-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I5C5mBS60KZ9V961hHJxZJ2q/sGr0/8ZGVdfHc5qxZXPE42GFOIUY4QrLj36geZT VyyB7d81dpnGhLSRQ1MYrA== /in/edgar/work/0000105770-00-000029/0000105770-00-000029.txt : 20001114 0000105770-00-000029.hdr.sgml : 20001114 ACCESSION NUMBER: 0000105770-00-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEST PHARMACEUTICAL SERVICES INC CENTRAL INDEX KEY: 0000105770 STANDARD INDUSTRIAL CLASSIFICATION: [3060 ] IRS NUMBER: 231210010 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08036 FILM NUMBER: 760586 BUSINESS ADDRESS: STREET 1: 101 GORDON DR STREET 2: P O BOX 645 CITY: LIONVILLE STATE: PA ZIP: 19341-0645 BUSINESS PHONE: 6105942900 MAIL ADDRESS: STREET 1: 101 GORDON DRIVE STREET 2: PO BOX 645 CITY: LIONVILLE STATE: PA ZIP: 19341-0645 10-Q 1 0001.txt 10Q3-2000 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarterly Period Ended September 30, 2000 --------------- Commission File Number 1-8036 ------ WEST PHARMACEUTICAL SERVICES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 23-1210010 - -------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number 101 Gordon Drive, PO Box 645, Lionville, PA 19341-0645 - -------------------------------- ------------------------------- (Address of principal executive (Zip Code) offices) Registrant's telephone number, including area code 610-594-2900 ------------ N/A - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months, and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . --- --- September 30, 2000 -- 14,318,136 - -------------------------------------------------------------------------------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Page 2 Index Form 10-Q for the Quarter Ended September 30, 2000 Page ----- Part I - Financial Information Item 1. Financial Statements Consolidated Statements of Income for the Three and Nine Months ended September 30, 2000 and September 30, 1999 3 Condensed Consolidated Balance Sheets at September 30, 2000 and December 31, 1999 4 Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2000 and September 30, 1999 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Quantitative and Qualitative Disclosure about Market Risk 16 Part II - Other Information Item 1. Legal Proceedings 17 Item 2. Changes in Securities and Use of Proceeds 17 Item 3. Defaults Upon Senior Securities 17 Item 4. Submission of Matters to a Vote of Security Holders 17 Item 6. Exhibits and Reports on Form 8-K 17 SIGNATURES 18 Index to Exhibits F-1 Page 3 Part I. Financial Information Item 1. Financial Statements West Pharmaceutical Services, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per share data)
Three Months Ended Nine Months Ended Sept. 30, 2000 Sept, 30, 1999 Sept. 30, 2000 Sept. 30, 1999 -------------- -------------- -------------- --------------- Net sales ........................ $ 104,500 100% $115,100 100% $ 324,900 100% $353,700 100% Cost of goods and services sold .. 79,900 76 80,800 70 243,900 75 245,200 69 -------------- --------------- --------------- --------------- Gross profit .................. 24,600 24 34,300 30 81,000 25 108,500 31 Selling, general and administrative expenses ....... 16,500 16 19,200 17 50,900 16 55,900 16 Other (income) expense, net ...... (200) -- (300) -- 200 -- -- -- -------------- -------------- -------------- -------------- Operating profit .............. 8,300 8 15,400 13 29,900 9 52,600 15 Interest expense ................. 3,200 3 2,900 2 9,600 3 7,700 2 -------------- -------------- -------------- -------------- Income before income taxes and minority interests ....... 5,100 5 12,500 11 20,300 6 44,900 13 Provision for income taxes ....... 500 1 4,000 4 6,200 2 16,500 5 Minority interests ............... -- -- -- -- 200 -- 100 -- -------------- -------------- -------------- -------------- Income from consolidated operations 4,600 4% 8,500 7% 13,900 4% 28,300 8% --- --- --- --- Equity in net income of affiliated companies .......... -- 100 800 200 -------- -------- --------- -------- Net income .................. $ 4,600 $ 8,600 $ 14,700 $ 28,500 -------- -------- --------- -------- Net income per share: Basic ...................... $ 0.32 $ 0.58 $ 1.02 $ 1.91 Assuming dilution ........... $ 0.32 $ 0.57 $ 1.02 $ 1.89 -------- -------- --------- -------- Average common shares outstanding 14,337 14,898 14,437 14,972 Average shares assuming dilution 14,337 15,074 14,439 15,113 See accompanying notes to consolidated financial statements.
Page 4 West Pharmaceutical Services, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
Unaudited Sept. 30, Dec. 31, 2000 1999 --------- -------- ASSETS Current assets: Cash, including equivalents .......... $ 41,600 $ 45,300 Accounts receivable .................. 67,800 74,600 Inventories .......................... 41,600 42,100 Current deferred income tax benefits . 7,200 7,300 Other current assets ................. 24,700 15,400 -------- -------- Total current assets ..................... 182,900 184,700 -------- -------- Net property, plant and equipment ........ 235,700 227,600 Investments in affiliated companies ...... 21,300 20,200 Goodwill ................................. 60,500 66,500 Deferred charges and other assets ........ 61,600 52,800 -------- -------- Total Assets ............................. $562,000 $551,800 -------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt .... $ 500 $ 2,200 Notes payable ........................ -- 27,400 Accounts payable ..................... 25,700 25,500 Accrued expenses: Salaries, wages, benefits .......... 10,500 15,600 Income taxes payable ............... 10,800 5,500 Other .............................. 30,600 27,800 -------- -------- Total current liabilities ................ 78,100 104,000 -------- -------- Long-term debt, excluding current portion 192,000 141,500 Deferred income taxes .................... 46,600 48,000 Other long-term liabilities .............. 25,000 26,300 Minority interests ....................... 900 800 Shareholders' equity ..................... 219,400 231,200 -------- -------- Total Liabilities and Shareholders' Equity $562,000 $551,800 -------- -------- See accompanying notes to consolidated financial statements
Page 5 West Pharmaceutical Services, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Nine Months Ended Sept. 30, Sept. 30, 2000 1999 -------- -------- Cash flows from operating activities: Net income, plus net non-cash items .......... $ 31,500 $ 48,100 Changes in assets and liabilities ........... 4,600 (5,100) -------- -------- Net cash provided by operating activities ...... 36,100 43,000 -------- -------- Cash flows from investing activities: Property, plant and equipment acquired ........ (42,300) (32,600) Proceeds from sale of assets .................. 400 100 Payment for acquisitions, net of cash acquired (2,000) (17,200) Customer advances, net of repayments ............. (800) 100 -------- -------- Net cash used in investing activities ............. (44,700) (49,600) -------- -------- Cash flows from financing activities: Proceeds from senior debt ...................... -- 100,000 Net borrowings (repayments) under revolving credit agreements ............................ 40,700 (77,800) Repayment of other long-term debt .............. (15,500) (1,300) Notes payable, net ............................. -- 7,200 Dividend payments .............................. (7,400) (7,200) Sale of common stock, net ...................... 600 2,900 Purchase of treasury stock ..................... (10,700) (9,000) -------- -------- Net cash provided by financing activities.......... 7,700 14,800 -------- -------- Effect of exchange rates on cash .................. (2,800) (2,000) -------- -------- Net(decrease)increase in cash, including equivalents $ (3,700) $ 6,200 -------- -------- See accompanying notes to consolidated financial statements
Page 6 West Pharmaceutical Services, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) (In thousands, except share and per share data) The interim consolidated financial statements for the nine-month period ended September 30, 2000 should be read in conjunction with the consolidated financial statements and notes thereto of West Pharmaceutical Services, Inc.(The Company), appearing in the Company's 1999 Annual Report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. Interim results are based on the Company's accounts without audit. 1. Interim Period Accounting Policy --------------------------------- In the opinion of management, the unaudited Condensed Consolidated Balance Sheet as of September 30, 2000 and the related unaudited Consolidated Statements of Income for the three and nine-month periods then ended, and the unaudited Condensed Consolidated Statement of Cash Flows for the nine-month period then ended and for the comparative period in 1999 contain all adjustments, consisting only of normal recurring accruals, necessary to present fairly the financial position as of September 30, 2000 and the results of operations and cash flows for the respective periods. The results of operations for any interim period are not necessarily indicative of results for the full year. Operating Expenses ------------------ To better relate costs to benefits received or activity in an interim period, certain operating expenses have been annualized for interim reporting purposes. Such expenses include certain employee benefit costs, annual quantity discounts and advertising. Income Taxes ------------- The tax rate used for interim periods is the estimated annual effective consolidated tax rate, based on the current estimate of full year results, except that taxes applicable to operating results in Brazil and prior year adjustments, if any, are recorded as identified. The effective tax rate for 2000 is estimated at 38.5%, an increase of 1.0% over the tax rate used for the first six months of 2000. This change was made in response to the currently projected geographic mix of earnings. The 1999 full year effective tax rate (excluding unusual items) was 37.5%. In the third quarter of 2000, a net $1,600 tax benefit was recorded in response to a change in local tax laws in Germany that provided an additional tax benefit from the 1997 reorganization of the German subsidiaries. The 1999 third quarter included a $700 tax benefit from the settlement of a prior years' tax appeal. Page 7 West Pharmaceutical Services, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) (continued) 2. Inventories at September 30, 2000 and December 31, 1999 are summarized as follows:
9/30/00 12/31/99 ------- -------- Finished goods $15,300 $14,000 Work in process 13,500 12,800 Raw materials 12,800 15,300 ------- ------- $41,600 $42,100 ------- ------- ------- -------
3. The carrying value of property, plant and equipment at September 30, 2000 and December 31, 1999 is determined as follows:
9/30/00 12/31/99 -------- -------- Property, plant and equipment $505,200 $489,200 Less accumulated depreciation and amortization .......... 269,500 261,600 -------- -------- Net property, plant and equipment ............. $235,700 $227,600 -------- -------- -------- --------
Page 8 West Pharmaceutical Services, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) (Continued) 4. For the three and nine months ended September 30, 2000 and 1999, the Company's comprehensive income (loss) is as follows:
Three Months Ended Nine Months Ended 9/30/00 9/30/99 9/30/00 9/30/99 -------- -------- -------- -------- Net income ............. $ 4,600 $ 8,600 $ 14,700 $ 28,500 Foreign currency translation adjustments (5,100) 2,600 (9,300) (10,600) -------- -------- -------- -------- Comprehensive (loss)income $ (500) $ 11,200 $ 5,400 $ 17,900 -------- -------- -------- -------- -------- -------- -------- --------
5. Net sales to external customers and operating profit (loss) by operating segment for the three and nine months ended September 30, 2000 and September 30, 1999 are as follows:
Three Months Ended Nine Months Ended September 30 September 30 Net Sales: 2000 1999 2000 1999 ---------- -------- -------- -------- -------- Device product development $ 86,800 $ 92,700 $273,500 $286,900 Contract services ........ 17,300 21,900 50,700 65,900 Drug delivery research and development ........ 300 500 1,000 900 Corporate and unallocated. 100 -- (300) -- -------- -------- -------- -------- Consolidated Total ....... $104,500 $115,100 $324,900 $353,700 -------- -------- -------- -------- -------- -------- -------- -------- Page 9 West Pharmaceutical Services, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) (Continued) Three Months Ended Nine Months Ended September 30 September 30 Operating Profit (Loss): 2000 1999 2000 1999 -------------------------- -------- -------- -------- -------- Device product development $ 16,000 $ 20,800 $ 56,200 $ 68,300 Contract services ........ (2,000) 1,400 (9,400) 5,400 Drug delivery research and development ........ (2,600) (2,200) (7,300) (5,200) Corporate and unallocated (3,100) (4,600) (9,600) (15,900) -------- -------- -------- -------- Consolidated Total ....... $ 8,300 $ 15,400 $ 29,900 $ 52,600 -------- -------- -------- -------- -------- -------- -------- --------
Compared with December 31, 1999, there were no material changes in the amount of assets as of September 30, 2000 for any operating segment. 6. Common stock issued at September 30, 2000 was 17,165,141 shares, of which 2,847,005 shares were held in treasury. Dividends of $.17 per common share were paid in the third quarter of 2000 and a dividend of $.18 per share payable to holders of record on October 18, 2000 was declared on August 1, 2000. 7. The Company has accrued the estimated cost of environmental compliance expenses related to soil or ground water contamination at current and former manufacturing facilities. The ultimate cost to be incurred by the Company and the timing of such payments cannot be fully determined. However, based on consultants' estimates of the costs of remediation in accordance with applicable regulatory requirements, the Company believes the accrued liability of $1,400 at September 30, 2000 is sufficient to cover the future costs of these remedial actions, which will be carried out over the next several years. The Company has not anticipated any possible recovery from insurance or other sources. 8. In January 2000, the Company paid $1,000 to acquire additional ownership in a firm involved in developing genotyping technology. As of June 30, 2000 the Company's cumulative investment in this firm is $2,300 representing a 12.8% ownership interest. Upon the satisfaction of certain future milestones, the Company is conditionally committed to investing up to an additional $1,300 which would result in a cumulative ownership percentage of up to 19.95%. Page 10 West Pharmaceutical Services, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) (Continued) 9. In July 2000, the Company signed a $135,000 revolving credit agreement with a group of six banks. The credit agreement consists of a $70,000 five-year revolving credit facility and a $65,000 364-day line of credit. Interest cost on these facilities will be charged at London Inter-Bank Offering Rates (LIBOR) plus a margin dependent on the Company's debt to total capital ratio. The interest rate on the initial borrowings under these facilities was 7.4%. Commitment fees on these credit agreements also fluctuate according to the Company's debt to total capital ratio with a maximum commitment fee of 17.5 basis points on the 364-day facility and 20.0 basis points on the five-year facility. As of September 30, 2000, the Company had borrowed $44,300 directly under the five-year facility. These borrowings were recorded as long-term debt. Additional notes payable of $20,800 under other uncommitted facilities were also classified as long-term debt, as the Company has the intent and ability to re-finance these obligations on a long-term basis under the 5-year facility. Page 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. - ------------------------------------------------------------------- Results of Operations for the Three and Nine Months ended September 30, 2000 Versus Comparable 1999 Periods - ------------------------------------------------------------------- Net Sales - ------------ Net Sales for the third quarter of 2000 were $104.5 million compared to $115.1 million reported in the third quarter of 1999. At constant exchange rates, sales for the third quarter 2000 declined 5.2% versus the prior year quarter. Third quarter 2000 sales for the Device Product Development segment were $86.8 million, a decline of 1.4% (at constant exchange rates) from 1999 sales of $92.7 million. Sales in European and Asian markets grew by 10%, largely as a result of increased demand in pre-filled syringe markets, the need for "clean products" in Europe and economic recovery in certain Asian countries. This increase was offset by low demand in domestic markets. Aggressive supply chain management, including targeted inventory reductions, and a lower-value product mix are the largest factors for the domestic decrease in Device Product Development sales. The Contract Services segment experienced another slow quarter. Third quarter contract services sales were $17.3 million, down $4.6 million compared with the third quarter of 1999. The contract manufacturing and packaging unit continues to experience a decline in volume over the prior year. The current focus by pharmaceutical companies on managing a reduced pipeline of new products, often as a result of merger activities, has resulted in a reduction in the demand for outsourcing, all of which directly impacts the contract services segment. The Company is aggressively seeking new business, but to date has not been successful in converting new customer contacts into orders. Competition is aggressive and customers are often reluctant to change if their current supplier has met their service needs. Net sales for the nine months of 2000 were $324.9 million, 8.1% lower than reported net sales in the same period of 1999. Measured at constant exchange rates, sales were 4.5% lower than in 1999. Excluding exchange rate variances, Device Product Development sales were .1% lower as increased demand in international markets was offset by decreased sales in domestic markets. Year-to-date Contract Services segment sales declined by 23.0% from the prior year level, from the same causes as were stated above for the third quarter decrease. Gross Profit - --------------- The third quarter 2000 consolidated gross margin was 23.5% compared with 29.8% in third quarter 1999. Lower margins were reported in both the Device Product Development and Contract Services segments. For the Device Product Development segment, lower domestic sales volumes, lower-value product mix and the higher cost of dollar-based raw materials to international operations negatively impacted gross margins. For the Contract Services segment, low demand and contract cancellations within the contract manufacturing and packaging unit caused the segment to operate below breakeven margins. The Company does not expect the Contract Services segment to return to profitability in 2000. Page 12 Results of Operations for the Three and Nine Months ended September 30, 2000 Versus Comparable 1999 Periods - ------------------------------------------------------------------- The consolidated gross profit margin for the 2000 nine-month period was 24.9% compared with 30.7% in the same period of 1999. The year-to-date negative gross margin of the contract manufacturing and packaging unit caused the majority of the decline in the profit margin. Year-to-date gross margins in the Device Product Development segment also declined as a result of the lower demand for high-value product mix in the domestic market and U.K. Plastics facility volume reductions and severance costs. Selling, General and Administrative Expenses - -------------------------------------------------------- Selling, general and administrative expenses were down $2.7 million (14.1%) as compared with the third quarter of 1999. Lower incentive based compensation expenses, higher income on pension assets and the favorable impact of foreign exchange rates on non-U.S. dollar expenses more than offset higher drug delivery systems research and development expenses. The research and development effort has led to the Company's first drug delivery system licensing agreement. This agreement and related revenue recognition issues are discussed more fully under the caption "Recently Issued Accounting Pronouncements". For the nine-month period ending September 30, 2000, selling, general and administrative expenses declined by $5.0 million versus the prior year. The same factors that influenced the third quarter comparisons also influenced the year-to-date figures. In addition, 2000 results include a full 9 months of the clinical services unit's expenses (acquired April 20, 1999) versus only 5 months in 1999. Other (income) expense - ----------------------------- In the third quarter of 2000, foreign currency transaction losses and an equipment loss largely offset interest income on investments. The nine-month period of 2000 contains costs related to a one-time environmental action by Brazilian customs which resulted in the destruction of raw material and finished products which were imported into that country. Interest Expense - ------------------------------------------------- Interest expense increased by $.3 million over 1999 in the third quarter comparison ($1.9 million in the year-to-date comparison), largely due to additional debt associated with stock repurchases under a one million share buyback program announced in March of 1999. During 2000, 399,700 shares have been purchased at an average cost of $26.81 per share, bringing the total shares repurchased under this program to 930,500. Higher interest rates and the impact of lower operating cash flow also contributed to the increased interest expense, for both the quarter and year-to-date comparisons. Page 13 Results of Operations for the Three and Nine Months ended September 30, 2000 Versus Comparable 1999 Periods - ------------------------------------------------------------------- Taxes - ------- In the third quarter of 2000, a net $1.6 million tax benefit was recorded in response to a change in local tax laws in Germany that provided an additional tax benefit from the 1997 reorganization of the German subsidiaries. The 1999 third quarter included a $0.7 million tax benefit from the settlement of a prior years' tax appeal. Excluding the non-recurring benefit, the effective tax rate for the third quarter of 2000 was 41.5%, which includes the impact of increasing the estimated full-year tax rate to 38.5%. This increase is due to the change in the expected geographic mix of estimated 2000 income. The tax rate in the third quarter of 1999 was 37.4% excluding the non-recurring benefit. The effective tax rate was 38.5% versus 38.2% for the nine-month periods ending September 30, 2000 and 1999, respectively, excluding these non-recurring benefits. Equity in Net income of Affiliated Companies - ----------------------------------------------------------------- The contribution to earnings from Daikyo Seiko, Ltd., a Japanese company in which the Company holds a 25% ownership interest, and the Company's Mexican affiliates was very small during the quarter. Daikyo reported lower sales and profits during the quarter, after posting strong results in the first six months of 2000. Net Income - ---------- Net income for the third quarter 2000 was $4.6 million, or $0.32 per share, compared with net income of $8.6 million, or $.58 per share, in the same period of 1999. Excluding the non-recurring tax benefits noted above, third quarter 2000 earnings per share were $0.21 versus $0.53 in 1999. Average common shares outstanding in the third quarter of 2000 were 14.3 million compared with 14.9 million during third quarter of 1999. The reduction in average common shares outstanding is due to the Company's stock buyback program. For the nine-month period, 2000 net income was $14.7 million, or $1.02 per share, compared with $28.5 million, or $1.91 per share, in 1999. Excluding the non-recurring tax benefits, net income for the nine-month period was $13.1 million, or $0.91 per share, in 2000 versus $27.8 million, or $1.86 per share, in 1999. Average common shares outstanding for the first nine months of 2000 were 14.4 million compared with 15.0 million in 1999. Financial Position - ------------------ Working capital at September 30, 2000 was $104.8 million compared with $80.7 million at December 31, 1999. The working capital ratio at September 30, 2000 was 2.3 to 1. The improvement in the working capital ratio is mostly due to the Company's new credit facility, which provides the ability to refinance short-term notes payable on a long-term basis. In July 2000, the Company signed a $135 million revolving credit agreement with a group of six banks. The credit agreement consists of a $70 million five-year revolving credit facility and a $65 million 364-day line of credit. Interest cost on these facilities will be charged on London Inter-Bank Offering Rates (LIBOR) plus a margin dependent on Page 14 Results of Operations for the Three and Nine Months ended September 30, 2000 Versus Comparable 1999 Periods - ------------------------------------------------------------------- the Company's debt to total capital ratio. The interest rate on the initial borrowings under this facility was 7.4%. Commitment fees on these credit agreements also fluctuate according to the Company's debt to total capital ratio with a maximum commitment fee of 17.5 basis points on the 364-day facility and 20.0 basis points on the five-year facility. Debt as a percentage of total invested capital at September 30, 2000 was 46.6% compared with 42.5% at December 31, 1999. For the nine-month period, funds generated from operations totaled $36.1 million versus $43.0 million in the prior year period as a result of the lower net income. Capital spending for the year-to-date 2000 period increased to $42.3 million, primarily due to facility, maintenance and efficiency upgrades on Device Product Development segment assets. Full year capital spending for 2000 is projected to be approximately $60.0 million. Other investment activity for the nine-months of 2000 included a $1.0 million additional investment in a genotyping technology company, and $1.0 million payment to acquire an exclusive technology license, which will enable the Company to manufacture a patented reconstitution device to deliver lyophilized drugs. Cash flow from financing activities in the year-to-date 2000 period included cash dividends totaling $7.4 million ($0.51 per share) and $10.7 million of common stock repurchases (399,700 shares at an average price of $26.81 per share). These net cash outflows were financed through $25.2 million of increased borrowings. The Company believes its financial condition and current capitalization provide sufficient flexibility to meet cash flow requirements in the future. On October 16, 2000, the Company announced that its Board of Directors had authorized management to engage UBS Warburg LLC to review all of the Company's strategic alternatives and identify opportunities to enhance shareholder value, which may include disposition of assets or business combinations involving the Company. Recently Issued Accounting Pronouncements - ------------------------------------------------------- In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101). Among other things, SAB 101 provides guidance for recording revenue related to non-refundable, up-front fees received in connection with conveying licensing or other intangible rights or for delivery of particular products or services. In general, SAB 101 defers the recognition of revenue from such up-front payments over any related service period. During the third quarter of 2000, the Company completed agreements with Innovative Drug Delivery Systems, Inc. ("IDDS") granting IDDS exclusive rights to the Company's transmucosal drug delivery technologies for the delivery of morphine and fentanyl, both well-known pain medications, and midazolam, an anti-anxiety drug frequently administered prior Page 15 Results of Operations for the Three and Nine Months ended September 30, 2000 Versus Comparable 1999 Periods - ------------------------------------------------------------------- to surgery. In addition, the agreement grants an option on a fourth product, morphine-6-glucuronide, for the treatment of pain and sedation. The agreements provide for IDDS to make license, option and milestone payments to the Company that could total up to $30 million through year 2004. West would also be entitled to royalties on the sale of any licensed products that proceed through commercialization. As of September 30, 2000 the Company had received non-refundable license and option payments totaling $2.5 million from IDDS. In compliance with SAB 101, the Company has deferred recognition of the $2.5 million and will recognize this payment into income as the services under related agreements are performed. In July 2000, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board reached a consensus on Issue 00-10 "Accounting for Shipping and Handling Revenues and Costs". Issue 00-10 addresses the income statement presentation of amounts charged to customers for shipping and handling. The Company will adopt EITF 00-10 in the fourth quarter of 2000 and will reclassify shipping and handling costs to the cost of goods sold line. Currently the Company nets these costs against sales. This reclassification will have no impact on reported gross profit amounts. In June 1998, the Financial Accounting Standards Board issued Statement No. 133 "Accounting for Derivative Financial Instruments and Hedging Activities". Statement 133 was amended by Statement 137 in July 1999 and by Statement 138 issued in June 2000. Statement 133, as amended, requires the Company to recognize all derivatives as either assets or liabilities and measure those instruments at fair value as of the balance sheet date. Derivative instruments include interest rate swap agreements, forward exchange contracts and certain options, including such items "embedded" within host contracts such as sales agreements, leases, and supply contracts. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging transaction. Generally, the timing of gain or loss recognition in the income statement of such changes in fair value for a hedging instrument is matched with the recognition of the item or risk being hedged. Changes in fair value from derivative instruments with no hedging designation or purpose are recognized immediately into earnings. The Company will adopt Statement 133, as amended, as of January 1, 2001. Given the Company's current and anticipated derivative activities, management does not believe the adoption of Statement 133 will have a material effect on the Company's consolidated financial position and results of operations. Page 16 Results of Operations for the Three and Nine Months ended September 30, 2000 Versus Comparable 1999 Periods - ------------------------------------------------------------------- Market Risk - --------------- The Company is exposed to various market risk factors such as fluctuating interest rates and foreign currency rate fluctuations. These risk factors can impact results of operations, cash flows and financial position. These risks are managed periodically with the use of derivative financial instruments such as interest rate swaps and forward exchange contracts. In accordance with Company policy, derivative financial instruments are not used for speculation or trading purposes. At September 30, 2000 the Company had four interest rate swap agreements in effect, with an estimated fair value of less than $0.1 million. The Company also had two forward contracts in effect at September 30, 2000. The forward contracts effectively hedge foreign currency commitments to purchase equipment. The fair value of the forward contracts at September 30, 2000 was less than $0.1 million. Certain statements in this report that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "estimate", "expect", "intend", "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking statements, including but not limited to (1) sales demand, (2) the timing and success of customer's projects, (3) competitive pressures, (4) the strength or weakness of the U.S. dollar, (5) inflation and (6) the cost of raw materials. The Company does not intend to update these forward-looking statements. Item 3. Quantitative and Qualitative Disclosure about Market Risk ---------------------------------------------------------- The information called for by this item is incorporated by reference to the text appearing in Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations- Market Risk". Page 17 Part II - Other Information Item 1. Legal Proceedings ----------------- None. Item 2. Changes in Securities and Use of Proceeds ----------------------------------------- None. Item 3. Defaults Upon Senior Securities ------------------------------- None. Item. 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- None. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) See Index to Exhibits on pages F-1 and F-2 of this Report. (b) No reports on Form 8-K have been filed for the quarter ended September 30, 2000. Page 18 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WEST PHARMACEUTICAL SERVICES,INC. ----------------------------------- (Registrant) November 13, 2000 /s/ Anna Mae Papso - ------------------ ----------------------------------- Date Corporate Vice President of Finance INDEX TO EXHIBITS Exhibit Number (3) (a) Amended and Restated Articles of Incorporation of the Company through January 4, 1999, incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-8036). (3) (b) ByLaws of the Company, as amended through October 27, 1998, incorporated by reference to Exhibit (3)(b) to the Company's Form 10-Q for the quarter ended September 30, 1998 (File No. 1-8036). (4) Miscellaneous long term debt instruments and credit facility agreements of the Company, under which the underlying authorized debt is equal to less than ten percent of the total assets of the Company and its subsidiaries on a consolidated basis, are not filed as exhibits to this report pursuant to Section (b) (4) (iii) A of Item 601 of Reg S-K. The Company agrees to furnish to the Commission, upon request, copies of any such unfiled instruments. (4) (a) Form of stock certificate for common stock, incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-8036). (4) (b) Note Purchase Agreement dated as of April 8, 1999 among the Company and several insurance companies. (4) (c) Credit Agreement, dated as of July 26, 2000 among the Company, several banks, and PNC Bank, N.A., as agent for the banks. (10) None. (11) Not Applicable. (12) Not Applicable. (15) None. (16) Not applicable. (18) None. (19) None. (22) None. (23) None. (24) None. (27) Financial Data Schedule. (99) None. F - 1 EX-4.(B) 2 0002.txt NOTE PURCHASE AGREEMENT WEST PHARMACEUTICAL SERVICES, INC. and certain other Obligors NOTE PURCHASE AGREEMENT DATED AS OF APRIL 8,1999 $100,000,000 6.81% SENIOR NOTES DUE APRIL 8, 2009 TABLE OF CONTENTS PAGE 1. AUTHORIZATION OF NOTES................................................1 2. SALE AND PURCHASE OF NOTES............................................1 3. CLOSING...............................................................2 4. CONDITIONS TO CLOSING.................................................2 4.1 Representations and Warranties...............................2 4.2 Performance; No Default......................................2 4.3 Compliance Certificates......................................2 4.4 Opinions of Counsel..........................................3 4.5 Purchase Permitted By Applicable Law, etc....................3 4.6 Sale of Other Notes..........................................3 4.7 Payment of Special Counsel Fees..............................3 4.8 Private Placement Number.....................................3 4.9 Changes in Corporate Structure...............................4 4.10 Proceedings and Documents....................................4 5. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.......................4 5.1 Organization; Power and Authority............................4 5.2 Authorization, etc...........................................4 5.3 Disclosure...................................................4 5.4 Organization and Ownership of Shares of Subsidiaries.........5 5.5 Financial Statements.........................................5 5.6 Compliance with Laws, Other Instruments, etc.................6 5.7 Governmental Authorizations, etc.............................6 5.8 Litigation; Observance of Statutes and Orders ......................6 5.9 Taxes ..............................................................6 5.10 Title to Property; Leases ..........................................7 5.11 Licenses, Permits, etc .............................................7 5.12 Compliance with ERISA ..............................................7 5.13 Private Offering by the Company ....................................8 5.14 Use of Proceeds; Margin Regulations ................................8 5.15 Existing Indebtedness ..............................................9 5.16 Foreign Assets Control Regulations, etc ............................9 5.17 Status under Certain Statutes ......................................9 5.18 Environmental Matters ..............................................9 5.19 Year 2000 .........................................................10 6. REPRESENTATIONS OF THE PURCHASER ..................................10 6.1 Purchase for Investment ...........................................10 6.2 Source of Funds ...................................................11 TABLE OF CONTENTS PAGE 7. INFORMATION AS TO OBLIGORS, ETC ...................................12 7.1 Financial and Business Information ................................12 7.2 Officer's Certificate .............................................14 7.3 Inspection ........................................................15 8. PREPAYMENT OF THE NOTES ...........................................15 8.1 Payment at Maturity ...............................................15 8.2 Optional Prepayments with Make-Whole Amount .......................15 8.3 Prepayment in connection with Asset Disposition ...................16 8.4 Allocation of Partial Prepayments .................................16 8.5 Maturity; Surrender, etc ..........................................16 8.6 Purchase of Notes .................................................17 8.7 Make-Whole Amount .................................................17 9. AFFIRMATIVE COVENANTS .............................................18 9.1 Compliance with Law ...............................................18 9.2 Insurance .........................................................18 9.3 Maintenance of Properties .........................................19 9.4 Payment of Taxes ..................................................19 9.5 Corporate Existence, etc ..........................................19 10. NEGATIVE COVENANTS ................................................19 10.1 Transactions with Affiliates ......................................20 10.2 Line of Business ..................................................20 10.3 Consolidated Funded Debt ..........................................20 10.4 Priority Debt .....................................................20 10.5 Interest Charges Coverage Ratio ...................................20 10.6 Merger, Consolidation, etc ........................................21 10.7 Sale of Assets, etc ...............................................22 10.8 Liens .............................................................22 11. EVENTS OF DEFAULT .................................................25 12. REMEDIES ON DEFAULT, ETC ..........................................27 12.1 Acceleration ......................................................27 12.2 Other Remedies ....................................................27 12.3 Rescission ........................................................28 12.4 No Waivers or Election of Remedies, Expenses, etc .................28 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES .....................28 13.1 Registration of Notes .............................................28 13.2 Transfer and Exchange of NOLL~ ....................................29 13.3 Replacement of Notes ..............................................29 TABLE OF CONTENTS PAGE 14. PAYMENTS ON NOTES ....................................................29 14.1 Place of Payment .....................................................29 14.2 Home Office Payment ..................................................30 15. EXPENSES, ETC ........................................................31 15.1 Transaction Expenses .................................................31 15.2 Survival .............................................................31 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;ENTIRE AGREEMENT ..........31 17. AMENDMENT AND WAIVER .................................................31 17.1 Requirements .........................................................31 17.2 Solicitation of Holders of Notes .....................................32 17.3 Binding Effect, etc ..................................................32 17.4 Notes held by Obligors, etc ..........................................32 18. NOTICES ..............................................................33 19. REPRODUCTION OF DOCUMENTS ............................................33 20. CONFIDENTIAL INFORMATION .............................................33 21. SUBSTITUTION OF PURCHASER ............................................35 22. MISCELLANEOUS ........................................................35 22.1 Successors and Assigns ...............................................35 22.2 Payments Due on Non-Business Days ....................................35 22.3 Severability .........................................................36 22.4 Construction .........................................................36 22.5 Counterparts .........................................................36 22.6 Governing Law ........................................................36 22.7 Release of Obligors ..................................................36 SCHEDULES & EXHIBITS SCHEDULE A -- Information Relating to Purchasers SCHEDULE -- Defined Terms SCHEDULE C -- Payment Instructions SCHEDULE 4.9 -- Changes in Corporate Structure SCHEDULE 5.3 -- Disclosure Materials SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock SCHEDULE 5. -- Financial Statements SCHEDULE 5.8 -- Certain Litigation SCHEDULE 5.11 -- Patents, etc. SCHEDULE 5.12 -- ERISA Affiliates SCHEDULE 5.14 -- Use of Proceeds SCHEDULE 5.15 -- Existing Indebtedness EXHIBIT 1 -- Form of 6.8 1% Senior Note due April 8, 2009 EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Obligors EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers WEST PHARMACEUTICAL SERVICES, INC. and certain other Obligors 101 Gordon Drive P.O. Box 645 Lionville, PA 19341-0645 $100,000,000 6.81% SENIOR NOTES DUE APRIL 8, 2009 Dated as of April 8, 1999 To Each of the Purchasers Listed in the Attached Schedule A: Ladies and Gentlemen: Each of WEST PHARMACEUTICAL SERVICES, INC., a Pennsylvania corporation (together with its assigns, the 'Company"), WEST PHARMACEUTICAL SERVICES OF FLORIDA, INC., a Florida corporation (together with its successor and assigns, "West Florida"), and WEST PHARMACEUTICAL SERVICES LAKEWOOD, INC., a Delaware corporation (together with its successors and assigns, "West Lakewood") (the Company, West Florida and West Lakewood are referred to herein, collectively, as the "Obligors") agrees with you as follows: 1. AUTHORIZATION OF NOTES The Obligors will authorize the issue and sale of $100,000,000 aggregate principal amount of their 6.81% Senior Notes due April 8, 2009 (the "Notes", such term to include any such notes issued in substitution therefor pursuant to Section 13 of this Agreement or the Other Agreements (as hereinafter defined)). The Notes shall be substantially in the form set out in Exhibit 1, with such changes therefrom, if any, as may be approved by you and the Obligors. Certain capitalized terms used in this Agreement are defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement. 2. SALE AND PURCHASE OF NOTES Subject to the terms and conditions of this Agreement, the Obligors will issue and sell to you and you will purchase from the Obligors, at the Closing provided for in Section 3, Notes in the principal amount specified opposite your name in Schedule A at the purchase price of 100% of the principal amount thereof. Contemporaneously with entering into this Agreement, the Obligors are entering into separate Note Purchase Agreements (the "Other Agreements") identical with this Agreement with each of the other purchasers named in Schedule A (the "Other Purchasers"), providing for the sale at such Closing to each of the Other Purchasers of Notes in the principal amount specified opposite its name in Schedule A. Your obligation hereunder and the obligations of the Other Purchasers under the Other Agreements are several and not joint obligations and you shall have no obligation under any Other Agreement and no liability to any Person for the performance or non-performance by any Other Purchaser thereunder. 3. CLOSING The sale and purchase of the Notes to be purchased by you and the Other Purchasers shall occur at the offices of Hebb & Gitlin, One State Street, Hartford, Connecticut 06103, at 10:00 a.m., eastern time, at a closing (the "Closing") on April 8, 1999. At the Closing the Obligors will deliver to you the Notes to be purchased by you in the form of a single Note (or such greater number of Notes in denominations of at least $2,000,000 as you may request) dated the date of the Closing and registered in your name (or in the name of your nominee), as indicated in Schedule A, against payment by federal funds wire transfer in immediately available funds in the amount of the purchase price therefor as directed by the Obligors in Schedule C. If at the Closing the Obligors shall fail to tender such Notes to you as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment. 4. CONDITIONS TO CLOSING Your obligation to purchase and pay for the Notes to be sold to you at the Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions: 4.) Representations and Warranties. The representations and warranties of the Obligors in this Agreement shall be correct when made and at the time of the Closing. 4.2 Performance; No Default. The Obligors shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by them prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Schedule 5.14) no Default or Event of Default shall have occurred and be continuing. 4.3 Compliance Certificates. (a) Officer's Certificate. The Company shall have delivered to you an Officer's Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2, 4.6, 4.7, and 4.9 have been fulfilled. (b) Secretary's Certificate. Each Obligor shall have delivered to you a certificate certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes, this Agreement and the Other Agreements. 4.4 Opinions of Counsel. You shall have received opinions in form and substance satisfactory to you, dated the date of the Closing from (a) Dechert Price & Rhoads, counsel for the Obligors, covering the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and such Obligors hereby instruct their counsel to deliver such opinion to you) and (b) Hebb & Gitlin, your special counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(b) and covering such other matters incident to such transactions as you may reasonably request. 4.5 Purchase Permitted By Applicable Law, etc. On the date of the Closing your purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by you, you shall have received an Officer's Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such purchase is so permitted. 4.6 Sale of Other Notes. Contemporaneously with the Closing the Obligors shall sell to the Other Purchasers and the Other Purchasers shall purchase the Notes to be purchased by them at the Closing as specified in Schedule A. 4.7 Payment of Special Counsel Fees. Without limiting the provisions of Section 15.1, the Obligors shall have paid on or before the Closing the fees, charges and disbursements of your special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing. 4.8 Private Placement Number. A Private Placement number issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for the Notes. 