powers; Conduct of Business.  Each Loan Party shall qualify and remain
qualified to do business in each jurisdiction in which the nature of its
business requires it to be so qualified except for those jurisdictions where
failure to so qualify does not have or is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect.

8.03         Compliance with Laws, etc. 
Each Loan Party shall (i) comply with all Requirements of Law and all
restrictive covenants affecting such Person or the business, property, assets
or operations of such Person and (ii) obtain as needed all Permits necessary
for its operations and maintain such Permits in good standing except in the
case where noncompliance with either clause (i) or (ii) above does not have or
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect.

8.04         Payment of Taxes and Claims.  Each Loan Party shall pay (i) all taxes,
assessments and other governmental charges imposed upon it or on any of its
properties or assets or in respect of any of its franchises, business, income
or property before any penalty or interest accrues thereon, the failure to make
payment of which will have or is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect, and (ii) all claims (including,
without limitation, claims for labor, services, materials and supplies) for
sums which have become due and payable prior to the same becoming subject to a
Lien upon any of such Person’s properties or assets and prior to the time when
any penalty or fine shall be incurred with respect thereto, the failure to make
payment of which will 

 52
 

 

 

have or is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect; provided,
however, that no such taxes, assessments and governmental charges
referred to in clause (i) above or claims referred to in clause (ii) above need
be paid if being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if adequate reserves shall have been
set aside therefor in accordance with GAAP.

8.05         Insurance.  Each
Loan Party shall maintain, with financially sound and reputable insurers, insurance
in such amounts and against such liabilities and hazards as customarily is
maintained by other companies operating similar businesses.

8.06         Inspection of Property; Books and
Records; Discussions.  Each Loan Party shall permit any authorized
representative(s) designated by the Administrative Agent to visit and inspect
any of the assets of such Loan Party, to examine, audit, check and make copies
of its financial and accounting records, books, journals, orders, receipts and
any correspondence and other data relating to its businesses or the
transactions contemplated by the Loan Documents (including, without limitation,
in connection with environmental compliance, hazard or liability), to discuss
such Person’s affairs, finances and accounts with its officers and, in the
presence of an officer of such Loan Party, independent certified public
accountants, all upon reasonable notice and at such reasonable times during normal
business hours, once each fiscal year; provided, however, that
upon the occurrence and during the continuance of an Event of Default each Loan
Party shall permit any authorized representative(s) designated by the Administrative
Agent or any Lender to do all of the foregoing without notice, at any time and
as often as the Administrative Agent or any Lender may request.  Each such visitation and inspection (i) by or
on behalf of any Lender shall be at such Lender’s expense and (ii) by or on
behalf of the Administrative Agent shall be at the Borrower’s expense.  Each Loan Party shall keep and maintain in
all material respects proper books of record and account in which entries in
conformity with GAAP subject to normal year-end audit adjustments and the
absence of complete footnote disclosure shall be made of all dealings and
transactions in relation to its businesses and activities.

8.07         ERISA Compliance. 
The Borrower shall, and shall cause to the best of its ability, each
ERISA Affiliate to, establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA, the Code, all other applicable
laws, and the regulations and interpretations thereunder and the respective requirements
of the governing documents for such Plans except where the failure to do so
will not have or is not reasonably likely to have a Material Adverse Effect.

8.08         Maintenance of Property. 
Each Loan Party shall maintain in all material respects its owned and
leased property in good condition and repair (ordinary wear and tear excepted)
and in accordance with any applicable manufacturers’ specifications and
recommendations, and not permit, commit or suffer any waste (except in the ordinary
course of business) or abandonment of any such property and from time to time
shall make or cause to be made all repairs, renewal and replacements thereof,
except where the failure to make such repairs, renewals and replacements would
not have or is not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect; provided, however, that such property
may be altered, renovated or discarded in the ordinary course of business.

8.09         Maintenance of Licenses, Permits, etc.  Each Loan Party shall maintain in full force
and effect all licenses, permits, governmental approvals, franchises,
authorizations or other rights necessary for the operation of its business,
except where the failure to obtain any of the foregoing would not have or is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect; and notify the Administrative Agent in writing, promptly after
learning thereof, of the suspension, cancellation, revocation or discontinuance
of or of any pending or overtly threatened action or proceeding seeking to
suspend, cancel, revoke or discontinue any such license, permit, governmental
approval, franchise authorization or right where such action will have or is
reasonably likely to have a Material Adverse Effect.

8.10         Loan Party.

(a)           The
Borrower will at all times maintain Guaranties from each Subsidiary that, at
any time from and after the Closing Date, accounts for at least 5% of the
Borrower’s EBITDA on a consolidated basis (calculated as of the last day of the
Borrower’s and the Guarantors’ most recently ended fiscal quarter for the four
consecutive fiscal quarters ending with such fiscal quarter), provided
that Subsidiaries that account for less than 5% of such EBITDA shall execute
Guaranties as well to the extent necessary such that as of the end of each
fiscal quarter the 

 53
 

 

 

aggregate EBITDA of the Borrower and the Guarantors (calculated as of
the last day of the Borrower’s and the Guarantors’ most recently ended fiscal
quarter for the four consecutive fiscal quarters ending with such fiscal quarter)
do not constitute less than 90% of the aggregate EBITDA of the Borrower and its
Subsidiaries (calculated as of the last day of the Borrower’s and its Subsidiaries’
most recently ended fiscal quarter for the four consecutive fiscal quarters
ending with such fiscal quarter); provided that, in no event shall any
SPV be required to become a Guarantor hereunder if its guaranty of any
Indebtedness of the Borrower would violate any of the Receivables Purchase
Documents.  Each Subsidiary that is
required to become a Guarantor after the Closing Date pursuant to this Section
8.10(a) shall execute a Guaranty and an Acknowledgment of New Loan Party.  Each Subsidiary that executes a Guaranty or
any supplement or amendment thereto shall promptly deliver such Guaranty,
supplement or amendment to the Administrative Agent.

(b)           In
the event of a sale or other disposition of all or substantially all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the Capital Stock of any Guarantor, in each
case to a Person that is not (either before or after giving effect to such
transactions) an Affiliate of the Borrower, then such Guarantor (in the event
of a sale or disposition, by way of merger, consolidation or otherwise, of all
of the Capital Stock of such Guarantor) or the Person acquiring the property
(in the event of a sale or other disposition of all or substantially all of the
assets of such Guarantor) will be released and relieved of any obligations
under its respective Guaranty, provided that after such release, the
Borrower remains in compliance with Section 8.10(a).

ARTICLE IX

NEGATIVE COVENANTS

The Borrower covenants and agrees so long as any Term
Loan Commitment or Revolving Loan Commitment is outstanding and thereafter
until payment in full of the Obligations and the expiration of all Letters of
Credit:

9.01         Indebtedness. 
The Loan Parties shall not, directly or indirectly, create, incur,
assume or otherwise become or remain liable with respect to any Indebtedness,
except:

(i)      the Obligations;

(ii)     trade payables in the ordinary course of
business;

(iii)    Permitted Existing Indebtedness;

(iv)    to the extent permitted by Section 9.13,
obligations under Capital Leases and purchase money Indebtedness incurred by
the Loan Parties to finance the acquisition of Property if, when added to all
other obligations and Indebtedness created, incurred or assumed under this
clause (iv), the aggregate amount of such obligations and Indebtedness does not
exceed 15% of Net Worth at such time;

(v)     Indebtedness (including Accommodation
Obligations) owing by a Loan Party to the Borrower or any Subsidiary;

(vi)    Accommodation Obligations that are permitted
under Section 9.05;

(vii)   Interest Rate Contracts with respect to the
Loans, and other Interest Rate Contracts entered into for bona fide hedging
activity and not for speculative purposes;

(viii)  other unsecured Indebtedness incurred in an
aggregate principal amount not to exceed $100,000,000 outstanding at any time;

(ix)    foreign exchange contracts entered into for
the purpose of hedging foreign exchange risk;

 

 54

 

(x)     Attributable Debt or Receivables Facility
Attributable Indebtedness if, when added to all other Attributable Debt and
Receivables Facility Attributable Indebtedness created, incurred or assumed
under this clause (x), the aggregate amount outstanding does not exceed 15% of
Net Worth;

(xi)    Indebtedness incurred by a Loan Party that
has operations outside of the United States, provided that the aggregate
amount of such Indebtedness does not exceed $40,000,000 at any time;

(xii)   Indebtedness of any Person existing
immediately prior to its being consolidated with or merged into the Borrower or
a Subsidiary or its becoming a Subsidiary; provided that such
Indebtedness shall not have been created or assumed in contemplation of such
consolidation or merger or such Person’s becoming a Subsidiary; and provided
further that immediately after any such Indebtedness is acquired or
assumed under this clause (xii), the aggregate principal amount of all
Indebtedness acquired or assumed under this clause (xii) does not exceed 15% of
Net Worth at such time;

(xiii)  refinancings, extensions or other
modifications of any of the items of Indebtedness described in clauses (iii),
(iv), (v), (vi), (viii), (x) or (xii) above, provided that the principal
amount thereof outstanding at such time is not increased and that the terms of
such refinancing, extensions or modifications are not materially adverse to the
Lenders; and

(xiv)  Indebtedness incurred by a Loan Party, all of
the net proceeds of which are used substantially simultaneously to repay
amounts due on the Convertible Contingent Senior Debentures if the holders
thereof exercise their right to require the Borrower to repurchase the
securities as provided in the Convertible Contingent Senior Debenture Indenture
on or after March 15, 2010, provided that no amount of such Indebtedness
other than interest shall be permitted to be repaid at a date earlier than one
year after the later of the Term Loan Maturity Date and the Revolving Loan
Maturity Date.

