CREDIT AGREEMENT AND GUARANTY

 

CREDIT AGREEMENT

 

TABLE OF CONTENTS

 

		Page
SECTION 1. DEFINITIONS		1
1.1	Certain Defined Terms	1
1.2	Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement	23
1.3	Other Definitional Provisions and Rules of Construction	23
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS		24
2.1	Commitment; Making of Loans; Letters of Credit	24
2.2	Issuance of Letters of Credit and Purchase of Participations Therein	25
2.3	Pro Rata Shares; Availability of Funds; UCP	29
2.4	The Register; Evidence of Debt; Notes	30
2.5	Interest on the Loans	31
2.6	Fees	35
2.7	Provisions Regarding Payments	36
2.8	Increased Costs; Taxes	38
2.9	Special Provisions Governing LIBOR Rate Loans	43
2.10	Matters Relating to Currency Exchange Rates and Conversion of Amounts to Alternative Currencies	44
2.11	Defaulting Lenders	45
2.12	Removal or Replacement of a Lender	46
2.13	Mitigation	47
2.14	Increase in the Aggregate Commitments	47
SECTION 3. CONDITIONS PRECEDENT		49
3.1	Conditions to Effectiveness	49
3.2	Conditions Precedent to each Credit Extension	51
3.3	Conditions Precedent to each Commitment Increase	52
SECTION 4. REPRESENTATIONS AND WARRANTIES		52
4.1	Organization, Powers, Qualification, Good Standing, Business and Subsidiaries	52
4.2	Authorization of Borrowing, etc.	53
4.3	Disclosure	53
4.4	Financial Condition	54
4.5	No Material Adverse Change	54
4.6	Intellectual Property Matters	54
4.7	No Litigation; Compliance with Laws	55
4.8	No Default	55
4.9	Governmental Regulation	55

 

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4.10	Securities Activities	55
4.11	Employee Benefit Plans	56
4.12	Environmental Protection	56
4.13	Pari Passu	57
4.14	Restrictions	57
SECTION 5. AFFIRMATIVE COVENANTS		57
5.1	Financial Statements and Other Reports	57
5.2	Books and Records	60
5.3	Existence	60
5.4	Insurance	60
5.5	Payment of Taxes	60
5.6	Payment and Performance of Obligations	61
5.7	Maintenance of Properties	61
5.8	Compliance with Laws	61
5.9	Use of Proceeds	61
5.10	Claims Pari Passu	61
5.11	Further Assurances	61
SECTION 6. NEGATIVE COVENANTS		62
6.1	Liens	62
6.2	Indebtedness	64
6.3	Acquisitions	65
6.4	Restrictions on Subsidiary Distributions	65
6.5	Restricted Payments	66
6.6	Restriction on Fundamental Changes and Asset Sales	66
6.7	Conduct of Business	66
6.8	Fiscal Year	67
6.9	Interest Rate Agreements and Currency Agreements	67
6.10	Transactions with Shareholders and Affiliates	67
6.11	Financial Covenants	67
SECTION 7. GUARANTY		68
7.1	Guaranty of the Obligations	68
7.2	Payment by the Borrower	68
7.3	Liability of Guarantor Absolute	68
7.4	Waivers by Guarantor	70
7.5	Guarantor’s Rights of Subrogation, Contribution, etc.	71
7.6	Subordination of Other Obligations	72
7.7	Continuing Guaranty	72
7.8	Authority of Credit Parties	72
7.9	Financial Condition of Credit Parties	72
7.10	Bankruptcy, etc.	72

 

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SECTION 8. EVENTS OF DEFAULT		73
8.1	Failure to Make Payments When Due	73
8.2	Default in Other Agreements	73
8.3	Breach of Certain Covenants	74
8.4	Breach of Representation or Warranty	74
8.5	Other Defaults Under Loan Documents	74
8.6	Involuntary Bankruptcy; Appointment of Receiver, etc.	74
8.7	Voluntary Bankruptcy; Appointment of Receiver, etc.	75
8.8	Judgments and Attachments	75
8.9	Dissolution	75
8.10	Employee Benefit Plans	75
8.11	Change in Control	75
8.12	Repudiation of Obligations	75
SECTION 9. MISCELLANEOUS		76
9.1	Assignments and Participations in Loans and Letters of Credit	76
9.2	Expenses	78
9.3	Indemnity	79
9.4	Exception for Subsidiary Borrowers	80
9.5	Set-Off	80
9.6	Amendments and Waivers	81
9.7	Independence of Covenants	81
9.8	Notices	82
9.9	Survival of Representations, Warranties and Agreements	83
9.10	Failure or Indulgence Not Waiver; Remedies Cumulative	84
9.11	Marshalling; Payments Set Aside	84
9.12	Severability	84
9.13	Headings	84
9.14	Applicable Law	84
9.15	Successors and Assigns	85
9.16	Consent to Jurisdiction and Service of Process	85
9.17	Waiver of Jury Trial	86
9.18	Confidentiality	86
9.19	Ratable Sharing	87
9.20	Counterparts; Effectiveness	88
9.21	Obligations Several; Independent Nature of Lenders’ Rights	88
9.22	Usury Savings Clause	88
9.23	Judgment Currency	89
9.24	Termination of Existing Credit Agreement	89
9.25	No Fiduciary Duty	89
SECTION 10. AGENTS		90
10.1	Authorization and Authority	90
10.2	Agent Individually	90

 

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10.3	Duties of Agent; Exculpatory Provisions	91
10.4	Reliance by Agent	92
10.5	Delegation of Duties	93
10.6	Resignation of Agent	93
10.7	Non-Reliance on Administrative Agent and Other Lenders	94
10.8	Right to Indemnity	95
10.9	Agents Under Guaranty	95
10.10	No Other Duties, etc.	96
SECTION 11. SUBSIDIARY BORROWERS		96
11.1	Joinder of Subsidiary Borrowers	96
11.2	Termination of Status as Subsidiary Borrower	98

 

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EXHIBITS

 

I		Form of Notice of Borrowing
II		Form of Conversion/Continuation Notice
III		Form of Note
IV		Form of Certificate Re Non-Bank Status
V		Form of Assignment Agreement
VI		Form of Issuance Notice
VII		Form of Secretary’s Certificate
VIII		Form of Officer’s Certificate
IX		Form of Joinder Agreement

 

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SCHEDULES

 

2.1A		Lenders’ Commitments and Pro Rata Shares
3.1F		Litigation
6.1		Liens
6.2		Subsidiary Indebtedness
6.10		Transactions with Affiliates

 

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CREDIT AGREEMENT AND GUARANTY

 

This CREDIT AGREEMENT AND GUARANTY is dated as of October 14, 2009 and entered into by and among Hospira, Inc., a Delaware corporation (the “ Borrower ”), the Subsidiary Borrowers from time to time party hereto, the banks and financial institutions listed on the signature pages hereof (collectively, the “ Initial Lenders ”), Citigroup Global Markets, Inc. ( “CGMI” ), RBS Securities Inc. (“ RBS Securities ”) and Morgan Stanley Senior Funding, Inc. (“ MSSF ”) as joint lead bookrunners and joint lead arrangers (in such capacity, the “ Lead Arrangers ”), The Royal Bank of Scotland plc (“ RBS ”) and MSSF as joint syndication agents (in such capacity, the “ Syndication Agents ”), BANK OF AMERICA, N.A. and WACHOVIA BANK, N.A., A WELLS FARGO COMPANY, as co-documentation agents (in such capacity, the “ Documentation Agents ”), and Citibank, N.A. as administrative agent for the Lenders (“ Citibank ” and in such capacity, the “ Administrative Agent ”).

 

PRELIMINARY STATEMENTS

 

The Credit Parties have requested, and the Lenders have agreed to extend, revolving loans and letters of credit in the amount and on the terms and conditions set forth herein.

 

NOW, THEREFORE , in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Credit Parties, the Lenders, the Lead Arrangers, the Syndication Agents and the Administrative Agent agree as follows:

 

SECTION 1.                             DEFINITIONS

 

1.1                                Certain Defined Terms .

 

The following terms used in this Agreement shall have the following meanings:

 

“ Acquisition ” means the purchase or other acquisition (by merger or otherwise) by a Person of all or substantially all of the assets of, or all of the Capital Stock of, or a business line or unit or a division of, any other Person.

 

“ Administrative Agent ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Affected Lender ” shall have the meaning ascribed to such term in Section 2.9B.

 

“ Affiliate ” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

 

“ Agents ” means the Administrative Agent, the Syndication Agents and the Documentation Agents, collectively, and also means and includes any successor Administrative Agent appointed pursuant to Section 10.6.

 

“ Aggregate Amounts Due ” shall have the meaning ascribed to such term in Section 9.19.

 

“ Agreement ” means this Credit Agreement and Guaranty as it may be amended, supplemented or otherwise modified from time to time.

 

“ Alternative Currency ” means Euros, Canadian dollars, pounds sterling, Japanese yen or any other currency that is acceptable to all Lenders.

 

“ Alternative Currency Loan ” means a LIBOR Rate Loan made in an Alternative Currency pursuant to the applicable Notice of Borrowing or a Canadian Prime Rate Loan.

 

“ Alternative Currency Sublimit ” means a Dollar Amount of $100,000,000.

 

“ Applicable Currency ” means, as to any particular payment or Loan, the currency in which it is denominated or payable.

 

“ Applicable Law ” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

 

“ Applicable Margin ” means, as of any date, a percentage per annum determined by reference to the applicable Performance Level with respect to the Borrower in effect on such date, as set forth below:

 

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For purposes hereof, “ Performance Level ” means, with respect to the Borrower, Performance Level I, Performance Level II, Performance Level III, Performance Level IV or Performance Level V, as identified by reference to the public debt rating of the Borrower, as the case may be, in effect on such date as set forth below:

 

 

For purposes of this definition, the Performance Level shall be determined by the applicable public debt rating for the Borrower as follows: (i) the public debt ratings shall be determined by the then-current rating announced by either S&P or Moody’s, as the case may be, for any class of non-credit-enhanced long-term senior unsecured debt issued by the Borrower; (ii) if only one of S&P and Moody’s shall have in effect such a public debt rating, the Performance Level shall be determined by reference to the applicable rating; (iii) if neither S&P nor Moody’s shall have in effect such a public debt rating, the applicable Performance Level will be Level V; (iv) if such public debt ratings established by S&P and Moody’s shall fall within different levels, the public debt rating will be determined by the higher of the two ratings, provided that, in the event that the lower of such public debt ratings is more than one level below the higher of such public debt ratings, the public debt rating will be determined based upon the level that is one level above the lower of such public debt ratings; (v) if any such public debt 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 (vi) if S&P or Moody’s shall change the basis on which such public debt ratings are

 

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established, each reference to the public debt rating 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.

