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Exhibit 10.131
SENIOR SECURED CREDIT AGREEMENT
dated as of
December 4, 1996
among
COSMAR CORPORATION
as Borrower,
THE GUARANTORS named herein
and
THE LENDERS named herein
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TABLE OF CONTENTS
Section Heading Page
RECITALS................................................................................................ 1
SECTION 1 DEFINITIONS....................................................................... 1
1.1 Certain Defined Terms............................................................. 1
1.2 Accounting Terms ................................................................. 27
1.3 Other Definitional Provisions; Anniversaries...................................... 27
SECTION 2 AMOUNT AND TERMS OF LOAN COMMITMENT
AND LOANS; NOTES.................................................................. 28
2.1 Bridge Loan and Bridge Note....................................................... 28
A. Bridge Loan Commitment........................................................ 28
B. Notice of Borrowing........................................................... 28
C. Disbursement of Funds......................................................... 28
D. Bridge Notes.................................................................. 28
E. Scheduled Payment of Bridge Loan.............................................. 29
F. Termination of Bridge Loan Commitments........................................ 29
G. Pro Rata Borrowings........................................................... 29
2.2 Term Loan and Term Note .......................................................... 29
A. Term Loan Commitment.......................................................... 29
B. Notice of Conversion.......................................................... 29
C. Making of Term Loan........................................................... 29
D. Maturity of Term Loan......................................................... 30
E. Term Notes.................................................................... 30
2.3 Interest on the Loans............................................................. 30
A. Rate of Interest.............................................................. 30
B. Interest Payments............................................................. 30
C. Post-Maturity Interest........................................................ 30
D. Computation of Interest....................................................... 31
2.4 Fees .................................................................... 31
2.5 Prepayments and Payments.......................................................... 31
A. Prepayments................................................................... 31
B. Manner and Time of Payment.................................................... 35
C. Payments on Non-Business Days................................................. 35
D. Notation of Payment........................................................... 36
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Section Heading Page
2.6 Use of Proceeds................................................................... 36
A. Bridge Loan................................................................... 36
B. Term Loan..................................................................... 36
C. Margin Regulations............................................................ 36
SECTION 3 CONDITIONS........................................................................ 37
3.1 Conditions to Bridge Loan......................................................... 37
3.2 Conditions to Term Loan........................................................... 44
SECTION 4 REPRESENTATIONS AND WARRANTIES.................................................... 45
4.1 Organization and Good Standing; Capitalization.................................... 45
4.2 Authorization and Power........................................................... 46
4.3 No Conflicts or Consents.......................................................... 46
4.4 Enforceable Obligations........................................................... 47
4.5 Properties; Liens................................................................. 48
4.6 Financial Condition............................................................... 48
4.7 Full Disclosure................................................................... 50
4.8 No Default........................................................................ 50
4.9 Compliance with Contracts, Etc.................................................... 51
4.10 No Litigation..................................................................... 51
4.11 [Intentionally omitted]........................................................... 51
4.12 Taxes............................................................................. 51
4.13 ERISA............................................................................. 52
4.14 Compliance with Law............................................................... 52
4.15 Government Regulation............................................................. 53
4.16 Capital Structure and Subsidiaries................................................ 53
4.17 Intellectual Property............................................................. 53
4.18 Environmental Matters............................................................. 54
4.19 Survival of Representations and Warranties........................................ 56
4.20 Permits........................................................................... 56
4.21 Insurance......................................................................... 57
4.22 Labor Matters..................................................................... 57
4.23 Guarantees........................................................................ 57
4.24 Senior Secured Indenture; etc..................................................... 58
4.25 Broker's or Finder's Fees......................................................... 58
4.26 Debt Agreements................................................................... 59
4.27 Security Interest................................................................. 59
4.28 Pari Passu Loan Obligations....................................................... 59
SECTION 5 AFFIRMATIVE COVENANTS............................................................. 60
5.1 Financial Statements and Other Reports............................................ 60
5.2 Corporate Existence, Etc.......................................................... 65
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Section Heading Page
5.3 Payment of Taxes and Claims; Tax Consolidation.................................... 65
5.4 Maintenance of Properties; Insurance.............................................. 66
5.5 Inspection........................................................................ 66
5.6 Equal Security for Loans and Notes ............................................... 67
5.7 Compliance with Laws, Etc. ....................................................... 67
5.8 Maintenance of Accurate Records, Etc. ............................................ 67
5.9 Take-Out Financing ............................................................... 67
5.10 ERISA Compliance ................................................................. 68
5.11 Exchange of Term Notes ........................................................... 69
5.12 Payments in U.S. Dollars ......................................................... 70
5.13 Register ......................................................................... 70
5.14 Lenders Meeting .................................................................. 71
5.15 Local Counsel Opinions; Mortgaged Properties Documentation;
Non-Perfected Collateral.......................................................... 71
SECTION 6 NEGATIVE COVENANTS................................................................ 73
6.1 Coverage Ratios; Indebtedness..................................................... 73
6.2 Liens............................................................................. 76
6.3 Restricted Payments............................................................... 77
6.4 Investments; Joint Ventures....................................................... 78
6.5 Contingent Obligations............................................................ 79
6.6 Restriction on Fundamental Changes................................................ 80
6.7 Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries............................................................ 81
6.8 Transactions with Shareholders and Affiliates..................................... 82
6.9 Subsidiary Stock.................................................................. 83
6.10 Business Activities............................................................... 83
6.11 [Intentionally omitted]........................................................... 83
6.12 [Intentionally omitted]........................................................... 83
6.13 Refinancing of the Loans in Part.................................................. 83
6.14 Asset Sales....................................................................... 84
6.15 Transfer of Assets to Subsidiaries................................................ 84
6.16 Additional Guarantees............................................................. 84
6.17 Security Interests................................................................ 85
6.18 Impairment of Security Interest .................................................. 85
6.19 [Intentionally omitted] .......................................................... 85
6.20 Restriction on Tax Consolidation ................................................. 86
6.21 Sale and Lease-Backs ............................................................. 86
6.22 Limitation on Other Restrictions on Amendment of Loan
Documents......................................................................... 86
6.23 Modifications of Certain Documents; Etc. ......................................... 86
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Section Heading Page
6.24 Pledge of Additional Collateral .................................................. 87
6.25 Restrictions on Capital Expenditures ............................................. 87
SECTION 7 EVENTS OF DEFAULT................................................................. 88
7.1 Failure To Make Payments When Due ................................................ 88
7.2 Default in Other Agreements ...................................................... 88
7.3 Breach of Certain Covenants ...................................................... 89
7.4 Breach of Warranty ............................................................... 89
7.5 Other Defaults Under Agreement or Loan Documents ................................. 89
7.6 Involuntary Bankruptcy; Appointment of Custodian, Etc. ........................... 89
7.7 Voluntary Bankruptcy; Appointment of Custodian, Etc............................... 90
7.8 Judgments and Attachments ........................................................ 90
7.9 Dissolution....................................................................... 90
7.10 Guarantee......................................................................... 90
7.11 Collateral Document Default ...................................................... 91
7.12 ERISA Matters .................................................................... 91
7.13 Environmental Matters............................................................. 91
7.14 Non-Monetary Judgment ............................................................ 92
7.15 Injunction ....................................................................... 92
7.16 Damage, Strike, Casualty; Etc. ................................................... 92
7.17 Licenses and Permits ............................................................. 92
7.18 Subordination Provisions ......................................................... 92
7.19 Debt Tender Offer ................................................................ 93
SECTION 8 PROVISIONS RELATING TO THE COLLATERAL
AGENT AND CIBC/WG ................................................................ 94
8.1 Appointment ...................................................................... 94
8.2 Delegation of Duties ............................................................. 94
8.3 Exculpatory Provisions ........................................................... 94
8.4 Reliance by Collateral Agent ..................................................... 95
8.5 Notice of Default ................................................................ 96
8.6 Non-Reliance on Collateral Agent and Other Lenders ............................... 96
8.7 Indemnification .................................................................. 97
8.8 Collateral Agent or CIBC/WG in Its Individual Capacity............................ 97
8.9 Resignation of the Collateral Agent; Successor
Collateral Agent ................................................................. 98
SECTION 9 GUARANTEE ........................................................................ 98
9.1 Unconditional Guarantee .......................................................... 98
9.2 Ranking of Guarantee ............................................................. 99
9.3 Severability...................................................................... 99
9.4 Release of a Guarantor ........................................................... 99
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Section Heading Page
9.5 Limitation of Guarantor's Liability ............................................. 100
9.6 Guarantors May Consolidate, etc., on Certain Terms .............................. 100
9.7 Contribution .................................................................... 101
9.8 Waiver of Subrogation ........................................................... 101
9.9 Evidence of Guarantee ........................................................... 102
9.10 Waiver of Stay, Extension or Usury Laws ......................................... 102
SECTION 10 MISCELLANEOUS ................................................................... 102
10.1 Representation of the Lenders ................................................... 102
10.2 Participations in and Assignments of Loans and Notes ............................ 104
10.3 Expenses......................................................................... 106
10.4 Indemnity........................................................................ 107
10.5 Setoff........................................................................... 108
10.6 Amendments and Waivers........................................................... 108
10.7 Independence of Covenants........................................................ 109
10.8 Entirety......................................................................... 109
10.9 Notices.......................................................................... 109
10.10 Survival of Warranties and Certain Agreements.................................... 110
10.11 Failure or Indulgence Not Waiver; Remedies Cumulative............................ 110
10.12 Severability..................................................................... 110
10.13 Headings......................................................................... 110
10.14 Applicable Law................................................................... 111
10.15 Successors and Assigns; Subsequent Holders of Notes ............................. 111
10.16 Counterparts; Effectiveness...................................................... 111
10.17 Consent to Jurisdiction; Venue; Waiver of Jury Trial............................. 111
10.18 Sharing of Benefits.............................................................. 112
10.19 Taxes and Other Taxes............................................................ 113
10.20 Waiver of Stay, Extension or Usury Laws ......................................... 114
10.21 Requirements of Law.............................................................. 114
10.22 Confidentiality.................................................................. 115
10.23 Role of Special Counsel.......................................................... 115
10.24 Joint and Several Liability...................................................... 116
10.25 Collateral Agent Third Party Beneficiary......................................... 116
SIGNATURE PAGES........................................................................................ 117
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SCHEDULES
A SUBSIDIARIES
B EXISTING INDEBTEDNESS
C EXISTING LIENS
D LITIGATION
E ERISA
F EXISTING INVESTMENTS
G INTELLECTUAL PROPERTY
H PERMITS
I BROKERS FEES
J TAXES
EXHIBITS
I FORM OF BRIDGE NOTE
II FORM OF TERM NOTE
III FORM OF COMPLIANCE CERTIFICATE
IV-A FORM OF NOTICE OF BORROWING
IV-B FORM OF NOTICE OF CONVERSION
V FORM OF OPINION OF ▇▇▇▇, WEISS, RIFKIND, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ AND ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ESQ. - GENERAL
COUNSEL FOR THE PARENT GUARANTOR
VI FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
- SPECIAL COUNSEL FOR THE LENDERS
VII FORM OF NOTATION OF GUARANTEE
VIII FORM OF SECURITY AGREEMENT
IX FORM OF INTERCOMPANY NOTE
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This Senior Secured Credit Agreement is dated as of December
4, 1996, and entered into by and among Cosmar Corporation, a Delaware
corporation (the "Borrower"), Renaissance Cosmetics, Inc., a Delaware
corporation (the "Parent Guarantor"), the other Guarantors named on the
signature pages hereto and the Lenders named on the signature pages hereto (the
"Lenders").
