-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, P33E9IxLSZ48gZavSZdEMgLw7BWscKBoPr9grnXnebjiaaHWEoF992oeRtGsQEy1 aN7viD1jlmhiDfmMGEwj2g== 0000051396-95-000010.txt : 19950512 0000051396-95-000010.hdr.sgml : 19950512 ACCESSION NUMBER: 0000051396-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: MSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MALLINCKRODT GROUP INC CENTRAL INDEX KEY: 0000051396 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 361263901 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00483 FILM NUMBER: 95537025 BUSINESS ADDRESS: STREET 1: 7733 FORSYTH BOULEVARD CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3148545299 MAIL ADDRESS: STREET 1: 7733 FORSYTH BLVD CITY: ST LOUIS STATE: MO ZIP: 63105-1820 FORMER COMPANY: FORMER CONFORMED NAME: IMCERA GROUP INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL MINERALS & CHEMICAL CORP DATE OF NAME CHANGE: 19900614 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF ___ THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-483 ______________________________ MALLINCKRODT GROUP INC. (Exact name of registrant as specified in its charter) New York 36-1263901 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7733 Forsyth Boulevard St. Louis, Missouri 63105-1820 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 314-854-5200 ______________________________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X. No . Applicable Only To Issuers Involved In Bankruptcy Proceedings During The Preceding Five Years: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes . No . Applicable Only To Corporate Issuers: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 76,633,149 shares excluding 10,483,140 treasury shares as of April 28, 1995. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED). The accompanying interim condensed consolidated financial statements of Mallinckrodt Group Inc. (the Company or Mallinckrodt) do not include all disclosures normally provided in annual financial statements. These financial statements, which should be read in conjunction with the consolidated financial statements contained in Mallinckrodt's 1994 Annual Report to Shareholders, are unaudited but include all adjustments which Mallinckrodt's management considers necessary for a fair presentation. These adjustments consist of normal recurring accruals except as discussed in Note 1 of the Notes to Condensed Consolidated Financial Statements. Interim results are not necessarily indicative of the results for the fiscal year. All references to years are to fiscal years ended June 30 unless otherwise stated. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In millions except per share amounts)
Quarter Ended Nine Months Ended March 31, March 31 1995 1994 1995 1994 - -------------------------------------------------------------------------------- Net sales $ 569.1 $ 486.7 $1,573.1 $1,397.9 Operating costs and expenses: Cost of goods sold 313.2 257.2 867.5 750.7 Selling, administrative and general expenses 144.2 132.6 414.3 380.2 Research and development expenses 23.5 24.0 71.3 68.3 Other operating (income) expense, net .7 .4 (3.3) (.6) -------- -------- --------- --------- Total operating costs and expenses 481.6 414.2 1,349.8 1,198.6 -------- -------- --------- --------- Operating earnings 87.5 72.5 223.3 199.3 Equity in pre-tax earnings of joint venture 6.3 4.8 16.5 11.8 Interest and other nonoperating income (expense), net (.2) .7 (1.0) .6 Interest expense (17.6) (10.3) (41.4) (28.3) -------- -------- --------- --------- Earnings from continuing operations before income taxes 76.0 67.7 197.4 183.4 Income tax provision 27.9 24.8 74.0 68.5 -------- -------- --------- --------- Earnings from continuing operations 48.1 42.9 123.4 114.9 Loss from discontinued operations (1.1) (.6) (2.7) (2.1) -------- -------- --------- --------- Net earnings 47.0 42.3 120.7 112.8 Preferred stock dividends (.1) (.1) (.3) (.3) -------- -------- --------- --------- Available for common shareholders $ 46.9 $ 42.2 $ 120.4 $ 112.5 ======== ======== ========= ========= Earnings per common share Continuing operations $.62 $.55 $1.59 $1.48 Discontinued operations (.01) (.01) (.03) (.03) ------- -------- ------- ------- Net earnings $.61 $.54 $1.56 $1.45 ======= ======== ======= ======= (See Notes to Condensed Consolidated Financial Statements on page 5.)
1 CONDENSED CONSOLIDATED BALANCE SHEET (In millions except share and per share amounts)
March 31, June 30, 1995 1994 - ---------------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 87.4 $ 87.9 Trade receivables, less allowances of $13.4 at March 31 and $11.1 at June 30 410.0 343.6 Inventories 448.3 376.9 Deferred income taxes 75.7 77.6 Other current assets 56.4 46.0 --------- --------- Total current assets 1,077.8 932.0 Investments and long-term receivables, less allowances of $13.6 at March 31 and $13.1 at June 30 158.7 147.0 Property, plant and equipment 1,555.6 1,396.0 Accumulated depreciation (570.7) (532.8) --------- --------- Net property, plant and equipment 984.9 863.2 Intangible assets 523.7 489.3 Deferred income taxes 2.5 2.0 --------- --------- Total assets $2,747.6 $2,433.5 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt $ 225.3 $ 147.8 Accounts payable 160.4 139.4 Accrued liabilities 349.4 356.0 Income taxes payable 31.5 25.4 Deferred income taxes 2.1 2.1 --------- --------- Total current liabilities 768.7 670.7 Long-term debt, less current maturities 591.5 522.0 Deferred income taxes 54.5 36.6 Accrued postretirement benefits 140.1 124.7 Other noncurrent liabilities and deferred credits 80.3 63.6 --------- --------- Total liabilities 1,635.1 1,417.6 Shareholders' equity: 4 Percent cumulative preferred stock 11.0 11.0 Common stock, par value $1, authorized 300,000,000 shares; issued 87,116,289 shares as of March 31 and June 30 87.1 87.1 Capital in excess of par value 269.0 268.2 Reinvested earnings 935.8 846.4 Marketable securities valuation allowance (2.2) (1.4) Foreign currency translation (10.0) (32.8) Treasury stock (178.2) (162.6) --------- --------- Total shareholders' equity 1,112.5 1,015.9 --------- --------- Total liabilities and shareholders' equity $2,747.6 $2,433.5 ========= ========= (See Notes to Condensed Consolidated Financial Statements on page 5.)
2 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions) Nine months ended March 31, 1995 1994 - -------------------------------------------------------------------------------- CASH FLOW - OPERATING ACTIVITIES Net earnings $ 120.7 $112.8 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 89.4 73.0 Postretirement benefits 8.7 5.3 Undistributed equity in earnings of joint venture (11.9) (9.0) Deferred income taxes 19.5 7.3 Gains on disposals of assets (.8) Other, net (20.1) (9.0) -------- ------- 205.5 180.4 Changes in noncash operating working capital: Accounts receivable (41.3) (12.3) Inventories (33.1) (18.2) Accounts payable, accrued liabilities and income taxes, net (18.6) (37.5) Other, net (4.3) 3.3 -------- ------- Net cash provided by operating activities 108.2 115.7 CASH FLOWS - INVESTING ACTIVITIES Capital expenditures (112.4) (122.0) Acquisition spending (99.2) (94.6) IFL dividend receivable 51.9 Proceeds from asset disposals 17.6 5.3 Short-term investments (1.7) Other, net (5.5) 4.7 -------- ------- Net cash used by investing activities (199.5) (156.4) CASH FLOWS - FINANCING ACTIVITIES Increase (decrease) in short-term debt 55.0 (7.4) Proceeds from long-term debt 93.0 198.2 Payments on long-term debt (15.3) (100.7) Issuance of Mallinckrodt common stock 4.1 8.5 Acquisition of treasury stock (14.7) Dividends paid (31.3) (28.0) -------- ------- Net cash provided by financing activities 90.8 70.6 -------- ------- Increase (decrease) in cash and cash equivalents (.5) 29.9 Cash and cash equivalents at beginning of period 87.9 51.3 -------- ------- Cash and cash equivalents at end of period $ 87.4 $81.2 ======== ======= (See Notes to Condensed Consolidated Financial Statements on page 5.)
3 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (In millions except per share amounts)
1995 1994 --------- --------- 4 Percent cumulative preferred stock Balance at June 30 and March 31 $ 11.0 $ 11.0 Common stock Balance at June 30 and March 31 87.1 87.1 Capital in excess of par value Balance at June 30 268.2 262.4 Stock options exercised .8 2.2 Restricted stock awards 1.7 --------- --------- Balance at March 31 269.0 266.3 Reinvested earnings Balance at June 30 846.4 780.3 Net earnings 120.7 112.8 Dividends 4 Percent cumulative preferred stock ($3.00 per share) (.3) (.3) Common stock ($.405 per share in 1995 and $.36 per share in 1994) (31.0) (27.7) --------- --------- Balance at March 31 935.8 865.1 Marketable securities valuation allowance Balance at June 30 (1.4) (2.2) Valuation adjustment (.8) 2.2 --------- --------- Balance at March 31 (2.2) Foreign currency translation Balance at June 30 (32.8) (56.4) Translation adjustment 22.8 (2.7) --------- --------- Balance at March 31 (10.0) (59.1) Treasury stock Balance at June 30 (162.6) (171.7) Purchase of common stock (14.7) Stock options exercised 3.3 6.3 Restricted stock awards (4.2) 2.0 --------- --------- Balance at March 31 (178.2) (163.4) --------- --------- Total shareholders' equity $1,112.5 $1,007.0 ========= ========= (See Notes to Condensed Consolidated Financial Statements on page 5.)
4 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Provisions for income taxes were based on estimated annual effective tax rates for each fiscal year. The income tax provision for the first nine months of 1994 included a favorable adjustment of $3.0 million, or $.04 a share resulting from tax law changes. The Company's effective tax rate for the first nine months was 37.5 percent, compared to last year's 39.0 percent excluding the favorable adjustment discussed above. This decrease reflects an earnings mix toward certain foreign countries with lower statutory tax rates and utilization of certain tax losses. 2. Earnings per common share were based on the weighted average number of common and common equivalent shares outstanding (77,389,344 and 77,614,829 for the nine months ended March 31, 1995 and 1994, and 77,276,374 and 77,890,468 for the quarters ended March 31, 1995 and 1994, respectively). 3. The components of inventory include the following as of March 31, 1995: (In millions) Raw materials and supplies $113.4 Work in process 101.2 Finished goods 233.7 ------ $448.3 ====== 4. As of March 31, 1995, the Company has authorized and issued 100,000 shares, par value $100, 4 Percent cumulative preferred stock of which 98,330 shares are outstanding. Mallinckrodt also has authorized 1,400,000 shares, par value $1, of Series preferred stock, none of which is outstanding. Shares included in treasury stock were: March 31, June 30, 1995 1994 ------------ ------------ Common stock 10,520,291 10,110,056 4 Percent cumulative preferred stock 1,670 1,670 5. At March 31, 1995, common shares reserved were: Exercise of common stock purchase rights 87,730,876 Exercise of stock options and granting of stock awards 11,134,878 ------------ Total 98,865,754 ============ 6. Supplemental cash flow information for the nine months ended March 31 included: (In millions)
1995 1994 ------ ------ Interest paid $34.7 $23.9 Income taxes paid $40.8 $29.0 Noncash investing and financing activities: Assumption of liabilities related to acquisitions $ 1.8 $12.6 Issuance of common stock for restricted stock awards $ 3.7
5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS General - ------- Earnings from continuing operations for the third quarter ended March 31, 1995 were $48 million, or 62 cents per share. Excluding a two-cent per share tax benefit in the third quarter of fiscal 1994, this is a 17 percent increase over the comparable 53 cents per share for the prior year. Net sales for the quarter were up 17 percent to $569 million, compared to $487 million last year. Net earnings for the third quarter were $47 million, or 61 cents per share, compared with $42 million, or 54 cents per share, during the same period a year ago. For the nine months, earnings from continuing operations were $123 million, or $1.59 per share. Excluding tax benefits totaling 4 cents per share from last year's first and third quarters, this is a 10 percent increase over the comparable $1.44 per share for the first nine months of fiscal 1994. Net sales for the nine months were up 13 percent to $1.6 billion, compared to $1.4 billion last year. Net earnings for the nine months were $121 million, or $1.56 per share, compared with $113 million, or $1.45 per share, last year. A comparison of sales and operating earnings follows: (In millions)
Quarter Ended Nine Months Ended March 31, March 31, 1995 1994 1995 1994 - --------------------------------------------------------------------------- Sales - ----- Mallinckrodt Chemical $159 $111 $ 392 $ 315 Mallinckrodt Medical 256 223 726 649 Mallinckrodt Veterinary 155 153 456 434 Intersegment sales (1) (1) ----- ----- ------- ------ $569 $487 $1,573 $1,398 ===== ===== ======= ====== Operating earnings - ------------------ Mallinckrodt Chemical $ 20 $ 18 $ 42 $ 37 Mallinckrodt Medical 58 47 160 141 Mallinckrodt Veterinary 16 15 41 42 Corporate (7) (8) (20) (21) ----- ----- ------- ------- $ 87 $ 72 $ 223 $ 199 ===== ===== ======= =======
Business Segments - ----------------- Registered trademarks are indicated by an asterisk.
MALLINCKRODT CHEMICAL Net Sales (In millions) Quarter Ended Nine Months Ended March 31, March 31, 1995 1994 1995 1994 - --------------------------------------------------------------------------- Pharmaceutical Specialties $ 73 $ 59 $186 $170 Catalyst, Performance & Lab Chemicals 86 52 206 145 ---- ---- ---- ---- $159 $111 $392 $315 ==== ==== ==== ====
Mallinckrodt Chemical achieved earnings of $26.6 million for the third quarter and $58.6 million for the nine months ended March 31, 1995, representing increases of 19 percent and 20 percent, respectively, over the prior year. These results include the equity-investment share of earnings from Tastemaker, the flavors joint venture, of $6.3 million and $16.5 million for the quarter and nine months, respectively. Net sales increased 43 percent and 24 percent compared to the corresponding prior year quarter and nine months, respectively. Pharmaceutical specialties sales increased 22 6 percent for the quarter and 9 percent for the first nine months. Continued strength in worldwide sales volume for medicinal narcotics was the main contributor to the increases. Catalysts, performance and lab chemicals sales improved 67 percent and 42 percent for the quarter and nine months, respectively. Results benefited from the acquisitions of J.T. Baker Inc. in 1995 and Catalyst Resources, Inc. in 1994, and the reclassification of a small specialty chemical business to continuing operations.
MALLINCKRODT MEDICAL Net Sales (In millions) Quarter Ended Nine Months Ended March 31, March 31, 1995 1994 1995 1994 - -------------------------------------------------------------------------- Imaging $119 $105 $349 $308 Anesthesiology & Critical Care 82 72 228 206 Nuclear Medicine 55 46 149 135 ---- ---- ---- ---- $256 $223 $726 $649 ==== ==== ==== ====
Mallinckrodt Medical's operating earnings increased 22 percent for the quarter, compared to last year, to $57.6 million and 13 percent for the nine months to $159.9 million. Net sales improved 15 percent and 12 percent for the same periods. Imaging sales for both the quarter and nine months increased 13 percent, benefiting principally from higher worldwide sales volume of the x-ray contrast medium Optiray*. Anesthesiology and critical care sales were up 15 percent and 11 percent for the quarter and nine months, respectively, boosted by the 1994 acquisition of DAR S.p.A., higher tracheostomy tube sales volume in Europe and Japan and increased sales volume of hemoglobin and glucose testing products in the U.S. and Europe. Nuclear medicine sales increased 17 percent for the quarter and 10 percent for the nine months compared to last year. Higher U.S. sales reflected increased TechneScan MAG3* volume and the introduction of OctreoScan*, while Europe experienced broad based volume improvement.
