THIS FIFTH FORBEARANCE
AGREEMENT (this “Agreement”) is entered into as of December 14,
2001 among LEINER HEALTH PRODUCTS INC. (the “U.S. Borrower”), VITA
HEALTH PRODUCTS INC. (the “Canadian Borrower,” and together with the
U.S. Borrower, the “Borrowers”), THE BANK OF NOVA SCOTIA, as U.S. Agent
and as Canadian Agent, and the lenders party to the Credit Agreement referred
to that certain Amended and Restated Credit Agreement, dated as of May 15,
1998 (as further amended, supplemented, amended and restated or otherwise
modified prior to the date hereof, the “Credit Agreement”; capitalized
terms used but not defined herein shall have the meanings given them in the
Credit Agreement), the Agents and the Lenders made Loans and other financial
accommodations to the Borrowers.
following Defaults or Events of Default (the “Existing Defaults”) exist
under the Credit Agreement:
failure of the Borrowers to comply with each of the financial covenants set
forth in Section 9.2.4 of the Credit Agreement as of or for the Fiscal
Quarters ending December 31, 2000, March 31, 2001, June 30,
2001, September 30, 2001 and December 31, 2001; and
Borrowers’ breach of the representations, warranties and statements contained
in the Loan Documents in connection therewith.
C. On or
about June 29, 2001, the Borrowers, the Agents and the Lenders entered
into a forbearance agreement (the “First Forbearance Agreement”)
pursuant to which the Agents and the Lenders agreed to forbear with respect to
their rights or remedies against the Borrowers based on the Existing Defaults
until September 1, 2001 and agreed that the forbearance period would be
automatically extended if the Borrowers met certain conditions set forth in
Section 1(b) of the First Forbearance Agreement.
D. On or
about August 31, 2001, the Borrowers, the Agents and the Lenders entered
into a Second Forbearance Agreement pursuant to which the Agents and the
Lenders agreed to extend the Forbearance Period (as defined in the First
Forbearance Agreement) until September 28, 2001.
or about September 28, 2001, the Borrowers, the Agents and the Lenders
entered into a Third Forbearance Agreement pursuant to which the Agents and the
Lenders agreed to further extend the Forbearance Period (as defined in the
First Forbearance Agreement) until November 2, 2001.
or about November 2, 2001, the Borrowers, the Agents and the Lenders
entered into a Fourth Forbearance Agreement pursuant to which the Agents and
the Lenders agreed to further extend the Forbearance Period (as defined in the
First Forbearance Agreement) until December 14, 2001.
Borrowers, the Agents and the undersigned Lenders have agreed in principle to a
restructuring of the Obligations on the terms and conditions set forth in the
Term Sheet for Restructuring of Senior Debt (the “Senior Debt Term Sheet”)
annexed as Exhibit A to the Fourth Forbearance Agreement, subject among
other things to the completion of the Agents’ and the Lenders’ due diligence
and all required internal credit approvals and definitive documentation
(including financial covenants satisfactory to the Lenders).
U.S. Borrower intends to file a voluntary petition (the "Chapter 11
Case") for relief under chapter 11 of title 11 of the United States
Code (the "Bankruptcy Code") and in connection therewith
intends to file a plan of reorganization and a disclosure statement, each in
form and substance acceptable to the Agents in their sole discretion and
consistent, in all material respects, with the Senior Debt Term Sheet
(respectively, the "Plan" and the "Disclosure
Borrowers have requested that the Required Lenders extend their forbearance on
the terms and conditions set forth below to give the Borrowers sufficient time
to fully document the restructuring of the Obligations and the recapitalization
of the Borrowers.
Required Lenders are willing to forbear from exercising their rights and
remedies in connection with the Existing Defaults on the terms and conditions
set forth herein.