4.9 Changes in Corporate Structure. Except as specified in Schedule 4.9, no Obligor shall have changed its jurisdiction of incorporation or been a party to any merger or consolidation, nor shall any Obligor have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5. 4.10 Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to you and your special counsel, and you and your special counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request. 5. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS Each Obligor represents and warrants to you that: 5.1 Organization; Power and Authority. Each Obligor is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Obligor has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Other Agreements and the Notes and to perform the provisions hereof and thereof. 5.2 Authorization, etc. This Agreement and the Other Agreements and the Notes have been duly authorized by all necessary corporate action on the part of the Obligors, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of each Obligor enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 5.3 Disclosure. The Company, through its agent, PNC Capital Markets, Inc., has delivered to you and each Other Purchaser a copy of a Private Placement Memorandum, dated January, 1999 (the "Memorandum"), relating to the transactions contemplated hereby. Except as disclosed in Schedule 5.3, this Agreement, the Memorandum, the documents, certificates or other writings identified in Schedule 5.3 and the financial statements listed in Schedule 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one of the documents, certificates or other writings identified therein, or in the financial statements listed in Schedule 5.5, since December 31, 1998, there has been no change in the financial condition, operations, business or properties of the Company or any of its Subsidiaries except changes that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect. 5.4 Organization and Ownership of Shares of Subsidiaries. (a) Schedule 5.4 is (except as noted therein) a complete and correct list of the Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its Capital Stock or similar equity interests outstanding owned by the Company and each other Subsidiary. (b) All of the outstanding shares of Capital Stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4). (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact. 5.5 Financial Statements. The Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). 5.6 Compliance with Laws, Other Instruments, etc. The execution, delivery and performance by the Obligors of this Agreement, the Other Agreements and the Notes will not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other Material agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary. 5.7 Governmental Authorizations, etc. Assuming the accuracy of your representation made in Section 6.1, no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Obligors of this Agreement, the Other Agreements or the Notes. 5.8 Litigation; Observance of Statutes and Orders. (a) Except as disclosed in Schedule 5.8, there are no actions, suits or proceedings pending or, to the knowledge of any Obligor, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. (b) Neither the Company nor any Subsidiary is in default under any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental Authority, which default or violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. 5.9 Taxes. The Company and its Subsidiaries have filed all income tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments payable by them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not individually or in the aggregate Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The Federal income tax liabilities of the Company and its Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 1994. 5.10 Title to Property; Leases. The Company and its Subsidiaries have good and sufficient title to their respective Material properties, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement, except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect. All Material leases are valid and subsisting and are in full force and effect in all material respects. 5.11 Licenses, Permits, etc. Except as disclosed in Schedule 5.11, the Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, that are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect. 5.12 Compliance with ERISA. (a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that would reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not be individually or in the aggregate Material. (b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan's most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan's most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities. The term "benefit liabilities" has the meaning specified in section 4001 of ERISA and the terms "current value" and "present value" have the meaning specified in section 3 of ERISA. (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material. (d) The expected postretirement benefit obligation (determined as of the last day of the Company's most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material. (e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975 (c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of your representation in Section 6.2 as to the Sources to be used to pay the purchase price of the Notes to be purchased by you. (f) Schedule 5.12 sets forth all ERISA Affiliates and all "employee benefit plans" maintained by the Company (or any "affiliates" thereof) or in respect of which the Notes could constitute an "employer security" ("employee benefit plan" has the meaning specified in section 3 of ERISA, "affiliate" has the meaning specified in section 407(d) of ERISA and section V of the Department of Labor Prohibited Transaction Exemption 95-60 (60 FR 35925, July 12,1995) and "employer security" has the meaning specified in section 407(d) of ERISA). 5.13 Private Offering by the Company. Neither any of the Obligors nor anyone acting on behalf of any of them has offered the Notes or any similar Securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than you, the Other Purchasers and not more than 10 other Institutional Investors, each of which has been offered the Notes at a private sale for investment. Neither any of the Obligors nor anyone acting on behalf of any of them has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act. 5.14 Use of Proceeds; Margin Regulations. The Obligors will apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 1% of the value of the consolidated assets of the Company and its Subsidiaries and none of the Obligors has any present intention that margin stock will constitute more than 1% of the value of such assets. As used in this Section, the terms "margin stock" and "purpose of buying or carrying" shall have the meanings assigned to them in said Regulation U. 5.15 Existing Indebtedness. Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of December 31, 1998 (except that such list reflecting all such Indebtedness secured by any Lien shall be as of March 31, 1999), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries. Neither the Company nor any Subsidiary is in default, and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment. 5.16 Foreign Assets Control Regulations, etc. Neither the sale of the Notes by the Obligors hereunder nor their use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. 5.17 Status under Certain Statutes. Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Transportation Acts (49 U.S.C.), as amended, or the Federal Power Act, as amended. 5.18 Environmental Matters. Neither the Company nor any Subsidiary has knowledge of any claim or has received any written notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed to you in writing, (a) neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except. in each case, such as could not reasonably be expected to result in a Material Adverse Effect; (b) neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and (c) all buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect. 5.19 Year 2000. The Company and its Subsidiaries have reasonable grounds for believing that they will be Year 2000 Compliant and Ready on or before June 30, 1999. "Year 2000 Compliant and Ready" means that (a) the Company and its Subsidiaries' hardware and software systems, with respect to the operation of their business, will (i) handle satisfactorily date information involving any and all dates before, during and/or after January 1, 2000, including accepting input, providing output and performing date calculations in whole or in part and (ii) operate accurately, without Material interruption, on and in respect of any and all dates before, during and/or after January 1, 2000, and without any Material change in performance; and (b) the Company and its Subsidiaries have developed alternative plans to ensure business continuity in all Material respects in the event of the failure of the items identified in clauses (i) and (ii) in the foregoing clause (a). 6. REPRESENTATIONS OF THE PURCHASER 6.1 Purchase for Investment. You represent that you are purchasing the Notes for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all times be within your or their control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Obligors are not required to register the Notes. 6.2 Source of Funds. You represent that at least one of the following statements is an accurate representation as to each source of funds (a "Source") to be used by you to pay the purchase price of the Notes to be purchased by you hereunder: (a) the Source is an "insurance company general account" as defined in United States Department of Labor Prohibited Transaction Exemption ("PTE") 95-60 (60 FR35925, July 12, 1995) and there is no "employee benefit plan" (as defined in section 3(3) of ERISA and section 4975(e)(1) of the Code (treating as a single plan all plans maintained by the same employer or employee organization or affiliate thereof)) with respect to which the amount of the general account reserves and liabilities of all contracts held by or on behalf of such plan exceeds 10% of the total reserves and liabilities of such general account (exclusive of separate account liabilities plus surplus, as set forth in the National Association of Insurance Commissioners' Annual Statement filed with your state of domicile; or (b) if you are an insurance company, the Source does not include assets allocated to any separate account maintained by you in which any employee benefit plan (or its related trust) has any interest, other than a separate account that is maintained solely in connection with your fixed contractual obligations under which the amounts payable, or credited, to such plan and to any participant or beneficiary of such plan (including any annuitant) are not affected in any manner by the investment performance of the separate account; or (c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in writing pursuant to this paragraph (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or (d) the Source constitutes assets of an "investment fund" (within the meaning of Part V of PTE 84-14 (the "QPAM Exemption")) managed by a "qualified professional asset manager" or "QPAM" (within the meaning of Part V of the OPAM Exemption), no employee benefit plan's assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such OPAM, exceed 20% of the total client assets managed by such OPAM, the conditions of Part 1(c) and (g) of the OPAM Exemption are satisfied, neither the OPAM nor a person controlling or controlled by the OPAM (applying the definition of "control" in Section V(e) of the OPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this paragraph (d); or (e) the Source is a governmental plan; or (f) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this paragraph (f); or ( g) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA. As used in this Section 6.2, the terms "employee benefit plan", "governmental plan", "party in interest" and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA. 7. INFORMATION AS TO OBLIGORS, ETC. 7.) Financial and Business Information. The Company shall deliver to each holder of Notes that is an Institutional Investor: (a) Quarterly Statements -- within 45 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of, (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and (ii) consolidated statements of income, changes in shareholders' equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Company's Quarterly Report on Form 10-0 prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a); (b) Annual Statements -- within 90 days alter the end of each fiscal year of the Company, duplicate copies of, (i) a consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and (ii) consolidated statements of income, changes in shareholders' equity and cash flows of the Company and its Subsidiaries, for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time period specified above of the Company's annual report on form 10-K for such fiscal year (together with the Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(b); (c) SEC and Other Reports -- promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Subsidiary to public securities holders generally, and (ii) each regular or periodic report, each registration statement that shall have become effective (without exhibits except as expressly requested by such holder), and each final prospectus and all amendments thereto filed by the Company or any Subsidiary with the Securities and Exchange Commission; (d) Notice of Default or Event of Default -- promptly, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default, a written notice specifying the nature and period of existence thereof and what action the Obligors are taking or propose to take with respect thereto; (e) ERISA Matters -- promptly, and in any event within five days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto: (i) with respect to any Plan, any reportable event, as defined in section 4043(b) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or (ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or (iii) any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title 1 cr IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect; and (f) Q9 Requested Information -- with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Notes (other than so-called "management letters" from the relevant Obligors independent certified public accountants) as from time to time may be reasonably requested by any such holder of Notes. 7.2 Officer's Certificate. Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of a Senior Financial Officer setting forth: (a) Covenant Compliance -- the information (including detailed calculations) required in order to establish whether the Obligors were in compliance with the requirements of Section 10.3 through Section 10.5 hereof, inclusive, Section 10.7 and clause (ix) of Section 10.8(a) during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence); and (b) Event of Default -- a statement that such officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto. 7.3 Inspection. The Company shall permit the representatives of each holder of Notes that is an Institutional Investor: (a) No Default -- if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company's officers, and, with the consent of the Company (which consent will not be unreasonably withheld), to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and (b) Default -- if a Default or Event of Default then exists, at the expense of the Company and the other Obligors to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Obligors authorize said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested. 8. PREPAYMENT OF THE NOTES 8.1 Payment at Maturity. The Obligors will pay all of the principal amount of the of the Notes remaining outstanding, if any, on April 8, 2009. 8.2 Optional Prepayments with Make-Whole Amount. The Obligors may, at their option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes (but, if in part, in an amount not less than $1,000,000 or such lesser amount as shall then be outstanding), at 100% of the principal amount so prepaid, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Obligors will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date, the principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.4), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Obligors shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date. 8.3 Prepayment in connection with Asset Disposition. (a) Notice of Debt Prepayment Offer. If the Obligors shall make a Debt Prepayment Offer in connection with an Asset Disposition, they will give written notice of such offer to each holder of Notes within 10 months after the consummation thereof, which notice shall contain and constitute an offer to prepay a Ratable Portion of the Notes held by such holder on a date (the "Proposed Prepayment Date") specified in such notice that is not less than 30 days and not more than 60 days after the date such notice shall be given, and shall be accompanied by the certificate described in subparagraph (d) of this Section 8.3. If the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the 60th day after the date such notice shall be given. (b) Acceptance; Rejection. A holder of Notes may accept the offer to prepay made pursuant to this Section 8.3 by causing a notice of such acceptance to be delivered to the Company at least 10 days prior to the Proposed Prepayment Date. A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.3 shall be deemed to constitute an acceptance of such offer by such holder. (c) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.3 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment and the applicable Make-Whole Amount. The prepayment shall become due and owing, and shall be made, on the Proposed Prepayment Date. (d) Officer's Certificate. Each offer to prepay the Notes of any holder pursuant to this Section 8.3 shall be accompanied by a certificate, executed by a Senior Financial Officer and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.3; (iii) the computation, in reasonable detail, of the Ratable Portion of the Notes held by such holder which is offered to be prepaid; and (iv) the interest that would be due on such Ratable Portion to be prepaid, accrued to the Proposed Prepayment Date. 8.4 Allocation of Partial Prepayments In the case of each partial prepayment of the Notes, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment. 8.5 Maturity; Surrender, etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Obligors shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and canceled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note. 8.6 Purchase of Notes The Obligors will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement, the Other Agreements and the Notes or (b) pursuant to an offer to purchase made by an Obligor or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions. Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 30 days. If the holders of greater than or equal to 50% of the principal amount of the Notes then outstanding accept such offer, the Obligors shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 10 Business Days from its receipt of such notice to accept such offer. The Obligors will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement or the Other Agreements and no Notes may be issued in substitution or exchange for any such Notes. 8.7 Make-Whole Amount The term "Make-Whole Amount" means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings: "Called Principal" means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or Section 8.3 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires. "Discounted Value" means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. "Reinvestment Yield" means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by (a) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as Page "678" on the Bridge Telerate Service (or such other display as may replace Page 678 on the Bridge Telerate Service) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (b) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (i) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (ii) interpolating linearly between (1) the actively traded U.S. Treasury security with the constant maturity closest to and greater than the Remaining Average Life and (2) the actively traded U.S. Treasury security with the constant maturity closest to and less than the Remaining Average Life. "Remaining Average Life" means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the maturity date of the Notes. "Remaining Scheduled Payments" means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2, Section 8.3 or Section 12.1. "Settlement Date" means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or Section 8.3 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires. 9. AFFIRMATIVE COVENANTS Each Obligor covenants that so long as any of the Notes are outstanding: 9.1 Compliance with Law. The Company will and will cause each of its Subsidiaries to comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not reasonably be expected, individually or in the aggregate, to have a materially adverse effect on the business, operations, affairs, financial condition, properties or assets of the Company and its Subsidiaries taken as a whole. 9.2 Insurance. The Company will and will cause each of its Subsidiaries to maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated. 9.3 Maintenance of Properties. The Company will and will cause each of its Subsidiaries to maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance would not, individually or in the aggregate, have a materially adverse effect on the business, operations, affairs, financial condition, properties or assets of the Company and its Subsidiaries taken as a whole. 9.4 Payment of Taxes. The Company will and will cause each of its Subsidiaries to file all income tax or similar tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies payable by any of them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, provided that neither the Company nor any Subsidiary need pay any such tax or assessment if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in the aggregate would not reasonably be expected to have a materially adverse effect on the business, operations, affairs, financial condition, properties or assets of the Company and its Subsidiaries taken as a whole. 9.5 Corporate Existence, etc. Each Obligor will at all times preserve and keep in full force and effect its corporate existence. Subject to Sections 10.6 and 10.7, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not, individually or in the aggregate, have a materially adverse effect on the business, operations, affairs, financial condition, properties or assets of the Company and its Subsidiaries taken as a whole. 10. NEGATIVE COVENANTS Each Obligor covenants that so long as any of the Notes are outstanding: 10.1 Transactions with Affiliates. The Company will not and will not permit any Subsidiary to enter into directly or indirectly any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except pursuant to the reasonable requirements of the Company's or such Subsidiary's business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm's-length transaction with a Person not an Affiliate. 10.2 Line of Business. The Company will not, and will not permit any of its Subsidiaries to, engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries is engaged on the date of this Agreement as described in the Memorandum. 10.3 Consolidated Funded Debt. The Company will not at any time permit Consolidated Funded Debt to exceed 50% of Consolidated Total Capitalization, in each case determined at such time. In determining the Company's compliance with this Section 10.3, there shall be deducted from the calculation of Consolidated Funded Debt (including the calculation thereof needed to determine Consolidated Total Capitalization) an amount equal to the cash and marketable securities held by the Company and its Subsidiaries on the date of determination of Consolidated Funded Debt, but only to the extent that such amount may be applied to the prepayment of Consolidated Funded Debt at such time without penalty or premium, provided that if such Consolidated Funded Debt were so prepaid, (a) such prepayment would not conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default or create any obligation under, any instrument evidencing Debt of the Company or its Subsidiaries or any other agreement of the Company or its Subsidiaries, and (b) no Default or Event of Default would exist immediately prior to such prepayment, or would result therefrom. 10.4 Priority Debt. The Company will not at any time permit Priority Debt to exceed 18% of Consolidated Total Capitalization in each case determined at such time. 10.5 Interest Charges Coverage Ratio. The Company will not permit the ratio of (a) the sum of (i) Consolidated EBIT for any period of four consecutive fiscal quarters of the Company plus (ii) 50% of the depreciation and amortization taken into account in determining Consolidated Net Income for such period to (b) Consolidated Interest Expense for such period to be less than 2.50 to 1.00. 10.6 Merger, Consolidation, etc. The Company will not, and will not permit any of its Subsidiaries to, consolidate with, merge with, or acquire all or substantially all of the assets of any other Person, or Transfer substantially all of its assets in a single transaction or series of transactions to any Person (except that any Subsidiary of the Company may (x) consolidate with or merge with, or Transfer substantially all of its assets in a single transaction or series of transactions to, the Company (with the Company being the survivor thereof) and (y) Transfer all of its assets in compliance with the provisions of Section 10. 7 and upon satisfaction of the requirements of paragraph (a) of this Section 10.6 (it being understood that the reference to "surviving entity" in such paragraph shall be deemed to be a reference to the transferee of such assets)), provided, however, that the foregoing restriction does not apply to the consolidation or merger of the Company or any Subsidiary with, or the Transfer of substantially all of the assets of the Company or any Subsidiary in a single transaction or series of transactions to, any Person so long as: (a) immediately prior to, and immediately after giving effect to, any such transaction involving a Subsidiary, no Default or Event of Default would exist and if such Subsidiary was an Obligor the surviving entity becomes an Obligor upon consummation of any such transaction pursuant to such agreements and instruments as shall be reasonably satisfactory to the Required Holders, and the Company shall have caused to be delivered to each holder of Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all such agreements and instruments are enforceable in accordance with their terms and comply with the terms hereof; (b) immediately prior to, and immediately after giving effect to, any such transaction involving the Company, no Default or Event of Default would exist and either (i) the Company is the surviving or acquiring corporation, or (ii) if the Company is not the surviving or acquiring corporation, such corporation shall have executed and delivered to each holder of Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement, the Other Agreements, and the Notes (pursuant to such agreements and instruments as shall be reasonably satisfactory to the Required Holders), and the Company shall have caused to be delivered to each holder of Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof. No such Transfer of substantially all of the assets of the Company or a Subsidiary shall have the effect of releasing the Company from its liability under this Agreement, the Other Agreements or the Notes. 10.7 Sale of Assets, etc. The Company will not, and will not permit any of its Subsidiaries to, make any Asset Disposition, unless: (a) in the good faith opinion of the Company, such disposition is in exchange for consideration having a Fair Market Value at least equal to that of the property exchanged; and (b) immediately after giving effect to such disposition; (i) no Default or Event of Default would exist; and (ii) the Disposition Value of all property that was the subject of any Asset Disposition occurring during the period of 360 days ending on and including the date of such disposition would not exceed 10% of Consolidated Total Assets determined as of the end of the then most recently ended fiscal year of the Company. If prior to the consummation of a Transfer, the Company shall deliver a written notice to all holders of the Notes stating that all of the Net Proceeds Amount arising therefrom is to be applied to a Debt Prepayment Offer or a Property Reinvestment Application within 360 days after such consummation, then such Transfer shall not be deemed an Asset Disposition for purpose of clause (b)(ii) of this Section 10.7. If the Company does not apply the Net Proceeds Amount as specified in such notice within such 360 day period, then such Transfer shall be deemed to have been an Asset Disposition at the time of the consummation thereof, and the Company's compliance with this Section 10.7 as of such time shall be determined on such basis. 10.8 Liens. (a) Negative Pledge. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly create, assume, incur or suffer to be created, assumed or incurred or to exist (upon the happening of a contingency or otherwise), any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company or any such 22 WEST PHARMACEUTICAL SERVICES. INC. NOTE PURCHASE AGREEMENT Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except: (i) Taxes, etc.-- Liens for taxes, assessments or other governmental charges that are not yet due and payable or the payment of which is not at the time required by Section 9.4; (ii) Legal Proceedings -- Liens arising from judicial attachments, judgments or awards, the time for the appeal or petition for rehearing of which has not expired, or in respect of which the Company or a Subsidiary is in good faith pursuing an appeal or other proceeding for review, (iii) Ordinary Course Liens -- Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business (A) in connection with workers' compensation, unemployment insurance, social security and other like laws, (B) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety and performance bonds (of a type other than set forth in Section 10.8(a)(ii)), bids, leases (other than Capitalized Leases), purchase, construction or sales contracts and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining or advances or credit or the payment of the deferred purchase price of property, (C) to secure the claims or demands of materialmen, mechanics, carriers, warehousemen, vendors, repairmen, landlords, lessors and other like Persons, arising in the ordinary course of business, and (D) in the nature of reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other similar title exceptions or encumbrances affecting real property, provided that (1) any amounts secured by such Liens are not overdue, or, if overdue, such Liens are being contested in good faith and (2) such Liens do not, in the. aggregate, materially detract from the value of such property or materially impair the use of such property in the conduct of the business of the Company or any Subsidiary, or the conduct of the business of the Company and the Subsidiaries taken as a whole; (iv) Existing Liens- Liens in existence as of the date of the Closing securing Debt and listed in Schedule 5.15; (v) Subsidiary Liens - Liens on property of any of the Subsidiaries securing Debt owing to the Company; 23 (vi) Purchase Money Liens Liens on tangible property (or any' improvement thereon) acquired or constructed by the Company or any Subsidiary after the date of the Closing to secure Debt of the Company or such Subsidiary incurred in connection with such acquisition or construction, provided that (A) no such Lien shall extend to or cover any property other than the property (or improvement thereon) being acquired or constructed, (B) the principal amount of Debt secured by any such Lien, together with the aggregate principal amount of all other Debt secured by Liens on such property, shall not exceed the lesser of (I) an amount equal to the Fair Market Value (as determined in good faith by the Board of Directors of the Company) of such property so acquired or constructed and (II) the cost to the Company or such Subsidiary of such property (or improvement thereon) so acquired or constructed, and (C) such Lien shall be created concurrently with or within 120 days after such acquisition or the substantial completion of such construction; (vii) Acquisition Liens - Liens existing on property of a Person immediately prior to its being consolidated with or merged into the Company or a Subsidiary or its becoming a Subsidiary, or any Lien existing on any property acquired by the Company or any Subsidiary at the time such property is so acquired (whether or not the Debt secured thereby shall have been assumed), provided that (A) no such Lien shall have been created or assumed in contemplation of such consolidation or merger or such Person's becoming a Subsidiary or such acquisition of property, and (B) each such Lien shall extend solely to the item or items of property so acquired and, if required by the terms of the instrument originally creating such Lien, other property which is an improvement to or is acquired for specific use in connection with such acquired property; (viii) Renewals - Liens securing renewals, extensions (as to time) and refinancings of Debt secured by the Liens covered by clauses (i) though (vii), inclusive, provided that (A) the amount of Debt secured by each such Lien is not increased in excess of the amount of Debt outstanding on the date of such renewal, extension or refinancing, (B) none of such Liens is extended to include any additional property of the Company or any Subsidiary, and (C) immediately after such renewal, extension or refinancing no Default or Event of Default would exist; and (ix) Priority Debt - Liens securing Debt of the Company or any Subsidiary and not otherwise permitted by clauses (i) through (viii), inclusive, of this Section 10.8(a), but only to the extent that Priority Debt does not at any time exceed 18% of Consolidated Total Capitalization. (b) Financing Statements. The Company will not, and will not permit any of the Subsidiaries to, sign or file a financing statement under the Uniform Commercial Code of any jurisdiction that names the Company or such Subsidiary as debtor, or sign any security agreement authorizing any secured party thereunder to file any such financing statement, except, in any such case, a financing statement filed or to be filed to perfect a security interest that the Company or such Subsidiary is entitled to create, assume or incur, or permit to exist, under the foregoing provisions of this Section 10.8 or to evidence for informational purposes a lessor's interest in property leased to the Company or any such Subsidiary. 11. EVENTS OF DEFAULT An "Event of Default" shall exist if any of the following conditions or events shall occur and be continuing: (a) the Obligors default in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or (b) the Obligors default in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or (c) any Obligor defaults in the performance of or compliance with any term contained in Sections 10.1 through 10.8, inclusive, or Section 7.1(d); or (d) any Obligor defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a "notice of default" and to refer specifically to this paragraph (d) of Section 11); or (e) any representation or warranty made in writing by or on behalf of any Obligor or by any officer of any Obligor in this Agreement or the Other Agreements or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or (f) (i) the Company or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount in excess of $10,000,000 beyond any period of grace provided with respect thereto or (ii) the Company or any Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount in excess of $10,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared, due and payable before its stated maturity or before its regularly scheduled dates of payment; or (g) the Company or any Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or (h) a court or governmental authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Subsidiaries, or any such petition shall be filed against the Company or any of its Subsidiaries and such petition shall not be dismissed within 60 days; or (i) a final judgment or judgments for the payment of money aggregating in excess of $10,000,000 are rendered against one or more of the Company and its Subsidiaries and which judgments are not, within 30 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 30 days after the expiration of such stay; or (j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate "amount of unfunded benefit liabilities" (within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed $10,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title IV of ERISA or the penalty or excise tax provisions of Title I of ERISA or the Code relating to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, would reasonably be expected to have a Materially Adverse Effect. As used in Section 11(j), the terms "employee benefit plan" and "employee welfare benefit plan" shall have the respective meanings assigned to such terms in Section 3 of ERISA. 12. REMEDIES ON DEFAULT, ETC. 12.1 Acceleration. (a) If an Event of Default with respect to any Obligor described in paragraph (g) or (h) of Section 11 (other than an Event of Default described in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable. (b) If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable. (c) If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable. Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Obligors acknowledge, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Obligors (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Obligors in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances. 12.2 Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. 12.3 Rescission. At any time after any Notes have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Obligors have paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than nonpayment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon. 12.4 No Waivers or Election of Remedies, Expenses, etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder's rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Obligors under Section 15, the Obligors will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys' fees, expenses and disbursements. 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. 13.1 Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes. 13.2 Transfer and Exchange of Notes. Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), each of the Obligors shall execute and deliver, at the Obligors' expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Obligors may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $2,000,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $2,000,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2. 13.3 Replacement of Notes. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $10,000,000, such Person's own unsecured agreement of indemnity shall be deemed to be satisfactory), or (b) in the case of mutilation, upon surrender and cancellation thereof, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated arid bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon. 14. PAYMENTS ON NOTES 14.1 Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in Lionville, Pennsylvania at the principal office of the Company in such jurisdiction. The Obligors may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction. 14.2 Home Office Payment. So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Obligors will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below your name in Schedule A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant: to Section 14.1. Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Obligors will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by you under this Agreement and that has made the same agreement relating to such Note as you have made in this Section 14.2. 15. EXPENSES, ETC. 15.1 Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Obligors will pay all costs and expenses (including reasonable attorneys' fees of a special counsel and, if reasonably required, local or other counsel) incurred by you and each Other Purchaser or holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Other Agreements or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Other Agreements or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Other Agreements or the Notes, or by reason of being a holder of any Note, and (b) the costs and expenses, including financial advisors' fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes. The Obligors will pay, and will save you and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses if any, of brokers and finders (other than those retained by you). 15.2 Survival. The obligations of the Obligors under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, the Other Agreements or the Notes, and the termination of this Agreement. 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT All representations and warranties contained herein shall survive the execution and delivery of this Agreement, the Other Agreements and the Notes, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of you or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of any Obligor pursuant to this Agreement shall be deemed representations and warranties of such Obligor under this Agreement. Subject to the preceding sentence, this Agreement, the Other Agreements and the Notes embody the entire agreement and understanding between you and the Obligors and supersede all prior agreements and understandings relating to the subject matter hereof. 17. AMENDMENT AND WAIVER 17.1 Requirements. This Agreement, the Other Agreements and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Obligors and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to you unless consented to by you in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12,17 or 20. 17.2 Solicitation of Holders of Notes. (a) Solicitation. The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes. (b) Payment. The Obligors will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment. 17.3 Binding Effect, etc. Any amendment or waiver consented to as provided in this Section 17 applies equally 1:0 all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Obligors without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between any Obligor and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented. 17.4 Notes held by Obligors, etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, the Other Agreements or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by any Obligor or any of its Affiliates shall be deemed not to be outstanding. 18. NOTICES All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent: (i) if to you or your nominee, to you or it at the address specified for such communications in Schedule A, or at such other address as you or it shall have specified to the Company in writing, (ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or (iii) if to any Obligor, to such Obligor at the address set forth at the beginning hereof to the attention of the General Counsel, or at such other address as such Obligor shall have specified to the holder of each Note in writing. Notices under this Section 18 will be deemed given only when actually received. 19. REPRODUCTION OF DOCUMENTS This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and you may destroy any original document so reproduced. Each Obligor agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit any Obligor or any other holder 9f Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction. 20. CONFIDENTIAL INFORMATION For the purposes of this Section 20, "Confidential Information" means information delivered to you by or on behalf of any Obligor or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by you as being confidential information of such Obligor or such Subsidiary, provided that such term does not include information that (a) was publicly available or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly available through no act or omission by you or any person acting on your behalf, (c) otherwise becomes known to you other than through disclosure by any Obligor or any Subsidiary or (d) constitutes financial statements delivered to you under Section 7.1 that are otherwise publicly available. You will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you, provided that you may deliver or disclose Confidential Information to (i) your directors, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by your Notes), (ii) your financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which you offer to purchase any Security of any Obligor (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over you, (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about your investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (A) to effect compliance with any law, rule, regulation or order applicable to you, (B) in response to any subpoena or other legal process, (C) in connection with any litigation to which you are a party or (D) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20. 21. SUBSTITUTION OF PURCHASER You shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate's agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, wherever the word "you" is used in this Agreement (other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of you. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word "you" is used in this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of an original holder of the Notes under this Agreement. 22. MISCELLANEOUS 22.1 Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not. 22.2 Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day. 22.3 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction. 22.4 Construction. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. 22.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. 22.6 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. 22.7 Release of Obligors. Subject to the next succeeding sentence, at such time as any Obligor, other than the Company, has been effectively released from any and all obligations under or in respect of the Bank Credit Agreement and the Company has delivered to the Required Holders a certificate or other written statement from the Banks (or an agent acting on their behalf) to that effect, then such Obligor shall be released from all liabilities hereunder or in respect of the Notes automatically without any action on the part of any party hereto or any other Person. The release provided For in the preceding sentence shall only be effective upon delivery of such certificate or other written statement from the Banks (or an agent acting on their behalf) if: (a) no Default or Event of Default is continuing at such time; and (b) at such time such Obligor has no Debt outstanding to any Person, or any commitment to have Debt outstanding to any Person other than the Company or a Wholly-Owned Subsidiary of the Company. [Remainder of page intentionally blank; next page is signature page.] If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company. WEST PHARMACEUTICAL SERVICES, INC. By: /s/ Stephen M. Heumann Name: Stephen M. Heumann Title: Vice President Treasurer and Assistant Secretary WEST PHARMACEUTICAL SERVICES OF FLORIDA, INC. By:. /s/ Stephen J. White Name: Stephen J. White Title: Vice President WEST PHARMACEUTICAL SERVICES LAKEWOOD), INC. By: /s/ Stephen M. Heumann Name: Stephen M. Heumann Title: President The foregoing is hereby agreed to as of the date thereof. GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY By:___________________ Name: Title: If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company. WEST PHARMACEUTICAL SERVICES, INC. By:___________________ Name: Title: WEST PHARMACEUTICAL SERVICES OF FLORIDA, INC. By:____________________ Name: Title: WEST PHARMACEUTICAL SERVICES LAKEWOOD, INC. By: _____________________ Name: Title: The foregoing is hereby agreed to as of the date thereof. GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY By: /s/ Jon M. Lucia Name: Jon M. Lucia Title: Assistant Vice President and Investment Officer SCHEDULE A INFORMATION AS TO PURCHASERS