 

“ Applicable Reserve Requirement ” means, at any time with respect to any Lender, for any LIBOR Rate Loan, the rate, expressed as a decimal, at which reserves (including any basic marginal, special, supplemental, emergency or other reserves) are required to be maintained by such Lender against “Eurocurrency liabilities” (as such term is defined in Regulation D) under regulations issued from time to time by the Board of Governors of the Federal Reserve System or other applicable banking regulator. Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserves required to be maintained by the applicable Lender with respect to (i) any category of liabilities which includes deposits by reference to which the applicable LIBOR rate is to be determined, or (ii) any category of extensions of credit or other assets which include LIBOR Rate Loans. For purposes hereof, a LIBOR Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credit for proration, exceptions or offsets that may be available from time to time to the applicable Lender.

 

“ Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“ Asset Sale ” means a sale, lease or sub-lease (as lessor or sublessor), sale and leaseback transaction, assignment, conveyance, transfer or other disposition to, or any exchange of property with, any Person, in one transaction or a series of transactions, of all or any part of any Credit Party’s or any of their Subsidiaries’ businesses, properties or assets of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, including the Capital Stock of any Subsidiary of such Credit Party, other than such businesses, properties or assets sold in the ordinary course of business and consistent with past business practice of the Borrower and its Subsidiaries.

 

“ Assignment Agreement ” means an assignment agreement, substantially in the form of Exhibit V hereto, satisfactory in form and substance to the Administrative Agent.

 

“ Assuming Lender ” shall have the meaning specified in Section 2.14B.

 

“ Assumption Agreement ” shall have the meaning specified in Section 2.14B.

 

“ Available Amount ” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

 

“ Bahamian Subsidiary ” means Hospira Ltd.

 

“ Bankruptcy Code ” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

 

“ Base Rate ” means, for any day, a rate per annum equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus

 

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1 / 2  of 1% and (iii) (c) the British Bankers Association Interest Settlement Rate applicable to Dollars for a period of one month (“ One Month LIBOR ”) plus 1.00% (for the avoidance of doubt, the One Month LIBOR for any day shall be based on the rate appearing on Reuters LIBOR01 Page (or other commercially available source providing such quotations as designated by the Agent from time to time) at approximately 11:00 a.m. London time on such day. Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or One Month LIBOR shall be effective on the effective day of such change in the Prime Rate, the Federal Funds Effective Rate or One Month LIBOR, respectively.

 

“ Base Rate Loan ” means a Loan bearing interest at a rate determined by reference to the Base Rate or, with regard to a Loan denominated in Canadian Dollars, the Canadian Prime Rate.

 

“ Beneficiary ” means each Agent, the Issuing Bank and Lender.

 

“ Borrower ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Borrower Commercial Paper Debt ” means short-term Indebtedness incurred by the Borrower in the ordinary course of business of the Borrower and pursuant to the Borrower’s commercial paper program.

 

“ Borrowing ” means a borrowing consisting of Loans of the same Type that (i) are made to the same Borrower, (ii) are made, continued or converted on the same day and (iii) in the case of LIBOR Rate Loans, have the same Interest Period.

 

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City, or, with respect to the obligations of any Subsidiary Borrower, Toronto, Canada or London, England, as applicable, are authorized or required by law to remain closed, provided that (a) when used in connection with a LIBOR Rate Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market, (b) when used in connection with an Alternative Currency Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in deposits in the applicable Alternative Currency in the London interbank market and (c) when used in connection with any Loan denominated in Euros, the term “Business Day” shall also exclude any day on which the TARGET payment system is not open for the settlement of payment in Euro.

 

“ Canadian Dollars ” means the lawful money of Canada.

 

“ Canadian Prime Rate ” means, on any day, the annual rate of interest (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the greater of:

 

(a)           the annual rate of interest announced from time to time by Citibank, N.A. as its prime rate in effect on such day for determining interest rates on Canadian Dollar denominated commercial loans in Canada; and

 

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(b)           the annual rate of interest equal to the sum of (A) the CDOR Rate in effect on such day and (B) 1%.

 

“ Canadian Subsidiary ” means Hospira Healthcare Corporation, a corporation organized under the Canada Business Corporations Act.

 

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

 

“ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

 

“ Cash ” means money, currency or a credit balance in any demand or deposit account.

 

“ Cash Equivalents ” means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (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, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A 1 from S&P or at least P 1 from Moody’s; (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A 1 from S&P or at least P 1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; (v) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000 and (c) has the highest rating obtainable from either S&P or Moody’s; and (vi) in the case of any Credit Party or Subsidiary of a Credit Party doing business outside the United States, any obligation that is substantially similar or comparable to the obligations described above and that is customary in the applicable jurisdiction in which such Subsidiary is doing business.

 

“ CDOR Rate ” means, on any date, the annual rate of interest which is the average of the rates of Canadian Dollars bankers’ acceptances for a term of thirty (30) days which appear on the “Reuters Screen CDOR Page” at approximately 10:00 a.m. (Toronto time), on such date, or if such date is not a Business Day, then on the immediately preceding Business Day; provided , that if such rate does not appear on the Reuters Screen CDOR Page as

 

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contemplated, the CDOR Rate on any date shall be the annual rate of interest quoted to Citibank, N.A. for such bankers’ acceptances for a term of thirty (30) days.

 

“ Certificate re Non-Bank Status ” means a certificate substantially in the form of Exhibit IV annexed hereto delivered by a Lender to the Administrative Agent pursuant to Section 2.8 B(iii)(b).

 

“ CGMI ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Change of Control ” means (i) any Person or “group” (within the meaning of Rules 13d 3 and 13d 5 under the Exchange Act) shall have acquired beneficial ownership of 30% or more on a fully diluted basis of the voting and/or economic interest in the Capital Stock of the Borrower; (ii) any Person or “group” (within the meaning of Rules 13d 3 and 13d 5 under the Exchange Act) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of the Borrower; (iii) during any period of up to 24 consecutive months, commencing before or after the date of this Agreement, a majority of the members of the board of directors of the Borrower shall not be Continuing Directors; (iv) any Person or “group” (within the meaning of Rules 13d 3 and 13d 5 under the Exchange Act) shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Borrower or (v) an event of series of events resulting in the Borrower ceasing to (i) beneficially own and control 100% on a fully diluted basis of the economic and voting interests in the Capital Stock of any Subsidiary Borrower (other than directors’ qualifying shares) or (ii) have the power to elect a majority of the members of the board of directors (or similar governing body) of any Subsidiary Borrower.

 

“ Citibank ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Commitment ” means the Dollar Amount of the commitment of a Lender to make or otherwise fund any Loan and to acquire participations in Letters of Credit hereunder and “ Commitments ” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Commitment, if any, is set forth on Schedule 2.1A or in the applicable Assumption Agreement or Assignment Agreement, as the case may be, subject to any adjustment, increase or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Commitments as of the Effective Date is $700,000,000.

 

“ Commitment Increase ” means an increase in the aggregate amount of the Commitments pursuant to Section 2.14.

 

“ Commitment Period ” means the period from the Effective Date to but excluding the Maturity Date.

 

“ Compliance Certificate ” means a certificate of the chief financial officer, treasurer or controller of the Borrower setting forth computations in reasonable detail demonstrating (i) compliance with the covenants set forth in Section 6.11, as at the end of the

 

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period covered by such financial statements, and (ii) certifying that such officer has obtained no knowledge of any Potential Event of Default or Event of Default except as specified in such certificate.

 

“ Consolidated Adjusted EBITDA ” means, in respect of the Borrower and its Subsidiaries on a consolidated basis, for any period, an amount equal to (i) the sum, without duplication, of the amounts for such period of (a) Consolidated Net Income, (b) Consolidated Financing Expense, (c) provisions for taxes based on income, (d) total depreciation expense, (e) total amortization expense, (f) other non-Cash items reducing Consolidated Net Income (excluding any such non-Cash item to the extent that it represents an accrual or reserve for potential Cash items in any future period or amortization of a prepaid Cash item that was paid in a prior period) and (g) Permitted Addbacks, minus (ii) other non-Cash items increasing Consolidated Net Income for such period (excluding any such non-Cash item to the extent it represents the reversal of an accrual or reserve for potential Cash item in any prior period); provided that “Consolidated Adjusted EBITDA” for the fiscal quarters ending December 31, 2008, March 31, 2009 and June 30, 2009 shall be deemed to be $236,727,000, $195,890,000 and $217,680,000, respectively.

 

“ Consolidated Financing Expense ” means, in respect of the Borrower and its Subsidiaries on a consolidated basis, for any period, total interest expense (including that portion attributable to Capital Leases in accordance with GAAP and capitalized interest) with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to any letters of credit and bankers’ acceptance financing and net costs under Interest Rate Agreements; provided that “Consolidated Financing Expense” for the fiscal quarters ending December 31, 2008, March 31, 2009 and June 30, 2009 shall be deemed to be $29,493,000, $26,998,000 and 28,341,000, respectively.

 

“ Consolidated Net Income ” means, in respect of the Borrower and its Subsidiaries on a consolidated basis, for any period, (i) the net income (or loss) for the Borrower and its Subsidiaries for such period taken as a single accounting period determined in conformity with GAAP, minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary of the Borrower) in which any other Person (other than the Borrower or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of its Subsidiaries by such Person during such period, (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries or that Person’s assets are acquired by the Borrower or any of its Subsidiaries, (c) the income of any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (d) any after-tax gains or losses attributable to Asset Sales or returned surplus assets of any Pension Plan, and (e) (to the extent not included in clauses (a) through (d) above) any net extraordinary gains or net non-cash extraordinary losses.

 

“ Consolidated Net Worth ” means, at any date of determination, all items which in conformity with GAAP would be included under shareholders’ equity on a consolidated balance sheet of the Borrower and its Subsidiaries.

 

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“ Consolidated Total Debt ” means, in respect of the Borrower and its Subsidiaries on a consolidated basis, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness, determined on a consolidated basis in accordance with GAAP.

 

“ Continuing Director ” as applied to any Person, means, for any period, an individual who is a member of the board of directors of such Person on the first day of such period or whose election to the board of directors of such Person is approved by a majority of the other Continuing Directors.

 

“ Contractual Obligation ”, as applied to any Person, means any provision of any securities issued by that Person or of any indenture, mortgage, deed of trust, or other material contract, undertaking, agreement or other material 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.

 

“ Conversion/Continuation Date ” means the effective date of a continuation or conversion, as the case may be, as set forth in the applicable Conversion/Continuation Notice.

 

“ Conversion/Continuation Notice ” means a Conversion/Continuation Notice substantially in the form of Exhibit II .

 

“ Credit Date ” means the date of a Credit Extension.