In consideration of the
Recitals and of the mutual promises and covenants contained herein, the
Borrowers, the Agents and the Required Lenders agree as follows:
Section 1. Agreement
(a) Forbearance. During the period (the “Forbearance Period”) commencing on
the date hereof and ending on the date of any Forbearance Default (as defined
below), and subject to the satisfaction of the conditions set forth in
Section 2 hereof, the Agents and the Lenders will forbear from exercising
their rights and remedies under the Credit Agreement and the other Loan
Documents solely with respect to the Existing Defaults. “Forbearance Default” shall mean:
(i) an Event of Default (other than the Existing Defaults), (ii) the
failure of either Borrower to keep or perform any of the covenants or
agreements contained herein providing for a payment or prepayment to the Agents
or the Lenders, (iii) the failure of either Borrower to keep or perform
any of the covenants or agreements contained herein (other than those referred
to in clause (ii) above) two Business Days after the date the Borrowers
receive written notice from an Agent of any such failure (the “Notice Period”),
provided that in the event any such failure is remedied within the
Notice Period, such failure shall not constitute a Forbearance Default,
(iv) any representation or warranty of either Borrower herein shall be
incorrect when made or deemed made in any material respect, (v) the U.S.
Borrower and LHPG shall not have filed the Disclosure Statement and Plan by
February 28, 2002, (vi) the U.S. Borrower and LHPG file, propound or
otherwise support any plan of reorganization other than the Plan or other
creditors of the U.S. Borrower or of LHPG file any plan of reorganization other
than the Plan in accordance with Section 1121(c) of the Bankruptcy Code,
(vii) the Plan is modified or replaced such that it (or any such
replacement) at any time is not consistent in all material respects with the
Senior Debt Term Sheet, (viii) the definitive documentation for the Plan
and Disclosure Statement provides, or is modified to provide, for any terms
that are not consistent in all material respects with the Senior Debt Term Sheet,
(ix) the U.S. Borrower or LHPG shall withdraw or revoke the Plan or the
U.S. Borrower or LHPG shall publicly announce its intention not to pursue the
Plan, (x) an examiner with expanded powers or a trustee shall have been
appointed or elected in the Chapter 11 Case, the Chapter 11 Case shall
have been converted to a case under chapter 7 of the Bankruptcy Code, or the
Chapter 11 Case shall have been dismissed by order of the Bankruptcy Court
for the District of Delaware and (xi) any other event shall occur, the
effect or result of which, is the termination of any of the Forbearance and
Lock-Up Agreements dated as of November 19, 2001 among the U.S. Borrower, LHPG
and the “Consenting Holder” party thereto.
(b) Nature of the Forbearance. The forbearance set forth herein is limited
and shall not be deemed (i) a waiver of any Default or Event of Default,
including the Existing Defaults, which now exist or may hereafter arise,
(ii) a forbearance with respect to any term, condition or obligation of
the Borrowers in the Credit Agreement or any other Loan Document other than the
Existing Defaults, (iii) a waiver of any of the conditions precedent to
Credit Extensions contained in Section 7.2 of the Credit Agreement or
(iv) subject to the terms contained herein, to prejudice any right or
remedy which any Agent or any Lender may now or in the future have under or in
connection with the Credit Agreement or any other Loan Document.
2. Conditions Precedent to
Effectiveness of Agreement. This Agreement shall not be effective unless and until each of
the following conditions shall have been satisfied in the sole discretion of
Agents shall have received (i) counterparts of this Agreement duly
executed by each of the Borrowers and the Required Lenders and (ii) an
Affirmation and Consent, in form and substance satisfactory to the Agents, duly
executed by each of the Guarantors.
Agents shall have been reimbursed for the unpaid fees and expenses incurred
through the date hereof of its professionals, including the unpaid fees and
expenses of Luskin, Stern & Eisler LLP, PricewaterhouseCoopers LLP, Casas,
Benjamin & White, LLC (“CBW”) and Hunton & Williams.
3. Representations and Warranties. The Borrowers hereby represent and warrant
to the Agents and to the Lenders as follows:
(a) Recitals. The Recitals in this Agreement are true and correct in all
(b) Incorporation of Representations and Statements. All statements of the Borrowers contained in
Section 7.2.1 of the Credit Agreement, and all representations and
warranties of the Borrowers in the Credit Agreement and the other Loan
Documents, are incorporated herein in full by this reference and are, other
than with respect to the Existing Defaults, true and correct as of the date
hereof in all material respects.