RECITALS
WHEREAS, the Parent Guarantor and the Borrower desire that the
Lenders extend a senior secured credit facility to the Borrower in connection
with the Acquisitions and the Nomura Refinancing (each as defined herein);
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereby agree
as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the
following meanings:
"Acquired Business" means the capital stock of MEM Company,
Inc. and its affiliates and the assets associated with the fragrance division of
Procter & ▇▇▇▇▇▇ Corporation, as described in the Acquisition Agreements.
"Acquisitions" means the P&G Acquisition and the MEM
Acquisition, including without limitation the repayment of all Indebtedness of
the Acquired Business.
"Acquisition Agreements" means the P&G Acquisition Agreement
and the MEM Acquisition Agreement.
"Additional Collateral" has the meaning ascribed to such term
in Section 6.24.
"Adjusted Net Assets" has the meaning ascribed to such term in
Section 9.7.
"Affiliate," as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means (i) the possession, directly or
indirectly, of the power to direct or
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cause the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise, or (ii)
the ownership of more than 10% of the voting securities of that Person; provided
that neither the Canadian Imperial Bank of Commerce ("CIBC") nor any of its
Affiliates shall be treated as an Affiliate of the Parent Guarantor or of any
Subsidiary of the Parent Guarantor.
"Agreement" means this Senior Secured Credit Agreement dated
as of December 4, 1996, as it may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"Amount of Unfunded Benefit Liability" means, with respect to
any Pension Plan, (i) if set forth on the most recent actuarial valuation report
with respect to such Pension Plan, the amount of unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA) and (ii) otherwise, the excess of
(a) the greater of the current liability (as defined in Section 412(l)(7) of the
Internal Revenue Code) or the actuarial present value of the accrued benefits
with respect to such Pension Plan over (b) the market value of the assets of
such Pension Plan.
"Applicable Rate" means 11.5% for the period from the Closing
Date to the six month anniversary of the Closing Date and 12.5% thereafter.
"Applicable Spread" means 0% from the Closing Date until the
nine month anniversary of the Closing Date and for each consecutive 90-day
period after the nine month anniversary of the Closing Date, the Applicable
Spread in effect for the immediately preceding 90-day period plus .5%.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, lease, assignment, transfer or other disposition for value
(including, without limitation, pursuant to any amalgamation, merger or
consolidation or pursuant to any sale-and-leaseback transaction) by the Parent
Guarantor, the Borrower or by any Subsidiary of the Parent Guarantor to any
Person other than the Parent Guarantor, the Borrower or any of its wholly-owned
Subsidiaries (any such transaction, a "disposi tion") of (i) any of the stock of
any of the Parent Guarantor's Subsidiaries, (ii) substantially all of the assets
of any division or line of business of the Parent Guarantor or of any
Subsidiaries of the Parent Guarantor, or (iii) any other assets (whether
tangible or intangible) of the Parent Guarantor or of any Subsidiaries of the
Parent Guarantor; excluding (a) any disposition of Cash Equivalents or inventory
in the ordinary course of business or obsolete equipment in the ordinary course
of business consistent with past practices of the Parent Guarantor or such
Subsidiary, any disposition of slow-moving inventory acquired in connection with
an acquisition of business or assets of any other Person or the lease or
sub-lease of any real or personal property in the ordinary course of business,
(b) any transfer of properties or assets in which 100% of the consideration
received by the transferor consists of properties or assets (other than cash)
that will be used in the business of the
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transferor, (c) any transfer of properties or assets that constitutes an
Investment permitted under and made in accordance with Section 6.4, (d) any
transfer of MEM Company, Inc.'s facility (and related fixtures and equipment)
located in Northvale, New Jersey, provided that the proceeds of such transfer
shall be used by the Parent Guarantor and its Subsidiaries within 60 days of the
closing of such transfer to purchase, make improvements to and commence
operations in the facility in Mountaintop, Pennsylvania currently identified by
the Parent Guarantor and its Subsidiaries as the "Central Distribution Center",
and (e) any disposition of stock or assets in any single transaction or related
series of transactions the aggregate value of which is equal to $500,000 or
less.
"Available Cash Flow" means, with respect to any Person for
any period, the consolidated earnings before interest, taxes, depreciation and
amortization, or "EBITDA," of such Person, to be calculated as the sum, without
duplication, of (i) Consolidated Net Income, (ii) Consolidated Cash Interest and
Dividend Expense, (iii) Consolidated Tax Expense, (iv) depreciation, (v)
amortization and (vi) all other non-cash charges deducted in the calculation of
Consolidated Net Income (but excluding any non-cash charges related to the item
described in clause (v) of the definition of "Consolidated Net Income") for the
period as to which the computation of Available Cash Flow is made, all as
determined in accordance with GAAP.
"Bankruptcy Law" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute
or any other United States federal, state or local law or the law of any other
jurisdiction relating to bankruptcy, insolvency, winding up, liquidation,
reorganization or relief of debtors, whether in effect on the date hereof or
hereafter.
"Bankruptcy Order" means any court order made in a proceeding
pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation, winding
up, dissolution or reorganization, or appointing a custodian of a debtor or of
all or any substantial part of a debtor's property, or providing for the
staying, arrangement, adjustment or composition of indebtedness or other relief
of a debtor.
"Board of Directors" means, with respect to any Person, the
Board of Directors of such Person or any duly authorized committee of that
Board.
"Borrower" has the meaning ascribed to such term in the
introduction to this Agreement.
"Bridge Loan Commitment" means the commitment of the Lenders
to make the Bridge Loan as set forth in Section 2.1A.
"Bridge Loan" means, collectively, the loans made by the
Lenders pursuant to Section 2.1A.
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"Bridge Notes" has the meaning ascribed to such term in
Section 2.1D.
"Business Day" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of New York, New York or is a
day on which banking institutions therein located are authorized or required by
law or other governmental action to close.
"Capital Expenditures" has the meaning ascribed to such term
in Section 6.25.
"Capital Lease," as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is required to be accounted for as a capital lease on
the balance sheet of that Person.
"Capitalized Lease Obligation" means obligations under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations determined in
accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including,
without limitation, each class of Common Stock and Preferred Stock of such
Person and (ii) with respect to any Person that is not a corporation, any and
all partnership or other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having a rating from either Standard &
Poor's Rating Group ("S&P") of AA or ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's")
of Aa; (iii) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating from either
S&P's of A-1 or Moody's of P-1; and (iv) certificates of deposit or bankers'
acceptances maturing within one year from the date of acquisition thereof issued
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia that (a) is "well capitalized"
(as defined in the regulations of its primary Federal banking regulator) and (b)
has Tier 1 capital (as defined in such regulations) of not less than $100
million.
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"Cash Flow Leverage Ratio" means the ratio of (i) the sum of
the aggregate outstanding principal amount of all Indebtedness of the Parent
Guarantor, the Borrower and Subsidiaries of the Parent Guarantor determined as
of the date of such calculation on a consolidated basis in accordance with GAAP
to (ii) Available Cash Flow of the Parent Guarantor, the Borrower and
Subsidiaries of the Parent Guarantor determined on a consolidated basis for the
period of such calculation.
"Cash Proceeds" means, with respect to any Asset Sale, cash
payments (including any cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise (other than the portion of such
deferred payment constituting interest, which shall be deemed not to constitute
Cash Proceeds) but only as and when so received) received from such Asset Sale.
"Casualty Event" means, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
Property for which such Person or any of its Subsidiaries receives insurance
proceeds or proceeds of a condemnation award. Casualty Event shall not include
any taking or Destruction or loss of title to Real Property Assets.
"Change of Control" means the occurrence of one or more of the
following events: (i) any Person (including a Person's Affiliates and
associates), other than a Permitted Holder, becomes the beneficial owner (as
defined under Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of 50% or more of the total voting power of the Parent
Guarantor Common Stock, (ii) prior to a Public Equity Offering, the Permitted
Holders collectively shall dispose of more than 50% of the shares of the Parent
Guarantor Common Stock owned by the Permitted Holders in the aggregate as of the
date hereof (excluding dispositions made to another Permitted Holder), (iii) any
Person (including a Person's Affiliates and associates), other than a Permitted
Holder, becomes the beneficial owner of more than 35% of the total voting power
of the Parent Guarantor Common Stock, and the Permitted Holders together with
the officers and employees of the Parent Guarantor beneficially own, in the
aggregate, a lesser percentage of the total voting power of the Parent Guarantor
Common Stock than such other Person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Parent Guarantor, as the case may be,
(iv) there shall be consummated any consolidation or merger of the Parent
Guarantor in which the Parent Guarantor is not the continuing or surviving
corporation or pursuant to which the Parent Guarantor Common Stock would be
converted into cash, securities or other property, other than a merger or
consolidation of the Parent Guarantor in which the holders of the Parent
Guarantor Common Stock outstanding immediately prior to the consolidation or
merger hold, directly or indirectly, at least a majority of the Common Stock of
the surviving corporation immediately after such consolidation or merger, (v)
subsequent to a Public Equity Offering, during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of the Parent Guarantor (together with any new
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directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Parent Guarantor has been approved by 66
2/3% of the directors then still in office who either were directors at the
beginning of such period or whose election or recommendation for election was
previously so approved) cease to constitute a majority of the Board of Directors
of the Parent Guarantor or (vi) the occurrence of any "Change of Control" as
defined in the Senior Secured Indenture or the indenture pursuant to which any
Demand Take-Out Notes are issued.
"Change of Control Date" has the meaning ascribed to such term
in Section 2.5A(iv).
"CIBC" has the meaning ascribed to such term in the definition
of "Affiliate" in this Section 1.1.