MALLINCKRODT VETERINARY Net Sales (In millions) Quarter Ended Nine Months Ended March 31, March 31, 1995 1994 1995 1994 - --------------------------------------------------------------------------- Pharmaceuticals $ 65 $ 62 $192 $179 Biologicals 28 27 74 69 Feed Ingredients 40 41 124 123 Veterinary Specialties & Other 22 23 66 63 ---- ---- ---- ---- $155 $153 $456 $434 ==== ==== ==== ====
Mallinckrodt Veterinary's third quarter operating earnings improved by 8 percent and net sales were up slightly compared to the same period last year. Operating earnings for the nine months were flat, while net sales were 5 percent higher. Currency favorably impacted comparative results for both periods. Pharmaceutical sales increased 6 percent and 8 percent for the quarter and nine months, respectively, compared to the same periods a year ago, from higher parasiticide and antimicrobial sales volume. Biologicals sales improved 3 percent and 7 percent for the same periods, principally in Europe. Feed ingredients sales decreased 3 percent for the quarter and were flat for the nine months. Veterinary specialties sales decreased 4 percent for the quarter, but were 5 percent higher for the nine months. Results for the quarter were adversely influenced by the exit of a non-strategic business. 7 Corporate Matters - ----------------- Corporate expense decreased $.8 million and $.9 million for the third quarter and nine months, respectively, compared to last year. These favorable variances reflected last year's corporate headquarters' reorganization. The Company's effective tax rate for the first nine months was 37.5 percent, compared to last year's 39.0 percent excluding the favorable adjustments previously discussed. This decrease reflects an earnings mix toward certain foreign countries with lower statutory tax rates and the utilization of certain tax losses. FINANCIAL CONDITION The Company's financial resources are expected to continue to be adequate to support existing businesses and fund new opportunities. Since June 30, 1994, cash and cash equivalents decreased $.5 million. Operations provided $108.2 million of cash, while acquisition and capital spending totaled $211.6 million. The Company's current ratio at March 31, 1995, was 1.4. Debt as a percentage of invested capital was 42.3 percent. As of March 31, 1995, the Company had the authority to repurchase approximately 13 million shares of its common stock under an outstanding Board of Directors resolution. The Company has a $450 million private-placement commercial paper program. This program is backed by $550 million of U.S. lines of credit available until November 1999. At March 31, 1995, commercial paper borrowings amounted to $257.7 million. There were no outstanding borrowings under the the U.S. lines of credit at March 31, 1995. At March 31, 1995 non-U.S. lines of credit totaling $277.2 million were also available and borrowings under these lines amounted to $49.8 million. The non-U.S. lines are cancelable at any time. Estimated capital spending for the year ending June 30, 1995, is approximately $200 million. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In the previously reported matter involving a former drum recycling facility in Auburn Hills, Michigan, the State of Michigan has made its Remedial Investigation and Feasibility Study for the site available for public comment. The remedy for the site will not become final until the comment period ends. It remains impossible to estimate the cleanup costs for this site. The previously reported matter involving claims asserted by the Whitehall Township Authority ("WTA") against Trimet Technical Products, Inc., a subsidiary of the Company, has been settled. Trimet has agreed to make total settlement payments to WTA of approximately $676,500. Trimet also remains responsible for a groundwater remediation project at the site. The Company does not believe that future remediation costs will have a material adverse effect on its financial condition or the results of the Company's operations. The Company does not anticipate making any further reports on this matter. Except as described above, there have not been any material developments in the legal proceedings previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended June 30,1994, as supplemented by the Company's Quarterly Reports on Form 10-Q for the periods ended September 30, 1994 and December 31, 1994. ITEM 2. CHANGES IN SECURITIES Not applicable. 8 ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 5. OTHER INFORMATION. Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits 4.1 Indenture dated as of March 15, 1985 as amended and restated as of February 15, 1995 between Mallinckrodt and First Trust of New York, National Association. Incorporated herein by reference to Exhibit 4.1 to Form S-3 Registration Statement No. 33-57821. 10.1 Credit Agreement dated March 16, 1995 between Coopers Animal Health Inc. with Mallinckrodt as Guarantor and Morgan Guaranty Trust Company of New York, as Agent ($100 million facility). 11.1 Primary earnings per share computation for the nine months ended March 31, 1995 and 1994. 11.2 Fully diluted earnings per share computation for the nine months ended March 31, 1995 and 1994. 11.3 Primary earnings per share computation for the quarters ended March 31, 1995 and 1994. 11.4 Fully diluted earnings per share computation for the quarters ended March 31, 1995 and 1994. 27 Financial Data Schedule. (b) Reports on Form 8-K. During the quarter and through the date of this report, the following reports on Form 8-K were filed. - Report dated January 4, 1995, under Item 5 regarding the purchase by Mallinckrodt Chemical of J.T. Baker Inc. - Report dated March 1, 1995, under Item 5 regarding the completion of the purchase by Mallinckrodt Chemical of J.T. Baker Inc. * * * * * * * * * * * * * * * * 9 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Mallinckrodt Group Inc. ------------------------------ Registrant By: MICHAEL A. ROCCA By: WILLIAM B. STONE ------------------------- ----------------------------- Michael A. Rocca William B. Stone Senior Vice President and Vice President and Controller Chief Financial Officer Date: May 11, 1995 10 EX-11.1 2 Exhibit 11.1 EARNINGS PER SHARE PRIMARY COMPUTATION ($ in millions except share and per share amounts)
Nine Months Ended March 31, 1995 1994 - ---------------------------------------------------------------------- Basis for computation of earnings per common and common equivalent shares: Earnings from continuing operations $ 123.4 $ 114.9 Deduct dividends on 4 Percent cumulative preferred stock (.3) (.3) -------- -------- Earnings from continuing operations available to common shareholders 123.1 114.6 Loss from discontinued operations (2.7) (2.1) -------- -------- Available for common shareholders $ 120.4 $ 112.5 ======== ======== Number of shares: Weighted average shares outstanding 76,681,341 76,750,855 Shares issuable upon exercise of stock options, net of shares assumed to be repurchased 708,003 863,974 ---------- ---------- 77,389,344 77,614,829 ========== ========== Earnings per common share: Continuing operations $1.59 $1.48 Discontinued operations (.03) (.03) ------ ------ Net earnings $1.56 $1.45 ====== ======
EX-11.2 3 Exhibit 11.2 EARNINGS PER SHARE FULLY DILUTED COMPUTATION ($ in millions except share and per share amounts)
Nine Months Ended March 31 1995 1994 - ---------------------------------------------------------------------- Basis for computation of earnings per common and common equivalent shares: Earnings from continuing operations $ 123.4 $ 114.9 Deduct dividends on 4 Percent cumulative preferred stock (.3) (.3) -------- -------- Earnings from continuing operations available to common shareholders 123.1 114.6 Loss from discontinued operations (2.7) (2.1) -------- -------- Available for common shareholders $ 120.4 $ 112.5 ======== ======== Number of shares: Weighted average shares outstanding 76,681,341 76,750,855 Shares issuable upon exercise of stock options, net of shares assumed to be repurchased 961,800 1,039,980 ---------- ---------- 76,643,141 77,790,835 ========== ========== Earnings per common share: Continuing operations $1.59 $ 1.48 Discontinued operations (.04) (.03) ------ ------- Net earnings $1.55 $ 1.45 ====== =======
EX-11.3 4 Exhibit 11.3 EARNINGS PER SHARE PRIMARY COMPUTATION ($ in millions except share and per share amounts)
Quarter Ended March 31, 1995 1994 - ---------------------------------------------------------------------- Basis for computation of earnings per common and common equivalent shares: Earnings from continuing operations $ 48.1 $ 42.9 Deduct dividends on 4 Percent cumulative preferred stock (.1) (.1) -------- -------- Earnings from continuing operations available to common shareholders 48.0 42.8 Loss from discontinued operations (1.1) (.6) -------- -------- Available for common shareholders $ 46.9 $ 42.2 ======== ======== Number of shares: Weighted average shares outstanding 76,528,138 76,909,643 Shares issuable upon exercise of stock options, net of shares assumed to be repurchased 748,236 980,825 ---------- ---------- 77,276,374 77,890,468 ========== ========== Earnings per common share: Continuing operations $ .62 $ .55 Discontinued operations (.01) (.01) ------- ------- Net earnings $ .61 $ .54 ======= =======
EX-11.4 5 Exhibit 11.4 EARNINGS PER SHARE FULLY DILUTED COMPUTATION ($ in millions except share and per share amounts)
Quarter Ended March 31, 1995 1994 - ---------------------------------------------------------------------- Basis for computation of earnings per common and common equivalent shares: Earnings from continuing operations $ 48.1 $ 42.9 Deduct dividends on 4 Percent cumulative preferred stock (.1) (.1) ------- ------- Earnings from continuing operations available to common shareholders 48.0 42.8 Loss from discontinued operations (1.1) (.6) ------- -------- Available for common shareholders $ 46.9 $ 42.2 Number of shares: Weighted average shares outstanding 76,528,138 76,909,643 Shares issuable upon exercise of stock options, net of shares assumed to be repurchased 961,800 1,039,980 ---------- ---------- 77,489,938 77,949,623 ========== ========== Earnings per common share: Continuing operations $ .62 $ .55 Discontinued operations (.01) (.01) ------ ------ Net earnings $ .61 $ .54 ====== ======
EX-27 6
5 This schdule contains summary information extracted from the balance sheet and income statement, and is qualified in its entirety by reference to such financial schedules. 1,000,000 9-MOS JUN-30-1995 MAR-31-1995 87 0 423 13 448 1,078 1,556 571 2,748 769 592 87 0 11 1,014 2,748 1,573 1,573 868 1,350 1 0 41 197 74 123 (3) 0 0 120 1.56 1.55
EX-10.1 7 EXHIBIT 10.1 [CONFORMED COPY] $100,000,000 CREDIT AGREEMENT dated as of March 16, 1995 among Coopers Animal Health Inc. Mallinckrodt Group Inc., as Guarantor The Banks Listed Herein and Morgan Guaranty Trust Company of New York, as Agent TABLE OF CONTENTS This Table of Contents is not part of the Agreement to which it is attached, but is inserted for convenience of reference only. Page ---- ARTICLE 1 DEFINITIONS 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1 1.2. Accounting Terms and Determinations. . . . . . . . . . . . 13 1.3. Types of Borrowings. . . . . . . . . . . . . . . . . . . . 14 ARTICLE 2 THE CREDITS 2.1. Commitments to Lend. . . . . . . . . . . . . . . . . . . 14 2.2. Notice of Committed Borrowing. . . . . . . . . . . . . . 14 2.3. Money Market Borrowings. . . . . . . . . . . . . . . . . 15 2.4. Notice to Banks; Funding of Loans. . . . . . . . . . . . 18 2.5. Notes. . . . . . . . . . . . . . . . . . . . . . . . . . 19 2.6. Maturity of Loans. . . . . . . . . . . . . . . . . . . . 20 2.7. Interest Rates . . . . . . . . . . . . . . . . . . . . . 20 2.8. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 23 2.9. Optional Termination or Reduction of Commitments . . . . 23 2.10. Method of Electing Interest Rates. . . . . . . . . . . . 23 2.11. Scheduled Termination of Commitments . . . . . . . . . . 25 2.12. Optional Prepayments . . . . . . . . . . . . . . . . . . 25 2.13. General Provisions as to Payments. . . . . . . . . . . . 26 2.14. Funding Losses . . . . . . . . . . . . . . . . . . . . . 26 2.15. Computation of Interest and Fees . . . . . . . . . . . . 27 2.16. Regulation D Compensation. . . . . . . . . . . . . . . . 27 ARTICLE 3 CONDITIONS 3.1. Closing. . . . . . . . . . . . . . . . . . . . . . . . . 27 3.2. Borrowings . . . . . . . . . . . . . . . . . . . . . . . 27 ARTICLE 4 REPRESENTATIONS AND WARRANTIES 4.1. Corporate Existence. . . . . . . . . . . . . . . . . . . 28 4.2. Financial Condition. . . . . . . . . . . . . . . . . . . 29 4.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . 29 4.4. No Breach. . . . . . . . . . . . . . . . . . . . . . . . 29 4.5. Action . . . . . . . . . . . . . . . . . . . . . . . . . 30 4.6. Approvals. . . . . . . . . . . . . . . . . . . . . . . . 30 4.7. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 30 4.8. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 30 4.9. Investment Company Act . . . . . . . . . . . . . . . . . 31 4.10. Public Utility Holding Company Act . . . . . . . . . . . 31 4.11. True and Complete Disclosure . . . . . . . . . . . . . . 31 4.12. Environmental Matters. . . . . . . . . . . . . . . . . . 31 i Page ---- ARTICLE 5 COVENANTS 5.1. Financial Statements, Etc. . . . . . . . . . . . . . . . 32 5.2. Litigation . . . . . . . . . . . . . . . . . . . . . . . 34 5.3. Existence, Etc.. . . . . . . . . . . . . . . . . . . . . 34 5.4. Insurance. . . . . . . . . . . . . . . . . . . . . . . . 35 5.5. Limitation on Liens. . . . . . . . . . . . . . . . . . . 35 5.6. Mergers, Etc.. . . . . . . . . . . . . . . . . . . . . . 37 5.7. Change in Nature of Business . . . . . . . . . . . . . . 38 5.8. Total Debt to Total Capital Ratio. . . . . . . . . . . . 38 5.9. Indebtedness of Subsidiaries . . . . . . . . . . . . . . 38 5.10. Transactions with Affiliates . . . . . . . . . . . . . . 38 5.11. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . 38 5.12. Environmental Laws . . . . . . . . . . . . . . . . . . . 39 5.13. Most Favored Lender. . . . . . . . . . . . . . . . . . . 39 ARTICLE 6 DEFAULTS 6.1. Events of Default. . . . . . . . . . . . . . . . . . . . 40 6.2. Notice of Default. . . . . . . . . . . . . . . . . . . . 42 ARTICLE 7 THE AGENT AND THE CO-AGENT 7.1. Appointment and Authorization. . . . . . . . . . . . . . 43 7.2. Agent and Affiliates . . . . . . . . . . . . . . . . . . 43 7.4. Consultation with Experts. . . . . . . . . . . . . . . . 43 7.5. Liability of Agent . . . . . . . . . . . . . . . . . . . 43 7.6. Indemnification. . . . . . . . . . . . . . . . . . . . . 44 7.7. Credit Decision. . . . . . . . . . . . . . . . . . . . . 44 7.8. Successor Agent. . . . . . . . . . . . . . . . . . . . . 44 7.9. Agent's Fees . . . . . . . . . . . . . . . . . . . . . . 44 7.10. Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . 44 ARTICLE 8 CHANGE IN CIRCUMSTANCES 8.1. Basis for Determining Interest Rate Inadequate or Unfair 45 8.2. Illegality . . . . . . . . . . . . . . . . . . . . . . . 45 8.3. Increased Cost and Reduced Return. . . . . . . . . . . . 46 8.4. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 47 8.5. Base Rate Loans Substituted for Affected Fixed Rate Loans. . . . . . . . . . . . . . . . . . . . . . . . . . 49 8.6. Substitution of Bank . . . . . . . . . . . . . . . . . . 50 ii Page ---- ARTICLE 9 GUARANTY 9.1 The Guaranty . . . . . . . . . . . . . . . . . . . . . . 50 9.2 Guaranty Unconditiional . . . . . . . . . . . . . . . . 50 9.3 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances . . . . . . . . 51 9.4 Waiver by the Guarantor . . . . . . . . . . . . . . . . 51 9.5 Subrogation . . . . . . . . . . . . . . . . . . . . . . 51 9.6 Stay of Acceleration . . . . . . . . . . . . . . . . . . 51 ARTICLE 10 MISCELLANEOUS 10.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 52 10.2. No Waivers . . . . . . . . . . . . . . . . . . . . . . . 52 10.3. Expenses; Indemnification. . . . . . . . . . . . . . . . 52 10.4. Sharing of Set-Offs. . . . . . . . . . . . . . . . . . . 53 10.5. Amendments and Waivers . . . . . . . . . . . . . . . . . 53 10.6. Successors and Assigns . . . . . . . . . . . . . . . . . 53 10.7. Collateral . . . . . . . . . . . . . . . . . . . . . . . 55 10.8. Governing Law; Submission to Jurisdiction. . . . . . . . 55 10.9. Counterparts; Integration; Effectiveness . . . . . . . . 55 10.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . 56 10.11. Confidentiality. . . . . . . . . . . . . . . . . . . . . 56 PRICING SCHEDULE EXHIBIT A - Note. . . . . . . . . . . . . . . . . . . . . . . . 1 EXHIBIT B - Money Market Quote Request. . . . . . . . . . . . . 1 EXHIBIT C - Invitation for Money Market Quotes. . . . . . . . . 1 EXHIBIT D - Money Market Quote. . . . . . . . . . . . . . . . . 1 EXHIBIT E - Opinion of Counsel for the Borrower . . . . . . . . 1 EXHIBIT F - Opinion of Special Counsel for the Agent. . . . . . 1 EXHIBIT G - Assignment and Assumption Agreement . . . . . . . . 1 iii CREDIT AGREEMENT AGREEMENT dated as of March 16, 1995 among COOPERS ANIMAL HEALTH INC., MALLINCKRODT GROUP INC., as Guarantor, the BANKS party hereto from time to time, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent. The parties hereto agree as follows: ARTICLE 1 DEFINITIONS SECTION 1.1. Definitions. The following terms, as used herein, have the following meanings: "Absolute Rate Auction" means a solicitation of Money Market Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3. "Adjusted CD Rate" has the meaning set forth in Section 2.7(b). "Administrative Questionnaire" means, with respect to each Bank, an administrative questionnaire in the form prepared by the Agent and submitted to the Agent (with a copy to the Borrower) duly completed by such Bank. "Affiliate" means any Person that directly or indirectly controls, or is under common control with, or is controlled by, the Guarantor and, if such Person is an individual, any member of the immediate family (including parents, spouse, children and siblings) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this definition, "control" (including, with its correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that, in any event, any Person that owns directly or indirectly securities having 15% or more of the voting power for the election of directors or other governing body of a corporation or 15% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person. Notwithstanding the foregoing, (a) no individual shall be an Affiliate solely by reason of his or her being a director, officer or employee of the Guarantor or any of its Subsidiaries and (b) none of the Subsidiaries of the Guarantor shall be Affiliates. 4 "Agent" means Morgan Guaranty Trust Company of New York, in its capacity as agent for the Banks hereunder, and its successors in such capacity. "Applicable Lending Office" means, with respect to any Bank, (i) in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of its Money Market Loans, its Money Market Lending Office. "Assessment Rate" has the meaning set forth in Section 2.7(b). "Assignee" has the meaning set forth in Section 10.6(c). "Bank" means each bank listed on the signature pages hereof, each Assignee which becomes a Bank pursuant to Section 10.6(c), and their respective successors. "Bankruptcy Code" means the Federal Bankruptcy Code of 1978, as amended from time to time. "Base Rate" means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day. "Base Rate Loan" means (i) a Committed Loan which bears interest at the Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election or the provisions of Article 8 or (ii) an overdue amount which was a Base Rate Loan immediately before it became overdue. "Borrower" means Coopers Animal Health Inc., a Delaware corporation, and its successors. "Borrowing" has the meaning set forth in Section 1.3. "Capital Lease Obligations" means, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP (including Statement of Financial Accounting Standards No. 13 of the Financial Accounting Standards Board), and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP (including such Statement No. 13) (and including, without limitation in the case of the Guarantor, the $41,000,000 (at the Effective Date) capital lease between IMC Fertilizer Group, Inc. and American Cyanamid relating to property located in Brewster, Florida). 2 "CD Base Rate" has the meaning set forth in Section 2.7(b). "CD Loan" means (i) a Committed Loan which bears interest at a CD Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which was a CD Loan immediately before it became overdue. "CD Margin" means a rate per annum determined in accordance with the Pricing Schedule. "CD Rate" means a rate of interest determined pursuant to Section 2.7(b) on the basis of an Adjusted CD Rate. "CD Reference Banks" means The Chase Manhattan Bank N.A., The First National Bank of Chicago and Morgan Guaranty Trust Company of New York. "Closing Date" means the date on or after the Effective Date on which the Agent shall have received the documents specified in or pursuant to Section 3.1. "Co-Agent" means The Chase Manhattan Bank N.A., in its capacity as co-agent hereunder. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Commitment" means, with respect to each Bank listed on the signature pages hereof, the amount set forth opposite the name of such Bank on the signature pages hereof, and with respect to any Bank which becomes a party to this Agreement pursuant to Section 10.6(c), the amount of the Commitment thereby assumed by such Bank, in each case as such amount may be reduced from time to time pursuant to Sections 2.9 and 10.6(c) or increased pursuant to Section 10.6(c). "Committed Loan" means a loan made by a Bank pursuant to Section 2.1; provided that, if any such loan or loans (or portions thereof) are combined or subdivided pursuant to a Notice of Interest Rate Election, the term "Committed Loan" shall refer to the combined principal amount resulting from such combination or to each of the separate principal amounts resulting from such subdivision, as the case may be. "Consolidated Net Worth" means, as at any date, the sum, for the Guarantor and its Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP), of the following: (a) the amount of capital stock, plus (b) the amount of capital in excess of par value, plus 3 (c) the amount of reinvested earnings (or in the case of a reinvested earnings deficit, minus the amount of such deficit), minus (d) the cost of treasury stock. "Covenant" means, with respect to any agreement or instrument representing or governing Indebtedness, any covenant (whether expressed as a covenant or an event of default) contained therein. "Default" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Derivatives Obligations" of any Person means all obligations of such Person in respect of any rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions. "Domestic Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close. "Domestic Lending Office" means, as to each Bank, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Agent; provided that any Bank may so designate separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and its CD Loans, on the other hand, in which case all references herein to the Domestic Lending Office of such Bank shall be deemed to refer to either or both of such offices, as the context may require. "Domestic Loans" means CD Loans or Base Rate Loans or both. "Domestic Reserve Percentage" has the meaning set forth in Section 2.7(b). "Effective Date" means the date this Agreement becomes effective in accordance with Section 10.9. "Environmental Claim" means, with respect to any Person, (a) any written or oral notice, claim, demand or other communication (collectively, a "claim") by any other Person alleging or asserting 4 such Person's liability for investigatory costs, cleanup costs, governmental response costs, damages to natural resources or other Property, personal injuries, fines or penalties arising out of, based on or resulting from (i) the presence, or Release into the environment, of any Hazardous Material at any location, whether or not owned by such Person, or (ii) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law. The term "Environmental Claim" shall include, without limitation, any claim by any governmental authority for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and any claim by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the presence of Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment. "Environmental Laws" means any and all present and future Federal, state, local and foreign laws, rules or regulations, and any orders or decrees, in each case as now or hereafter in effect, relating to the regulation or protection of human health, safety or the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals or toxic or hazardous substances or wastes into the indoor or outdoor environment, including, without limitation, ambient air, soil, surface water, ground water, wetlands, land or subsurface strata, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or toxic or hazardous substances or wastes. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute. "ERISA Affiliate" means any corporation or trade or business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which the Guarantor is a member and (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which the Guarantor is a member. "Euro-Dollar Business Day" means any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London. "Euro-Dollar Lending Office" means, as to each Bank, its office, branch or affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Agent. 5 "Euro-Dollar Loan" means (i) a Committed Loan which bears interest at a Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which was a Euro-Dollar Loan immediately before it became overdue. "Euro-Dollar Margin" means a rate per annum determined in accordance with the Pricing Schedule. "Euro-Dollar Rate" means a rate of interest determined pursuant to Section 2.7(c) on the basis of a London Interbank Offered Rate. "Euro-Dollar Reference Banks" means the principal London offices of The Chase Manhattan Bank N.A., The First National Bank of Chicago and Morgan Guaranty Trust Company of New York. "Euro-Dollar Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of "Eurocurrency liabilities" (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Bank to United States residents). "Event of Default" has the meaning set forth in Section 6.1. "Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, provided that (i) if such day is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if no such rate is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Morgan Guaranty Trust Company of New York on such day on such transactions as determined by the Agent. 6 "Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base Rate pursuant to Section 8.1) or any combination of the foregoing. "GAAP" means generally accepted accounting principles applied on a basis consistent with those which, in accordance with Section 1.2 hereof, are to be used in making the calculations for purposes of determining compliance with this Agreement. "Group of Loans" means at any time a group of Loans consisting of (i) all Committed Loans which are Base Rate Loans at such time, (ii) all Euro-Dollar Loans having the same Interest Period at such time or (iii) all CD Loans having the same interest period at such time, provided that, if a Committed Loan of any particular Bank is converted to or made as a Base Rate Loan pursuant to Section 8.2 or 8.5, such Loan shall be included in the same Group or Groups of Loans from time to time as it would have been in if it had not been so converted or made. "Guarantee" means a guarantee, an endorsement, a contingent agreement to purchase or to furnish funds for the payment or maintenance of, or otherwise directly or indirectly to be or become contingently liable under or with respect to, the Indebtedness of any Person, but excluding endorsements for collection or deposit in the ordinary course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative meaning. "Guarantor" means Mallinckrodt Group Inc., a New York corporation, and its successors. "Hazardous Material" means collectively, (a) any petroleum or petroleum products, flammable explosives, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, and transformers or other equipment that contain dielectric fluid containing polychlorinated biphenyls (PCB's), (b) any chemicals or other materials or substances which are now or hereafter become defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", "contaminants", "pollutants" or words of similar import under any Environmental Law and (c) any other chemical or other material or substance, exposure to which is now or hereafter prohibited, limited or regulated under any Environmental Law. "Indebtedness" means, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such 7 Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within one year of the date the respective goods are delivered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person under any contract for the purchase of materials, supplies or other Property or the rendering of services if such contract (or any related document) requires that payment for such materials, supplies or other Property or services shall be made regardless of whether or not delivery of such materials, supplies or other Property is ever made or tendered or such services are ever rendered; (e) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person (other than commercial documentary letters of credit); (f) Capital Lease Obligations of such Person; and (g) Indebtedness of others Guaranteed by such Person; provided, that Indebtedness of the Guarantor and its Subsidiaries shall not include obligations of the Guarantor and its Subsidiaries in respect of (i) contingent (as opposed to matured) obligations under the Guarantor's $100,000,000 "rabbi trust" letters of credit (provided, however, that contingent obligations under the Guarantor's "rabbi trust" letters of credit in excess of $100,000,000 shall be Indebtedness of the Guarantor); (ii) matured obligations under the Guarantor's $100,000,000 "rabbi trust" letters of credit in respect of drawings thereunder not in excess of $100,000,000 that are repaid within one day of such drawing; and (iii) unfunded liabilities of the Guarantor in respect of postretirement health and welfare benefits under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 106 ("Employers' Accounting for Postretirement Benefits Other Than Pensions") not in excess of $96,000,000 in the aggregate. "Indemnitee" has the meaning set forth in Section 10.3(b). "Interest Period" means: (1) with respect to each Euro- Dollar Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing or on the date specified in the applicable Notice of Interest Rate Election and ending one, two, three or six months thereafter, as the Borrower may elect in the applicable notice; provided that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar 8 Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and (c) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date; (2) with respect to each CD Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing or on the date specified in the applicable Notice of Interest Rate Election and ending 30, 60, 90 or 180 days thereafter, as the Borrower may elect in the applicable notice; provided that: (a) any Interest Period (other than an Interest Period determined pursuant to clause (b) below) which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day; and (b) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date; (3) with respect to each Money Market LIBOR Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing and ending such whole number of months thereafter (but not less than 1 month) as the Borrower may elect in accordance with Section 2.3; provided that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and (c) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date; and (4) with respect to each Money Market Absolute Rate Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing and ending such number of days thereafter (but not less than 7 days) as the Borrower may elect in accordance with Section 2.3; provided that: 9 (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day; and (b) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date. "LIBOR Auction" means a solicitation of Money Market Quotes setting forth Money Market Margins based on the London Interbank Offered Rate pursuant to Section 2.3. "Lien" means, with respect to any Property, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such Property. For purposes of this Agreement, a Person shall be deemed to own subject to a Lien any Property that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement (other than an operating lease) relating to such Property. "Loan" means a Domestic Loan, a Euro-Dollar Loan or a Money Market Loan and "Loans" means Domestic Loans, Euro-Dollar Loans or Money Market Loans or any combination of the foregoing. "London Interbank Offered Rate" has the meaning set forth in Section 2.7(c). "Margin Stock" means "margin stock" within the meaning of Regulations U and X. "Material Adverse Effect" means a material adverse effect on (a) the financial condition, operations or business taken as a whole of the Guarantor and its Subsidiaries, (b) the ability of the Borrower or the Guarantor to perform its respective obligations hereunder and under the Notes, (c) the validity or enforceability of this Agreement or of the Notes or (d) the rights and remedies of the Banks and the Agent hereunder and under the Notes. "Money Market Absolute Rate" has the meaning set forth in Section 2.3(d). "Money Market Absolute Rate Loan" means a loan to be made by a Bank pursuant to an Absolute Rate Auction. "Money Market Lending Office" means, as to each Bank, its Domestic Lending Office or such other office, branch or affiliate of such Bank as it may hereafter designate as its Money Market Lending Office by notice to the Borrower and the Agent; provided that any Bank may from time to time by notice to the Borrower and the Agent designate separate Money Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate 10 on the other hand, in which case all references herein to the Money Market Lending Office of such Bank shall be deemed to refer to either or both of such offices, as the context may require. "Money Market LIBOR Loan" means a loan to be made by a Bank pursuant to a LIBOR Auction (including such a loan bearing interest at the Base Rate pursuant to Section 8.1). "Money Market Loan" means a Money Market LIBOR Loan or a Money Market Absolute Rate Loan. "Money Market Margin" has the meaning set forth in Section 2.3(d)(ii)(C). "Money Market Quote" means an offer by a Bank to make a Money Market Loan in accordance with Section 2.3. "Multiemployer Plan" means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been made by the Guarantor or any ERISA Affiliate and which is covered by Title IV of ERISA. "Notes" means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the Loans, and "Note" means any one of such promissory notes issued hereunder. "Notice of Borrowing" means a Notice of Committed Borrowing (as defined in Section 2.2) or a Notice of Money Market Borrowing (as defined in Section 2.3(f)). "Notice of Interest Rate Election" has the meaning set forth in Section 2.10. "Operating Lease Amount" means, at any time, an amount equal to eight times the amount by which (i) the minimum rental commitments under non-cancelable operating leases of the Guarantor and its Subsidiaries for the fiscal year of the Guarantor and its Subsidiaries following the most recent fiscal year for which audited financial statements are available at such time, as reflected in the notes to such financial statements, exceed (ii) $50,000,000. "Parent" means, with respect to any Bank, any Person controlling such Bank. "Participant" has the meaning set forth in Section 10.6(b). "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. 11 "Person" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Plan" means an employee benefit or other plan established or maintained by the Guarantor or any ERISA Affiliate and that is covered by Title IV of ERISA, other than a Multiemployer Plan. "Pricing Schedule" means the Schedule attached hereto identified as such. "Prime Rate" means the rate of interest publicly announced by Morgan Guaranty Trust Company of New York in New York City from time to time as its Prime Rate. "Property" means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. "Quarterly Date" means the last day of March, June, September and December in each year, the first of which shall be the first such day after the date of this Agreement; provided that if any such day is not a Euro-Dollar Business Day, then such Quarterly Date shall be the next succeeding Euro-Dollar Business Day (unless such Euro-Dollar Business Day falls in a subsequent calendar month, in which event such Quarterly Date shall be the next preceding Euro- Dollar Business Day). "Reference Banks" means the CD Reference Banks or the Euro-Dollar Reference Banks, as the context may require, and "Reference Bank" means any one of such Reference Banks. "Regulations U and X" mean, respectively, Regulations U and X of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Release" means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata. "Required Banks" means at any time Banks having at least 51% of the aggregate amount of the Commitments or, if the Commitments shall have been terminated, holding Notes evidencing at least 51% of the aggregate unpaid principal amount of the Loans. "Revolving Credit Period" means the period from and including the Effective Date to and excluding the Termination Date. 12 "Subsidiary" means, as to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person; unless otherwise specified, "Subsidiary" means a Subsidiary of the Guarantor. "Termination Date" means March 15, 1996, or, if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day. "Total Capital" means, at any time, Consolidated Net Worth plus Total Debt. "Total Debt" means, at any time, the aggregate outstanding principal amount of all Indebtedness of the Guarantor and its Subsidiaries at such time (determined on a consolidated basis without duplication in accordance with GAAP). "Wholly-Owned Subsidiary" means any Subsidiary all of the shares of capital stock or other ownership interests of which (except directors' qualifying shares) are at the time directly or indirectly owned by the Guarantor. "United States" means the United States of America, including the States and the District of Columbia, but excluding its territories and possessions. SECTION 1.2. Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the Guarantor's independent public accountants) with the most recent audited consolidated financial statements of the Guarantor and its Consolidated Subsidiaries delivered to the Banks; provided that, if the Guarantor notifies the Agent that the Guarantor wishes to amend any covenant in Article 5 to eliminate the effect of any change in generally accepted accounting principles on the operation of such covenant (or if the Agent notifies the Guarantor that the Required Banks wish to amend Article 5 for such purpose), then the Guarantor's compliance with such 13 covenant shall be determined on the basis of generally accepted accounting principles in effect immediately before the relevant change in generally accepted accounting principles became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Guarantor and the Required Banks. SECTION 1.3 Types of Borrowings. The term "Borrowing" denotes the aggregation of Loans of one or more Banks to be made to the Borrower pursuant to Article 2 on the same date, all of which Loans are of the same type (subject to Article 8) and, except in the case of Base Rate Loans, have the same initial Interest Period. Borrowings are classified for purposes of this Agreement either by reference to the pricing of Loans comprising such Borrowing (e.g., a "Fixed Rate Borrowing" is a Euro-Dollar Borrowing, a CD Borrowing or a Money Market Borrowing (excluding any such Borrowing consisting of Money Market LIBOR Loans bearing interest at the Base Rate pursuant to Section 8.1), and a "Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by reference to the provisions of Article 2 under which participation therein is determined (i.e., a "Committed Borrowing" is a Borrowing under Section 2.1 in which all Banks participate in proportion to their Commitments, while a "Money Market Borrowing" is a Borrowing under Section 2.3 in which the Bank participants are determined on the basis of their bids in accordance therewith). ARTICLE 2 THE CREDITS SECTION 2.1. Commitments to Lend. During the Revolving Credit Period, each Bank severally agrees, on the terms and conditions set forth in this Agreement, to make loans to the Borrower pursuant to this Section from time to time in amounts such that the aggregate principal amount of Committed Loans by such Bank at any one time outstanding shall not exceed the amount of its Commitment. Each Borrowing under this Section shall be in an aggregate principal amount of $10,000,000 or any larger multiple of $1,000,000 (except that any such Borrowing may be in the aggregate amount available in accordance with Section 3.2(c)) and shall be made from the several Banks ratably in proportion to their respective Commitments. Within the foregoing limits, the Borrower may borrow under this Section, prepay Loans to the extent permitted by Section 2.12 and reborrow at any time during the Revolving Credit Period under this Section. SECTION 2.2. Notice of Committed Borrowing. The Borrower shall give the Agent notice (a "Notice of Committed Borrowing") not later than 10:30 A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y) the second Domestic Business Day before each CD Borrowing and (z) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing, (A) specifying: 14 (i) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing; (ii) the aggregate amount of such Borrowing; (iii) whether the Loans comprising such Borrowing are to bear interest initially at the Base Rate, a CD Rate or a Euro-Dollar Rate; and (iv) in the case of a Fixed Rate Borrowing, the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period; and (B) certifying that each of the conditions precedent to such Borrowing has been satisfied. SECTION 2.3. Money Market Borrowings. (a) The Money Market Option. In addition to Committed Borrowings pursuant to Section 2.1, the Borrower may, as set forth in this Section, request the Banks during the Revolving Credit Period to make offers to make Money Market Loans to the Borrower. The Banks may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section. (b) Money Market Quote Request. When the Borrower wishes to request offers to make Money Market Loans under this Section, it shall transmit to the Agent by telex or facsimile transmission a Money Market Quote Request substantially in the form of Exhibit B hereto so as to be received not later than 10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic Business Day next preceding the date of Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Agent shall have mutually agreed and shall have notified to the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective) specifying: (i) the proposed date of Borrowing, which shall be a Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic Business Day in the case of an Absolute Rate Auction, (ii) the aggregate amount of such Borrowing, which shall be $10,000,000 or a larger multiple of $1,000,000, (iii) the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period, and 15 (iv) whether the Money Market Quotes requested are to set forth a Money Market Margin or a Money Market Absolute Rate. The Borrower may request offers to make Money Market Loans for more than one Interest Period in a single Money Market Quote Request. No Money Market Quote Request shall be given within five Euro-Dollar Business Days (or such other number of days as the Borrower and the Agent may agree) of any other Money Market Quote Request. (c) Invitation for Money Market Quotes. Promptly upon receipt of a Money Market Quote Request, the Agent shall send to the Banks by telex or facsimile transmission an Invitation for Money Market Quotes substantially in the form of Exhibit C hereto, which shall constitute an invitation by the Borrower to each Bank to submit Money Market Quotes offering to make the Money Market Loans to which such Money Market Quote Request relates in accordance with this Section. (d) Submission and Contents of Money Market Quotes. (i) Each Bank may submit a Money Market Quote containing an offer or offers to make Money Market Loans in response to any Invitation for Money Market Quotes. Each Money Market Quote must comply with the requirements of this subsection (d) and must be submitted to the Agent by telex or facsimile transmission at its offices specified in or pursuant to Section 10.1 not later than (x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New York City time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Agent shall have mutually agreed and shall have notified to the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective); provided that Money Market Quotes submitted by the Agent (or any affiliate of the Agent) in the capacity of a Bank may be submitted, and may only be submitted, if the Agent or such affiliate notifies the Borrower of the terms of the offer or offers contained therein not later than (x) one hour prior to the deadline for the other Banks, in the case of a LIBOR Auction or (y) 15 minutes prior to the deadline for the other Banks, in