(c) Power; Authorization. Each of the Borrowers has the corporate
power, and has been duly authorized by all requisite corporate action, to
execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly
executed and delivered by the Borrowers.
(d) Enforceability. This Agreement is the legal, valid and
binding obligation of each of the Borrowers, enforceable against them in
accordance with its terms.
(e) No Violation. The execution, delivery and performance of this Agreement does
not and will not (i) violate any law, rule, regulation or court order to which
either of the Borrowers is subject, (ii) conflict with or result in a breach of
any Organic Document of the Borrowers or any agreement or instrument to which
either of the Borrowers is party or by which it or its properties are bound, or
(iii) result in the creation or imposition of any Lien, security interest or
encumbrance on any property of either of the Borrowers, whether now owned or
hereafter acquired, other than liens in favor of the Agents.
(f) Obligations. As of the date hereof the outstanding principal balance of the
U.S. Revolving Loans is $89,265,615.83; U.S. Letter of Credit Outstandings is $11,902,372;
Term B Loans is $65,125,196.41; Term C Loans is $62,274,581.93;
Term D Loans is $29,254,342.26; Canadian Revolving Loans is Cdn.
$28,739,529.87; Canadian Swingline Loans is Cdn. $230,000; and Canadian Term
Loans is Cdn. $16,544,824.21. Interest
and fees have accrued thereon as provided in the Credit Agreement and the other
Loan Documents. The obligation of the
Borrowers to repay the Loans, together with all interest and fees accrued
thereon, and the other Obligations is absolute and unconditional, and there
exists no right of set off or recoupment, counterclaim or defense of any nature
whatsoever to payment of the Obligations.
Section 4. Covenants
of Borrowers. The
Borrowers agree as follows:
(a) Forecasts. By no later than 4:00 p.m. on the second Business Day of each
week, the Borrowers will deliver to the Agents updated weekly rolling cash flow
forecasts for the following twelve week period, together with an actual to
forecast variance analysis for the preceding week, which forecasts shall also
include a certification from an Authorized Officer of the U.S. Borrower
representing to the information required pursuant to paragraph (c) below.
(b) U.S. Balance Sheets. Within 30 days after the end of each month,
the Borrowers will deliver to the Agents consolidated and consolidating balance
sheets of the U.S. Borrower and its Subsidiaries (including consolidating
balance sheets of the Canadian Borrower and its Subsidiaries) as of the end of
such month, and consolidated and consolidating statements of earnings and cash
flow of the U.S. Borrower and its Subsidiaries (including consolidating
statements of earnings and cash flow of the Canadian Borrower and its
Subsidiaries) for such month and for the period commencing at the end of the
previous Fiscal Year and ending with the last day of such month.
(c) Disbursements, etc. The Borrowers will not permit cumulative
(from September 1, 2001) disbursements for all applicable months, as set forth
in the Borrowers’ September 18, 2001 rolling 13-week forecast, as may be
revised with the approval of CBW (the “Forecast”), to exceed 110% of the
cumulative (from September 1, 2001) amounts set forth therefor in the Forecast
and will not permit the cash balance at the end of any month to be less than
90% of the cash balance set forth in the Forecast for such month. The Borrowers agree that all payments or
disbursements to an Affiliate or employee of a Borrower (including Severance
Payments (as defined below)) inconsistent with the Forecast or which are otherwise
outside of the ordinary course of business must be approved in advance by David
Coles or the CFO hired by the U.S. Borrower pursuant to Section (4)(p) below.
(d) Cooperation. The Borrowers agree to cooperate fully with the Agents, the
Lenders and their professionals, including in connection with any audit or
appraisal of the business, assets or financial condition of the Borrowers and
their Subsidiaries, in all cases at the Borrowers’ expense.