"CIBC/WG" means CIBC Wood Gundy Securities Corp.
"Change of Control Offer" has the meaning ascribed to such
term in Section 2.5A(iv).
"Closing Date" means December 4, 1996 or such other date on or
before December 21, 1996 on which the Bridge Loan is made and the conditions set
forth in Section 3.1 are satisfied or waived in accordance with Section 10.6.
"Closing Date Guarantors" means the Parent Guarantor, ▇▇▇▇
Perfumes Corp., Great American Cosmetics, Inc., Houbigant (1995)
Limited/Houbigant (1995) Limitee and MEM Company, Inc.
"Collateral" shall mean all of the Pledged Collateral and
Mortgaged Real Property.
"Collateral Agent" means the collateral agent appointed
pursuant to Section 8.1 and each successor collateral agent appointed under the
Security Agreement with the consent of the Borrower and the Required Lenders.
"Commission" means the Securities and Exchange Commission.
"Commitment Letter" means the commitment letter dated November
21, 1996 between the Parent Guarantor and CIBC Wood Gundy Securities Corp.
"Common Stock" of any Person means any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of, such Person's common stock, whether
outstanding on the Closing Date or issued after the Closing Date, and includes,
without limitation, all series and classes of such common stock.
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"Compliance Certificate" means a certificate substantially in
the form of Exhibit III annexed hereto delivered to the Lenders by the Parent
Guarantor and the Borrower pursuant to Section 5.1(iv)(b).
"Consolidated Cash Interest and Dividend Expense" means, with
respect to any Person for any period, without duplication, the sum of (i) the
total cash interest expense of such Person and Subsidiaries of the Person for
such period, on a consolidated basis, determined in accordance with GAAP,
whether paid or accrued, to the extent such expense was deducted in computing
the Consolidated Net Income of such Person, and (ii) all cash dividends paid or
declared during such period on any preferred stock of such Person and
Subsidiaries of such Person.
"Consolidated Net Income" means, with respect to any Person,
for any period, the aggregate of the net income (or loss) of such Person and
Subsidiaries of the Person for such period, on a consolidated basis, determined
in accordance with GAAP; provided that (a) the net income of any other Person in
which such Person or any Subsidiaries of the Person has an interest (which
interest does not cause the net income of such other Person to be consolidated
with the net income of such Person and Subsidiaries of the Person in accordance
with GAAP) shall be included only to the extent of the amount of dividends or
distributions actually paid to such Person or such Subsidiary by such other
Person during such period; (b) the net income of any Subsidiary of such Person
that is subject to any Payment Restriction shall be excluded to the extent such
Payment Restriction would prevent the payment of an amount that otherwise could
have been paid to such Person or to a Subsidiary of such Person not subject to
any Payment Restriction; and (c) there shall be excluded (i) the net income (or
loss) of any other Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition, (ii) all gains and losses realized
on any Asset Sale (without regard to the $500,000 threshold set forth in the
definition of Asset Sale), (iii) all gains and losses realized on the purchase
or other acquisition by such Person or any Subsidiaries of such Person of any
Securities of such Person or any Subsidiaries of such Person, (iv) all other net
extraordinary gains and losses, and (v) all deferred financing costs written off
in connection with the early extinguishment of any Indebtedness, in each case,
incurred by the Parent Guarantor or any Subsidiaries of the Parent Guarantor in
connection with the Transactions.
"Consolidated Tax Expense" means, for any Person, for any
period, the aggregate income tax expense of such Person and Subsidiaries of the
Person determined on a consolidated basis in accordance with GAAP, excluding,
however, the income tax expense of such Person attributable to a disposition of
assets the gain from which is excluded form the calculation of "Consolidated Net
Income," but only to the extent such income tax expense does not exceed the cash
portion of the consideration received by such Person in connection with the
disposition of such assets.
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"Contested Claim" means any Tax, Indebtedness or other claim
or liability (i) the validity or amount of which is being diligently contested
in good faith, (ii) for which adequate reserve, or other appropriate provision,
if any, as required in conformity with GAAP shall have been made, and (iii) with
respect to which any right to execute upon or sell any assets of the Parent
Guarantor or of any Subsidiaries of the Parent Guarantor has not matured or has
been and continues to be effectively enjoined, superseded or stayed.
"Contingent Obligation," as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for ▇▇▇▇ bursement of
drawings, or (iii) under Interest Rate Agreements and Currency Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclause (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Conversion Date" means the one year anniversary of the
Closing Date or such later date to which the Conversion Date may be deferred
pursuant to Section 3.2D.
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"Creditor" means the Collateral Agent or any Lender;
"Creditors" means all of them.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement designed to protect Parent Guarantor or
any Subsidiaries of the Parent Guarantor against fluctuations in currency
values.
"Custodian" means any receiver, interim receiver, receiver and
manager, trustee, assignee, liquidator, sequestrator or similar official charged
with maintaining possession or control over property for one or more creditors,
whether under any Bankruptcy Law or otherwise.
"Demand Take-Out Notes" means unsecured senior subordinated
notes of the Parent Guarantor issued under a senior subordinated indenture
(substantially similar to senior subordinated indentures generally utilized in
the offering of high yield securities at the time of execution) the proceeds of
which shall be used to repay the Bridge Notes in whole or in part, which Demand
Take-Out Notes shall be guaranteed by, or shall contain restrictive covenants
extending to, each entity that guarantees the Bridge Loan.
"Destruction" has the meaning assigned to the term in the
Mortgages. Destruction shall not include a Casualty Event.
"Disqualified Capital Stock" means any Capital Stock which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable at the sole option of the holder), or upon the
happening of any event (other than an event which would constitute a Change of
Control), (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof (except upon the occurrence of a Change of Control), in whole or in
part, on or prior to the final maturity date of the Notes, or (ii) is
convertible into or exchangeable for (at the sole option of the holder thereof)
(a) debt securities or (b) any Capital Stock referred to in (i) above, in each
case at any time prior to the final maturity of the Notes; provided that only
the portion of Capital Stock which so matures or is mandatorily redeemable, is
so convertible or exchangeable or is so redeemable at the option of the holder
thereof prior to such final maturity date shall be deemed to be Disqualified
Capital Stock.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA (i) which is, or, at any time within the five
calendar years immediately preceding the date hereof, was, maintained or
contributed to by any of the Parent Guarantor or Subsidiaries of the Parent
Guarantor or any of their
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respective ERISA Affiliates or (ii) with respect to which the Parent Guarantor
or any Subsidiaries of the Parent Guarantor retains any liability, including any
potential joint and several liability as a result of an affiliation with an
ERISA Affiliate or a party that would be an ERISA Affiliate except for the fact
the affiliation ceased more than five calendar years prior to the date hereof.
"Environmental Claim" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
response or corrective action, any damage, including, without limitation,
personal injury (including sickness, disease or death), tangible or intangible
property damage, contribution, indemnity, indirect or consequential damages,
damage to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions, in each
case arising under any Environmental Law, including without limitation, relating
to, resulting from or in connection with Hazardous Materials and relating to the
Parent Guarantor, any Subsidiaries of the Parent Guarantor or any of their
respective properties or predecessors in interest.
"Environmental Laws" means all principles of common law,
statutes, ordinances, orders, rules, regulations, plans, policies or decrees and
the like relating to (i) pollution or protection of human health or the
environment, including without limitation ambient air, indoor air, soil, surface
water, ground water, land or subsurface strata, including, without limitation,
those relating to fines, injunctions, penalties, damages, contribution, cost
recovery compensation, losses or injuries resulting from the Release or
threatened Release of Hazardous Materials, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials (but excluding the Federal
Food, Drug and Cosmetic Act (21 U.S.C. Section 301 et seq.)), or (iii)
occupational safety and health, industrial hygiene, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Section 136 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section
651 et seq.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. Section 11001 et seq.), each as amended or supplemented, and any
analogous future or present statutes and regulations promulgated pursuant
thereto, each as in effect as of the date of determination.
"Environmental Lien" means a Lien in favor of a Tribunal or
other Person (i) for any liability under an Environmental Law or (ii) for
damages arising from or costs incurred by such Tribunal or other Person in
response to a release or
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threatened release of any hazardous or toxic waste, substance or constituent
into the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate", as applied to any Person, means (i) any
corporation which is, or was at any time within the five calendar years
immediately preceding the date hereof, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is, or was at any time within the five calendar years
immediately preceding the date hereof, a member; (ii) any trade or business
(whether or not incorporated) which is, or was at any time within the five
calendar years immediately preceding the date hereof, a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which that Person is, or was at any time within
the five calendar years immediately preceding the date hereof, a member; and
(iii) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is, or was at any time within the five calendar years immediately
preceding the date hereof, a member.
"ERISA Event" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by any of the Parent Guarantor or Subsidiaries of the Parent
Guarantor or any of their respective ERISA Affiliates from any Pension Plan with
two or more contributing sponsors or the termination of any such Pension Plan
resulting in liability pursuant to Sections 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of liability on any
of the Parent Guarantor or Subsidiaries of the Parent Guarantor or any of their
respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal by
any of the Parent Guarantor or Subsidiaries of the Parent Guarantor or any of
their respective ERISA
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Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by any of the Parent Guarantor or
Subsidiaries of the Parent Guarantor or any of their respective ERISA Affiliates
of notice from any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or
has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an
act or omission which could reasonably be expected to give rise to the
imposition on any of the Parent Guarantor or Subsidiaries of the Parent
Guarantor or any of their respective ERISA Affiliates of fines, penalties, taxes
or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of any Employee
Benefit Plan; (ix) the assertion of a material claim (other than routine claims
for benefits) against any Employee Benefit Plan other than a Multiemployer Plan
or the assets thereof, or against any of the Parent Guarantor or Subsidiaries of
the Parent Guarantor or any of their respective ERISA Affiliates in connection
with any such Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"Event of Default" means each of the events set forth in
Section 7.
"Excess Cash Flow" means, with respect to any Person for any
fiscal year, the excess of (a) Available Cash Flow less Consolidated Cash
Interest and Dividend Expense that was payable in cash, less Taxes paid, less
Capital Expenditures actually incurred, all for or during the previous fiscal
year, all as determined in accordance with GAAP following the preparation of
such Person's audited financial statements for such previous fiscal year, over
(b) $2.5 million.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Exchange Document Request" has the meaning ascribed to such
term in Section 5.11(a).
"Exchange Notes" has the meaning ascribed to such term in
Section 5.11(b).
"Exchange Request" has the meaning ascribed to such term in
Section 5.11(c).
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"Facilities" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated or used by any of
the Parent Guarantor or Subsidiaries of the Parent Guarantor or any of their
respective predecessors in interest.