 

“ Credit Exposure ” means, with respect to any Lender as of any date of determination, (i) prior to the termination of the Commitments, that Lender’s Commitment; and (ii) after the termination of the Commitments, the sum of (a) the aggregate outstanding principal amount of the Loans of that Lender, (b) in the case of the Issuing Bank, the aggregate Letter of Credit Usage in respect of all Letters of Credit issued by that Lender (net of any participations by Lenders in such Letters of Credit), and (c) the aggregate amount of all participations by that Lender in any outstanding Letters of Credit or any unreimbursed drawing under any Letter of Credit.

 

“ Credit Extension ” means the making of a Loan or the issuing of a Letter of Credit.

 

“ Credit Party ” means each Person (other than any Agent, Lead Arranger, the Issuing Bank or any Lender or other representative thereof) from time to time party to a Loan Document.

 

“ Currency Agreement ” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement.

 

“ Default Excess ” means, with respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal amount of Loans of all Lenders (calculated as if all Defaulting Lenders had funded all of their respective Defaulted Loans) over the aggregate outstanding principal amount of all Loans of such Defaulting Lender.

 

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“ Default Period ” means, with respect to any Defaulting Lender, the period commencing on the date of the applicable Funding Default and ending on the earliest of the following dates: (i) the date on which all Commitments are cancelled or terminated and/or the Obligations are declared or become immediately due and payable, (ii) the date on which (a) the Default Excess with respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the non pro rata application of any voluntary or mandatory prepayments of the Loans in accordance with the terms of Section 2.7B) and (b) such Defaulting Lender shall have delivered to the Credit Parties and the Administrative Agent a written reaffirmation of its intention to honor its obligations hereunder with respect to its Commitment, and (iii) the date on which the Credit Parties, the Administrative Agent and the Requisite Lenders waive all Funding Defaults of such Defaulting Lender in writing.

 

“ Defaulted Loan ” shall have the meaning ascribed to such term in Section 2.11.

 

“ Defaulting Lender ” shall have the meaning ascribed to such term in Section 2.11.

 

“ Deposit Account ” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.

 

“ Disclosed Litigation ” shall have the meaning ascribed to such term in Section 3.1F.

 

“ Documentation Agents ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Dollar-Denominated Loan ” means a Loan that is made in Dollars.

 

“ Dollar Amount ” means, at any time:

 

(a)                                   with respect to any Dollar-Denominated Loan, the principal amount thereof then outstanding;

 

(b)                                  with respect to any Alternative Currency Loan, the principal amount thereof then outstanding in the relevant Alternative Currency, converted to Dollars in accordance with Section 2.10; and

 

(c)                                   with respect to any Letter of Credit, the amount thereof.

 

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

 

“ Effective Date ” means the date on which the conditions specified in Section 3.1 are satisfied or waived in accordance with Section 9.6.

 

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“ Eligible Assignee ” means (A) any Lender and any Affiliate of any Lender; and (B) any commercial bank, savings and loan association, savings bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buys loans as one of its businesses; provided that none of the Borrower, an Affiliate of the Borrower or any of its Subsidiaries shall be an Eligible Assignee.

 

“ Employee Benefit Plan ” means any “employee benefit plan” as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) which is or was maintained or contributed to by the Borrower or any of its ERISA Affiliates.

 

“ Environmental Claim ” means any investigation, notice, notice of violation, claim, action, suit, proceeding, order, consent decree, settlement, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law, (ii) in connection with any Hazardous Materials or any actual or alleged Hazardous Materials Activity or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

 

“ Environmental Laws ” means any and all current or future federal, state, local and foreign laws and regulations, statutes, ordinances, orders, rules, guidance documents, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters, including those relating to any Hazardous Materials Activity, (ii) the generation, use, storage, transportation or disposal of Hazardous Materials, or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare.

 

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

 

“ ERISA Affiliate ” means, as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member.

 

“ ERISA Event ” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which 30-day notice to the PBGC has been waived); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan

 

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pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by the Borrower or any of its ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which might reasonably constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on the Borrower or any of its ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal by the Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential withdrawal liability to the Borrower or any of its ERISA Affiliates as a result of the withdrawal, or the receipt by the Borrower or any of its ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the imposition on the Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan, in each case in an amount that would be material; (ix) the assertion of a claim (other than routine claims for benefits) against any Employee Benefit Plan or the assets thereof, or against the Borrower or any of its ERISA Affiliates in connection with any Employee Benefit Plan, if, in any such case, such claim would reasonably be expected to result in any material liability; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code if, in either case, such failure would reasonably be expected to result in any material liability for the Borrower or any of its ERISA Affiliates; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

 

“ Euro ” means the single currency of the members of the European Union from time to time that adopt a single, shared currency.

 

“ Event of Default ” means each of the events set forth in Section 8.

 

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

 

“ Facilities ” means any and all real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by the Borrower or any of its Subsidiaries or any of their respective predecessors or Affiliates.

 

“ Facility Fee ” shall have the meaning ascribed to such term in Section 2.6(i)(a).

 

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“ Federal Funds Effective Rate ” means for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent, in its capacity as a Lender, on such day on such transactions as determined by the Administrative Agent.

 

“ Fee Letter ” means the Fee Letter, dated September 18, 2009, among the Borrower, Citibank and CGMI, as the same may be amended, supplemented or otherwise modified from time to time.

 

“ Fiscal Quarter ” means a fiscal quarter of any Fiscal Year.

 

“ Fiscal Year ” means the fiscal year of the Borrower and its Subsidiaries ending on December 31 of each calendar year (excluding any Subsidiary of the Borrower that is acquired after the date hereof that has not yet changed its fiscal year to a calendar year). For purposes of this Agreement, any particular Fiscal Year shall be designated by reference to the calendar year in which such Fiscal Year ends.

 

“ Fund ” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“ Funding and Payment Office ” means, for each of the Administrative Agent and the Issuing Bank, the office of such Person as set forth under the such Person’s name on the signature pages hereof, or such other office designated in a written notice delivered by the Administrative Agent or the Issuing Bank to the Borrower and each Lender.

 

“ Funding Default ” shall have the meaning ascribed to such term in Section 2.11.

 

“ GAAP ” means, subject to the limitations on the application thereof set forth in Section 1.2, generally accepted accounting principles set forth in opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the United States accounting profession, in each case as the same are applicable to the circumstances as of the date of determination.

 

“ Governmental Acts ” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority.

 

“ Governmental Authority ” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or

 

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instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

 

“ Governmental Authorization ” means any permit, license, authorization, plan, directive, registration with, approval of, consent order or consent decree of or from, or notice to any Governmental Authority.

 

“ Guaranteed Obligations ” shall have the meaning ascribed to such term in Section 7.1.

 

“ Guarantor ” means the Borrower.

 

“ Guaranty ” means the guaranty of the Guarantor set forth in Section 7.

 

“ Hazardous Materials ” means any chemical, material or substance, (i) exposure to which is prohibited or limited by any Governmental Authority, (ii) which is designated, classified or regulated as “hazardous” or “toxic” or as a “pollutant” or “contaminant” under any Environmental Law or (iii) which may or could pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor or outdoor environment.

 

“ Hazardous Materials Activity ” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

 

“ Highest Lawful Rate ” shall have the meaning ascribed to such term in Section 9.22.

 

“ Increase Date ” shall have the meaning specified in Section 2.14A.

 

“ Increasing Lender ” shall have the meaning specified in Section 2.14A.

 

“ Indebtedness ”, as applied to any Person, means (without duplication) (i) all indebtedness for borrowed money; (ii) that portion of obligations with respect to Capital Leases that is classified as a liability on a balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA), which purchase price is (a) due more than six months from the date of incurrence of the obligation in respect thereof or (b) evidenced by a note or similar written instrument; (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; (vi) the face amount of any letter of credit issued for the account of that

 

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Person or as to which that Person is otherwise liable for reimbursement of drawings; (vii) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another; (viii) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof; and (ix) any liability of such Person for an obligation of another through any agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (b) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (a) or (b) of this clause (ix), the primary purpose or intent thereof is as described in clause (viii) above.

 

“ Indemnitees ” shall have the meaning ascribed to such term in Section 9.3.

 

“ Indemnified Liabilities ” shall have the meaning ascribed to such term in Section 9.3.

 

“ Initial Lenders ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Interest Coverage Ratio ” means the ratio as of the last day of any Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period then ended, to (ii) Consolidated Financing Expense for such four-Fiscal Quarter period.

 

“ Interest Payment Date ” means with respect to (i) any Base Rate Loan, each March 31, June 30, September 30 and December 31 of each year, commencing on the first such date to occur after the Effective Date, and the Maturity Date and (ii) any LIBOR Rate Loan, the last day of each Interest Period and, if any Interest Period is longer than three months, the date that is three months after the first day of such Interest Period, provided that, if any Interest Payment Date would otherwise fall on a day which is not a Business Day, it shall be postponed to the next day which is a Business Day.

 

“ Interest Period ” shall have the meaning ascribed to such term in Section 2.5B.

 

“ Interest Rate Agreement ” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement.

 

“ Interest Rate Determination Date ” means, with respect to any Interest Period, the second Business Day prior to the first day of such Interest Period.

 

“ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

 

“ Irish Subsidiary ” means Hospira, an organization organized under the laws of Ireland.

 

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“ Issuance ” with respect to any Letter of Credit means the issuance, amendment, renewal or extension of such Letter of Credit.

 

“ Issuance Notice ” means an Issuance Notice substantially in the form of Exhibit VI .

 

“ Issuing Bank ” means any Lender that has agreed to become an Issuing Bank and has been approved as an Issuing Bank by the Administrative Agent and the Borrower, together with its permitted successors and assigns in such capacity.

 

“ Joinder Agreement ” means a Joinder Agreement substantially in the form of Exhibit IX , with such amendments or modifications as may be approved by the Administrative Agent.

 

“ Joinder Date ” means the date on which the conditions specified in Section 11 are satisfied or waived in accordance with Section 9.6.

 

“ Joint Venture ” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; provided that in no event shall any corporate Subsidiary of any Person be considered a Joint Venture to which such Person is a party.

 

“ Lead Arrangers ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Lender ” and “ Lenders ” shall mean the Initial Lenders, each Assuming Lender that shall become a party hereto pursuant to Section 2.14 and each Person that shall become a party hereto pursuant to Section 9.15.

 

“ Letter of Credit ” means a commercial or standby letter of credit issued or to be issued by the Issuing Bank pursuant to this Agreement.

 

“ Letter of Credit Agreement ” has the meaning specified in Section 2.2B.

 

“ Letter of Credit Sublimit ” means the lesser of (i) $100,000,000 and (ii) the aggregate unused amount of the Commitments then in effect.