the case of an Absolute Rate Auction. Subject to Articles 3 and 6, any Money Market Quote so made shall be irrevocable except with the written consent of the Agent given on the instructions of the Borrower. (ii) Each Money Market Quote shall be in substantially the form of Exhibit D hereto and shall in any case specify: (A) the proposed date of Borrowing, (B) the principal amount of the Money Market Loan for which each such offer is being made, which principal amount (w) may be greater than or less than the Commitment 16 of the quoting Bank, (x) must be $5,000,000 or a larger multiple of $1,000,000, (y) may not exceed the principal amount of Money Market Loans for which offers were requested, (z) may be subject to an aggregate limitation as to the principal amount of Money Market Loans for which offers being made by such quoting Bank may be accepted, (C) in the case of a LIBOR Auction, the margin above or below the applicable London Interbank Offered Rate (the "Money Market Margin") offered for each such Money Market Loan, expressed as a percentage (specified to the nearest 1/10,000th of 1%) to be added to or subtracted from such base rate, (D) in the case of an Absolute Rate Auction, the rate of interest per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market Absolute Rate") offered for each such Money Market Loan, and (E) the identity of the quoting Bank. A Money Market Quote may set forth up to five separate offers by the quoting Bank with respect to each Interest Period specified in the related Invitation for Money Market Quotes. (iii) Any Money Market Quote shall be disregarded if it: (A) is not substantially in conformity with Exhibit D hereto or does not specify all of the information required by subsection (d)(ii); (B) contains qualifying, conditional or similar language; (C) proposes terms other than or in addition to those set forth in the applicable Invitation for Money Market Quotes; or (D) arrives after the time set forth in subsection (d)(i). (e) Notice to Borrower. The Agent shall promptly notify the Borrower of the terms (x) of any Money Market Quote submitted by a Bank that is in accordance with subsection (d) and (y) of any Money Market Quote that amends, modifies or is otherwise inconsistent with a previous Money Market Quote submitted by such Bank with respect to the same Money Market Quote Request. Any such subsequent Money Market Quote shall be disregarded by the Agent unless such subsequent Money Market Quote is submitted solely to correct a manifest error in such former Money Market Quote. The Agent's notice to the Borrower shall specify (A) the aggregate principal amount of Money Market Loans for which offers have been received for each Interest Period specified in the related Money Market Quote Request, (B) the respective principal 17 amounts and Money Market Margins or Money Market Absolute Rates, as the case may be, so offered and (C) if applicable, limitations on the aggregate principal amount of Money Market Loans for which offers in any single Money Market Quote may be accepted. (f) Acceptance and Notice by Borrower. Not later than 10:30 A.M. (New York City time) on (x) the third Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Agent shall have mutually agreed and shall have notified to the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective), the Borrower shall notify the Agent of its acceptance or non-acceptance of the offers so notified to it pursuant to subsection (e). In the case of acceptance, such notice (a "Notice of Money Market Borrowing") shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower may accept any Money Market Quote in whole or in part; provided that: (i) the aggregate principal amount of each Money Market Borrowing may not exceed the applicable amount set forth in the related Money Market Quote Request; (ii) the principal amount of each Money Market Borrowing must be $10,000,000 or a larger multiple of $1,000,000; (iii) acceptance of offers may only be made on the basis of ascending Money Market Margins or Money Market Absolute Rates, as the case may be; and (iv) the Borrower may not accept any offer that is described in subsection (d)(iii) or that otherwise fails to comply with the requirements of this Agreement. (g) Allocation by Agent. If offers are made by two or more Banks with the same Money Market Margins or Money Market Absolute Rates, as the case may be, for a greater aggregate principal amount than the amount in respect of which such offers are accepted for the related Interest Period, the principal amount of Money Market Loans in respect of which such offers are accepted shall be allocated by the Agent among such Banks as nearly as possible (in multiples of $1,000,000, as the Agent may deem appropriate) in proportion to the aggregate principal amounts of such offers. Determinations by the Agent of the amounts of Money Market Loans shall be conclusive in the absence of manifest error. SECTION 2.4. Notice to Banks; Funding of Loans. (a) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify each 18 Bank of the contents thereof and of such Bank's share (if any) of such Borrowing and such Notice of Borrowing shall not thereafter be revocable by the Borrower. (b) Not later than 12:00 Noon (New York City time) on the date of each Borrowing, each Bank participating therein shall make available its share of such Borrowing, in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 9.1. Unless the Agent determines that any applicable condition specified in Article 3 has not been satisfied, the Agent will make the funds so received from the Banks available to the Borrower at the Agent's aforesaid address. (c) Unless the Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Agent such Bank's share of such Borrowing, the Agent may assume that such Bank has made such share available to the Agent on the date of such Borrowing in accordance with subsection (b) of this Section and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such share available to the Agent, such Bank and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.7 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Bank's Loan included in such Borrowing for purposes of this Agreement. SECTION 2.5. Notes. (a) The Loans of each Bank shall be evidenced by a single Note payable to the order of such Bank for the account of its Applicable Lending Office in an amount equal to the aggregate unpaid principal amount of such Bank's Loans. (b) Each Bank may, by notice to the Borrower and the Agent, request that its Loans of a particular type be evidenced by a separate Note in an amount equal to the aggregate unpaid principal amount of such Loans. Each such Note shall be in substantially the form of Exhibit A hereto with appropriate modifications to reflect the fact that it evidences solely Loans of the relevant type. Each reference in this Agreement to the "Note" of such Bank shall be deemed to refer to and include any or all of such Notes, as the context may require. (c) Upon receipt of each Bank's Note pursuant to Section 3.1(a), the Agent shall forward such Note to such Bank. Each Bank shall record the date, amount, type and maturity of each Loan made by 19 it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Bank so elects in connection with any transfer or enforcement of its Note, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the failure of any Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required. SECTION 2.6. Maturity of Loans. (a) Each Committed Loan shall mature, and the principal amount thereof shall be due and payable, on the Termination Date. (b) Each Money Market Loan included in any Money Market Borrowing shall mature, and the principal amount thereof shall be due and payable, on the last day of the Interest Period applicable to such Borrowing. SECTION 2.7. Interest Rates. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Base Rate for such day. Such interest shall be payable quarterly in arrears on each Quarterly Date and, with respect to the principal amount of any Base Rate Loan converted to a CD Loan or a Euro-Dollar Loan, on each date a Base Rate Loan is so converted. Any overdue principal of or interest on any Base Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for such day. (b) Each CD Loan shall bear interest on the outstanding principal amount thereof, for each day during each Interest Period applicable thereto, at a rate per annum equal to the sum of the CD Margin for such day plus the Adjusted CD Rate applicable to such Interest Period; provided that if any CD Loan or any portion thereof shall, as a result of clause (2)(b) of the definition of Interest Period, have an Interest Period of less than 30 days, such portion shall bear interest during such Interest Period at the rate applicable to Base Rate Loans during such period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than 90 days, at intervals of 90 days after the first day thereof. Any overdue principal of or interest on any CD Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day, provided that until the end of the Interest Period applicable to such CD Loan, any such overdue principal shall bear interest at the higher of the foregoing rate and 2% plus the sum 20 of the CD Margin plus the Adjusted CD Rate applicable to such Loan at the date such payment was due. The "Adjusted CD Rate" applicable to any Interest Period means a rate per annum determined pursuant to the following formula: [ CDBR ]* ACDR = [ ---------- ] + AR [ 1.00 - DRP ] ACDR = Adjusted CD Rate CDBR = CD Base Rate DRP = Domestic Reserve Percentage AR = Assessment Rate __________ * The amount in brackets being rounded upward, if necessary, to the next higher 1/100 of 1% The "CD Base Rate" applicable to any Interest Period is the rate of interest determined by the Agent to be the average (rounded upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the first day of such Interest Period by two or more New York certificate of deposit dealers of recognized standing for the purchase at face value from each CD Reference Bank of its certificates of deposit in an amount comparable to the principal amount of the CD Loan of such CD Reference Bank to which such Interest Period applies and having a maturity comparable to such Interest Period. "Domestic Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including without limitation any basic, supplemental or emergency reserves) for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of new non-personal time deposits in dollars in New York City having a maturity comparable to the related Interest Period and in an amount of $100,000 or more. The Adjusted CD Rate shall be adjusted automatically on and as of the effective date of any change in the Domestic Reserve Percentage. "Assessment Rate" means for any day the annual assessment rate in effect on such day which is payable by a member of the Bank Insurance Fund classified as adequately capitalized and within supervisory subgroup "A" (or a comparable successor assessment risk classification) within the meaning of 12 C.F.R. Section 327.3(e) (or any successor provision) to the Federal Deposit Insurance Corporation (or 21 any successor) for such Corporation's (or such successor's) insuring time deposits at offices of such institution in the United States. The Adjusted CD Rate shall be adjusted automatically on and as of the effective date of any change in the Assessment Rate. (c) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for each day during each Interest Period applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such day plus the London Interbank Offered Rate applicable to such Interest Period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof. The "London Interbank Offered Rate" applicable to any Interest Period means the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per annum at which deposits in dollars are offered to each of the Euro-Dollar Reference Banks in the London interbank market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest Period is to apply and for a period of time comparable to such Interest Period. (d) Any overdue principal of or interest on any Euro-Dollar Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day, provided that until the end of the Interest Period applicable to such Euro-Dollar Loan, any such overdue principal shall bear interest at the higher of the foregoing rate and the sum of 2% plus the Euro-Dollar Margin for such day plus the London Interbank Offered Rate applicable to such Loan at the date such payment was due. (e) Subject to Section 8.1, each Money Market LIBOR Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the London Interbank Offered Rate for such Interest Period (determined in accordance with Section 2.7(c) as if the related Money Market LIBOR Borrowing were a Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the Bank making such Loan in accordance with Section 2.3. Each Money Market Absolute Rate Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the Money Market Absolute Rate quoted by the Bank making such Loan in accordance with Section 2.3. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof. Any overdue principal of or interest on any Money Market Loan shall bear interest, payable on demand, for each day until 22 paid at a rate per annum equal to the sum of 2% plus the Base Rate for such day. (f) The Agent shall determine each interest rate applicable to the Loans hereunder. The Agent shall give prompt notice to the Borrower and the participating Banks of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error. (g) Each Reference Bank agrees to use its best efforts to furnish quotations to the Agent as contemplated by this Section. If any Reference Bank does not furnish a timely quotation, the Agent shall determine the relevant interest rate on the basis of the quotation or quotations furnished by the remaining Reference Bank or Banks or, if none of such quotations is available on a timely basis, the provisions of Section 8.1 shall apply. SECTION 2.8. Fees. (a) Facility Fee. The Borrower shall pay to the Agent for the account of the Banks ratably a facility fee at the Facility Fee Rate (determined daily in accordance with the Pricing Schedule). Such facility fee shall accrue (i) from and including the Effective Date to but excluding the date of termination of the Commitments in their entirety, on the daily aggregate amount of the Commitments (whether used or unused) and (ii) from and including such date of termination to but excluding the date the Loans shall be repaid in their entirety, on the daily aggregate outstanding principal amount of the Loans. (b) Payments. Accrued fees under this Section shall be payable quarterly in arrears on each Quarterly Date until the date of termination of the Commitments in their entirety (and, if later, the date the Loans shall be repaid in their entirety). SECTION 2.9. Optional Termination or Reduction of Commitments. During the Revolving Credit Period, the Borrower may, upon at least three Domestic Business Days' notice to the Agent, (i) terminate the Commitments at any time, if no Loans are outstanding at such time or (ii) ratably reduce from time to time by an aggregate amount of $10,000,000 or any larger multiple of $1,000,000, the aggregate amount of the Commitments in excess of the aggregate outstanding principal amounts of the Loans. SECTION 2.10. Method of Electing Interest Rates. (a) The Loans included in each Committed Borrowing shall bear interest initially at the type of rate specified by the Borrower in the applicable Notice of Committed Borrowing. Thereafter, the Borrower may from time to time elect to change or continue the type of interest rate borne by each Group of Loans (subject in each case to the provisions of Article 8), as follows: 23 (i) if such Loans are Base Rate Loans, the Borrower may elect to convert such Loans to CD Loans as of any Domestic Business Day or to Euro-Dollar Loans as of any Euro-Dollar Business Day; (ii) if such Loans are CD Loans, the Borrower may elect to convert such Loans to Base Rate Loans or Euro-Dollar Loans or elect to continue such Loans as CD Loans for an additional Interest Period, subject to Section 2.14 in the case of any such conversion or continuation effective on any day other than the last day of the then current Interest Period applicable to such Loans; and (iii) if such Loans are Euro-Dollar Loans, the Borrower may elect to convert such Loans to Base Rate Loans or CD Loans or elect to continue such Loans as Euro-Dollar Loans for an additional Interest Period, subject to Section 2.14 in the case of any such conversion or continuation effective on any day other than the last day of the then current Interest Period applicable to such Loans. Each such election shall be made by delivering a notice (a "Notice of Interest Rate Election") to the Agent not later than 10:30 A.M. (New York City time) on the third Euro-Dollar Business Day before the conversion or continuation selected in such notice is to be effective (unless the relevant Loans are to be converted to Domestic Loans of the other type or are CD Rate Loans to be continued as CD Rate Loans for an additional Interest Period, in which case such notice shall be delivered to the Agent not later than 10:30 A.M. (New York City time) on the second Domestic Business Day before such conversion or continuation is to be effective). A Notice of Interest Rate Election may, if it so specifies, apply to only a portion of the aggregate principal amount of the relevant Group of Loans; provided that (i) such portion is allocated ratably among the Loans comprising such Group and (ii) the portion to which such Notice applies, and the remaining portion to which it does not apply, are each $10,000,000 or any larger multiple of $1,000,000. (b) Each Notice of Interest Rate Election shall specify: (i) the Group of Loans (or portion thereof) to which such notice applies; (ii) the date on which the conversion or continuation selected in such notice is to be effective, which shall comply with the applicable clause of subsection (a) above; (iii) if the Loans comprising such Group are to be converted, the new type of Loans and, if the Loans being converted are to be Fixed Rate Loans, the duration of the next succeeding Interest Period applicable thereto; and 24 (iv) if such Loans are to be continued as CD Loans or Euro-Dollar Loans for an additional Interest Period, the duration of such additional Interest Period. Each Interest Period specified in a Notice of Interest Rate Election shall comply with the provisions of the definition of Interest Period. (c) Upon receipt of a Notice of Interest Rate Election from the Borrower pursuant to subsection (a) above, the Agent shall promptly notify each Bank of the contents thereof and such notice shall not thereafter be revocable by the Borrower. If the Borrower fails to deliver a timely Notice of Interest Rate Election to the Agent for any Group of Fixed Rate Loans, such Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto. (d) An election by the Borrower to change or continue the rate of interest applicable to any Group of Loans pursuant to this Section 2.10 shall not constitute a "Borrowing" subject to the provisions of Section 3.2. SECTION 2.11. Scheduled Termination of Commitments. The Commitments shall terminate on the Termination Date and any Loans then outstanding (together with accrued interest thereon) shall be due and payable on such date. SECTION 2.12. Optional Prepayments. (a) Subject in the case of any Fixed Rate Loans to Section 2.14, the Borrower may, upon at least one Domestic Business Day's notice to the Agent, prepay the Group of Base Rate Loans (or any Money Market Borrowing bearing interest at the Base Rate pursuant to Section 8.1), upon at least three Domestic Business Days' notice to the Agent, prepay any Group of CD Loans, or upon at least three Euro-Dollar Business Days' notice to the Agent, prepay any Group of Euro-Dollar Loans, in each case in whole at any time, or from time to time in part in amounts aggregating $10,000,000 or any larger multiple of $1,000,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Loans of the several Banks included in such Group or Borrowing. (b) Except as provided in subsection (a) above the Borrower may not prepay all or any portion of the principal amount of any Money Market Loan prior to the maturity thereof. (c) Upon receipt of a notice of prepayment pursuant to this Section, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share (if any) of such prepayment and such notice shall not thereafter be revocable by the Borrower. 25 SECTION 2.13. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and of fees hereunder, not later than 12:00 Noon (New York City time) on the date when due, in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 9.1. The Agent will promptly distribute to each Bank its ratable share of each such payment received by the Agent for the account of the Banks. Whenever any payment of principal of, or interest on, the Domestic Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans or the Money Market LIBOR Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. Whenever any payment of principal of, or interest on, the Money Market Absolute Rate Loans shall be due on a day which is not a Euro- Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. (b) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such payment, each Bank shall repay to the Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Agent, at the Federal Funds Rate. SECTION 2.14. Funding Losses. If the Borrower makes any payment of principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is converted (pursuant to Article 2, 6, or 8 or otherwise) on any day other than the last day of an Interest Period applicable thereto, or the last day of an applicable period fixed pursuant to Section 2.7(d), or if the Borrower fails to borrow or prepay any Fixed Rate Loans after notice has been given to any Bank in accordance with Section 2.4(a) or 2.12(c), the Borrower shall reimburse each Bank within 15 days after demand for any resulting loss or expense incurred by it (or by an existing or prospective Participant in the related Loan), including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for the period after any such payment or conversion or failure to borrow or prepay, provided that such Bank shall have 26 delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. SECTION 2.15. Computation of Interest and Fees. Interest based on the Prime Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest and fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). SECTION 2.16. Regulation D Compensation. For so long as any Bank maintains reserves against "Eurocurrency liabilities" (or any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of such Bank to United States residents), and as a result the cost to such Bank (or its Applicable Lending Office) of making or maintaining its Euro-Dollar Loans is increased, then such Bank may require the Borrower to pay, contemporaneously with each payment of interest on the Euro-Dollar Loans, additional interest on the related Euro-Dollar Loan of such Bank at a rate per annum determined by such Bank up to but not exceeding the excess of (i) (A) the applicable London Interbank Offered Rate divided by (B) one minus the Euro-Dollar Reserve Percentage over (ii) the applicable London Interbank Offered Rate. Any Bank wishing to require payment of such additional interest (x) shall so notify the Borrower and the Agent, in which case such additional interest on the Euro-Dollar Loans of such Bank shall be payable to such Bank at the place indicated in such notice with respect to each Interest Period commencing at least three Euro-Dollar Business Days after the giving of such notice and (y) shall furnish to the Borrower at least five Euro-Dollar Business Days prior to each date on which interest is payable on the Euro-Dollar Loans an officer's certificate setting forth in reasonable detail the amount to which such Bank is then entitled under this Section 2.16 (which shall be consistent with such Bank's good faith estimate of the level at which the related reserves are maintained by it). ARTICLE 3 CONDITIONS SECTION 3.1. Closing. The closing hereunder shall occur upon receipt by the Agent of the following documents, each dated the Closing Date unless otherwise indicated: (a) a duly executed Note for the account of each Bank dated on or before the Closing Date complying with the provisions of Section 2.5; 27 (b) an opinion of the General Counsel of the Guarantor, substantially in the form of Exhibit E hereto; (c) an opinion of Davis Polk & Wardwell, special counsel for the Agent, substantially in the form of Exhibit F hereto; and (d) all documents the Agent may reasonably request relating to the existence of the Borrower and the Guarantor, the corporate authority for and the validity of this Agreement and the Notes, and any other matters relevant hereto, all in form and substance satisfactory to the Agent. The Agent shall promptly notify the Borrower and the Banks of the Closing Date, and such notice shall be conclusive and binding on all parties hereto. SECTION 3.2. Borrowings. The obligation of any Bank to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions: (a) the fact that the Closing Date shall have occurred on or prior to March 31, 1995; (b) receipt by the Agent of a Notice of Borrowing as required by Section 2.2 or 2.3, as the case may be; (c) the fact that, immediately after such Borrowing, the aggregate outstanding principal amount of the Loans will not exceed the aggregate amount of the Commitments; (d) the fact that, immediately before and after such Borrowing, no Default shall have occurred and be continuing; and (e) the fact that the representations and warranties of the Guarantor and the Borrower contained in this Agreement (except those contained in Section 4.2(c), in Section 4.3(i) and in the last sentence of Section 4.12 hereof) shall be true on and as of the date of such Borrowing. Each Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower and the Guarantor on the date of such Borrowing as to the facts specified in clauses (c), (d) and (e) of this Section. ARTICLE 4 REPRESENTATIONS AND WARRANTIES The Guarantor and the Borrower represent and warrant that: SECTION 4.1. Corporate Existence. Each of the Guarantor and its Subsidiaries: (a) is a corporation, partnership or other entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (b) has all requisite corporate or 28 other power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted; and (c) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could have a Material Adverse Effect. The Borrower is a Wholly-Owned Subsidiary of the Guarantor. SECTION 4.2. Financial Condition. (a) The Guarantor has heretofore furnished to each of the Banks the consolidated balance sheet of the Guarantor and its Subsidiaries as at June 30, 1994 and the related consolidated statements of earnings, cash flows and changes in shareholders' equity of the Guarantor and its Subsidiaries for the fiscal year ended on said date, with the opinion thereon of Ernst & Young LLP. All such financial statements fairly present, in all material aspects, the consolidated financial condition of the Guarantor and its Subsidiaries, as at said date, and the consolidated results of their operations for the fiscal year ended on said date, all in accordance with GAAP. (b) The Guarantor has heretofore furnished to each of the Banks the unaudited consolidated balance sheet of the Guarantor and its Subsidiaries as at December 31, 1994 and the related unaudited consolidated statements of earnings, cash flows and changes in shareholders' equity of the Guarantor and its Subsidiaries for the six month period ended on said date. All such financial statements fairly present, in all material aspects, the consolidated financial condition of the Guarantor and its subsidiaries, as at said date, and the consolidated results of their operations for the six month period ended on said date, all in accordance with GAAP. (c) Since December 31, 1994, there has been no material adverse change, and nothing has occurred that is reasonably likely to result in any material adverse change, in the consolidated financial condition, operations or business taken as a whole of the Guarantor and its Subsidiaries from that set forth in the financial statements referred to in clause (b) above as at the date referred to therein. SECTION 4.3. Litigation. Except as may be disclosed in regular periodic reports filed with the Securities and Exchange Commission prior to the date of this Agreement (copies of which reports have heretofore been furnished to the Banks), there are no legal or arbitral proceedings, or any proceedings by or before any governmental or regulatory authority or agency, now pending or (to the knowledge of the Guarantor) threatened against the Guarantor or any of its Subsidiaries (i) which, if adversely determined, is reasonably likely to have a Material Adverse Effect or (ii) which in any manner draws into question the validity of this Agreement or the Notes. SECTION 4.4. No Breach. None of the execution and delivery of this Agreement and the Notes, the consummation of the transactions 29 herein contemplated or compliance with the terms and provisions hereof will conflict with or result in a breach of, or require any consent under, the charter or by-laws of the Borrower or the Guarantor, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which the Guarantor or any of its Subsidiaries is a party or by which any of them or any of their Property is bound or to which any of them is subject, or constitute a default under any such agreement or instrument. SECTION 4.5. Action. Each of the Guarantor and the Borrower has all necessary corporate power, authority and legal right to execute, deliver and perform its obligations under this Agreement and the Notes; the execution, delivery and performance by each of the Guarantor and the Borrower of this Agreement and the Notes have been duly authorized by all necessary corporate action on its part (including, without limitation, any required shareholder approvals); and this Agreement has been duly and validly executed and delivered by each of the Guarantor and the Borrower and constitutes, and each of the Notes (in the case of the Borrower) when executed and delivered for value will constitute, its legal, valid and binding obligation, enforceable against each of the Guarantor and the Borrower (as) applicable) in accordance with its respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors' rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). SECTION 4.6. Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any governmental or regulatory authority or agency, or any securities exchange, are necessary for the execution, delivery or performance by the Guarantor and the Borrower of this Agreement or (in the case of the Borrower) the Notes or for the legality, validity or enforceability hereof. SECTION 4.7. ERISA. Each Plan, and, to the knowledge of the Guarantor, each Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or State law, and no event or condition has occurred and is continuing as to which the Guarantor would be under an obligation to furnish a report to the Banks under Section 5.1(e) hereof. SECTION 4.8. Taxes. The Guarantor and its Subsidiaries are members of an affiliated group of corporations filing consolidated returns for Federal income tax purposes, of which the Guarantor is the "common parent" (within the meaning of Section 1504 of the Code) of such group. The Guarantor and its Subsidiaries have filed all Federal income tax returns and all other material tax returns that are required to be filed by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Guarantor or 30 any of its Subsidiaries. The charges, accruals and reserves on the books of the Guarantor and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of the Borrower, adequate. The Guarantor has not given or been requested to give a waiver of the statute of limitations relating to the payment of Federal, state, local and foreign taxes or other impositions, the payment of which is reasonably likely to have a Material Adverse Effect. SECTION 4.9. Investment Company Act. Neither the Guarantor nor any of its Subsidiaries is an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. SECTION 4.10. Public Utility Holding Company Act. Neither the Guarantor nor any of its Subsidiaries is a "holding company", or an "affiliate" of a "holding company," or a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. SECTION 4.11. True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of the Gurantor or the Borrower to the Agent or any Bank in connection with the negotiation, preparation or delivery of this Agreement or included herein or delivered pursuant hereto, when taken as a whole do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by the Guarantor and its Subsidiaries to the Agent and any Bank in connection with this Agreement and the transactions contemplated hereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to the Guarantor or the Borrower that could have a Material Adverse Effect that has not been disclosed herein or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to the Banks for use in connection with the transactions contemplated hereby. SECTION 4.12. Environmental Matters. In the ordinary course of its business, the Guarantor conducts an ongoing review of the effect of Environmental Laws on the business, operations and properties of the Guarantor and its Subsidiaries, in accordance with customary industry practice. On the basis of this review, the Guarantor has reasonably concluded that the costs of compliance with Environmental Laws are unlikely to have a Material Adverse Effect. 31 ARTICLE 5 COVENANTS The Guarantor and the Borrower agree that, so long as any Bank has any Commitment hereunder or any amount payable under any Note remains unpaid: SECTION 5.1. Financial Statements, Etc. The Guarantor will deliver to each of the Banks: (a) as soon as available and in any event within 60 days after the end of each of the first three quarterly fiscal periods of each fiscal year of the Guarantor, consolidated statements of earnings, cash flows and changes in shareholders' equity of the Guarantor and its Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated balance sheet of the Guarantor and its Subsidiaries as at the end of such period, setting forth in each case in comparative form the corresponding consolidated figures for the corresponding period in the preceding fiscal year, accompanied by a certificate of a senior financial officer of the Guarantor, which certificate shall state that said consolidated financial statements fairly present, in all material respects, the consolidated financial condition and results of operations of the Guarantor and its Subsidiaries, in accordance with generally accepted accounting principles, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments); (b) as soon as available and in any event within 120 days after the end of each fiscal year of the Guarantor, consolidated statements of earnings, cash flows and changes in shareholders' equity of the Guarantor and its Subsidiaries for such fiscal year and the related consolidated balance sheet of the Guarantor and its Subsidiaries as at the end of such fiscal year, setting forth in each case in comparative form the corresponding consolidated figures for the preceding fiscal year, and accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that said consolidated financial statements fairly present, in all material respects, the consolidated financial condition and results of operations of the Guarantor and its Subsidiaries as at the end of, and for, such fiscal year in accordance with generally accepted accounting principles; (c) promptly upon their becoming available, copies of all registration statements and regular periodic reports, if any, which the Guarantor shall have filed with the Securities and Exchange Commission (or any governmental agency substituted therefor) or any national securities exchange; (d) promptly upon the mailing thereof to the shareholders of the Guarantor generally, copies of all financial statements, reports and proxy statements so mailed; 32 (e) as soon as possible, and in any event within ten days after the Guarantor knows or has reason to believe that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists, a statement signed by a senior financial officer of the Guarantor setting forth details respecting such event or condition and the action, if any, that the Guarantor or its ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by the Guarantor or an ERISA Affiliate with respect to such event or condition): (i) any reportable event, as defined in Section 4043(b) of ERISA and the regulations issued thereunder, with respect to a Plan, as to which PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event (provided that a failure to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code or Section 302(e) of ERISA, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(d) of the Code); and any request for a waiver under Section 412(d) of the Code for any Plan; (ii) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by the Guarantor or an ERISA Affiliate to terminate any Plan; (iii) the institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Guarantor or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan; (iv) the complete or partial withdrawal from a Multiemployer Plan by the Guarantor or any ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default) or the receipt by the Guarantor or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA; (v) the institution of a proceeding by a fiduciary of any Multiemployer Plan against the Guarantor or any ERISA Affiliate to enforce Section 515 of ERISA, which proceeding is not dismissed within 30 days; and 33 (vi) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of which such Plan is a part if the Guarantor or an ERISA Affiliate fails to timely provide security to the Plan in accordance with the provisions of said Sections; (f) promptly after the Guarantor or Borrower knows or has reason to believe that any Default has occurred, a notice of such Default describing the same in reasonable detail and, together with such notice or as soon thereafter as possible, a description of the action that the Guarantor has taken or proposes to take with respect thereto; and (g) from time to time such other information regarding the financial condition, operations, business or prospects of the Guarantor or any of its Subsidiaries (including, without limitation, any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA) as any Bank or the Agent may reasonably request. The Guarantor will furnish to each Bank, at the time it furnishes each set of financial statements pursuant to paragraph (a) or (b) above, a certificate of a senior financial officer of the Guarantor (i) to the effect that no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail and describing the action that the Guarantor has taken or proposes to take with respect thereto) and (ii) setting forth in reasonable detail the computations necessary to determine whether the Guarantor is in compliance with Sections 5.8 and 5.9 hereof as of the end of the respective quarterly fiscal period or fiscal year. SECTION 5.2. Litigation. The Guarantor will promptly give to each Bank notice of all legal or arbitral proceedings, and of all proceedings by or before any governmental or regulatory authority or agency, and any material development in respect of such legal or other proceedings, affecting the Guarantor or any of its Subsidiaries, except proceedings which, if adversely determined, would not have a Material Adverse Effect. Without limiting the generality of the foregoing, the Guarantor will give to each Bank notice of the assertion of any Environmental Claim by any Person against, or with respect to the activities of, the Guarantor or any of its Subsidiaries and notice of any alleged violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizations, other than any Environmental Claim or alleged violation which, if adversely determined, would not have a Material Adverse Effect. SECTION 5.3. Existence, Etc. The Guarantor will, and will cause each of its Subsidiaries to: (a) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises (provided that 34 nothing in this Section 5.3 shall prohibit any transaction expressly permitted under Sections 5.6 and 5.7 hereof); (b) comply with the requirements of all applicable laws, rules, regulations and orders of governmental or regulatory authorities if failure to comply with such requirements could have a Material Adverse Effect; (c) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; (d) maintain all of its Properties used or useful in its business in good working order and condition, ordinary wear and tear excepted; (e) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP; and (f) subject to Section 10.11 hereof, permit representatives of any Bank or the Agent, during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by such Bank or the Agent (as the case may be). SECTION 5.4. Insurance. The Guarantor will, and will cause each of its Subsidiaries to, keep insured by financially sound and reputable insurers all Property of a character usually insured by corporations engaged in the same or similar business similarly situated against loss or damage of the kinds and in the amounts customarily insured against by such corporations and carry such other insurance as is usually carried by such corporations. SECTION 5.5. Limitation on Liens. The Guarantor will not, nor will it permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except: (a) Liens in existence on the date hereof securing Indebtedness outstanding on the date hereof in an aggregate principal amount not exceeding $50,000,000; (b) Liens imposed by any governmental authority for taxes, assessments or charges not yet due or which are being contested in good faith and by appropriate proceedings if, unless the amount thereof is not material with respect to it or its financial condition, 35 adequate reserves with respect thereto are maintained on the books of the Guarantor or the affected Subsidiaries, as the case may be, in accordance with GAAP; (c) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings; (d) pledges or deposits under worker's compensation, unemployment insurance and other social security legislation; (e) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (f) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, easements, licenses, restrictions on the use of Property or minor imperfections in title thereto which, in the aggregate, are not material in amount, and which do not in any case materially detract from the value of the Property subject thereto or interfere with the ordinary conduct of the business of the Guarantor or any of its Subsidiaries; (g) Liens on Property of any corporation which becomes a Subsidiary of the Guarantor after the date of this Agreement; provided that such Liens are in existence at the time such corporation becomes a Subsidiary of the Guarantor, were not created in anticipation thereof and do not at any time secure any Indebtedness other than Indebtedness which was secured by such Liens at the time such corporation became a Subsidiary; (h) Liens upon real and/or tangible personal Property acquired after the date hereof (by purchase, construction or otherwise) by the Guarantor or any of its Subsidiaries, each of which Liens either (A) existed on such Property before the time of its acquisition and was not created in anticipation thereof, or (B) was created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such Property; provided that no such Lien shall extend to or cover any Property of the Guarantor or such Subsidiary other than the Property so acquired and improvements thereon; (i) Liens related to or arising from the refinancing of the $41,000,000 (at the Effective Date) capital lease between IMC 36 Fertilizer Group, Inc. and American Cyanamid relating to property located in Brewster, Florida; (j) Liens incidental to the conduct of its business or the ownership of its Property which were not incurred in connection with the borrowing of money, the obtaining of credit or Derivatives Obligations, and which do not in the aggregate materially detract from the value of its Property or materially impair the use thereof in the operation of its business; (k) Liens arising from judgments, decrees or attachments not in excess of $25,000,000 in the aggregate and in circumstances not constituting an Event of Default under Section 6.1(h) hereof; (l) leases or subleases granted to others otherwise permitted by this Agreement; (m) UCC financing statements and other similar filings regarding leases and other Liens otherwise permitted by this Agreement; (n) rights to receive income in connection with consignment arrangements or licensing agreements in the ordinary course of the Guarantor's or such Subsidiary's business, as the case may be; (o) Liens on cash and cash equivalents securing Derivatives Obligations, provided that the aggregate amount of cash and cash equivalents subject to such Liens may at no time exceed $50,000,000; and (p) any extension, renewal or replacement of the foregoing, provided, however, that the Liens permitted hereunder shall not be spread to cover any additional Indebtedness or Property (other than a substitution of like Property). Notwithstanding the foregoing, nothing in this Section 5.5 shall restrict the ability of the Guarantor or any of its Subsidiaries to sell or assign its accounts receivable. SECTION 5.6. Mergers, Etc. The Guarantor will not, nor will it permit any of its Subsidiaries to, merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, except that (i) any Subsidiary of the Guarantor may merge or consolidate with or into, or transfer assets to, or acquire assets of, any other Subsidiary of the Guarantor, (ii) any Subsidiary of the Guarantor may merge or consolidate with or into, or transfer assets to, the Guarantor and (iii) the Guarantor may merge with or consolidate into, or acquire assets of, and any Subsidiary of the Guarantor may merge or consolidate 37 with or into, or acquire assets of, any other Person, provided in each case that, immediately after giving effect to such proposed transaction, no Default would exist and in the case of any such proposed transaction to which the Guarantor is a party, the Guarantor is the surviving corporation. SECTION 5.7. Change in Nature of Business. The Guarantor will not (i) make any material change in the nature of the business of the Guarantor and its Subsidiaries taken as a whole as carried on as of the date hereof, or (ii) acquire, or permit any of its Subsidiaries to acquire, businesses which result in any material change in the nature of the business of the Guarantor and its Subsidiaries taken as a whole as carried on as of the date hereof; provided, however, that the Guarantor or any of its Subsidiaries may engage in or acquire a business of a nature substantially related to the nature of its business as carried on as of the date hereof, and provided, further, in each case that, immediately after giving effect to such proposed transaction, no Default would exist. SECTION 5.8. Total Debt to Total Capital Ratio. The Guarantor will not permit the ratio of (a) the sum of (x) Total Debt (excluding, for purposes of this Section 5.8 only, Capital Lease Obligations under the $41,000,000 (at the Effective Date) capital lease between IMC Fertilizer Group, Inc. and American Cyanamid relating to property located in Brewster, Florida) plus (y) the Operating Lease Amount at any time to (b) Total Capital at such time to exceed 0.60 to 1. SECTION 5.9. Indebtedness of Subsidiaries. The Guarantor will not permit the aggregate Indebtedness of all of its Subsidiaries (exclusive of Indebtedness owing to the Guarantor or a Wholly-Owned Subsidiary) to exceed at any time (i) 25% of Total Capital, if the ratio of Total Debt to Total Capital is equal to or less than 0.50 to 1 at such time; and (ii) 20% of Total Capital, if the ratio of Total Debt to Total Capital is greater than 0.50 to 1 at such time. SECTION 5.10. Transactions with Affiliates. Except as expressly permitted by this Agreement, the Guarantor will not, nor will it permit any of its Subsidiaries to, directly or indirectly enter into transactions with any Affiliates unless the monetary or business consideration arising therefrom would be substantially as advantageous to the Guarantor and its Subsidiaries as the monetary or business consideration which would obtain in a comparable transaction with a Person not an Affiliate. SECTION 5.11. Use of Proceeds. The Borrower will use the proceeds of the Loans hereunder solely for general corporate purposes (in compliance with all applicable legal and regulatory requirements); provided that neither the Agent nor any Bank shall have any responsibility as to the use of any of such proceeds. No part of the proceeds of any extension of credit hereunder will be used to buy or carry any Margin Stock. 