"Foreign Plan" has the meaning ascribed to such term in
Section 4.13E.
"Form S-4" means the Parent Guarantor's Registration Statement
on Form S-4 (No. 333-13171) filed with the Commission on October 1, 1996.
"Funding Guarantor" has the meaning ascribed to such term in
Section 9.7.
"GAAP" means those generally accepted accounting principles
and practices which are recognized as such by the Financial Accounting Standards
Board and which are consistently applied for all periods after the date hereof
so as to properly reflect the financial conditions, and the results of
operations and changes in financial position, of the Parent Guarantor and
Subsidiaries of the Parent Guarantor, except that any accounting principle or
practice required to be changed in order to continue as a generally accepted
accounting principle or practice may be so changed.
"Guarantee Obligations" has the meaning ascribed to such term
in Section 9.1.
"Guarantees" means, collectively, the guarantees delivered to
the Lenders by the Guarantors pursuant to Section 9 which are evidenced by
notations of guarantee substantially in the form of Exhibit VII hereto.
"Guarantors" means (i) the Parent Guarantor, (ii) each of the
other Closing Date Guarantors and (iii) each of the Parent Guarantor's
Subsidiaries which becomes a Guarantor pursuant to Section 6.16 hereof.
"Hazardous Materials" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," "infectious waste," "toxic substances" or
any other formulations intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any flammable
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substances or explosives; (v) any radioactive materials; (vi) asbestos in any
form; (vii) urea formaldehyde foam insulation; (viii) electrical equipment which
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million; (ix) pesticides; and (x) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority or which may or could pose a hazard
to human health or safety or the environment.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall
have meanings correlative to the foregoing); provided, however, that any
amendment, modification or waiver of any document pursuant to which Indebtedness
was previously Incurred shall only be deemed to be an Incurrence of Indebtedness
if and to the extent such amendment, modification or waiver (i) increases the
principal thereof or interest rate or premium payable thereon or (ii) changes to
an earlier date the stated maturity thereof or the date of any scheduled or
required principal payment thereon or the time or circumstances under which such
Indebtedness shall be redeemed; provided, further, that any Indebtedness of a
Person existing at the time such Person becomes (after the Closing Date) a
Subsidiary of the Parent Guarantor (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at
the time it becomes a Subsidiary of the Parent Guarantor.
"Indebtedness" means, with respect to any Person, (i) all
indebtedness, obligations and liabilities of such Person for borrowed money,
(ii) that portion of obligations with respect to Capital Leases that is properly
classified as a liability on a balance sheet of such Person in conformity with
GAAP, (iii) notes payable and drafts accepted representing extensions of credit,
whether or not representing obligations for borrowed money, of such Person, (iv)
any indebtedness, obligation or liability of such Person owed for all or any
part of the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more than six
months (or a longer period of up to one year, if such terms are available from
suppliers in the ordinary course of business) from the date of incurrence of the
obligation in respect thereof or (b) evidenced by a note or similar written
instrument, (v) all indebtedness, obligations and liabilities secured by any
Lien on any property or asset owned or held by that Person regardless of whether
the indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person except that "Indebtedness" shall not
include trade payables and accrued liabilities Incurred in the ordinary course
of business for the purchase of goods or services which are not secured by a
Lien other than a Permitted Encumbrance and obligations under Interest Rate
Agreements and Currency Agreements (which constitute Contingent Obligations, not
Indebtedness), (vi) guarantees of such Person in respect of Indebtedness of
other Persons and (vii) all
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Disqualified Capital Stock issued by such Person with the amount of Indebtedness
represented by such Disqualified Capital Stock being equal to the greater of its
voluntary or involuntary liquidation preference and its maximum fixed repurchase
price, but excluding accrued dividends, if any. For purposes hereof, the
"maximum fixed repurchase price" of any Disqualified Capital Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Capital Stock as if such Disqualified Capital Stock
were purchased on any date on which Indebtedness shall be required to be
determined pursuant to this Agreement, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such fair
market value to be determined reasonably and in good faith by the board of
directors of the issuer of such Disqualified Capital Stock.
"indemnified liabilities" has the meaning ascribed to such
term in Section 10.4.
"Indemnitees" has the meaning ascribed to such term in Section
10.4.
"Intellectual Property" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of the Parent Guarantor, the Borrower and
Subsidiaries of the Parent Guarantor as currently conducted that are material to
the condition (financial or otherwise), business or operations of the Parent
Guarantor, the Borrower and Subsidiaries of the Parent Guarantor, taken as a
whole.
"Intercompany Indebtedness" means any Indebtedness of the
Parent Guarantor or any of its Subsidiaries which, in the case of the Parent
Guarantor, is owing to any wholly-owned Subsidiary of the Parent Guarantor and
which, in the case of any such Subsidiary, is owing to the Parent Guarantor or
any wholly-owned Subsidiary of the Parent Guarantor; provided, however, that if
as of any date any Person other than the Parent Guarantor or a wholly-owned
Subsidiary of the Parent Guarantor owns or holds such Indebtedness, or holds any
Lien in respect thereof, such Indebtedness shall no longer be Intercompany
Indebtedness permitted to be Incurred pursuant to Section 6.1(vi).
"Intercompany Note" has the meaning ascribed to such term in
the definition of "Permitted Investments" in this Section 1.1.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect Parent Guarantor or any
Subsidiaries of the Parent Guarantor against fluctuations in interest rates.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor code or statute.
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"Investment" means (i) any direct or indirect purchase or
other acquisition of, or of a beneficial interest in, any Securities of any
other Person or (ii) any direct or indirect loan, advance (other than advances
to employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business), extension of credit or
capital contribution to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business.
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment less the sum of all amounts received in respect of such Investment.
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided, however, that, as to any such arrangement in corporate form, such
corporation shall not, as to any Person of which such corporation is a
Subsidiary, be considered to be a Joint Venture to which such Person is a party.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees of any
state, commonwealth, nation, territory, possession, province, county, parish,
town, township, village, municipality or Tribunal, and "Law" means each of the
foregoing.
"Lenders" has the meaning ascribed to that term in the
introduction to this Agreement and shall include any assignee of any Loan, Note
or Loan Commitment to the extent of such assignment; provided, however, from and
after the Closing Date, the Borrower shall be entitled to treat the registered
holders of the Notes (including, without limitation, any registered holder
acting as nominee for a Lender) as reflected on the Register as a "Lender" and
the Borrower and the Guarantors shall be entitled to rely on the Register to
determine the identity of the "Lenders" and the amount of Loans held by each for
all purposes of this Agreement and the other Loan Documents, including, without
limitation, for purposes of determining Persons entitled to receive payment or
to consent to amendments and waivers under the Loan Documents. Notwithstanding
the foregoing, no Lender shall be relieved of its obligations under this
Agreement as a result of causing its Notes to be registered in the name of a
nominee.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
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"Litigation" means any action, suit, proceeding, claim,
lawsuit and/or investigation conducted or threatened by or before any Tribunal.
"Loan Commitment" means the Bridge Loan Commitment and the
Term Loan Commitment.
"Loan Documents" means this Agreement, the Bridge Notes, the
Term Notes, the Guarantees, the Senior Secured Indenture, the Exchange Notes,
the Registration Rights Agreement and the Security Documents.
"Loans" means the Bridge Loan and the Term Loan as each may be
outstanding.
"Margin Stock" has the meaning ascribed to such term in
Regulation U and Regulation G of the Board of Governors of the Federal Reserve
System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets or condition (financial or
otherwise) of the Parent Guarantor and Subsidiaries of the Parent Guarantor,
taken as a whole, or (ii) the material impairment of the ability of the Parent
Guarantor, the Borrower or any other Guarantor to perform, or the material
impairment of the ability of the Collateral Agent or Lenders to enforce, the
Obligations.
"Material Subsidiary" means, with respect to any accounting
period, any Subsidiary of the Parent Guarantor incorporated or otherwise
organized in any jurisdiction within the United States or Canada and (i) whose
revenues constitute greater than 10% of the aggregate dollar value of the
revenues of the Parent Guarantor and Subsidiaries of the Parent Guarantor, taken
as a whole, for such accounting period or (ii) the fair market value of whose
assets at any time during such accounting period is greater than 10% of the fair
market value of all of the assets of the Parent Guarantor and Subsidiaries of
the Parent Guarantor at such time.
"Maximum Cash Interest Rate" means an interest rate of 15% per
annum; provided that in computing such interest rate, fees paid to the Lenders
shall not be deemed an interest payment.
"MEM Acquisition" means the acquisition by the Parent
Guarantor or its affiliates of the capital stock of MEM Company, Inc. and its
affiliates pursuant to the MEM Acquisition Agreement.
"MEM Acquisition Agreement" means the Agreement and Plan of
Merger, dated as of August 6, 1996, as amended, between MEM Company, Inc., the
Parent Guarantor and RAI.
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"Mortgage" means a term loan mortgage, assignment of leases,
security agreement and fixture filing, or a term loan deed of trust, assignment
of leases, security agreement and fixture filing, creating and evidencing a Lien
on a Mortgaged Real Property, which shall be in form and substance reasonably
satisfactory to CIBC/WG and the Borrower and which shall be dated the date of
delivery thereof and made by the owner of the Mortgaged Real Property described
therein for the benefit of the Collateral Agent, as mortgagee (grantee or
beneficiary), assignee and secured party, as the same may at any time be
amended, modified or supplemented in accordance with the terms thereof and
hereof.
"Mortgaged Real Property" means each Real Property Asset which
shall be subject to a Mortgage delivered pursuant to Sections 5.15 and 6.24.
"Multiemployer Plan" means a Pension Plan which is a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA.
"Net Award" shall have the meaning ascribed to such term in
each Mortgage.
"Net Cash Proceeds" means, with respect to any Asset Sale,
Cash Proceeds of such Asset Sale net of bona fide direct costs of sale including
(i) income taxes reasonably estimated to be actually payable as a result of such
Asset Sale within two years of the date of such Asset Sale and (ii) payment of
the outstanding principal amount of, premium or penalty, if any, and interest
on, any Indebtedness that is secured by a Lien on the stock or assets in
question and that is required to be repaid under the terms thereof as a result
of such Asset Sale.
"Nomura Refinancing" means the Refinancing and retirement of
all amounts outstanding under the Note Purchase Agreement dated December 21,
1994, as amended, by and among the Parent Guarantor, the Borrower and Nomura
Holding America Inc.
"Non-Perfected Collateral" means non-United States
Intellectual Property; Inventory and Equipment not in the possession or located
at the premises of the Debtors; fixtures; and any Collateral in which a security
interest may not be perfected by the filing in any state of the United States of
a Uniform Commercial Code financing statement (other than the Pledged Stock).