(e) Payment of Fees. In addition to and not in limitation of the
terms of Section 12.3 of the Credit Agreement, the Borrowers agree to pay
on demand all reasonable fees and expenses of (i) the Agents and all
professionals retained by the Agents or by Luskin, Stern & Eisler LLP
(including special counsel engaged to review various litigation issues), and
(ii) each Lender (other than the legal fees of each Lender expressly
excepted from payment under Section 12.3 of the Credit Agreement), in each
case incurred in connection with the Credit Agreement or this Agreement and the
matters contemplated hereby and the restructuring of the Obligations, and
whether incurred prior to or subsequent to the date hereof.
(f) Bank Accounts. Neither the Borrowers nor any of their
Subsidiaries will maintain any checking, savings or other account at any bank
or other financial institution, or any other account where money or securities
may be deposited or maintained, other than the accounts specified in the
Amended and Restated Perfection Certificate dated as of June 15, 2001 and the
Control Agreement and First Amendment to Concentration Bank Agreement, dated as
of August 20, 2001.
(g) Suspension of Commitments. The Commitments are suspended, except that
before the earlier of (x) the termination of the Forbearance Period or (y) the
occurrence of a Default (other than an Existing Default), the U.S. Borrower may
deliver a U.S. Issuance Request to the U.S. Issuer, and the U.S. Issuer shall
(subject to the receipt by the U.S. Issuer of proper documentation therefor)
issue a U.S. Letter of Credit in a stated amount of not more than $100,000, for
the benefit of American Express, in its capacity as the U.S. Borrower’s
corporate travel vendor (or another corporate travel vendor to the U.S.
Borrower), provided that contemporaneously with the issuance of such
U.S. Letter of Credit, the U.S. Borrower shall permanently repay U.S. Revolving
Loans to the U.S. Agent for the pro rata benefit of the U.S. Lenders in an
amount not less than the stated amount of the U.S. Letter of Credit issued by the
(h) LIBOR Restrictions. The outstanding principal amount of the
Loans may not be continued as, or converted into, LIBO Rate Loans or Canadian
BAs, as applicable.
(i) Increased Interest. The Applicable Margin shall in each case be
maintained at a rate of 1% over that otherwise in effect in accordance with the
terms of the Credit Agreement.
(j) Restrictions on Indebtedness, Etc. The Borrowers and their Subsidiaries are
prohibited from incurring Indebtedness under clauses (d), (g), (h) or (l)
of Section 9.2.2 of the Credit Agreement; making Investments under
clauses (f), (i) or (j) of Section 9.2.5 of the Credit Agreement;
redeeming shares of Capital Stock under clause (iii) of the proviso to
Section 9.2.6 of the Credit Agreement; consummating acquisitions or
mergers under clauses (b), (c) or (d) of Section 9.2.10 of the Credit
Agreement; or paying any fees under clause (b) of Section 9.2.13 of
the Credit Agreement.
(k) Monthly Payment of Interest and Fees. All interest for Base Rate Loans and
Canadian Prime Rate Loans, and all Letter of Credit fees payable under
Section 5.3.3 of the Credit Agreement, shall be payable in arrears on the
fifteenth day of each month (instead of the Quarterly Payment Dates).
(l) Canadian Balance Sheets. Within 21 days after the end of each month,
the Canadian Borrower will deliver to the Canadian Agent consolidated and
consolidating balance sheets of the Canadian Borrower and its Subsidiaries as
of the end of such month and consolidated statements of earnings and cash flow
of the Canadian Borrower and its Subsidiaries for such month and for the period
commencing at the end of the previous Fiscal Year and ending with the last day
of such month.
(m) Intercompany Dispositions. The U.S. Borrower and its U.S. Subsidiaries
will not, directly or indirectly, make any Investments (including intercompany
loans or capital contributions) in or to the Canadian Borrower or any of the
Canadian Borrower’s Subsidiaries, or sell, transfer, lease, contribute or
otherwise convey (including by way of merger), or grant options, warrants or
other rights (all collectively referred to as a “Disposition”) with
respect to all or any part of their assets to the Canadian Borrower or any of
the Canadian Borrower’s Subsidiaries other than in the ordinary course of
business consistent with past practices.