38 SECTION 5.12. Environmental Laws. The Guarantor will, and will cause each of its Subsidiaries to, comply in all material respects with the requirements of all applicable Environmental Laws and all ordinances and regulatory and administrative authorities with respect thereto, and shall not permit or suffer any of its Subsidiaries to, generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce or process Hazardous Materials other than in the ordinary course of business and in compliance in all material respects with applicable Environmental Laws, and shall not, and shall not permit or suffer any of its Subsidiaries to, cause or permit, as a result of any intentional or unintentional act or omission on the part of the Guarantor or any Subsidiary thereof, the installation or placement of Hazardous Materials in violation of or actionable under in any material respect applicable Environmental Laws onto any of its Property or suffer the presence of Hazardous Materials in violation of or actionable under in any material respect applicable Environmental Laws on any of its Property. The Guarantor shall, and shall cause each of its Subsidiaries to, promptly undertake and diligently pursue to completion any remedial clean-up action required of the Guarantor or any Subsidiary under applicable Environmental Laws in the event of any release of Hazardous Materials. SECTION 5.13. Most Favored Lender. The Guarantor will not and will not permit any Subsidiary to (a) enter into any indenture, agreement or other instrument under which any Indebtedness for borrowed money in excess of $15,000,000 for any such indenture, agreement or instrument (or series of related agreements or instruments) of the Guarantor or of any Subsidiary may be issued (a "Restricted Agreement"), or (b) agree to any amendment, waiver, consent, modification, refunding, refinancing or replacement of any Restricted Agreement, in either case, with terms the effect of which is to (i) include a Covenant which imposes a restriction, limitation or obligation in favor of another lender not imposed in favor of the Banks by this Agreement, or (ii) revise or alter any Covenant contained therein the effect of which is to impose a restriction, limitation or obligation in favor of another lender not imposed in favor of the Banks by this Agreement, unless the Guarantor or such Subsidiary, as the case may be, concurrently (x) notifies the Banks and the Agent thereof and (y) incorporates herein such additional, altered or revised Covenant. If the Agent at the time so elects by notice to the Guarantor and the Banks, the incorporation of each such additional Covenant shall be deemed to occur automatically without any further action or the execution of any additional document by any of the parties to this Agreement. If the Agent does not elect to effect such an automatic incorporation, the Agent shall promptly tender to the Guarantor and the Borrower for execution by them an amendment (executed by the Agent) incorporating such additional Covenant. 39 ARTICLE 6 DEFAULTS SECTION 6.1. Events of Default. If one or more of the following events ("Events of Default") shall have occurred and be continuing: (a) The Borrower and the Guarantor shall: (i) default in the payment of any principal of any Loan when due (whether at stated maturity or at mandatory or optional prepayment); or (ii)default in the payment of any interest on any Loan, any fee or any other amount payable by it hereunder when due and such default shall have continued unremedied for five days; or (b) The Guarantor or any of its Subsidiaries shall default beyond any applicable grace period, or, in the case of any Derivatives Obligations for which no grace period is otherwise provided, beyond five days, in the payment when due of any principal of or interest on any Indebtedness (other than the Indebtedness hereunder or under the Notes) aggregating $15,000,000 or more, or in the payment when due of amounts exceeding $15,000,000 in the aggregate for the payment or collateralization of Derivatives Obligations; or any event specified in any note, agreement, indenture or other document evidencing or relating to any such Indebtedness or any event specified in any instrument or agreement governing such Derivatives Obligations shall occur if the effect of such event is (or, with the giving of notice or the passage of time or both, would be) to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, such Indebtedness to become due, or to be prepaid in full (whether by redemption, purchase, offer to purchase or otherwise), prior to its stated maturity or to have the interest rate thereon reset to a level so that securities evidencing such Indebtedness trade at a level specified in relation to the par value thereof or, in the case of an instrument or agreement governing such Derivatives Obligations, to permit the payments owing under such instrument or agreement to be liquidated; or (c) Any representation, warranty or certification made or deemed made herein (or in any modification or supplement hereto) by the Guarantor or the Borrower, or any certificate furnished to any Bank or the Agent pursuant to the provisions hereof, shall prove to have been false or misleading as of the time made or furnished in any material respect; or (d) The Guarantor shall default in the performance of any of its obligations under any of Sections 5.1(f), 5.5 through 5.9 (inclusive), or 5.13 hereof; or either of the Borrower or the Guarantor shall default in the performance of any of its other obligations in this Agreement and such default shall continue unremedied for a period of 30 days after notice thereof to the Borrower by the Agent at the request of any Bank; or 40 (e) The Guarantor or any of its Subsidiaries shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due; or (f) The Guarantor or any of its Subsidiaries shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its Property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code or (vi) take any corporate action for the purpose of effecting any of the foregoing; or (g) A proceeding or case shall be commenced, without the application or consent of the Guarantor or any of its Subsidiaries, in any court of competent jurisdiction, seeking (i) its reorganization, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of the Guarantor or such Subsidiary or of all or any substantial part of its Property, or (iii) similar relief in respect of the Guarantor or such Subsidiary under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days; or an order for relief against the Guarantor or such Subsidiary shall be entered in an involuntary case under the Bankruptcy Code; or (h) A final judgment or judgments for the payment of money in excess of $15,000,000 in the aggregate shall be rendered by one or more courts, administrative tribunals or other bodies having jurisdiction against the Guarantor or any of its Subsidiaries and the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof and the Guarantor or the relevant Subsidiary shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or (i) An event or condition specified in Section 5.1(e) hereof shall occur or exist with respect to any Plan or Multiemployer Plan and, as a result of such event or condition, together with all other such events or conditions, the Guarantor or any ERISA Affiliate shall 41 incur or in the opinion of the Required Banks shall be reasonably likely to incur a liability to a Plan, a Multiemployer Plan or PBGC (or any combination of the foregoing) which would constitute, in the determination of the Required Banks, a Material Adverse Effect; or (j) Any Person or two or more Persons acting in concert shall have acquired, in one transaction or in a series of related transactions, beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Guarantor (or other securities convertible into such securities) representing 40% or more of the combined voting power of the Guarantor then outstanding securities entitled to vote in the election of directors (other than securities having such power only by reason of the happening of a contingency) or there shall have been a drawing under the Guarantor's "rabbi trust" letters of credit due to a "change of control" thereunder or; (k) at any time any oblication of the Guarantor under Article 9 shall for any reason cease to be in full force and effect, or the Guarantor shall so assert in writing; or (l) The Borrower shall for any reason fail to constitute a Wholly- Owned Subsidiary of the Guarantor; THEREUPON: (1) in the case of an Event of Default other than one referred to in clause (f) or (g) of this Section 6.1 with respect to the Guarantor or the Borrower, (A) the Agent, upon request of the Banks having at least 51% of the aggregate amount of the Commitments, shall, by notice to the Borrower, terminate the Commitments and they shall thereupon terminate, and (B) the Agent, upon request of Banks holding at least 51% of the aggregate unpaid principal amount of the Loans, shall, by notice to the Borrower, declare the principal amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Borrower hereunder and under the Notes to be forthwith due and payable, whereupon such amounts shall be immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Borrower; and (2) in the case of the occurrence of an Event of Default referred to in clause (f) or (g) of this Section 6.1 with respect to the Guarantor or the Borrower, the Commitments shall automatically be terminated and the principal amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Borrower hereunder and under the Notes shall automatically become immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Borrower. SECTION 6.2. Notice of Default. The Agent shall give notice to the Borrower under Section 6.1(d) promptly upon being requested to do so by any Bank and shall thereupon notify all the Banks thereof. 42 ARTICLE 7 THE AGENT AND THE CO-AGENT SECTION 7.1. Appointment and Authorization. Each Bank irrevocably appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the Notes as are delegated to the Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto. SECTION 7.2 Agent and Affiliates. Morgan Guaranty Trust Company of New York shall have the same rights and powers under this Agreement as any other Bank and may exercise or refrain from exercising the same as though it were not the Agent, and Morgan Guaranty Trust Company of New York and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Guarantor or any Subsidiary or affiliate of the Guarantor as if it were not the Agent hereunder. SECTION 7.3. Action by Agent. The obligations of the Agent hereunder are only those expressly set forth herein. Without limiting the generality of the foregoing, the Agent shall not be required to take any action with respect to any Default, except as expressly provided in Article 6. SECTION 7.4. Consultation with Experts. The Agent may consult with legal counsel (who may be counsel for the Guarantor or the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. SECTION 7.5. Liability of Agent. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence or willful misconduct. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of the Guarantor or the Borrower; (iii) the satisfaction of any condition specified in Article 3, except receipt of items required to be delivered to the Agent; or (iv) the validity, effectiveness or genuineness of this Agreement, the Notes or any other instrument or writing furnished in connection herewith. The Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, telex, facsimile transmission or similar writing) believed by it to be genuine or to be signed by the proper party or parties. 43 SECTION 7.6. Indemnification. Each Bank shall, ratably in accordance with its Commitment, indemnify the Agent, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower or the Guarantor) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees' gross negligence or willful misconduct) that such indemnitees may suffer or incur in connection with this Agreement or any action taken or omitted by such indemnitees hereunder. SECTION 7.7. Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under this Agreement. SECTION 7.8. Successor Agent. The Agent may resign at any time by giving notice thereof to the Banks and the Borrower. Upon any such resignation, the Required Banks shall have the right to appoint a successor Agent reasonably acceptable to the Borrower. If no successor Agent shall have been so appointed by the Required Banks, and shall have accepted such appointment, within 30 days after the retiring Agent gives notice of resignation, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $50,000,000. Upon the acceptance of its appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent. SECTION 7.9. Agent's Fees. The Borrower shall pay to the Agent for its own account fees in the amounts and at the times previously agreed upon between the Borrower and the Agent. SECTION 7.10. Co-Agent. Nothing in this Agreement shall impose upon the Co-Agent, in its capacity as such, any duty or obligation whatsoever. 44 ARTICLE 8 CHANGE IN CIRCUMSTANCES SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Interest Period for any CD Loan, Euro-Dollar Loan or Money Market LIBOR Loan: (a) the Agent is advised by the Reference Banks that deposits in dollars (in the applicable amounts) are not being offered to the Reference Banks in the relevant market for such Interest Period, or (b) in the case of CD Loans or Euro-Dollar Loans, Banks having 50% or more of the aggregate principal amount of the affected Loans advise the Agent that the Adjusted CD Rate or the London Interbank Offered Rate, as the case may be, as determined by the Agent will not adequately and fairly reflect the cost to such Banks of funding their CD Loans or Euro-Dollar Loans, as the case may be, for such Interest Period, the Agent shall forthwith give notice thereof to the Borrower and the Banks, whereupon until the Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, (i) the obligations of the Banks to make CD Loans or Euro-Dollar Loans, as the case may be, or to continue or convert outstanding Loans as or into CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended and (ii) each outstanding CD Loan or Euro-Dollar Loan, as the case may be, shall be converted into a Base Rate Loan on the last day of the then current Interest Period applicable thereto. Unless the Borrower notifies the Agent at least two Domestic Business Days before the date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, (i) if such Fixed Rate Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall bear interest for each day from and including the first day to but excluding the last day of the Interest Period applicable thereto at the Base Rate for such day. SECTION 8.2 Illegality. If, on or after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall forthwith give notice thereof to the other Banks and 45 the Borrower, whereupon until such Bank notifies the Borrower and the Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Bank to make Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans, shall be suspended. Before giving any notice to the Agent pursuant to this Section, such Bank shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. If such notice is given, each Euro-Dollar Loan of such Bank then outstanding shall be converted to a Base Rate Loan either (a) on the last day of the then current Interest Period applicable to such Euro-Dollar Loan if such Bank may lawfully continue to maintain and fund such Loan to such day or (b) immediately if such Bank shall determine that it may not lawfully continue to maintain and fund such Loan to such day. SECTION 8.3. Increased Cost and Reduced Return. (a) If on or after (x) the date hereof, in the case of any Committed Loan or any obligation to make Committed Loans or (y) the date of the related Money Market Quote, in the case of any Money Market Loan, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding (i) with respect to any CD Loan any such requirement included in an applicable Domestic Reserve Percentage and (ii) with respect to any Euro-Dollar Loan any such requirement with respect to which such Bank is entitled to compensation during the relevant Interest Period under Section 2.16), special deposit, insurance assessment (excluding, with respect to any CD Loan, any such requirement reflected in an applicable Assessment Rate) or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its Applicable Lending Office) or on the United States market for certificates of deposit or the London interbank market any other condition affecting its Fixed Rate Loans, its Note or its obligation to make Fixed Rate Loans and the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Applicable Lending Office) under this Agreement or under its Note with respect thereto, by an amount deemed by such Bank to be material, then, within 15 days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such increased cost or reduction. 