SECOND AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of September 8, 2005 (this Amendment), is entered into among WATSON PHARMACEUTICALS, INC., a Nevada corporation (the Borrower), the Lenders (as defined below) and the Administrative Agent (as defined below), and amends the Credit Agreement, dated as of May 30, 2003 (as amended, supplemented or modified from time to time, the Credit Agreement), entered into among the Borrower, the financial institutions from time to time party hereto, whether by execution of the Credit Agreement or an Assignment and Acceptance (the Lenders), WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for the Lenders (in such capacity, the Administrative Agent), BANK OF AMERICA, N.A. and CIBC WORLD MARKETS CORP., each in its capacity as co-syndication agent for the Lenders (each, in such capacity, a Syndication Agent), and LEHMAN COMMERCIAL PAPER, INC., in its capacity as documentation agent for the Lenders (in such capacity, the Documentation Agent). Unless otherwise defined herein, the terms defined in the Credit Agreement shall be used herein as therein defined.
PRELIMINARY STATEMENT
The Lenders and the Borrower have agreed, subject to the terms and conditions of this Amendment, to amend the Credit Agreement as hereinafter set forth.
STATEMENT OF AGREEMENT
SECTION 1. Amendment to Credit Agreement. The Credit Agreement is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, hereby amended as follows:
(a) Section 1.01 of the Credit Agreement is amended by adding the following defined term in proper alphabetical order:
Applicable Commitment Fee Percentage means, as of any date, a percentage per annum determined by reference to the Debt Rating in effect on such date as set forth below:
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| Debt Rating |
| Applicable Commitment |
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Tier |
| S&P/Moodys |
| Fee Percentage |
|
I |
| > BBB+/Baa1 |
| 0.10% |
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II |
| BBB/Baa2 |
| 0.125% |
|
III |
| BBB-/Baa3 |
| 0.15% |
|
IV |
| BB+/Ba1 |
| 0.20% |
|
V |
| < BB+/Ba1 |
| 0.25% |
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(b) The definition of Applicable Base Rate Margin is amended by deleting such definition in its entirety and substituting therefor the following:
Applicable Base Rate Margin means, as of any date, a percentage per annum determined by reference to the Debt Rating in effect on such date as set forth below:
|
| Debt Rating |
| Applicable Base |
|
Tier |
| S&P/Moodys |
| Rate Margin |
|
I |
| > BBB+/Baa1 |
| 0.0% |
|
II |
| BBB/Baa2 |
| 0.0% |
|
III |
| BBB-/Baa3 |
| 0.0% |
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IV |
| BB+/Ba1 |
| 0.0% |
|
V |
| < BB+/Ba1 |
| 0.25% |
|
(c) The definition of Applicable Eurodollar Rate Margin is amended by deleting such definition in its entirety and substituting therefor the following:
Applicable Eurodollar Rate Margin means, as of any date, a percentage per annum determined by reference to the Debt Rating in effect on such date as set forth below:
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| Debt Rating |
| Applicable Eurodollar |
|
Tier |
| S&P/Moodys |
| Rate Margin |
|
I |
| > BBB+/Baa1 |
| 0.50% |
|
II |
| BBB/Baa2 |
| 0.625% |
|
III |
| BBB-/Baa3 |
| 0.75% |
|
IV |
| BB+/Ba1 |
| 1.00% |
|
V |
| < BB+/Ba1 |
| 1.25% |
|
(d) The definition of Debt Rating is amended by deleting such definition in its entirety and substituting therefor the following:
Debt Rating means, as of any date, the higher rating that has been most recently announced by either S&P or Moodys, as the case may be, for any class of non-credit enhanced long-term senior unsecured debt issued by the Borrower; provided that if at any time the difference between the ratings of such type most recently announced by S&P and Moodys is more than one rating grade, the rating that is one grade above the lower of such two ratings shall apply. For purposes of the foregoing, (a) if either S&P or Moodys shall not have a rating in effect, then the Debt Rating shall be the available rating, (b) if any rating established by S&P or Moodys shall be changed, such change shall be effective as of the date on which such change is first announced publicly by the rating agency making such change, and (c) if S&P or Moodys shall change the basis on which ratings are established, each reference herein to ratings announced by S&P or Moodys, as the case may be, shall refer to the then equivalent rating by S&P or Moodys, as the case may be.
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(e) Section 4.03(a) of the Credit Agreement is hereby amended by deleting the words rate of 0.375% per annum therein and inserting in substitution therefor the words Applicable Commitment Fee Rate.
(f) Section 6.01(J) of the Disclosure Letter is amended by inserting the following at the end of the sentence immediately before the period:
and to the matters described and set forth under the caption Legal Proceedings in Part I, Item 3 of the Borrowers Report on Form 10-K for the fiscal year ended December 31, 2004 and under the caption Legal Proceedings in Part II, Item 1 of the Borrowers Reports on Form 10-Q for the quarterly periods ended March 31, 2005 and June 30, 2005.
SECTION 2. Conditions Precedent to Effectiveness. This Amendment shall become effective as of the date first above written upon the satisfaction of the following conditions precedent:
(a) The Administrative Agent shall have received this Amendment executed by the Borrower and the Lenders.