9.02         Sales of Assets. 
The Loan Parties shall not, directly or indirectly, sell, assign,
transfer, lease, convey or otherwise dispose of any assets, whether now owned
or hereafter acquired, or enter into any agreement to do so, except:

(i)      sales of inventory or marketable
securities in the ordinary course of business;

(ii)     the disposition of Property if such
Property is obsolete or no longer used in or useful in the ordinary course of
such Loan Party’s business;

(iii)    leases, subleases, licenses and sublicenses
of Property to other persons in the ordinary course of business;

(iv)    the transactions set forth in Section
9.02(iv) of the Disclosure Letter;

(v)     the sale of Property, provided that
(A) the value of such Property does not exceed 15% of Net Worth at the time of
such sale and (B) when added to all other Property sold, assigned, transferred,
leased, conveyed or otherwise disposed of under this clause (v), the aggregate
amount does not exceed 20% of Net Worth during any twelve-month period;

(vi)    the transactions set forth in Section 9.02(vi)
of the Disclosure Letter;

(vii)   any sale of assets required by a Governmental
Authority in connection with the acquisition of other assets, including,
without limitation, as required in connection with the Acquisition;

(viii)  the sale or transfer of Property pursuant to a
transaction permitted under Section 9.10;

(ix)    any transfer of an interest in Receivables
and Related Security on a limited recourse basis under the Receivables Purchase
Documents, provided that such transfer qualifies as a legal sale and as
a sale under Agreement Accounting Principles; and

 55
 

 

 

(x)     other sales of assets with an aggregate
market value not in excess of $20,000,000 in any Fiscal Year; provided
that, notwithstanding clauses (i) through (ix) above, in no instance shall any
Loan Party, directly or indirectly, sell, assign, transfer, lease, convey or
otherwise dispose of any accounts receivable of such Loan Party, except (a) for
assignments in the ordinary course of business of past due accounts receivable
for collection, (b) as may be required under clause (vii) above and (c) as may
be permitted under clause (ix) above.

9.03         Liens.  The Loan Parties shall not, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with
respect to their Property, except:

(i)      Permitted Existing Liens;

(ii)     Customary Permitted Liens;

(iii)    Liens securing Indebtedness permitted under Section
9.01(iv), provided that the Lien extends only to the property
subject to such Capital Leases or the acquired Property, Liens securing Indebtedness
under Section 9.01(xi), provided that the Lien extends to
Property outside the United States, and Liens in favor of a Loan Party securing
Indebtedness under Section 9.01(v);

(iv)    leases or subleases and licenses or
sublicenses granted to others, in each case incidental to, and not interfering
with, the ordinary conduct of the business of the Borrower and its Subsidiaries;

(v)     rights of setoff and similar arrangements
and Liens in favor of depository institutions and securities intermediaries to secure
customary fees and similar amounts related to bank accounts or securities
accounts;

(vi)    any Lien existing on Property of a Person
immediately prior to its being consolidated with or merged into the Borrower or
a Subsidiary or its becoming a Subsidiary, or any Lien existing on Property
acquired by the Borrower or any Subsidiary at the time such Property is so
acquired (whether or not the Indebtedness secured thereby shall have been
assumed); provided that (A) no such Lien shall have been created or assumed
in contemplation of such consolidation or merger or such Person’s becoming a
Subsidiary or such acquisition of Property and (B) each such Lien shall extend
solely to the item or items of Property so acquired and, if required by the
terms of the instrument originally creating such Lien, other property which is
an improvement to or is acquired for specific use in connection with such
Property;

(vii)   Liens not otherwise permitted by the other
clauses of this Section 9.03 securing Indebtedness at any time
outstanding in an aggregate amount not to exceed 15% of Net Worth;

(viii)  attachment and judgment Liens that do not
constitute an Event of Default pursuant to Section 11.01(h); and

(ix)    any Lien renewing, extending or refunding
any Lien permitted by clauses (i) through (vii), provided that such Lien
is not extended to any other Property.

9.04         Investments.  The
Loan Parties shall not, directly or indirectly, make any Investment (other than
(i) Investments made in the ordinary course of business and (ii) Investments
required in connection with the Receivables Purchase Documents) if, immediately
before and after giving effect to such Investment, an Event of Default shall
have occurred and be continuing.

9.05         Accommodation Obligations.  The Loan Parties shall not, directly or
indirectly, create or become or be liable with respect to any Accommodation
Obligation, except:

(i)      recourse obligations resulting from
endorsement of negotiable instruments for collection in the ordinary course of
business;

 56
 

 

 

(ii)     the Guaranties and guaranties of the
Convertible Contingent Senior Debentures;

(iii)    Accommodation Obligations in respect of
obligations of customers and suppliers in an aggregate amount not to exceed
$50,000,000 at any time;

(iv)    Accommodation Obligations in Strategic
Partners, provided that the aggregate amount of all such Accommodation
Obligations made, created or assumed under this clause (iv) does not exceed 10%
of Net Worth;

(v)     Accommodation Obligations in respect of
Indebtedness owing by a Loan Party to the Borrower or any Subsidiary;

(vi)    Accommodation Obligations in respect of
Indebtedness owing by Subsidiaries that are not Loan Parties in an aggregate
amount not to exceed 5% of Net Worth;

(vii)   Accommodation Obligations in the ordinary
course of business with respect to the loans of officers, directors and
employees of a Loan Party in an aggregate amount not to exceed $15,000,000 at
any time;

(viii)  Accommodation Obligations of the Borrower or
any of its Subsidiaries arising under the Receivables Purchase Documents; and

(ix)    Accommodation Obligations with respect to
Indebtedness of Loan Parties otherwise permitted under Section 9.01.

9.06         Restricted Payments. 
The Loan Parties shall not, directly or indirectly, declare or make any
Restricted Payments, except that any Loan Party may make dividends and other
distributions to the Borrower or another Loan Party, and except that the
Borrower may, so long as (i) no Event of Default has occurred and is continuing
and (ii) on a Pro Forma Basis immediately after giving effect to such
Restricted Payment the Leverage Ratio would not exceed 25 basis points less
than the maximum Leverage Ratio permitted pursuant to Section 10.03,
make other Restricted Payments in an aggregate amount from and after the
Closing Date not to exceed $150,000,000 plus 25% of cumulative EBITDA from June
30, 2006 to such date.

9.07         Change in Nature of Business.  The Loan Parties shall not make any material
change in the nature or conduct of their Business in general.

9.08         Transactions with Affiliates.  None of the Loan Parties shall, directly or
indirectly, enter into or permit to exist any transaction with any Affiliate of
such Loan Party except for (i) transactions in existence as of the date hereof
and described in Section 9.08 of the Disclosure Letter, (ii) transactions
between or among the Loan Parties, (iii) transactions the terms of which are
not less favorable to such Loan Party than those that might be obtained in an
arm’s length transaction at the time from a Person who is not an Affiliate,
(iv) reimbursement for reasonable salaries, bonuses and other compensation paid
to officers, directors and managers of such Loan Party commensurate with
salary, bonus and compensation levels of other companies engaged in a similar
business in similar circumstances and (v) Permitted Receivables Transfers.

9.09         Restriction on Fundamental Changes.  No Loan Party shall merge
into or consolidate with any other Person, or permit any other Person to merge
into it, or liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution), or convey, lease, sell, transfer or otherwise dispose of, in one
transaction or series of transactions, all or substantially all of its business
or assets, whether now or hereafter acquired except that:

(i)      Any Loan Party may merge or consolidate
into, or liquidate or dissolve into, the Borrower, provided that the
Borrower is the surviving entity;

(ii)     Other than with respect to the Borrower,
any Loan Party may merge or consolidate into, or liquidate or dissolve into,
any other Loan Party; and

 57
 

 

 

(iii)    Any Person may merge or consolidate into a
Loan Party, or a Loan Party may merge or consolidate into any Person, provided
that (A) such Person is an entity organized and existing under the laws of a
State in the United States; (B) the Loan Party is the surviving entity and if
the Loan Party is not the Borrower such Loan Party is a Wholly-Owned Subsidiary
of the Borrower; and (C) no Default or Event of Default has occurred or will
occur prior to and after giving effect to such merger or consolidation.

9.10         Sales and Leasebacks. 
No Loan Party shall become liable, by assumption or by Accommodation
Obligation, with respect to any lease of any property (whether real or personal
or mixed) (i) which such Loan Party has sold or transferred or will sell or
transfer to any other Person or (ii) which such Loan Party intends to use for
substantially the same purposes as any other asset which it has sold or
transferred or will sell or transfer to any other Person in connection with
such lease (a “Sale and Leaseback Transaction”); provided that a
Loan Party may enter into a Sale and Leaseback Transaction if the gross cash
proceeds of such Sale and Leaseback Transaction are at least equal to the fair
market value (as determined in good faith by the Board of Directors of such
Loan Party) of the Property that is the subject of such Sale and Leaseback
Transaction and such Loan Party is not in violation of Section 9.01(x)
after giving effect thereto.

9.11         Margin Regulations. 
No Loan Party shall use all or any portion of the proceeds of any Loan
made under this Agreement (i) to purchase or carry any Margin Stock or (ii) in
violation of Regulation U.