The Canadian Borrower and its Subsidiaries will not, directly or
indirectly, make any Investments (including intercompany loans or capital contributions)
in or to (or pay dividends or make distributions to) the U.S. Borrower or any
of the U.S. Borrower’s U.S. Subsidiaries, or make any Disposition with respect
to all or any part of their assets to the U.S. Borrower or any of the U.S.
Borrower’s U.S. Subsidiaries, other than in the ordinary course of business
consistent with past practices.
(n) Restrictions on Reallocation of Commitments. The Borrowers’ right to reallocate the
unused Canadian Revolving Loan Commitment Amount and the unused U.S. Revolving
Loan Commitment Amount pursuant to, respectively, Sections 2.2.3 and 3.2.2
of the Credit Agreement is suspended.
(o) Antitrust Proceeds. Unless otherwise agreed to by the Required
Lenders, including as to amount and application, concurrently with the receipt
by either of the Borrowers or any of their Affiliates of any judgment,
settlement or other proceeds or amounts, however characterized (with all of the
foregoing collectively referred to as the “Proceeds”), arising from or
in connection with any antitrust claims (the “Claims”) (including claims
pending in (i) the United States District Court for the Central District
of California styled Leiner Health Products Inc. v. F. Hoffman-LaRoche Ltd.,
et al., Case No. 99-09832-JSL and (ii) the United States District
Court for the District of Columbia entitled In Re Vitamins Antitrust
Litigation, MDL No. 1285, Misc. No. 99-0197, and all facts and
circumstances at issue therein), the U.S. Borrower shall make, or cause to be
made, a mandatory prepayment of the Loans in the amount of such Proceeds (with
such prepayment being applied to the remaining Term Loan amortization payments prorata in accordance with the amount of each such remaining Term Loan
amortization payment) and the cash collateralization of all Letters of Credit
and a corresponding reduction of each Revolving Loan Commitment Amount. The Borrowers reaffirm and ratify the
perfected security interest in the Claims and Proceeds of the Agents and the
(p) Chief Financial Officer. The U.S. Borrower agrees to hire a chief
financial officer of the U.S. Borrower (the “CFO”) who shall be
reasonably satisfactory to the Agents and use good faith efforts to complete
such hiring on or before February 28, 2002. The Borrowers shall provide the Agents and CBW with access to the
executive search firm retained in connection with the CFO search process and
will direct such firm to fully cooperate with the Agents and CBW regarding all
reasonable requests for information or documentation in connection therewith. The Borrowers will continue to work in good
faith with the Agents and their professionals to refine the description of the
required qualifications, capabilities, role and authority of the CFO
position. The U.S. Borrower further
agrees that David Coles' employment shall not be terminated until at least
30 days following the commencement of employment of the CFO.
(q) Severance Agreements. The Borrowers shall not enter into any
severance agreement (a “Severance Agreement”) with, or similar
arrangement providing for the payment of money or other consideration (a “Severance
Payment”) to, any current or former employee in connection with the
termination (under any circumstances) of such employee’s employment with a
Borrower without the Agents’ prior written consent, which shall not be unreasonably
withheld or delayed, provided that a Borrower may enter into a Severance
and Release Agreement (a “Release”) which is contemplated by and
executed in connection with a Severance Agreement existing on the date hereof,
so long as such Release does not expand the rights of any employee under the
related Severance Agreement. The
Borrowers will promptly deliver to the Agents copies of all Releases reasonably
requested by the Agents or CBW and will not make any Severance Payments or
enter into any Release without first providing 5 Business Days’ prior
written notice to the Agents. The
Borrowers will not make any discretionary non-contractual Severance Payments
without the Agents’ prior written consent.