46 (b) If any Bank shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank's obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, within 15 days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction. (c) Each Bank will promptly notify the Borrower and the Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section but in any event within 45 days, after such Bank obtains actual knowledge thereof; provided that (i) if any Bank fails to give such notice within 45 days after it obtains actual knowledge of such an event, such Bank shall, with respect to compensation payable pursuant to this Section 8.3 in respect of any costs resulting from such event, only be entitled to payment under this Section 8.3 for costs incurred from and after the date 45 days prior to the date that such Bank does give such notice and (ii) each Bank will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank claiming compensation under this Section and setting forth in reasonable detail the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Bank shall use reasonable averaging and attribution methods. SECTION 8.4. Taxes. (a) For the purposes of this Section 8.4, the following terms have the following meanings: "Taxes" means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings with respect to any payment by the Borrower or the Guarantor pursuant to this Agreement or under any Note, and all liabilities with respect thereto, excluding (i) in the case of each Bank and the Agent, taxes imposed on its income, and franchise or similar taxes imposed on it, by a jurisdiction under the laws of which such Bank or the Agent (as the case may be) is organized or in which its principal executive office is located or, in the case of each Bank, in which its Applicable Lending Office is located and 47 (ii) in the case of each Bank, any United States withholding tax imposed on such payments but only to the extent that such Bank is subject to United States withholding tax at the time such Bank first becomes a party to this Agreement. "Other Taxes" means any present or future stamp or documentary taxes and any other excise or property taxes, or similar charges or levies, which arise from any payment made pursuant to this Agreement or under any Note or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note. (b) Any and all payments by the Borrower and the Guarantor to or for the account of any Bank or the Agent hereunder or under any Note shall be made without deduction for any Taxes or Other Taxes; provided that, if the Borrower or the Guarantor (as the case my be) shall be required by law to deduct any Taxes or Other Taxes from any such payments, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 8.4) such Bank or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or Guarantor (as applicable) shall make such deductions, (iii) the Borrower or Guarantor (as applicable) shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) the Borrower or Guarantor (as applicable) shall furnish to the Agent, at its address referred to in Section 10.1, the original or a certified copy of a receipt evidencing payment thereof. (c) Each of the Borrower and the Guarantor agrees to indemnify each Bank and the Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 8.4) paid by such Bank or the Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be paid within 15 days after such Bank or the Agent (as the case may be) makes demand therefor. (d) Each Bank organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Bank listed on the signature pages hereof and on or prior to the date on which it becomes a Bank in the case of each other Bank, and from time to time thereafter if requested in writing by the Borrower (but only so long as such Bank remains lawfully able to do so), shall provide the Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Bank is entitled to benefits under an income tax treaty to which the United States is a party which exempts the Bank from United States withholding tax or reduces the rate of withholding tax on payments of interest for the account of such Bank or certifying that the income receivable pursuant to this Agreement is 48 effectively connected with the conduct of a trade or business in the United States. (e) For any period with respect to which a Bank has failed to provide the Borrower with the appropriate form pursuant to Section 8.4(d) (unless such failure is due to a change in treaty, law or regulation occurring subsequent to the date on which such form originally was required to be provided), such Bank shall not be entitled to indemnification under Section 8.4(b) or (c) with respect to Taxes imposed by the United States; provided that if a Bank, which is otherwise exempt from or subject to a reduced rate of withholding tax, becomes subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Bank shall reasonably request to assist such Bank to recover such Taxes. (f) If the Borrower is required to pay additional amounts to or for the account of any Bank pursuant to this Section 8.4, then such Bank will change the jurisdiction of its Applicable Lending Office if, in the judgment of such Bank, such change (i) will eliminate or reduce any such additional payment which may thereafter accrue and (ii) is not otherwise disadvantageous to such Bank. SECTION 8.5. Base Rate Loans Substituted for Affected Fixed Rate Loans. If (i) the obligation of any Bank to make, or convert outstanding Loans to, Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii) any Bank has demanded compensation under Section 8.3 or 8.4 with respect to its CD Loans or Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business Days' prior notice to such Bank through the Agent, have elected that the provisions of this Section shall apply to such Bank, then, unless and until such Bank notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist: (a) all Loans which would otherwise be made by such Bank as (or continued as or converted into) CD Loans or Euro-Dollar Loans, as the case may be, shall instead be Base Rate Loans (on which interest and principal shall be payable contemporaneously with the related Fixed Rate Loans of the other Banks); and (b) after each of its CD Loans or Euro-Dollar Loans, as the case may be, has been repaid (or converted to a Base Rate Loan), all payments of principal which would otherwise be applied to repay such Fixed Rate Loans shall be applied to repay its Base Rate Loans instead. If such Bank notifies the Borrower that the circumstances giving rise to such notice no longer apply, the principal amount of each such Base Rate Loan shall be converted into a CD Loan or Euro-Dollar Loan, as the case may be, on the first day of the next succeeding Interest Period applicable to the related CD Loans or Euro-Dollar Loans of the other Banks. 49 SECTION 8.6. Substitution of Bank. Provided that no Default shall have occurred and be continuing, if (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii) any Bank has demanded compensation under Section 8.3 or 8.4 the Borrower shall have the right to seek a substitute bank or banks satisfactory to the Agent (which may be one or more of the Banks) to purchase the Note and assume the Commitment of such Bank. ARTICLE 9 GUARANTY SECTION 9.1. The Guaranty. The Guarantor hereby unconditionally guarantees the full and punctual payment (whether at stted maturity, upon acceleration or otherwise) of the principal of and interest on each Note issued by the Borrower pursuant to this Agreement, and the full and punctual payment of allother amounts payable by the Borrower under this Agreement. Upon failure by the Borrower to pay punctually any such amount, the Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in this Agreement. Section 9.2. Guaranty Unconditional. The obligations of the Guarantor hereunder shall be unconditiional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (i) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Borrower under this Agreement or any Note, by operation of law or otherwise; (ii) any modification or amendment of or supplement to this Agreement or any Note; (iii) any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of the Borrower under this Agreement or any Note; (iv) any change in the corporate existence, structure or ownership of the Borrower, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower or its assets or any resulting release or discharge of any obligation of the Borrower contained in this Agreement or any Note; (v) the existence of any claim, set-off or other rights which the Guarantor may have at any time against the Borrower, the Agent, any Bank or any other Person, whether in connection herewith or any unrelated transactions, provided that nothing herein shall prevent the assertiion of any such claim by separate suit or compulsory counterclaim; 50 (vi) any invalidity or unenforceability relating to or against the Borrower for any reason of this Agreement or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by the Borrower of the principal of or interest on any Note or any other amount payable by the Borrower under this Agreement; or (vii) any other act or omission to act or delay of any kind by the Borrower, the Agent, any Bank or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph constitute a legal or equitable discharge of or defense to the Guarantor's obligations hereunder. SECTION 9.3. Discharge Only Upon Payment In Full; Reinstatement in Certain Circumstances. The Guarantor's obligations hereunder shall remain in full force and effect until the Commitments shall have terminated and the principal of and interest on the Notes and all other amounts payable by the Borrower under this Agreement shall have been paid in full. If at any time any payment of the principal of or interest on any Note or any other amount payable by the Borrower under this Agreement is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, the Guarantor's obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time. SECTION 9.4 Waiver by the Guarantor. The Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Borrower or any other Person. SECTION 9.5. Subrogation. Upon making any payment with respect to any Borrower hereunder, the Guarantor shall be subrogated to the rights of the payee against the Borrower with respect to such payment; provided that the Guarantor shall not enforce any payment by way of subrogation until all amounts of principal of and interest on the Notes and all other amounts payable by the Borrower under this Agreement have been paid in full. SECTION 9.6. Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Borrower under this Agreement or the Notes is stayed upon the sinolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable by the Guarantor hereunder forthwith on demand by the Agent made at the request of the requisite proportion of the Banks specified in Article 6 of this Agreement. ARTICLE 10 MISCELLANEOUS SECTION 10.1. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including 51 bank wire, telex, facsimile transmission or similar writing) and shall be given to such party: (a) in the case of the Borrower, the Guarantor or the Agent, at its address, facsimile number or telex number set forth on the signature pages hereof, (b) in the case of any Bank, at its address, facsimile number or telex number set forth in its Administrative Questionnaire or (c) in the case of any party, such other address, facsimile number or telex number as such party may hereafter specify for the purpose by notice to the Agent, the Guarantor and the Borrower. Each such notice, request or other communication shall be effective (i) if given by telex, when such telex is transmitted to the telex number specified in this Section and the appropriate answerback is received, (ii) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section and confirmation of receipt is received, (iii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iv) if given by any other means, when delivered at the address specified in this Section; provided that notices to the Agent under Article 2 or Article 8 shall not be effective until received. SECTION 10.2. No Waivers. No failure or delay by the Agent or any Bank in exercising any right, power or privilege hereunder or under any Note shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 10.3. Expenses; Indemnification. The Borrower shall pay (i) all out-of-pocket expenses of the Agent, including fees and disbursements of special counsel for the Agent, in connection with the preparation and administration of this Agreement, any waiver or consent hereunder or any amendment hereof or any Default or alleged Default hereunder and (ii) if an Event of Default occurs and is continuing, all out-of-pocket expenses incurred by the Agent and each Bank, including (without duplication) the fees and disbursements of outside counsel and the allocated cost of inside counsel, in connection with collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom. (b) The Borrower and the Guarantor jointly and severally agree to indemnify the Agent and each Bank, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel and settlement costs, which may be incurred by such Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement or any actual or proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall have the right to be 52 indemnified hereunder for such Indemnitee's own gross negligence or willful misconduct as determined by a court of competent jurisdiction. SECTION 10.4. Sharing of Set-Offs. Each Bank agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest due with respect to any Note held by it which is greater than the proportion received by any other Bank in respect of the aggregate amount of principal and interest due with respect to any Note held by such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Notes held by the other Banks, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Notes held by the Banks shall be shared by the Banks pro rata; provided that nothing in this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower or the Guarantor other than its indebtedness hereunder. Each of the Borrower and the Guarantor agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Note, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Borrower or the Guarantor (as the case may be)in the amount of such participation. SECTION 10.5. Amendments and Waivers. Any provision of this Agreement or the Notes may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower, the Guarantor and the Required Banks (and, if the rights or duties of the Agent are affected thereby, by the Agent); provided that no such amendment or waiver shall, unless signed by all the Banks, (i) increase or decrease the Commitment of any Bank (except for a ratable decrease in the Commitments of all Banks) or subject any Bank to any additional obligation, (ii) reduce the principal of or rate of interest on any Loan, or any fees hereunder (iii) postpone the date fixed for any payment of principal of or interest on any Loan, or any fees hereunder or for termination of any Commitment or (iv) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of this Agreement; and provided further that, at the option of the Agent, an additional, altered or revised Covenant shall be incorporated herein pursuant to Section 5.13 either (i) automatically or (ii) by an amendment signed solely by the Agent, the Guarantor and the Borrower. SECTION 10.6. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except 53 that the Borrower may not assign or otherwise transfer any of its rights under this Agreement without the prior written consent of all Banks. (b) Any Bank may at any time grant to one or more banks or other institutions (each a "Participant") participating interests in its Commitment or any or all of its Loans. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Agent, such Bank shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of Section 10.5 without the consent of the Participant. Each of the Borrower and the Guarantor agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Section 2.16 and Article 8 with respect to its participating interest. An assignment or other transfer which is not permitted by subsection (c) or (d) below shall be given effect for purposes of this Agreement only to the extent of a participating interest granted in accordance with this subsection (b). (c) Any Bank may at any time assign to one or more banks or other institutions (each an "Assignee") all, or a proportionate part (equivalent to an initial Commitment of not less than $10,000,000, unless a lower amount is agreed to by the Borrower and the Agent) of all, of its rights and obligations under this Agreement and the Notes, and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit G hereto executed by such Assignee and such transferor Bank, with (and subject to) the subscribed consent of the Borrower, which shall not be unreasonably withheld, and the Agent; provided that if an Assignee is an affiliate of such transferor Bank, no such consent shall be required; and provided further that such assignment may, but need not, include rights of the transferor Bank in respect of outstanding Money Market Loans. Upon execution and delivery of such instrument and payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set forth in such instrument of assumption, and the transferor Bank shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant 54 to this subsection (c), the transferor Bank, the Agent and the Borrower shall make appropriate arrangements so that, if required, a new Note is issued to the Assignee. In connection with any such assignment, the transferor Bank shall pay to the Agent an administrative fee for processing such assignment in the amount of $2,500. If the Assignee is not incorporated under the laws of the United States of America or a state thereof, it shall deliver to the Borrower and the Agent certification as to exemption from deduction or withholding of any United States federal income taxes in accordance with Section 8.4. (d) Any Bank may at any time assign all or any portion of its rights under this Agreement and its Note to a Federal Reserve Bank. No such assignment shall release the transferor Bank from its obligations hereunder. (e) No Assignee, Participant or other transferee of any Bank's rights shall be entitled to receive any greater payment under Section 8.3 or 8.4 than such Bank would have been entitled to receive with respect to the rights transferred, unless such transfer is made with the Borrower's prior written consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such Bank to designate a different Applicable Lending Office under certain circumstances or at a time when the circumstances giving rise to such greater payment did not exist. SECTION 10.7. Collateral. Each of the Banks represents to the Agent and each of the other Banks that it in good faith is not relying upon any "margin stock" (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement. SECTION 10.8 Governing Law; Submission to Jurisdiction. This Agreement and each Note shall be governed by and construed in accordance with the laws of the State of New York. The Borrower and the Guarantor hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Borrower and the Guarantor irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. SECTION 10.9 Counterparts; Integration; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, 55 oral or written, relating to the subject matter hereof. This Agreement shall become effective upon receipt by the Agent of counterparts hereof signed by each of the parties hereto (or, in the case of any party as to which an executed counterpart shall not have been received, receipt by the Agent in form satisfactory to it of telegraphic, telex, facsimile or other written confirmation from such party of execution of a counterpart hereof by such party). SECTION 10.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE GUARANTOR, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 10.11. Confidentiality. The Agent and each Bank agree to keep any information delivered or made available by the Borrower or the Guarantor pursuant to this Agreement confidential from anyone other than persons employed or retained by it who are engaged in evaluating, approving, structuring or administering the credit facility contemplated hereby; provided that nothing herein shall prevent any Bank from disclosing such information (a) to any other Bank or to the Agent, (b) to any other Person if reasonably incidental to the administration of the credit facility contemplated hereby, (c) upon the order of any court or administrative agency, (d) upon the request or demand of any regulatory agency or authority, (e) which had been publicly disclosed other than as a result of a disclosure by the Agent or Bank prohibited by this Agreement, (f) in connection with any litigation to which the Agent or Bank or its subsidiaries or Parent may be a party, (g) to the extent necessary in connection with the exercise of any remedy hereunder, (h) to such Bank's or the Agent's legal counsel and independent auditors and (i) subject to provisions substantially similar to those contained in this Section, to any actual or proposed Participant or Assignee. 56 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. COOPERS ANIMAL HEALTH INC. By /s/ Paul D. Cottone ------------------------------ Name: Paul D. Cottone Title: President Address: 428 E. Hawley Street Mundelein,IL 60060 Facsimile: (708) 949-3756 MALLINCKRODT GROUP INC., as Guarantor By /s/ Michael A. Rocca ------------------------------ Name: Michael A. Rocca Title: Senior Vice President, Chief Financial Officer and Treasurer Address: 7733 Forsyth Boulevard Clayton, Missouri 63105 Facsimile: (314) 854-5380 Commitments: - ------------ $20,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Patricia Merritt ------------------------------- Name: Patricia Merritt Title: Vice President 57 $16,000,000 BANK OF AMERICA ILLINOIS By /s/ Paul B. Higdon ------------------------------- Name: Paul B. Higdon Title: Managing Director $16,000,000 THE BOATMEN'S NATIONAL BANK OF ST. LOUIS By /s/ Robert S. Holmes, Jr. ------------------------------- Name: Robert S. Holmes, Jr. Title: Vice President $16,000,000 THE CHASE MANHATTAN BANK N.A. By /s/ Peter Dedousis ------------------------------- Name: Peter Dedousis Title: Managing Director $16,000,000 CITIBANK, N.A. By /s/ Mary W. Corkran ------------------------------- Name: Mary W. Corkran Title: Vice President $16,000,000 THE FIRST NATIONAL BANK OF CHICAGO By /s/ Robert R. Bourke ------------------------------- Name: Robert R. Bourke Title: Vice President _________________ Total Commitments $100,000,000 ================= 58 MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Patricia Merritt --------------------------------- Name: Patricia Merritt Title: Vice President Address: 60 Wall Street New York, New York 10260 Telex number: 177615 MGT UT Facsimile number: (212) 648-5018 59 PRICING SCHEDULE Each of "CD Margin", "Euro-Dollar Margin" and "Facility Fee Rate" means, for any day, the rates set forth below (in basis points per annum) in the row opposite such term and in the column corresponding to the "Pricing Level" that exists on such day:
Level I Level II Level III Level IV CD Margin 31.00 34.00 40.00 42.50 Euro-dollar Margin 18.50 21.50 27.50 30.00 Facility Fee 6.50 8.50 10.00 15.00 Rate Level V Level VI Level VII CD Margin 58.75 62.50 75.00 Euro-dollar Margin 46.25 50.00 62.50 Facility Fee 18.75 25.00 37.50 Rate