9.12         ERISA.  The Borrower shall not, nor shall it permit
any ERISA Affiliate to, do any of the following to the extent the same will
have or is reasonably likely to have a Material Adverse Effect:

(i)      engage, or knowingly permit any ERISA
Affiliate to engage, in any prohibited transaction described in Sections 406 of
ERISA or 4975 of the Code for which a class exemption is not available or a
private exemption has not been previously obtained from the DOL;

(ii)     permit to exist any accumulated funding
deficiency (as defined in Sections 302 of ERISA or 412 of the Code), with
respect to any Benefit Plan, which has not been waived;

(iii)    fail, or permit any ERISA Affiliate to fail,
to pay timely required contributions or annual installments due with respect to
any waived funding deficiency to any Plan;

(iv)    terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan which would result in any liability of the
Borrower, or any ERISA Affiliate under Title IV of ERISA or under such Benefit
Plan; or

(v)     fail, or permit any ERISA Affiliate to
fail, to pay any required installment under section (m) of Section 412 of the
Code or any other payment required under Section 412 of the Code or Section 302
of ERISA on or before the due date for such installment or other payment.

9.13         Capital Expenditures. 
The Loan Parties shall not make or incur any Capital Expenditures in any
Fiscal Year if, after giving effect to such Capital Expenditures, the aggregate
amount of all Capital Expenditures made by the Loan Parties during such Fiscal
Year would exceed the amount set forth below for such Fiscal Year:

	
  Fiscal Year Ending

  	
   

  	
   

  	
   

  	
  Maximum Amount

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  150,000,000

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  150,000,000

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $

  	
  150,000,000

  	
   

  
	
  December 31,
  2010

  	
   

  	
  $

  	
  150,000,000

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  150,000,000

  	
   

  

 

provided, however, that for
each Fiscal Year the Borrower may incur an amount of Capital Expenditures in
excess of the maximum amount prescribed above up to the difference between
$150,000,000 and the amount of Capital Expenditures made in the prior Fiscal
Year.

 58
 

 

 

9.14         Amendment of Governing Documents.  No Loan Party shall amend, supplement or otherwise
change its Governing Documents in any respect that is materially detrimental to
the Lenders.

9.15         Environmental Liabilities.  Except as disclosed in Section 6.01(O) of the
Disclosure Letter, no Loan Party shall become legally obligated, whether by
settlement, stipulation, nonappealable judgment, nonappealable conclusion of an
administrative proceeding, or statute, for any Liabilities and Costs which
exceed $35,000,000 in a particular instance or $75,000,000 in the aggregate,
arising out of or relating to (i) the Release or threatened Release at any
location of any Contaminant into the environment, or any Remedial Action in
response thereto or (ii) any violation of any Environmental, Health or Safety
Requirement of Law.

ARTICLE X

FINANCIAL COVENANTS

The Borrower covenants and agrees so long as any Term
Loan Commitment or Revolving Loan Commitment is outstanding and thereafter
until payment in full of the Obligations:

10.01       Minimum Net Worth. 
The Net Worth of the Borrower and its Subsidiaries on a consolidated
basis at the last day of each fiscal quarter of each Fiscal Year shall not be
less than the sum of (i) 80% of June 30, 2006 Net Worth plus (ii) an amount
equal to the sum of 50% of Net Income for each fiscal quarter ending after June
30, 2006 (provided that Net Income for any such fiscal quarter shall be
taken into account for purposes of this calculation only if positive).

10.02       Minimum Interest Coverage Ratio.  The Interest Coverage Ratio of the Borrower
and its Subsidiaries on a consolidated basis at the last day of each fiscal
quarter of each Fiscal Year shall not be less than 5.00 to 1.00.

10.03       Maximum Leverage Ratio. 
The Leverage Ratio of the Borrower and its Subsidiaries on a consolidated
basis at the last day of each fiscal quarter of each Fiscal Year shall not be
greater than the ratios set forth in the table below:  

	
  Date

  	
   

  	
   

  	
   

  	
  Maximum Leverage Ratio

  	
   

  
	
  December 31,
  2006

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  March 31, 2007

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  June 30, 2007

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  March 31, 2008

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  September 30,
  2008

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  March 31, 2009

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  June 30, 2009

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  September 30,
  2009

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  December 31, 2009 and
  thereafter

  	
   

  	
  2.50 to 1.00

  	
   

  

 

ARTICLE XI

EVENTS OF DEFAULT; RIGHTS
AND REMEDIES

11.01       Events of Default. 
Each of the following occurrences shall constitute an Event of Default
under this Agreement:

 59
 

 

 

(a)           Failure
to Make Payments When Due.  The
Borrower shall fail to pay any principal of any Note when due, shall fail to
pay any interest on any Note within three (3) Business Days after such interest
shall have become due, or shall fail to pay any other Obligation within five
(5) Business Days after such Obligation shall have become due.

(b)           Breach
of Representation or Warranty.  Any
representation or warranty made or deemed to have been made by any Loan Party
under this Agreement, the Notes, any of the other Loan Documents or any
certificate or statement furnished by any Loan Party pursuant to this Agreement
shall be false in any material respect when made.

(c)           Breach
of Certain Covenants.  Any Loan Party
shall fail duly and punctually to perform or observe any agreement, covenant or
obligation binding on such Loan Party under Section 7.04, Section
8.01, Article IX or Article X of this Agreement.

(d)           Other
Defaults.  Any Loan Party shall fail
duly and punctually to perform or observe any term, covenant or obligation
binding on such Loan Party (i) under Section 7.01 or Section 7.08
of this Agreement and such failure shall continue unremedied for ten (10)
Business Days after the occurrence of such failure or (ii) under this Agreement
(other than as described in Section 11.01(a), (c) or (d)(i)),
and such failure shall continue unremedied for thirty (30) days after any
senior officer of any Loan Party knew, or, in the exercise of due care, should
have known, of such failure (or such lesser period of time as is mandated by
applicable Requirements of Law).

(e)           Default
as to Other Indebtedness.  Any Loan
Party shall fail to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise, and after giving effect
to applicable grace periods) with respect to any Indebtedness (other than an
Obligation) if the aggregate principal amount of such other Indebtedness is
$35,000,000 or more; or any breach, default or event of default shall occur, or
any other condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness (including the occurrence of any
termination event or event of like import in connection with the Receivables
Purchase Facility), (i) if the effect thereof (with or without the giving of
notice or lapse of time or both) is to cause an acceleration, mandatory
redemption or other required repurchase of such Indebtedness or permit the
holder or holders of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such Indebtedness;
or any such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise repurchased
by any Loan Party (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof; or the holder or holders of any Lien,
securing obligations of $25,000,000 or more, shall commence foreclosure of such
Lien upon property of any Loan Party; provided that, notwithstanding
anything to the contrary contained herein, this Section 11.01(e) shall
not apply to any secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness, but provided  further that such secured Indebtedness
is paid when due; or (ii) if such default or event shall occur or such
condition exist under any Receivables Purchase Documents, the effect of which
is to (A) terminate, or permit the investors thereunder to terminate, the
reinvestment of collections or proceeds of Receivables and Related Security
under any Receivables Purchase Document (other than a termination resulting
solely from the request of the Borrower or any of its Subsidiaries) or (B)
cause the replacement of, or permit the investors thereunder to replace, the
Person then acting as servicer for the related Receivables Purchase Facility,
if the Person then acting as servicer is a Loan Party or an Affiliate thereof.

(f)            Involuntary
Bankruptcy; Appointment of Receiver, etc.

(i)      An involuntary case shall be commenced
against any Loan Party and the petition shall not be dismissed, stayed, bonded
or discharged within sixty (60) days; or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of any Loan Party
in an involuntary case, under any applicable bankruptcy, insolvency or other
similar law now or hereinafter in effect; or any other similar relief shall be
granted under any applicable federal, state, local or foreign law; or the Board
of Directors of any Loan Party (or any committee thereof) adopts any resolution
or otherwise authorizes any action to approve any of the foregoing.

 60
 

 

 

(ii)     A decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
any Loan Party or over all or a substantial part of the assets of any Loan
Party shall be entered; or an interim receiver, trustee or other custodian of
any Loan Party or of all or a substantial part of the assets of any Loan Party
shall be appointed or a warrant of attachment, execution or similar process
against any substantial part of the assets of any Loan Party shall be issued
and any such event shall not be stayed, dismissed, bonded or discharged within
sixty (60) days; or the Board of Directors of any Loan Party (or any committee
thereof) adopts any resolution or otherwise authorizes any action to approve
any of the foregoing.

(g)           Voluntary
Bankruptcy; Appointment of Receiver, etc. 
Any Loan Party shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its assets; or any
Loan Party shall make any assignment for the benefit of creditors or shall be
unable or fail, or shall admit in writing its inability, to pay its debts as
such debts become due; or the Board of Directors of any Loan Party (or any
committee thereof) adopts any resolution or otherwise authorizes any action to
approve any of the foregoing.

(h)           Judgments
and Attachments.  Any money judgment
(other than a money judgment (x) covered by insurance as to which the insurance
company has acknowledged coverage or (y) for which a Loan Party has a binding
right (acknowledged by the indemnitor) to be indemnified by an indemnitor having
a rating for any class of its non-credit enhanced long-term senior unsecured
debt of not less than “BBB-” from S&P or “Baa3” from Moody’s or any of the
indemnitors identified on Section 11.01(H) of the Disclosure Letter), writ or
warrant of attachment, or similar process against any Loan Party or any assets
of any Loan Party involving in any case an amount in excess of $35,000,000 is
entered and shall remain undischarged, unvacated, unbonded or unstayed for a
period of thirty (30) days.