- -------------------------------------------------------------------------------- Purchaser Name THE PRUDENTIAL INSURANCE COMPANY OF AMERICA - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Name in Which Note is Registered THE PRUDENTIAL INSURANCE COMPANY OF AMERICA - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Note Registration Number; R-l; $50,000,000 Principal Amount - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Payment on Account of Note Federal Funds Wire Transfer Bank of New York Method New York, New York ABA No.: 021~O0O.:018 Account Information For the Account of: The Prudential Insurance Company of America Account No.: 890-0304-391 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Accompanying Information Name of Company: West Pharmaceutical Services, Inc. Description of Security: 681%. Senior Notes Due April 8, 2009 Security Number: 95531* AA 6 Due Date and Application (as among principal premium and interest) of the payment being made: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for Notices The Prudential Insurance Company of America Related to Payments c/o Prudential Capital Group Four Gateway Center, 71h Floor 100 Mulberry Street Newark, New Jersey 07102-4077 Attn: Trade Management Group - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for All other Notices The Prudential Insurance Company of America c/o Prudential Capital Group - Private Placements One Gateway Center, 11"' Floor Newark, New Jersey 07102-5311 Attn: Managing Director Recipient of telephonic prepayment notices: Manager, Trade Management Group (973) 802-7398 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Other Instructions THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By ------------------------------ Name: Title: Vice President - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Instructions re Delivery of Notes Law Department of Purchaser - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Tax Identification Number 22-1211670 - -------------------------------------------------------------------------------- Schedule A-1 - -------------------------------------------------------------------------------- Purchaser Name GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Name in Which Note is Registered GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Note Registration Number; R-2; $10,000,000 Principal Amount - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Payment on Account of Note Federal Funds Wire Transfer Norwest Bank Minnesota, N.A. Method 733 Marquette Avenue. Investors Bldg.. 5" Floor Minneapolis, Minnesota 55479-0047 Account Information ABA No.: 09100019 TRUST CLEARING #0000840245 FFC/Great-West Life & Annuity Insurance Co. /12468800 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Accompanying Information Name of Company: West Pharmaceutical Services, Inc. Description of Security: 6.81% Senior Notes Due April 8, 2009 Security Number: 95531* AA6 Due Date and Application (as among principal premium and interest) of the payment being made: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for Notices Related to Norwest Bank Minnesota, N.A. Payments 733 Marquetle Avenue, Investors Bldg., 5h Floor Minneapolis, Minnesota 55479-0047 Attention: Income Collections Fax: (612) 667-3331 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for All other Notices Great-West Life & Annuity Insurance Company 8515 East Orchard Road 3'~ Floor, Tower 2 Englewood, Colorado 80111 Attention: Corporate Finance Investments Fax: (303) 689-6193 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Other Instructions GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By___________________ Name: Title: By___________________ Name: Title: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Instructions re Delivery of Notes Norwest Bank Minnesota, N.A. 733 Marquette Avenue. 5"' Floor Minneapolis, Minnesota 55479-0047 Attention: Security Clearance - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Tax Identification Number 84-0467907 - -------------------------------------------------------------------------------- Schedule A-2 - -------------------------------------------------------------------------------- Purchaser Name THE GREAT-WEST LIFE ASSURANCE COMPANY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Name in Which Note is Registered GERLACH & CO. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Note Registration Number; Principal R-3; $5,000,000 Amount - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Payment on Account of Note Federal Funds Wire Transfer Citibank NYC/Cust Method ABA #02 1000089 Credit A/C #36853718 Account Information For further credit to:A/C #091595 Great -West life Assurance Co. Bonds U.S. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Accompanying Information Name of Company: West Pharmaceutical Services. Inc. Description of Security: 6.81% Senior Notes Due April 8, 2009 Security Number: 95531* AA6 Due Date and Application (as among principal, premium and interest) of the payment being made: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for Notices Related Citibank, N.A. to Payments Investor Services Division Securities Processing Services 20 Exchange Place/Level C New York, New York 10043 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for All other Notices The Great-West Life Assurance Company 100 Osborne Street North Winnipeg, Manitoba CANADA R3C 3A5 Attention: Securities Accounting Fax: (204) 946-8849 with a copy to: Great-West Life & Annuity Insurance Company Investments Division 8515 East Orchard Road. 3T2 Englewood, Colorado 80111 Fax: (303) 689-6193 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Other Instructions THE GREAT-WEST LIFE ASSURANCE COMPANY By___________________ Name: Title: By__________________ Name: Title: - -------------------------------------------------------------------------------- Schedule A-3 - ---- --------------------------------------------------------------------------- Purchaser Name THE GREAT-WEST LIFE ASSURANCE COMPANY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Instructions re Delivery of Notes Citibank, NA. Investor Services Division Securities Processing Services 20 Exchange Place/Level C New York, New York 10043 Custody Account #091595 Great-West Life Assurance Co. - Bonds U.S. Schedule A-4 - -------------------------------------------------------------------------------- Purchaser Name MUTUAL OF OMAHA INSURANCE COMPANY - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Name in Which Note is Registered MUTUAL OF OMAHA INSURANCE COMPANY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Note Registration Number; Principal R-4; $5,000,000 Amount - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Payment on Account of Note Federal Funds Wire Transfer Chase Manhattan Bank Method ABA No.: 021000021 Private Income Processing Account Information For credit to: Mutual of Omaha Insurance Company Account No.: 900-9000200 a/c: G07096 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Accompanying Information Name of Company: West Pharmaceutical Services, Inc. Description of Security: 6.81% Senior Notes Due April 8, 2009 Security Number: 95531* AA6 Due Date and Application (as among principal, premium and interest) of the payment being made: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for Notices Related The Chase Manhattan Bank to Payments 4 New York Plaza, 13"' Floor New York, NY 10004 Attn: Income Processing - I. Pipperato a/c: G07096 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for All other Notices 4 - Investment Loan Administration Mutual of Omaha Insurance Company Mutual of Omaha Plaza Omaha, NE 68175-1011 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Other Instructions MUTUAL OF OMAHA INSURANCE COMPANY By___________________ Name: Title: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Instructions re Delivery of Notes The Chase Manhattan Bank North America Insurance - 6" floor Attn: Ann Marie Mazza 3 Chase Metrotech Center Brooklyn, NY 11245 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Tax Identification Number 47-0246511 - -------------------------------------------------------------------------------- Schedule A-5 - -------------------------------------------------------------------------------- Purchaser Name GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Name in Which Note is Registered SALKELD & CO. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Note Registration Number; Principal R-5; $5,000,000 Amount - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Payment on Account of Note Method Federal Funds Wire Transfer Account Information Bankers Trust Company 14 Wall Street New York, NY 10005 SWIFTCode: BKTRUS33 ABA No: 021001033 Account Number 99-911-145 FCC #: 097833 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Accompanying Information Name of Company: West Pharmaceutical Services, Inc. Description of Security: 6.81% Senior Notes Due April 8, 2009 Security Number: 95531* AA6 Due Date and Application (as among principal, premium and interest) of the payment being made: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for Notices Related to GE Financial Assurance Payments Account: General Electric Capital Assurance Company Two Union Square 601 Union Street Seattle, WA 98101 Attn: Investment Accounting Tel: (206) 516-2871 Fax: (206) 516-4740 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for All other Notices GE Financial Assurance Account: General Electric Capital Assurance Company Two Union Square 601 Union Street Seattle, WA 98101 Attn: Investment Dept., Private Placements Tel: (206) 516-4954 Fax: (206) 516-4863 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Other Instructions GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY By___________________ Name: Title: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Instructions re Delivery of Notes Bankers Trust Co. 14 Wall Street, 4'~ Floor Mail Stop 4042, Window 61 New York, NY 10005 Acct #097833 Attn: Lorraine Squires Tel: (212) 618-2200 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Tax Identification Number 91-6027719 - -------------------------------------------------------------------------------- Schedule A-6 - -------------------------------------------------------------------------------- Purchaser Name GE LIFE AND ANNUITY ASSURANCE COMPANY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Name in Which Note is Registered SALKELD & CO. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Note Registration Number; Principal R-6; $10,000,000 Amount - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Payment on Account of Note Method Federal Funds Wire Transfer Account Information Bankers Trust Company 14 Wall Street New York, NY 10005 SWIFT Code: BKTRUS33 ABA No: 021001033 Account Number 99-911-145 FCC #: 097828 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Accompanying Information Name of Company: West Pharmaceutical Services, Inc. Description of Security: 6.81% Senior Notes Due April 8, 2009 Security Number: 95531* AA 6 Due Date and Application (as among principal, premium and interest) of the payment being made: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for Notices Related to GE Financial Assurance Payments Account: GE Life and Annuity Assurance Company Two Union Square 601 Union Street Seattle, WA 98101 Attn: Investment Accounting Tel: (206) 516-2871 Fax: (206) 516-4740 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for All other Notices GE Financial Assurance Account: GE Life and Annuity Assurance Company TWO Union Square 601 Union Street Seattle, WA 98101 Attn: Investment Dept., Private Placements Tel: (206) 516-4954 Fax: (206) 516-4863 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Other Instructions GE LIFE AND ANNUITY ASSURANCE COMPANY By___________________ Name: Title: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Instructions re Delivery of Notes Bankers Trust Co. 14 Wall Street, 4~h Floor Mail Stop 4042, Window 61 New York, NY 10005 Acct #097828 Attn: Lorraine Squires Tel: (212) 618-2200 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Tax Identification Number 54-0283385 - -------------------------------------------------------------------------------- Schedule A-7 - -------------------------------------------------------------------------------- Purchaser Name JACKSON NATIONAL LIFE INSURANCE COMPANY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Name in Which Note is Registered Jackson National Life Insurance Company By PPM America Inc Attorney-in-fact - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Note Registration Number; Principal R-7; $15,000,000 Amount - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Payment on Account of Note Federal Funds Wire Transfer NORTHERN TRUST CHGO Method ABA No.: 071-000-152 Credit Account #5186041000 Account Information For Further Credit to: 26-91241/Jackson National Life Insurance Company Attn: Tarsa Lewis - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Accompanying Information Name of Company: West Pharmaceutical Services, Inc. Description of Security: 6.81% Senior Notes Due April 8. 2009 Security Number: 95531* AA6 Due Date and Application (as among principal, premium and interest) of the payment being made: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for Notices Related Susan Perrino to Payments Private Placements PPM America Inc. 225 West Wacker Drive Chicago, IL 60606 Tel: 312-634-1205 Fax: 312-634-0054 and Oscell Owens Northern Trust Company 801 5 Canal St, Floor ClN Chicago, IL 60607 Tel: 312-444-5754 Fax: 312-630-8179 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address for All other Notices Joseph Dimberio Vice President, Private Placements PPM America, Inc. 225 West Wacker Drive, Suite 1200 Chicago, IL 60606-1228 Tel: 312-634-2597 Fax: 312-634-0054 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Other Instructions By: PPM America, Inc., as attorney in fact, on behalf of Jackson National Life Insurance Company By____________________ Name: Title: - -------------------------------------------------------------------------------- Schedule A-8 - -------------------------------------------------------------------------------- Purchaser Name JACKSON NATIONAL LIFE INSURANCE COMPANY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Instructions re Delivery of Notes Northern Trust Company 40 Broad Street. 19th Floor Acct. #2691241/Jackson National Life Insurance Company New York, NY 10004 Attn: Jose Mero Tel: 212.701.7507 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Tax Identification Number 38-1659835 - -------------------------------------------------------------------------------- Schedule A-9
SCHEDULE B DEFINED TERMS As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term: "Affiliate" means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person. As used in this definition, "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an "Affiliate" is a reference to an Affiliate of the Company. "Agreement" is defined in Section 17.3. "Asset Disposition" means any Transfer except: (a) any Transfer from a Subsidiary to the Company or a Wholly-Owned Subsidiary, or (b) any Transfer from the Company to a Wholly-Owned Subsidiary, or (c) any Transfer made in the ordinary course of business and involving only property that is either (i) inventory held for sale or (ii) equipment, fixtures, supplies or materials of a type no longer utilized in the operation of the business of the Company or its Subsidiaries or that is obsolete, or (d) any sale of Capital Stock of the Company and its Subsidiaries. "Bank Credit Agreement" means the Credit Agreement dated as of August 28, 1995, among the Obligors, the Banks set forth on the signature pages thereof, and Corestates Bank, N.A., as agent for such Banks, as may be amended, restated, or otherwise modified or replaced from time to time. "Banks" means the banks initially party to the Bank Credit Agreement and each other bank or other Person from time to time acting as a lender or other provider of financial accommodations to the Obligors under the Bank Credit Agreement. "Business Day" means any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed. "Capital Stock" means, as to any Person, any class of capital stock, share capital or similar equity interest of such Person. Schedule B-I "Capitalized Lease" means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP. "Capitalized Lease Obligations" means, with respect to any Person, the amount of the obligation of such Person as the lessee under a Capitalized Lease that would, in accordance with GAAP, appear as a liability on a balance sheet of such Person. "Closing" is defined in Section 3. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder from time to time. "Company" is defined in the first paragraph of this Agreement. "Confidential Information" is defined in Section 20. "Consolidated EBIT" means, for any period, Consolidated Net Income for such period plus, to the extent deducted in the determination of such Consolidated Net Income: (a) Consolidated Interest Expense; and (b) taxes imposed on or measured by income or excess profits. "Consolidated Funded Debt" means (a) all Debt, liabilities, and obligations now existing or hereafter arising for money borrowed by any of the Obligors or their Subsidiaries, whether or not evidenced by any note, indenture, or agreement (including without limitation, the Notes and any indebtedness for money borrowed from an Affiliate, but not including trade accounts payable), (b) standby letter of credit outstanding of any Obligor or any Subsidiary to the extent drawn as of the date of determination of Debt, (c) all Debt of others for money borrowed (including an Affiliate) with respect to which an Obligor or any Subsidiary has become liable by way of a guarantee or indemnity to the extent such Debt is not included in (a) or (b) above, and (d) Capitalized Lease Obligations of the Obligors and their Subsidiaries, all as determined on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" means, with respect to any period, the sum (without duplication) of the following (in each case, eliminating all offsetting debits and credits between the Company and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP): (a) all interest in respect of Debt of the Company and its Subsidiaries (including imputed interest on Capitalized Lease Obligations) deducted in determining Consolidated Net Income for such period together with all interest capitalized or deferred during such period and not deducted in determining Consolidated Net Income for such period, and (b) all debt discount and expense amortized or required to be amortized in the determination of Consolidated Net Income for such period. Schedule B-2 "Consolidated Net Income" means, for any period, the gross revenues of the Company arid its Subsidiaries for such period less all expenses and other proper charges (including taxes on income) determined on a consolidated basis in accordance with GAAP consistently applied, but excluding in any event: (a) earnings or losses attributable to minority interests; (b) any restoration during such period to income of any contingency reserve, except to the extent that provision for such reserve was made during such period out of income accrued during such period; (c) any gains or losses arising from any write-up or write down of assets; (d) extraordinary or nonrecurring gains or losses; (e) net earnings and losses of any Person accrued prior to the date it became a Subsidiary; (f) any portion of the net earnings of any Subsidiary that for any reason is unavailable for payment of dividends or other distributions to the Company or any other Subsidiary; (g) net earnings or losses of any Person (other than a Subsidiary) in which the Company or any Subsidiary shall have an ownership interest unless such net earnings shall have actually been received by the Company or such Subsidiary in the form of a cash distribution; (h) net earnings or losses of any Person, substantially all the assets of which have been acquired in any manner by the Company or any Subsidiary, realized by such other Person prior to the date of such acquisition; and (i) net earnings or losses of any Person to which the assets of the Company or any Subsidiary shall have been sold, transferred or disposed of, or into which the Company or any Subsidiary shall have merged or consolidated, prior to the date of such transaction. "Consolidated Net Worth" means, at any time, (a) the total assets of the Company and its Subsidiaries which would be shown as assets on a consolidated balance sheet of the Company and its Subsidiaries as of such time prepared in accordance with GAAP, after eliminating all amounts properly attributable to minority interests, if any, in the stock and surplus of Subsidiaries, minus (b) the total liabilities of the Company and its Subsidiaries which would be shown as liabilities on a consolidated balance sheet of the Company and its Subsidiaries as of such time prepared in accordance with GAAP. Schedule B-3 "Consolidated Senior Debt" means, as of any date of determination, all Debt of the Company and its Subsidiaries, other than any such Debt that is subordinated in right of payment in any respect to the Notes, outstanding on such date after eliminating all offsetting debits and credits between the Company and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP. "Consolidated Total Assets" means, as of the date of any determination thereof, all assets of the Company and its Subsidiaries, as shown on a consolidated balance sheet and determined in accordance with GAAP. "Consolidated Total Capitalization" means, at any time, the sum of (i) Consolidated Funded Debt plus (ii) Consolidated Net Worth. "Debt" means, with respect to any Person, without duplication, (a) its liabilities for borrowed money; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) its Capitalized Lease Obligations; (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) its redemption obligations, prior to the maturity of the Notes, in respect of all Redeemable Preferred Stock; and (f) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (e) hereof. Debt of any Person shall include all obligations of such Person of the character described in clauses (a) through (e) to the extent such Person remains legally liable in respect thereof, notwithstanding that any such obligation is deemed to be extinguished under GAAP. "Debt Prepayment Offer" means, with respect to any Transfer of property by the Company or any Subsidiary, the offer, in writing, by the Company or such Subsidiary of cash in an amount equal to the Net Proceeds Amount with respect to such Transfer to pay Consolidated Senior Debt (other than Consolidated Senior Debt in respect of any revolving credit or similar facility providing the Company or any Subsidiary with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Consolidated Senior Debt the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Consolidated Senior Debt) and any Schedule B - 4 interest accrued with respect thereto, provided that in connection with any such Transfer and offer, the Company shall have offered to prepay the Ratable Portion of each outstanding Note in accordance with Section 8.3. For purposes of Section 10.7, the Net Proceeds Amount in respect of any Transfer shall be deemed applied to a Debt Prepayment Offer upon the extension of the offer in respect thereof, regardless of whether such offer is accepted, provided that the actual prepayment in respect of any issue of Debt is made within 60 days of the acceptance of such offer. "Default" means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default. "Default Rate" means that rate of interest that is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2% over the rate of interest publicly announced by the Bank of New York in New York, New York, as its "base" or "prime" rate. "Disposition Value" means, at any time, with respect to any property (a) in the case of property that does not constitute Subsidiary Stock, the book value thereof, valued at the time of the disposition thereof in good faith by the Company, and (b) in the case of property that constitutes Subsidiary Stock, an amount equal to that percentage of the book value of the assets of the Subsidiary that issued such stock as is equal to the percentage that the book value of such Subsidiary Stock represents of the book value of all of the outstanding Capital Stock of such Subsidiary (assuming, in making such calculations, that all Securities convertible into such Capital Stock are so converted and giving full effect to all transactions that would occur or be required in connection with such conversion) determined at the time of the disposition thereof, in good faith by the Company. "Environmental Laws" means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to hazardous substances or wastes, air emissions and discharges to waste or public systems. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. "ERISA Affiliate" means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code. "Event of Default" is defined in Section 11. "Exchange Act" means the Securities Exchange Act of 1934, as amended. Schedule B-5 "Fair Market Value" means, at any time and with respect to any property, the sale value of such property that would be realized in an arm's length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell). "GAAP" means generally accepted accounting principles as in effect from time to time in the United States of America. "Governmental Authority" means (a) the government of (i) the United States of America or any State or other political subdivision thereof, or (ii) any jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government. "Guaranty" means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or (d) otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof. In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. Schedule B-6 "Hazardous Material" means any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation, and polychlorinated biphenyls) "holder" means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1. "Indebtedness" means, with respect to any Person, without duplication, (a) its liabilities for borrowed money; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) its Capitalized Lease Obligations; (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money); (f) Swaps of such Person; and (g) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof. Indebtedness shall not include overnight borrowings incurred in any clearing account or overdraft account so long as such borrowings are paid in full as of the close of business on the following day. "Institutional Investor" means (a) any original purchaser of a Note, (b) any holder of a Note holding more than 5% of the aggregate principal amount of the Notes then outstanding, and (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form. "Lien" means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Schedule B-7 Capitalized Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements). "Make- Whole Amount" is defined in Section 8.7. "Material" means material in relation to the business, operations, affairs, financial condition assets, or properties of the Company and its Subsidiaries taken as a whole. "Material Adverse Effect" means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, or (b) the ability of the Obligors to perform their obligations under this Agreement, the Other Agreements and the Notes, or (c) the validity or enforceability of this Agreement, the Other Agreements or the Notes. "Memorandum" is defined in Section 5.3. "Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA). "Net Proceeds Amount" means, with respect to any Transfer of any property by any Person, an amount equal to the result (if positive) of (a) the aggregate amount of the consideration (valued at the Fair Market Value of such consideration at the time of the consummation of such Transfer) received by such Person in respect of such transfer, minus (b) all ordinary and reasonable out-of-pocket costs and expenses actually incurred by such Person in connection with such Transfer (including, without limitation, all income taxes payable by such Person in connection therewith). "Notes" is defined in Section 1. "Obligor" is defined in the introductory sentence of this Agreement. "Officer's Certificate" means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate. "Other Agreements" is defined in Section 2. "Other Purchasers" is defined in Section 2. "PBGC' means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto. "Person" means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof. Schedule B-8 "Plan" means an "employee benefit plan" (as defined in section 3(3) of ERISA) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability. "Preferred Stock" means, in respect of any corporation, shares of the Capital Stock of such corporation that are entitled to preference or priority over any other shares of the Capital Stock of such corporation in respect of payment of dividends or distribution of assets upon liquidation. "Priority Debt" means, at any time, without duplication, (a) all Debt of the Company arid its Subsidiaries secured by Liens not permitted under any of clauses (i) to (viii), inclusive, of Section 1O.8(a),plus (b) all Debt and Preferred Stock of Subsidiaries (other than Debt of any Subsidiary owed to, or Preferred Stock of any Subsidiary held by, the Company or any Wholly-Owned Subsidiary, and Debt of any Subsidiary which is an Obligor). Notwithstanding clause (a) of the preceding sentence, any Debt of a Subsidiary secured by a Lien permitted by Section 1O.8(a)(iv) shall constitute Priority Debt. "property" or "properties" means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate. "Property Reinvestment Application" means, with respect to any transfer of property, the application of an amount equal to the Net Proceeds Amount with respect to such Transfer to the acquisition by the Company or any Subsidiary of operating assets of the Company or any Subsidiary of a nature similar, and a value at least equivalent, to the property subject to such transfer. "Proposed Prepayment Date" is defined in Section 8.3 (a). "PTE" is defined in Section 6.2. "Purchaser" means the Persons listed as purchasers of Notes on Schedule A. "QPAM Exemption" is defined in Section 6.2(d). "Ratable Portion" means, for any Note, in connection with a Transfer, an amount equal to the product of (a) the Net Proceeds Amount in respect of such Transfer, multiplied by (b) a fraction the numerator of which is the outstanding principal amount of such Note and the denominator of which is that portion of Consolidated Senior Debt to which a Debt Prepayment Offer is made (as set forth in the definition of such term). "Redeemable" means, with respect to the Preferred Stock of any Person, each share of such Person's Preferred Stock that is: Schedule B-9 (a) redeemable, payable or required to be purchased or otherwise retired or extinguished, or convertible into Debt of such Person (i) at a fixed or determinable date, whether by operation of sinking fund or otherwise, (ii) at the option of any Person other than such Person, or (iii) upon the occurrence of a condition not solely within the control of such Person; or (b) convertible into other Redeemable Preferred Stock. "Required Holders" means, at any time, the holders of at least a majority of the principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates). "Responsible Officer" means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this agreement. "Security" has the meaning set forth in section 1(1) of the Securities Act. "Securities Act" means the Securities Act of 1933, as amended from time to time. "Senior Financial Officer" means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company. "Short Term Debt" means Debt of the Company or its Subsidiaries with a maturity of less than 365 days. "Source" is defined in Section 6.2. "Subsidiary" means a corporation with respect to which a majority of the Voting Stock (other than stock having such power only by reason of the happening of a contingency) is at the time owned by the Company or by one or more Subsidiaries of the Company. "Subsidiary Stock" means, with respect to any Person, the Capital Stock (or any options or warrants to purchase stock or other Securities exchangeable for or convertible into any Capital Stock) of any Subsidiary of such Person. "Swaps" means, with respect to any Person, payment obligations with respect to interest rate swaps, currency swaps and similar obligations obligating such Person to make payments, whether periodically or upon the happening of a contingency. For the purposes of this Agreement, the amount of the obligation under any Swap shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such Person, based on the assumption that such Swap had terminated at the end of such fiscal quarter, and in making such determination, if any agreement relating to such Swap provides for the netting of amounts payable by and to such Person thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligation shall be the net amount so determined. Schedule B-10 "Transfer" means, with respect to any Person, any transaction in which such Person sells, conveys, transfers or leases (as lessor) any of its property, including, without limitation, Subsidiary Stock. For purposes of determining the application of the Net Proceeds Amount in respect of any Transfer, the Company may designate any Transfer as one or more separate Transfers each yielding a separate Net Proceeds Amount. In any such case, (a) the Disposition Value of any property subject to each such separate Transfer and (b) the amount of Consolidated Total Assets attributable to any property subject to each such separate Transfer shall be determined by ratably allocating the aggregate Disposition Value of, and the aggregate Consolidated Total Assets attributable to, all property subject to all such separate Transfers to each such separate Transfer on a proportionate basis. "Voting Stock" means Capital Stock of any class or classes of a corporation the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors (or Persons performing similar functions), irrespective of whether or not at the time stock of any other class or classes shall have or might have special voting power or rights by reason of the happening of any contingency. "West Florida" is defined in the first paragraph of this Agreement. "West Lakewood" is defined in the first paragraph of this Agreement. "Wholly-Owned Subsidiary" means, at any time, any Subsidiary one hundred percent (100%) of all of the equity interests (except directors' qualifying shares) and Voting Stock of which are owned by any one or more of the Company and the Company's other Wholly-Owned Subsidiaries at such time. Schedule B-1l SCHEDULE C PAYMENT INSTRUCTIONS FIRST UNION NATIONAL BANK Philadelphia, PA ABA No. 031201467 Acct. No. 2100010518545 West Pharmaceutical Services, Inc. Schedule C-1 Schedule 4.9 None Schedule 5.3 Additional Disclosures None Schedule 5.4 ORGANIZATION A~D OWNERSHIP OF SHARES OF SUBSIDIARIES
Jurisdiction of Percentage of Shares its Organization of Capital Stock West Pharmaceutical Services, Inc. Pennsylvania Parent Co. The West Company of Michigan, Inc. Michigan 100.0 West Pharmaceutical Services Lakewood, Inc. Delaware 100.0 Paco Packaging, Inc. Delaware 100.0 Paco Technologies, Inc. Delaware 100.0 Paco Laboratories, Inc. Delaware 100.0 Charter Laboratories, Inc. Delaware 100.0 West Pharmaceutical Services Canovanas, Inc. Delaware 100.0 Citation Plastics Co. New Jersey 100.0 West Pharmaceutical Services Vega Alta, Inc. Delaware 100.0 West Pharmaceutical Services of Florida, Inc. Florida 100.0 Senetics, Inc. Colorado 100.0 West International Sales Corporation U.S. Virgin Islands 100.0 West Pharmaceutical Services of Delaware, Inc. Delaware 100.0 West Pharmaceutical Services Colombia S.A. Colombia 52.1 (1) The West Company Holding GmbH Germany 100.0 The West Company (Custom & Germany 100.0 Specialty Services) GmbH The West Company Danmark A/S Denmark 100.0 The West Company Italia S.R.L. Italy 95.0 (2) West Pharmaceutical Services France S.A. France 99.99(3) The West Company Verwaltungs GmbH Germany 100.0 The West Company Deutschland GmbH & Co KG Germany 100.0 The West Company Hispania S.A. Spain 27.4(4) Pharma-Gummi Beograd Yugoslavia 84.7(5) The West Company (Mauritius) Ltd. Mauritius 100.0 West Pharmaceutical Services Group Limited England 100.0 West Pharmaceutical Services Drug Delivery & England 100.0 Clinical Research Centre Ltd. West Pharmaceutical Services Cornwall Ltd. England 100.0 Plasmec PLC England 100.0 West Pharmaceutical Services Lewes Ltd. England 100.0 The West Company Argentina S.A. Argentina 100.0 West Pharmaceutical Services Brasil Ltda. Brasil 100.0 The West Company Venezuela C.A. Venezuela 100.0 The West Company Singapore Pty. Ltd. Singapore 100.0 West Pharmaceutical Services Australia Pty. Ltd. Australia 100.0 West Company Korea Ltd. Korea 100.0
(1) In addition, 46.16 % is owned directly by West Pharmaceutical Services, Inc.; 1.55% is held in treasury by West Pharmaceutical Services Colombia S.A. (2) In addition, 5 % is owned directly by West Pharmaceutical Services, Inc. (3) In addition, .01% is owned directly by nine individual shareholders. (4) In addition, 54.7% is owned directly by West Pharmaceutical Services, Inc.; 17.9% is owned by one shareholder. (5) Affiliated company accounted for on the cost basis. Schedule 5.5 Financial Statements Annual Reports for the Fiscal Years Ended December 31, 1993 through 1998 Schedule 5.8 None Schedule 5.11 None SCHEDULE 5.12 EMPLOYEE BENEFIT PLANS Employee Benefit Plans: 1. The West Company, Incorporated Salaried Employees' Retirement Plan 2. PACO Pharmaceutical Services, Inc. Savings Plan 3. The West Company, Incorporated Hourly Employees' Pension Plan 4. The West Company Savings Plan 5. PACO Pharmaceutical Services, Inc. Retirement Plan for Salaried Employees 6. The West Company, Incorporated Supplemental Employees' Retirement Plan ERISA Affiliates: West Pharmaceutical Services Inc. and all U.S. incorporated subsidiaries listed on Schedule 5.4 except West Pharmaceutical Services of Delaware, Inc., Citation Plastics Co. and Senetics Inc. Schedule 5.14 Use of Proceeds Refinance existing debt, make acquisitions and General Corporate Purposes Schedule 5.15 THE WEST COMPANY. INC. CONSOLIDATED DEBT ANALYSIS as of December 31, 1998 ($0OO~s)
................................. SHORT-TERM AND CURRENT PORTION OF LONG-TERM LONG-TERM TOTAL RATE(1) MATURITY DOMESTIC Short-Term First Union: Interest Rate Swap .... $ 3,000 $ 0 $ 3,000 6.54% April, 2001 First Union: Interest Rate Swap ....... $ 3,000 $ 0 $ 3,000 6.78% July, 2001 First Union: Interest Rate Swap ....... $ 3,000 $ 0 $ 3,000 6.51% August, 2001 First Union: Revolver ................. $ 16,638 $ 0 $ 16,638 5.50% February, 1999 First Union: ..... GBP 3,950 $ 6,554 $ 0 $ 6,554 8.12% January, 1999 Total Short Term ........................ $ 32,192 $ 0 $ 32,192 6.34% Long-Term: Tax Exempt: Chase Manhattan-Puerto Rico IRB ....... $ 0 $ 4,771 $ 4,771 5.95% January, 2005 Morgan New York-Kinston, NC IRB ....... $ 0 $ 6,273 $ 6,273 4.30% October, 2005 Taxable: City of Kinston, NC-Equipment Purchase ...$ 101 $ 30 $ 131 5.31% November, 1999 First Union: Revolver ....................$ 0 $ 48,362 $ 48,362 5.52% February, 1999 Paco Convertible Bonds ...................$ 0 $ 3,340 $ 3,340 6.50% March, 2007 Total Long-Term: .........................$ 101 $ 62,776 $ 62,877 5.48% TOTAL DOMESTIC DEBT ......................$ 32,293 $ 62,776 $ 95,069 5.77% INTERNATIONAL: Short-Term First Union: ............... GBP 401 $ 665 $ 0 $ 665 6.35% May, 1999 First Union: ............ GBP 204 $ 339 $ 0 $ 339 6.35% May, 1999 First Union: GBP 1,288 ............. $ 2,137 $ 0 $ 2,137 6.35% July, 1999 Total Short-Term ...................... $ 3,141 $ 0 $ 3,141 6.35% Long-Term: Sparkasse: .............. DEM 851 $ 517 $ 0 $ 517 8.17% April, 2007 Sparkasse: .............. DEM 270 $ 0 $ 162 $ 162 3.50% March, 2000 Sparkasse: .............. DEM 7,320 $ 0 $ 4,383 $ 4,383 8.17% April, 2007 Dresdner: ............... DEM 4,000 $ 0 $ 2,395 $ 2,395 6.80% June, 2002 Sparkasse: .............. DEM 1,500 $ 0 $ 898 $ 898 3.78% January, 1999 Dresdner: .............. DEM 1,000 $ 0 $ 599 $ 599 3.78% January, 1999 Dresdner: ............... DEM 19,218 $ 0 $ 11,518 $ 11,518 3.76% March, 1999 First Union:GBP 6,950 .............. $ 0 $ 11,533 $ 11,533 7.23% October, 2003 First Union:GBP 2,000 ............... $ 0 $ 3,319 $ 3,319 6.52% June, 1999 First Union:GBP 2,000 ............... $ 0 $ 3,319 $ 3,319 6.45% June, 1999 FIH: ................... DKK 26,784 $ 142 $ 4,069 $ 4,211 6.94% February, 2016 Total Long-Term ....................... $ 659 $ 42,195 $ 42,855 6.10% TOTAL INTERNATIONAL DEBT: ............. $ 3,800 $ 42,195 $ 45,996 6.12% TOTAL CONSOLIDATED DEBT: .............. $ 36,093 $104,971 $141,065 5.89%
Schedule 5.15 The West Company, Inc. Summary of Letters of Credit as of December31, 1998 Wachovia Bank, NA. Beneficiary: Zurich Insurance Company Amount: U.S. $1,511,202.00 Expiration Date: October 1,1999 Notification Date: August 1,1999 (60 days) Annual Fee: 30 basis points or $4,533.61 Purpose: To guarantee our deductible under the workers compensation, general liability and automobile policies. PNC Bank Beneficiary: Morgan Guaranty Trust Company of New York & Nations Bank of North Carolina Amount: U.S. $7,879,110.00 Expiration Date: December 1,1999 Notification Date: September 1,1999 (90 days) Annual Fee: 65 basis points or $51,214.22 Purpose: To provide a financial guarantee supporting the remarketing of our industrial revenue bonds. Banque Nationale de Paris IJC No. C-21 11 Beneficiary: New Jersey Department of Environmental Protection Amount: U.S. $950,000.00 Expiration Date: December 18, 1999 Notification Date: August 20,1999 (120 days) Annual Fee: 37.5 basis points or $3.61 1.38 Purpose: To guarantee the Wayne facility EPA cleanup. Banque Nationale de Paris LJC No. C-21 10 Beneficiary: New Jersey Department of Environmental Protection Amount: U.S. $ 60,750 Expiration Date: December 17, 1999 Notification Date: August 20, 1999 (120 days) Annual Fee: 37.5 basis points or $230.98 Purpose: To guarantee the Newton facility EPA cleanup. First Union National Bank Beneficiary: Korea Exchange Bank Amount: U.S. $140,000.00 Expiration Date: Jan. 3, 2000 Notification Date: Dec 19, 1999(15 days) Annual Fee: 125 basis points or $1,750.00 Purpose: To guarantee West Company Korea LTD credit facility. First Union National Bank Beneficiary: WestPac Banking Corporation Amount: AUD 200,000 Expiration Date: June 17,1999 Notification Date: April 18. 1999 (60 days) Annual Fee: 125 basis points or $1,771.00 Purpose: To guarantee West Pharmapackaging PTY LTD credit facility. First Union National Bank Beneficiary: Zurich American Insurance Group Applicant: Paco Pharmaceutical Services. Inc. Amount: USD 735,420.00 Expiration Date: Dec. 27, 1999 Notification Date: Nov 27. 1999 (30 days) Annual Fee: 30 basis points or $2,236.90 Purpose: To guarantee PACO's deductable under the workers compensation policy First Union National Bank Beneficiary: Zurich American Insurance Group Applicant: Paco Pharmaceutical Services, Inc. Amount: USD 539,580.00 Expiration Date: March 7, 1999 Notification Date: February 5,1999 (30 days) Annual Fee: 30 basis points or $1,618.74 Purpose: To guarantee Paco's deductable under the workers compensation policy. EXHIBIT 1 FORM OF NOTE WEST PHARMACEUTICAL SERVICES, INC. and certain other Obligors 6.8 1% SENIOR NOTE DUE APRIL 8,2009 No. R- __________ [Date] $________________ PPN_____________ FOR VALUE RECEIVED, the undersigned, West Pharmaceutical Services, Inc., a Pennsylvania corporation (herein called the "Company"), West Pharmaceutical Services of Florida, Inc., a Florida corporation ("West Florida"), and West Pharmaceutical Services Lakewood, Inc., a Delaware corporation ("West Lakewood"), (the Company, West Florida and West Lakewood are referred to herein, collectively, as the "Obligors"), hereby jointly and severally promise to pay to ___________________________ or registered assigns, the principal sum of _____________________ DOLLARS ($_______) on April 8, 2009, with interest (computed on the basis of a 360-day year and actual days elapsed) (a) on the unpaid balance thereof at the rate of 6.81% per annum from the date hereof, payable quarterly, on the 8th day of each of July, October, January and April in each year, commencing with the 8th day of July, October, January or April next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreements referred to below), payable quarterly as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 8.81% or (ii) 2.0% over the rate of interest publicly announced by Bank of New York from time to time in New York, New York as its "base" or "prime" rate. Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the address shown in the register maintained by the Company for such purpose or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreements referred to below. This Note is one of a series of joint and several Senior Notes (herein called the "Notes") issued pursuant to separate Note Purchase Agreements, dated as of April 8,1999 (as from time to time amended, the "Note Purchase Agreements"), between the Obligors and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to have made the representation set forth in Section 6.2 of the Note Purchase Agreements. This Note is a registered Note and, us provided in the Note Purchase Agreements, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Obligors may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Obligors will not be affected by any notice to the contrary. The Obligors will make required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreements. This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreements, but not otherwise. If an Event of Default, as defined in the Note Purchase Agreements, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreements. THIS NOTE AND THE NOTE PURCHASE AGREEMENTS SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPALS OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. WEST PHARMACEUTICAL SERVICES, INC. By:___________________ Name: Title: WEST PHARMACEUTICAL SERVICES OF FLORIDA, INC. By:___________________ Name: Title: WEST PHARMACEUTICAL SERVICES LAKEWOOD, INC. By:______________________ Name: Title: Exhibit 1-2 EXHIBIT 4.4(a) FORM OF OPINION OF SPECIAL COUNSEL TO THE OBLIGORS [Letterhead of Counsel for Obligors] April __, 1999 To the Persons Listed on Annex 1 hereto Re: $100,000,000 6.81% Senior Notes Due 2009, issued by West Pharmaceutical Services, Inc., West Pharmaceutical Services of Florida, Inc. and West Pharmaceutical Services Lakewood, Inc. Ladies and Gentlemen: We have acted as special counsel to WEST PHARMACEUTICAL SERVICES, INC., a Pennsylvania corporation (together with its successors and assigns, the "Company"), WEST PHARMACEUTICAL SERVICES OF FLORIDA, INC., a Florida corporation (together with its successors and assigns, "West Florida"), and WEST PHARMACEUTICAL SERVICES LAKEWOOD, INC., a Delaware corporation (together with its successors and assigns, "West Lakewood") (the Company, West Florida and West Lakewood are referred to herein, collectively, as the "Obligors") in connection with the separate Note Purchase Agreements, each dated as of April 8, 1999 (collectively, the "Note Purchase Agreement"), among the Obligors and each of the purchasers listed on Annex 1 attached hereto (the "Purchasers"), which provide, among other things, for the issuance and sale by the Obligors of their 6.81% Senior Notes due 2009, in the aggregate principal amount of $100,000,000. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned to them by or pursuant to the terms of the Note Purchase Agreement. This opinion is being furnished to you at the request of the Obligors pursuant to Section 4.4(a) of the Note Purchase Agreement. In acting as such special counsel, we have examined originals, or copies otherwise identified to our satisfaction, of the following documents: (a) the Note Purchase Agreement; (b) the Obligors' 6.81% Senior Notes due 2009, dated the date hereof, in the form of Exhibit 1 to the Note Purchase Agreement, and in the principal amounts and with the registration numbers respectively set forth in Schedule A to the Note Purchase Agreement (the "Notes"); and (c) a letter to Hebb & Gitlin and the undersigned from PNC Capital Markets. Inc., dated the date hereof, making certain representations with respect to the manner in which the Notes were offered (the "Offeree Letter"). In addition, we have also examined: (i) such corporate records of the Obligors as we have considered appropriate, including certified copies of the certificate of incorporation and bylaws of the Obligors and resolutions of the boards of directors of the Obligors, each as in effect on the date hereof; (ii) a long-form good standing certificate of each of the Obligors from their respective jurisdictions of organization; and (iii) originals, or copies certified or otherwise identified to our satisfaction, of such other documents, records, instruments and certificates of public officials as we have deemed necessary or appropriate to enable us to render this opinion. In our examination of the aforesaid documents, we have assumed, without independent investigation, the following: (i) the authenticity of all documents submitted to us as originals, (ii) the conformity of any documents submitted to us as certified, photostatic, reproduced or conformed copies to their respective originals and the authenticity of all such originals, (iii) the authenticity of all signatures other than those of officers of the Obligors, (iv) the legal capacity of all individuals who have executed the Note Purchase Agreement and the Notes, and (v) the enforceability of the Note Purchase Agreement against each party thereto other than the Obligors. In addition, we have assumed that the Obligors have received fair consideration and reasonably equivalent value in exchange for their execution and delivery of the Note Purchase Agreement and the Notes. In rendering our opinion, we have relied, to the extent we deem necessary and proper, on; (i) warranties and representations as to certain factual matters contained in the Note Purchase Agreement; and (ii) the Offeree Letter. Based on the foregoing, and subject to the assumptions, exceptions and qualifications set forth herein, we are of the opinion that: 1. Each of the Obligors is duly organized, validly existing and, to the extent recognized in such jurisdiction, in good standing under the laws of its jurisdiction of organization, and each Obligor has the requisite corporate power and authority to execute and perform the Note Purchase Agreement and to issue the Notes and has the full corporate power and corporate authority to conduct the activities in which it now engages and is duly licensed or qualified and is in good standing as a foreign corporation in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business transacted by it makes such licensing or qualification necessary. 2. Each of the Obligors has the requisite corporate power and authority to execute and deliver each of the Note Purchase Agreement and the Notes and to perform its obligations thereunder. 3. Each of the Note Purchase Agreement and the Notes has been duly authorized by all necessary action on the part of each of the Obligors. has been executed and delivered by duly authorized officers of each of the Obligors and constitutes the legal, valid and binding obligation of each of the Obligors, enforceable against each such Obligor in accordance with its terms. 4. The execution and delivery of the Note Purchase Agreement and the Notes, and the issuance and sale of the Notes, by the Obligors and the performance by the Obligors of their obligations thereunder will not (i) violate, conflict with, result in a breach of or constitute a default under, the Obligors' certificates of incorporation or by-laws or any applicable law or regulation of the United States or the laws of each Obligors' respective jurisdiction of organization or, to the best of our knowledge after due inquiry in respect thereof, the agreements identified in Annex 2 hereto, or (ii) result in the creation or imposition of any Lien upon any of the Obligors' properties or the properties of a Subsidiary. 5. To the best of our knowledge (based solely on the officers' certificates of each of the Obligors), there are no actions, suits or proceedings pending or threatened against or affecting the Obligors or any Subsidiary or any of their respective properties in any court or before any arbitrator of any kind or before any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 6. No consent, approval or authorization of, or registration, filing, or declaration with, any Governmental Authority of the United States or the States of Pennsylvania, Florida or Delaware is required in connection with the offer, issue, sale and delivery of the Notes, or the execution, delivery or performance by the Obligors of the Note Purchase Agreement or the Notes. 7. The offering, issuance, sale and delivery of the Notes under the circumstances contemplated by the Note Purchase Agreement and the Notes are exempt from the registration requirements of the Securities Act of 1933, as amended, and the qualification of an indenture with respect to the Notes under the Trust Indenture Act of 1939, as amended, is not required in connection with such transactions. 8. Neither the issuance of the Notes nor the intended use of the proceeds of the Notes as set forth in Schedule 5.14 of the Note Purchase Agreement will violate Regulations U, T or X of the Board of Governors of the Federal Reserve Board. 9. No Obligor is an "investment company" within the meaning of the Investment Company Act of 1940, as amended, nor is any Obligor a "holding company" or "affiliate" of a "holding company," or "subsidiary company" of a "holding company," or "public utility" within the meaning of the Public Utility Holding Company Act of 1935, as amended. All opinions herein contained with respect to the enforceability of documents and instruments are qualified to the extent that: (a) the availability of equitable remedies, including without limitation, specific enforcement and injunctive relief, is subject to the discretion of the court before which any proceedings therefor may be brought. (b) the enforceability of certain terms provided in the Note Purchase Agreement and the Notes may be limited by: (i) applicable bankruptcy, reorganization, arrangement, insolvency, moratorium or similar laws affecting the enforcement of creditors' rights generally as at the time in effect; (ii) common law or statutory requirements with respect to commercial reasonableness; and (iii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or equity). (c) We are not admitted to the Bar of the State of New York and, accordingly, in rendering all opinions with respect to matters governed by New York law, we have assumed that such law is the same, in all material respects, as the law of the State of Pennsylvania; We acknowledge that this opinion is being issued at the request of the Obligors pursuant to Section 4.4(a) of the Note Purchase Agreement and we agree that the parties listed on Annex I hereto may rely and are relying hereon in connection with the consummation of the transactions contemplated by the Note Purchase Agreement. In addition, future holders of the Notes may rely on this opinion as if it were addressed to them. Very truly yours, [COUNSEL FOR OBLIGORS] ANNEX 1 Addressees Exhibit 4.4(a)-5 EXHIBIT 4.4(b) FORM OF OPINION OF SPECIAL COUNSEL FOR THE PURCHASERS [Letterhead of Hebb & Gitlin] April , 1999 To the Persons Listed on Annex 1 hereto Re: $100,000,000 6.81% Senior Notes Due 2009, issued by West Pharmaceutical Services, Inc., West Pharmaceutical Services of Florida, Inc. and West Pharmaceutical Services Lakewood, Inc. Ladies and Gentlemen: Reference is made to the separate Note Purchase Agreements, dated as of April 8, 199!) (collectively, the "Note Purchase Agreement"), among WEST PHARMACEUTICAL SERVICES, INC., a Pennsylvania corporation (together with its successors and assigns, the "Company"), WEST PHARMACEUTICAL SERVICES OF FLORIDA INC., a Florida corporation (together with its successors and assigns, "West Florida"), and WEST PHARMACEUTICAL SERVICES LAKEWOOD, INC., a Delaware corporation (together with its successors and assigns, "West Lakewood")(the Company, West Florida and West Lakewood are referred to herein, collectively, as the "Obligors") and each of the purchasers listed on Schedule A attached thereto (the "Purchasers"), which provide, among other things, for the issuance and sale by the Obligors of their 6.81% Senior Notes due 2009, in the aggregate principal amount of $100,000,000. The capitalized terms used herein and not defined herein have the respective meanings assigned to them by or pursuant to the terms of the Note Purchase Agreement. We have acted as special counsel to the Purchasers in connection with the transactions contemplated by the Note Purchase Agreement. This opinion is delivered to you pursuant to Section 4.4(b) of the Note Purchase Agreement. In acting as such counsel, we have examined: (a) the Note Purchase Agreement; (b) the Obligors' 6.81% Senior Notes due 2009, dated the date hereof, in the form of Exhibit 1 to the Note Purchase Agreement, and in the principal amounts and with the registration numbers set forth on Schedule A to the Note Purchase Agreement (the "Notes"); (c) an Officer's Certificate of the Company delivered pursuant to Section 4.3(a) of the Note Purchase Agreement; (d) a certificate of the Secretary of each of the Obligors delivered pursuant to Section 4.3(b) of the Note Purchase Agreement; (e) a letter to Hebb & Gitlin and Dechert Price & Rhoads from PNC Capital Markets, Inc., dated April 1, 1999, making certain representations with respect to the manner in which the Notes were offered (the "Offeree Letter"); (f) the opinion of Dechert Price & Rhoads, counsel to the Obligors, dated the date hereof; (g) the opinion of Ruden McClosky Smith Schuster & Russell, P.A., special Florida counsel to West Florida, dated the date hereof; and (h) originals, or copies certified or otherwise identified to our satisfaction, of such other documents, records, instruments and certificates of public officials as we have deemed necessary or appropriate to enable us to render this opinion. In our examination of the aforesaid documents, we have assumed, without independent investigation, the following: (i) the authenticity of all documents submitted to us as originals, (ii) the conformity of any documents submitted to us as certified, photostatic, reproduced or conformed copies to their respective originals and the authenticity of all such originals, (iii) the authenticity of all signatures, (iv) the legal capacity of all individuals who have executed any of the Note Purchase Agreement and the Notes, and (v) the enforceability of the Note Purchase Agreement against each party thereto other than the Obligors. In addition, we have assumed that the Obligors have received fair consideration and reasonably equivalent value in exchange for their execution and delivery of the Note Purchase Agreement and the Notes. In rendering our opinion, we have relied, to the extent we deem necessary and proper, on: (i) warranties and representations as to certain factual matters contained in the Note Purchase Agreement; (ii) the Offeree Letter; and (iii) said opinions of Dechert Price & Rhoads and Ruden McClosky Smith Schuster & Russell, P.A. referred to in clauses (f) and (g) above with respect to all questions concerning the valid existence and good standing of, and the authorization, execution and delivery of instruments by, each of the Obligors (except that we have made an independent examination of certified copies of the certificates or articles of incorporation of the Obligors and the certificates specified in clause (d) above), and our conclusions as to such matters are subject to the same assumptions and qualifications as are contained in said opinions. Based on such investigation as we have deemed appropriate, such opinions of Dechert Price & Rhoads and Ruden McClosky Smith Schuster & Russell, P.A. satisfactory in scope and form to us and in our opinion the Purchasers and we are justified in relying thereon. Based on the foregoing, we are of the following opinions: 1. Each of the Obligors is validly existing and in good standing under the laws of its jurisdiction of organization. 2. Each of the Obligors has the requisite corporate power and authority to execute and deliver each of the Note Purchase Agreement and the Notes and to perform its obligations thereunder. 3. Each of the Note Purchase Agreement and the Notes has been duly authorized by all necessary corporate action on the part of each of the Obligors, has been executed and delivered by duly authorized officers of each of the Obligors and constitutes the legal, valid and binding obligation of each such Obligor, enforceable against each such Obligor in accordance with its terms. 4. The execution and delivery of the Note Purchase Agreement and the Notes, and the issuance and sale of the Notes, by the Obligors and the performance by such Obligors of their obligations thereunder will not violate, conflict with, result in a breach of or constitute a default under, such Obligors' certificates or articles of incorporation or by-laws. 5. No consents, approvals or authorizations of Governmental Authorities are required on the part of the Obligors under the laws of the United States of America or the State of New York in connection with the offer, issue, sale and delivery of the Notes, or the execution, delivery or performance by the Obligors of the Note Purchase Agreement or the Notes. Our opinion in this paragraph 5 is based solely on a review of generally applicable laws of the United States of America and New York, and not on any search with respect to, or review of, any orders, decrees, judgments or other determinations specifically applicable to the Obligors. 6. The offering, issuance, sale and delivery of the Notes under the circumstances contemplated by the Note Purchase Agreement and the Notes are exempt from the registration requirements of the Securities Act of 1933, as amended, and the qualification of an indenture with respect to the Notes under the Trust Indenture Act of 1939, as amended, is not required in connection with such transactions. All opinions herein contained with respect to the enforceability of documents and instruments are qualified to the extent that: (a) the availability of equitable remedies, including without limitation, specific enforcement and injunctive relief, is subject to the discretion of the court before which any proceedings therefor may be brought; and (b) certain terms provided in the Note Purchase Agreement and the Notes may be limited by i) applicable bankruptcy, reorganization, arrangement, insolvency, moratorium or similar laws affecting the enforcement of creditors' rights generally as at the time in effect; and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or equity). We express no opinion as to the law of any jurisdiction other than the law of New York, the laws of Pennsylvania, Florida and Delaware (but only in reliance on the opinions of Dechert Price & Rhoads and Ruden McClosky Smith Schuster & Russell, P.A.), and United States federal law. Subsequent holders of the Notes may rely on this opinion as if it were addressed to them. Very truly yours, ANNEX 1 Addressees The Prudential Insurance Company of America do Prudential Capital Group One Gateway Center, 11th Floor Newark, New Jersey 07102-5311 Great-West Life & Annuity Insurance Company 8515 East Orchard Road 3rd Floor, Tower 2 Englewood, CO 80111 The Great-West life Assurance Company 100 Osborne Street North Winnipeg, Manitoba CANADA R3C 3M Mutual of Omaha Insurance Company 4-Investment Loan Administration Mutual of Omaha Plaza Omaha, NE 68175-1011 GE Financial Assurance Account: General Electric Capital Assurance Company Two Union Square 601 Union Street Seattle, WA 98101 GE Financial Assurance Account: GE life and Annuity Assurance Company Two Union Square 601 Union Street Seattle, WA 98101 Jackson National life Insurance Company PPM America, Inc. 225 West Wacker Drive, Suite 1200 Chicago, IL 60606-1228 EX-4.(C) 3 0003.txt CREDIT AGREEMENT CREDIT AGREEMENT CREDIT AGREEMENT, dated as of July 26, 2000, among WEST PHARMACEUTICAL SERVICES, INC., a Pennsylvania corporation (the "Company"), the direct and indirect subsidiaries of the Company from time to time parties hereto (collectively, the "Borrowers"), the several banks and other financial institutions from time to time parties hereto (the "Banks") and PNC BANK, NATIONAL ASSOCIATION, as agent for the Banks hereunder (in such capacity, the "Agent"). W I T N E S S E T H: In consideration of the promises and the agreements hereinafter set forth, and intending to be legally bound hereby, the parties hereto hereby agree as follows: SECTION 1. DEFINITIONS 1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Affected Bank": has the meaning assigned to such term in Section 2.24. "Affiliate": as to any Person, any other Person which, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person and any member, director, officer or employee of any such Person. For purposes of this definition, "control" shall mean the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or in effect cause the direction of the management and policies of such Person whether by contract or otherwise. "Agreement": this Credit Agreement, as amended, supplemented or otherwise modified from time to time. "Applicable Margin": for any LIBOR Loan on any date, the percentage per annum set forth below in the column entitled 364 Day Facility or Five Year Facility, as applicable, opposite the Leverage Ratio shown on the last Compliance Certificate delivered by the Borrowers to the Agent pursuant to subsection 5.2(b) prior to such date:
Level Leverage Ratio 364 Day Facility Five Year Facility I Less than or equal to 0.50% 0.475% 0.35 to 1.0 II Less than or equal to 0.45 0.60% 0.575% to 1.0 but greater than 0.35 to 1.0 III Greater than 0.45 to 1.0 0.825% 0.80%
; provided, however, that (a) adjustments, if any, to the Applicable Margin resulting from a change in the Leverage Ratio shall be effective five Business Days after the Agent has received a Compliance Certificate, (b) in the event that no Compliance Certificate has been delivered for a fiscal quarter prior to the last date on which it can be delivered without violation of subsection 5.2(b), the Applicable Margin from such date until such Compliance Certificate is actually delivered shall be that applicable under Level III, (c) in the event that the actual Leverage Ratio for any fiscal quarter is subsequently determined to be greater than that set forth in the Compliance Certificate for such fiscal quarter, the Applicable Margin shall be recalculated for the applicable period based upon such actual Leverage Ratio and (d) anything in this definition to the contrary notwithstanding, until receipt by the Agent of the Compliance Certificate for the fiscal quarter ending September 30, 2000, the Applicable Margin shall be that applicable under Level III. Any additional interest on the Loans resulting from the operation of clause (c) above shall be payable by the Borrowers jointly and severally to the Banks within five (5) days after receipt of a written demand therefor from the Agent. "Application": in respect of each Letter of Credit issued by the Issuing Bank, an application, in such form as the Issuing Bank may specify from time to time, requesting issuance of such Letter of Credit. "Assignment and Acceptance": an assignment and acceptance entered into by a Bank and a Purchasing Bank, and accepted by the Agent, in the form of Exhibit B attached hereto, or such other form as shall be approved by the Agent. "Base Rate": for any day, a rate per annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus one half of one percent (0.5%). If for any reason the Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Agent to obtain sufficient quotations in accordance with the definition of such term, the Base Rate shall be determined without regard to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, as the case may be. "Base Rate Loan": any Loan bearing interest at a rate determined by reference to the Base Rate. "Borrowers' Representative": has the meaning assigned to such term in Section 2.20. "Borrowing Date": any Business Day on which a Loan is to be made at the request of the Borrowers under this Agreement. "Business Day": a day other than a Saturday, Sunday or other day on which commercial banks in Philadelphia, Pennsylvania are authorized or required by law to close and (a) with respect to advances or payments of Loans or any other matters relating to Loans denominated in an Optional Currency, such day also shall be a day on which dealings in deposits in the relevant Optional Currency are carried on in the applicable interbank market, (b) with respect to advances or payments of Loans denominated in an Optional Currency, such day shall also be a day on which all applicable banks into which Loan proceeds may be deposited are open for business and foreign exchange markets are open for business in the principal financial center of the country of such currency and (c) with respect to advances of LIBOR Loans made in Dollars or any other matters relating to LIBOR Loans made in Dollars, such day shall also be a day on which banks are open for dealings in dollar deposits in the London Interbank Market. "Capital Lease" at any time, a lease with respect to which the lessee is required to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP. "Capital Lease Obligations": at any time, the amount of the obligations under Capital Leases which would be shown at such time as a liability on a consolidated balance sheet of the Company and its consolidated Subsidiaries prepared in accordance with GAAP. "Capital Stock": 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) and any and all warrants or options to purchase any of the foregoing. "Change of Control": an event or series of events by which (a) any "person" or "group" (as such terms are defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder), is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under such Exchange Act, except that a Person shall be deemed to have "beneficial ownership" of all shares that any such Person has the right to acquire without condition, other than passage of time, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 30% of the total voting power of the then outstanding Voting Stock of the Company, or (b) from and after the date hereof, individuals who on the date hereof constitute the Board of Directors of the Company (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors then still in office who were either directors on the date hereof or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office. "Closing Date": the first date on which all of the conditions precedent set forth in Section 4.1 have been satisfied or waived by the Agent, which date is July 26, 2000. "Closing Fee": the closing fee in the amount of $185,625, payable by the Borrowers to the Agent in Dollars, for distribution to the Banks based on their respective Ratable Share of the Total Commitments. "Code": the Internal Revenue Code of 1986, as amended from time to time. "Commitments": the 364 Day Commitments and/or the Five Year Commitments, as the context may require. "Commonly Controlled Entity": an entity, whether or not incorporated, which is under common control with the Company within the meaning of Section 4001 of ERISA or is part of a group which includes the Company and which is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code. "Compliance Certificate": has the meaning assigned to such term in subsection 5.2(b). "Computation Date": has the meaning assigned to such term in subsection 2.6(a). "Contractual Obligation": as to any Person, any provision of any security issued by such Person or any provision of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "Costs": has the meaning assigned to such term in subsection 2.16(d). "Declining Bank's 364 Day Maturity Date": has the meaning assigned to such term in subsection 2.14(d)(i). "Default": any of the events specified in Section 7, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition precedent therein set forth, has been satisfied. "Distribution": in respect of any Person, (a) dividends or other distributions on Capital Stock of such Person (except distributions in Capital Stock of such Person); (b) the redemption or acquisition of such Capital Stock or of warrants, rights or other options to purchase such Capital Stock (except when solely in exchange for Capital Stock of such Person); and (c) any payment on account of, or the setting apart of any assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of any share of any class of Capital Stock of such Person or any warrants or options to purchase any such Capital Stock. "Dollar Equivalent": with respect to any amount of any currency, the Equivalent Amount of such currency expressed in Dollars. "Dollar Equivalent Facility Usage": (a) as to the 364 Day Facility, at any time the Dollar Equivalent amount of all 364 Day Loans then outstanding and (b) as to the Five Year Facility, at any time the sum of (i) the Dollar Equivalent amount of all Five Year Loans and the aggregate amount of all Swing Line Loans then outstanding, and (ii) the Letter of Credit Obligations then outstanding. "Dollars" and "$": dollars in lawful currency of the United States of America. "EBIT": shall mean, for any period, consolidated net income (or net loss) plus the sum of (a) interest expense, (b) income tax expense, (c) extraordinary or unusual losses or other losses not incurred in the ordinary course of business, (d) any non-cash charge against net income required to be recognized in connection with the issuance of capital stock to employees (whether upon lapse of vesting restrictions, exercise of employee options or otherwise) and (e) any non-cash charge against net income required to be recognized in connection with employee pension plans, in each case to the extent included in the calculation of consolidated net income, less extraordinary or unusual gains or other gains not incurred in the ordinary course of business included in the calculation of consolidated net income, in each case determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP for such period. "Environmental Laws": any and all Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or binding requirements of any Governmental Authority, or binding Requirement of Law regulating, relating to or imposing liability or standards of conduct concerning protection of the environment, as now or may at any time hereafter be in effect. "Equivalent Amount": at any time, as determined by the Agent (which determination shall be conclusive absent manifest error), with respect to an amount of any currency (the "Reference Currency") which is to be computed as an equivalent amount of another currency (the "Equivalent Currency"), the amount of such Equivalent Currency converted from such Reference Currency using the average spot rate quoted to the Agent (based on the market rates then prevailing and available to the Agent) or the commercial market rate of exchange, as determined by the Agent, for the sale of such Equivalent Currency for such Reference Currency at a time determined by the Agent on the second Business Day immediately preceding the event for which such calculation is made. "Equivalent Currency": has the meaning assigned to such term in the definition of Equivalent Amount. "ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time. "Euro": Euro units. "Eurocurrency Rate Reserve Percentage": the maximum percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined by the Agent which is in effect during any relevant period: (i) as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as "Eurocurrency Liabilities") of a member bank in such System; and (ii) to be maintained by a Bank as required for reserve liquidity, special deposit, or a similar purpose by any governmental or monetary authority of any country or political subdivision thereof (including any central bank), against (A) any category of liabilities that includes deposits by reference to which a LIBOR Rate is to be determined, or (B) any category of extension of credit or other assets that includes Loans or Tranches to which a LIBOR Rate applies. "Event of Default": any of the events specified in Section 7, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Existing Credit Agreement": the Credit Agreement, dated as of August 28, 1995, among certain of the Borrowers, First Union National Bank (formerly CoreStates Bank, N.A.), as agent, and the banks and financial institutions from time to time parties thereto, as heretofore amended, supplemented or otherwise modified. "Extension Request": has the meaning assigned to such term in subsection 2.14(d)(i). "Extensions of Credit": the collective reference to Loans made and Letters of Credit issued under this Agreement. "Facilities": the 364 Day Facility and the Five Year Facility. "Facility Fees": those certain fees payable to the Banks on the Facilities as described in subsection 2.7(a). "Facility Fee Rate": for any Facility on any date, the percentage per annum set forth below in the column entitled 364 Day Facility or Five Year Facility, as applicable, opposite the Leverage Ratio shown on the last Compliance Certificate delivered by the Borrowers to the Agent pursuant to subsection 5.2(b) prior to such date:
Level Leverage Ratio 364 Day Facility Five Year Facility I Less than or equal to 0.125% 0.15% 0.35 to 1.0 II Less than or equal to 0.45 0.15% 0.175% to 1.0 but greater than 0.35 to 1.0 III Greater than 0.45 to 1.0 0.175% 0.20%
; provided, however, that, (a) adjustments, if any, to the Facility Fee Rate resulting from a change in the Leverage Ratio shall be effective five Business Days after the Agent has received a Compliance Certificate, (b) in the event that no Compliance Certificate has been delivered for a fiscal quarter prior to the last date on which it can be delivered without violation of subsection 5.2(b), the Facility Fee Rate from such date until such Compliance Certificate is actually delivered shall be that applicable under Level III, (c) in the event that the actual Leverage Ratio for any fiscal quarter is subsequently determined to be greater than that set forth in the Compliance Certificate for such fiscal quarter, the Facility Fee Rate shall be recalculated for the applicable period based upon such actual Leverage Ratio and (d) anything in this definition to the contrary notwithstanding, until receipt by the Agent of the Compliance Certificate for the fiscal quarter ending September 30, 2000, the Facility Fee Rate shall be that applicable under Level III. Any additional Facility Fee that is due to the Banks resulting from the operation of clause (c) above shall be payable by the Borrowers jointly and severally within five (5) days after receipt of a written demand therefor from the Agent. "Federal Funds Effective Rate": for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it. "Fee Letter": the letter, dated May 31, 2000, from the Agent to the Company relating to the payment of certain fees and expenses in connection with the transactions contemplated hereby, as amended, supplemented or otherwise modified from time to time. "Five Year Bank": at any time, the Bank or Banks which at that time are obligated, subject to the terms of this Agreement, to make Five Year Loans, to issue or participate in Letters of Credit and to make or participate in Swing Line Loans (or, at any time after the Five Year Commitments shall have expired or been terminated, any Bank that has Five Year Loans then outstanding or a participation in Letters of Credit or Swing Line Loans then outstanding). "Five Year Commitment": as to any Five Year Bank, the obligation of such Bank to make Five Year Loans, to issue and/or acquire participating interests in Letters of Credit hereunder and to make or participate in Swing Line Loans, in an aggregate Dollar Equivalent amount at any one time outstanding not to exceed the amount set forth opposite such Bank's name on Schedule I hereto under the caption "Five Year Commitment," as the same may be changed from time to time in accordance with the provisions of this Agreement and/or any applicable Assignment and Acceptance. "Five Year Commitment Percentage": as to any Five Year Bank at any time, the percentage which such Bank's Five Year Commitment constitutes of the aggregate Five Year Commitments of all Five Year Banks at such time (or at any time after the Five Year Commitments shall have expired or terminated, the percentage which the amount of such Bank's Five Year Exposure constitutes of the aggregate amount of the Five Year Exposure of all Five Year Banks at such time). "Five Year Commitment Period": the period from and including the date hereof to but not including the Five Year Termination Date. "Five Year Exposure": as to any Five Year Bank at any date, an amount equal to the sum of (a) the aggregate Dollar Equivalent amount of all Five Year Loans made by such Bank then outstanding, (b) such Bank's Five Year Commitment Percentage of the Letter of Credit Obligations then outstanding and (c) such Bank's Five Year Commitment Percentage of the amount of the Swing Line Loans then outstanding. "Five Year Facility": the revolving credit facility pursuant to which the Five Year Banks have committed to make Five Year Loans, to issue and/or acquire participating interests in Letters of Credit hereunder and to make or participate in Swing Line Loans. "Five Year Loans": has the meaning assigned to such term in subsection 2.1(b). "Five Year Notes": has the meaning assigned to such term in Section 2.3, as the same may be amended, supplemented or otherwise modified from time to time. "Five Year Termination Date": with respect to the Five Year Facility, the earlier of (a) July 25, 2005 and (b) the date the Five Year Commitments are terminated as provided herein. "Foreign Borrower": shall mean any Borrower organized under the laws of any jurisdiction other than the United States of America or one of its states, commonwealths or territories or the District of Columbia. "Foreign Subsidiary": shall mean any Subsidiary organized under the laws of any jurisdiction other than the United States of America or one of its states, commonwealths or territories or the District of Columbia. "GAAP": at any time with respect to the determination of the character or amount of any asset or liability or item of income or expense, or any consolidation or other accounting computation, generally accepted accounting principles as in effect in the United States on the date of, or at the end of the period covered by, the financial statements from which such asset, liability, item of income, or item of expense, is derived, or, in the case of any such computation, as in effect on the date when such computation is required to be determined, consistently applied. "Governmental Acts": has the meaning assigned to such term in subsection 2.8(j). "Governmental Authority": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Guaranty Obligation": as to any Person, any guarantee of payment or performance by such Person of any Indebtedness or other obligation of any other Person, or any agreement to provide financial assurance with respect to the financial condition, or the payment of the obligations of, such other Person (including, without limitation, purchase or repurchase agreements, reimbursement agreements with respect to letters of credit or acceptances, indemnity arrangements, grants of security interests to support the obligations of another Person, keepwell agreements and take-or-pay or through-put arrangements) which has the effect of assuring or holding harmless any third Person against loss with respect to one or more obligations of such third Person; provided, however, the term Guaranty Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation of any Person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made and (b) the maximum amount for which such contingently liable Person may be liable pursuant to the terms of the instrument embodying such Guaranty Obligation, unless such primary obligation and the maximum amount for which such contingently liable Person may be liable are not stated or determinable, in which case the amount of such Guaranty Obligation shall be such contingently liable Person's maximum reasonably anticipated liability in respect thereof as determined by the Company in good faith. Guaranty Obligations of any Person shall include the amount of any future "earn-out" or similar payments to be made to any other Person in connection with a Permitted Acquisition whether or not the same are reflected as indebtedness on the financial statements of the contingently liable Person. "Indebtedness": of any Person at any date, without duplication: (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than trade liabilities incurred in the ordinary course of business not more than 60 days overdue (or being contested in good faith) and payable in accordance with customary practices), including earn-outs and similar obligations, (b) any other indebtedness which is evidenced by a note, bond, debenture or similar instrument, (c) all Capital Lease Obligations of such Person, (d) all obligations of such Person in respect of outstanding letters of credit, acceptances and similar obligations created for the account of such Person, (e) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (f) all redemption obligations, prior to the Five Year Termination Date, in respect of Redeemable preferred stock of such Person, (g) net liabilities of such Person under interest rate cap agreements, interest rate swap agreements, foreign currency exchange agreements, netting agreements and other hedging agreements or arrangements (calculated on a basis satisfactory to the Agent and in accordance with accepted practice), (h) withdrawal liabilities of such Person or any Commonly Controlled Entity under a Plan, and (i) all Guaranty Obligations of such Person with respect to liabilities of a type described in any of clauses (a) through (h) of this definition. The Indebtedness of any Person shall include any Indebtedness of any partnership in which such Person is the general partner. "Insolvency": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA. "Insolvent": pertaining to a condition of Insolvency. "Intellectual Property": has the meaning ascribed thereto in Section 3.16. "Interest Coverage Ratio": for any period, the ratio of (a) EBIT plus 50% of depreciation and amortization expense to (b) interest expense, in each case for the Company and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP. "Interest Payment Date": (a) as to any Base Rate Loan, the last day of each calendar quarter while such Loan is outstanding, (b) as to any LIBOR Loan having an Interest Period of three months or less, the last day of such Interest Period, and (c) as to any LIBOR Loan having an Interest Period longer than three months, the day which is (i) three months after the first day of such Interest Period and (ii) the last day of such Interest Period. "Interest Period": with respect to any LIBOR Loan: (a) initially the period commencing on the borrowing or continuation date, as the case may be, with respect to such LIBOR Loan and ending one, two, three or six months thereafter, as selected by the Borrowers in their Notice of Borrowing, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such LIBOR Loan and ending one, two, three or six months thereafter, as selected by the Borrowers by irrevocable notice to the Agent in a Notice of Borrowing not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided, that the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day; (ii) with respect to LIBOR Loans, 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 end on the last Business Day of a calendar month; (iii) with respect to 364 Day Loans that are LIBOR Loans, no Interest Period shall extend beyond the 364 Day Termination Date or any Declining Bank's 364 Day Maturity Date; and (iv) with respect to Five Year Loans that are LIBOR Loans, no Interest Period shall extend beyond the Five Year Termination Date. "Issuing Bank": PNC Bank, National Association, or such other Bank as designated by the Company to be the Issuing Bank and approved by the Required Banks, in its capacity as issuer of any Letter of Credit. "Joinder and Assumption Agreement": a Joinder and Assumption Agreement substantially in the form of Exhibit D hereto pursuant to which a Subsidiary shall join this Agreement and other Loan Documents, as amended, supplemented or otherwise modified from time to time. "Law": any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree or award of any Governmental Authority. "Lending Office": the lending office (s) of the Banks set forth on Schedule I hereto or notice of which has been given to the Agent in accordance with the provisions of this Agreement. "Letter of Credit": has the meaning assigned to that term in subsection 2.8(a). "Letter of Credit Coverage Requirement": with respect to each Letter of Credit at any time, 102% of the maximum amount available to be drawn thereunder at such time (determined without regard to whether any conditions to drawing could be met at such time). "Letter of Credit Fee": has the meaning assigned to that term in subsection 2.8(b). "Letter of Credit Fee Rate": on any date, the percentage per annum set forth below opposite the Leverage Ratio shown on the last Compliance Certificate delivered by the Borrowers to the Agent pursuant to subsection 5.2(b) prior to such date:
Level Leverage Ratio Letter of Credit Fee Rate I Less than or equal to 0.475% 0.35 to 1.0 II Less than or equal to 0.45 0.575% to 1.0 but greater than 0.35 to 1.0 III Greater than 0.45 to 1.0 0.80%