Capitalized terms used in this definition and not defined in this Agreement have
the meanings ascribed thereto in the Security Agreement.
"Notes" means, collectively, the Bridge Notes and the Term
Notes.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit IV-A annexed hereto with respect to a proposed borrowing.
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"Notice of Conversion" means a notice substantially in the
form of Exhibit IV-B annexed hereto with respect to a proposed conversion.
"Obligations" means all obligations of every nature of the
Borrower and the Guarantors from time to time owed to the Lenders and the
Collateral Agent under the Loan Documents, whether for principal,
reimbursements, interest, fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise (including
obligations of performance).
"Offer Payment Date" has the meaning ascribed to such term in
Section 2.5A(iv).
"Officer" means the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer, the Controller, the Treasurer or
the Secretary of the Parent Guarantor and the Borrower.
"Officers' Certificate" means, as applied to any corporation,
a certificate executed on behalf of such corporation by two Officers; provided,
however, that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of the Loans hereunder shall include (i) a
statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"Original Term Notes" has the meaning ascribed to such term in
Section 2.2E.
"Other Taxes" has the meaning ascribed to such term in Section
10.19.
"P&G Acquisition" means the acquisition by the Parent
Guarantor or its affiliates of the assets associated with the fragrance division
of Procter & ▇▇▇▇▇▇ Corporation pursuant to the P&G Acquisition Agreement.
"P&G Acquisition Agreement" means the Asset Sale and Purchase
Agreement dated as of October 29, 1996, as amended, by and among Procter &
▇▇▇▇▇▇ Corporation, the Parent Guarantor and certain of its affiliates.
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"Parent Guarantor" has the meaning ascribed to such term in
the introduction to this Agreement.
"Parent Guarantor Common Stock" means the common stock, par
value $.01 per share, of the Parent Guarantor.
"Pari Passu Indebtedness" means, with respect to the Borrower
or any Guarantor, Indebtedness of such Person which ranks pari passu in right of
payment to the Loans or the Guarantee of such Guarantor, as the case may be.
"Payment Restriction" has the meaning ascribed to such term in
Section 6.7.
"PBGC" means the Pension Benefit Guaranty Corporation, and any
successor to all or any of the Pension Benefit Guaranty Corporation's functions
under ERISA.
"Pension Plan" means an Employee Benefit Plan which is subject
to the provisions of Title IV of ERISA.
"Permits" has the meaning ascribed to such term in Section
4.20.
"Permitted Encumbrances" means (i) Liens granted to secure the
Obligations hereunder; (ii) Liens existing on the Closing Date set forth on
Schedule C hereto to the extent and in the manner such Liens are in effect on
the Closing Date; (iii) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by Section 5.3; (iv)
statutory Liens of landlords and banks and rights of offset, and Liens of
carriers, warehousemen, workmen, repairmen, mechanics and materialmen and other
Liens imposed by law incurred in the ordinary course of business for sums not
yet delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor; (v) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, utility payments, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money); (vi) any attachment or judgment Lien not constituting an Event of
Default; (vii) leases or subleases granted to others not interfering in any
material respect with the ordinary conduct of the business of the Parent
Guarantor and Subsidiaries of the Parent Guarantor, taken as a whole; (viii)
easements, rights-of-way, restrictions, minor defects, encroachments or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business of
the Parent Guarantor and Subsidiaries of the Parent Guarantor, taken as a whole;
(ix) any (a) interest or title of a lessor or sublessor (other than the Parent
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Guarantor or any Subsidiaries of the Parent Guarantor) under any lease, (b)
restriction or encumbrance that the interest or title of such lessor or
sublessor may be subject to (including without limitation ground leases or other
prior leases of the demised premises, mortgages, mechanics liens, tax liens, and
easements), or (c) subordination of the interest of the lessee or sublessee
under such lease to any restrictions or encumbrance referred to in the preceding
clause (b); (x) Liens arising from filing UCC financing statements for
precautionary purposes relating solely to true leases of personal property
permitted by this Agreement under which the Parent Guarantor or any Subsidiaries
of the Parent Guarantor is a lessee; (xi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (xii) any zoning or similar law or
right reserved to or vested in any governmental office or agency to control or
regulate the use of any real property; (xiii) Liens securing obligations (other
than obligations representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary course of
business of the Parent Guarantor and Subsidiaries of the Parent Guarantor; (xiv)
Liens upon specific items of inventory or other goods and proceeds of any Person
securing such Person's obligations in respect of bankers' acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods in the ordinary course of business;
(xv) Liens securing reimbursement obligations with respect to letters of credit
which encumber documents and other property relating to such letters of credit
and the products and proceeds thereof; (xvi) Liens arising out of consignment or
similar arrangements for the sale of goods entered into by the Parent Guarantor
or any Subsidiary in the ordinary course of business in accordance with past
practices; (xvii) Liens to secure Permitted Refinancing Indebtedness to the
extent the Indebtedness Refinanced was secured and such Liens do not extend to
any property other than the property which was subject to the Lien under the
Indebtedness being Refinanced; (xviii) Liens resulting from financing statements
and other liens of record that secure either Indebtedness repaid in full on the
Closing Date or Indebtedness of MEM Company, Inc. repaid in full at the closing
of the MEM Acquisition, in each case as evidenced by pay-off documentation
(including the former lenders' further assurances as to termination of such
Liens) in form and substance reasonably satisfactory to CIBC/WG and, in the case
of Uniform Commercial Code financing statements, as to which the Parent
Guarantor and the Borrower shall have delivered to the Lenders properly
completed and duly and fully executed Uniform Commercial Code termination
statements reasonably satisfactory to CIBC/WG; (xix) Liens on properties or
assets of MEM Company, Inc. or any of its Subsidiaries not otherwise permitted
under this Agreement, provided that such Liens are terminated or released within
10 Business Days of the Borrower becoming aware of them; (xx) Liens on each
Mortgaged Real Property to the extent indicated on Schedule B of the title
insurance policy being issued to insure Lenders' Lien on such Mortgaged Real
Property; and (xxi) customary provisions of any lease, license or contract
prohibiting the assignment, subletting or transfer of any rights of the Parent
Guarantor, the Borrower and the Subsidiaries of the Parent Guarantor either in
existence on the Closing Date or contained in a lease, license or agreement
entered
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into in the ordinary course of business that is not material to the Parent
Guarantor or the Subsidiary of the Parent Guarantor which is a party thereto.
"Permitted Holders" means (i) ▇▇▇▇ ▇▇▇▇ Equity Partners, L.P.
or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (ii) the heirs, executors, administrators, testamentary
trustees, legatees or beneficiaries of ▇▇▇▇ ▇▇▇▇ Equity Partners, L.P. or ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ or of any Person described in this clause (ii), (iii) a trust the
beneficiaries of which include only persons described in clauses (i) and (ii)
above and their respective spouses and lineal descendants, (iv) the general
partner and each limited partner of ▇▇▇▇ ▇▇▇▇ Equity Partners, L.P. and (v) any
Subsidiary of either ▇▇▇▇ ▇▇▇▇ Equity Partners, L.P. or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or both
of them jointly.
"Permitted Investments" means (a) Investments in cash and Cash
Equivalents; (b) Investments by the Parent Guarantor or by any Subsidiary of the
Parent Guarantor in any Person that is or will become immediately after such
Investment a wholly-owned Subsidiary of the Parent Guarantor that either (I) has
not Incurred (and will not Incur as a result of or in connection with such
transaction) any Indebtedness (other than Indebtedness permitted to be Incurred
by such Subsidiary under Section 6.1) or (II) is a Guarantor; provided, however,
that (x) such Investment shall be a Permitted Investment only for so long as any
such Subsidiary in which the Investment has been made meets the conditions set
forth above and (y) no Investment in any such Person or Subsidiary (including
any transaction pursuant to which any Person becomes a Subsidiary of the Parent
Guarantor) will be a Permitted Investment if and for so long as such Subsidiary
is or would be subject to any Payment Restriction; (c) Investments made by the
Parent Guarantor or by Subsidiaries of the Parent Guarantor out of the Net Cash
Proceeds of an Asset Sale made in compliance with Section 2.5A(ii)(a); (d)
Intercompany Indebtedness by and between the Parent Guarantor and Subsidiaries
of the Parent Guarantor which is subordinated to the Parent Guarantor's and the
Borrower's Obligations hereunder, as the case may be, as set forth in a note
substantially in the form of Exhibit IX annexed hereto and with appropriate
insertions (the "Intercompany Note"); and (e) Intercompany Indebtedness owed by
any Subsidiary of the Parent Guarantor that is not a Guarantor to the Parent
Guarantor, the Borrower or any other Guarantor either (i) outstanding on the
Closing Date or (ii) Incurred after the Closing Date in an amount not to exceed
$5 million at any one time outstanding.
"Permitted Refinancing Indebtedness" means (A) any Refinancing
by the Parent Guarantor of Indebtedness of the Parent Guarantor or of
Subsidiaries of the Parent Guarantor (other than Indebtedness Incurred or
outstanding pursuant to clauses (ii), (vi) and (xi) of Section 6.1) and (B) any
Indebtedness incurred pursuant to a Refinancing by any Subsidiary of the Parent
Guarantor of Indebtedness Incurred by such Subsidiary (other than Indebtedness
Incurred or outstanding pursuant to clauses (ii), (iv), (vi) and (xi) of Section
6.1), in the case of each of (A) and (B), that does not (1) result in an
increase in the total of the aggregate principal amount of the Indebtedness of
such Person being Refinanced as of the date of such proposed
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Refinancing (if such Indebtedness that is Refinancing the existing Indebtedness
is issued at a price less than 100% of the principal amount thereof, an increase
shall not be deemed to have occurred unless the gross proceeds of such
Indebtedness that is Refinancing the existing Indebtedness is in excess of the
total of the aggregate principal amount of the Indebtedness being Refinanced as
of the date of such proposed Refinancing) or (2) create Indebtedness with a
Weighted Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced; provided, however, that (x) if
such Indebtedness being Refinanced is Indebtedness of the Parent Guarantor, then
such Refinancing Indebtedness shall be Indebtedness solely of the Parent
Guarantor and (y) if such Indebtedness being Refinanced is subordinate or junior
in right of payment to the Loans or if recourse in respect of the Indebtedness
being Refinanced is limited in any respect, then such Indebtedness proposed to
be Incurred to Refinance the existing Indebtedness shall be subordinate in right
of payment to the Loans and recourse with respect thereto, as the case may be,
shall be limited at least to the same extent and in the same manner as the
Indebtedness being Refinanced.