(b) In consideration of this Amendment and the amendments made herein, the Borrower shall have paid (i) to the Administrative Agent, for the account of each Lender, a fee in the amount of 3.5 basis points (0.035%) on the aggregate principal amount of such Lenders Revolving Loan Commitment, and (ii) the arrangement fee payable to Wachovia Capital Markets, LLC (the Arranger) pursuant to the Engagement Letter dated as of August 16, 2005 between the Borrower and the Arranger.
SECTION 3. Representations and Warranties. The Borrower represents and warrants as follows:
(a) After giving effect to this Amendment, all of the representations and warranties contained in Section 6.01 of the Credit Agreement and in the other Loan Documents are true and complete in all material respects (except to the extent that such representations or warranties are made as of an earlier date, in which case they shall be true and complete in all material respects as of such earlier date).
(b) After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.
SECTION 4. Reference to and Effect on the Loan Documents.
(a) Upon the effectiveness of this Amendment, on and after the date hereof each reference in the Credit Agreement to this Agreement, hereunder, hereof or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the Credit Agreement, thereunder, thereof or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby.
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(b) Except as specifically amended above, the Credit Agreement and all other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.
SECTION 5. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.
SECTION 6. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written.
| WATSON PHARMACEUTICALS, INC. | ||
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| By: | /s/ R. Todd Joyce |
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| Title: | VP Corporate Controller and Treasurer |
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Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| WACHOVIA BANK, NATIONAL | ||
| ASSOCIATION, as Administrative Agent and | ||
| Lender | ||
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| By: | /s/ Richard L. Nelson |
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| Title: | Vice President |
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Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| CIBC INC., as Lender | ||
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| By: | /s/ George Knight |
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| George Knight |
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| Title: | Managing Director |
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| CIBC World Markets Corp. As Agent |
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Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| BANK OF AMERICA, N.A., as Lender | ||
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| By: | /s/ Joseph L. Corah |
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| Joseph L. Corah |
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| Title: | Senior Vice President |
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Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| LEHMAN COMMERCIAL PAPER, INC., as | ||
| Lender | ||
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| By: | /s/ Janine M. Shugan |
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| Janine M. Shugan |
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| Title: | Authorized Signatory |
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Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| BANCO POPULAR DE PUERTO RICO, | ||
| NEW YORK BRANCH, as Lender | ||
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| By: | /s/ Hector J. Gonzalez |
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| Title: | Vice President |
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Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| BANK LEUMI USA, as Lender | ||
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| By: | /s/ Joung Hee Hong |
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| Joung Hee Hong |
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| Title: | Vice President |
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S-7
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| THE BANK OF EAST ASIA, LIMITED, as Lender | ||
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| By: | /s/ David Loh |
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| Title: | SVPCommercial Lending |
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| By: | /s/ Simon Keung |
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| Title: | SVP & Controller |
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S-8
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
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Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| COMERCIA BANK, as Lender | |||
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| By: |
| /s/ Don R. Carruth |
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| Name: | Don R. Carruth |
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| Title: | Corporate Banking Officer |
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S-10
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| E.SUN COMMERCIAL BANK, LTD., LOS | ||
| ANGELES BRANCH, as Lender | ||
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| By: | /s/ Benjamin Lin |
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| Title: | E.V.P. & General Manager |
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Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| FIRST COMMERCIAL BANK, as Lender | ||
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| By: | /s/ Helen Tong |
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| Title: | VP & General Manager |
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S-12
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| THE NORTHERN TRUST COMPANY, as Lender | ||
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| By: | /s/ John E. Burda |
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| Title: | Vice President |
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S-13
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| SUMITOMO MITSUI BANKING | ||
| CORPORATION, as Lender | ||
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| By: | /s/ Yoshihiro Hyakutome |
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| Yoshihiro Hyakutome |
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| Title: | Joint General Manager |
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S-14
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| TAIPEI FUBON COMMERCIAL BANK, NEW | ||
| YORK AGENCY, as Lender | ||
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| By: | /s/ Sophia Jing |
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| Name: | Sophia Jing |
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| Title: | VP & General Manager |
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S-15
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| U.S. BANK, NATIONAL ASSOCIATION, as | ||
| Lender | ||
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| By: | /s/ Janet Jordan |
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| Title: | Vice President |
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S-16
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| UNION BANK OF CALIFORNIA, N.A., as Lender | ||
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| By: | /s/ Peter Thompson |
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| Title: | Peter Thompson, Vice President |
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S-17
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| UNITED OVERSEAS BANK LIMITED, LOS | ||
| ANGELES AGENCY, as Lender | ||
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| By: | /s/ Hoong Chen |
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| Title: | First VP & General Manager |
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S-18
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| CATHAY UNITED BANK (fka United World | ||
| Chinese Commercial Bank), as Lender | ||
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| By: | /s/ Allen Peng |
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| Title: | EVP & General Manager |
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Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement
| WELLS FARGO BANK, N.A., as Lender | ||
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| By: | /s/ Lucy Nixon |
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| Lucy Nixon |
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| Title: | Senior Vice President |
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S-20
Watson Pharmaceuticals, Inc.
Second Amendment to Credit Agreement