; provided, however, that (a) adjustments, if any, to the Letter of Credit Fee Rate resulting from a change in the Leverage Ratio shall be effective five Business Days after the Agent has received a Compliance Certificate, (b) in the event that no Compliance Certificate has been delivered for a fiscal quarter prior to the last date on which it can be delivered without violation of subsection 5.2(b), the Letter of Credit Fee Rate from such date until such Compliance Certificate is actually delivered shall be that applicable under Level III, (c) in the event that the actual Leverage Ratio for any fiscal quarter is subsequently determined to be greater than that set forth in the Compliance Certificate for such fiscal quarter, the Letter of Credit Fee Rate shall be recalculated for the applicable period based upon such actual Leverage Ratio and (d) anything in this definition to the contrary notwithstanding, until receipt by the Agent of the Compliance Certificate for the fiscal quarter ending September 30, 2000, the Letter of Credit Fee Rate shall be that applicable under Level III. Any additional fees on the Letters of Credit resulting from the operation of clause (c) above shall be payable by the Borrowers jointly and severally to the Banks within five (5) days after receipt of a written demand therefor from the Agent. "Letter of Credit Obligations": at any time, an amount equal to the sum of (a) 100% of the maximum amount available to be drawn under all Letters of Credit outstanding at such time (determined without regard to whether any conditions to drawing could be met at such time) and (b) the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to subsection 2.8(d)(i). "Letter of Credit Participant": in respect of each Letter of Credit, each Five Year Bank (other than the Issuing Bank) in its capacity as the holder of a participating interest in such Letter of Credit. "Leverage Ratio": on any date (a) Total Debt on such date to (b) the sum of (i) Total Debt on such date and (ii) shareholders' equity on such date for the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP. "LIBOR Loan": any Loan bearing interest at a rate determined by reference to the LIBOR Rate. "LIBOR Rate": (a) with respect to Loans in Dollars comprising any Tranche to which the LIBOR Rate applies for any Interest Period, the interest rate per annum determined by the Agent by dividing (the resulting quotient rounded upward to the nearest 1/100th of 1% per annum) (i) the rate of interest determined by the Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the London interbank offered rate of interest per annum appearing on Telerate display page 3750 or such other display page on the Telerate System as may replace such page evidencing quotes by the British Bankers' Association (or appropriate successor or, if the British Bankers' Association or its successor ceases to provide such quotes, a comparable replacement determined by the Agent) at approximately 11:00 a.m., London time, two (2) Business Days prior to the first day of such Interest Period for an amount comparable to such Tranche and having a borrowing date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Eurocurrency Rate Reserve Percentage. Such LIBOR Rate may also be expressed by the following formula: Telerate page 3750 quoted by British Bankers' LIBOR Rate = Association or appropriate successor 1.00 - Eurocurrency Rate Reserve Percentage The LIBOR Rate shall be adjusted with respect to any LIBOR Loan in Dollars outstanding on the effective date of any change in the Eurocurrency Rate Reserve Percentage as of such effective date. The Agent shall give prompt notice to the Borrowers of the LIBOR Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error. (b) with respect to Loans in an Optional Currency comprising any Tranche to which the LIBOR Rate applies for any Interest Period, the interest rate per annum determined by Agent by dividing (the resulting quotient rounded upward to the nearest 1/100th of 1% per annum) (i) the rate of interest per annum determined by the Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the rate of interest per annum for deposits in the relevant Optional Currency which appears on the relevant Telerate Page (or, if no such quotation is available on such Telerate Page, on the appropriate Reuters Screen) at approximately 9:00 a.m., Philadelphia time, two (2) Business Days prior to the first day of such Interest Period for delivery on the first day of such Interest Period for a period, and in an amount, comparable to such Interest Period and principal amount of such Tranche ("Optional Currency Euro Rate") by (ii) a number equal to 1.00 minus the Eurocurrency Rate Reserve Percentage. Such LIBOR Rate may also be expressed by the following formula: LIBOR Rate = Optional Currency Euro Rate 1 - Eurocurrency Rate Reserve Percentage The LIBOR Rate shall be adjusted with respect to any LIBOR Loan in an Optional Currency outstanding on the effective date of any change in the Eurocurrency Rate Reserve Percentage as of such effective date. The Agent shall give prompt notice to the Borrowers of the LIBOR Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error. The LIBOR Rate for any Loans in an Optional Currency shall be based upon the LIBOR Rate for the currency in which such Loans are requested. "Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Capital Lease having substantially the same economic effect as any of the foregoing). "Loan Documents": this Agreement, the Notes, the Joinder and Assumption Agreements and the Applications, as the same may be supplemented or amended from time to time in accordance herewith or therewith, and Loan Document shall mean any of the Loan Documents. "Loans": the collective reference to the 364 Day Loans, the Five Year Loans and the Swing Line Loans. "Material Adverse Effect": a material adverse effect on (a) the business, operations, property or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole, (b) the ability of the Company and the other Borrowers to perform their obligations under this Agreement, the Notes or any other Loan Document or (c) the validity or enforceability of this Agreement, the Notes or any of the other Loan Documents or the rights or remedies of the Agent or the Banks hereunder or thereunder. "Materials of Environmental Concern": any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Law, including, without limitation, asbestos, polychlorinated biphynels, and ureaformaldehyde insulation. "Multiemployer Plan": a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "New Provisions": has the meaning assigned to such term in Section 5.11. "Note Purchase Agreement": means that certain Note Purchase Agreement, dated as of April 8, 1999, between the Company, certain other obligors party thereto and the purchasers party thereto, as amended, supplemented or otherwise modified from time to time. "Notes": means the Five Year Notes, the 364 Day Notes and the Swing Line Note. "Notice of Borrowing": with respect to a Loan of any Type, a notice from the Borrowers in respect of such Loan, containing the information in respect of such Loan and delivered to the Agent, in the manner and by the time specified pursuant to the terms hereof. A form of the Notice of Borrowing for Loans is attached hereto as Exhibit C. "Optional Currency": each of the following currencies: French Francs, Deutsche Marks, British Pounds Sterling, Euros, and any other currency approved by Agent pursuant to subsection 2.6(d). "Original Currency": has the meaning assigned to such term in Section 2.19. "Other Currency": has the meaning assigned to such term in Section 2.19. "Other Taxes": has the meaning assigned to such term in subsection 2.17(b). "Participant": has the meaning assigned to such term in subsection 9.6(f). "PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA. "Permitted Acquisition": an acquisition by a Borrower of the stock or assets of a Person, provided that: at the time that any definitive agreement is entered into in respect of such acquisition, no Default or Event of Default shall exist or would exist if such acquisition were consummated on such date; provided further, no less than five (5) days prior to consummating any such acquisition in which the aggregate consideration paid by the Borrowers (including payments under non-compete arrangements and assumption of debt) exceeds $20,000,000, the Borrowers shall deliver to the Agent a certificate of a Responsible Officer certifying to the Agent and the Banks that no such Default or Event of Default exists or would exist if such acquisition were consummated on such date. "Permitted Liens": (a) any Liens for current taxes, assessments and other governmental charges not yet due and payable or being contested in good faith by the Company or any Subsidiary by appropriate proceedings and for which adequate reserves have been established by the Company and its Subsidiaries on a consolidated basis as reflected in its financial statements; (b) any mechanic's, landlord's, materialman's, carrier's, warehousemen's or similar Liens for sums not yet due or being contested in good faith by the Company or any Subsidiary by appropriate proceedings and for which adequate reserves have been established by the Company and its Subsidiaries on a consolidated basis as reflected in its financial statements; (c) easements, rights-of-way, restrictions and other similar encumbrances on the real property or fixtures of the Company or any Subsidiary incurred in the ordinary course of business which individually or in the aggregate are not substantial in amount and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Company or any Subsidiary; (d) Liens (other than Liens imposed on any property of the Borrowers or any ERISA Affiliate pursuant to ERISA or Section 412 of the Code) incurred or deposits made in the ordinary course of business, including Liens in connection with workers' compensation, unemployment insurance and other types of social security and Liens to secure performance of tenders, statutory obligations, surety and appeal bonds, bids, leases that are not Capital Leases, performance bonds, sales contracts and other similar obligations, in each case, not incurred in connection with the obtaining of credit or the payment of a deferred purchase price, and which do not, in the aggregate, result in a Material Adverse Effect; (e) Liens on tangible property (or any improvement thereon) acquired or constructed by the Company or any Subsidiary after the Closing Date to secure Indebtedness of the Company or such Subsidiary incurred in connection with such acquisition or construction; provided that: (i) no such Lien shall extend to or cover any property other than the property (or improvement thereon) being acquired or constructed; (ii) the principal amount of the Indebtedness secured by any such Lien, together with the aggregate principal amount of all other Indebtedness secured by Liens on such property, shall not exceed the lesser of (A) an amount equal to the fair market value (as determined in good faith by the Board of Directors of the Company) of such property so acquired or constructed and (B) the cost to the Company or such Subsidiary of such property (or improvement thereon) so acquired or constructed, and; (iii) such Lien shall be created concurrently with or within 120 days after such acquisition or the substantial completion of such construction; (f) Liens existing on real property or equipment of a Subsidiary which Lien existed at the time of the acquisition of such Subsidiary and, for a period of ninety (90) days from the date of acquisition of such Subsidiary, Liens upon any other personal property of such Subsidiary; (g) Liens existing upon the date hereof as set forth in Schedule II hereto; (h) judgment and other similar Liens arising in connection with court proceedings, in existence less than thirty (30) days after entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies and the claims secured thereby are being actively contested in good faith and by appropriate legal proceedings; (i) Liens in favor of any governmental agency or authority for the purpose of financing, through industrial revenue bonds or notes, the construction, acquisition or purchase of facilities, or machinery, equipment or other assets, or of any air, water or solid waste pollution control facilities to be used in connection with any such property; (j) other Liens incidental to the conduct of the Borrowers' or their Subsidiaries' businesses conducted in the ordinary course (including without limitation, Liens on goods securing trade letters of credit issued in respect of importation of goods in the ordinary course of business) or the ownership of any Borrower's or its Subsidiaries' property and assets which were not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not in the aggregate materially detract from the value of such Borrower's or such Subsidiary's property or assets or materially impair the use thereof in its business; (k) Liens in favor of the Company or another Borrower on the assets of any of its Subsidiaries; and (l) Liens on assets of Foreign Subsidiaries securing Indebtedness in an aggregate amount not to exceed at any time $15,000,000. "Person": an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Plan": at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Company or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. "Preferred Stock": means, in respect of any corporation, shares of Capital Stock of such corporation that are entitled to preference or priority over any other shares of the Capital Stock of such corporation in respect of payment of dividends or distribution of assets upon liquidation. "Prime Rate": the rate of interest per annum publicly announced from time to time by PNC Bank, National Association as its prime rate in effect at its principal office in Philadelphia, Pennsylvania; each change in the Prime Rate shall be effective on the date such change is publicly announced as effective. "Principal Office": the main banking office of the Agent in Philadelphia, Pennsylvania. "Priority Debt": at any time, without duplication (a) all Indebtedness and Preferred Stock of Subsidiaries (other than Indebtedness of any Subsidiary owed to, or Preferred Stock of any Subsidiary held by, the Company or any Wholly-Owned Subsidiary, and Indebtedness of any Subsidiary which is a Borrower), plus (b) all Indebtedness of a Subsidiary secured by a Lien permitted under clause (g) of the definition of Permitted Lien. "Properties": the collective reference to the facilities and properties owned, leased or operated by the Company or any of its Subsidiaries. "Publication 500": has the meaning assigned to such term in subsection 2.8(f). "Purchase Money Security Interest": Liens upon tangible personal property securing loans to the Borrowers or deferred payments by the Borrowers for the purchase of such tangible personal property, in each case securing amounts which do not exceed the purchase price of the property subject to such security interests. "Purchasing Bank": has the meaning assigned to such term in subsection 9.6(b). "Ratable Share": (a) with respect to 364 Day Loans, such Bank's 364 Day Commitment Percentage and (b) with respect to Five Year Loans, such Bank's Five Year Commitment Percentage. "Redeemable": with respect to the preferred stock of any Person, each share of such Person's preferred stock that is: (a) redeemable, payable or required to be purchased or otherwise retired or extinguished or convertible into debt of such Person (i) at a fixed or determinable date, whether by operation of sinking fund or otherwise, (ii) at the option of any Person other than such Person, or (iii) upon the occurrence of a condition not solely within the control of such Person; or (b) convertible into other Redeemable preferred stock of such Person. "Reference Currency": has the meaning assigned to such term in the definition of Equivalent Amount. "Regulation U": Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect, and all official rulings and interpretations thereunder or thereof. "Regulation X": Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect, and all official rulings and interpretations thereunder or thereof. "Reimbursement Obligation": in respect of each Letter of Credit, the obligation of the Borrowers to reimburse the Issuing Bank for all drawings made thereunder in accordance with subsection 2.8(d)(i) and the Application related to such Letter of Credit for amounts drawn under such Letter of Credit. "Reorganization": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. "Replacement Bank": has the meaning assigned to such term in subsection 2.14(d)(ii). "Reportable Event": any of the events set forth in Section 4043(c)(1), (2), (4), (5), (6), (10) and (13) of ERISA. "Required Banks": at any time, those Banks which are then in compliance with their obligations hereunder holding (a) 51% of the Total Commitments (other than the Swing Line Commitment) of such Banks or (b) in the event the Total Commitments shall have expired or been terminated, 51% of the Total Exposure of such Banks. "Requirement of Law": as to any Person, the Articles or Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case binding upon such Person or any of its property or to which such Person or any of its property is subject. "Responsible Officer": with respect to any Borrower, the chief executive officer, president, treasurer, controller or chief financial officer of such Borrower. Unless otherwise qualified, all references to a "Responsible Officer" in this Agreement shall refer to a Responsible Officer of the Company. "Single Employer Plan": any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan. "Subsidiary": as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only be reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company. "Swing Line Bank": PNC Bank, National Association, and any successor thereto, or any other Bank to which the Swing Line Commitment is assigned. "Swing Line Commitment": the obligation of the Swing Line Bank to make Swing Line Loans in an aggregate amount at any one time outstanding not to exceed the amount set forth opposite the Swing Line Bank's name on Schedule I hereto under the caption "Swing Line Commitment", as the same may be changed from time to time in accordance with the provisions of this Agreement and/or any applicable Assignment and Acceptance. "Swing Line Conversion Date": has the meaning assigned to such term in subsection 2.1(d)(iv). "Swing Line Loan": has the meaning assigned to such term in subsection 2.1(d)(i). "Swing Line Note": has the meaning assigned to such term in subsection 2.1(d)(iii). "Swing Line Repayment Date": has the meaning assigned to such term in subsection 2.1(d)(ii). "Taxes": has the meaning assigned to such term in Section 2.17. "Total Commitments": the 364 Day Commitments, the Five Year Commitments and the Swing Line Commitment. "Total Commitment Percentage": as to any Bank at any time, the percentage which such Bank's 364 Day Commitment and Five Year Commitment then constitutes of the aggregate 364 Day Commitments and Five Year Commitments at such time (or, at any time after the Total Commitments shall have expired or terminated, the percentage which the amount of such Bank's Total Exposure bears to the aggregate amount of the Total Exposure of all the Banks at such time). "Total Debt": at any date, without duplication, the aggregate of all Indebtedness of the Company and its Subsidiaries determined on a consolidated basis (including the current portion thereof and the undrawn stated amount of any Letters of Credit then outstanding), other than (but only to the extent that the following would not be included on a consolidated balance sheet of the Company and its Subsidiaries at such date): (a) earn-outs or similar obligations, (b) Indebtedness described in clauses (g) and (h) of the definition of "Indebtedness", and (c) Guaranty Obligations in respect of the Indebtedness described in clauses (a) and (b) above. "Total Exposure": as to any Bank at any date, an amount equal to the sum of its (a) Five Year Exposure and (b) the aggregate Dollar Equivalent amount of all 364 Day Loans made by such Bank then outstanding. "Tranche": specified portions of Loans outstanding as follows: (a) any Loans to which a LIBOR Rate applies which become subject to the same LIBOR Rate under the same Notice of Borrowing and which have the same Interest Period, which are denominated either in Dollars or in the same Optional Currency and under the same Facility shall constitute one Tranche, and (b) all Loans under the same Facility to which the Base Rate applies shall constitute one Tranche. "Type": when used in respect of any Loan, shall refer to the Rate by reference to which interest on such Loan is determined. For purposes hereof, "Rate" shall include the LIBOR Rate and the Base Rate. "Voting Stock": Capital Stock of any class or classes of a Person the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the directors (or Persons performing similar functions). "Wholly-Owned Subsidiary": at any time, any Subsidiary one hundred percent (100%) of all of the equity securities (except directors' qualifying shares) and Voting Stock of which are owned by any one or more of the Company and its other Wholly-Owned Subsidiaries at such time. "Year 2000 Problem": has the meaning assigned to such term in Section 3.20. "364 Day Banks": at any time, the Bank or Banks which at that time are obligated, subject to the terms of this Agreement, to make 364 Day Loans (or, at any time after the 364 Day Commitments shall have expired or been terminated, any Bank that has 364 Day Loans then outstanding). "364 Day Commitment": as to any 364 Day Bank, the obligation of such Bank to make 364 Day Loans in an aggregate Dollar Equivalent amount at any one time outstanding not to exceed the amount set forth opposite such Bank's name on Schedule I hereto under the caption "364 Day Commitment," as the same may be changed from time to time in accordance with the provisions of this Agreement and/or any applicable Assignment and Acceptance. "364 Day Commitment Percentage": as to any 364 Day Bank at any time, the percentage which such Bank's 364 Day Commitment constitutes of the aggregate 364 Day Commitments at such time (or at any time after the 364 Day Commitments shall have expired or terminated, the percentage which the aggregate Dollar Equivalent amount of such Bank's 364 Day Loans then outstanding bears to the aggregate Dollar Equivalent amount of all 364 Day Loans then outstanding). "364 Day Commitment Period": the period from and including the date hereof to but not including the 364 Day Termination Date. "364 Day Facility": the revolving credit facility pursuant to which the 364 Day Banks have committed to make 364 Day Loans. "364 Day Loans": has the meaning assigned to such term in subsection 2.1(a). "364 Day Notes": has the meaning assigned to such term in Section 2.3, as the same may be amended, supplemented or otherwise modified from time to time. "364 Day Termination Date": with respect to the 364 Day Facility, the earlier of (a) July 24, 2001 or such later date to which the 364 Day Termination Date shall have been extended pursuant to subsection 2.14(d) hereof and (b) the date the 364 Day Commitments are terminated as provided herein. 1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the Notes, the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto. (b) As used herein and in the Notes and the other Loan Documents, and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to the Company and its Subsidiaries not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP. (c) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined in this Agreement shall be equally applicable to both the singular and plural forms of such terms. SECTION 2. LOANS AND TERMS OF COMMITMENTS 2.1 The Loans. (a) 364 Day Facility. Subject to the terms and conditions hereof, each 364 Day Bank severally agrees to make revolving credit loans under the 364 Day Facility in either Dollars or one or more Optional Currencies (the "364 Day Loans") to the Borrowers on a joint and several basis from time to time during the 364 Day Commitment Period in an aggregate principal amount at any one time outstanding not to exceed the amount of such Bank's 364 Day Commitment; provided, that (i) after giving effect to each such 364 Day Loan the aggregate Dollar Equivalent amount of 364 Day Loans from such Bank shall not exceed such Bank's 364 Day Commitment, and (ii) no 364 Day Loan to which the Base Rate applies shall be made in an Optional Currency. The 364 Day Commitments may be terminated or reduced from time to time pursuant to Section 2.14. Within the foregoing limits, the Borrowers may during such Commitment Period borrow, repay and reborrow under the 364 Day Commitments, subject to and in accordance with the terms and limitations hereof. (b) Five Year Facility. Subject to the terms and conditions hereof, each Five Year Bank severally agrees to make revolving credit loans under the Five Year Facility in either Dollars or one or more Optional Currencies (the "Five Year Loans") to the Borrowers on a joint and several basis from time to time during the Five Year Commitment Period in an aggregate principal amount at any one time outstanding not to exceed the amount of such Bank's Five Year Commitment; provided, that (i) after giving effect to each such Five Year Loan, the aggregate Dollar Equivalent amount of outstanding Five Year Loans made by such Bank shall not exceed (x) such Bank's Five Year Commitment minus (y) the sum of such Bank's Ratable Share (based on its Five Year Commitment Percentage) of the amount of Swing Line Loans and Letter of Credit Obligations then outstanding, and (ii) no Five Year Loan to which the Base Rate applies shall be made in an Optional Currency. The Five Year Commitments may be terminated or reduced from time to time pursuant to Section 2.14. Within the foregoing limits, the Borrowers may during the Five Year Commitment Period borrow, repay and reborrow under the Five Year Commitments, subject to and in accordance with the terms and limitations hereof. (c) Type of Loans. The 364 Day Loans and the Five Year Loans may from time to time be (i) LIBOR Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the Borrowers and notified to the Agent in accordance with Sections 2.4 and 2.5; provided, that no Loan shall be made as a LIBOR Loan after the date that is one month prior to the 364 Day Termination Date or the Five Year Termination Date, as the case may be. (d) Swing Line Loans.(i) Subject to the terms and conditions hereof, the Swing Line Bank may in its discretion make swing line loans in Dollars (the "Swing Line Loans") to the Borrowers from time to time during the Five Year Commitment Period in an aggregate outstanding principal amount up to the amount of the Swing Line Commitment for periods not to exceed seven days as requested by the Borrowers and agreed to by the Swing Line Bank; provided, that, no Swing Line Loan shall be made if, after giving effect to the making of such Swing Line Loan and the simultaneous application of the proceeds thereof, (x) the aggregate amount of all outstanding Swing Line Loans plus the aggregate Dollar Equivalent amount of all outstanding Five Year Loans plus the aggregate amount of the Letter of Credit Obligations then outstanding, would exceed the aggregate amount of the Five Year Commitments of all of the Banks or (y) the aggregate Dollar Equivalent amount of all Five Year Loans made by a Bank plus such Bank's Ratable Share (based on its Five Year Commitment Percentage) of the amount of Swing Line Loans and Letter of Credit Obligations then outstanding would exceed its Five Year Commitment. Within the foregoing limits, the Borrowers may during the Five Year Commitment Period borrow, repay and reborrow under the Swing Line Commitment, subject to and in accordance with the terms and limitations hereof. The interest rate for a Swing Line Loan shall be the rate that is mutually agreed by the Borrowers and the Swing Line Bank at the time such Swing Line Loan is made or, absent such an agreement, at the Base Rate. (ii) The Borrowers may request a Swing Line Loan to be made on any Business Day. Each request for a Swing Line Loan shall be in the form of a Notice of Borrowing (or a request by telephone immediately confirmed in writing, it being understood that the Swing Line Bank may rely on the authority of any individual making such telephonic request without the necessity of receipt of such written confirmation) and received by the Agent not later than twelve o'clock noon (12:00) (Philadelphia time) on the Business Day such Swing Line Loan is to be made, specifying in each case (i) the amount to be borrowed, (ii) the requested borrowing date, and (iii) the date such Swing Line Loan is to be repaid, if applicable (the "Swing Line Repayment Date"). The request for such Swing Line Loan shall be irrevocable. Provided that all applicable conditions precedent contained herein have been satisfied, the Swing Line Bank shall, not later than 4:00 p.m., Philadelphia time, on the date specified in the Borrowers' request for such Swing Line Loan, make such Swing Line Loan by crediting the Borrowers' deposit account with the Swing Line Bank or as otherwise directed by the Borrowers. (iii) The obligation of the Borrowers to repay the Swing Line Loans shall be evidenced by a promissory note of the Borrowers dated the date hereof, payable to the order of the Swing Line Bank in the principal amount of the Swing Line Commitment and substantially in the form of Exhibit A-3 (as amended, supplemented or otherwise modified from time to time, the "Swing Line Note"). (iv) Swing Line Loans shall be repaid on the earlier of (1) the Five Year Termination Date, (2) the Swing Line Repayment Date for such Swing Line Loan or (3) the seventh day after the date such Swing Line Loan was made (any such date being the "Swing Line Conversion Date"). Unless the Borrowers shall have notified the Agent prior to 11:00 a.m., Philadelphia time, on such Swing Line Conversion Date that the Borrowers intend to repay such Swing Line Loan with funds other than the proceeds of a Five Year Loan, the Borrowers shall be deemed to have given notice to the Agent requesting the Five Year Banks to make Five Year Loans which shall earn interest at the Base Rate in effect on the Swing Line Conversion Date in an aggregate amount equal to the amount of such Swing Line Loan plus interest thereon, and subject to satisfaction or waiver of the conditions specified in Section 4.2, the Five Year Banks shall, on the Swing Line Conversion Date, make Five Year Loans, which shall earn interest at the Base Rate, in an aggregate amount equal to the amount of such Swing Line Loan plus interest thereon, the proceeds of which shall be applied directly by the Agent to repay the Swing Line Bank for such Swing Line Loan plus accrued interest thereon; and provided, further, that if for any reason the proceeds of such Five Year Loans are not received by the Swing Line Bank on the Swing Line Conversion Date in an aggregate amount equal to the amount of such Swing Line Loan plus accrued interest, the Borrowers shall reimburse the Swing Line Bank on the day immediately following the Swing Line Conversion Date, in same day funds, in an amount equal to the excess of the amount of such Swing Line Loan over the aggregate amount of such Five Year Loans, if any, received plus accrued interest thereon. (v) In the event that the Borrowers shall fail to repay the Swing Line Bank as provided in this Section 2.1(d) in an amount equal to the amount required under Section 2.1(d), the Agent shall promptly notify each Five Year Bank of the unpaid amount of such Swing Line Loan and of such Bank's respective participation therein in an amount equal to such Bank's pro rata share of such Swing Line Loan (based on its Five Year Commitment Percentage). Each Five Year Bank shall make available to the Agent for payment to the Swing Line Bank an amount equal to its respective participation therein, in same day funds, at the office of the Agent specified in such notice, not later than 11:00 a.m., Philadelphia time, on the Business Day after the date the Agent notifies each Bank. In the event that any Five Year Bank fails to make available to the Agent the amount of such Bank's participation in such unpaid amount as provided herein, the Swing Line Bank shall be entitled to recover such amount on demand from such Bank together with interest thereon at a rate per annum equal to the Federal Funds Effective Rate for each day during the period between the Swing Line Conversion Date and the date on which such Bank makes available its participation in such unpaid amount. The failure of any Bank to make available to the Agent its pro rata share of any such unpaid amount shall not relieve any other Bank of its obligations hereunder to make available to the Agent its pro rata share of such unpaid amount on the Swing Line Conversion Date. The Agent shall distribute to each Bank which has paid all amounts payable by it under this Section 2.1(d) with respect to the unpaid amount of any Swing Line Loan, such Bank's pro rata share of all payments received by the Agent from the Borrowers in repayment of such Swing Line Loan when such payments are received. Notwithstanding anything to the contrary herein, each Bank which has paid all amounts payable by it under this Section 2.1(d) shall have a direct right to repayment of such amounts from the Borrowers subject to the procedures for repaying Banks set forth in this Section 2.1(d) and the provisions of Section 9.8. (vi) In the event the Five Year Commitments are terminated in accordance with the terms hereof, the Swing Line Commitment shall also be terminated automatically. In the event the Borrowers reduce the Five Year Commitment to less than the Swing Line Commitment, the Swing Line Commitment shall immediately be reduced to an amount equal to the Five Year Commitment. In the event the Borrowers reduce the Five Year Commitment to less than the outstanding principal amount of the Swing Line Loans, the Borrowers shall immediately repay the amount by which the outstanding Swing Line Loans exceeds the Swing Line Commitment as so reduced plus accrued interest thereon. (vii) At no time shall there be more than two outstanding Swing Line Loans. Each Swing Line Loan shall be in an original principal amount of $100,000 or a whole multiple thereof. (viii) The Borrowers shall have the right at any time and from time to time to prepay the Swing Line Loans, in whole or in part, without premium or penalty (but in any event subject to Section 2.18), upon prior written, facsimile or telephonic notice to the Swing Line Bank given no later than 1:00 p.m., Philadelphia time, on the date of any proposed prepayment. Each notice of prepayment shall specify the Swing Line Loan to be prepaid and the amount to be prepaid, shall be irrevocable and shall commit the Borrowers to prepay such amount on such date, with accrued interest thereon and any amounts owed under Section 2.18 hereof. 2.2 Nature of Banks' Obligations with Respect to Loans. Each Bank shall be obligated to participate in each request for Loans pursuant to Section 2.4 in accordance with its Ratable Share with respect to the applicable Facility. The obligations of each Bank hereunder are several. The failure of any Bank to perform its obligations hereunder shall not affect the obligations of the Borrowers to any other party nor shall any other party be liable for the failure of any Bank to perform its obligations hereunder. The Banks shall have no obligation to make 364 Day Loans hereunder on or after the 364 Day Termination Date or to make Five Year Loans or Swing Line Loans on or after the Five Year Termination Date. 2.3 Notes. (a) The 364 Day Loans made by each 364 Day Bank shall be evidenced by a promissory note of the Borrowers, substantially in the form of Exhibit A-1, with appropriate insertions as to payee, date and principal amount (a "364 Day Note"), payable to the order of such Bank and in a principal amount equal to the amount of the initial 364 Day Commitment of such Bank; provided, however, that the principal amount of each 364 Day Loan made in an Optional Currency shall be paid by the Borrowers in such Optional Currency. Each 364 Day Bank is hereby authorized to record the date, currency, Type and amount of each 364 Day Loan made by such Bank, each continuation thereof, each conversion of all or a portion thereof to another Type, the date and amount of each payment or prepayment of principal thereof and, in the case of LIBOR Loans, the length of each Interest Period with respect thereto, on the schedule annexed to and constituting a part of its 364 Day Note, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded, provided, that the failure of any 364 Day Bank to make such recordation (or any error in such recordation) shall not affect the obligations of the Borrowers hereunder or under such 364 Day Note. Each 364 Day Note shall (a) be dated the Closing Date, (b) be stated to mature on the 364 Day Termination Date and (c) provide for the payment of interest in accordance with Sections 2.9 and 2.10. (b) The Five Year Loans made by each Five Year Bank shall be evidenced by a promissory note of the Borrowers, substantially in the form of Exhibit A-2, with appropriate insertions as to payee, date and principal amount (a "Five Year Note"), payable to the order of such Bank and in a principal amount equal to the amount of the initial Five Year Commitment of such Bank; provided, however, that the principal amount of each Five Year Loan made in an Optional Currency shall be paid by the Borrowers in such Optional Currency. Each Five Year Bank is hereby authorized to record the date, currency, Type and amount of each Five Year Loan made by such Bank, each continuation thereof, each conversion of all or a portion thereof to another Type, the date and amount of each payment or prepayment of principal thereof and, in the case of LIBOR Loans, the length of each Interest Period with respect thereto, on the schedule annexed to and constituting a part of its Five Year Note, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded, provided, that the failure of any Five Year Bank to make such recordation (or any error in such recordation) shall not affect the obligations of the Borrowers hereunder or under such Five Year Note. Each Five Year Note shall (a) be dated the Closing Date, (b) be stated to mature on the Five Year Termination Date and (c) provide for the payment of interest in accordance with Sections 2.9 and 2.10. (c) The Swing Line Loans shall be evidenced by the Swing Line Note, payable to the order of the Swing Line Bank and in a principal amount equal to the amount of the Swing Line Commitment. The Swing Line Bank is hereby authorized to record the date, Type and amount of each Swing Line Loan made by such Bank and the date and amount of each payment or prepayment of principal thereof on the schedule annexed to and constituting a part of the Swing Line Note, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded, provided, that the failure of the Swing Line Bank to make such recordation (or any error in such recordation) shall not affect the obligations of the Borrowers hereunder or under the Swing Line Note. The Swing Line Note shall (a) be dated the Closing Date, (b) be stated to mature on the Five Year Termination Date and (c) provide for the payment of interest in accordance with Sections 2.9 and 2.10. 2.4 Procedure for 364 Day Loans and Five Year Loans. (a) Except as otherwise provided herein, the Borrowers may from time to time prior to the applicable Termination Date request the Banks to make 364 Day Loans and/or Five Year Loans by delivering to the Agent, not later than 11:00 a.m., Philadelphia time, (i) three (3) Business Days prior to the proposed Borrowing Date with respect to the making of Loans in Dollars to which the LIBOR Rate applies and four (4) Business Days prior to the proposed Borrowing Date with respect to the making of Loans in an Optional Currency and (ii) the Business Day of the proposed Borrowing Date with respect to the making of a Loan to which the Base Rate applies, of a duly completed Notice of Borrowing or a request by telephone immediately confirmed in writing, it being understood that the Agent may rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation. Each Notice of Borrowing shall be irrevocable and shall specify (i) the proposed Borrowing Date; (ii) the aggregate amount of the proposed 364 Day Loans and Five Year Loans (expressed in the currency in which such Loans shall be funded) comprising each Tranche, the Dollar Equivalent amount of which shall be in integral multiples of $100,000 and not less than $3,000,000 or, if less, the maximum amount under the 364 Day Commitment or the Five Year Commitment, as the case may be; (iii) whether the LIBOR Rate or Base Rate shall apply to the proposed Loans comprising the applicable Tranche; (iv) the currency in which such Loans shall be funded if the Borrowers are electing the LIBOR Rate, (v) in the case of a Tranche to which the LIBOR Rate applies, the Interest Period for the proposed Loans comprising such Tranche, and (vi) the amount of such Loans requested to be made for the account of one or more Foreign Borrowers with the name of each such Foreign Borrower. (b) The Agent shall, promptly after receipt by it of a Notice of Borrowing pursuant to this Section 2.4, notify the applicable Banks of its receipt of such Notice of Borrowing specifying: (i) the proposed Borrowing Date and the time and method of disbursement of the Loans requested thereby; (ii) the amount, currency, Facility, and Type of each such Loan and the applicable Interest Period (if any); and (iii) the apportionment among the Banks of such Loans as determined by the Agent in accordance with Section 2.2. Subject to the terms and conditions hereof, each applicable Bank shall remit the principal amount of each Loan in the requested currency to the Agent at the Principal Office (or, with respect to Loans in an Optional Currency, such other Lending Office as the Agent shall from time to time notify such Bank) prior to 2:00 p.m., Philadelphia time (or, with respect to Loans in an Optional Currency, such other time as the Agent shall notify the Banks), on the Borrowing Date requested by the Borrowers in funds immediately available to the Agent. Such borrowing will then be made available to the Borrowers by the Agent crediting the account of the Company on the books of the office specified in subsection 9.2 (or, with respect to Loans in an Optional Currency, the applicable Lending Office of the Agent) with the aggregate of the amounts made available to the Agent by the Banks and in like funds as received by the Agent. Unless the Agent shall have received notice from a Bank prior to the date of any borrowing that such Bank will not make available to the Agent such Bank's portion of such borrowing, the Agent may assume that such Bank has made such portion available in accordance with this subsection 2.4(b) and the Agent may, in reliance upon such assumption, make available to the Borrowers on such date a corresponding amount. If and to the extent that any Bank shall not have made such Bank's pro rata portion of such borrowing available to the Agent, such Bank and the Borrowers (without prejudice to the Borrowers' rights against such Bank) severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrowers until the date such amount is repaid to the Agent at (i) in the case of the Borrowers, the interest rate applicable at the time to the Loans comprising such borrowing and (ii) in the case of such Bank, the Federal Funds Effective Rate, provided, that, if such Bank shall not pay such amount within three Business Days of such Borrowing Date, the interest rate on such overdue amount shall, at the expiration of such three Business Day period, be the rate per annum applicable to Base Rate Loans. If such Bank shall repay to the Agent such corresponding amount, such amount shall constitute such Bank's Loan as part of such borrowing for purposes of this Agreement. (c) If in a Notice of Borrowing no election as to the Type of Loan is specified in any such notice, then the requested Loan shall be a Base Rate Loan, and if no election as to the Facility under which the Loan is to be made is specified, then the requested Loan shall be a Five Year Loan. If a LIBOR Loan is requested but no Interest Period with respect to such Loan is specified in any such notice, then the Borrowers shall be deemed to have selected an Interest Period of one month's duration. 2.5 Conversion and Continuation Options. The Borrowers shall have the right at any time upon prior irrevocable notice to the Agent (i) not later than 11:00 noon, Philadelphia time, one Business Day prior to conversion, to convert any LIBOR Loan to a Base Rate Loan, (ii) not later than 11:00 a.m., Philadelphia time, three Business Days prior to conversion or continuation, to convert any Base Rate Loan into a LIBOR Loan or to continue any LIBOR Loan as a LIBOR Loan for any additional Interest Period, (iii) not later than 11:00 a.m. Philadelphia time, four Business Days prior to continuation, to continue any LIBOR Loan denominated in an Optional Currency as a LIBOR Loan in such currency for an additional period and (iv) not later than 11:00 a.m. Philadelphia time, four Business Days prior to conversion to convert the Interest Period with respect to any Loan in an Optional Currency to another permissible Interest Period, subject in each case to the following: (a) a LIBOR Loan may not be converted at a time other than the last day of the Interest Period applicable thereto; (b) any portion of a Loan maturing or required to be repaid in less than one month may not be converted into or continued as a LIBOR Loan; (c) no LIBOR Loan may be continued as such and no Base Rate Loan may be converted to a LIBOR Loan when any Default has occurred and is continuing and the Agent or the Required Banks have determined that such a continuation is not appropriate; (d) any portion of a LIBOR Loan that cannot be converted into or continued as a LIBOR Loan by reason of subsection 2.5(b) or 2.5(c) or as to which the Borrowers have failed to give notice of conversion or continuation automatically shall in the case of a LIBOR Loan denominated in an Optional Currency be prepaid on the last day of the Interest period in effect for such Loan (subject to the provisions of subsection 2.12(c)), or in the case of any other LIBOR Loan be converted to a Base Rate Loan on the last day of the Interest Period in effect for such Loan; (e) no LIBOR Loan denominated in an Optional Currency may be converted into a Base Rate Loan or converted into a LIBOR Loan denominated in another Optional Currency; (f) the provisions of subsection 2.6(c) limiting under certain circumstances the continuation of LIBOR Loans denominated in an Optional Currency; and (g) no Swing Line Loan may be a LIBOR Loan. Each request by the Borrowers to convert or continue a Loan shall constitute a representation and warranty that no Default shall have occurred and be continuing. Accrued interest on a Loan (or portion thereof) being converted shall be paid by the applicable Borrower(s) at the time of conversion. In connection with each such conversion or continuation requested by the Borrowers, the Borrowers shall deliver to the Agent a Notice of Borrowing or shall make such request by telephone immediately confirmed in writing, it being understood that the Agent may rely on the authority of any individual making such telephonic request without the necessity of receipt of such written confirmation. 2.6 Utilization of Commitments in Optional Currencies. (a) The Agent will determine the Dollar Equivalent amount of (i) proposed Loans denominated in an Optional Currency as of the requested Borrowing Date, and (ii) outstanding Loans denominated in an Optional Currency as of the end of each Interest Period (each such date under clauses (i) and (ii), a "Computation Date"). (b) The Banks shall be under no obligation to make the Loans requested by the Borrowers which are denominated in an Optional Currency if any Bank notifies the Agent by 5:00 p.m., Philadelphia time, three (3) Business Days prior to the Borrowing Date for such Loans that such Bank cannot due to market conditions provide its share of such Loans in such Optional Currency. In the event the Agent timely receives a notice from a Bank pursuant to the preceding sentence, the Agent will notify the Borrowers no later than 12:00 noon, Philadelphia time, two (2) Business Days prior to the Borrowing Date for such Loans that the Optional Currency is not then available for such Loans, and the Agent shall promptly thereafter notify the Banks of the same. If the Borrowers receive a notice described in the preceding sentence, the Borrowers may, by notice to the Agent not later than 5:00 p.m., Philadelphia time, two (2) Business Days prior to the Borrowing Date for such Loans, withdraw the Notice of Borrowing for such Loans. If the Borrowers withdraw such Notice of Borrowing, the Agent will promptly notify each Bank of the same and the Banks shall not make such Loans. If the Borrowers do not withdraw such Notice of Borrowing before such time, (i) the Borrowers shall be deemed to have requested that the Loans referred to in their Notice of Borrowing shall be made in Dollars in an amount equal to the Dollar Equivalent amount of such Loans and shall bear interest at the Base Rate, and (ii) the Agent shall promptly deliver a notice to each Bank stating: (A) that such Loans shall be made in Dollars and shall bear interest at the Base Rate, (B) the aggregate amount of such Loans, and (C) such Bank's Ratable Share of such Loans. (c) If the Borrowers deliver a Notice of Borrowing pursuant to Section 2.5 requesting that the Banks continue as a LIBOR Loan an outstanding Tranche of Loans denominated in an Optional Currency, the Banks shall be under no obligation to continue such LIBOR Loan if any Bank delivers to the Agent a notice by 5:00 p.m., Philadelphia time, three (3) Business Days prior to effective date of such continuation that such Bank cannot due to market conditions provide or continue Loans in such Optional Currency. In the event the Agent timely receives a notice from a Bank pursuant to the preceding sentence, the Agent will notify the Borrowers no later than 12:00 noon, Philadelphia time, two (2) Business Days prior to the effective date of such continuation that the continuation of such Loans in such Optional Currency is not then available, and the Agent shall promptly thereafter notify the Banks of the same. If the Agent shall have so notified the Borrowers that any such continuation of Optional Currency Loans is not then available, any notice of continuation with respect thereto shall be deemed withdrawn, and such Optional Currency Loans shall be prepaid on the last day of the Interest Period with respect to any such Optional Currency Loans, subject to the provisions of subsection 2.12(c) and to the Borrowers' right to reborrow in Dollars or in another Optional Currency pursuant to Section 2.4. (d) The Borrowers may deliver to the Agent a written request that Loans hereunder also be permitted to be made in any other lawful currency (other than Dollars), in addition to the currencies specified in the definition of "Optional Currency" herein, provided, that such currency must be freely traded in the offshore interbank foreign exchange markets, freely transferable, freely convertible into Dollars and available to the Banks in the applicable interbank market. The Agent may grant or deny such request in its sole discretion. The Agent will promptly notify the applicable Banks of any such request and whether the Agent has granted or rejected such request. The Agent will promptly notify the Borrowers of the acceptance or rejection by the Agent of the Borrowers' request. The requested currency shall be approved as an Optional Currency hereunder only if the Agent approves the Borrowers' request. (e) The Agent may, with respect to notices by the Borrowers for Loans in an Optional Currency or voluntary prepayments of less than the full amount of an Optional Currency Tranche, engage in reasonable rounding of the Optional Currency amounts requested to be loaned or repaid; and, in such event, the Agent shall promptly notify the Borrowers and the Banks of such rounded amounts and the Borrowers' request or notice shall thereby be deemed to reflect such rounded amounts. 2.7 Fees. (a) The Borrowers jointly and severally agree to pay to the Agent for the account of each Bank, on each March 31, June 30, September 30 and December 31 during the 364 Day Commitment Period and Five Year Commitment Period and on the date on which the 364 Day Commitments and the Five Year Commitments shall be permanently reduced or terminated as provided herein, a facility fee (the "Facility Fee") at a rate per annum equal to the applicable Facility Fee Rate in effect from time to time on the amount of the 364 Day Commitment or Five Year Commitments, as the case may be, during the preceding quarter (or shorter period commencing with the date hereof or ending with the termination date for such Facility or the date on which either of such Commitments shall be terminated or reduced). All Facility Fees shall be computed on the basis of the actual number of days elapsed in a year of 360 days and shall be paid in Dollars. The Facility Fees due to each Bank with respect to the 364 Day Facility and the Five Year Facility shall commence to accrue on the date hereof, and shall cease to accrue on the 364 Day Termination Date or Five Year Termination Date, as the case may be. The Agent shall distribute the applicable Facility Fees on the Loans among the Banks pro rata in accordance with their respective 364 Day Commitment Percentage or Five Year Commitment Percentages, as the case may be. (b) The Borrowers jointly and severally agree to pay the Agent, for its own account, administrative and other fees at the times and in the amounts set forth in the Fee Letter. (c) The foregoing fees shall be paid on the dates due, in immediately available funds, to the Agent for distribution, if and as appropriate, among the Banks. Once paid, none of the foregoing fees shall be refundable under any circumstances. 