"Person" means and includes natural persons, corporations,
limited liability companies, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"PIK Interest Amount" has the meaning ascribed to such term in
Section 2.3B.
"Pledged Collateral" means all of the Pledged Collateral as
defined in the Security Agreement.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of Default if
that condition or event were not cured or removed within any applicable grace or
cure period.
"Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights (as compared to any other Capital Stock
of such Person) with respect to dividends or redemptions or upon liquidation.
"Principal Office" means, as to each Lender, the office of the
registered holder of the Notes as reflected on the Register or, in the case of
the registered holders as of the Closing Date, as set forth on Annex I to this
Agreement or such other office as such registered holder of the Notes may
designate in writing to the Parent Guarantor and the Borrower from time to time.
"Public Equity Offering" means a public offering by the Parent
Guarantor of Parent Guarantor Common Stock (however designated and whether
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voting or non-voting) and any and all rights, warrants or options to acquire
such Parent Guarantor Common Stock.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"RAI" means Renaissance Acquisition, Inc., a Delaware
corporation and a wholly-owned Subsidiary of the Parent Guarantor.
"Real Property Assets" means fee simple interests in land,
buildings, improvements, and fixtures attached thereto or used in the operation
thereof, in each case owned by the Parent Guarantor, the Borrower or any other
Guarantor and with a fair market value of $1 million or more.
"Refinance" means, in respect of any security or Indebtedness,
to refinance, extend, renew, refund or defease, or to issue a security or
Indebtedness in exchange or replacement for, such security or Indebtedness in
whole or in part. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Register" has the meaning ascribed to such term in Section
5.13.
"Registration Rights Agreement" means a registration rights
agreement substantially in the form contemplated by the Commitment Letter and
this Agreement (with such changes thereto as CIBC/WG, the Parent Guarantor and
the Borrower shall approve).
"Related Business Investment" means any Investment by a Person
in any other Person a majority of whose revenues are derived or will, as a
consequence of such Investment, be derived from the operation of any line of
business engaged in or reasonably related to a line of business engaged in by
the Parent Guarantor or any Subsidiaries of the Parent Guarantor as of the
Closing Date.
"Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"Reportable Event" has the meaning ascribed to such term in
Section 4043 of ERISA, but excluding any event for which the 30-day notice
requirement has been waived by applicable regulations of the PBGC.
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"Required Lenders" means Lenders that are the registered
holders in the aggregate of more than 50% of the outstanding principal amount of
Notes as reflected on the Register.
"Restricted Payment" has the meaning ascribed to such term in
Section 6.3.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options, warrants,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Security Agreement" means a Security Agreement substantially
in the form of Exhibit VIII among the Borrower, the Guarantors and the
Collateral Agent, as the same may be amended, modified or supplemented in
accordance with the terms thereof and hereof.
"Security Documents" means the Mortgages and the Security
Agreement.
"Senior Notes" has the meaning ascribed to such term in
Section 6.7.
"Senior Officers" means each of the Chief Executive Officer,
Senior Vice President and Chief Financial Officer of the Parent Guarantor.
"Senior Secured Indenture" means an indenture between the
Parent Guarantor or the Borrower and a trustee substantially in the form
contemplated by the Commitment Letter and this Agreement (with such changes
thereto as CIBC/WG, the Parent Guarantor and the Borrower shall approve, and, at
such time as notes issued thereunder are sold in a public offering, with other
appropriate changes to reflect such public offering), as the same may at any
time be amended, modified and supplemented and in effect.
"Subordinated Indebtedness" means Indebtedness of the Parent
Guarantor, the Borrower or any other Guarantor which is expressly subordinated
in right of payment to the Notes or the Guarantee of such Guarantor, as the case
may be.
"Subsequent Term Note" has the meaning ascribed to such term
in Section 2.2E.
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"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereto is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof.
"Take-Out Banks" has the meaning ascribed to such term in
Section 3.1Q.
"Take-Out Securities" means any Securities of the Borrower
and/or the Guarantors the proceeds of which are used to repay the Notes in full
and any Securities of the Borrower and/or the Guarantors issued in accordance
with Section 6.13 the proceeds of which are used to Refinance the Notes in part,
including, without limitation, the Demand Take-Out Notes.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other charges of any
nature whatsoever, including interest penalties, from time to time or at any
time imposed by any Law or any Tribunal.
"Term Loan Commitment" has the meaning ascribed to such term
in Section 2.2A.
"Term Notes" has the meaning ascribed to such term in Section
2.2E.
"Transactions" shall mean, collectively, (i) the Acquisitions,
(ii) the Nomura Refinancing, (iii) the incurrence of the Loans hereunder on the
Closing Date, (iv) the repayment of all Indebtedness and other obligations of
the Parent Guarantor and Subsidiaries of the Parent Guarantor (except for
Indebtedness listed on Schedule B hereto not to exceed $73,699,684 which may
remain outstanding and Intercompany Indebtedness), (v) any other transaction on
the Closing Date contemplated in relation to the foregoing and (vi) the payment
of Transaction Costs.
"Transaction Costs" means the fees, costs and expenses payable
by the Parent Guarantor pursuant hereto and other fees, costs and expenses
payable by the Parent Guarantor or a Subsidiary of the Parent Guarantor in
connection with the Transactions.
"Tribunal" means any government, any arbitration panel, any
court or any governmental department, commission, board, bureau, agency,
authority or instrumentality of the United States or any state, province,
commonwealth, nation, territory, possession, county, parish, town, township,
village or municipality, whether now or hereafter constituted and/or existing.
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"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Voting Stock" means, with respect to any Person, securities
of any class or classes of Capital Stock in such Person entitling the holders
thereof to vote under ordinary circumstances in the election of members of the
board of directors or other governing body of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
"wholly-owned Subsidiary" means, with respect to any Person,
any corporation, association or other business entity of which 100% of the total
voting power of shares of stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other wholly-owned
Subsidiaries of that Person or a combination thereof, other than directors'
qualifying shares or similar shares held by a director or officer of a foreign
Subsidiary.
1.2 Accounting Terms
For the purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP.
1.3 Other Definitional Provisions; Anniversaries
Any of the terms defined in Section 1.1 may, unless the
context otherwise requires, be used in the singular or the plural depending on
the reference. For purposes of this Agreement, a monthly anniversary of the
Closing Date shall occur on the same day of the applicable month as the day of
the month on which the Closing Date occurred; provided, however, that if the
applicable month has no such day (i.e., 29, 30 or 31), the monthly anniversary
shall be deemed to occur on the last day of the applicable month.
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SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENT
AND LOANS; NOTES
2.1 Bridge Loan and Bridge Note
A. Bridge Loan Commitment. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of the
Parent Guarantor and the Borrower herein set forth, the Lenders hereby agree to
lend to the Borrower on the Closing Date $117,500,000 in the aggregate (the
"Bridge Loan"), each such Lender committing to lend the amount set forth next to
such Lender's name on the signature pages hereto. The Lenders' commitments to
make the Bridge Loan to the Borrower pursuant to this Section 2.1A are herein
called individually, the "Bridge Loan Commitment" and collectively, the "Bridge
Loan Commitments."
B. Notice of Borrowing. When the Borrower desires to borrow
under this Section 2.1, it shall deliver to the Lenders a Notice of Borrowing no
later than 11:00 A.M. (New York time), at least one Business Day in advance of
the Closing Date or such later date as shall be agreed to by the Lenders. The
Notice of Borrowing shall specify the applicable date of borrowing (which shall
be a Business Day).
C. Disbursement of Funds. (a) Upon satisfaction or waiver of
the conditions set forth in Section 3.1, no later than 12:00 Noon (New York
time) on the Closing Date, each Lender will make available its pro rata share
(based on its Bridge Loan Commitment then in effect) of the Bridge Loan
requested to be made on such date in the manner provided below. All amounts
shall be made available in U.S. Legal Tender and immediately available funds to
the Borrower by depositing to its account at the place in the United States
notified by the Borrower to the Lenders in writing at least two Business Days in
advance of the Loan to be made by each such Lender.
(b) Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its Bridge Loan Commitment hereunder or to prejudice
any rights which the Borrower may have against any Lender as a result of any
default by such Lender hereunder.
D. Bridge Notes. The Borrower shall execute and deliver to
each Lender or its nominee on the Closing Date a Bridge Note dated the Closing
Date substantially in the form of Exhibit I annexed hereto to evidence the
portion of the Bridge Loan made on such date by such Lender and with appropriate
insertions ("Bridge Notes").
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E. Scheduled Payment of Bridge Loan. Subject to Section 2.2,
the Borrower shall pay in full the outstanding amount of the Bridge Loan and all
other Obligations owing hereunder no later than the Conversion Date.
F. Termination of Bridge Loan Commitments. The Bridge Loan
Commitments hereunder shall terminate on the earlier of (i) the date on which
either of the Acquisition Agreements are terminated in accordance with their
respective terms or (ii) December 21, 1996 if the Bridge Loan is not made on or
before such date unless the Acquisition Agreements, in form and substance
satisfactory to CIBC/WG have been extended beyond such date. The Borrower shall
have the right, without premium or penalty, to reduce or terminate the aggregate
Bridge Loan Commitments of the Lenders hereunder at any time.
G. Pro Rata Borrowings. The Bridge Loan made under this
Agreement shall be made by the Lenders pro rata on the basis of their respective
Bridge Loan Commitments. It is understood that no Lender shall be responsible
for any default by any other Lender of its obligation to make its portion of the
Bridge Loan hereunder and that each Lender shall be obligated to make its
portion of the Bridge Loan hereunder, regardless of the failure of any other
Lender to fulfill its commitments hereunder.
2.2 Term Loan and Term Note
A. Term Loan Commitment. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of the
Parent Guarantor and the Borrower herein set forth, the Lenders hereby agree, on
the Conversion Date, upon the request of the Borrower, to convert the then
outstanding principal amount of the Bridge Notes into a term loan (the "Term
Loan"), such Term Loan to be in the aggregate principal amount of the then
outstanding principal amount of the Bridge Notes. The Lenders' commitments under
this Section 2.2A are herein called individually, the "Term Loan Commitment" and
collectively, the "Term Loan Commitments."
B. Notice of Conversion. If the Borrower has not repaid the
Bridge Loan in full on or prior to the Conversion Date, then the Borrower shall
convert the then outstanding principal amount of the Bridge Notes into a Term
Loan under this Section 2.2. The Borrower shall deliver to the Lenders a Notice
of Conversion no later than 11:00 A.M. (New York time), at least two Business
Days in advance of the Conversion Date. The Notice of Conversion shall specify
the Conversion Date (which shall be a Business Day) and the principal amount of
the Bridge Notes outstanding on the Conversion Date to be converted into a Term
Loan.