(r) Net Disposition Proceeds. The Borrowers agree that notwithstanding
anything to the contrary contained in the second sentence of the definition of
“Net Disposition Proceeds” in the Credit Agreement, Net Disposition Proceeds
shall exclude only an aggregate amount equal to $500,000 of proceeds of Permitted
Dispositions received on or after July 1, 2001 through and until the
termination of the Forbearance Period, provided that the proceeds of (i)
any Permitted Disposition resulting in proceeds of less than $50,000 and
(ii) the sale of Obsolete Inventory (as defined below), shall also be
excluded from Net Disposition Proceeds and shall not be counted toward the
$500,000 basket. “Obsolete Inventory”
shall mean inventory for which the U.S. Borrower took an inventory reserve for
Fiscal Year 2001 or which comprises part of a discontinued product line, other
than inventory transferred in connection with a sale of all of the stock, all
or substantially all of the assets, or a division or other similar operating or
administrative unit of a Borrower or a Subsidiary or Affiliate of a
Borrower. As part of the second weekly
rolling cash flow forecast and the actual to forecast variance report for any
month, the U.S. Borrower shall deliver to the Agents, with respect to the prior
month, a report certified by David Coles or the CFO hired by the U.S. Borrower
pursuant to Section 4(p) above, of the sales value, standard cost and
inventory reserve associated with the Obsolete Inventory sold in such month.
(s) Continued Compliance with Loan Documents. Each of the Borrowers will continue to
comply with all of its covenants and other obligations under the Credit
Agreement and the other Loan Documents.
(t) Disclosure Statement and Plan. The U.S. Borrower shall use commercially
reasonable efforts to complete each of the Disclosure Statement and the Plan by
December 21, 2001.
The provisions contained in
paragraphs (a), (c), (d), (f), (i), (o), (q), (r) and (t) above shall
continue to and including the date of termination of the Forbearance Period
(and shall terminate on such date) and the provisions contained in
paragraphs (b), (e), (g), (h), (j), (k), (l), (m), (n), (p) and (s) shall
survive termination of the Forbearance Period.
Nothing in this Agreement, including paragraph 4(r) or the
termination thereof, shall prejudice or otherwise affect the right of any party
to argue that the sale of Obsolete Inventory by a Borrower does or does not
constitute a Permitted Disposition or that the proceeds of any such sale do or
do not constitute Net Disposition Proceeds, and no party shall assert in any
proceeding or other context that terms of paragraph 4(r) or the
termination thereof are relevant to any such argument.
5. Effect and Construction of
Agreement. Except as
expressly provided herein, the Credit Agreement and the other Loan Documents
shall remain in full force and effect in accordance with their respective
terms, and this Agreement shall not be construed to:
the validity, perfection or priority of any Lien or security interest securing
or impair any rights, powers or remedies of any Agent or any Lender under the
Credit Agreement or any other Loan Document upon termination of the Forbearance
Period, with respect to the Existing Defaults or otherwise;
an agreement by any Agent or any Lender or to require any Agent or any Lender
to extend the Forbearance Period, or grant additional forbearance periods, or
extend the term of the Credit Agreement or the time for payment of any of the
any Lender to make any Loans or other extensions of credit to the Borrower.
In the event of any inconsistency between the
terms of this Agreement and the Credit Agreement or any of the other Loan
Documents, this Agreement shall govern.
The Borrowers acknowledge that they have consulted with counsel and with
such other experts and advisors as they have deemed necessary in connection
with the negotiation, execution and delivery of this Agreement. This Agreement shall be construed without
regard to any presumption or rule requiring that it be construed against the
party causing this Agreement or any part hereof to be drafted.
Section 6. Reference
to and Effect on the Loan Documents.
the effectiveness 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
Agreement shall be a Loan Document.
Section 7. Miscellaneous.
(a) Further Assurances. The Borrowers agree to execute such other
and further documents and instruments as the Agents may request to implement
the provisions of this Agreement.
(b) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. No
other person or entity shall be entitled to claim any right or benefit
hereunder, including, without limitation, the status of a third-party
beneficiary of this Agreement.
(c) Integration. This Agreement, together with the Credit Agreement and the other
Loan Documents, constitutes the entire agreement and understanding among the
parties relating to the subject matter hereof, and supersedes all prior
proposals, negotiations, agreements and understandings relating to such subject
matter. In entering into this
Agreement, the Borrowers acknowledge that they are relying on no statement,
representation, warranty, covenant or agreement of any kind made by any Agent,
any Lender or any employee or agent of any Agent or any Lender, except for the
agreements of the Agents and the Lenders set forth herein.