2.8 Letter of Credit Subfacility. (a) The Borrowers may request the issuance of a letter of credit (each, a "Letter of Credit") by delivering to the Issuing Bank a completed Application and agreement for letters of credit in such form and with such other certificates, documents and information as the Issuing Bank may specify from time to time by no later than 10:00 a.m., Philadelphia time, at least five (5) Business Days, or such shorter period as may be agreed to by the Issuing Bank, in advance of the proposed date of issuance. Each Letter of Credit shall be denominated in Dollars. Subject to the terms and conditions hereof and in reliance on the agreements of the other applicable Banks set forth in this Section 2.8, the Issuing Bank will issue a Letter of Credit, provided, that each Letter of Credit shall (A) have a maximum maturity of twelve (12) months from the date of issuance, and (B) in no event expire later than five (5) Business Day prior to the Five Year Termination Date, and provided further, that in no event shall (i) the amount of the Letter of Credit Obligations at any one time exceed the lesser of (x) $15,000,000, or (y) the Five Year Commitments minus the Dollar Equivalent amount of the outstanding Five Year Loans and Swing Line Loans or (ii) the sum of the aggregate Dollar Equivalent amount of all Five Year Loans made by a Bank plus such Bank's Ratable Share (based on its Five Year Commitment Percentage) of the amount of Swing Line Loans and Letter of Credit Obligations then outstanding exceed its Five Year Commitment. The Issuing Bank shall not at any time be obligated to issue any Letter of Credit hereunder if such issuance would conflict with, or cause the Issuing Bank or any Letter of Credit Participant to exceed any limits imposed by any applicable Requirement of Law. Notwithstanding the provisions of this subsection 2.8, the Five Year Banks and the Borrowers hereby agree that the Issuing Bank may issue upon the Borrowers' request, one or more Letter(s) of Credit which by its or their terms may be extended for additional periods of up to one year each provided that (i) the initial expiration date (or any subsequent expiration date) of each such Letter of Credit is not later than five (5) Business Days prior to the Five Year Termination Date, and (ii) renewal of such Letters of Credit, at the Issuing Bank's discretion, shall be available upon written request from the Borrowers to the Issuing Bank at least thirty (30) days (or such other time period as agreed by the Borrowers and the Agent) before the date upon which notice of renewal is otherwise required. (b) The Borrowers shall pay in Dollars (i) to the Agent for the ratable account of the Five Year Banks a fee (the "Letter of Credit Fee") computed at the Letter of Credit Fee Rate in effect from time to time and (ii) to the Agent for the account of the Issuing Bank a fronting fee equal to 0.125% per annum, on the daily average undrawn stated amount of outstanding Letters of Credit (computed in each case on the basis of the actual number of days such Letters of Credit are outstanding in a year of 360 days), which amounts shall be payable quarterly in arrears commencing with the last Business Day of each March, June, September and December following the issuance of a Letter of Credit and on the Five Year Termination Date. The Borrowers shall also pay to the Agent in Dollars for the sole account of the Issuing Bank, the Issuing Bank's then in effect customary fees and administrative expenses payable with respect to the Letters of Credit as the Issuing Bank may generally charge or incur from time to time in connection with the issuance, maintenance, modification (if any), assignment or transfer (if any), negotiation, and administration of Letters of Credit. Once paid, all of the above fees shall be nonrefundable under all circumstances. The Agent shall, promptly following its receipt thereof, distribute to the Issuing Bank and the Five Year Banks all fees and commissions received by the Agent for their respective accounts pursuant to this subsection. (c) (i) The Issuing Bank irrevocably agrees to grant and hereby grants to each Letter of Credit Participant, and, to induce the Issuing Bank to issue Letters of Credit hereunder, each Letter of Credit Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Bank, on the terms and conditions hereinafter stated, for such Letter of Credit Participant's own account and risk, an undivided interest equal to such Letter of Credit Participant's Five Year Commitment Percentage in the Issuing Bank's obligations and rights under each Letter of Credit issued by the Issuing Bank hereunder and the amount of each draft paid by the Issuing Bank thereunder. Each Letter of Credit Participant unconditionally and irrevocably agrees with the Issuing Bank that, if a draft is paid under any Letter of Credit issued by the Issuing Bank for which the Issuing Bank is not reimbursed in full by the Borrowers in accordance with the terms of this Agreement, such Letter of Credit Participant shall pay to the Issuing Bank upon demand at the Issuing Bank's address for notices specified herein an amount equal to such Letter of Credit Participant's Five Year Commitment Percentage of the amount of such draft or any part thereof, which is not so reimbursed. Any action taken or omitted by the Issuing Bank under or in connection with a Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create for the Issuing Bank any resulting liability to any Bank. (ii) If any amount required to be paid by any Letter of Credit Participant to the Issuing Bank pursuant to subsection 2.8(c)(i) in respect of any unreimbursed portion of any payment made by the Issuing Bank under any Letter of Credit is not paid to the Issuing Bank on the date such payment is due from such Letter of Credit Participant, such Letter of Credit Participant shall pay to the Issuing Bank on demand an amount equal to the product of (x) such amount, times (y) the daily average Federal Funds Effective Rate, as quoted by the Issuing Bank, during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Bank, times (z) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. A certificate of the Issuing Bank submitted to any Letter of Credit Participant with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. (iii) Whenever, at any time after the Issuing Bank has made payment under any Letter of Credit and has received from any Letter of Credit Participant its pro-rata share of such payment in accordance with subsection 2.8(c)(i), the Issuing Bank receives any payment related to such Letter of Credit (whether directly from the Borrowers or otherwise, including by way of set-off or proceeds of collateral applied thereto by the Issuing Bank), or any payment of interest on account thereof, the Issuing Bank will distribute to such Letter of Credit Participant its pro-rata share thereof; provided, however, that in the event that any such payment received by the Issuing Bank shall be required to be returned by the Issuing Bank, such Letter of Credit Participant shall return to the Issuing Bank the portion thereof previously distributed by the Issuing Bank to it. (d) (i) Each Borrower jointly and severally agrees to reimburse the Issuing Bank in respect of a Letter of Credit on each date on which a draft presented under such Letter of Credit is paid by the Issuing Bank for the amount of (i) such draft so paid and (ii) any taxes, fees, charges or other costs or expenses incurred by the Issuing Bank in connection with such payment. Each such payment shall be made to the Issuing Bank at its Principal Office in Dollars and in immediately available funds. (ii) Interest shall be payable on any and all amounts remaining unpaid by the Borrowers under this subsection from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full at the per annum rate of the Base Rate plus 2.0% and shall be payable on demand by the Issuing Bank. (e) (i) The obligations of the Borrowers under this subsection 2.8 shall be joint and several. The Borrowers also jointly and severally agree with the Issuing Bank that the Issuing Bank shall not be responsible for, and the Borrowers' Reimbursement Obligations under subsection 2.8(d)(i) shall not be affected by, among other things (x) the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, provided, that reliance upon such documents by the Issuing Bank shall not have constituted gross negligence or willful misconduct of the Issuing Bank or (y) any dispute between or among any Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or (z) any claims whatsoever of any Borrower against any beneficiary of such Letter of Credit or any such transferee. (ii) The Issuing Bank shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by the Issuing Bank's gross negligence or willful misconduct. (iii) Each Borrower jointly and severally agrees that any action taken or omitted by the Issuing Bank under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct, shall be binding on such Borrower and shall not result in any liability of the Issuing Bank to such Borrower. (f) If any draft shall be presented for payment to the Issuing Bank under any Letter of Credit, the Issuing Bank shall promptly notify the Company of the date and amount thereof. The responsibility of the Issuing Bank to the Borrowers in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit and any other obligation expressly imposed by the provisions of the Uniform Customs and Practice for Documentary Credits, 1993 Revision, International Chamber of Commerce Publication No. 500 ("Publication 500") other than Article 48(g) thereof, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit. (g) To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Agreement, the provisions of this Agreement shall apply. (h) Each Borrower agrees jointly and severally to be bound by the terms of each Application and the Issuing Bank's written regulations and customary practices relating to letters of credit, though such interpretation may be different from such Borrower's own. It is understood and agreed that, except in the case of gross negligence or willful misconduct, the Agent shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following the Borrowers' instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto. To the extent not otherwise inconsistent with this Agreement, the provisions of Publication 500 are hereby made a part of this Agreement with respect to the obligations in connection with each Letter of Credit. (i) Each Five Year Bank's payment obligation under subsection 2.8(c) and the obligations of the Borrowers to reimburse the Issuing Bank upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable under any circumstances, and shall be performed strictly in accordance with the terms of this Section 2.8 under all circumstances, including the following circumstances: (i) any set-off, counterclaim, recoupment, defense or other right which such Bank may have against the Issuing Bank, the Borrowers or any other Person for any reason whatsoever; (ii) any lack of validity or enforceability of any Letter of Credit; (iii) the existence of any claim, set-off, defense or other right which the Borrowers or any Five Year Bank 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), the Issuing Bank or any Bank or any other Person or, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between the Borrowers and the beneficiary for which any Letter of Credit was procured); (iv) any draft, demand, certificate 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 even if the Issuing Bank has been notified thereof; (v) payment by the Issuing Bank under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit; (vi) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of the Borrowers; (vii) any breach of this Agreement or any other Loan Document by any of the Borrowers; (viii) the occurrence or continuance of an insolvency proceeding with respect to the Borrowers; (ix) the fact that an Event of Default or a Default shall have occurred and be continuing; (x) the fact that the Five Year Termination Date shall have passed or this Agreement or the Five Year Commitments hereunder shall have been terminated; and (xi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing. (j) In addition to amounts payable as provided in Section 9.5, the Borrowers hereby agree to protect, indemnify, pay and save harmless the Issuing Bank and the Banks from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of 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, other than as a result of (A) the gross negligence or willful misconduct of the Issuing Bank as determined by a final judgment of a court of competent jurisdiction or (B) subject to the following clause (ii), the wrongful dishonor by the Issuing Bank of a proper demand for payment made under any Letter of Credit, or (ii) the failure of the Issuing Bank to honor a drawing under any such Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority (all such acts or omissions herein called "Governmental Acts"). (k) As between the Borrowers and the Issuing Bank, the Borrowers assume all risks of the acts and omissions of, or misuse of the Letters of Credit 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 an 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 (even if the Issuing Bank shall have been notified thereof); (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) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of the Borrowers against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among the Borrowers and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, facsimile, cable, telex or otherwise; (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, and none of the above shall affect or impair, or prevent the vesting of, any of the Issuing Bank's rights or powers hereunder. In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by the Issuing Bank under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not create any liability of the Issuing Bank to the Borrowers or any Bank. 2.9 Interest Rates and Payment Dates. The Borrowers shall pay interest in respect of the outstanding unpaid principal amount of the 364 Day Loans and the Five Year Loans as selected by it from the Base Rate or LIBOR Rate set forth below applicable thereto, it being understood that, subject to the provisions of this Agreement, the Borrowers may select different interest rates and different Interest Periods to apply simultaneously to Loans comprising different Tranches and may convert to or renew one or more interest rates with respect to all or any portion of Loans comprising any Tranche, provided, that there shall not be at any one time outstanding more than five (5) Tranches in the aggregate under the 364 Day Facility and eight (8) Tranches in the aggregate under the Five Year Facility (excluding Swing Line Loans). If at any time the designated rate applicable to any Loan made by any Bank exceeds such Bank's highest lawful rate, the rate of interest on such Bank's Loan shall be limited to such Bank's highest lawful rate. Interest on the principal amount of each Loan made in an Optional Currency shall be paid by the Borrowers in such Optional Currency. (a) Subject to the provisions of Section 2.10, (i) each Base Rate Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be) at a rate per annum equal to the Base Rate, and (ii) each Swing Line Loan shall bear interest at the Base Rate or another rate to which the Borrowers and the Swing Line Bank agree. (b) Subject to the provisions of Section 2.10, each LIBOR Loan shall bear interest at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days, provided that, for Loans made in an Optional Currency for which a 365-day basis is the only market practice available to the Agent, such rate shall be calculated on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be) equal to the LIBOR Rate for the Interest Period in effect for such LIBOR Loan plus the Applicable Margin. (c) Interest on each 364 Day Loan and Five Year Loan shall be payable in arrears on each Interest Payment Date applicable to such Loan; provided, that (i) interest accruing on overdue amounts pursuant to Section 2.10 shall be payable on demand as provided in such Section and (ii) accrued and unpaid interest on such Loans shall be payable on the 364 Day Termination Date or the Five Year Termination Date, as the case may be. Interest on each Swing Line Loan shall be payable on the day such Swing Line Loan becomes due, including the Five Year Termination Date. (d) As soon as practicable the Agent shall notify the Borrowers and the Banks of (i) each determination of a LIBOR Rate and (ii) the effective date and the amount of each change in the interest rate on a LIBOR Loan or Base Rate Loan. Each determination of an interest rate by the Agent, pursuant to any provision of this Agreement (including this Section 2.9 and Section 2.10) shall be conclusive and binding on the Borrowers and the Banks in the absence of clearly demonstrable error). At the request of the Borrowers, the Agent shall deliver to the Borrowers a statement showing the quotations used by it in determining any interest rate pursuant to subsections 2.9(a) and (b). 2.10 Default Interest. Upon the occurrence of and during the continuance of an Event of Default under subsection 7.1(a) or (f), the outstanding principal amount of the Loans and, to the extent permitted by law, accrued and unpaid interest thereon and any other amount payable hereunder, shall bear interest from the date of such occurrence at a rate per annum which is equal to two percent (2%) in excess of the Base Rate (after as well as before judgment). Upon the occurrence of and during the continuance of an Event of Default other than under subsection 7.1(a) or (f), the outstanding principal amount of the Loans and, to the extent permitted by law, accrued and unpaid interest thereon and any other amounts payable hereunder, shall bear interest from the date that the Agent, at the written request of the Required Banks, shall send notice to the Company of the application of the default rate at a rate per annum which is equal to two percent (2%) in excess of the Base Rate (after as well as before judgment). 2.11 Pro Rata Treatment of Loans and Payments; Facility Fees. (a) Except as required under Section 2.13, each borrowing by the Borrowers hereunder, each payment or prepayment of principal of the Loans (other than the Swing Line Loans), each payment of interest on such Loans, each payment of Facility Fees and Letter of Credit Fees, and each reduction of the 364 Day Commitments and the Five Year Commitments, shall be made pro rata among the Banks in accordance with their respective 364 Day Commitment Percentages or Five Year Commitment Percentages, as the case may be. (b) Except as provided in subsection 2.1(d), each borrowing of a Swing Line Loan, each payment or prepayment of principal of a Swing Line Loan, each payment of interest on the Swing Line Loans and each reduction of the Swing Line Commitment shall be for the sole account of the Swing Line Bank. (c) Each Bank agrees that in computing such Bank's portion of any borrowing to be made hereunder, the Agent may, in its discretion, round each Bank's percentage of such borrowing to the next higher or lower whole Dollar amount. 2.12 Payments. (a) The Borrowers shall make each payment (including principal of or interest on any borrowing or any fees or other amounts) hereunder not later than 11:00 a.m., Philadelphia time, on the date when due to the Agent at its offices set forth in Section 9.2 for the ratable accounts of the Banks in Dollars in immediately available funds; provided that, any payments of principal of or interest on a Loan in an Optional Currency shall be made not later than the time that the Borrowers shall be notified by the Agent for payments with respect to such Optional Currency, on the date due in immediately available funds at the Lending Office at which such Loan was made in such funds as may then be customary for the settlement of international transactions in such other Optional Currency. Such payments shall be made without set-off or counterclaim of any kind. The Agent shall distribute to the applicable Banks any payments received by the Agent promptly upon receipt in like funds as received. The Agent shall promptly distribute such amounts to the applicable Banks in immediately available funds. The Agent's and each Bank's statement of account, ledger or other relevant record shall, in the absence of manifest error, be conclusive as the statement of the amount of principal of and interest on the Loans and other amounts owing under this Agreement (including the Equivalent Amounts of the applicable currencies where such computations are required). (b) Whenever any payment (including principal of or interest on any borrowing or any fees or other amounts) hereunder (other than payments on LIBOR Loans) shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, if applicable. Whenever any payment (including principal of or interest on any borrowing or any fees or other amounts) hereunder on a LIBOR Loan shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. (c) The entire amount of principal of and interest on any Loan made in an Optional Currency shall be repaid in the same Optional Currency in which such Loan was made, provided, however, that if it is impossible or illegal for the Borrowers to effect payment of a Loan in the Optional Currency in which such Loan was made, or if the Borrowers default in their obligations to do so, the Required Banks may at their option permit such payment to be made (i) at and to a different location, subsidiary, affiliate or correspondent of the Agent, or (ii) in the Equivalent Amount of Dollars or (iii) in an Equivalent Amount of such other currency (freely convertible into Dollars) as the Required Banks may solely at their option designate. Upon any events described in (i) through (iii) of the preceding sentence, the Borrowers shall make such payment and the Borrowers agree to hold each Bank harmless from and against any loss incurred by any Bank arising from the cost to such Bank of any premium, any costs of exchange, the cost of hedging and covering the Optional Currency in which such Loan was originally made, and from any change in the value of Dollars, or such other currency, in relation to the Optional Currency that was due and owing. Such loss shall be calculated for the period commencing with the first day of the Interest Period for such Loan and continuing through the date of payment thereof. Without prejudice to the survival of any other agreement of the Borrowers hereunder, the Borrowers' obligations under this subsection shall survive termination of this Agreement. 2.13 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available. (a) The Agent shall have the rights specified in subsection 2.13(c) if on any date on which a LIBOR Rate would otherwise be determined, the Agent shall have determined that adequate and reasonable means do not exist for ascertaining such LIBOR Rate. (b) The Agent shall have the rights specified in subsection 2.13(c) if at any time: (i) any Bank shall have determined that the making, maintenance or funding of any Loan to which a LIBOR Rate applies has been made unlawful by compliance by such Bank in good faith with any Law or any interpretation or application thereof by any Governmental Authority or with any request or directive of any such Governmental Authority (whether or not having the force of Law), or (ii) the Required Banks shall have determined that the making, maintenance or funding of any Loan to which a LIBOR Rate applies has been made impracticable by compliance by such Banks in good faith with any Law or any interpretation or application thereof by any Governmental Authority or with any request or directive of any such Governmental Authority (whether or not having the force of Law), or (iii) any Bank shall have determined that such LIBOR Rate will not adequately and fairly reflect the cost to such Bank of the establishment or maintenance of any such Loan, or (iv) any Bank shall have determined that after making all reasonable efforts, deposits of the relevant amount in Dollars or in the Optional Currency (as applicable) for the relevant Interest Period for a Loan to which a LIBOR Rate applies are not available to such Bank in the London interbank market. (c) In the case of any event specified in subsection 2.13(a) above, the Agent shall promptly so notify the Banks and the Borrowers thereof, and in the case of an event specified in subsection 2.13(b) above, such Bank(s) shall promptly so notify the Agent and endorse a certificate to such notice as to the specific circumstances of such notice, and the Agent shall promptly send copies of such notice and certificate to the other Banks and the Borrowers. Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of (A) the Banks, in the case of such notice given by the Agent, or (B) such Bank(s), in the case of such notice given by such Bank(s), to allow the Borrowers to select, convert to or renew a LIBOR Rate or select an Optional Currency (as applicable) shall be suspended until the Agent shall have later notified the Borrowers, or such Bank(s) shall have later notified the Agent, of the Agent's or such Bank(s)', as the case may be, determination that the circumstances giving rise to such previous determination no longer exist. If at any time the Agent makes a determination under subsection 2.13(a) and the Borrowers have previously notified the Agent of their selection of, conversion to or renewal of a LIBOR Rate and such interest rate has not yet gone into effect, such notification shall be deemed to provide for selection of, conversion to or renewal of a Base Rate Loan to the extent permitted hereunder. If any Bank notifies the Agent of a determination under subsection 2.13(b), the Borrowers shall, subject to the Borrowers' indemnification obligations under subsection 2.18 as to any Loan of the Bank to which a LIBOR Rate applies, on the date specified in such notice either (i) as applicable, convert such Loan (if not denominated in an Optional Currency) to the Base Rate or select a different Optional Currency or Dollars, or (ii) prepay such Loan in accordance with Section 2.15. Absent due notice from the Borrowers of conversion or prepayment, such Loan shall automatically be converted to the Base Rate upon such specified date unless such Loan is in an Optional Currency in which case such Loan shall be prepaid. 2.14 Termination, Reduction and Extension of Commitments. (a) The 364 Day Commitments shall be automatically terminated on the 364 Day Termination Date whereupon all 364 Day Loans and accrued interest thereon shall become due and payable. The Five Year Commitments and the Swing Line Commitment shall be automatically terminated on the Five Year Termination Date whereupon all Five Year Loans and Swing Line Loans and accrued interest thereon shall become due and payable. (b) Upon at least five Business Days' prior irrevocable written (including facsimile) notice to the Agent, the Borrowers may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Commitments; provided, however, that (i) each partial reduction of the Commitments under either Facility shall be in a minimum principal amount of $1,000,000 or in a whole multiple thereof, and (ii) the Commitments may not be reduced or terminated if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the Dollar Equivalent Facility Usage of the 364 Day Facility or the Five Year Facility at such time would exceed the aggregate amount of the 364 Day Commitments or the Five Year Commitments, as the case may be, at such time. (c) Each reduction in the 364 Day Commitments or the Five Year Commitments hereunder shall be made ratably among the Banks in accordance with their respective 364 Day Commitment Percentages or Five Year Commitment Percentages. The Borrowers shall pay to the Agent for the account of the applicable Banks on the date of each termination or reduction of the 364 Day Commitments or the Five Year Commitments, as the case may be, the Facility Fees on the amount of such Commitments so terminated or reduced accrued to the date of such termination or reduction. (d) (i) During the period beginning one hundred and twenty (120) days and ending sixty (60) days prior to the initial and any subsequent 364 Day Termination Date, the Borrowers may deliver to the Agent (which shall promptly transmit to each 364 Day Bank) a notice (an "Extension Request") requesting that the 364 Day Commitments be extended to the date three hundred sixty four (364) days after the 364 Day Termination Date then in effect (a "Subsequent 364 Day Termination Date"). Within thirty (30) days after its receipt of any such notice, each applicable Bank shall notify the Agent of its willingness or unwillingness so to extend its 364 Day Commitment. Any Bank that shall fail so to notify the Agent within such period shall be deemed to have declined to extend its 364 Day Commitment. In the event that 364 Day Banks holding at least 51% of the 364 Day Commitments shall approve an Extension Request (i) the respective 364 Day Commitments of the 364 Day Banks shall, without further act by any party hereto, be extended to the Subsequent 364 Day Termination Date but only with respect to the 364 Day Banks that have given such written approval, and (ii) the term "364 Day Termination Date" shall thereafter mean such Subsequent 364 Day Termination Date. Any such extension shall be evidenced by a written agreement among the Agent, the 364 Day Banks that have approved such Extension Request and the Borrowers, such agreement to be in form and substance acceptable to the Agent and the Banks. Except to the extent that a 364 Day Bank that did not give its written approval to such Extension Request (a "Declining Bank") is replaced prior to the 364 Day Termination Date in effect prior to such Extension Request (the "Declining Bank's 364 Day Maturity Date"), as provided in clause (ii) below, the 364 Day Loans and all interest, fees and other amounts owed to such Declining Banks with respect to the 364 Day Facility shall be paid in full on the Declining Bank's 364 Day Maturity Date. (ii) In the event that the 364 Day Banks holding at least 51% of the 364 Day Commitments shall have approved an Extension Request, the Borrowers shall have the right, but not the obligation, at their own expense, upon notice to a Declining Bank and the Agent, to replace such Declining Bank (in accordance with and subject to the restrictions contained in Section 9.6) at any time before the fifth (5th) day prior to the 364 Day Termination Date with a bank or other financial institution (a "Replacement Bank") willing to purchase all of the Declining Banks' interests under the 364 Day Facility and to approve the extension of the 364 Day Termination Date. Upon the request of the Agent, a Declining Bank will transfer and assign without recourse (in accordance with and subject to the restrictions contained in Section 9.6) all of its interests, rights and obligations under its 364 Day Commitment to the applicable Replacement Bank; provided, however, that (i) no such assignment shall conflict with any Requirement of Law, and (ii) such Declining Bank shall be paid in immediately available funds on the date of such assignment the principal of and interest accrued to the date of payment on the 364 Day Loans made by such Declining Bank and all other amounts accrued for such Declining Bank's account or owed to it hereunder with respect to its 364 Day Commitment and 364 Day Loans (including fees and any unpaid costs or expenses). The addition of such Replacement Bank or Banks shall be subject to the consent of the Agent, which consent will not be unreasonably withheld. (iii) At any time prior to the replacement of a Declining Bank pursuant to clause (ii) above, the Borrowers may, upon not less than 15 days' prior written notice to the Agent and such Declining Bank, elect to repay in full all 364 Day Loans held by such Declining Bank as of a Business Day (prior to such Declining Bank's 364 Day Maturity Date) set forth in such notice. In the event of such election by the Borrowers, the Borrowers shall pay to the Agent on the date designated in such notice, for the account of such Declining Bank, the outstanding amount of all 364 Day Loans and other sums payable to such Declining Bank hereunder and all amounts (if any) payable to such Declining Bank under Section 2.18 by reason of such payment. 2.15 Prepayment of Loans. (a) The Borrowers shall have the right at any time and from time to time to prepay Loans in the currency or currencies in which such Loans were made, in whole or in part, without premium or penalty (but in any event subject to subsection 2.18), upon prior written, telecopy or telephonic notice to the Agent given, in the case of Base Rate Loans, no later than 11:00 am., Philadelphia time, one Business Day before any proposed prepayment, and in the case of LIBOR Loans, no later than 11:00 a.m., Philadelphia time, three Business Days before any such proposed prepayment. In each case the notice shall specify the date, amount and currency of each such prepayment, whether the prepayment is of LIBOR Loans or Base Rate Loans, or a combination thereof, and, if a combination thereof, the amount allocable to each; provided, however, that each such partial prepayment shall be in the principal amount of at least (i) with respect to prepayments of Base Rate, $1,000,000 or in whole multiples of $100,000 in excess thereof, and (ii) with respect to prepayments of Loans in Dollars that bear interest at the LIBOR Rate, $3,000,000 or in whole multiples of $100,000 in excess thereof, and (iii) with respect to prepayment of Loans in an Optional Currency, the Dollar Equivalent of $3,000,000 or in whole multiples of $100,000 in excess thereof. (b) On the date of any termination or reduction of either of the 364 Day Commitments or the Five Year Commitments pursuant to Section 2.14, the Borrowers shall pay or prepay so much of the Loans as shall be necessary in order that the Dollar Equivalent Facility Usage at such time would not exceed the aggregate amount of the 364 Day Commitments or the Five Year Commitments at such time, as applicable. (c) If on any Computation Date the amount of the Dollar Equivalent Facility Usage of the 364 Day Facility or the Five Year Facility is greater than the aggregate amount of the 364 Day Commitments or the Five Year Commitments at such time, as applicable, as a result of a change in exchange rates between one or more Optional Currencies and Dollars, then the Agent shall notify the Borrowers of the same and the Borrowers shall within two (2) Business Days after receiving such notice prepay so much of the Loans as shall be necessary in order that the Dollar Equivalent Facility Usage of the Facilities shall not exceed the aggregate amount of the 364 Day Commitments or Five Year Commitments, as the case may be, after giving effect to such prepayments. (d) All prepayment notices shall be irrevocable. The principal amount of the Loans for which a prepayment notice is given, together with interest on such principal amount except with respect to Base Rate Loans, shall be due and payable on the date specified in such prepayment notice as the date on which the proposed prepayment is to be made in the currency in which such Loan was made. If the Borrowers prepay a Five Year Loan, all outstanding Swing Line Loans shall (unless the Swing Line Bank shall otherwise agree) first be repaid from the proceeds thereof. If the Borrowers fail to specify the applicable Tranche which the Borrowers are prepaying, the prepayment shall, subject to the immediately prior sentence, be applied to Base Rate Loans, then to Dollar LIBOR Loans and then to Optional Currency Loans, with payments applied to LIBOR Loans being applied in order of next maturing Interest Periods. Any prepayment hereunder shall be subject to the Borrowers' obligation to indemnify the Banks under Section 2.18. (e) Upon receipt of any notice of prepayment, the Agent shall promptly notify each Bank thereof. (f) Amounts prepaid pursuant to this Section (other than subsection (b) hereof) may be reborrowed, subject to the terms and conditions hereof. 2.16 Requirements of Law. (a) In the event that any change in any Requirement of Law or in the interpretation, or application thereof or compliance by any Bank with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Bank to any tax of any kind whatsoever with respect to this Agreement, any Note, any Letter of Credit, any Application or any LIBOR Loan made by it or payments by the Borrowers of principal, interest, fees or other amounts due from the Borrowers hereunder, or change the basis of taxation of payments to such Bank in respect thereof (except for taxes covered by Section 2.17 and changes in the rate of tax on the net income or franchise taxes of such Bank or a surcharge on the net income or franchise taxes of such Bank); (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans, letters of credit or other extensions of credit by, or any other acquisition of funds by, any Bank or any Lending Office of any Bank which is not otherwise included in the determination of the interest rate on such LIBOR Loan hereunder; or (iii) shall impose on any Bank or any Lending Office of any Bank any other condition; and the result of any of the foregoing is to increase the cost to such Bank or its Lending Office, by an amount which such Bank deems to be material, of making, converting into, continuing or maintaining LIBOR Loans, maintaining any commitment hereunder or issuing or participating in Letters of Credit or to reduce any amount receivable hereunder in respect thereof then, in any such case, the Borrowers shall as promptly as practicable pay such Bank, upon its demand, any additional amounts necessary to compensate such Bank for such increased cost or reduced amount receivable. If any Bank becomes entitled to claim any additional amounts pursuant to this subsection, it shall as promptly as practicable notify the Company, through the Agent, of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection setting out in reasonable detail the calculation thereof, submitted by such Bank, through the Agent, to the Company shall be conclusive in the absence of clearly demonstrable error. This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder. (b) In the event that any Bank shall have determined that any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Bank or any corporation controlling such Bank with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing the rate of return on such Bank's or such corporation's capital as a consequence of its obligations hereunder or under any Letter of Credit to a level below that which such Bank or such corporation could have achieved but for such change or compliance (taking into consideration such Bank's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, the Borrowers shall as promptly as practicable pay such Bank, upon its demand, such additional amount or amounts as will compensate such Bank for such reduction. If any Bank becomes entitled to claim any additional amounts pursuant to this subsection, it shall as promptly as practicable notify the Company, through the Agent, of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection submitted by such Bank, through the Agent, to the Company shall be conclusive in the absence of clearly demonstrable error. This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder. (c) Each Bank agrees that it will use reasonable efforts in order to avoid or to minimize, as the case may be, the payment by the Borrowers of any additional amount under subsection 2.16(a) or (b); provided, however, that no Bank shall be obligated to incur any expense, cost or other amount in connection with utilizing such reasonable efforts. (d) Failure or delay on the part of any Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital ("Costs") shall not constitute a waiver of such Bank's right to demand such compensation; provided that the Borrowers shall not be under any obligation to compensate any Bank under paragraph (a) or (b) above with respect to Costs with respect to any period prior to the date that is three months prior to the date such Bank knew or should reasonably have been expected to be aware of (i) the circumstances giving rise to such Costs, (ii) the fact that such circumstances would in fact result in a claim for increased compensation by reason of such Costs, and (iii) the exact amount of such Costs; provided further that the foregoing limitation shall not apply to any Costs arising out of the retroactive application of any law, regulation, rule, guideline or directive as aforesaid within such three month period. 2.17 Taxes. (a) All payments made by the Borrowers hereunder and under each Note shall be made free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges, or withholdings, and all liabilities with respect thereto (excluding, in the case of the Agent and each Bank, net income taxes and franchise or gross receipts taxes imposed on the Agent or such Bank, as the case may be, as a result of a present or former connection between the jurisdiction of the government or taxing authority imposing such tax and the Agent or such Bank (excluding a connection arising solely from the Agent or such Bank having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or the Notes)) (all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and withholdings being hereinafter called "Taxes"). If the Borrowers shall be required by Law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Agent and each Bank receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers shall timely pay the full amount deducted to the relevant tax authority or other authority in accordance with applicable Law. (b) In addition, the Borrowers agree to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges, or similar levies which arise from any payment made hereunder or from the execution, delivery, or registration of, or otherwise with respect to, this Agreement or any Note (hereinafter referred to as "Other Taxes"). (c) The Borrowers shall indemnify the Agent and each Bank for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this subsection) paid by the Agent or any Bank and any liability (including penalties, interest, and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date the Agent or a Bank makes written demand therefor. (d) Within 30 days after the date of any payment of any Taxes by the Borrowers, if available, the Borrowers shall furnish to the Agent and each Bank, at its address referred to herein, the original or a certified copy of a receipt evidencing payment thereof. (e) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in subsections 2.17(a) through (d) shall survive the payment in full of principal and interest hereunder and under any instrument delivered hereunder. (f) Each Bank that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver to the Borrowers and the Agent (i) two duly completed copies of United States Internal Revenue Service Form W-8ECI or W-8BEN or successor applicable form, as the case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form. Each such Bank also agrees to deliver to the Borrowers and the Agent two further copies of the said Form W-8ECI or W-BEN and Form W-8 or W-9, or successor applicable forms or other manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrowers, and such extensions or renewals thereof as may reasonably be requested by the Borrowers or the Agent, unless in any such case an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Bank from duly completing and delivering any such form with respect to it and such Bank so advises the Company and the Agent. Each such Bank shall certify (i) in the case of a Form W-8ECI or W-BEN, that it is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes and (ii) in the case of a Form W-8 or W-9 or successor applicable form, that it is entitled to an exemption from United States backup withholding tax. (g) Notwithstanding the foregoing subsections 2.17(a) through (e), the Borrowers shall not be required to pay any additional amounts to any Bank in respect of United States withholding tax pursuant to such subsections if (i) the obligation to pay such additional amounts would not have arisen but for a failure by such Bank to comply with the requirements of subsection 2.17(f) or (ii) such Bank shall not have furnished the Company with such forms listed in subsection 2.17(f) and shall not have taken such other steps as reasonably may be available to it under applicable tax laws and any applicable tax treaty or convention to obtain an exemption from, or reduction (to the lowest applicable rate) of, such United States withholding tax. (h) If the Agent or any Bank receives a refund in respect of Taxes or Other Taxes paid by the Borrowers, which in the good faith judgment of the Agent or such Bank is allocable to such payment, it shall, if no Event of Default has occurred, promptly pay such refund to the Borrowers, net of all out-of-pocket expenses (including any taxes to which such Bank has become subject as a result of its receipt of such refund) of the Agent or such Bank incurred in obtaining such refund and without interest; provided, however, that the Borrowers agree to promptly return such refund (plus all out-of-pocket expenses including any penalties, interest or other charges imposed by the relevant governmental authority) to the Agent or the applicable Bank, as the case may be, if it receives notice from the Agent or such Bank that the Agent or such Bank is required to repay such refund to such governmental authority. Nothing contained in this Section 2.17(h) shall require the Agent or any Bank to make available its tax returns (or any other information relating to its taxes which it deems to be confidential) to the Borrowers or any other Person. 2.18 Indemnity. (a) The Borrowers jointly and severally agree to indemnify each Bank and to hold each Bank harmless from any loss or expense which such Bank may sustain or incur as a consequence of (i) default by the Borrowers in payment when due of the principal amount of or interest on any LIBOR Loan or Swing Line Loan, (ii) default by the Borrowers in making a borrowing of, conversion into or continuation of LIBOR Loans or Swing Line Loans which are not Base Rate Loans after the Borrowers have given a notice requesting the same in accordance with the provisions of this Agreement, (iii) default by the Borrowers in making any prepayment after the Borrowers have given a notice thereof in accordance with the provisions of this Agreement or (iv) the making of a prepayment (whether voluntary, mandatory, as a result of acceleration or otherwise) of LIBOR Loans or Swing Line Loans which are not Base Rate Loans on a day which is not the last day of an Interest Period with respect thereto (or, in the case of a Swing Line Loans on the date such Swing Line Loan is due), including, without limitation, in each case, any such loss or expense arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained. A certificate as to any amounts that a Bank is entitled to receive under this Section 2.18 submitted by such Bank, through the Agent, to the Company shall be conclusive in the absence of clearly demonstrable error and all such amounts shall be paid by the Borrowers promptly upon demand by such Bank. This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder. (b) For the purpose of calculation of all amounts payable to a Bank under this subsection, each Bank shall be deemed to have actually funded its relevant LIBOR Loan or Swing Line Loan through the purchase of a deposit bearing interest at the LIBOR Rate or the applicable rate on such Swing Line Loan, as the case may be, in an amount equal to the amount of that LIBOR Loan or Swing Line Loan, as the case may be, and having a maturity comparable to the relevant Interest Period or applicable period for such Swing Line Loan; provided, however, that each Bank may fund each of its LIBOR Loans, and the Swing Line Bank may fund its Swing Line Loans, in any manner it sees fit, and the foregoing assumptions shall be utilized only for the calculation of amounts payable under this subsection. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 2.19 Judgment Currency. (a) If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder or under a Note in any currency (the "Original Currency") into another currency (the "Other Currency"), the parties hereby agree, to the fullest extent permitted by Law, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase the Original Currency with the Other Currency after any premium and costs of exchange on the Business Day preceding that on which final judgment is given. (b) The obligation of the Borrowers in respect of any sum due from the Borrowers to any Bank hereunder shall, notwithstanding any judgment in an Other Currency, whether pursuant to a judgment or otherwise, be discharged only to the extent that, on the Business Day following receipt by any Bank of any sum adjudged to be so due in such Other Currency, such Bank may in accordance with normal banking procedures purchase the Original Currency with such Other Currency. If the amount of the Original Currency so purchased is less than the sum originally due to such Bank in the Original Currency, the Borrowers jointly and severally agree, as a separate obligation and notwithstanding any such judgment or payment, to indemnify such Bank against such loss. 2.20 Borrowers' Representative. Each of the Borrowers hereby appoints the Company as its non-exclusive representative, and grants to the Company an irrevocable power of attorney to act as its attorney-in-fact, with regard to all matters relating to this Agreement and each of the other Loan Documents, including, without limitation, execution and delivery of any Notice of Borrowing, and amendments, supplements, waivers or other modifications hereto or thereto, receipt of any notices hereunder or thereunder and receipt of service of process in connection herewith or therewith and making all elections as to interest rates and interest payment dates. (In such capacity, the Company is herein referred to as the "Borrowers' Representative.") The Agent and the Banks shall be entitled to rely exclusively on the Borrowers' Representative's authority so to act in each instance without inquiry or investigation, and each of the Borrowers hereby agrees to indemnify and hold harmless the Agent and the Banks for any losses, costs, delays, errors, claims, penalties or charges arising from or out of the Borrowers' Representative's actions pursuant to this Section 2.20 and the Agent's and the Banks' reliance thereon and hereon. Notice from the Borrowers' Representative shall be deemed to be notice from all of the Borrowers and notice to the Borrowers' Representative shall be deemed to be notice to all of the Borrowers. Nothing in this Section 2.20 shall vitiate or be held contrary to the Borrowers' representations and covenants regarding the Loans or the net worth or solvency of the Borrowers made herein or in any of the Loan Documents. 