C. Making of Term Loan. Upon satisfaction or waiver of the
conditions precedent specified in Section 3.2 hereof, each Lender shall extend
to the Borrower the portion of the Term Loan to be issued on the Conversion Date
by such
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Lender by cancelling on its records a corresponding principal amount of the
Bridge Notes held by such Lender.
D. Maturity of Term Loan. The Term Loan shall mature and the
Borrower shall pay in full the outstanding principal amount thereof and accrued
interest thereon on the seventh anniversary of the Closing Date (the "Maturity
Date").
E. Term Notes. The Borrower shall execute and deliver to each
Lender on the Conversion Date a Term Note dated the Conversion Date
substantially in the form of Exhibit II annexed hereto to evidence the portion
of the Term Loan made on such date by such Lender, in the principal amount of
the Bridge Notes held by such Lender on such date and with other appropriate
insertions ("Original Term Notes"). On or after the Conversion Date, on each
interest payment date on which the Borrower elects to pay a PIK Interest Amount
pursuant to Section 2.3B, the Borrower shall execute and deliver to each Lender
on such interest payment date a Term Note dated such interest payment date
substantially in the form of Exhibit II annexed hereto in a principal amount
equal to such Lender's pro rata portion of such PIK Interest Amount and with
other appropriate insertions (each a "Subsequent Term Note" and, together with
the Original Term Notes, the "Term Notes"). A Subsequent Term Note shall bear
interest at the same rate borne by all Term Notes.
2.3 Interest on the Loans
A. Rate of Interest. The Loans shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
prepayment, acceleration or otherwise) at a rate per annum equal to the
Applicable Rate, as in effect from time to time, plus the Applicable Spread, as
in effect from time to time; provided, that, in no event will the combined sum
of interest (cash or otherwise) on the Loans exceed 20.00% per annum.
B. Interest Payments. Interest shall be payable (i) with
respect to the Bridge Loan, in arrears on the 15th day of each month commencing
January 15, 1997, and upon any prepayment of the Bridge Loan (to the extent
accrued on the amount being prepaid) and at maturity of the Bridge Loan and (ii)
with respect to the Term Loan, in arrears on December 15, March 15, June 15 and
September 15 of each year, commencing on December 15, 1997, upon any prepayment
of the Term Loan (to the extent accrued on the amount being prepaid) and at
maturity of the Term Loan; provided, however, that if, on any interest payment
date, the interest rate borne by the Term Loan, exceeds the Maximum Cash
Interest Rate, the Borrower may pay all or a portion of the interest payable in
excess of the Maximum Cash Interest Rate by issuance of Subsequent Term Notes in
an aggregate principal amount equal to the amount of such interest being so paid
(the "PIK Interest Amount").
C. Post-Maturity Interest. Any principal payments on a Loan
not paid when due and, to the extent permitted by applicable law, any interest
payment on
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a Loan not paid when due, in each case whether at stated maturity, by notice of
prepayment, by acceleration or otherwise, shall thereafter bear interest payable
upon demand at a rate which is 2.00% per annum in excess of the rate of interest
otherwise payable under this Agreement on such Loan.
D. Computation of Interest. Interest on the Loans shall be
computed on the basis of a 360-day year and twelve 30-day months. In computing
interest on the Loans, the date of the making of the Loans shall be included and
the date of payment shall be excluded; provided, however, that if a Loan is
repaid on the same day on which it is made, one day's interest shall be paid on
that Loan.
2.4 Fees
The Borrower agrees to pay to each Lender (i) a funding fee in
an amount equal to 1.0% of the full amount of the Bridge Loan made by such
Lender, which amount shall be paid by the Borrower to CIBC/WG for the benefit of
all of the Lenders and (ii) to the extent the Bridge Loans are outstanding 91
days after the Closing Date, an extension fee in an amount equal to 0.5% of the
Bridge Loan made by such Lender outstanding on such date, in each case payable
to each Lender in accordance with the Commitment Letter. In addition, at the
time of the issuance of any Term Notes, the Borrower shall pay to each holder of
the Term Notes a fee of 3.0% of the principal amount of the Term Notes so issued
to such holder.
Once paid, the foregoing fees shall not be refundable under
any circumstances. All fees payable hereunder shall be paid in cash.
2.5 Prepayments and Payments
A. Prepayments
(i) Voluntary Prepayments. The Borrower may, upon not less
than two Business Days' prior written or telephonic notice confirmed in
writing to the Lenders, at any time and from time to time, prepay the
Loans made to the Borrower in whole or in part in an aggregate minimum
amount of $500,000 and integral multiples of $100,000 in excess of that
amount; provided that unless Loans are to be prepaid in full, such
voluntary prepayments shall not result in the aggregate amount of the
Loans outstanding being less than $75 million or shall not be made at a
time when the aggregate amount of the Loans outstanding is less than
$75 million. Notice of prepayment having been given as aforesaid, the
principal amount of the Loans to be prepaid shall become due and
payable on the prepayment date. Amounts of the Loans so prepaid may not
be reborrowed.
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(ii) Mandatory Prepayments
(a) Prepayments from Asset Sales. Upon receipt by the
Parent Guarantor, the Borrower or any Subsidiary of the Parent
Guarantor of Cash Proceeds of any Asset Sale or series of related Asset
Sales in excess of $10 million occurring after the Closing Date, the
Parent Guarantor or any Subsidiary of the Parent Guarantor (whether or
not the Borrower) shall use the Net Cash Proceeds of such Asset Sale(s)
to prepay the Loans. Not later than 180 days after receipt by the
Parent Guarantor, the Borrower or any Subsidiary of the Parent
Guarantor of Cash Proceeds of any Asset Sale or series of related Asset
Sales in excess of $5 million occurring after the Closing Date, the
Parent Guarantor or any Subsidiary of the Parent Guarantor (whether or
not the Borrower) shall use the Net Cash Proceeds of such Asset Sale(s)
to prepay the Loans to the extent not reinvested prior to that date in
any line of business engaged in or reasonably related to a line of
business engaged in by the Parent Guarantor or any Subsidiary of the
Parent Guarantor as of the Closing Date. Concurrently with the
consummation of an Asset Sale, the Parent Guarantor and the Borrower
shall deliver to the Lenders an Officer's Certificate demonstrating the
derivation of Net Cash Proceeds from the gross sales price of such
Asset Sale(s).
(b) Casualty Events. On the date (or next Business
Day if such date is not a Business Day) on which the Parent Guarantor,
the Borrower or any Subsidiary of the Parent Guarantor receives any Net
Cash Proceeds from any Casualty Event with respect to Property pledged
pursuant to the Security Agreement, the Parent Guarantor and the
Borrower shall prepay the Loans in an aggregate principal amount equal
to 100% of such Net Cash Proceeds; provided, however, that so long as
no Event of Default or Potential Event of Default then exists and such
Net Cash Proceeds do not exceed $1.0 million, such Net Cash Proceeds
shall not be required to be so applied on such date to the extent that
the Parent Guarantor and the Borrower have delivered an Officers'
Certificate to the Lenders on or prior to such date stating that such
proceeds shall be used to (1) repair, replace or restore any Property
in respect of which such Net Cash Proceeds were paid or (2) fund the
expansion or substitution of other Property used or usable in the
business of the Parent Guarantor, the Borrower and the Subsidiaries of
the Parent Guarantor, in each case within 180 days following the date
of the receipt of such Net Cash Proceeds; provided, further, however,
that (i) if the amount of such Net Cash Proceeds exceeds $1.0 million,
then the entire amount and not just the portion in excess of $1.0
million shall be applied and (ii) if all or any portion of such Net
Cash Proceeds not required to be applied to the prepayment of the Loans
pursuant to the preceding proviso is not so used within 180 days after
the date of the receipt of such Net Cash Proceeds, such remaining
portion shall be applied on the last Business Day of such period as
specified in subsection (iii) of this Section 2.5A.
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(c) Recovery Events. On the date (or next Business
Day if such date is not a Business Day) on which the Parent Guarantor,
the Borrower or any Subsidiary of the Parent Guarantor receives any Net
Cash Proceeds from any taking or Destruction or loss of title to any
Mortgaged Real Property, the Parent Guarantor and the Borrower shall
prepay the Loans in an aggregate principal amount equal to 100% of such
Net Cash Proceeds; provided, however, that so long as no Event of
Default or Potential Event of Default then exists and such Net Cash
Proceeds do not exceed $1.0 million, such Net Cash Proceeds shall not
be required to be so applied on such date to the extent that the Parent
Guarantor and the Borrower have delivered an Officers' Certificate to
the Lenders on or prior to such date stating that such proceeds shall
be used to (1) repair, replace or restore any Mortgaged Real Property
in respect of which such Net Cash Proceeds were paid or (2) fund the
purchase of substitute or additional Mortgaged Real Property, in each
case within 180 days following the date of the receipt of such Net Cash
Proceeds; provided, further, however, that (i) if the amount of such
Net Cash Proceeds exceeds $1.0 million, then the entire amount and not
just the portion in excess of $1.0 million shall be applied and (ii) if
all or any portion of such Net Cash Proceeds not required to be applied
to the prepayment of Term Loans pursuant to the preceding proviso is
not so used within 180 days after the date of the receipt of such Net
Cash Proceeds, such remaining portion shall be applied on the last
Business Day of such period as specified in subsection (iii) of this
Section 2.5A.
(d) Prepayments from Issuances of Take-Out
Securities. Concurrently with the receipt by the Parent Guarantor or
the Borrower of proceeds from the issuance of Take-Out Securities or
from sales of debt or equity securities by the Parent Guarantor, the
Borrower or any Subsidiary of the Parent Guarantor in excess of $5
million individually or in the aggregate, the Borrower shall prepay the
Loans in a principal amount equal to the lesser of the proceeds thereof
(net of expenses payable by the Parent Guarantor or the Borrower to any
Person other than an Affiliate of the Parent Guarantor in connection
with the issuance thereof) or the aggregate principal amount of the
Notes then outstanding.
(e) P&G Acquisition. In the event the P&G Acquisition
has not been consummated, following satisfaction (or waiver or
amendment, with the prior written consent of CIBC/WG) of each of the
conditions thereto in the MEM Acquisition Agreement in the form
delivered to the Lenders pursuant to Section 3.1(A)(9) hereof, prior to
December 21, 1996, the Borrower shall be required to redeem $40 million
aggregate principal amount of the Notes, pro rata among the holders
thereof, on or before December 24, 1996 at a price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest to the date
of redemption. Notice of redemption shall be by 10:00 A.M. (New York
time) on December 23, 1996.