 

“ Letter of Credit Usage ” means, as at any date of determination, the sum of (i) the maximum aggregate amount which is, or at any time thereafter may become, available for drawing under all Letters of Credit then outstanding, and (ii) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Bank and not theretofore reimbursed by or on behalf of the Borrower.

 

“ Leverage Ratio ” means, in respect of the Borrower and its Subsidiaries on a consolidated basis, the ratio of (i) Consolidated Total Debt as of the last day of any Fiscal Quarter to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period then ended.

 

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“ LIBOR ” means, for any Interest Rate Determination Date, the offered rate in the London interbank market for deposits in Dollars or the relevant Alternative Currency offered for a term comparable to such Interest Period that appears on Reuters LIBOR01 Page as of approximately 11:00 A.M., London time (or such other page as may replace such page on such service for the purpose of displaying the rates at which such Dollar or Alternative Currency deposits are offered by leading banks in the London interbank deposit market), or if no quotation appears on Reuters LIBOR01 Page, the average rate per annum which the offices of four leading banks selected by the Administrative Agent and located in London offer for deposits in Dollars or the relevant Alternative Currency in the London interbank deposit market at approximately 11:00 a.m. (London time).

 

“ LIBOR Rate Loan ” means any Loan bearing interest at a rate calculated with respect to LIBOR.

 

“ Lien ” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

 

“ Loan ” means a loan made by a Lender to a Credit Party pursuant to Section 2.1A.

 

“ Loan Documents ” means this Agreement, the Fee Letter, any Note, any Joinder Agreement and any letter of credit application or reimbursement agreement executed by the Borrower in favor of the Issuing Bank relating to Letters of Credit.

 

“ Margin Stock ” shall have the meaning ascribed to such term in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.

 

“ Material Adverse Effect ” means a material adverse effect upon (i) the business, operations, properties or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the Borrower to perform, or of the Administrative Agent to enforce, any of the Obligations of the Borrower (including the Obligations under Section 7 hereof) or (iii) the legality, validity, binding effect or enforceability against the Borrower (or any Subsidiary Borrower that has outstanding or has requested Alternative Currency Loans) of a Loan Document to which it is a party. For the avoidance of doubt, changes or effects resulting from items related to Permitted Addbacks shall not be considered in determining whether a Material Adverse Effect has occurred.

 

“ Maturity Date ” means the earliest to occur of (i) the third anniversary of the Effective Date, (ii) the date the Commitments are permanently reduced to zero pursuant to Section 2.7B, and (iii) the date of the termination of the Commitments pursuant to Section 8.

 

“ Mayne Pharma ” means Mayne Pharma Limited ACN 097 064 330.

 

“ Mayne Pharma Acquisition ” means the acquisition by Hospira Holdings (S.A.) Pty Ltd of all of the stock of Mayne Pharma.

 

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“ Moody’s ” means Moody’s Investor Services, Inc. or any successor thereto.

 

“ MSSF ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Multiemployer Plan ” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA to which the Borrower or any of its ERISA Affiliates is obligated to make contributions.

 

“ Non-US Lender ” shall have the meaning ascribed to such term in Section 2.8B(iii)(a).

 

“ Note ” means a promissory note of a Credit Party issued pursuant to Section 2.4C, substantially in the form of Exhibit III , as amended, supplemented or otherwise modified from time to time.

 

“ Notice of Borrowing ” means a notice substantially in the form of Exhibit I annexed hereto delivered by any Credit Party to the Administrative Agent pursuant to Section 2.1B with respect to a proposed Borrowing.

 

“ Obligations ” means all obligations of every nature of the Credit Parties from time to time owing to the Agents, the Lead Arrangers and the Lenders or any of them under the Loan Documents.

 

“ Officer’s Certificate ” means, as applied to any corporation, a certificate executed on behalf of such corporation by any one of its chairman of the board (if an officer), its president, one of its vice presidents, its chief financial officer or its treasurer or, as applied to any limited partnership, a certificate executed on behalf of such limited partnership by the chairman of the board (if an officer), the president, one of the vice presidents, the chief financial officer or treasurer of the general partner of such limited partnership, or, if the general partner of such limited partnership is an individual, executed by such individual; provided that every Officer’s Certificate with respect to the compliance with a condition precedent to the making of any Borrowing shall include: (i) a statement that the officer making or giving such Officer’s Certificate has read such condition and any definitions or other provisions contained in this Agreement relating thereto, (ii) a statement that, in the opinion of the signer, he has made or has caused to be made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such condition has been complied with, and (iii) a statement as to whether, in the opinion of the signer, such condition has been complied with.

 

“ Organizational Documents ” means (i) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by laws, as amended, (ii) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, and (iv) with respect to any limited liability company, its articles of organization, as amended, and its operating agreement, as amended. In the event any term or condition of this Agreement or any other Loan Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to

 

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any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.

 

“ Patriot Act ” shall have the meaning ascribed to such term in Section 3.1D(ii).

 

“ PBGC ” means the Pension Benefit Guaranty Corporation and any successor thereto.

 

“ Pension Plan ” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA and which is intended to be qualified under Section 401(a) of the Code.

 

“ Performance Level ” shall have the meaning ascribed to such term within the definition of “Applicable Margin”.

 

“ Permitted Addbacks ” means each of the following to the extent taken into account in determining Consolidated Net Income for such period (all calculated on a consolidated pre-tax basis): (a) any one-time or special non-cash charges or expenses resulting from the Mayne Pharma Acquisition, including charges relating to the write-up of Mayne Pharma’s inventory and the write-off of in-process research and development; (b) the first $115,000,000 of charges and expenses (whether cash or non-cash) incurred before December 31, 2008 related to the integration of Mayne Pharma into the Borrower, including charges and expenses for employee severance or retention, integration of information systems, plant shutdowns, product relocation and relabeling and consulting fees); (c) the first $109,000,000 of restructuring charges and expenses (whether cash or non-cash) incurred after March 31, 2006 and before December 31, 2008 related to the Borrower’s closure of its Ashland, Ohio, Donegal, Ireland and Montreal, Canada facilities and exit from its North Chicago, Illinois facility and related expenses (whether cash or non-cash) for the relocation of production from such facilities to other facilities; and (d) the first $125,000,000 of non-recurring cash expenses and charges incurred after September 30, 2009 in connection with Project Fuel (the previously-announced project to reduce operating costs and optimize manufacturing capabilities and capacity and related research and development operations).

 

“ Permitted Foreign Credit Facilities ” means those foreign credit facilities permitted pursuant to Section 6.2(viii).

 

“ Person ” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

 

“ Potential Defaulting Lender ” means any Lender that (a) is a Defaulting Lender, (b) is or becomes the subject of a bankruptcy or insolvency proceeding, (c) has notified the Borrower, the Administrative Agent, the Issuing Bank or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements generally in which it commits to extend credit or (d)

 

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failed, within three Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit, provided that such Lender shall cease to be a Potential Defaulting Lender under this clause (d) upon receipt of such information; provided , further , that a Lender shall not be a Potential Defaulting Lender solely by virtue of the ownership or acquisition of any ownership interest in such Lender or parent company thereof or the exercise of control over a Lender or parent company thereof by a governmental authority or instrumentality thereof.

 

“ Potential Event of Default ” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

 

“ Prime Rate ” means the rate of interest as announced by the Administrative Agent from time to time as its base rate, as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. The Administrative Agent or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

 

“ Pro Rata Share ” means, with respect to any Lender, the percentage obtained by dividing (a) the Credit Exposure of such Lender by (b) the aggregate Credit Exposure of all Lenders.

 

“ Proceedings ” shall have the meaning ascribed to such term in Section 5.1(vi).

 

“ Qualified Receivables Transaction ” means any transaction or series of transactions that may be entered into by the Borrower or any Subsidiary of the Borrower pursuant to which the Borrower or any such Subsidiary may sell, convey, pledge or otherwise transfer to a newly-formed Subsidiary of the Borrower or other special purpose entity, or any other Person, any accounts receivable (including chattel paper, instruments and general intangibles) or notes receivable and the rights and certain other property related thereto, provided that (i) all of the terms and conditions of such transaction or series of transactions, including the amount and type of any recourse to the Borrower or a Subsidiary of the Borrower with respect to the assets transferred, are acceptable to the Administrative Agent and the Requisite Lenders and (ii) the Receivables Transaction Attributed Indebtedness incurred in all such transactions does not exceed $150,000,000 at any time outstanding.

 

“ RBS ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ RBS Securities ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Receivables Transaction Attributable Indebtedness ” means, with respect to any Qualified Receivables Transaction on any date of determination, the unrecovered purchase price on such date of all assets sold, conveyed, pledged or otherwise transferred by the Borrower or any wholly-owned Subsidiary of the Borrower to the third-party conduit entity or other receivables credit provider under such Qualified Receivables Transaction.

 

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“ Register ” shall have the meaning ascribed to such term in Section 2.4A.

 

“ Regulation D ” means Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

“ Reimbursement Date ” shall have the meaning ascribed to such term in Section 2.2D.

 

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

 

“ Release ” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.

 

“ Replacement Lender ” shall have the meaning ascribed to such term in Section 2.12.

 

“ Requisite Lenders ” means Lenders having aggregate Pro Rata Shares of more than 50%; provided that during a Default Period the Credit Exposure held or deemed held by any Defaulting Lender shall be excluded for purposes of making a determination of Requisite Lenders.

 

“ Responsible Officer ” means the Chief Executive Officer, the Chief Financial Officer, the Treasurer or the General Counsel of a Credit Party or any other officer of such Credit Party responsible for overseeing or reviewing compliance with the Agreement.

 

“ Restricted Payment ” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of Capital Stock of the Borrower, except a dividend payable solely in shares of such class of Capital Stock to the holders of such class of Capital Stock; (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 the Borrower; and (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of the Borrower, except any repurchase or other acquisition of shares of such Capital Stock, or warrants, options or other rights to acquire such shares, in connection with employee compensation in the ordinary course of business in accordance with plans approved by the board of directors of the Borrower.

 

“ S&P ” means Standard & Poor’s Ratings Group, a division of The McGraw Hill Corporation or any successor thereto.

 

“ Securities ” means any stock, share, partnership interest, membership interest in a limited liability company, voting trust certificates, certificate of interest or participation in any profit-sharing agreement or arrangement, option, warrant, bond, debenture, note, or other

 

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evidence of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” 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.

 

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

 

“ Significant Subsidiary ” means, at any time, a Subsidiary that has or represents at least 5% of (i) the consolidated gross revenues of the Borrower and its Subsidiaries for the Fiscal Year then most recently ended and/or (ii) the consolidated assets of the Borrower and its Subsidiaries as of the last day of the Fiscal Year then most recently ended.