(i)            Dissolution.  Any order, judgment or decree shall be
entered against any Loan Party decreeing its involuntary dissolution or split
up and such order shall remain undischarged and unstayed for a period of sixty
(60) days.

(j)            Certain
Loan Documents.  At any time, for any
reason, this Agreement, any Note or any Guaranty ceases to be in full force and
effect or any Loan Party seeks to repudiate its obligations hereunder or
thereunder.

(k)           ERISA
Liabilities.  Any Termination Event
occurs which will or is reasonably likely to subject either the Borrower or an
ERISA Affiliate to a liability which will, or is reasonably likely to involve
an amount in excess of $25,000,000.

(l)            Waiver
Application.  The plan administrator
of any Benefit Plan applies under Section 412(d) of the Code for a waiver of
the minimum funding standards of Section 412(a) of the Code and the
Administrative Agent reasonably believes that the substantial business hardship
upon which the application for the waiver is based could subject either the
Borrower or any ERISA Affiliate to liability which will or is reasonably likely
to involve an amount in excess of $25,000,000.

(m)          Change
of Control.  A Change of Control
shall have occurred.

An Event of Default shall be deemed “continuing” until
cured or waived in writing in accordance with Section 13.09.

11.02       Rights and Remedies. 
Upon the occurrence of any Event of Default described in Section
11.01(f) or 11.01(g), the Revolving Loan Commitments and the
obligations of each Issuing Bank to issue Letters of Credit shall automatically
and immediately terminate and the unpaid principal amount of, and any and all
accrued interest on, the Obligations and all accrued fees shall automatically
become immediately due and payable, and the Borrower 

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shall immediately pay to
the Administrative Agent an amount equal to the aggregate face amount of all
outstanding Letters of Credit to be held by the Administrative (for the benefit
of itself and the Lenders) as cash collateral for the Obligations in respect of
the Letters of Credit, all without presentment, demand, or protest or other
requirements of any kind (including, without limitation, valuation and appraisement,
diligence, presentment, notice of intent to demand or accelerate and of
acceleration), all of which are hereby expressly waived by the Borrower, and
the obligations of the Lenders to make Loans hereunder shall thereupon
terminate; and upon the occurrence and during the continuance of any other
Event of Default, the Administrative Agent shall, at the request, or may with
the consent, of the Requisite Lenders, do any or all of the following: (i)
declare that the Revolving Loan Commitments are terminated, whereupon the
Revolving Loan Commitments shall immediately terminate, (ii) declare that the
obligations of each Issuing Bank to issue Letters of Credit are terminated,
whereupon the obligations to issue Letters of Credit shall terminate, and/or (iii)
declare that the unpaid principal amount of, and any and all accrued interest
on, the Obligations and all accrued fees to be, and the same shall thereupon
be, immediately due and payable, without presentment, demand, or protest or
other requirements of any kind (including, without limitation, valuation and appraisement,
diligence, presentment, notice of intent to demand or accelerate and of
acceleration, except as may be specifically provided for herein), all of which
are hereby expressly waived by the Borrower, and (iv) require the Borrower to
pay to the Administrative Agent an amount equal to the aggregate face amount of
all outstanding Letters of Credit to be held by the Administrative Agent (for
the benefit of itself and the Lenders) as cash collateral for the Obligations
in respect of the Letters of Credit, whereupon the Borrower shall immediately
pay such amount to the Administrative Agent without presentment, demand, notice
or protest or other requirements of any kind, all of which are hereby expressly
waived by the Borrower.  Notwithstanding
the foregoing, the provisions of this Section 11.02 shall not apply to
Obligations of any Loan Party under or in connection with any Interest Rate
Contract or foreign exchange contract with any Lender or Affiliate of any
Lender, the rights and remedies with respect to which shall be governed by the
terms of such contracts and applicable law.

ARTICLE XII

THE ADMINISTRATIVE AGENT

12.01       Appointment.

(a)           Each
Lender hereby designates and appoints CIBC as the Administrative Agent of such
Lender under this Agreement, and each Lender hereby irrevocably authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement, the Notes and the Loan Documents and to exercise such powers as
are set forth herein or therein together with such other powers as are
reasonably incidental thereto.  As to any
matters not expressly provided for by this Agreement or the other Loan
Documents, the Administrative Agent shall not be required to exercise any
discretion or take any action. 
Notwithstanding the foregoing, the Administrative Agent shall be
required to act or refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Requisite Lenders
(unless the instructions or consent of all of the Lenders is required hereunder
or thereunder) and such instructions shall be binding upon all Lenders; provided,
however, the Administrative Agent shall not be required to take any
action which (i) the Administrative Agent believes will expose it to personal
liability unless the Administrative Agent receives an indemnification satisfactory
to it from the Lenders with respect to such action or (ii) is contrary to this
Agreement, the Notes, the other Loan Documents or applicable law.  The Administrative Agent agrees to act as
such on the express conditions contained in this Article XII.

(b)           The
provisions of this Article XII are solely for the benefit of the
Administrative Agent and the Lenders, and none of the Loan Parties shall have
any rights to rely on or enforce any of the provisions hereof (other than as
expressly set forth in Section 12.07). 
In performing its functions and duties under this Agreement, the Administrative
Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation or relationship of agency, trustee
or fiduciary with or for any Loan Party. 
The Administrative Agent may perform any of its duties hereunder, or
under the Loan Documents, by or through its agents or employees.

12.02       Nature of Duties.  The
Administrative Agent shall not have any duties or responsibilities except those
expressly set forth in this Agreement or in the Loan Documents.  The duties of the Administrative Agent shall
be mechanical and administrative in nature. 
The Administrative Agent shall not have by reason of this Agreement a 

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fiduciary relationship in respect of any Holder.  Nothing in this Agreement or any of the Loan
Documents, expressed or implied, is intended to or shall be construed to impose
upon the Administrative Agent any obligations in respect of this Agreement or
any of the Loan Documents except as expressly set forth herein or therein.  Each Lender shall make its own independent
investigation of the financial condition and affairs of the Borrower and the
other Loan Parties in connection with the Loans hereunder and shall make its
own appraisal of the credit worthiness of the Borrower and the other Loan
Parties initially and on a continuing basis, and the Administrative Agent shall
not have any duty or responsibility, either initially or on a continuing basis,
to provide any Holder with any credit or other information with respect thereto
(except for reports required to be delivered by the Administrative Agent under
the terms of this Agreement).  If the
Administrative Agent seeks the consent or approval of the Lenders to the taking
or refraining from taking of any action hereunder, the Administrative Agent
shall send notice thereof to each Lender. 
The Administrative Agent shall promptly notify each Lender at any time
that the Lenders so required hereunder have instructed the Administrative Agent
to act or refrain from acting pursuant hereto.

12.03       Rights, Exculpation, etc.

(a)           Liabilities;
Responsibilities.  None of the
Agents, any Affiliate of any Agent, or any of their respective officers,
directors, employees, agents, attorneys or consultants shall be liable to any
Holder for any action taken or omitted by them hereunder, under the Notes or
under any of the Loan Documents, or in connection therewith, except that no
Person shall be relieved of any liability imposed by law for gross negligence
or willful misconduct.  The Administrative
Agent shall not be liable for any apportionment or distribution of payments
made by it in good faith, and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Holder to whom payment was due, but not made, shall be to recover from other
Holders any payment in excess of the amount to which they are determined to
have been entitled.  The Administrative
Agent shall not be responsible to any Holder for any recitals, statements,
representations or warranties herein or for the execution, effectiveness, genuineness,
validity, legality, enforceability, collectibility, or sufficiency of this
Agreement, the Notes or any of the other Loan Documents or the transactions
contemplated thereby, or for the financial condition of the Borrower or any
other Loan Party.  The Administrative
Agent is not making any representation and warranty in connection with, and
shall not be required to make any inquiry concerning, the performance or
observance of any of the terms, provisions or conditions of this Agreement, the
Notes or any of the Loan Documents, or the financial condition of the Borrower
or any other Loan Party, or the existence or possible existence of any Default
or Event of Default.

(b)           Right
to Request Instructions.  The
Administrative Agent may at any time request instructions from the Lenders (and
after all Obligations owing to the Lenders have been paid in full, from the
Holders) with respect to any actions or approvals which by the terms of any of
the Loan Documents the Administrative Agent is permitted or required to take or
to grant, and the Administrative Agent shall be absolutely entitled to refrain
from taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from those Lenders or Holders, as the case may be,
from whom the Administrative Agent is required to obtain such instructions for
the pertinent matter in accordance with the Loan Documents.  Without limiting the generality of the
foregoing, no Holder shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting under the Loan Documents in accordance with the
instructions of all Lenders or, where required by the express terms of this
Agreement, a lesser proportion of the Lenders, or of all Holders (after the
Obligations owing to the Lenders have been paid in full).

(c)           IntraLinks.  Any information, notice, document or other
communication posted by the Administrative Agent on IntraLinks shall constitute
delivery of such information, notice, document or other communication to each
Lender upon receipt by such Lender of notification from the Administrative
Agent that such information, notice, document or other communication has been
posted.

12.04       Reliance.  The
Administrative Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents or any telephone message
believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person, and with respect to all matters pertaining
to this Agreement or any of the Loan Documents and its duties hereunder or
thereunder, upon advice of legal counsel, independent public accountants and
other experts selected by it.