For purposes of this Schedule, the following terms have the following meanings: "Level I Pricing" applies at any date if, at such date, the Guarantor's long-term debt is rated A+ or higher by S&P or A1 or higher by Moody's (subject to the paragraph on split ratings below). "Level II Pricing" applies at any date if, at such date, (i) the Guarantor's long-term debt is rated A- or higher by S&P or A3 or higher by Moody's (subject to the paragraph on split ratings below) and (ii) Level I Pricing does not apply. 1 "Level III Pricing" applies at any date if, at such date, (i) the Guarantor's long-term debt is rated BBB+ or higher by S&P or Baa1 or higher by Moody's (subject to the paragraph on split ratings below) and (ii) neither Level I Pricing nor Level II Pricing applies. "Level IV Pricing" applies at any date if, at such date, (i) the Guarantor's long-term debt is rated BBB or higher by S&P and Baa2 or higher by Moody's and (ii) none of Level I Pricing, Level II Pricing and Level III Pricing applies. "Level V Pricing" applies at any date if, at such date, (i) the Guarantor's long-term debt is rated BBB- or higher by S&P and Baa3 or higher by Moody's, and (ii) none of Level I Pricing, Level II Pricing, Level III Pricing, and Level IV Pricing applies. "Level VI Pricing" applies at any date if, at such date, (i) the Guarantor's long-term debt is rated BB+ or higher by S&P and Ba1 or higher by Moody's, and (ii) none of Level I Pricing, Level II Pricing, Level III Pricing, Level IV Pricing, and Level V Pricing applies. "Level VII Pricing" applies at any date if, at such date, no other Pricing Level applies. "Moody's" means Moody's Investors Service, Inc. "Pricing Level" refers to the determination of which of Level I, Level II, Level III, Level IV, Level V, Level VI or Level VII applies at any date. "S&P" means Standard & Poor's Ratings Group. "Usage" means at any date the percentage equivalent of a fraction (i) the numerator of which is the aggregate outstanding principal amount of the Loans at such date, after giving effect to any borrowing or payment on such date, and (ii) the denominator of which is the aggregate amount of the Commitments at such date, after giving effect to any reduction of the Commitments on such date. For purposes of this Schedule, if for any reason any Loans remain outstanding after termination of the Commitments, the Usage for each date on or after the date of such termination shall be deemed to be greater than 50%. The credit ratings to be utilized for purposes of this Schedule are those assigned to the senior unsecured long-term debt securities of the Guarantor without third-party credit enhancement, and any rating assigned to any other debt security of the Guarantor shall be disregarded. The rating in effect at any date is that in effect at the close of business on such date. For purposes of determining eligibility for Level I Pricing, Level II Pricing or Level III Pricing, so long as the Guarantor 2 qualifies for at least Level IV Pricing, split ratings will be dealt with as follows: If the Guarantor is split-rated and the ratings differential is one level, the higher rating will apply. If the Guarantor is split-rated and the ratings differential is two levels or more, the rating at the midpoint will apply. If there is no midpoint rating, the higher of the two intermediate ratings will apply. 3 EXHIBIT A - Note NOTE New York, New York ___________, _____ For value received, Coopers Animal Health Inc. (the "Borrower"), promises to pay to the order of (the "Bank"), for the account of its Applicable Lending Office, the unpaid principal amount of each Loan made by the Bank to the Borrower pursuant to the Credit Agreement referred to below on the maturity date provided for in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, New York. All Loans made by the Bank, the respective types and maturities thereof and all repayments of the principal thereof shall be recorded by the Bank and, if the Bank so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding may be endorsed by the Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This note is one of the Notes referred to in the $100,000,000 Credit Agreement dated as of March 16, 1995 among the Borrower, Mallinckrodt Group Inc., as Guarantor, the banks party thereto from time to time, and Morgan Guaranty Trust Company of New York, as Agent (as the same may be amended from time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof. COOPERS ANIMAL HEALTH INC. By____________________ Name: Title: 1 LOANS AND PAYMENTS OF PRINCIPAL _____________________________________________________________________
2 EXHIBIT B - Money Market Quote Request Form of Money Market Quote Request ---------------------------------- [Date] To: Morgan Guaranty Trust Company of New York From: Coopers Animal Health Inc. Re: $100,000,000 Credit Agreement (the "Credit Agreement") dated as of March 16, 1995 among Coopers Animal Health Inc., Mallinckrodt Group Inc., as Guarantor, the Banks party thereto from time to time, and Morgan Guaranty Trust Company of New York, as Agent We hereby give notice pursuant to Section 2.3 of the Credit Agreement that we request Money Market Quotes for the following proposed Money Market Borrowing(s): Date of Borrowing: __________________ Principal Amount (2) Interest Period (3) - -------------------- ------------------- $ (2) Amount must be $10,000,000 or a larger multiple of $1,000,000. (3) Not less than one month (LIBOR Auction) or not less than 7 days (Absolute Rate Auction), subject to the provsions of the definition of Interest Period. Such Money Market Quotes should offer a Money Market [Margin] [Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.] Terms used herein have the meanings assigned to them in the Credit Agreement. COOPERS ANIMAL HEALTH INC. By________________________ Name: Title: 1 EXHIBIT C - Invitation for Money Market Quotes Form of Invitation for Money Market Quotes To: [Name of Bank] Re: Invitation for Money Market Quotes to Coopers Animal Health Inc. (the "Borrower") Pursuant to Section 2.3 of the $100,000,000 Credit Agreement dated as of March 16, 1995 among Coopers Animal Health Inc., Mallinckrodt Group Inc., as Guarantor, the Banks party thereto from time to time, and the undersigned, as Agent, we are pleased on behalf of the Borrower to invite you to submit Money Market Quotes to the Borrower for the following proposed Money Market Borrowing(s): Date of Borrowing: __________________ Principal Amount Interest Period - ---------------- ---------------- $ Such Money Market Quotes should offer a Money Market [Margin] [Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.] Please respond to this invitation by no later than [2:00 P.M.] [9:30 A.M.] (New York City time) on [date]. MORGAN GUARANTY TRUST COMPANY OF NEW YORK By______________________ Authorized Officer 1 EXHIBIT D - Money Market Quote Form of Money Market Quote To: Morgan Guaranty Trust Company of New York, as Agent Re: Money Market Quote to Coopers Animall Health Inc. (the "Borrower") In response to your invitation on behalf of the Borrower dated _____________, 19__, we hereby make the following Money Market Quote on the following terms: 1. Quoting Bank: ________________________________ 2. Person to contact at Quoting Bank: _____________________________ 3. Date of Borrowing: ____________________* 4. We hereby offer to make Money Market Loan(s) in the following principal amounts, for the following Interest Periods and at the following rates: Principal Interest Money Market Amount** Period*** [Margin****] [Absolute Rate*****] - --------- ---------- ------------- --------------------- $ $ [Provided, that the aggregate principal amount of Money Market Loans for which the above offers may be accepted shall not exceed $____________.]** __________ * As specified in the related Invitation. ** Principal amount bid for each Interest Period may not (notes continued on following page) 1 We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the $100,000,000 Credit Agreement dated as of March 16, 1995 among Coopers Animal Health Inc., Mallinckrodt Group Inc., as Guarantor, the Banks party thereto from time to time, and yourselves, as Agent, irrevocably obligates us to make the Money Market Loan(s) for which any offer(s) are accepted, in whole or in part. Very truly yours, [NAME OF BANK] Dated:_______________ By:__________________________ Authorized Officer __________ exceed principal amount requested. Specify aggregate limitation if the sum of the individual offers exceeds the amount the Bank is willing to lend. Bids must be made for $5,000,000 or a larger multiple of $1,000,000. *** Not less than one month or not less than 7 days, as specified in the related Invitation. No more than five bids are permitted for each Interest Period. **** Margin over or under the London Interbank Offered Rate determined for the applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%) and specify whether "PLUS" or "MINUS". ***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%). 2 EXHIBIT E - Opinion of Counsel for the Borrower (Closing Date) Each of the Banks and the Agent party to the Credit Agreement referred to below Morgan Guaranty Trust Company of New York, as Agent for said Banks 60 Wall Street New York, NY 10260 Ladies and Gentlemen: I am the General Counsel of Mallinckrodt Group Inc., a corporation organized under the laws of the State of New York (the "Guarantor") and am furnishing this opinion in connection with the Credit Agreement dated as of March 16, 1995 (the "Credit Agreement") between the Borrower, the Guarantor, the banks party thereto from time to time, and Morgan Guaranty Trust Company of New York, as Agent, providing for, among other things, the making of loans by the Banks in an aggregate principal amount not exceeding $100,000,000. All capitalized terms used but not defined herein have the respective meanings given to such terms in the Credit Agreement. In rendering the opinions expressed below, I have examined: (i) the Credit Agreement; (ii) the Notes (collectively with the Credit Agreement, the "Credit Documents"); and (iii) such corporate records, agreements and instruments of the Borrower and the Guarantor and such other documents and records as I have deemed necessary as a basis for the opinions expressed below. In my examination, I have assumed the genuineness of all signatures (except those of officers of the Borrower and the Guarantor), the authenticity of all documents submitted to me as originals and the conformity with authentic original documents of all documents submitted to me as copies. When relevant facts were not independently established, I have relied upon representations made in or pursuant to the Credit Documents and certificates of appropriate representatives of the Borrower and the Guarantor. In rendering the opinions expressed below, I have assumed, with respect to all of the documents referred to in this opinion 1 letter, that (except, to the extent set forth in the opinions expressed below, as to the Borrower and the Guarantor): (i) such documents have been duly authorized by, have been duly executed and delivered by, and constitute legal, valid, binding and enforceable obligations of, all of the parties to such documents; (ii) all signatories to such documents have been duly authorized; and (iii) all of the parties to such documents are duly organized and validly existing and have the power and authority (corporate or other) to execute, deliver and perform such documents. Based upon and subject to the foregoing and subject also to the comments and qualifications set forth below, and having considered such questions of law as I have deemed necessary as a basis for the opinions expressed below, I am of the opinion that: 1. The Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the State of New York and the Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. 2. The Borrower has all requisite corporate power to execute and deliver, and to perform its obligations under, each Credit Document and has all requisite corporate power to borrow under the Credit Agreement. The Guarantor has all requisite corporate power to executive and deliver, and to perform its obligations under, the Credit Agreement. 3. The execution, delivery and performance by the Borrower of the Credit Documents and the borrowings by the Borrower under the Credit Agreement have been duly authorized by all necessary corporate action on the part of the Borrower. The execution, delivery, and performance by the Guarantor of the Credit Agreement have been duly authorized by all necessary cororate action on the part of the Guarantor. 4. Each Credit Document has been duly executed and delivered by the Borrower. Each Credit Agreement has been duly executed and delivered by the Guarantor. 5. Under Missouri conflict of laws principles, the stated choice of New York Law to govern the Credit Documents will be honored by the courts of the State of Missouri and the Credit Documents will be construed in accordance with, and will be treated as being governed by, the law of the State of New York. However, if the Credit Documents were stated to be governed by and construed in accordance with the law of the State of Missouri, or if a court 2 were to apply the law of the State of Missouri to the Credit Documents, (i) each Credit Document (assuming, in the case of the Notes, execution and delivery thereof for value) would constitute the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, and (ii) the Credit Agreement would constitute the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except in each case, as the foregoing may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally and except as the enforceability of the Credit Documents is subject to the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law), including, without limitation, (a) the possible unavailability of specific performance, injunctive relief or any other equitable remedy and (b) concepts of materiality, reasonableness, good faith and fair dealing. 6. No authorization, approval or consent of, and no filing or registration with, any governmental or regulatory authority or agency is required on the part of either the Borrower or the Guarantor for (i) the execution, delivery or performance by the Borrower of, or for the legality, validity or enforceability of, the Credit Agreement or (ii) the execution, delivery or performance by the Guarantor of, or for the legality, validity or enforceability of, the Credit Agreement. for any borrowing by the Borrower under the Credit Agreement. 7. The execution, delivery and performance by each of the Borrower and the Guarantor of the Credit Agreement and, in the case of the Borrower, the Notes, and borrowings by the Borrower under the Credit Agreement, do not and will not (a) violate any provision of the charter or by-laws of the Borrower or Guarantor, (b) violate any applicable law, rule or regulation, (c) violate any order, writ, injunction or decree of any court or governmental authority or agency or any arbitral award applicable to the Borrower or the Guarantor of which I have knowledge (after due inquiry) or (d) result in a breach of, constitute a default under, require any consent under, or result in the acceleration or required prepayment of any indebtedness pursuant to the terms of, any agreement or instrument of which I have knowledge (after due inquiry) to which the Borrower or Guarantor is a party or by which the Borrower or Guarantor is bound or to which the Borrower or Guarantor is subject. 8. Except as may be disclosed in regular periodic reports filed with the Securities and Exchange Commission prior to the date of the Credit Agreement (copies of which reports have heretofore been furnished to the Banks), I have no knowledge (after due inquiry) of any legal or arbitral proceeding by or before any governmental or regulatory authority or agency, now pending or threatened against the Guarantor or any of its Subsidiaries or any of their respective Properties that, if adversely determined, is reasonably likely to have a Material Adverse Effect. 3 9. Neither the Guarantor, the Borrower nor any of its Subsidiaries is an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. 10. Neither the Guarantor, the Borrower nor any of the Guarantor's other Subsidiaries is a "holding company", or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. The foregoing opinions are subject to the following comments and qualifications: A. The enforceability of Section 10.3 of the Credit Agreement may be limited by laws rendering unenforceable indemnification contrary to Federal or State securities laws and the public policy underlying such laws. B. The enforceability of provisions in the Credit Documents to the effect that terms may not be waived or modified except in writing may be limited under certain circumstances. C. I express no opinion as to (i) the effect of the laws of any jurisdiction in which any Bank is located (other than the State of Missouri) that limit the interest, fees, or other charges such Bank may impose, and (ii) the second sentence of Section 10.8 of the Credit Agreement, insofar as such sentence relates to the subject matter jurisdiction of the United States District Court for the Southern District of New York to adjudicate any controversy related to the Credit Documents. The foregoing opinions are limited to matters involving the Federal law of the United States of America, the law of the State of Missouri and (with respect to my opinions in paragraphs 1 through 4 above) the Business Corporation Law of the State of New York and the General Corporation Law of the State of Delaware, and I do not express any opinion as to any other laws. At the request of my client, this opinion letter is, pursuant to Section 3.1(b) of the Credit Agreement, provided to you by me in my capacity as General Counsel of the Guarantor and may not be relied upon by any Person for any purpose other than in connection with the transactions contemplated by the Credit Agreement without, in each instance, my prior written consent. Very truly yours, 4 EXHIBIT F - Opinion of Special Counsel for the Agent OPINION OF DAVIS POLK & WARDWELL, SPECIAL COUNSEL FOR THE AGENT --------------------------------------- [Closing Date] To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Ladies and Gentlemen: We have participated in the preparation of the $100,000,000 Credit Agreement (the "Credit Agreement") dated as of March 16, 1995 among Coopers Animal Health Inc., (the "Borrower"), Mallinckrodt Group Inc., as Guarantor (the "Guarantor), the banks party thereto from time to time (the "Banks"), and Morgan Guaranty Trust Company of New York, as Agent, and have acted as special counsel for the Agent for the purpose of rendering this opinion pursuant to Section 3.1(c) of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined. We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, we are of the opinion that: 1. The execution, delivery and performance by the Borrower and the Guarantor of the Credit Agreement and by the Borrower of the Notes are within the Guarantor's or the Borrower's, as applicable, corporate powers and have been duly authorized by all necessary corporate action. 2. The Credit Agreement constitutes a valid and binding agreement of each of the Borrower and the Guarantor and each Note constitutes a valid and binding obligation of the Borrower, in each case enforceable in accordance with its terms except as the same may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and by general principles of equity. 1 We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the State of Delaware and the federal laws of the United States of America. In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Bank is located which limits the rate of interest that such Bank may charge or collect. This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by any other person without our prior written consent. Very truly yours, 2 EXHIBIT G - Assignment and Assumption Agreement ASSIGNMENT AND ASSUMPTION AGREEMENT AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"), COOPERS ANIMAL HEALTH INC. (the "Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates to the $100,000,000 Credit Agreement dated as of March 16, 1995 among the Borrower, Mallinckrodt Group Inc., as Guarantor, the Assignor and the other Banks party thereto from time to time, as Banks, and Morgan Guaranty Trust Company of New York, as Agent (the "Credit Agreement"); WHEREAS, as provided under the Credit Agreement, the Assignor has a Commitment to make Loans to the Borrower in an aggregate principal amount at any time outstanding not to exceed $__________; WHEREAS, Committed Loans made to the Borrower by the Assignor under the Credit Agreement in the aggregate principal amount of $__________ are outstanding at the date hereof; and WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of the Assignor under the Credit Agreement in respect of a portion of its Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"), together with a corresponding portion of its outstanding Committed Loans, and the Assignee proposes to accept assignment of such rights and assume the corresponding obligations from the Assignor on such terms; NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows: SECTION 1. Definitions. All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Credit Agreement. SECTION 2. Assignment. The Assignor hereby assigns and sells to the Assignee all of the rights of the Assignor under the Credit Agreement to the extent of the Assigned Amount, and the Assignee hereby accepts such assignment from the Assignor and assumes all of the obligations of the Assignor under the Credit Agreement to the extent of the Assigned Amount, including the purchase from the Assignor of the corresponding portion of the principal amount of the Committed Loans made by the Assignor outstanding at the date hereof. Upon the execution and delivery hereof by the Assignor, the Assignee, 1 [the Borrower and the Agent] and the payment of the amounts specified in Section 3 required to be paid on the date hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and be obligated to perform the obligations of a Bank under the Credit Agreement with a Commitment in an amount equal to the Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date hereof, be reduced by a like amount and the Assignor released from its obligations under the Credit Agreement to the extent such obligations have been assumed by the Assignee. The assignment provided for herein shall be without recourse to the Assignor. SECTION 3. Payments. As consideration for the assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in Federal funds in the amount heretofore mutually agreed between them. It is understood that facility fees in respect of the Assigned Amount accrued to the date hereof are for the account of the Assignor and such fees accruing from and including the date hereof are for the account of the Assignee. Each of the Assignor and the Assignee hereby agrees that if it receives any amount under the Credit Agreement which is for the account of the other party hereto, it shall receive the same for the account of such other party to the extent of such other party's interest therein and shall promptly pay the same to such other party. [SECTION 4. Consent of the Borrower and the Agent. This Agreement is conditioned upon the consent of the Borrower and the Agent pursuant to Section 10.6(c) of the Credit Agreement. The execution of this Agreement by the Borrower and the Agent is evidence of this consent. Pursuant to Section 10.6(c), the Borrower agrees to execute and deliver a Note payable to the order of the Assignee to evidence the assignment and assumption provided for herein.] SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation or warranty in connection with, and shall have no responsibility with respect to, the solvency, financial condition, or statements of the Borrower, or the validity and enforceability of the obligations of the Borrower in respect of the Credit Agreement or any Note. The Assignee acknowledges that it has, independently and without reliance on the Assignor, any other Bank or the Agent and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and will continue to be responsible for making its own independent appraisal of the business, affairs and financial condition of the Borrower. SECTION 6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. SECTION 7. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 2 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. [ASSIGNOR] By_________________________ Name: Title: [ASSIGNEE] By__________________________ Name: Title: COOPERS ANIMAL HEALTH INC. By__________________________ Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By__________________________ Name: Title: 3 -----END PRIVACY-ENHANCED MESSAGE-----