2.21 European Monetary Union. (a) If, as a result of the implementation of the European monetary union, (i) any Optional Currency ceases to be lawful currency of the nation issuing the same and is replaced by the Euro, or (ii) any Optional Currency and the Euro are at the same time recognized by any governmental authority of the nation issuing such currency as lawful currency of such nation and the Agent shall so request in a notice delivered to the Borrowers, then any amount payable hereunder by the Borrowers in such Optional Currency shall instead be payable in the Euro and the amount so payable shall be determined by translating the amount payable in such Optional Currency to the Euro at the exchange rate recognized by the European Central Bank for the purpose of implementing the European monetary union. Prior to the occurrence of the event or events described in clauses (i) and (ii) of the preceding sentence, each amount payable hereunder in any Optional Currency will, except as otherwise provided herein, continue to be payable only in that Optional Currency. (b) The Borrowers agree, at the request of the Agent, to compensate the Agent or any Bank for any loss, cost, expense or reduction in return that the Agent or such Bank shall reasonably determine shall be incurred or sustained by the Agent or such Bank as a result of the implementation of the European monetary union and that would not have been incurred or sustained but for the transactions provided for herein. A certificate of the Agent or such Bank setting forth the determination of the amount or amounts necessary to compensate the Agent or such Bank shall be delivered to the Borrowers through the Agent and shall be conclusive absent manifest error so long as such determination is made on a reasonable basis. The Borrowers shall pay the Agent or such Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof. (c) The Borrowers agree at the time of or at any time following the implementation of any changes to the European monetary union, to use reasonable efforts to enter into an agreement amending this Agreement in order to reflect the implementation of such changes, and to place the Banks and the Borrowers in the position with respect to the settlement of payments of the Euro as they would have been with respect to the settlement of the Optional Currency it replaced. 2.22 Foreign Borrower Obligations. (a) Notwithstanding the joint and several liability of the Borrowers under this Agreement, the obligations of each Foreign Borrower on account of principal and interest and Reimbursement Obligations shall be limited to the principal amount advanced to such Foreign Borrower and its Subsidiaries and reimbursement of draws under Letters of Credit issued for the account of such Foreign Borrower and its Subsidiaries and, in each case, interest thereon. Each Foreign Borrower shall be liable only for its pro rata share of all fees and expenses and other sums due hereunder (other than principal and interest on the Loans) based upon the ratio of Loans outstanding to such Foreign Borrower to the total amount of Loans outstanding hereunder. (b) Any Foreign Borrower may from time to time deliver a termination notice to the Agent requesting that it no longer be a party hereto. Such termination shall be effective two Business Days after receipt by the Agent so long as all obligations of such Foreign Borrower hereunder have been paid in full (including principal, interest and other amounts) and no Letter of Credit issued for the account or benefit of such Foreign Borrower is outstanding; provided that, to the extent this Agreement provides for the survival of certain provisions upon termination hereof, such surviving provisions shall survive a termination under this subsection with respect to any such Foreign Borrower. Following receipt of such notice, no further Loans may be borrowed by such Foreign Borrower hereunder, unless such Foreign Borrower shall thereafter rejoin this Agreement as a Borrower pursuant to the joinder provisions of Section 5.9 hereof. 2.23 Change of Lending Office. Each Bank agrees that, upon the occurrence of any event giving rise to the operation of Sections 2.16 or 2.17 with respect to such Bank, it will, if requested by the Borrowers, use reasonable efforts (subject to overall policy considerations of such Bank) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Bank, cause such Bank and its lending office(s) to suffer no economic, legal, regulatory or other disadvantage, and provided, further, that nothing in this Section shall affect or delay the required performance of any of the obligations of the Borrowers or the rights of any Bank pursuant to Sections 2.16 or 2.17. 2.24. Substitution of Banks. Upon the receipt by the Borrowers from any Bank (an "Affected Bank") of a notice under Section 2.13(b) or a claim under Section 2.16 or 2.17, the Borrowers may: (a) request one or more of the other Banks to acquire and assume all or part of such Affected Bank's Loans and Commitment; or (b) replace such Affected Bank by designating another bank or financial institution that is willing to acquire such Loans and assume such Commitment; provided that (i) such replacement does not conflict with any Requirement of Law, (ii) no Default or Event of Default shall have occurred and be continuing at the time of such replacement, (iii) the replacement bank or institution shall purchase, at par, all Loans, accrued interest and other amounts owing to such replaced Bank on and as of the date of replacement, (iv) the Borrowers shall be liable to such replaced Bank under Section 2.18 if any LIBOR Loan owing to such replaced Bank shall be prepaid (or purchased) other than on the last day of the Interest Period relating thereto and shall pay any such amounts to such Bank on the date of such replacement, (v) the replacement bank or institution, if not already a Bank, shall be reasonably satisfactory to the Agent, (vi) the replaced Bank shall be obligated to make such replacement in accordance with the provisions of Section 9.6 (provided that the Borrowers or replacement Bank shall be obligated to pay the registration and processing fee) and (vii) the Borrowers shall pay all additional amounts (if any) required pursuant to Sections 2.16 or 2.17, as the case may be, to the extent such additional amounts were incurred on or prior to the consummation of such replacement. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agent and the Banks to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, each of the Borrowers hereby represents and warrants to the Agent and each Bank that: 3.1 Financial Condition. (a) The consolidated balance sheet of the Company and its consolidated Subsidiaries as at December 31, 1999 and the related consolidated statements of income and of cash flows for the period ended on such date, copies of which have heretofore been furnished to each Bank, present fairly the consolidated financial condition of the Company and its consolidated Subsidiaries as at such date, and the consolidated results of their operations and their consolidated cash flows for the period then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved. Neither the Company nor any of its consolidated Subsidiaries had, at the date of the most recent balance sheet referred to above, any material Guaranty Obligation, liability for taxes, or any long-term lease or unusual forward or long-term commitment, including, without limitation, any interest rate or foreign currency swap or exchange transaction, which is required by GAAP to be but is not reflected in the foregoing statements or in the notes thereto. (b) The unaudited consolidated balance sheet of the Company and its consolidated Subsidiaries as at March 31, 2000 and the related unaudited consolidated statements of income and of cash flows for the three-month period ended on such date, certified by a Responsible Officer, copies of which have heretofore been furnished to each Bank, present fairly the consolidated financial condition of the Company and its consolidated Subsidiaries as at such date, and the consolidated results of their operations and their consolidated cash flows for the three-month period then ended (subject to normal year-end audit adjustments). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved. Neither the Company nor any of its consolidated Subsidiaries had, at the date of the balance sheet referred to above, any material Guaranty Obligation, liability for taxes, or any long-term lease or unusual forward or long-term commitment, including, without limitation, any interest rate or foreign currency swap or exchange transaction, which is required by GAAP to be but is not reflected in the foregoing statements or in the notes thereto. 3.2 No Change. Since December 31, 1999, there has been no development or event nor any prospective development or event which has had or could reasonably be expected to have a Material Adverse Effect. 3.3 Corporate Existence; Compliance with Law. Each of the Borrowers and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate or other power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified to transact business and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect, and (d) is in compliance with all Requirements of Law except to the extent that its failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 3.4 Corporate Power; Authorization; Enforceable Obligations. Each of the Borrowers has the corporate or other power, authority, and legal right to make, deliver and perform this Agreement, the Applications and each other Loan Document to which it is a party and to borrow hereunder and has taken all necessary corporate or other action to authorize the Extensions of Credit on the terms and conditions of this Agreement and each other Loan Document to which it is a party and to authorize the execution, delivery and performance of this Agreement and each other Loan Document to which it is a party. No consent or authorization of, filing with or other act by or in respect of, any Governmental Authority or any other Person (including stockholders and creditors of the Borrowers) is required in connection with the Extensions of Credit hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement, the Notes, the Applications or any other Loan Document. This Agreement has been and each other Loan Document to which it is a party will be, duly executed and delivered on behalf of such Borrower. This Agreement constitutes and each other Loan Document when executed and delivered will constitute, a legal, valid and binding obligation of the Borrowers party thereto enforceable against such Borrowers in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 3.5 No Legal Bar. The execution, delivery and performance of this Agreement, the Notes, the Applications and the other Loan Documents by the Borrowers, the Extensions of Credit extended hereunder and the use of the proceeds thereof will not violate any Requirement of Law or Contractual Obligation of any Borrower or any of its Subsidiaries and will not result in, or require, the creation or imposition of any Lien on any properties or revenues of any Borrower pursuant to any such Requirement of Law or Contractual Obligation. 3.6 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrowers, threatened against any Borrower or any of their respective Subsidiaries or against any of its or their respective properties or revenues (a) with respect to this Agreement, the Notes, the other Loan Documents or any of the transactions contemplated hereby, or (b) as to which there is a reasonable likelihood of an adverse determination and which, if adversely determined, could have a Material Adverse Effect. 3.7 No Default. Neither the Company, any other Borrower nor any of its or their Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 3.8 Taxes. Each of the Borrowers has filed or caused to be filed all tax returns which, to its knowledge, are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves, if any, in conformity with GAAP have been provided on the books of the Company or its Subsidiaries, as the case may be); no federal tax Lien has been filed against any of the Borrowers or any of their Subsidiaries. 3.9 Federal Regulations. No part of the proceeds of any Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U or for any purpose which violates the provisions of Regulation U or any other Regulations of the Board of Governors of the Federal Reserve System. If requested by any Bank or the Agent, the Borrowers will furnish to the Agent and each Bank a statement to the foregoing effect in conformity with the requirements of FR Form U-l referred to in said Regulation U. No part of the proceeds of the Loans hereunder will be used for any purpose which violates, or which is inconsistent with, the provisions of Regulation X. 3.10 ERISA. Each Plan (such representations in respect of any Multiemployer Plan being made to the best knowledge of each Borrower) has complied in all material respects with the applicable provisions of ERISA and the Code. No prohibited transaction or accumulated funding deficiency (each as defined in subsection 7.1(i)) or Reportable Event has occurred with respect to any Single Employer Plan. The present value of all accrued benefits under each Single Employer Plan of which any Borrower or a Commonly Controlled Entity is a sponsor (based on those assumptions used to fund the Plans), as calculated by such Borrower's actuaries, did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of the Plans allocable to such benefits. Neither any Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan and neither any Borrower nor any Commonly Controlled Entity would become subject under ERISA to any liability if any Borrower or any such Commonly Controlled Entity were to withdraw completely from any Multiemployer Plan as of the valuation date most closely preceding the date this representation is made or deemed made. Such Multiemployer Plans are neither in Reorganization as defined in Section 4241 of ERISA nor Insolvent as defined in Section 4245 of ERISA. The present value (determined using actuarial and other assumptions which are reasonable in respect of the benefits provided and the employees participating) of the liability of the Borrowers and each Commonly Controlled Entity for post-retirement benefits to be provided to their current and former employees under Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all such Plans allocable to such benefits. Neither any Borrower nor any Commonly Controlled Entity has any or has received notice of any liability under the Coal Industry Retiree Health Benefit Act of 1992. Neither a Reportable Event nor an "accumulated funding deficiency" within the meaning of Section 412 of the Code or Section 302 of ERISA has occurred during the five-year period to the date on which this representation is made or deemed made with respect to any Single Employer Plan or Multiemployer Plan. No termination of a Single Employer Plan has occurred, and no Lien on assets of any of the Borrowers or any Commonly Controlled Entity in favor of the PBGC or a Plan has arisen during such five-year period. 3.11 Investment Company Act. None of the Borrowers is an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. 3.12 Public Utility Holding Company Act. No Borrower is subject to regulation as a "holding company", subject to regulation as an "affiliate" of a "holding company", or subject to regulation as a "subsidiary company" of a "holding company", in each case under the Public Utility Holding Company Act of 1935, as amended. 3.13 Environmental Matters. Except to the extent that all of the following could not reasonably be expected to have a Material Adverse Effect: (a) The Properties do not contain, and have not previously contained, in, on, or under, including, without limitation, the soil and groundwater thereunder, any Materials of Environmental Concern in amounts or concentrations that constitute or constituted a violation of, or reasonably could give rise to liability under Environmental Laws. (b) The Properties and all operations and facilities at the Properties are in compliance, and have in the last five years been in compliance with all Environmental Laws, and there is no contamination at, under or about the Properties or violation of any Environmental Law with respect to the Properties or the business operated by any Borrower or any Subsidiary thereof which could interfere with the continued operation of any of the Properties or impair the fair saleable value of any thereof. None of the Borrowers nor any of their Subsidiaries have assumed any liability of any Person under Environmental Laws. (c) Neither the Company nor any other Borrower nor any of their Subsidiaries has received or is aware of any claim, notice of violation, alleged violation, non-compliance, investigation or advisory action or potential liability regarding environmental matters or compliance of Environmental Law with regard to the Properties which has not been satisfactorily resolved by the Company or such other Borrower or Subsidiary, nor is the Company nor any other Borrower or Subsidiary aware or have reason to believe that any such action is being contemplated, considered or threatened. (d) Materials of Environmental Concern have not been generated, treated, stored, transported, disposed of, at, on, from or under any of the Properties by any of the Borrowers nor any of their Subsidiaries, nor have any Materials of Environmental Concern been transferred by any of the Borrowers or any of their Subsidiaries from the Properties to any other location except in either case in the ordinary course of business of the Borrowers or any Subsidiary thereof in compliance with all Environmental Laws and such that it could not reasonably be expected to give rise to liability under any applicable Environmental Law. (e) There are no governmental, administrative actions or judicial proceedings pending or, to the best knowledge of each Borrower and its Subsidiaries after reasonable inquiry, contemplated or threatened under any Environmental Laws to which the Company or any Subsidiary is or will be named as a party with respect to the Properties, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to any of the Properties. (f) There has been no release or threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operation of the Company or any of its Subsidiaries in connection with the Properties or otherwise in connection with the business operated by the Company or any of its Subsidiaries in violation of or in amounts or in a manner that could reasonably be expected to give rise to liability under any Environmental Law. 3.14 No Material Misstatements. No financial statement, exhibit or schedule furnished by or on behalf of any Borrower to the Agent or any Bank in connection with the negotiation of this Agreement, any Note or any other Loan Document contains any misstatement of fact, or omitted or omits to state any fact necessary to make the statements therein not misleading under the circumstances under which they were made or given, where such misstatement or omission would be material to the interests of the Banks with respect to the performance of one or more Borrowers of its or their obligations hereunder or thereunder. 3.15 Title to Properties. The Borrowers have good and marketable title to or valid leasehold interest in all material properties, assets and other rights which they purport to own or lease or which are reflected as owned or leased on their respective books and records, free and clear of all Liens and encumbrances except Permitted Liens, and subject to the terms and conditions of the applicable leases, except for minor defects in title that do not interfere in any material respect with their ability to conduct their businesses as presently conducted. All leases of property are in full force and effect without the necessity for any consent which has not previously been obtained upon consummation of the transactions contemplated hereby unless the failure to be in effect or to obtain such consent would not have a Material Adverse Effect. 3.16 Intellectual Property. Each of the Borrowers owns, or is licensed to use, all trademarks, tradenames, copyrights, technology, know-how and processes necessary for the conduct of its business as currently conducted (the "Intellectual Property"), except for those as to which the failure to own or license could not reasonably be expected to have a Material Adverse Effect. No claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property, nor does such Borrower know of any valid basis for any such claim which could reasonably be expected to have a Material Adverse Effect. The use of such Intellectual Property by the Borrowers and their Subsidiaries does not infringe the rights of any Person, except for such claims and infringements that, in the aggregate, do not have a Material Adverse Effect. 3.17 List of Subsidiaries. All of the Subsidiaries of each Borrower as of the date hereof are listed on Schedule 3.17 to this Agreement under its name, and the respective number of shares of authorized Capital Stock and issued and outstanding Capital Stock are as set forth on such schedule. 3.18 Solvency. Each of the Borrowers is, and after receipt and application of the initial Loans hereunder will be, solvent such that: (a) the fair value of its assets (including without limitation the fair salable value of the goodwill and other intangible property of such Borrower) is greater than the total amount of its liabilities, including without limitation, Guaranty Obligations, (b) the present fair salable value of its assets (including without limitation the fair salable value of the goodwill and other intangible property of such Borrower) is not less than the amount that will be required to pay the probable liability on its debts as they become absolute and matured, and (c) it is able to realize upon its assets and pay its debts and other liabilities and commitments (including Guaranty Obligations) as they mature in the normal course of business. Each Borrower (a) does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature, and (b) is not engaged in a business or transaction, or about to engage in a business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice and industry in which it is engaged. 3.19 Insurance. All insurance policies and bonds maintained by the Borrowers and their Subsidiaries or any replacements thereof provide adequate coverage from reputable and financially sound insurers in amounts sufficient to insure the assets and risks of the Borrowers and their Subsidiaries in accordance with prudent business practice in the industry of the Borrowers and their Subsidiaries. 3.20 Year 2000. Prior to January 1, 2000, the Borrowers reviewed the areas within its business and operations which could be adversely affected by, and developed a program to address on a timely basis, the risk that certain computer applications used by the Borrowers may be unable to recognize and perform properly date-sensitive functions involving dates prior to and after December 31, 1999 (the "Year 2000 Problem"). The Year 2000 Problem did not result in, and is not reasonably expected to result in, any Material Adverse Effect. SECTION 4. CONDITIONS PRECEDENT 4.1 Conditions to Closing. This Agreement shall become effective upon the satisfaction of each of the following conditions precedent: (a) Credit Agreement and Notes. The Agent shall have received (i) this Agreement, (A) executed and delivered by a duly authorized officer of each Borrower, with a counterpart for each Bank, and (B) executed and delivered by a duly authorized officer of each Bank, (ii) for the account of each 364 Day Bank, a 364 Day Note, (iii) for the account of each Five Year Bank, a Five Year Note and (iv) a Swing Line Note for the account of the Swing Line Bank, in the case of clauses (ii), (iii) and (iv) hereof, conforming to the requirements hereof and executed by a duly authorized officer of each Borrower. (b) Corporate Proceedings; No Default. The Agent shall have received, with a counterpart for each Bank, a certificate of the Secretary or an Assistant Secretary of each Borrower dated as of the Closing Date certifying (A) that attached thereto is a true and complete copy of the resolutions, in form and substance satisfactory to the Agent, of the Board of Directors of such Borrower authorizing (i) the execution, delivery and performance of this Agreement, the Notes and the other Loan Documents to which it is a party, and (ii) the Extensions of Credit contemplated hereunder and that such resolutions attached thereto have not been amended, modified, revoked or rescinded, (B) as to the incumbency and specimen signature of each officer executing any Loan Document on behalf of a Borrower and (C) that the representations contained in Section 3 are true and correct, that the Borrowers are in compliance with all covenants contained herein and there exists no Default or Event of Default after giving effect to the initial Loans hereunder. (c) Corporate Documents. The Agent shall have received, with a counterpart for each Bank, true and complete copies of the articles or certificate of incorporation certified by the Secretary of State or similar official of the state of organization of each Borrower, and the by-laws of each Borrower, in each case, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of such Borrower. The documents and certifications of the Secretary or an Assistant Secretary contemplated in this subsection may be included within the certificate contemplated by subsection 4.1(b) above. (d) Fees and Expenses. The Agent shall have received (i) the Closing Fee and the fees required to be paid on the Closing Date pursuant to the Fee Letter and (ii) all other fees and expenses due and payable hereunder on or before the Closing Date (if then invoiced), including, without limitation, the reasonable fees and expenses accrued through the Closing Date of Ballard Spahr Andrews & Ingersoll, LLP, counsel to the Agent in connection with the transactions contemplated by the Loan Documents. (e) Legal Opinion. The Agent shall have received the executed legal opinion of Dechert Price & Rhoads, counsel to the Borrowers, substantially in the form of Exhibit E. (f) Good Standing. The Agent shall have received certificates of good standing, subsistence and/or status dated a recent date from the Secretary of State or appropriate taxing or other authorities in the jurisdiction of incorporation or organization of each Borrower other than Foreign Borrowers. (g) Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be satisfactory in form and substance to the Agent, and the Agent shall have received such other documents and legal opinions in respect of any aspect or consequence of the transactions contemplated hereby or thereby as it shall reasonably request. 4.2 Conditions to Each Extension of Credit. The agreement of each Bank to make any Extension of Credit requested to be made by it on any date (including, without limitation, its initial Extension of Credit) is subject to the satisfaction of the following conditions precedent: (a) Existing Credit Arrangements. On or before the initial Extension of Credit, the Existing Credit Agreement shall have been terminated and all Indebtedness thereunder shall have been repaid in full, all collateral (if any) pledged to secure such Indebtedness shall be released and executed Uniform Commercial Code termination statements shall either have been filed or be provided to the Agent. (b) Representations and Warranties. Each of the representations and warranties made by each Borrower herein or which are contained in any certificate, document or financial or other statement furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of such date as if made on and as of such date. (c) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Extensions of Credit requested to be made on such date. Each request by the Borrowers for an Extension of Credit hereunder shall constitute a representation and warranty by the Borrowers as of the date of such Extension of Credit that the conditions contained in this Section 4.2 have been satisfied. SECTION 5. AFFIRMATIVE COVENANTS Each of the Borrowers hereby agrees that, so long as either the 364 Day Commitments or the Five Year Commitments remain in effect, any Note or Letter of Credit remains outstanding and unpaid, or any other amount is owing to any Bank or the Agent hereunder, such Borrower shall: 5.1 Financial Statements. Furnish to each Bank: (a) as soon as available, but in any event not later than 90 days after the close of each fiscal year of the Company, a copy of the annual audit report for such year for the Company and its consolidated Subsidiaries, including therein a consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of such fiscal year, and related consolidated statements of income and retained earnings and changes in cash flows of the Company and its consolidated Subsidiaries for such fiscal year, all in reasonable detail, prepared in accordance with GAAP applied on a basis consistently maintained throughout the period involved and with the prior year with such changes thereon as shall be approved by the Company's independent certified public accountants, such financial statements to be certified by PriceWaterhouseCoopers LLP or other nationally recognized independent certified public accountants selected by the Company, without a "going concern" or like qualification or exception or qualification arising out of the scope of the audit (it being understood that delivery of the Company's report on form 10-K as filed with the Securities and Exchange Commission shall satisfy the provisions of this subsection); and (b) as soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal year of the Company, unaudited consolidated financial statements of the Company and its consolidated Subsidiaries, including therein (i) a consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of such fiscal quarter, (ii) the related consolidated statements of income and retained earnings of the Company and its consolidated Subsidiaries, and (iii) the related consolidated statement of changes in cash flows of the Company and its consolidated Subsidiaries all for the period from the beginning of such fiscal quarter to the end of such fiscal quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the corresponding figures for the like period of the preceding fiscal year; all in reasonable detail, prepared in accordance with GAAP applied on a basis consistently maintained throughout the period involved and with prior periods and accompanied by a certificate of a Responsible Officer of the Company stating that the financial statements fairly present the financial condition of the Company and its consolidated Subsidiaries as of the date and for the periods covered thereby (subject to normal year-end audit adjustments) (it being understood that delivery of the Company's report on form 10-Q as filed with the Securities and Exchange Commission shall satisfy the provisions of this subsection). 5.2 Certificates; Other Information. Furnish to each Bank: (a) concurrently with the delivery of the financial statements referred to in subsection 5.1(a), a certificate of the Company's independent certified public accountants reporting on such financial statements stating that in making the examination necessary for certifying such financial statements no knowledge was obtained of any Default or Event of Default, except as specifically indicated; (b) concurrently with the delivery of the financial statements referred to in subsections 5.1(a) and 5.1(b), a certificate of a Responsible Officer of the Company (each a "Compliance Certificate") showing in detail the calculations demonstrating compliance with the financial covenants set forth in Section 6.1, together with a certificate of a Responsible Officer of the Company stating that, to the best of his or her knowledge, each of the Borrowers during such period has kept, observed, performed and fulfilled each and every covenant and condition contained in this Agreement and in the Notes and the other Loan Documents to which it is a party and that such officer has obtained no knowledge of any Default or Event of Default except as specifically indicated; if the Compliance Certificate shall indicate that such officer has obtained knowledge of a Default or Event of Default, such Compliance Certificate shall state what efforts the Borrowers are making to cure such Default or Event of Default; and (c) promptly, such additional financial and other information as the Agent or any Bank may from time to time reasonably request. 5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature (including but not limited to all taxes, assessments and governmental charges and levies upon them or upon any of their respective income, profits or property prior to the date on which penalties attach thereto), except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Company or its Subsidiaries, as the case may be. 5.4 Maintenance of Existence. Except as otherwise permitted in Section 6.3, preserve, renew and keep in full force and effect its corporate existence and take all reasonable action to maintain all rights, privileges and franchises necessary in the normal conduct of its business; comply with all Contractual Obligations and Requirements of Law, except to the extent that failure to comply therewith could not in the aggregate, reasonably be expected to have a Material Adverse Effect. 5.5 Maintenance of Insurance; Property. (a) Insure its properties and assets against loss or damage by fire and such other insurable hazards as such assets are commonly insured (including fire, extended coverage, property damage, worker's compensation, public liability and business interruption insurance) and against other risks in such amounts as similar properties and assets are insured by prudent companies in similar circumstances carrying on similar businesses, and with reputable and financially sound insurers, including self insurance to the extent customary. (b) Maintain in good repair, working order and condition (ordinary wear and tear and casualty excepted) in accordance with the general practice of other businesses of similar character and size, all of those properties useful or necessary to its business, and, from time to time, each of the Company and its Subsidiaries will make or cause to be made all appropriate repairs, renewals or replacements thereof, in each case, except as would not, individually or in the aggregate, have a Material Adverse Effect. 5.6 Inspection of Property; Books and Records; Discussions. Keep proper books of records and account in conformity with GAAP and all Requirements of Law; and upon reasonable notice permit representatives of any Bank to visit and inspect any of its properties and examine and make abstracts from any of its books and records during normal business hours and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Company and its Subsidiaries with officers and employees of the Company and its Subsidiaries and with their independent certified public accountants. 5.7 Notices. Promptly give notice to the Agent and each Bank of: (a) the occurrence of any Default or Event of Default; (b) any (i) default or event of default under any Contractual Obligation of any Borrower or any Subsidiary thereof or (ii) litigation, investigation or proceeding which may exist at any time between any Borrower or any Subsidiary thereof and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could have a Material Adverse Effect; (c) any litigation or proceeding affecting any Borrower or any Subsidiary thereof which, if adversely determined, could have a Material Adverse Effect, as reasonably determined by the Company's corporate counsel; (d) the following events, as soon as possible and in any event within 30 days after any Borrower knows or has reason to know thereof: (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, any Lien in favor of PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or any Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan or (iii) an assessment of liability under the Coal Industry Retiree Health Benefit Act of 1992; and (e) an event which has had or could reasonably be expected to have a Material Adverse Effect. Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Borrowers and their Subsidiaries propose to take with respect thereto. 5.8 Environmental Laws. (a) Comply with, and require compliance by all tenants and all subtenants, if any, with, all Environmental Laws and obtain and comply with and maintain, and require that all tenants and subtenants obtain and comply with and maintain, any and all licenses, approvals, registrations or permits required by Environmental Laws, except in each case to the extent that failure to so comply or obtain or maintain such documents could not reasonably be expected to have a Material Adverse Effect; (b) Comply with all final lawful and binding orders and directives of all Governmental Authorities respecting Environmental Laws; and (c) Defend, indemnify and hold harmless the Agents and the Banks, and their respective employees, agents, officers, directors, successors and assigns from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to any violation of or noncompliance with or liability under any Environmental Laws, or any orders, requirements or demands of Governmental Authorities related thereto which in each case relate to or arise in connection with any Borrower or any of their Subsidiaries, any Property or any activities relating to any other property or business of a Borrower or its Subsidiaries or the enforcement of any rights provided herein or in the other Loan Documents, including, without limitation, attorneys' and consultants' fees, response costs, investigation and laboratory fees, court costs and litigation expenses, except to the extent that any of the foregoing arise out of the gross negligence or willful misconduct of any of the foregoing enumerated parties. This indemnity shall continue in full force and effect regardless of the termination of this Agreement and the payment of the Notes. 5.9 Notice and Joinder of New Subsidiaries. Notify the Agent as soon as practicable of its ownership of any Subsidiary that is not a Borrower in which the aggregate amount of loans and investments made by the Borrowers in such Subsidiary, or the assets of which, exceeds $5,000,000, and, unless such Subsidiary is a Foreign Subsidiary, cause such Subsidiary to execute and deliver to the Agent within sixty (60) days after the date such Subsidiary is acquired or otherwise exceeds the $5,000,000 threshold set forth above, a Joinder and Assumption Agreement pursuant to which it shall, among other things, become a Borrower hereunder. Within sixty (60) days after the Closing Date, the Borrowers shall cause West Pharmaceutical Services Cleveland, Inc., West Pharmaceutical Services Canovanas, Inc., West Pharmaceutical Services of Delaware, Inc., West Pharmaceutical Services Vega Alta, Inc. and Paco Laboratories, Inc. to become Borrowers hereunder by executing and delivering to the Agent a Joinder and Assumption Agreement. The Company may elect at any time to have any Foreign Subsidiary become a Borrower hereunder (subject to the provisions of Section 2.22(a) hereof) by executing and delivering to the Agent a Joinder and Assumption Agreement. 5.10 Use of Proceeds. Use the proceeds of the Loans (i) for working capital and general corporate purposes in the ordinary course of business including to pay all or a portion of the purchase price for Permitted Acquisitions and repurchases of Capital Stock of the Company and (ii) to repay Indebtedness under the Existing Credit Agreement. 5.11 Subsequent Credit Terms. Notify the Agent in writing prior to entering into any new credit arrangement or any amendment or modification of any existing credit arrangement, in each case providing debt financing of $5,000,000 or more, pursuant to which any of the Borrowers agrees to (a) financial covenants, (b) other than with respect to Capital Leases or purchase money financing, limitations on liens or (c) limitations on incurring debt, which in any such case are less favorable in any material respect to any of the Borrowers than those contained in this Agreement (any such less favorable provisions, the "New Provisions"). Effective upon any Borrower's entry into any such agreement, amendment or modification, this Agreement, at the option of the Required Banks in their sole discretion, shall be and shall be deemed to be immediately amended to add the New Provisions (until such agreement is terminated and all amounts owing thereunder are repaid, at which point the New Provisions shall no longer be effective); provided, however, that the foregoing shall not be applicable to or be deemed to affect any provision of this Agreement if any such agreement, amendment or modification is more favorable to such Borrower. Each of the Borrowers hereby agrees promptly to execute and deliver any and all such documents and instruments and to take all such further actions as the Agent may, in its sole discretion, deem necessary or appropriate to effectuate the provisions of this Section 5.11. SECTION 6. NEGATIVE COVENANTS Each of the Borrowers hereby agrees that, so long as any Commitments remain in effect, any Note or Letter of Credit remains outstanding and unpaid, or any other amount is owing to any Bank or Agent hereunder, such Borrower shall not and shall not permit any of its Subsidiaries to, directly or indirectly: 6.1 Financial Condition Covenants. (a) Leverage Ratio. As of the last day of any fiscal quarter of the Company, permit the Leverage Ratio to be greater than .55 to 1. (b) Interest Coverage Ratio. As of the last day of any fiscal quarter of the Company commencing with the fiscal quarter ending June 30, 2000, permit the Interest Coverage Ratio for the period of four consecutive fiscal quarters ending on such date to be less than 2.50 to 1. 6.2 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for Permitted Liens. 6.3 Limitations on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets, except that: (a) any Subsidiary of the Company may be merged or consolidated with or into the Company (provided that the Company shall be the continuing or surviving corporation) or with or into any Borrower (provided that such Borrower shall be the continuing or surviving corporation or such surviving or continuing corporation becomes a Borrower hereunder); and (b) any Subsidiary of the Company may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) (i) to a Borrower, (ii) to any Subsidiary (other than a Foreign Subsidiary) not required under Section 5.9 to be a Borrower hereunder both immediately before and after such transaction, or (iii) as permitted by Section 6.4 of this Agreement; and (c) subject to the terms of Section 5.9 hereof, any Subsidiary of the Company that is not a Borrower may be merged or consolidated with any other Subsidiary of the Company which is not a Borrower; provided, that immediately after any such transaction referred to in paragraphs (a), (b) and (c) above and after giving effect thereto, each of the Borrowers is in compliance with this Agreement and no Default or Event of Default shall have occurred and be continuing or result from such transaction. 6.4 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business or assets (including, without limitation, receivables and leasehold interests and Capital Stock or equity interests in any Subsidiary that is or is required to be a Borrower hereunder), whether now owned or hereafter acquired, except: (a) any sale, transfer or lease of assets in the ordinary course of business which are no longer necessary or required in the conduct of the Borrowers' or their Subsidiaries' business; (b) transactions involving the sale or lease of inventory in the ordinary course of business; (c) the sale or discount without recourse of accounts receivable arising in the ordinary course of business in connection with the compromise or collection in the ordinary course of business of such accounts receivable; (d) as permitted by Section 6.3; and (e) in addition to the above subsections 6.4(a) through 6.4(d), conveyances, sales, leases, assignments, transfers or other dispositions of assets of the Borrowers or any Subsidiary thereof; provided, that the aggregate amount of such conveyances, sales, leases, assignments, transfers and other dispositions, determined in accordance with GAAP, in any fiscal year of the Company does not exceed ten percent (10%) of the Company's consolidated total assets as of the beginning of such fiscal year, and provided, further, that such conveyances, sales, leases, assignments, transfers or other dispositions are for consideration which the officers or Board of Directors of the applicable Borrower or Subsidiary deems to be fair and reasonable. 6.5 Limitation on Distributions. At any time make (or incur any liability to make) or pay any Distribution (whether in cash or property or obligations of a Borrower or any Subsidiary thereof) in respect of the Borrowers or any Subsidiary thereof (other than a Distribution payable to the Company or from a Subsidiary to another Subsidiary), unless as of the declaration date after giving effect to the declaring, paying or making of any such Distribution, no Default or Event of Default would exist. 6.6 Transactions with Affiliates. Except as expressly permitted in this Agreement or between the Company and any Subsidiary or between Subsidiaries, directly or indirectly enter into any transaction or arrangement whatsoever (including without limitations any purchase, sale, lease or exchange of property or the rendering of any service) or make any payment to or otherwise deal with any Affiliate, except, as to all of the foregoing in the ordinary course of and pursuant to the reasonable requirements of such Borrower's and its Subsidiaries' business and upon fair and reasonable terms no less favorable to such Borrower or such Subsidiary, as the case may be, than would be obtained in a comparable arm's length transaction with a Person not an Affiliate. 6.7 Priority Debt. Permit, at any time, Priority Debt to exceed 18% of the sum of (a) Total Debt at such time and (b) shareholders' equity for the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP as of the end of the most recently completed fiscal quarter of the Company for which financial statements have been delivered to the Banks pursuant to Section 5.1(a) or (b), as the case may be. 6.8 Limitation on Acquisitions. Purchase, lease or otherwise acquire (in a single transaction or a series of related transactions) all or any substantial amount of the property or assets (including, without limitation, Capital Stock) of any Person except for Permitted Acquisitions. 6.9 Fiscal Year. Permit the fiscal year of a Borrower to end on a day other than December 31. 