 

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12.05       Indemnification. 
To the extent that the Administrative Agent, in its capacity as such, is
not reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Administrative Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, reasonable costs,
reasonable expenses or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by, or asserted against it in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the
Administrative Agent under the Loan Documents, in proportion to each Lender’s
Pro Rata Share, determined at the time such indemnity is sought; provided
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent’s gross negligence, bad
faith or willful misconduct.  The
obligations of the Lenders under this Section 12.04 shall survive the
payment in full of the Loans and all other Obligations and the termination of
this Agreement.  In the event that after
payment and distribution of any amount by the Administrative Agent to Lenders,
any Lender or third party, including the Borrower, any creditor of the Borrower
or a trustee in bankruptcy, recovers from the Administrative Agent any amount
found to have been wrongfully paid to the Administrative Agent or disbursed by
the Administrative Agent to Lenders, then Lenders, in proportion to their respective
Pro Rata Shares, shall reimburse the Administrative Agent for all such amounts.

12.06       The Administrative Agent Individually.  With respect to the Loans made by it CIBC
shall have and may exercise the same rights and powers hereunder and is subject
to the same obligations and liabilities as and to the extent set forth herein
for any other Lender.  The terms “Lenders”
or “Requisite Lenders” or any similar terms shall, unless the context clearly
otherwise indicates, include CIBC in its individual capacity as a Lender or one
of the Requisite Lenders.  CIBC and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with the Borrower, any of its
Subsidiaries or any of its Affiliates as if it were not acting as the
Administrative Agent pursuant hereto.

12.07       Successor Administrative Agents.

(a)           Resignation.  The Administrative Agent may resign from the
performance of all its functions and duties hereunder at any time by giving at
least thirty (30) days’ prior written notice to the Borrower and the
Lenders.  Such resignation shall take
effect upon the acceptance by a successor Administrative Agent of appointment
pursuant to this Section 12.07.

(b)           Appointment
by Requisite Lenders.  Upon any such
notice of resignation, the Requisite Lenders shall have the right to appoint a
successor Administrative Agent selected from among the Lenders, which appointment
shall be subject to the prior written approval of the Borrower (which may not
be unreasonably withheld, and shall not be required upon the occurrence and
during the continuance of an Event of Default).

(c)           Appointment
by Retiring Administrative Agent.  If
a successor Administrative Agent shall not have been appointed within the
thirty (30) day period provided in Section 12.07(a), the retiring
Administrative Agent shall then appoint a successor Administrative Agent who
shall serve as the Administrative Agent until such time, if any, as the
Requisite Lenders appoint a successor Administrative Agent as provided
above.  Each Lender shall indemnify and
hold the Administrative Agent harmless for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, reasonable
costs, reasonable expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against it in any way
relating to or arising out of the appointment of a successor Administrative
Agent pursuant to the terms of this subsection (c).

(d)           Rights
of the Successor and Retiring Administrative Agents.  Upon the acceptance of any 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, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement.  After any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of this Article XII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent under this Agreement.

12.08       Relations Among Lenders. 
Each Lender agrees that it will not take any legal action, nor institute
any actions or proceedings, against the Borrower or any other Loan Party
without the prior written consent of the 

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Requisite Lenders.  Without limiting the generality of the
foregoing, no Lender may accelerate or otherwise enforce its portion of the
Obligations, except in accordance with Section 11.02.

12.09       Concerning the Loan Documents.

(a)           Authority.  Each Lender authorizes and directs the
Administrative Agent to enter into any Loan Documents for the benefit of the
Lenders.  Each Lender agrees that any
action taken by the Administrative Agent or all Lenders (or, where required by
the express terms of this Agreement, a lesser proportion of the Lenders) in
accordance with the provisions of this Agreement or the other Loan Documents,
and the exercise by the Administrative Agent or all Lenders (or, where so
required, such lesser proportion) of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. 
Without limiting the generality of the foregoing, the Administrative
Agent shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders with respect to all payments
and collections arising in connection with this Agreement and the Loan
Documents; (ii) execute and deliver each Loan Document and accept delivery of
each such agreement delivered by any Loan Party and (iii) except as may be
otherwise specifically restricted by the terms of this Agreement or any other
Loan Document, exercise all remedies given to the Administrative Agent or the
Lenders under the Loan Documents, applicable law or otherwise.

(b)           Delivery
of Information.  To the extent not
separately delivered by the Borrower, the Administrative Agent agrees to
deliver to each Lender (by IntraLinks in accordance with Section 12.03(c),
mail, courier or fax) the information, notices, statements and other
communications delivered in writing by the Borrower to the Administrative Agent
pursuant to Article VII.

12.10       Other Agents. 
Notwithstanding any other provision of this Agreement or any of the
other Loan Documents, the Syndication Agents and Documentation Agents in their
capacity as such are named as such for recognition purposes only, and in their
capacities as such shall have no powers, rights, duties, responsibilities or
liabilities with respect to this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby.

ARTICLE XIII

MISCELLANEOUS

13.01       Assignments and Participations.

(a)           Assignments.  No assignment or participation of any Lender’s
rights or obligations under this Agreement and the Notes shall be made except
in accordance with this Section 13.01. 
Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement and the Notes in
accordance with the provisions of this Section 13.01.

(b)           Limitations
on Assignments.  Each assignment
shall be subject to the following conditions: 
(i) each assignment shall be of a constant, and not a varying,
ratable percentage of all of the assigning Lender’s rights and obligations in
respect of its interest being assigned under this Agreement and its Note and,
in the case of a partial assignment, shall be in a minimum principal amount of
$5,000,000, except that such limitation shall not apply to (x) an assignment by
any Lender of any portion of its rights and obligations to another Lender or an
Affiliate or Approved Fund of any Lender or (y) an assignment by any Lender of
all of its rights or obligations under this Agreement to an Eligible Assignee,
(ii) each such assignment shall be to an Eligible Assignee, and (iii) the parties
to each such assignment shall execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $3,500 (except in the case of
an assignment to an Affiliate of the assigning Lender or an Approved Fund of
the assigning Lender, the processing and recordation fee shall be $500 and none
of the other foregoing conditions shall apply) and without being subject to the
foregoing conditions.  Upon such
execution, delivery, acceptance and recording in the Register, from and after
the effective date specified in each Assignment and Acceptance and accepted by
the Administrative Agent (which effective date shall not be any earlier than
the date on which the Administrative Agent so accepts and records the
Assignment and Acceptance in the Register), (x) the assignee thereunder shall,
in addition to any rights and obligations hereunder held by it immediately
prior to such effective date, if any, have the rights and obligations 

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hereunder that have been assigned to it pursuant to such Assignment and
Acceptance and shall, to the fullest extent permitted by law, have the same
rights and benefits hereunder as if it were an original Lender hereunder and
(y) the assigning Lender shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of such assigning Lender’s rights and obligations under this Agreement,
the assigning Lender shall cease to be a party hereto).

(c)           The
Register.  The Administrative Agent,
acting for this purpose as agent for the Borrower, shall maintain at its
address referred to in Section 13.10 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register (the “Register”)
for the recordation of the names and addresses of the Lenders and the Term Loan
Commitment and Revolving Loan Commitment of each Lender from time to time and
whether such Lender is an original Lender or the assignee of another Lender
pursuant to an Assignment and Acceptance. 
The Administrative Agent shall incur no liability of any kind to the
Borrower, any Loan Party, any Lender or any other Person with respect to its
maintenance of the Register or the recordation of information therein.  The Administrative Agent will render a
monthly statement of such accounts to the Borrower.  Each such statement shall be deemed final,
binding and conclusive upon the Borrower and the other Loan Parties in all
respects as to all matters reflected therein (absent manifest error) unless the
Borrower, within thirty (30) days after the date such statement is rendered, delivers
to the Administrative Agent written notice of any objections which the Borrower
may have to any such statement.  In that
event, only those items expressly objected to in such notice shall be deemed to
be disputed by the Borrower.  The entries
in the Register shall be final, conclusive and binding upon the Borrower and
the other Loan Parties for all purposes, absent manifest error, and the
Borrower, each of its Subsidiaries and each other Loan Party, the Administrative
Agent and the Lenders shall treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.  No
assignment of any Term Loan Commitment, Revolving Loan Commitment, Loan or
Note, or any interest therein, shall be effective unless and until the
Assignment and Acceptance has been accepted by the Administrative Agent and
registered in the Register.  This Section
13.01(c) shall be construed so that all Term Loan Commitments, Revolving
Loan Commitments, Loans and Notes, and any interest therein, are maintained at
all times in “registered form” within the meaning of sections 163(f), 871(h)
and 881(c) of the Code.

(d)           Fee.  Upon its receipt of an Assignment and
Acceptance executed by the assigning Lender and an Eligible Assignee and a
processing and recordation fee of $3,500 (except in the case of an assignment
to an Affiliate of the assigning Lender or an Approved Fund of the assigning
Lender, the processing and recordation fee shall be $500 and none of the other
foregoing conditions shall apply) (payable by the assigning Lender or the
assignee, as shall be agreed between them), the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in compliance with
this Agreement and in substantially the form of Exhibit A hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein
in the Register and (iii) give prompt notice thereof to the Borrower.