 

“ Spot Rate ” means, for any Alternative Currency on any day, the average of the Administrative Agent’s spot buying and selling rates for the exchange of such Alternative Currency and Dollars as of approximately 11:00 a.m. (London, England time) on such day.

 

“ Subject Transaction ” shall have the meaning ascribed to such term in Section 6.11C.

 

“ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

 

“ Subsidiary Borrower ” means any Subsidiary that is designated as a “Subsidiary Borrower” pursuant to Section 11.

 

“ Surviving Obligations ” means contingent indemnification liabilities of the Borrower under the Loan Documents that are not yet due and payable.

 

“ Syndication Agents ” shall have the meaning ascribed to such term in the introduction to this Agreement.

 

“ Tax ” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed; provided “Tax on the overall net income” of a Person shall be construed as a reference to a tax imposed by the jurisdiction in which that Person is organized or in which that Person’s applicable principal office (and/or, in the case of a Lender, its lending office) is located or in which that Person (and/or, in the case of a Lender, its lending office) is deemed to be doing business on all or part of the net income, profits or gains (whether worldwide, or only insofar as such income, profits or gains are considered to arise in or to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in the case of a Lender, its applicable lending office).

 

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“ Terminated Lender ” shall have the meaning ascribed to such term in Section 2.12.

 

“ Total Utilization of Commitments ” means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Loans plus (ii) the Letter of Credit Usage.

 

“ Type of Loan ” means a Base Rate Loan or a LIBOR Rate Loan.

 

1.2                                Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement .

 

Except as otherwise expressly provided in this Agreement, all accounting terms not otherwise defined herein shall have the respective meanings assigned to them in conformity with GAAP. Calculations in connection with the definitions, covenants and other provisions of this Agreement shall utilize accounting principles and policies in effect on the date hereof which are in conformity with those used to prepare the financial statements referred to in Section 4.4. Financial statements and other information required to be delivered by the Borrower to the Administrative Agent pursuant to clauses (i) and (ii) of Section 5.1 shall be prepared in accordance with GAAP as in effect at the time of such preparation. In the event that a change in GAAP or other accounting principles and policies after the date hereof affects in any material respect the calculations of the covenants contained herein, the Lenders and the Borrower agree to negotiate in good faith to amend the affected covenants (and related definitions) to compensate for the effect of such changes so that the restrictions, limitations and performance standards effectively imposed by such covenants, as so amended, are substantially identical to the restrictions, limitations and performance standards imposed by such covenants as in effect on the date hereof; provided that, if the Requisite Lenders and the Borrower fail to reach agreement with respect to such amendment within a reasonable period of time following the date of effectiveness of any such change, calculation of compliance by the Borrower and its Subsidiaries with the covenants contained herein shall be determined in accordance with GAAP as in effect immediately prior to such change.

 

1.3                                Other Definitional Provisions and Rules of Construction .

 

A.                                     Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.

 

B.                                     References to “Sections” and subsections shall be to Sections and subsections, respectively, of this Agreement unless otherwise specifically provided.

 

C.                                     The use in any of the Loan Documents of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

 

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D.                                     Whenever the term “wholly-owned” is used with respect to a Subsidiary of a Person, such term means that all of the Capital Stock (other than directors’ qualifying shares) of such Subsidiary is owned, directly or indirectly, by such Person.

 

SECTION 2.                             AMOUNT AND TERMS OF COMMITMENTS AND LOANS

 

2.1                               Commitment; Making of Loans; Letters of Credit .

 

A.                                    Commitments.

 

(i)                                      During the Commitment Period, subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Credit Parties herein set forth, each Lender severally agrees to make Loans (including, with respect to Alternative Currency Loans, through any Affiliate of such Lender) (i) denominated in Dollars or any Alternative Currency to the Borrower, (ii) denominated in Canadian Dollars to the Canadian Subsidiary, (iii) denominated in Euros to the Irish Subsidiary, (iv) denominated in Dollars to the Bahamian Subsidiary or (v) denominated in the applicable Alternative Currency designated by any other Subsidiary Borrower, in an aggregate amount up to but not exceeding such Lender’s Commitment as set forth opposite its name on Schedule 2.1A annexed hereto; provided that after giving effect to the making of any Loans, (i) the Total Utilization of Commitments shall not exceed the Commitments; (ii) the aggregate Dollar Amount of all Alternative Currency Loans shall not exceed the Alternative Currency Sublimit; and (iii) the aggregate Dollar Amount of all Loans to any particular Subsidiary Borrower shall not exceed $50,000,000.

 

(ii)                                   Each Lender’s Commitment shall expire on the Maturity Date and all Loans and all other amounts owed hereunder with respect to the Loans and the Commitment of such Lender shall be paid in full no later than such date. Amounts borrowed pursuant to this Section 2.1A may be repaid and reborrowed during the Commitment Period.

 

B.                                    Borrowing Mechanics.

 

(i)                                      Except pursuant to 2.2D, each Borrowing shall at all times be in a minimum amount of $5,000,000 or higher integral multiples of 1,000,000 units of the Applicable Currency.

 

(ii)                                   Whenever any Credit Party desires that the Lenders make Loans, such Credit Party shall deliver to Administrative Agent on behalf of the Lenders a fully executed and delivered Notice of Borrowing (a) in the case of LIBOR Rate Loans denominated in Dollars, not later than 11:00 a.m. (New York City time), at least three (3) Business Days in advance of the proposed Credit Date; (b) in the case of LIBOR Rate Loans denominated in an Alternative Currency, not later than 11:00 a.m. (New York City time), at least four (4) Business Days in advance of the proposed Credit Date; or (c) in the case of Base Rate Loans, not later than 11:00 a.m. (New York City time), on the proposed Credit Date. Except as otherwise provided herein, a Notice of Borrowing for LIBOR Rate Loans shall be irrevocable on and after the related Interest Rate Determination Date, and the applicable Credit Party shall be bound to borrow such Loans in accordance therewith. Each Notice of Borrowing shall specify the following information:

 

(a)                                   the Applicable Currency;

 

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(b)                                  the aggregate amount (in the Applicable Currency) of such Loans;

 

(c)                                   the Credit Date of such Loans, which shall be a Business Day;

 

(d)                                  whether such Loans are to be Base Rate Loans or LIBOR Rate Loans;

 

(e)                                   in the case of LIBOR Rate Loans, the initial Interest Period to be applicable thereto; and

 

(f)                                     the location and number of the Credit Party’s account, as applicable, to which funds are to be disbursed.

 

(iii)                                Notice of receipt of each Notice of Borrowing, together with the amount of each Lender’s Pro Rata Share thereof, if any, together with the applicable interest rate, shall be provided by the Administrative Agent to each applicable Lender by facsimile with reasonable promptness, but (provided the Administrative Agent shall have received such notice by 11:00 a.m. (New York City time)) not later than 2:00 p.m. (New York City time) on the same day as the Administrative Agent’s receipt of such Notice of Borrowing from the applicable Credit Party.

 

(iv)                               Each Lender (or, if appropriate, with respect to Alternative Currency Loans, an Affiliate of such Lender) shall make the amount of its Loan available to the Administrative Agent on the applicable Credit Date by wire transfer:

 

(a)                                   if such Loan is to be made in Dollars, not later than 12:00 p.m. (New York City time), or, if later, not more than one hour after receipt of the Administrative Agent’s delivery of the notice pursuant to clause (iii) above, in same day funds in Dollars at the Funding and Payment Office; or

 

(b)                                  if such Loan is to be made in an Alternative Currency, not later than 12:00 p.m. (London, England time), in such Alternative Currency (in such funds as may then be customary for the settlement of international transactions in such Alternative Currency) at the Funding and Payment Office.

 

(v)                                  Except as provided herein, upon satisfaction or waiver of the conditions precedent specified in Section 3.1 and Section 3.2, the Administrative Agent shall make the proceeds of such Loans available to the applicable Credit Party on the applicable Credit Date by causing an amount of same day funds in the Applicable Currency equal to the proceeds of all such Loans received by the Administrative Agent from the Lenders to be credited to the account of the applicable Credit Party at the Funding and Payment Office or such other account as may be designated in writing to the Administrative Agent by the Credit Parties.

 

2.2                                Issuance of Letters of Credit and Purchase of Participations Therein .

 

A.                                     Letters of Credit. During the Commitment Period, subject to the terms and conditions hereof, the Issuing Bank agrees to issue Letters of Credit for the account of the Borrower in the aggregate amount up to but not exceeding the Letter of Credit Sublimit; provided (i) each Letter of Credit shall be denominated in Dollars; (ii) the stated amount of each

 

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Letter of Credit shall not be less than $5,000,000 or such lesser amount as is acceptable to the Issuing Bank; (iii) after giving effect to such issuance, in no event shall the Total Utilization of Commitments exceed the Commitments then in effect; (iv) after giving effect to such issuance, in no event shall the Letter of Credit Usage exceed the Letter of Credit Sublimit then in effect; (v) in no event shall any standby Letter of Credit have an expiration date later than the earlier of (1) five Business Days prior to the Maturity Date and (2) the date which is one year from the date of issuance of such standby Letter of Credit; and (vi) in no event shall any commercial Letter of Credit (x) have an expiration date later than the earlier of (1) five Business Days before the Maturity Date and (2) the date which is 180 days from the date of issuance of such commercial Letter of Credit or (y) be issued if such commercial Letter of Credit is otherwise unacceptable to the Issuing Bank in its reasonable discretion. Subject to the foregoing, the Issuing Bank may agree that a standby Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each, unless the Issuing Bank elects not to extend for any such additional period; provided the Issuing Bank shall not extend any such Letter of Credit if it has received written notice that an Event of Default has occurred and is continuing at the time the Issuing Bank must elect to allow such extension; provided further in the event a Funding Default exists, the Issuing Bank shall not be required to issue any Letter of Credit unless the Issuing Bank has entered into arrangements satisfactory to it and the Borrower to eliminate the Issuing Bank’s risk with respect to the participation in Letters of Credit of the Defaulting Lender, including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the Letter of Credit Usage.

 

B.                                     Notice of Issuance. Each Letter of Credit shall be issued upon notice, given not later than 11:00 A.M. (New York City time) on the fifth Business Day prior to the date of the proposed Issuance of such Letter of Credit (or on such shorter notice as the Issuing Bank may agree), by the Borrower to the Issuing Bank, and such Issuing Bank shall give the Administrative Agent, prompt notice thereof. Each such Issuance Notice by the Borrower shall be by facsimile or telephone, confirmed immediately in writing, specifying therein the requested (A) date of such Issuance (which shall be a Business Day), (B) Available Amount of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and address of the beneficiary of such Letter of Credit and (E) form of such Letter of Credit. Such Letter of Credit shall be issued pursuant to such application and agreement for letter of credit as the Issuing Bank and the Borrower shall agree for use in connection with such requested Letter of Credit (a “ Letter of Credit Agreement ”). If the requested form of such Letter of Credit is acceptable to the Issuing Bank in its reasonable discretion (it being understood that any such form shall have only explicit documentary conditions to draw and shall not include discretionary conditions), the Issuing Bank will, unless any Lender gives prior notice to the Issuing Bank or the Administrative Agent that the applicable conditions of Section 3.2 would not be satisfied at the time of such issuance, upon fulfillment of the applicable conditions set forth in Section 3.2, make such Letter of Credit available to the Borrower at its office referred to in Section 9.8 or as otherwise agreed with the Borrower in connection with such Issuance. In the event and to the extent that the provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern.