(d) Severability. The provisions of this Agreement are intended to be
severable. If any provision of this
Agreement shall be held invalid or unenforceable in whole or in part in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or enforceability without in any manner affecting
the validity or enforceability of such provision in any other jurisdiction or
the remaining provisions of this Agreement in any jurisdiction.
(e) Counterparts; Telecopied Signatures. This Agreement may be executed in any number
of counterparts and by different parties to this Agreement on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed to be, and effective as, an original
(f) Notices. Any notices with respect to this Agreement shall be given in the
manner provided for in Section 12.2 of the Credit Agreement.
(g) Survival. Except as otherwise provided herein, all representations,
warranties, covenants, agreements, undertakings, waivers and releases of the
Borrowers contained herein shall survive the termination of the Forbearance
(h) Amendment. No amendment, modification, rescission, waiver or release of any
provision of this Agreement shall be effective unless the same shall be in
writing and signed by the Borrowers, the Agents and the Required Lenders.
8. RELEASE OF CLAIMS. EACH OF THE BORROWERS HEREBY ACKNOWLEDGES
AND AGREES THAT IT DOES NOT HAVE ANY DEFENSES, COUNTERCLAIMS, OFFSETS,
CROSS-CLAIMS, CLAIMS OR DEMANDS OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE
ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF THE LIABILITY OF THE
BORROWERS TO REPAY ANY AGENT OR ANY LENDER AS PROVIDED IN THE CREDIT AGREEMENT
AND THE OTHER LOAN DOCUMENTS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY
KIND OR NATURE FROM ANY AGENT OR ANY LENDER.
EACH OF THE BORROWERS HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND
FOREVER DISCHARGES THE AGENTS AND THE LENDERS, AND EACH AGENT’S AND LENDER’S
PREDECESSORS, AGENTS, EMPLOYEES, CONSULTANTS, ADVISORS, ATTORNEYS, SUCCESSORS
AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION,
DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE
THE DATE THIS AGREEMENT IS EXECUTED, WHICH THE BORROWERS MAY NOW OR HEREAFTER
HAVE AGAINST ANY SUCH AGENT OR LENDER, AND SUCH AGENT’S OR LENDER’S
PREDECESSORS, AGENTS, EMPLOYEES, CONSULTANTS, ADVISORS, ATTORNEYS, SUCCESSORS
AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF
CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT
AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION AND EXECUTION OF THIS
Each of the Borrowers
acknowledges and agrees that it understands the meaning and effect of Section
1542 of the California Civil Code which provides:
“A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.”
EACH OF THE BORROWERS AGREES
TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD
DEFENSES, CLAIMS, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH
ARE RELEASED, WAIVED AND DISCHARGED BY THIS AGREEMENT. EACH OF THE BORROWERS HEREBY WAIVES AND
RELINQUISHES ALL RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER THE
AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE OR ANY SIMILAR LAW, TO
THE EXTENT SUCH LAW MAY BE APPLICABLE, WITH REGARD TO THE RELEASE OF SUCH
UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CONTRACTS,
LIABILITIES, INDEBTEDNESS AND OBLIGATIONS.
TO THE EXTENT THAT SUCH LAWS MAY BE APPLICABLE, EACH OF THE BORROWERS
WAIVES AND RELEASES ANY RIGHT OR DEFENSE WHICH IT MIGHT OTHERWISE HAVE UNDER
ANY OTHER LAW OF ANY APPLICABLE JURISDICTION WHICH MIGHT LIMIT OR RESTRICT THE
EFFECTIVENESS OR SCOPE OF ANY OF THEIR WAIVERS OR RELEASES HEREUNDER.
9. GOVERNING LAW; JURISDICTION;
WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK. THE
JURISDICTIONAL, VENUE AND SERVICE OF PROCESS PROVISIONS IN SECTION 12.14
OF THE CREDIT AGREEMENT AND THE JURY TRIAL WAIVER IN SECTION 12.15 OF THE
CREDIT AGREEMENT SHALL APPLY TO ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.