6.10 Limitation on Conduct of Business. Permit the general nature of the business of the Borrowers and their Subsidiaries, taken as a whole, to be substantially changed from the general nature of the businesses in which the Borrowers and their Subsidiaries are engaged on the date of this Agreement. SECTION 7. EVENTS OF DEFAULT 7.1 Events of Default. If any of the following events shall occur and be continuing: (a) A Borrower (i) shall fail to pay when due any principal on any Note or any Reimbursement Obligation when due, or (ii) shall fail to pay any other amount payable hereunder or thereunder (including without limitation any fees) within five (5) Business Days after the date due in accordance with the terms thereof or hereof; or (b) Any representation or warranty made or deemed made by a Borrower herein or in any other Loan Document or which is contained in any certificate or financial statement furnished at any time under or in connection with this Agreement shall prove to have been incorrect or misleading in any material respect on or as of the date made or deemed made; or (c) A Borrower shall default in the observance or performance of any agreement contained in Section 6 of this Agreement; or (d) A Borrower shall default in the observance or performance of any other agreement contained in this Agreement (other than as provided in subsections (a) through (c) above) or any other Loan Document, and such default shall continue unremedied (if it is capable of being remedied in such period) for a period of thirty (30) days with respect to Sections 5.3, 5.4 or 5.8 of this Agreement and five (5) Business Days with respect to all other applicable provisions; or (e) A Borrower or any Subsidiary thereof shall (i) default in the payment of any principal of or interest on or any other amount payable on any Indebtedness (other than the Notes) or in the payment of any Guaranty Obligation, beyond the period of grace (not to exceed 30 days), if any, provided in the instrument or agreement under which such Indebtedness or Guaranty Obligation was created and the aggregate amount of such Indebtedness and/or Guaranty Obligations in respect of which such default or defaults shall have occurred is at least $10,000,000; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or Guaranty Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is (x) with respect to Section 10.3 of the Note Purchase Agreement or any similar covenant, to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Guaranty Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to become due and payable prior to its stated maturity or such Guaranty Obligation to become payable, with the giving of notice if required, and (y) with respect to all other defaults, events or conditions, to cause such Indebtedness to become due and payable prior to its stated maturity or such Guaranty Obligation to become payable; or (f) (i) A Borrower or any of its Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or a Borrower or any of its Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against a Borrower or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against a Borrower or any of its Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, satisfied, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) a Borrower or any of its Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) a Borrower or any of its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they generally become due; or (g) One or more judgments or decrees shall be entered against a Borrower or any of its Subsidiaries involving in the aggregate a liability (excluding any such judgments or orders which are fully covered by insurance, subject to any customary deductible, and under which the applicable insurance carrier has acknowledged such full coverage in writing) of $10,000,000 or more and all such judgments or decrees shall not have been vacated, discharged, settled, satisfied or paid, or stayed or bonded pending appeal, within 30 days from the entry thereof; or (h) Any Change of Control shall occur; or (i) Without limiting the covenants and representations made herein relating ERISA matters (i) any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Company or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or institution of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Banks, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Banks is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist in regard to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or (j) the Company shall cease to own, directly or indirectly, one hundred percent (100%) of the legal and beneficial ownership of each other Borrower except for directors qualifying shares or pursuant to a transaction permitted under Section 6.3 or Section 6.4; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to a Borrower, automatically the Total Commitments (including the obligations of the Issuing Bank to issue Letters of Credit and the Banks to participate therein) shall immediately terminate, and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement, the Notes and the other Loan Documents shall automatically and immediately become due and payable (including, without limitation, all Letter of Credit Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder), and (B) if such event is any other Event of Default, with the consent of the Required Banks, the Agent may, or upon the written request of the Required Banks, the Agent shall, (i) by notice to the Company declare the Total Commitments to be terminated forthwith, whereupon the Total Commitments and the obligations of the Banks to make Loans, and the obligation of the Issuing Bank to issue Letters of Credit and the Banks to participate in any Letters of Credit thereafter issued shall immediately terminate; (ii) by notice of default to the Company, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement, the Notes and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable (including, without limitation, all Letter of Credit Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder); and/or (iii) by notice to the Company require the Borrowers to, and the Borrowers shall thereupon, deposit in a non-interest bearing account with the Agent, as cash collateral for their obligations under this Agreement, the Notes and the Applications, an amount equal to the Letter of Credit Coverage Requirement, and the Borrowers hereby pledge to the Agent and the Banks, and grant to the Agent and the Banks a security interest in, all such cash as security for such obligations. Amounts held in such cash collateral account shall be applied by the Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrowers hereunder and under the Notes. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrowers hereunder and under the Notes shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Company. The Borrowers shall execute and deliver to the Agent, for the account of the Issuing Bank and the Letter of Credit Participants, such further documents and instruments as the Agent may request to evidence the creation and perfection of the within security interest in such cash collateral account. Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived. SECTION 8. THE AGENT 8.1 Appointment. Each Bank hereby irrevocably designates and appoints PNC Bank, National Association as the Agent of such Bank under this Agreement and the other Loan Documents, and each such Bank irrevocably authorizes PNC Bank, National Association, as the Agent for such Bank, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement and the other Loan Documents, the Agent shall not have any duties or responsibilities, except those expressly set forth herein or therein, or any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement and the other Loan Documents or otherwise exist against the Agent. PNC Bank, National Association agrees to act as the Agent on behalf of the Banks to the extent provided in this Agreement and the other Loan Documents. 8.2 Delegation of Duties. The Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to engage and pay for the advice and services of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible to the Banks for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care. 8.3 Exculpatory Provisions. Neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or the other Loan Documents (except for its or such Person's own gross negligence or willful misconduct) or (b) responsible in any manner to any of the Banks for any recitals, statements, representations or warranties made by a Borrower or any officer thereof contained in this Agreement, the other Loan Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, the Notes or the other Loan Documents or for any failure of the Borrowers (or any of them) to perform their obligations hereunder or thereunder. The Agent shall not be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or the other Loan Documents, or to inspect the properties, books or records of the Borrowers (or any of them). 8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to one or more of the Borrowers), independent accountants and other experts selected by such Agent. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement or the other Loan Documents unless it shall first receive such advice or concurrence of the Required Banks as it deems appropriate or it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement, the Notes or the other Loan Documents in accordance with a request of the Required Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks and all future holders of the Notes. 8.5 Notice of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless it has received notice from a Bank or a Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Agent receives such a notice, the Agent shall give notice thereof to the Banks. The Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Banks; provided, that unless and until the Agent shall have received such directions, it may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Banks. 8.6 Non-Reliance on Agent and Other Banks. Each Bank expressly acknowledges that neither the Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Agent hereinafter taken, including any review of the affairs of the Borrowers, shall be deemed to constitute any representation or warranty by the Agent to any Bank. Each Bank represents to the Agent that it has, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Borrowers and made its own decision to make its Loans hereunder and enter into this Agreement and each other Loan Document to which it is a party. Each Bank also represents that it will, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrowers. Except for notices, reports and other documents expressly required to be furnished to the Banks by the Agent hereunder, the Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Borrowers which may come into the possession of the Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 8.7 Indemnification. The Banks agree to indemnify the Agent in its capacity as such (to the extent not reimbursed by the Borrowers and without limiting the obligation, if any, of the Borrowers to do so) in Dollars, ratably according to their respective Total Commitment Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of this Agreement, the other Loan Documents, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided, that no Bank shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct. The agreements in this Section 8.7 shall survive the payment of the Notes and all other amounts payable hereunder. 8.8 Agent in Its Individual Capacity. The Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrowers (or any of them) as though the Agent were not the Agent hereunder. With respect to its Loans made or renewed by it and any Note issued to it and with respect to any Letter of Credit issued or participated in by it, the Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Bank and may exercise the same as though it were not the Agent, and the terms "Bank" and "Banks" shall include the Agent in its individual capacity. 8.9 Successor Agent. The Agent may resign as Agent upon 30 days' notice to the Banks and the Borrowers. If the Agent shall resign as Agent under this Agreement, then the Required Banks shall appoint from among the Banks a successor agent for the Banks, which appointment shall be subject to the approval of the Borrowers (which approval shall not be unreasonably withheld and shall not be required if there shall then exist a Default or Event of Default). If no successor agent shall have been so appointed by the Required Banks and shall have accepted such appointment within 60 days after the retiring Agent's giving of notice of resignation then the retiring Agent may, on behalf of the Banks, appoint an interim successor agent. Any interim successor agent appointed under the preceding sentence may be replaced at any time by a successor agent designated by the Required Banks and subject to the approval of the Borrowers (which approval shall not be unreasonably withheld and shall not be required if there shall then exist a Default or Event of Default). Any such successor agent shall succeed to the rights, powers and duties of the Agent, and the term "Agent" shall mean such successor agent effective upon its appointment, and the former Agent's rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement or any holders of the Notes. After any retiring Agent's resignation as Agent, the provisions of this Section 8.9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. 8.10 Beneficiaries. Except as expressly provided herein, the provisions of this Section 8 are solely for the benefit of the Agent and the Banks, and the Borrowers shall not have any rights to rely on or enforce any of the provisions hereof. In performing its functions and duties under this Agreement and the other Loan Documents, the Agent shall act solely as agent of the Banks and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for the Borrowers. SECTION 9. MISCELLANEOUS 9.1 Amendments and Waivers. Neither this Agreement, any Note any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section. With the written consent of the Required Banks, the Agent and the Borrowers may, from time to time, enter into written amendments (including letter amendments), supplements or modifications hereto and to the Notes and the other Loan Documents for the purpose of adding any provisions to this Agreement, the Notes or any other Loan Document or changing in any manner the rights of the Banks or of the Borrowers hereunder or thereunder or waiving, on such terms and conditions as the Agent may specify in such instrument, any of the requirements of this Agreement, the Notes or any other Loan Document or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall directly or indirectly (a) reduce the amount or extend the maturity of any Note, any Loan or any installment thereof, or reduce the rate of interest or extend the time of payment of interest thereon, or reduce any fee payable to any Bank hereunder or extend the period for payment thereof, or change the duration or the amount of any Bank's 364 Day Commitment and/or Five Year Commitment in each case without the consent of the Bank affected thereby or (b) or amend, modify or waive any provision of this Section or reduce the percentage specified in the definition of Required Banks, or consent to the assignment or transfer by the Borrowers of any of their rights and obligations under this Agreement, the Notes and the other Loan Documents, in each case without the written consent of all the Banks, or (c) amend, modify or waive any provision of Section 2.1(d) or any other provision affecting Swing Line Loans without the written consent of the then Swing Line Bank, or (d) amend, modify or waive any provision of Section 2.8 or any other provisions affecting Letters of Credit without the written consent of the Issuing Bank, or (e) amend, modify or waive any provision of Section 8 without the written consent of the then Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Banks and shall be binding upon the Borrowers, the Banks, the Agent and all future holders of the Notes. In the case of any waiver, the Borrowers, the Banks and the Agent shall be restored to their former position and rights hereunder and under the outstanding Notes, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. 9.2 Notices; Lending Offices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including electronic transmission, facsimile transmission or posting on a secured Web site), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or three days after being deposited in the mail, postage prepaid, or, in the case of facsimile transmission notice, when sent during normal business hours with electronic confirmation or otherwise when received, or in the case of electronic transmission, when received and in the case of posting on a secured Web site, upon receipt of (i) notice of such posting and (ii) rights to access such Web site, addressed as follows in the case of the Borrowers, and the Agent, the Swing Line Bank or the Issuing Bank, and as set forth in Schedule I in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the Notes: The Borrowers c/o West Pharmaceutical Services, Inc. or any of them: 101 Gordon Drive Lionville, PA 19341 Attention: Stephen M. Heumann Facsimile: 610-594-3014 The Agent, PNC Bank, National Association the Swing Line 1000 Westlakes Drive, Suite 200 Bank or the Berwyn, PA 19312 Issuing Bank: Attention: Amy T. Petersen Facsimile: (610) 725-5799 with a copy to: PNC Bank, National Association One PNC Plaza, 22nd Floor 249 Fifth Avenue Pittsburgh, PA 15222 Attention: Arlene Ohler Facsimile: 412-762-8672 provided that (a) any notice, request or demand to or upon the Agent, the Issuing Bank or the Banks pursuant to Sections 2.4, 2.5, 2.8, 2.14 and 2.15 or to or upon the Swing Line Bank, shall not be effective until received and (b) any notice of a Default or Event of Default hereunder shall be sent by facsimile or nationally recognized overnight courier. Schedule I lists the Lending Offices of each Bank. Each Bank may change its Lending Office by written notice to the other parties hereto. 9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Agent or any Bank, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 9.4 Survival of Representations and Warranties. All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement, the Notes and the other Loan Documents. 9.5 Payment of Expenses and Taxes. Each of the Borrowers jointly and severally agrees (a) to pay or reimburse the Agent for all its out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and the syndication of, this Agreement, the Notes, the other Loan Documents and any other documents executed and delivered in connection herewith, and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements of counsel to the Agent, (b) to pay or reimburse the Agent for all its out-of-pocket costs and expenses incurred in connection with any amendment, supplement or modification to this Agreement, the Notes and the other Loan Documents and any other documents executed and delivered in connection therewith, and the administration of the Facilities, including without limitation, the reasonable fees and disbursements of counsel, (c) pay or reimburse the Bank and each Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the Notes, the other Loan Documents and any such other documents, including, without limitation, reasonable fees and disbursements of counsel to the Agent and to the several Banks, (d) to pay, indemnify, and hold each Bank and the Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the Notes, the other Loan Documents and any such other documents, and (e) to pay, indemnify, and hold each Bank and the Agent harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions (whether sounding in contract, in tort or on any other ground), judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of or in any other way arising out of or relating to, this Agreement, the Notes, the other Loan Documents or any such other documents contemplated by or referred to herein or therein or any action taken by any Bank or the Agent with respect to the foregoing including, without limitation, any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Laws applicable to the operations of the Borrowers or their Subsidiaries (all the foregoing, collectively, the "indemnified liabilities"), provided, that the Borrowers shall have no obligation hereunder to the Agent or any Bank with respect to indemnified liabilities arising from the gross negligence or willful misconduct of such person. The agreements in this Section shall survive repayment of the Notes and all other amounts payable hereunder. 9.6 Successors and Assigns. (a) Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and permitted assigns of such party; and all covenants, promises and agreements by or on behalf of a Borrower, the Agent or the Banks that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. The Borrowers may not assign or transfer any of their rights or obligations under this Agreement or the other Loan Documents without the prior written consent of each Bank. (b) Each Bank may, in accordance with applicable law, sell to any Bank or Affiliate thereof and, with the consent of the Company and the Agent (which consents shall not be unreasonably withheld or delayed), to one or more banks or other financial institutions (each, a "Purchasing Bank") all or any part of its interests, rights and obligations under this Agreement, the Notes and the other Loan Documents (including all or a portion of its Total Commitment and the Loans at the time owing to it and the Notes held by it); provided, however, that (i) so long as the 364 Day Commitments or Five Year Commitments are in effect, such assignment shall be in an amount not less than $5,000,000 (or such lesser amount as the Company and the Agent shall agree in their sole discretion), (ii) the parties to each such assignment shall execute and deliver to the Agent and the Company for its acceptance an Assignment and Acceptance, together with the 364 Day Note and Five Year Note subject to such assignment and a processing and recordation fee of $3,000; provided that no fee shall be payable with respect to any assignment by a Bank to an Affiliate thereof, (iii) unless otherwise agreed by the Agent and the Company in their sole discretion, such assignment shall be of all or a pro rata portion of such assigning Bank's 364 Day Commitment and Five Year Commitment and the Loans (other than Swing Line Loans) thereunder (i.e. no Bank may sell a non-pro rata interest) and (iv) the Swing Line Commitment and all outstanding Swing Line Loans may only be assigned in their entirety to a Bank then having a Five Year Commitment. Upon acceptance and recording pursuant to paragraph (e) of this Section 9.6, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least five Business Days after the execution thereof, (A) such Purchasing Bank shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Bank under this Agreement and (B) the assigning Bank thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Bank's rights and obligations under this Agreement and the other Loan Documents, such Bank shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.16, 2.17, 2.18, 2.19, 5.8(c) and 9.5 (to the extent that such Bank's entitlement to such benefits arose out of such Bank's position as a Bank prior to the applicable assignment). To the extent that an assignment of all or any portion of a Bank's rights and obligations pursuant to this Section 9.6 would, at the time of such assignment, result in increased costs under Section 2.16 or 2.17 compared to those being charged by the assigning Bank prior to such assignment, then the Borrowers shall not be obligated to pay the Purchasing Bank such excess increased costs (although the Borrowers shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the assignment). Such Assignment and Acceptance shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Bank and the resulting amounts and percentages held by the Banks arising from the purchase by such Purchasing Bank of all or a portion of the rights and obligations of such assigning Bank under this Agreement, the Notes and the other Loan Documents. Notwithstanding any provision of this Section 9.6, the consent of the Company shall not be required for any assignment which occurs at any time when an Event of Default shall have occurred and be continuing. (c) By executing and delivering an Assignment and Acceptance, the assigning Bank thereunder and the Purchasing Bank thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Bank warrants that it is the legal and beneficial owner of the interest being assigned thereby, free and clear of any adverse claim and that its 364 Day Commitment and/or Five Year Commitment, and the outstanding balances of its Loans, without giving effect to assignments thereof which have not become effective, are as set forth in such Assignment and Acceptance, (ii) except as set forth in (i) above, such assigning Bank makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the other Loan Documents, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto, or the financial condition of the Borrowers or any Subsidiary thereof or the performance or observance by the Borrowers or any Subsidiary thereof of any of its or their obligations under this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (iii) such Purchasing Bank represents and warrants that it is legally authorized to enter into such Assignment and Acceptance; (iv) such Purchasing Bank confirms that it has received a copy of this Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (v) such Purchasing Bank will independently and without reliance upon the Agent, such assigning Bank or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents; (vi) such Purchasing Bank appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto; and (vii) such Purchasing Bank agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement and the other Loan Documents are required to be performed by it as a Bank including, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to Section 2.17 to deliver the forms prescribed by the Internal Revenue Service of the United States certifying as to the Purchasing Bank's exemption from United States withholding taxes with respect to all payments to be made to the Purchasing Bank under this Agreement. (d) The Agent shall maintain at its offices in Philadelphia, Pennsylvania a copy of each Assignment and Acceptance and the names and addresses of the Banks, and the Total Commitments of, and principal amount of the Loans owing to, each Bank pursuant to the terms hereof from time to time. Such information maintained by the Agent shall be conclusive in the absence of manifest error and the Borrowers, the Agent and the Banks may treat each Person whose name is recorded pursuant to the terms hereof as a Bank hereunder for all purposes of this Agreement. (e) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Bank and a Purchasing Bank (and in the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Company and the Agent) together with the Note or Notes subject to such assignment and the processing and recordation fee referred to in paragraph (b) above, the Agent shall promptly (i) accept such Assignment and Acceptance, (ii) record the information contained therein and (iii) give notice thereof to the Banks. Within five Business Days after receipt of notice, the Borrowers, at their own expense, shall execute and deliver to the Agent, in exchange for the surrender of the original Note(s) (A) with respect to the assignment of Loans of any Bank, a new Note to the order of such Purchasing Bank in an amount equal to the amount of each applicable commitment assumed and (B) if the assigning Bank has retained a 364 Day Commitment and/or Five Year Commitment, a new Note or Notes to the order of such assignor in the amount equal to each applicable Commitment retained by it. Such new Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note(s); such new Notes shall be dated the date of the surrendered Notes which they replace and shall otherwise be in substantially the form of Exhibit A-1 or Exhibit A-2 hereto, as applicable. Canceled Notes shall be returned to the Company. (f) Each Bank may without the consent of the Company or the Agent sell participations to one or more banks or other entities (each a "Participant") in any Loan owing to such Bank, any Note held by such Bank, any Commitment of such Bank or any other interest of such Bank hereunder and under the other Loan Documents, provided, however, that (i) such Bank's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, (ii) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Bank shall remain the holder of any such Note for all purposes under this Agreement and the other Loan Documents, (iv) the Borrowers, the Banks and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement and the other Loan Documents, (v) in any proceeding under the Bankruptcy Code such Bank shall be, to the extent permitted by law, the sole representative with respect to the obligations held in the name of such Bank, whether for its own account or for the account of any Participant, (vi) such Bank shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of this Agreement or the Note or Notes held by such Bank or any other Loan Document, other than any such amendment, modification or waiver with respect to any Loan or Commitment in which such Participant has an interest that forgives principal, interest or fees or reduces the interest rate or fees payable with respect to any such Loan or Commitment, postpones any date fixed for any regularly scheduled payment of principal of, or interest or fees on, any such Loan or releases any guarantor of such Loan. (g) If amounts outstanding under this Agreement and the Notes are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement and any Note to the same extent as if the amount of its participating interest were owing directly to it as a Bank under this Agreement or any Note, provided that in purchasing such participation such Participant shall be deemed to have agreed to share with the Banks the proceeds thereof as provided in Section 9.8. The Borrowers also agree that each Participant shall be entitled to the benefits of Sections 2.16, 2.17, 2.18, 2.19, 5.8(c) and 9.5 with respect to its participation in the Total Commitments and the Loans outstanding from time to time; provided, that no Participant shall be entitled to receive any greater amount pursuant to such Sections than the assigning Bank would have been entitled to receive in respect of the amount of the participation transferred by such assigning Bank to such Participant had no such transfer occurred. (h) If any Participant of a Bank is organized under the laws of any jurisdiction other than the United States or any state thereof, the assigning Bank, concurrently with the sale of a participating interest to such Participant, shall cause such Participant (i) to represent to the assigning Bank (for the benefit of the assigning Bank, the other Banks, the Agent and the Borrowers) that under applicable law and treaties no taxes will be required to be withheld by the Agent, the Borrowers or the assigning Bank with respect to any payments to be made to such Participant in respect of its participation in the Loans and (ii) to agree (for the benefit of the assigning Bank, the other Banks, the Agent and the Borrowers) that it will deliver the tax forms and other documents required to be delivered pursuant to subsection 2.17(f) and comply from time to time with all applicable U.S. laws and regulations with respect to withholding tax exemptions. (i) Any Bank may at any time assign all or any portion of its rights under this Agreement and the Notes issued to it to a Federal Reserve Bank; provided that no such assignment shall release a Bank from any of its obligations hereunder. 9.7 Disclosure of Information. Unless otherwise consented to by the Company in writing, each of the Banks and the Agent agrees to use reasonable precautions to keep confidential, in accordance with its customary procedures for handling confidential information of the same nature and in accordance with safe and sound banking practices, any non-public information supplied to it by the Borrowers pursuant to this Agreement; provided that nothing herein shall limit the disclosure of any such information (a) to the extent required by statute, rule, regulation or judicial process, (b) to counsel for any Bank or the Agent, (c) to bank examiners, auditors or accountants, (d) to the Agent or any other Bank, (e) in connection with any litigation to which any one or more of the Banks or the Agent is a party and (f) to any Participant or Purchasing Bank (or prospective Participant or Purchasing Bank) so long as such Participant or Purchasing Bank (or prospective Participant or Purchasing Bank) agrees to comply with the requirements of this section. 9.8 Adjustments; Set-off. (a) Except as provided in subsection 2.14(d) with respect to the 364 Day Loans of a Declining Bank, if any Bank (a "benefitted Bank") shall at any time receive any payment of all or part of its Loans or the Reimbursement Obligations owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in subsection 7.1(f), or otherwise), in a greater proportion than its Ratable Share of any such payment to or collateral received by any other Bank, if any, in respect of such other Bank's Loans or the Reimbursement Obligations owing to it, or interest thereon, such benefitted Bank shall purchase for cash from the other Banks such portion of each such other Bank's Loans owing to it, or shall provide such other Banks with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefitted Bank to share the excess payment or benefits of such collateral or proceeds ratably with each of the Banks; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefitted Bank, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest unless the benefitted Bank is required to pay interest thereon, in which case each Bank returning funds to the benefitted Bank shall pay its pro rata share of such interest. Each of the Borrowers, jointly and severally agrees that each Bank so purchasing a portion of another Bank's Loans may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Bank were the direct holder of such portion. (b) In addition to any rights and remedies of the Banks provided by law, upon the occurrence and during the continuance of an Event of Default, each Bank shall have the right, without prior notice to the Borrowers (or any of them), any such notice being expressly waived by the Borrowers to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrowers hereunder or under the Notes (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Bank to or for the credit or the account of one or more Borrowers. Each Bank agrees promptly to notify the Company and the Agent after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-off and application. 9.9 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Company, on behalf of the Borrowers, and each of the Banks. 9.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 9.11 Integration. This Agreement and the other Loan Documents represent the agreement of the parties hereto with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Agent or any Bank relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents. 9.12 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. 9.13 Submission To Jurisdiction; Waivers. Each of the Borrowers hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement or the Notes, or for recognition and enforcement of any judgement in respect thereof, to the non-exclusive general jurisdiction of the Courts of the Commonwealth of Pennsylvania, the courts of the United States of America for the Eastern District of Pennsylvania, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Company at its address set forth in Section 9.2 or at such other address of which the Agent shall have been notified pursuant thereto; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages. 9.14 Acknowledgments. Each of Borrowers hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement, the Notes and the other Loan Documents; (b) neither the Agent nor any Bank has any fiduciary relationship to the Borrowers (or any of them) and the relationship hereunder between the Agent and Banks, on the one hand, and the Borrowers, on the other hand, is solely that of debtor and creditor; and (c) no joint venture exists among the Banks or among the Borrowers (or any of them) and the Banks. 9.15 No Right of Contribution. On and after the occurrence of an Event of Default hereunder, no Borrower shall seek or be entitled to any reimbursement from any other Borrower, or be subrogated to any rights of the Banks against the Borrowers, in respect of any payments made pursuant to the Loan Documents, until all amounts owing to the Banks hereunder and under the Notes are paid in full. 9.16 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENT AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY MANDATORY COUNTERCLAIM THEREIN. IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Agreement as of the day and year first above written. WEST PHARMACEUTICAL SERVICES, INC. By: ________________________________ Name: _____________________________ Title: _______________________________ WEST PHARMACEUTICAL SERVICES OF FLORIDA, INC. By: ________________________________ Name: _____________________________ Title: _______________________________ WEST PHARMACEUTICAL SERVICES LAKEWOOD, INC. By: ________________________________ Name: _____________________________ Title: _______________________________ WEST PHARMACEUTICAL SERVICES GROUP LIMITED By: ________________________________ Name: _____________________________ Title: _______________________________ PNC BANK, NATIONAL ASSOCIATION, as a Bank and as Agent By:__________________________________ Name:_______________________________ Title:________________________________ FIRST UNION NATIONAL BANK, as a Bank By:__________________________________ Name:_______________________________ Title:________________________________ DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, as a Bank By:__________________________________ Name:_______________________________ Title:________________________________ By:__________________________________ Name:_______________________________ Title:________________________________ NATIONAL CITY BANK, as a Bank By:__________________________________ Name:_______________________________ Title:________________________________ THE CHASE MANHATTAN BANK, as a Bank By:__________________________________ Name:_______________________________ Title:________________________________ MELLON BANK, N.A., as a Bank By:__________________________________ Name:_______________________________ Title:________________________________ SCHEDULE I BANKS AND COMMITMENT INFORMATION
Bank and Lending Office(s) Commitments 364 Day Five Year Swing Line PNC Bank, National Association $14,444,444.45 $15,555,555.55 $15,000,000 1000 Westlakes Dr., Suite 200 Berwyn, PA 19312 Attention: Amy Petersen Facsimile: 610-725-5799 First Union National Bank $10,833,333.33 $11,666,666.67 $0 1339 Chestnut Street PA 1242 Philadelphia, PA 19107 Attention: Wynelle Farlow Facsimile: 215-786-5356 Dresdner Bank AG, New York $10,833,333.33 $11,666,666.67 $0 and Grand Cayman Branches 75 Wall Street New York, NY 10005 Attention: Richard Morris Facsimile: 212-429-2524 National City Bank $9,629,629.63 $10,370,370.37 $0 One South Board Street, 13th Floor Philadelphia, PA 19107 Attention: Thomas McDowell Facsimile: 267-256-40001 The Chase Manhattan Bank $9,629,629.63 $10,370,370.37 $0 One Riverfront Plaza, Second Floor Newark, NJ 07102 Attention: Thomas Conroy Facsimile: 973-353-6158 Mellon Bank, N.A. $9,629,629.63 $10,370,370.37 $0 610 W. Germantown Pike, Suite 200 Plymouth Meeting, PA 19462 Attention: Frank McGrane Facsimile: 610-941-4136 ------------------------------------------ Total Commitments $65,000,000 $70,000,000 $15,000,000
SCHEDULE II EXISTING LIENS SCHEDULE 3.17 SUBSIDIARIES Shares of Capital Stock Name Authorized Issued and Outstanding EXHIBIT A-1 FORM OF 364 DAY NOTE EXHIBIT A-2 FORM OF FIVE YEAR NOTE EXHIBIT A-3 FORM OF SWING LINE NOTE EXHIBIT B FORM OF ASSIGNMENT AND ACCEPTANCE EXHIBIT C FORM OF NOTICE OF BORROWING EXHIBIT D FORM OF JOINDER AND ASSUMPTION AGREEMENT EXHIBIT E FORM OF OPINION OF COUNSEL CREDIT AGREEMENT among WEST PHARMACEUTICAL SERVICES, INC. and Certain of Its Subsidiaries, as Borrowers, The Several Lenders From Time to Time Parties Hereto and PNC BANK, NATIONAL ASSOCIATION, as Agent and PNC CAPITAL MARKETS, INC., as Lead Arranger Dated as of July 26, 2000 $135,000,000 CREDIT FACILITY TABLE OF CONTENTS Page SECTION 1. DEFINITIONS........................................................1 1.1 Defined Terms.........................................................1 1.2 Other Definitional Provisions........................................20 SECTION 2. LOANS AND TERMS OF COMMITMENTS....................................21 2.1 The Loans............................................................21 2.2 Nature of Banks' Obligations with Respect to Loans...................24 2.3 Notes................................................................24 2.4 Procedure for 364 Day Loans and Five Year Loans......................25 2.5 Conversion and Continuation Options..................................27 2.6 Utilization of Commitments in Optional Currencies....................27 2.7 Fees.................................................................29 2.8 Letter of Credit Subfacility.........................................29 2.9 Interest Rates and Payment Dates.....................................34 2.10 Default Interest..................................................35 2.11 Pro Rata Treatment of Loans and Payments; Facility Fees...........35 2.12 Payments..........................................................36 2.13 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available....................................................37 2.14 Termination, Reduction and Extension of Commitments...............38 2.15 Prepayment of Loans...............................................40 2.16 Requirements of Law...............................................41 2.17 Taxes.............................................................42 2.18 Indemnity.........................................................44 2.19 Judgment Currency.................................................45 2.20 Borrowers' Representative.........................................45 2.21 European Monetary Union...........................................45 2.22 Foreign Borrower Obligations......................................46 2.23 Change of Lending Office..........................................47 2.24 Substitution of Banks.............................................47 SECTION 3. REPRESENTATIONS AND WARRANTIES....................................47 3.1 Financial Condition..................................................47 3.2 No Change............................................................48 3.3 Corporate Existence; Compliance with Law.............................48 3.4 Corporate Power; Authorization; Enforceable Obligations..............48 3.5 No Legal Bar.........................................................49 3.6 No Material Litigation...............................................49 3.7 No Default...........................................................49 3.8 Taxes................................................................49 3.9 Federal Regulations..................................................49 3.10 ERISA.............................................................49 3.11 Investment Company Act............................................50 3.12 Public Utility Holding Company Act................................50 3.13 Environmental Matters.............................................50 3.14 No Material Misstatements.........................................51 3.15 Title to Properties...............................................51 3.16 Intellectual Property.............................................52 3.17 List of Subsidiaries..............................................52 3.18 Solvency..........................................................52 3.19 Insurance.........................................................52 3.20 Year 2000.........................................................52 SECTION 4. CONDITIONS PRECEDENT..............................................53 4.1 Conditions to Initial Extension of Credit............................53 4.2 Conditions to Each Extension of Credit...............................54 SECTION 5. AFFIRMATIVE COVENANTS.............................................54 5.1 Financial Statements.................................................55 5.2 Certificates; Other Information......................................55 5.3 Payment of Obligations...............................................56 5.4 Maintenance of Existence.............................................56 5.5 Maintenance of Insurance; Property...................................56 5.6 Inspection of Property; Books and Records; Discussions...............56 5.7 Notices..............................................................57 5.8 Environmental Laws...................................................57 5.9 Notice and Joinder of New Subsidiaries...............................58 5.10 Use of Proceeds...................................................58 5.11 Subsequent Credit Terms...........................................58 SECTION 6. NEGATIVE COVENANTS................................................59 6.1 Financial Condition Covenants........................................59 6.2 Limitation on Liens..................................................59 6.3 Limitations on Fundamental Changes...................................59 6.4 Limitation on Sale of Assets.........................................59 6.5 Limitation on Distributions..........................................60 6.6 Transactions with Affiliates.........................................60 6.7 Priority Debt........................................................60 6.8 Limitation on Acquisitions...........................................61 6.9 Fiscal Year..........................................................61 6.10 Limitation on Conduct of Business.................................61 SECTION 7. EVENTS OF DEFAULT.................................................61 7.1 Events of Default....................................................61 SECTION 8. THE AGENT.........................................................64 8.1 Appointment..........................................................64 8.2 Delegation of Duties.................................................64 8.3 Exculpatory Provisions...............................................64 8.4 Reliance by Agent....................................................64 8.5 Notice of Default....................................................65 8.6 Non-Reliance on Agent and Other Banks................................65 8.7 Indemnification......................................................65 8.8 Agent in Its Individual Capacity.....................................66 8.9 Successor Agent......................................................66 8.10 Beneficiaries.....................................................66 SECTION 9. MISCELLANEOUS.....................................................66 9.1 Amendments and Waivers...............................................66 9.2 Notices; Lending Offices.............................................67 9.3 No Waiver; Cumulative Remedies.......................................68 9.4 Survival of Representations and Warranties...........................68 9.5 Payment of Expenses and Taxes........................................68 9.6 Successors and Assigns...............................................69 9.7 Disclosure of Information............................................72 9.8 Adjustments; Set-off.................................................72 9.9 Counterparts.........................................................73 9.10 Severability......................................................73 9.11 Integration.......................................................73 9.12 GOVERNING LAW.....................................................74 9.13 Submission To Jurisdiction; Waivers...............................74 9.14 Acknowledgments...................................................74 9.15 No Right of Contribution..........................................74 9.16 WAIVERS OF JURY TRIAL.............................................75 SCHEDULES SCHEDULE I Bank and Commitment Information SCHEDULE II Existing Liens SCHEDULE 3.17 Subsidiaries EXHIBITS EXHIBIT A-1 Form of 364 Day Note EXHIBIT A-2 Form of Five Year Note EXHIBIT A-3 Form of Swing Line Note EXHIBIT B Form of Assignment and Acceptance Agreement EXHIBIT C Form of Notice of Borrowing EXHIBIT D Form of Joinder and Assumption Agreement EXHIBIT E Form of Opinion of Counsel EX-27 4 0004.txt FDS -- ATY. 5 FDS FOR 3RD QUARTER 10-Q
5 This schedule contains summary financial information extracted from the financial statements included in the Company's Form 10-Q for the quarterly period ended September 30, 2000 and is qualified in its entirety by reference to such financial information. 1,000 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 41,600 0 67,800 0 41,600 182,900 505,200 269,500 562,000 78,100 192,000 0 0 4,300 215,100 562,000 324,900 324,900 243,900 243,900 0 0 9,600 20,300 6,200 14,700 0 0 0 14,700 1.02 1.02
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