(f)            Participations.  Each Lender may sell participations to one or
more commercial banks, lending institutions, finance companies, insurance
companies, other financial institutions or funds in or to all or a portion of
its rights and/or obligations under and in respect of any and all facilities
under this Agreement (including, without limitation, all or a portion of any or
all of its Term Loan Commitments, Revolving Loan Commitments hereunder and the
Loans owing to it); provided, however, that (i) such Lender’s
obligations under this Agreement (including, without limitation, its Term Loan
Commitments, Revolving Loan Commitments hereunder) shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and (iv) such participant’s rights to agree or to restrict such
Lender’s ability to agree to the modification, waiver or release of any of the
terms of the Loan Documents, to consent to any action or failure to act by any
party to any of the Loan Documents or any of their respective Affiliates, or to
exercise or refrain from exercising any powers or rights which any Lender may
have under or in respect of the Loan Documents, shall be limited to the right
to consent to (A) any increase in or extension of the Revolving Loan Commitment
of the Lender from whom such participant purchased a participation, (B) the
reduction of the principal of, or rate or amount of interest (other than
interest accruing at the default rate) on, the Loans subject to such
participation (other than by the payment or prepayment thereof), (C) the
postponement of any date fixed for any payment of principal of, or interest on,
the Loans subject to such participation (except with

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respect to any modifications of the provisions
relating to prepayments of Loans and other Obligations), (D) releasing any
Material Guarantor of its obligations under a Guaranty (other than in
connection with any sale of such Guarantor permitted hereunder, in which case
such release shall be automatic upon such sale) and (E) releasing any material
portion of any collateral securing the Obligations (other than in connection
with any sale of assets or sale of a Subsidiary permitted hereunder).

(f)            Information
Regarding the Borrower.  Any Lender
may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 13.01, disclose to the
assignee or participant or proposed assignee or participant, any information
relating to the Borrower or any Subsidiary of the Borrower or any other Loan
Party furnished to such Lender by the Administrative Agent or by or on behalf
of the Borrower, such Subsidiary or such Loan Party; provided that,
prior to any such disclosure, such assignee or participant, or proposed
assignee or participant, shall agree to preserve in accordance with Section
13.23 the confidentiality of any confidential information described
therein.

(g)           Payment
to Participants.  Anything in this
Agreement to the contrary notwithstanding, in the case of any participation,
all amounts payable by the Borrower under the Loan Documents shall be
calculated and made in the manner and to the parties required hereby as if no
such participation had been sold.

(h)           Lenders’
Creation of Security Interests. 
Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement and its Notes (including, without limitation,
Obligations owing to it and the Notes held by it) in favor of any Federal
Reserve Bank of the Federal Reserve Board without notice to or consent of the
Borrower or the Administrative Agent.

13.02       Relations Among Lenders. 
Each Lender agrees that it will not take any action, nor institute any
actions or proceedings, against the Borrower or any other Loan Party with
respect to the Obligations, without the prior written consent of Requisite
Lenders.

13.03       Replacement of Lender. 
In the event that a Replacement Event occurs and is continuing with respect
to any Lender, the Borrower may designate a Replacement Lender to assume such
Lender’s Revolving Loan Commitment hereunder, to purchase the Loans and
participations of such Lender and such Lender’s rights hereunder, without
recourse to or representation or warranty by, or expense to, such Lender for a
purchase price equal to the outstanding principal amount of the Loans payable
to such Lender plus any accrued but unpaid interest on such Loans and accrued
but unpaid fees owing to such Lender, and upon such assumption, purchase and
substitution, and subject to the execution and delivery to the Administrative
Agent by the Replacement Lender of documentation satisfactory to the
Administrative Agent (pursuant to which such Replacement Lender shall assume
the obligations of such original Lender under this Agreement), the Replacement
Lender shall succeed to the rights and obligations of such Lender hereunder and
such Lender shall no longer be a party hereto or have any rights hereunder, provided
that the obligations of the Borrower to such Lender under Section 13.05
hereof with respect to events occurring or obligations arising before such
replacement shall survive such replacement.

13.04       Expenses.

(a)           Generally.  The Borrower agrees upon demand to pay, or
reimburse the Administrative Agent for, all of the Administrative Agent’s
reasonable audit, legal, appraisal, valuation, filing, document duplication and
reproduction and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including, without
limitation, the reasonable fees, expenses and disbursements of a single legal
counsel (and local counsel, if any), auditors, accountants, appraisers,
printers, insurance and environmental advisers, and other consultants and
agents) incurred by the Administrative Agent in connection with (i) the
preparation, negotiation, and execution of this Agreement and the other Loan
Documents; (ii) the interpretation of this Agreement (including, without limitation,
the satisfaction or attempted satisfaction of any of the conditions set forth
in Article V), the other Loan Documents and the making of the Loans
hereunder; (iii) the ongoing administration of this Agreement and the Loans,
including consultation with attorneys in connection therewith and with respect
to the Administrative Agent’s rights and responsibilities under this Agreement
and the other Loan Documents and the Administrative Agent’s periodic audits of
the Borrower and the other Loan Parties to the extent provided herein; (iv) the
protection, collection or enforcement of any of the Obligations or the
enforcement of any of the Loan Documents; (v) the 

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commencement, defense or intervention in any court proceeding relating
in any way to the Obligations, the assets of any Loan Party, any Loan Party,
this Agreement or any of the other Loan Documents; (vi) the response to, and
preparation for, any subpoena or request for document production with which the
Administrative Agent is served or deposition or other proceeding in which the
Administrative Agent is called to testify, in each case, relating in any way to
the Obligations, the assets of any Loan Party, any Loan Party, this Agreement
or any of the other Loan Documents; and (vii) any amendments, consents, waivers,
assignments, restatements, or supplements to any of the Loan Documents and the
preparation, negotiation, and execution of the same.

(b)           After
Default.  The Borrower further agrees
to pay or reimburse the Administrative Agent and each Lender upon demand for
all out-of-pocket costs and expenses, including, without limitation, reasonable
attorneys’ fees of a single counsel (and local counsel, regulatory counsel and
such additional counsel as the Administrative Agent reasonably determines are
necessary in light of conflicts of interest or the availability of different
claims or defenses) to the Administrative Agent and the Lenders, after the
occurrence and during the continuance of an Event of Default (i) in enforcing
any Loan Document or any of the Obligations or any security therefor or
exercising or enforcing any other right or remedy available by reason of such
Event of Default; (ii) in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement in the nature of a “work-out”
or in any insolvency or bankruptcy proceeding; (iii) in commencing, defending
or intervening in any litigation or in filing a petition, complaint, answer,
motion or other pleadings in any legal proceeding relating to the Obligations,
the Property, any Loan Party and related to or arising out of the transactions
contemplated hereby or by any of the other Loan Documents; and (iv) in taking
any other action in or with respect to any suit or proceeding (bankruptcy or otherwise)
described in clauses (i) through (iii) above.

13.05       Indemnity.  The
Borrower further agrees to defend, protect, indemnify, and hold harmless the
Administrative Agent, the Syndication Agent, the Documentation Agents, each of
the Lenders and each of their respective Affiliates, and their respective
officers, directors, employees, attorneys and agents (including, without limitation,
those retained in connection with the satisfaction or attempted satisfaction of
any of the conditions set forth in Article V) (collectively, the “Indemnitees”)
from and against any and all liabilities, obligations, losses (other than loss
of profits), damages, penalties, actions, judgments, suits, claims, costs,
expenses and disbursements of any kind or nature whatsoever (excluding any
taxes and including, without limitation, the reasonable fees and disbursements
of a single counsel (and local counsel, if any) for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of (a) this Agreement, the Notes, the other Loan Documents, or
any act, event or transaction related or attendant thereto, the making of the
Loans, the issuance of Letters of Credit, the management of such Loans and
Letters of Credit, the use or intended use of the proceeds of the Loans, or any
of the transactions contemplated by the Loan Documents, or (b) any Liabilities
and Costs under any Environmental Health or Safety Requirements or Law or
common law principles arising from or in connection with the past, present or
future operations of any Loan Party or any of its predecessors in interest, or
the past, present or future environmental condition of any Property of any Loan
Party, the presence of asbestos-containing materials at any Property of any
Loan Party or the Release or threatened Release of any Contaminant into the
environment from any Property of any Loan Party or to which any Loan Party sent
any Contaminant for treatment, storage disposal or recycling (collectively, the
“Indemnified Matters”); provided, however, the Borrower
shall have no obligation to an Indemnitee hereunder with respect to Indemnified
Matters caused by or resulting from the willful misconduct, bad faith or gross
negligence of any Indemnitee or disputes among Indemnitees, as determined by a
court of competent jurisdiction in a judgment or order.  Each Loan Party shall be prohibited from
asserting a claim against any Indemnitee for special, indirect, consequential
or punitive damages arising from or in connection with the Credit Agreement or
any Loan Documents.  To the extent that
the undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees.

13.06       Change in Accounting Principles.  If any change in the accounting principles
used in the preparation of the most recent financial statements referred to in Section
7.01 are hereafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) and are adopted by the Borrower and its
Subsidiaries with the agreement of its independent certified public accountants
and such changes result in a change in the method or results of calculation of
any of the covenants, standards or terms found 

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in Article IX and Article
X, the parties hereto agree to enter into negotiations in order to amend
such provisions so as to equitably reflect such changes with the desired result
that the criteria for evaluating compliance with such covenants, standards and
terms by the Borrower and its Subsidiaries shall be the same after such changes
as if such changes had not been made; provided, however, (i) no
change in GAAP that would affect the method of calculation of any of the
covenants, standards or terms shall be given effect in such calculations until
such provisions are amended, in a manner satisfactory to the Requisite Lenders
and the Borrower, to so reflect such change in accounting principles and (ii)
the Borrower shall be deemed to be in compliance with such covenants if and to
the extent that the Borrower would have been in compliance therewith under GAAP
as in effect immediately prior to such change.