 

C.                                     Responsibility of the Issuing Bank With Respect to Requests for Drawings and Payments. In determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, the Issuing Bank shall be responsible only to examine the documents

 

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delivered under such Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the terms and conditions of such Letter of Credit. As between the Borrower and the Issuing Bank, the Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by the Issuing Bank, by the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Letter 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 or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such 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 any such Letter of Credit to comply fully with any 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, cable, 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 such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Issuing Bank, including any Governmental Acts; none of the above shall affect or impair, or prevent the vesting of, any of the Issuing Bank’s rights or powers hereunder. Without limiting the foregoing and in furtherance thereof, any action taken or omitted by the Issuing Bank under or in connection with the Letters of Credit or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not give rise to any liability on the part of the Issuing Bank to the Borrower. Notwithstanding anything to the contrary contained in this Section 2.2C, the Borrower shall retain any and all rights it may have against the Issuing Bank for any liability arising out of the gross negligence or willful misconduct of the Issuing Bank.

 

D.                                     Reimbursement by the Borrower of Amounts Drawn or Paid Under Letters of Credit. In the event the Issuing Bank has determined to honor a drawing under a Letter of Credit, it shall immediately notify the Borrower and the Administrative Agent, and the Borrower shall reimburse the Issuing Bank on or before the Business Day immediately following the date on which such drawing is honored (the “ Reimbursement Date ”) in an amount in Dollars and in same day funds equal to the amount of such honored drawing; provided , anything contained herein to the contrary notwithstanding, (i) unless the Borrower shall have notified the Administrative Agent and the Issuing Bank prior to 10:00 a.m. (New York City time) on the date such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such honored drawing with funds other than the proceeds of Loans, the Borrower shall be deemed to have given a timely Notice of Borrowing to the Administrative Agent requesting the Lenders to make Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to the amount of such honored drawing, and (ii) subject to satisfaction or waiver of the applicable conditions specified in Section 3.2, the Lenders shall, on the Reimbursement Date, make Base Rate Loans in the amount of such honored drawing, the proceeds of which shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for the amount of such honored drawing; and provided further , if for any reason proceeds of Loans are not received by the Issuing Bank on the Reimbursement Date in an amount equal to the amount of such honored

 

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drawing, the Borrower shall reimburse the Issuing Bank, on demand, in an amount in same day funds equal to the excess of the amount of such honored drawing over the aggregate amount of such Loans, if any, which are so received. Nothing in this Section 2.2D shall be deemed to relieve any Lender from its obligation to make Loans on the terms and conditions set forth herein, and the Borrower shall retain any and all rights it may have against any Lender resulting from the failure of such Lender to make such Loans under this Section 2.2D.

 

E.                                       Lenders’ Purchase of Participations in Letters of Credit. Immediately upon the issuance of each Letter of Credit, each Lender having a Commitment shall be deemed to have purchased, and hereby agrees to irrevocably purchase, from the Issuing Bank a participation in such Letter of Credit and any drawings honored thereunder in an amount equal to such Lender’s Pro Rata Share (with respect to the Commitments) of the maximum amount which is or at any time may become available to be drawn thereunder. In the event that the Borrower shall fail for any reason to reimburse the Issuing Bank as provided in Section 2.2D, the Issuing Bank shall promptly notify each Lender of the unreimbursed amount of such honored drawing and of such Lender’s respective participation therein based on such Lender’s Pro Rata Share of the Commitments. Each Lender shall make available to the Issuing Bank an amount equal to its respective participation, in Dollars and in same day funds, at the office of the Issuing Bank specified in such notice, not later than 12:00 p.m. (New York City time) on the first Business Day (under the laws of the jurisdiction in which such office of the Issuing Bank is located) after the date notified by the Issuing Bank. In the event that any Lender fails to make available to the Issuing Bank on such Business Day the amount of such Lender’s participation in such Letter of Credit as provided in this Section 2.2E, the Issuing Bank shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by the Issuing Bank for the correction of errors among banks and thereafter at the Base Rate. Nothing in this Section 2.2E shall be deemed to prejudice the right of any Lender to recover from the Issuing Bank any amounts made available by such Lender to the Issuing Bank pursuant to this Section 2.2E in the event that it is determined that the payment with respect to a Letter of Credit in respect of which payment was made by such Lender constituted gross negligence or willful misconduct on the part of the Issuing Bank. In the event the Issuing Bank shall have been reimbursed by other Lenders pursuant to this Section 2.2E for all or any portion of any drawing honored by the Issuing Bank under a Letter of Credit, the Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under this Section 2.2E with respect to such honored drawing such Lender’s Pro Rata Share of all payments subsequently received by the Issuing Bank from the Borrower in reimbursement of such honored drawing when such payments are received. Any such distribution shall be made to a Lender at its notice address set forth on the signature pages hereto or at such other address as such Lender may request.

 

F.                                       Obligations Absolute. The obligation of the Borrower to reimburse the Issuing Bank for drawings honored under the Letters of Credit issued by it and to repay any Loans made by Lenders pursuant to Section 2.2D and the obligations of Lenders under Section 2.2E shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms hereof under all circumstances including any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit; (ii) the existence of any claim, set off, defense or other right which the Borrower or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting),

 

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the Issuing Bank, any Lender or any other Person or, in the case of a Lender, against the Borrower, whether in connection herewith, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between the Borrower or one of its Subsidiaries and the beneficiary for which any Letter of Credit was procured); (iii) any draft or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under any Letter of Credit against presentation of a draft or other document which does not strictly comply with the terms of such Letter of Credit; (v) the occurrence of any Material Adverse Effect; (vi) any breach hereof or any other Loan Document by any party thereto; (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or (viii) the fact that an Event of Default or a Potential Event of Default shall have occurred and be continuing; provided , in each case, that payment by the Issuing Bank under the applicable Letter of Credit shall not have constituted gross negligence or willful misconduct of the Issuing Bank under the circumstances in question.

 

G.                                     Indemnification. Without duplication of any obligation of the Borrower under Section 9.2 or 9.3, in addition to amounts payable as provided therein, the Borrower hereby agrees to protect, indemnify, pay and save harmless the Issuing Bank from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and, without duplication, allocated costs of internal counsel) which the Issuing Bank may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit by the Issuing Bank, other than as a result of (1) the gross negligence or willful misconduct of the Issuing Bank or (2) the wrongful dishonor by the Issuing Bank of a proper demand for payment made under any Letter of Credit issued by it, or (ii) the failure of the Issuing Bank to honor a drawing under any such Letter of Credit as a result of any Governmental Act.

 

2.3                                Pro Rata Shares; Availability of Funds; UCP .

 

A.                                     Pro Rata Shares. All Loans shall be made, and all participations purchased, by the Lenders (or, if applicable, by their Affiliates) simultaneously and proportionately to their respective Pro Rata Shares (determined as of the date of such Loans or such purchases, as the case may be), it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby nor shall any Commitment of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby. Each Lender acknowledges and agrees that its participation in each Letter of Credit will be automatically adjusted to reflect such Lender’s Pro Rata Share of each Letter of Credit at each time such Lender’s Commitment is increased pursuant to Section 2.14, reduced pursuant to Section 2.7B, amended pursuant to an assignment in accordance with Section 9.1 or otherwise changed pursuant to this Agreement.

 

B.                                     Availability of Funds. Unless the Administrative Agent shall have been notified by any Lender prior to the applicable Credit Date that such Lender does not intend to make available to the Administrative Agent the amount of such Lender’s Loan requested on such Credit Date, the Administrative Agent may assume that such Lender has made such amount

 

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available to the Administrative Agent on such Credit Date and the Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to the Borrower a corresponding amount on such Credit Date. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender or an Affiliate of such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Credit Date until the date such amount is paid to the Administrative Agent, at the customary rate set by the Administrative Agent for the correction of errors among banks for three Business Days and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent together with interest thereon, for each day from such Credit Date until the date such amount is paid to the Administrative Agent, at the rate payable hereunder for Base Rate Loans. Nothing in this Section 2.3B shall be deemed to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that the Borrower may have against any Lender as a result of any default by such Lender hereunder.

 

C.                                     Uniform Customs and Practice for Documentary Credits. It is hereby agreed that, except as otherwise specified in any Letter of Credit, each commercial Letter of Credit shall be subject to the Uniform Customs and Practice for Documentary Credits and each standby Letter of Credit shall be subject to the International Standby Practices (ISP 98).

 

2.4                                The Register; Evidence of Debt; Notes .

 

A.                                    Register.

 

(i)                                      The Administrative Agent shall maintain at its Payment and Funding Office a register for the recordation of the names and addresses of the Lenders and the Commitment and Loans of each Lender from time to time (the “ Register ”). The Register shall be available for inspection by the Credit Parties or any Lender at any reasonable time and from time to time upon reasonable prior notice. The Administrative Agent shall record in the Register the Commitment and the Loans of each Lender, and each repayment or prepayment in respect of the principal amount of such Loans. Any such recordation shall be prima facie evidence of the amount owed to such Lender hereunder; provided that failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Commitment or the Obligations in respect of any Loan. The Credit Parties hereby designate Citibank to serve as the Credit Parties’ agent solely for purposes of maintaining the Register as provided in this Section 2.4, and the Credit Parties hereby agree that, to the extent Citibank serves in such capacity, Citibank and its officers, directors, employees, agents and affiliates shall constitute “Indemnitees” hereunder.

 

(ii)                                   The Credit Parties, the Administrative Agent and the Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof, and no assignment or transfer of any Commitment or Loan shall be effective, in each case unless and until an Assignment Agreement effecting the assignment or transfer thereof shall have been accepted by the Administrative Agent and recorded in the Register as provided in Section 9.1C. Prior to such recordation, all amounts owed with respect to the applicable Commitment or Loan shall be owed

 

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to the Lender listed in the Register as the owner thereof, and any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Loans.

 

B.                                     Lenders’ Evidence of Debt. Each Lender shall maintain on its internal records an account or accounts evidencing the Obligations of each Credit Party to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding on the Credit Parties, absent manifest error; provided that the failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Commitments or the Obligations of the Credit Parties in respect of any applicable Loans; and provided further , in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern.

 

C.                                     Notes. If so requested by any Lender by written notice to any Credit Party (with a copy to the Administrative Agent), such Credit Party shall execute and deliver to such Lender, promptly after such Credit Party’s receipt of such notice, a Note or Notes to evidence such Lender’s Loans.

 

2.5                                Interest on the Loans .

 

A.                                    Rate of Interest; Type of Loan.

 

(i)                                      Subject to the provisions of Sections 2.5E, 2.8 and 2.9, each Loan shall bear interest on the unpaid principal amount thereof from the date made through the Maturity Date (whether by acceleration or otherwise) at a rate equal to (a) if a Base Rate Loan, the Base Rate plus the Applicable Margin or (b) if a LIBOR Rate Loan, the sum of LIBOR plus the Applicable Margin.

 

(ii)                                   The basis for determining the rate of interest with respect to any Loan and the Interest Period with respect to any LIBOR Rate Loan, shall be selected by the applicable Credit Party and notified to the Administrative Agent and the Lenders pursuant to the applicable Notice of Borrowing or Conversion/Continuation Notice, as the case may be. If on any day a Loan is outstanding with respect to which a Notice of Borrowing or Conversion/Continuation Notice has not been delivered to the Administrative Agent in accordance with the terms hereof specifying the applicable basis for determining the rate of interest, then for that day such Loan shall be a Base Rate Loan.

 

(iii)                                With respect to Dollar-Denominated Loans or Alternative Currency Loans denominated in Canadian Dollars, in the event the Borrower fails to specify Base Rate Loans or LIBOR Rate Loans in the applicable Notice of Borrowing or Conversion/Continuation Notice, such Loans (if outstanding as a LIBOR Rate Loans) will be automatically converted into Base Rate Loans on the last day of the then current Interest Period for such Loans (or if outstanding as Base Rate Loans will remain as, or (if not then outstanding) will be made as, Base Rate Loans). As soon as practicable after 11:00 a.m. (New York City time) on each Interest Rate Determination Date, the Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rate that shall apply

 

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to the LIBOR Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to the applicable Credit Party and each Lender.

 

B.                                     Interest Periods. The applicable interest period (each an “ Interest Period ”) of each Borrowing of LIBOR Rate Loans shall be a one (1), two (2), three (3) or six (6) month period, as selected by the applicable Credit Party in the applicable Notice of Borrowing or Conversion/Continuation Notice, initially commencing on the date of the Loan or any Conversion/Continuation Date, as the case may be; provided that

 

(i)                                      in the case of immediately successive Interest Periods applicable to LIBOR Rate Loans, each successive Interest Period shall commence on the day on which the immediately preceding Interest Period expires;

 

(ii)                                   if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that, if any Interest Period would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;

 

(iii)                                any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (iv) of this Section 2.5B, end on the last Business Day of a calendar month;

 

(iv)                               no Interest Period shall extend beyond the Maturity Date;

 

(v)                                  no more than ten (10) Interest Periods shall be outstanding at any time; and

 

(vi)                               if the applicable Credit Party fails to specify an Interest Period for any Borrowing of LIBOR Rate Loans in the applicable Notice of Borrowing or Conversion/Continuation Notice, such Credit Party shall be deemed to have selected an Interest Period of one (1) month.

 

C.                                     Interest Payments. On each Interest Payment Date for a Borrowing, the applicable Credit Party shall pay an amount equal to the aggregate amount of interest that has accrued on such Borrowing since the Effective Date or the last Interest Payment Date for such Borrowing, as applicable. In addition, interest on each Loan shall be payable upon any prepayment of such Loan (to the extent accrued on the amount being prepaid) and at maturity.

 

D.                                     Default Rate. Upon the occurrence and during the continuation of any Event of Default, (i) the Credit Parties shall no longer have the option to request LIBOR Rate Loans, (ii) each LIBOR Rate Loan denominated in Dollars shall convert to a Base Rate Loan at the end of the Interest Period then in effect for such LIBOR Rate Loan, (iii) upon request of the Requisite Lenders, the outstanding principal amounts of all LIBOR Rate Loans shall bear interest (including post-petition interest in any case or proceeding under the Bankruptcy Code) at a rate per annum equal to two percent (2%) plus the rate then applicable to LIBOR Rate Loans until the

 

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end of the applicable Interest Period and thereafter at a rate equal to two percent (2%) plus the rate then applicable to Base Rate Loans, and (iv) upon request of the Requisite Lenders, all outstanding Base Rate Loans and, to the extent permitted by applicable law, other Obligations arising hereunder or under any other Loan Document shall bear interest (including post-petition interest in any case or proceeding under the Bankruptcy Code) at a rate per annum equal to two percent (2%) plus the rate then applicable to such Base Rate Loans or such other Obligations arising hereunder or under any other Loan Document. Payment or acceptance of the increased rates of interest provided for in this Section 2.5D is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Agents or Lenders.

 

E.                                       Computation of Interest.

 

(i)                                      Interest payable pursuant to Section 2.5A shall be computed (i) in the case of Base Rate Loans on the basis of a 365 day or 366 day year, as the case may be, and (ii) in the case of LIBOR Rate Loans, on the basis of a 360 day year, in each case for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted from a LIBOR Rate Loan, the date of conversion of such LIBOR Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a LIBOR Rate Loan, the date of conversion of such Base Rate Loan to such LIBOR Rate Loan, as the case may be, shall be excluded; provided , if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

 

(ii)                                   For purposes of disclosure pursuant to the Interest Act (Canada), R.S. 1985, c I-15, the annual rates of interest or fees to which the rates of interest or fees provided in this Agreement and each Note (and stated herein or therein as applicable to be computed on the basis of a 365-day year or any other period of time less than a calendar year) are equivalent, and are the rates so determined multiplied by the actual number of days in the applicable calendar year and divided by 365 or such other period of time.

 

F.                                       Conversion/Continuation.

 

(i)                                      Subject to Section 2.9 and so long as no Potential Event of Default or Event of Default shall have occurred and then be continuing, each Credit Party shall have the option:

 

(a)                                   to convert at any time all or any part of any Borrowing of Dollar-Denominated Loans in an aggregate amount of $5,000,000 or a higher integral multiple of $1,000,000 from one Type of Loan to another Type of Loan; provided if any LIBOR Rate Loan is converted on a day other than the last day of an Interest Period therefor, the applicable Credit Party shall pay all amounts due under Section 2.8 in connection with such conversion; or

 

(b)                                  upon the expiration of any Interest Period applicable to any Borrowing LIBOR Rate Loans, to continue all or any portion of such Loans in a minimum

 

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amount of $5,000,000 or a higher integral multiple of 1,000,000 units of the Applicable Currency as LIBOR Rate Loans.

 

(ii)                                   The applicable Credit Party shall deliver a Conversion/Continuation Notice to the Administrative Agent no later than 11:00 a.m. (New York City time) at least one Business Day in advance of the proposed conversion date (in the case of a conversion to Base Rate Loans) and at least three Business Days in advance of the proposed Conversion/Continuation Date (in the case of a conversion to, or a continuation of, LIBOR Rate Loans). Except as otherwise provided herein, a Conversion/Continuation Notice for conversion to, or continuation of, LIBOR Rate Loans (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and the applicable Credit Party shall be bound to effect a conversion or continuation in accordance therewith.

 

G.                                     Letter of Credit Drawings. The Borrower agrees to pay to the Issuing Bank, with respect to drawings honored under any Letter of Credit, interest on the amount paid by the Issuing Bank in respect of each such honored drawing from the date such drawing is honored to but excluding the date such amount is reimbursed by or on behalf of the Borrower at a rate equal to (i) for the period from the date such drawing is honored to, but excluding, the applicable Reimbursement Date, the Base Rate plus the Applicable Margin, and (ii) thereafter, the Base Rate plus the Applicable Margin plus 2%.

 

H.                                     Computation of Interest on Reimbursement Obligations. Interest payable pursuant to Section 2.5G shall be computed on the basis of a 365/366 day year for the actual number of days elapsed in the period during which it accrues, and shall be payable on demand or, if no demand is made, on the date on which the related drawing under a Letter of Credit is reimbursed in full. Promptly upon receipt by the Issuing Bank of any payment of interest pursuant to Section 2.5G, the Issuing Bank shall distribute to each Lender, out of the interest received by the Issuing Bank in respect of the period from the date such drawing is honored to, but excluding, the date on which the Issuing Bank is reimbursed for the amount of such drawing (including any such reimbursement out of the proceeds of any Loans), the amount that such Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Letter of Credit for such period if no drawing had been honored under such Letter of Credit. In the event the Issuing Bank shall have been reimbursed by the Lenders for all or any portion of such honored drawing, the Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under Section 2.2E with respect to such honored drawing such Lender’s Pro Rata Share of any interest received by the Issuing Bank in respect of that portion of such honored drawing so reimbursed by the Lenders for the period from the date on which the Issuing Bank was so reimbursed by the Lenders to but excluding the date on which such portion of such honored drawing is reimbursed by the Borrower.

 

I.                                          Additional Interest on LIBOR Rate Loans. Each Credit Party shall pay to each Lender, so long as and to the extent such Lender shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including “Eurocurrency liabilities” (as such term is defined in Regulation D), additional interest on the unpaid principal amount of each LIBOR Rate Loan of such Lender, from the date of such Loan until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (a) the LIBOR rate for the

 

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applicable Interest Period for such Loan from (b) the rate obtained by dividing such LIBOR rate by a percentage equal to 100% minus the Applicable Reserve Requirement (expressed as a percentage) of such Lender for such Interest Period, payable on each date on which interest is payable on such Loan. Such Lender shall as soon as practicable provide notice to the Administrative Agent and the Borrower of any such additional interest arising in connection with such Loan, which notice shall be conclusive and binding, absent demonstrable error.

 

2.6                                Fees .

 

All fees referred to in this Section 2.6 shall be paid to the Administrative Agent at its Funding and Payment Office and upon receipt, the Administrative Agent shall promptly distribute to each Lender its Pro Rata Share thereof.

 

(i)                                      The Borrower agrees to pay to each Lender having Credit Exposure the fees listed below.

 

(a)                                   Facility Fee : From the Effective Date until the Maturity Date, the Borrower shall pay a facility fee (the “ Facility Fee ”) to each Lender (other than a Defaulting Lender for such time as such Lender is a Defaulting Lender solely in respect of its unused Commitment), ratably in accordance with such Lender’s then current Commitment, determined by reference to the pricing grid set forth in the definition of Applicable Margin. The Facility Fee shall be paid quarterly in arrears and on the Maturity Date;

 

(b)                                  Letter of Credit Fee : From the Effective Date until the Maturity Date, the Borrower shall pay letter of credit fees to each Lender (other than a Defaulting Lender for such time as such Lender is a Defaulting Lender, but subject to Section 2.11B(iv)), ratably in accordance with its then current Commitment, equal to (1) the Applicable Margin for LIBOR Rate Loans, times (2) the average aggregate daily maximum amount available to be drawn under all Letters of Credit (regardless of whether any conditions for drawing could then be met and determined as of the close of business on any date of determination).