13.07       Setoff.  In
addition to any Liens granted under the Loan Documents and any rights now or
hereafter granted under applicable law, upon the occurrence and during the continuance
of any Event of Default, each Lender and any Affiliate of any Lender is hereby
authorized by the Borrower and each other Loan Party at any time and from time
to time, without notice to any Person (any such notice being hereby expressly
waived) to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured (but not including trust
accounts)) and any other Indebtedness at any time held or owing by such Lender
or any of its Affiliates to or for the credit or the account of the Borrower or
such other Loan Party against and on account of the Obligations of the Borrower
to such Lender or any of its Affiliates, including, but not limited to, all
Loans and all claims of any nature or description arising out of or in
connection with this Agreement or the Notes, irrespective of whether or not (i)
such Lender shall have made any demand hereunder or (ii) the Administrative Agent,
at the request or with the consent of the Requisite Lenders, shall have
declared the principal of and interest on the Loans and other amounts due
hereunder and under the Notes to be due and payable as permitted by Article
XI and even though such Obligations may be contingent or unmatured.  Each Lender agrees that it shall not, without
the express consent of the Requisite Lenders, and that it shall, to the extent
it is lawfully entitled to do so, upon the request of the Requisite Lenders,
exercise its setoff rights hereunder against any accounts of the Borrower or
any other Loan Party now or hereafter maintained with such Lender or any of its
Affiliates.

13.08       Ratable Sharing.  The
Lenders agree among themselves that (i) with respect to all amounts received by
them which are applicable to the payment of the Obligations (excluding the
amounts described in Sections 3.04, 3.05 and 4.01(f))
equitable adjustment will be made so that, in effect, all such amounts will be
shared among them ratably in accordance with their Pro Rata Shares, whether
received by voluntary payment, by the exercise of the right of setoff or banker’s
lien, by counterclaim or cross-action or by the enforcement of any or all of
the Obligations (excluding the amounts described in Sections 3.04, 3.05
and 4.01(f), (ii) if any of them shall by voluntary payment or by the
exercise of any right of counterclaim, setoff, banker’s lien or otherwise,
receive payment of a proportion of the aggregate amount of the Obligations held
by it, which is greater than the amount which such Lender is entitled to
receive hereunder, the Lender receiving such excess payment shall purchase,
without recourse or warranty, an undivided interest and participation (which it
shall be deemed to have done simultaneously upon the receipt of such payment)
in such Obligations owed to the others so that all such recoveries with respect
to such Obligations shall be applied ratably in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess
payment received by the purchasing party is thereafter recovered from it, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such party to the extent necessary to
adjust for such recovery, but without interest except to the extent the
purchasing party is required to pay interest in connection with such
recovery.  Each of the Loan Parties
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 13.08 may, to the fullest extent permitted by
law, exercise all its rights of payment (including, subject to Section 13.07,
the right of setoff) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower or such Loan Party in the
amount of such participation.

13.09       Amendments and Waivers. 
Unless otherwise provided in this Agreement, no amendment or modification
of any provision of this Agreement or any other Loan Document shall be
effective without the written agreement of the Requisite Lenders (or the
Administrative Agent at the written direction or with the written consent of
the Requisite Lenders) and the Borrower, and no termination or waiver of any
provision of this Agreement or any other Loan Document, or consent to any
departure by the Borrower or any other Loan Party therefrom, shall be effective
without the written concurrence of the Requisite Lenders (or the Administrative
Agent at the written direction or with the written consent of the Requisite
Lenders).  Notwithstanding the foregoing:

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(a)           Any
amendment, modification, termination, waiver or consent with respect to any of
the following shall be effective only with the written agreement of each Lender
directly affected thereby: 
(i) reduction of the principal of, or rate or amount of interest
on, its portion of the Loans or Reimbursement Obligations or any fees or other
amounts payable to such Lender (other than by the payment or prepayment
thereof), (ii) postponement of any date fixed for any payment of principal of,
or interest on, any Loans or Reimbursement Obligations made or held by such
Lender or any fees or other amounts payable to such Lender (other than with respect
to any modifications of the provisions relating to prepayments of Loans and
other Obligations), or (iii) any increase in the amount of, or extension of,
any Revolving Loan Commitment of such Lender;

(b)           Any
amendment, modification, termination, waiver or consent with respect to any of
the following shall be effective only with the written agreement of each Lender:  (i) amendment of the definition of “Requisite
Lenders”, or (ii) amendment of Section 3.03(a), Section 13.08 or
this Section 13.09;

(c)           Any
amendment, modification, termination, waiver or consent with respect to
releasing any Material Guarantor or substantially all of the Guarantors of its
obligations under a Guaranty (other than in connection with any sale of such
Guarantor permitted hereunder, in which case such release shall be automatic
upon such sale) shall be effective only with the written agreement of Lenders
whose Pro Rata Shares, in the aggregate, are not less than 95.0%:

(d)           Any
amendment, modification, termination, waiver or consent with respect to any of
the respective rights or obligations of the Issuing Bank, the Swing Loan Lender
or the Administrative Agent set forth in this Agreement or any other Loan
Document shall be effective only by a written agreement, signed by the Issuing
Bank, the Swing Loan Lender or the Administrative Agent, as applicable, in
addition to the Lenders, if any, required as provided herein to take such
action; and

(e)           The
Fee Letter may be amended or modified, and any rights thereunder waived, in a
writing signed by the parties thereto.

Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.  No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.

13.10       Notices.

(a)           Unless
otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, faxed or sent by courier service or United States certified
mail and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of a facsimile or three (3) Business Days after
deposit in the United States mail with postage prepaid and properly
addressed.  Notices to the Administrative
Agent pursuant to Articles II, III or XII shall not be effective
until received by the Administrative Agent. 
For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 13.10)
shall be as set forth on the signature page of any applicable Assignment and
Acceptance, Lender Addendum, or, as to each party, at such other address as may
be designated by such party in a written notice to all of the other parties to
this Agreement.

(b)           The
Borrower agrees to indemnify and hold harmless each Indemnitee from and against
any and all claims, damages, liabilities, obligations, losses, penalties,
actions, judgments, suits, costs, disbursements and expenses of any kind or
nature (including, without limitation, reasonable fees and disbursements of counsel
to any such Indemnitee) which may be imposed on, incurred by or asserted
against any such Indemnitee in any manner relating to or arising out of any
action taken or omitted by such Indemnitee in good faith in reliance on any
notice or other written communication in the form of a facsimile purporting to
be from the Borrower; provided that the Borrower shall have no
obligation under this Section 13.10(b) to an Indemnitee with respect to
any indemnified matter caused by or resulting from the gross negligence, bad
faith or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a judgment or order.

 

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13.11       Survival of Warranties and Agreements.  All representations and warranties made
herein and all obligations of the Borrower in respect of taxes, indemnification
and expense reimbursement shall survive the execution and delivery of this
Agreement and the other Loan Documents, the making and repayment of the Loans
and the termination of this Agreement and shall not be limited in any way by
the passage of time or occurrence of any event and shall expressly cover time
periods when the Administrative Agent or any of the Lenders may have come into
possession or control of any assets of any Loan Party.

13.12       Failure or Indulgence Not Waiver;
Remedies Cumulative.  No failure or delay on the part of the Administrative
Agent or any Lender in the exercise of any power, right or privilege under this
Agreement, the Notes or any of the other Loan Documents shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other right, power or privilege.  All
rights and remedies existing under this Agreement, the Notes and the other Loan
Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.

13.13       Marshalling; Payments Set Aside.  Neither the Administrative Agent nor any
Lender shall be under any obligation to marshal any assets in favor of the
Borrower, any other Loan Party or any other Person or against or in payment of
any or all of the Obligations.  To the
extent that the Borrower makes a payment or payments to the Administrative
Agent or the Lenders, or any of such Persons exercises its rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party, then to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, right and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.

13.14       Independence of Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.

13.15       Severability. 
In case any provision in or obligation under this Agreement, the Notes
or the other Loan Documents shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

13.16       Headings. 
Section headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement or be given
any substantive effect.

13.17       Governing Law. 
THIS AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

13.18       Limitation of Liability. 
No claim may be made by the Borrower, any other Loan Party, any Lender,
the Administrative Agent or any other Person against the Administrative Agent
or any other Lender or the Affiliates, directors, officers, employees,
attorneys or agents of any of them for any special, consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or the Notes or the other Loan Documents, or any act, omission or
event occurring in connection therewith; and the Borrower, each other Loan
Party, each Lender and the Administrative Agent hereby waive, release and agree
not to sue upon any such claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.

13.19       Successors and Assigns. 
This Agreement, the Notes and the other Loan Documents shall be binding
upon the parties thereto and their respective successors and assigns and shall
inure to the benefit of the parties thereto and the successors and permitted
assigns of the Lenders.  The rights
hereunder of the Borrower and the other Loan Parties, or any interest therein,
may not be assigned without the written consent of all Lenders.

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13.20       Certain Consents and Waivers.

(a)           Personal
Jurisdiction.

(i)      EACH
OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE BORROWER AND THE OTHER LOAN
PARTIES IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT
SITTING IN NEW YORK, NEW YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS
OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL
COURT.  EACH OF THE BORROWER AND THE
OTHER LOAN PARTIES IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION, AS ITS
AGENT (THE “PROCESS AGENT”) FOR SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. 
EACH OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE BORROWER AND THE
OTHER LOAN PARTIES AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  EACH OF THE BORROWER AND THE OTHER LOAN
PARTIES WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT CONSIDERING THE DISPUTE.