 

(ii)                                   The Borrower agrees to pay directly to the Issuing Bank, for its own account, the following fees:

 

(a)                                   a fronting fee equal to 0.25% per annum (or such other rate as may be agreed to by the Borrower and the Issuing Bank), times the average aggregate daily maximum amount available to be drawn under all Letters of Credit (determined as of the close of business on any date of determination); and

 

(b)                                  such documentary and processing charges for any issuance, amendment, transfer or payment of a Letter of Credit as are in accordance with the Issuing Bank’s standard schedule for such charges and as in effect at the time of such issuance, amendment, transfer or payment, as the case may be.

 

(iii)                                All fees referred to in Section 2.6(i) and 2.6(ii)(a) shall be calculated on the basis of a 360 day year and the actual number of days elapsed and shall be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year during the

 

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Commitment Period, commencing on the first such date to occur after the Effective Date, and on the Maturity Date.

 

(iv)                               In addition to any of the foregoing fees, the Borrower agrees to pay to the Lead Arrangers and the Agents such other fees in the amounts and at the times separately agreed upon in the Fee Letter.

 

2.7                                Provisions Regarding Payments .

 

A.                                    Voluntary Prepayments.

 

(i)                                     Any time and from time to time:

 

(a)                                   the Borrower may prepay any Base Rate Loans on any Business Day in whole or in part, in an aggregate principal amount of $5,000,000 or a higher integral multiple of $1,000,000; provided , that if Loans are made pursuant to Section 2.2D, then during the thirty (30) days after the making of such Loans, the Borrower may make one prepayment of Base Rate Loans in any amount so long as after giving effect thereto, the aggregate principal amount of all Base Rate Loans is an integral multiple of $1,000,000; and

 

(b)                                  the Borrower may prepay any Borrowing of LIBOR Rate Loans on any Business Day in whole or in part in an aggregate principal Dollar Amount of $5,000,000 or a higher integral multiple of 1,000,000 units of the Applicable Currency.

 

(ii)                                   All prepayments shall be made upon prior written or telephonic notice received by the Administrative Agent not later than 11:00 a.m. (New York City time):

 

(a)                                   In the case of Base Rate Loans, on the date of such prepayment; and

 

(b)                                  In the case of LIBOR Rate Loans, two (2) Business Days’ prior to the date of such prepayment;

 

and, if such notice is given by telephone, such notice shall be promptly confirmed in writing to the Administrative Agent (and the Administrative Agent will promptly transmit such telephonic or original notice for the Loans by facsimile or telephone to each Lender). Upon the giving of any such notice, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein.

 

B.                                     Voluntary Commitment Reductions.

 

(i)                                      The Credit Parties may, upon not less than three (3) Business Days’ prior written or telephonic notice confirmed in writing to the Administrative Agent (which original written or telephonic notice the Administrative Agent will promptly transmit by facsimile or telephone to each applicable Lender), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Commitments in an amount up to the amount by which the Commitments exceed the Total Utilization of Commitments at the time

 

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of such proposed termination or reduction; provided any such partial reduction of the Commitments shall be in the amount of $5,000,000 or a higher integral multiple of $1,000,000.

 

(ii)                                   The Credit Parties’ notice to the Administrative Agent shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Commitments shall be effective on the date specified in the Borrower’s notice and shall reduce the Commitment of each Lender proportionately to its Pro Rata Share thereof.

 

C.                                     Mandatory Prepayments. Subject to Section 2.10B, the Credit Parties shall from time to time prepay the Loans to the extent necessary so that the Total Utilization of Commitments shall not at any time exceed the Commitments then in effect.

 

D.                                     Application of Prepayments/Reductions. Unless otherwise specified by the applicable Credit Party in a notice of prepayment,

 

(a) any amount to be applied pursuant to Section 2.7A or C shall be applied as follows:

 

first , to prepay outstanding reimbursement obligations with respect to Letters of Credit;

 

second , to prepay Loans to the full extent thereof; and

 

third , to cash collateralize Letters of Credit; and

 

(b) considering each Type of Loan being prepaid separately, any prepayment thereof shall be applied first to Base Rate Loans to the full extent thereof before application to LIBOR Rate Loans, in each case in a manner which minimizes the amount of any payments required to be made by the Credit Parties pursuant to Section 2.9C.

 

E.                                       General Provisions Regarding Payments.

 

(i)                                      Manner and Time of Payment . All payments by the Credit Parties of principal, interest, fees and other Obligations shall be made in Dollars or, with respect to Alternative Currency Loans, in the relevant Alternative Currency in same day funds, without defense, set-off or counterclaim, free of any restriction or condition, and delivered to the Administrative Agent not later than 12:00 p.m. (New York City time) on the date due at the Funding and Payment Office for the account of the Lenders; funds received by the Administrative Agent after that time on such due date shall be deemed to have been paid by the applicable Credit Party on the next succeeding Business Day.

 

(ii)                                   Payments on Business Days . Subject to the provisions of Section 2.5B with respect to Interest Periods, whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder.

 

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(iii)                                Application of Payments to Principal and Interest . All payments in respect of the principal amount of the Loans shall include payment of accrued interest on the principal amount being repaid or prepaid, and all such payments shall be applied to the payment of interest before application to principal.

 

(iv)                               Distribution to Lenders . The Administrative Agent shall promptly distribute to each Lender at such address as such Lender shall indicate in writing, such Lender’s applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder, together with all other amounts due thereto, including all fees payable with respect thereto, to the extent received by Administrative Agent.

 

(v)                                  Withdrawal of Notice . Notwithstanding the foregoing provisions hereof, if any Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any LIBOR Rate Loans, the Administrative Agent shall give effect thereto in apportioning payments received thereafter.

 

(vi)                               Authorization to Charge Accounts . Each Credit Party hereby authorizes the Administrative Agent to charge such Credit Party’s accounts with the Administrative Agent in order to cause timely payment to be made to the Administrative Agent of all principal, interest, fees and expenses due hereunder (subject to sufficient funds being available in its accounts for that purpose).

 

(vii)                            Non-Conforming Payments . The Administrative Agent shall deem any payment by or on behalf of any Credit Party hereunder that is not made in same day funds prior to 12:00 p.m. (New York City time) to be a non-conforming payment. Any such payment shall not be deemed to have been received by the Administrative Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day. The Administrative Agent shall give prompt telephonic notice to the applicable Credit Party and each applicable Lender (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Potential Event of Default or Event of Default in accordance with the terms of Section 8.1. Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the rate determined pursuant to Section 2.5D from the date such amount was due and payable until the date such amount is paid in full.

 

2.8                                Increased Costs; Taxes .

 

A.                                     Compensation for Increased Costs and Taxes. Subject to the provisions of Section 2.8B (which shall be controlling with respect to the matters covered thereby), in the event that any Lender shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or Governmental Authority, in each case that becomes effective after the date hereof, or compliance by such Lender with any guideline, request or

 

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directive issued or made after the date hereof by any central bank or other governmental or quasi-governmental authority (whether or not having the force of law):

 

(i)                                      subjects such Lender (or its applicable lending office) to any additional Tax (other than any Tax on the overall net income of such Lender) with respect to this Agreement or any of the other Loan Documents or any of its obligations hereunder or thereunder or any payments to such Lender (or its applicable lending office) of principal, interest, fees or any other amount payable hereunder;

 

(ii)                                   imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, Federal Deposit Insurance Corporation insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or other requirements with respect to LIBOR Rate Loans that are reflected in the definition of LIBOR); or

 

(iii)                                imposes any other condition (other than with respect to a Tax matter) on or affecting such Lender (or its applicable lending office) or its obligations hereunder or the London interbank market;

 

and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received or receivable by such Lender (or its applicable lending office) with respect thereto; then, in any such case, the Credit Parties shall promptly pay to such Lender, upon receipt of the statement referred to in the next sentence, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder. Such Lender shall deliver to the Credit Parties (with a copy to the Administrative Agent) a written statement, setting forth in reasonable detail the basis for, and a calculation in reasonable detail of, the additional amounts owed to such Lender under this Section 2.8A, which statement shall be conclusive and binding upon all parties hereto absent manifest error.

 

B.                                     Withholding of Taxes.

 

(i)                                      Payments to Be Free and Clear . All sums payable by any Credit Party under this Agreement and the other Loan Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account of, any Tax (other than a Tax on the overall net income of any Lender) imposed, levied, collected, withheld or assessed by or within the United States of America or any political subdivision in or of the United States of America or any other jurisdiction from or to which a payment is made by or on behalf of any Credit Party or by any federation or organization of which the United States of America or any such jurisdiction is a member at the time of payment.

 

(ii)                                   Grossing-up of Payments . If any Credit Party or any other Person is required by law to make any deduction or withholding on account of any such Tax from any sum

 

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paid or payable by such Credit Party to the Administrative Agent or any Lender under any of the Loan Documents:

 

(a)                                   such Credit Party shall notify the Administrative Agent of any such requirement or any change in any such requirement as soon as such Credit Party becomes aware of it;

 

(b)                                  such Credit Party shall pay any such Tax before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on such Credit Party) for its own account or (if that liability is imposed on the Administrative Agent or such Lender, as the case may be) on behalf of and in the name of the Administrative Agent or such Lender;

 

(c)                                   the sum payable by such Credit Party in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment, the Administrative Agent or such Lender, as the case may be, receives on the due date and retains a net sum equal to what it would have received and retained had no such deduction, withholding or payment been required or made; and

 

(d)                                  within thirty (30) days after paying any sum from which it is required by law to make any deduction or withholding, and within thirty (30) days after the due date of payment of any Tax which it is required by clause (b) above to pay, such Credit Party shall deliver to the Administrative Agent evidence reasonably satisfactory to the other affected parties of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority.

 

(iii)                                Evidence of Exemption from U.S. Withholding Tax .

 

(a)                                   Each Lender that is not a United States Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes (a “ Non-US Lender ”) shall deliver to the Administrative Agent for transmission to the Credit Parties, on or prior to the Effective Date (in the case of each Lender listed on the signature pages hereof on the Effective Date) or on or prior to the date of the Assumption Agreement or Assignment Agreement, as applicable, pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times as may be necessary in the determination of the Credit Parties or Administrative Agent (each in the reasonable exercise of its discretion), (x) two original copies of Internal Revenue Service