(ii)     EACH
OF THE BORROWER AND THE OTHER LOAN PARTIES AGREES THAT THE ADMINISTRATIVE AGENT
SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ANY OF THE OTHER LOAN
PARTIES OR THEIR RESPECTIVE PROPERTY IN A COURT IN ANY LOCATION TO ENABLE THE
ADMINISTRATIVE AGENT AND THE LENDERS TO REALIZE ON ANY SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE ADMINISTRATIVE AGENT OR ANY LENDER. 
EACH OF THE BORROWER AND THE OTHER LOAN PARTIES WAIVES ANY OBJECTION
THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE ADMINISTRATIVE AGENT
OR ANY LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION
13.20(a)(ii).

(b)           Service
of Process.  EACH OF THE BORROWER AND
THE OTHER LOAN PARTIES IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PROCESS
AGENT OR THE BORROWER’S OR SUCH LOAN PARTY’S NOTICE ADDRESS SPECIFIED BELOW,
SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING.  EACH OF THE BORROWER AND THE OTHER LOAN
PARTIES IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT IN ANY
JURISDICTION SET FORTH ABOVE.  NOTHING
HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER OR ANY OTHER LOAN PARTY IN THE COURTS OF ANY
OTHER JURISDICTION.

(c)           Waiver
of Jury Trial.  EACH OF THE
ADMINISTRATIVE AGENT, THE LENDERS, THE BORROWER AND THE OTHER LOAN PARTIES
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT.

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13.21       Counterparts; Effectiveness;
Inconsistencies.  This Agreement and any amendments, waivers,
consents, or supplements hereto may be executed in counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.  This Agreement shall become effective against
the Borrower, each other Loan Party, each Lender and the Administrative Agent
on the date hereof when each such party hereto executes and delivers this
Agreement.  This Agreement and each of
the other Loan Documents shall be construed to the extent reasonable to be
consistent one with the other, but to the extent that the terms and conditions
hereof are actually inconsistent with the terms and conditions of any other
Loan Document, this Agreement shall govern.

13.22       Entire Agreement. 
This Agreement, taken together with all of the other Loan Documents,
embodies the entire agreement and understanding among the parties hereto and
supersedes all prior agreements and understandings, written and oral, relating
to the subject matter hereof.

13.23       Confidentiality.

(a)           The
Lenders shall hold all nonpublic information obtained from any Loan Party
pursuant to this Agreement or any of the other Loan Documents in accordance
with such Lender’s customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking practices and in
any event any Lender may make disclosure (i) to its Affiliates or to any other
Lender, (ii) to its accountants, attorneys and other advisors who are notified
of the confidential nature thereof (provided in the case of (i) and (ii)
that such parties shall be subject to the provisions of this Section
13.23(a) to the same extent as such Lender), (iii) as reasonably required
by a bona fide offeree, transferee or participant (including, for purposes of
this Section 13.23(a), any counterparty or prospective counterparty to
any credit default swap or similar credit derivative transaction relating to
the obligations of the Borrower under this Agreement) in connection with the
contemplated transfer or participation, provided that any such offeree,
transferee or participant agrees in writing (and requires any of its offerees,
transferees or participants to agree in writing) to comply with this Section
13.23(a) or an equivalent thereof, (iv) as required or requested by any
Governmental Authority or representative thereof, (v) pursuant to any
applicable Requirement of Law or legal process, (vi) in connection with the
exercise of its remedies hereunder, or (vii) to the extent the same has become
publicly available other than as a result of a breach of this Agreement.  In no event shall any Lender be obligated or
required to return any materials furnished by the Borrower or any other Loan
Party; provided, however, each offeree shall be required to agree
that if it does not become a transferee or participant it shall return all
materials furnished to it by the Borrower or any other Loan Party in connection
with this Agreement or any of the other Loan Documents.

(b)           Notwithstanding
anything to the contrary in Section  13.23(a) or otherwise in the
Loan Documents, the information subject to any confidentiality requirement
shall not include, and the Administrative Agent and each Lender may disclose
without limitation of any kind, any information with respect to the “tax
treatment” and “tax structure” (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated hereby and all
materials of any kind (including opinion or other tax analyses) that are
provided to the Administrative Agent or such Lender relating to such tax
treatment and tax structure; provided that with respect to any document
or similar item that in either case contains information concerning the tax
treatment or tax structure of the transactions as well as other information,
this sentence shall only apply to such portions of the document or similar item
that relate to the tax treatment or tax structure of the Loans, Letters of
Credit and transactions contemplated hereby. 
The Loan Parties acknowledge that one or more of the Lenders may treat
its Loans as part of a transaction that is subject to Treasury Regulation
Section 1.6011-4 or Section 301.6112-1, and the Administrative Agent and such
Lender or Lenders, as applicable, may file such IRS forms or maintain such
lists and other records as they may determine is required by such Treasury
Regulations.

13.24       Patriot Act Information. 
Each Lender that is subject to the Patriot Act (as hereinafter defined)
and the Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies the Borrower that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name, address and
tax identification number of the Borrower and other information regarding the
Borrower that will allow such Lender or the Administrative Agent, as
applicable, to identify Borrower in accordance with the Patriot Act.  The Borrower hereby agrees to provide the
Lenders with such information necessary to comply 

 73
 

 

 

with the Patriot Act.
This notice is given in accordance with the requirements of the Patriot Act and
is effective as to the Lenders and the Administrative Agent.

[Signatures appear
on the following pages]

 

 74

 

 

IN WITNESS WHEREOF, this Agreement has been duly
executed as of the date first above written.

	
  

  	
  WATSON PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Todd
  Joyce

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President, Corporate 

  
	
   

  	
   

  	
  Controller and Treasurer

  

 

	
  

  	
  CANADIAN IMPERIAL BANK OF

  COMMERCE., acting through its New York

  agency, as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Doug Cornett

  	
   

  
	
   

  	
   

  	
  Name: Doug Cornett

  
	
   

  	
   

  	
  Title:  
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ E. Lindsay
  Gordon

  	
   

  
	
   

  	
   

  	
  Name: E. Lindsay Gordon

  
	
   

  	
   

  	
  Title:  
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  WACHOVIA CAPITAL MARKETS, LLC.,

  as Syndication Agent, Joint Bookrunner and

  Co-Lead Arranger

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kirk Tesch

  	
   

  
	
   

  	
   

  	
  Name: Kirk Tesch

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  CIBC WORLD MARKETS CORP., as Joint

  Bookrunner and Co-Lead Arranger

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Doug Cornett

  	
   

  
	
   

  	
   

  	
  Name: Doug Cornett

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as

  
	
   

  	
  Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul K.
  Stimpfl

  	
   

  
	
   

  	
   

  	
  Name:       Paul
  K. Stimpfl

  
	
   

  	
   

  	
  Title:        Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  UNION BANK OF CALIFORNIA, N.A., as

  
	
   

  	
  Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter
  Thompson

  	
   

  
	
   

  	
   

  	
  Name: Peter Thompson

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  SUMITOMO MITSUI BANKING

  CORPORATION, as

  
	
   

  	
  Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shigeru
  Tsuru

  	
   

  
	
   

  	
   

  	
  Name:  Shigeru Tsuru

  
	
   

  	
   

  	
  Title:    Joint General Manager

  
					

 

 S-1

 

ANNEX I

ADDRESSES FOR NOTICES

	
  LOAN PARTIES

  
	
   

  	
   

  	
   

  
	
  Watson Pharmaceuticals,
  Inc., and its Subsidiaries

  	
   

  	
  311 Bonnie Circle 

  Corona, California 92880-2882 

  Attention: Chief Financial Officer 

  Phone: 800-249-5499 

  Fax: 951-493-5817

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  311 Bonnie Circle 

  Corona, California 92880-2882 

  Attention: General Counsel 

  Phone: 800-249-5499 

  Fax: 951-493-5817

  
	
   

  	
   

  	
   

  
	
  ADMINISTRATIVE AGENT

  
	
   

  
	
  Canadian Imperial Bank of Commerce,

  acting through its New York agency

  	
   

  	
  Primary Credit Contact:
  

  
	
   

  	
   

  	
  300 Madison Avenue

  New York, NY 10017 

  Attention: Renee Dudley 

  Phone: 212-856-6781 

  Fax: 212-856-3763

  

 

 

 

ANNEX II

Pricing Grid

	
  Ratings

  	
   

  	
  Commitment Fee

  	
   

  	
  Applicable Margin

  for Eurodollar Loans

  	
   

  	
  Applicable Margin

  for Base Rate Loans

  	
   

  
	
  3
  BBB+/Baa1

  	
   

  	
  .100

  	
  %

  	
  .500

  	
  %

  	
  .000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB/Baa2

  	
   

  	
  .125

  	
  %

  	
  .625

  	
  %

  	
  .000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB-/Baa3

  	
   

  	
  .150

  	
  %

  	
  .750

  	
  %

  	
  .000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BB+/Ba1

  	
   

  	
  .200

  	
  %

  	
  1.00

  	
  %

  	
  .000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  < BB+/Ba1

  	
   

  	
  .250

  	
  %

  	
  1.25

  	
  %

  	
  .250

  	
  %

  

 

The ratings referred to above are the credit ratings
assigned to this credit facility by each of S&P and Moody’s,
respectively.  In the event of split
ratings, if the two ratings are one level apart, the higher rating shall apply,
and if the two ratings are more than one level apart, the level that is one
level higher than the lower of the two ratings shall apply.

 

 

ANNEX III

[EBITDA Table]

 

 

ANNEX IV

[Schedule of Guarantors]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]