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(f) Notice. The Parent Guarantor and the Borrower
shall notify the Lenders of any prepayment to be made pursuant to this
Section 2.5A(ii) at least two Business Days prior to such prepayment
date (unless otherwise specified above or shorter notice is
satisfactory to the Required Lenders).
(iii) Borrower's Mandatory Prepayment Obligation; Application
of Prepayments. All prepayments shall include payment of accrued
interest on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
(iv) Mandatory Offer to Purchase Notes.
(a) Upon the occurrence of a Change of Control (the
date of such occurrence, the "Change of Control Date"), the Lenders
shall have the right to require the repurchase of all of the Notes
pursuant to an offer to purchase (the "Change of Control Offer") at a
purchase price equal to 100% of the aggregate principal amount thereof,
plus accrued interest thereon to the date of repurchase.
(b) The notice to the Lenders shall contain all
instructions and materials necessary to enable the Lenders to tender
Notes.
(c) Within 30 days following any Change of Control
the Parent Guarantor shall mail a notice to the Lenders stating:
(1) that the Change of Control Offer is
being made pursuant to this Section 2.5(A)(iv) and that all
Notes validly tendered will be accepted for payment;
(2) the purchase price and the purchase
date, which shall be no earlier than 30 days nor later than 40
days from the date such notice is mailed (the "Offer Payment
Date");
(3) that any Note not tendered will continue
to accrue interest;
(4) that any Note accepted for payment
pursuant to the Change of Control Offer shall cease to accrue
interest after the Offer Payment Date unless the Borrower
shall default in the payment of the repurchase price of the
Notes;
(5) that if a Lender elects to have a Note
purchased pursuant to the Change of Control Offer it will be
required to surrender the Note, with the form entitled "Option
of Holder to Elect Purchase"
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on the reverse of the Note completed, to the Parent Guarantor
and the Borrower prior to 5:00 p.m. New York time on the Offer
Payment Date;
(6) that a Lender will be entitled to
withdraw its election if the Parent Guarantor and the Borrower
receive, not later than 5:00 p.m. New York time on the
Business Day preceding the Offer Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the
principal amount of Notes such Lender delivered for purchase,
and a statement that such Lender is withdrawing its election
to have such Note purchased; and
(7) that if Notes are purchased only in part
a new Note of the same type will be issued in principal amount
equal to the unpurchased portion of the Notes surrendered.
(d) On or before the Offer Payment Date, the Parent
Guarantor and the Borrower shall (i) accept for payment Notes or
portions thereof which are to be purchased in accordance with the
above, and (ii) wire transfer, to the extent they have received wire
instructions from the Lenders, or otherwise mail, to the Lenders whose
Notes are so accepted payment in an amount equal to the purchase price.
(e) The Parent Guarantor and the Borrower shall
comply with the requirements of Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the purchase of
Notes pursuant to an offer hereunder. To the extent the provisions of
any securities laws or regulations conflict with the provisions under
this Section, the Parent Guarantor and the Borrower shall comply with
the applicable securities laws and regulations and shall not be deemed
to have breached their obligations under this Section by virtue
thereof.
B. Manner and Time of Payment. All payments of principal and
interest and fees hereunder and under the Notes by the Parent Guarantor and the
Borrower shall be made without defense, set-off or counterclaim and in same-day
funds and delivered to the Lenders, unless otherwise specified, not later than
12:00 Noon (New York time) on the date due at the Principal Office of each of
the Lenders; funds received by the Lenders after that time shall be deemed to
have been paid by the Parent Guarantor or the Borrower, as the case may be, on
the next succeeding Business Day.
C. Payments on Non-Business Days. Whenever any payment to be
made hereunder or under the Notes shall be stated to be due on a day which is
not a Business Day, the payment shall be made on the next succeeding Business
Day and
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such extension of time shall be included in the computation of the payment of
interest hereunder or under the Notes or of the commitment and other fees
hereunder, as the case may be.
D. Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by granting
participations therein), such Lender will make a notation thereon of all
principal payments previously made thereon and of the date to which interest
thereon has been paid and will notify the Parent Guarantor and the Borrower of
the name and address of the transferee of that Note; provided, however, that the
failure to make (or any error in the making of) such a notation or to notify the
Parent Guarantor and the Borrower of the name and address of such transferee
shall not limit or otherwise affect the obligation of the Borrower hereunder or
under such Notes with respect to the Loans and payments of principal or interest
on any such Note.
2.6 Use of Proceeds
A. Bridge Loan. The proceeds of the Bridge Loan shall be
applied for general corporate purposes and to pay the consideration for the
Acquisitions, to consummate the Nomura Refinancing and to the payment of
Transaction Costs.
B. Term Loan. The proceeds of the Term Loan shall be used to
cancel any outstanding amount of Bridge Notes converted to Term Notes on such
date.
C. Margin Regulations. No portion of the proceeds of any
borrowing under this Agreement shall be used by the Parent Guarantor or the
Borrower in any manner which might cause the borrowing or the application of
such proceeds to violate the applicable requirements of Regulation G, Regulation
U, Regulation T or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation of the Board or to violate the Exchange Act, in
each case as in effect on the date or dates of such borrowing and such use of
proceeds. None of the Loans or the Notes are "indirectly secured" within the
meaning of Regulation G and Regulation U by Margin Stock, and notwithstanding
anything to the contrary in this Agreement or any other Loan Document, any
provisions contained in this Agreement or any other Loan Document that may be
deemed to cause the Loans or the Notes to be "indirectly secured" by Margin
Stock shall not apply to such Margin Stock to the extent that the value
(determined by any reasonable means) thereof exceeds 25% of the aggregate value
(determined by any reasonable means) of all of the assets of the Parent
Guarantor and the Subsidiaries of the Parent Guarantor so subject to such
provisions.
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SECTION 3 CONDITIONS
3.1 Conditions to Bridge Loan
The obligation of the Lenders to make the Bridge Loan is
subject to prior or concurrent satisfaction of each of the following conditions:
A. Principal Documents. On or before the Closing Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by the Lenders shall be reasonably satisfactory in
form and substance to CIBC/WG, and the Lenders shall have received the following
items, each of which shall be in form and substance satisfactory to CIBC/WG and,
unless otherwise noted, dated the Closing Date:
1. a certified copy of the Parent Guarantor's, the Borrower's
and each other Closing Date Guarantor's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Parent Guarantor, the Borrower and each other
Guarantor issued by the appropriate government officials of the
jurisdiction of its incorporation and of each jurisdiction in which it
owns any material assets or carries on any material business, each to
be dated a recent date prior to the Closing Date;
2. a copy of the Parent Guarantor's, the Borrower's and each
other Closing Date Guarantor's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
3. resolutions of the Parent Guarantor's, the Borrower's and
each other Closing Date Guarantor's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
each of the other Loan Documents and any other documents, instruments
and certificates required to be executed by the Parent Guarantor, the
Borrower or such other Closing Date Guarantor in connection herewith
and therewith and approving and authorizing the execution, delivery and
payment of the Notes and the consummation of the Transactions, each
certified as of the Closing Date by its Secretary or one of its
Assistant Secretaries as being in full force and effect without
modification or amendment;
4. signature and incumbency certificates of the Parent
Guarantor's, the Borrower's and each other Closing Date Guarantor's
officers executing this Agreement, the Security Agreement and/or the
Bridge Notes;
5. originally executed copies of this Agreement and the Bridge
Notes substantially in the form of Exhibit I annexed hereto executed in
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accordance with Section 2.1D drawn to the order of the Lenders and with
appropriate insertions;
6. an originally executed Notice of Borrowing substantially in
the form of Exhibit IV-A annexed hereto, signed by the President or a
Vice President of the Borrower;
7. originally executed copies of (I) one or more favorable
written opinions of (a) ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., counsel for the Parent Guarantor, the Borrower
and the other Guarantors, substantially in the form of Exhibit V
annexed hereto and addressed to the Lenders and (b) ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, special counsel for the Lenders, substantially in the form of
Exhibit VI annexed hereto and addressed to the Lenders and (II) such
other opinions of counsel and such certificates or opinions of
accountants, appraisers or other professionals as the Required Lenders
shall have reasonably requested;
8. a certificate of the chief financial officer of the Parent
Guarantor and the Borrower, stating that (A) after giving effect to the
consummation of the Transactions, (i) the Parent Guarantor, the
Borrower and the other Closing Date Guarantors are not insolvent and
will not be rendered insolvent by the borrowings under the loans, and
(ii) the fair saleable value of the assets of the Parent Guarantor, the
Borrower and the other Closing Date Guarantors will not be less than
the probable liability on their debts, (B) each of the Parent
Guarantor, the Borrower and the other Closing Date Guarantors will be
able to pay its debts as they mature and (C) each will not have
unreasonably small capital to conduct its business, all in form and
substance satisfactory to CIBC/WG;
9. true and correct copies of the Acquisition Agreements,
which shall not have been amended without the prior written consent of
CIBC/WG and which shall be in full force and effect; each of the
conditions to purchase contained in the MEM Acquisition Agreement shall
have been satisfied and not waived or amended without the prior written
consent of CIBC/WG;
10. a notation of Guarantee, executed and delivered by each
Closing Date Guarantor, dated the Closing Date, substantially in the
form of Exhibit VII annexed hereto, as applicable;
11. an originally executed copy of the Security Agreement
substantially in the form of Exhibit VIII amended hereto; and
12. a copy of all closing documents relating to the MEM
Acquisition and all such counterpart originals or certified copies of
such
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documents, instruments, certificates and opinions as the Required
Lenders may reasonably request.
B. Environmental Matters. The Lenders shall have received
reports and other information in form, scope and substance reasonably
satisfactory to CIBC/WG concerning environmental liabilities of the Parent
Guarantor, the Borrower and Subsidiaries of the Parent Guarantor and the
Acquired Business; provided, that no environmental audits or surveys shall be
required to be conducted.
C. Consents. On or before the Closing Date, all
authorizations, consents and approvals necessary in connection with the
Transactions (other than the P&G Acquisition) shall have been obtained and
remain in full force and effect and all applicable waiting periods under Law
applicable to the MEM Acquisition shall have expired without any action being
taken by any competent authority (including without limitation, any Tribunal)
which restrains, prevents or imposes materially adverse conditions upon the
completion of the MEM Acquisition, the financing thereof or the operation of the
portion of the Acquired Business to be acquired in the MEM Acquisition and
evidence of the receipt of such authorizations, consents and approvals
satisfactory to CIBC/WG shall have been delivered to the Lenders.
D. Existing Indebtedness. On or before the Closing Date, all
existing indebtedness (including Indebtedness owed to Nomura Holding America
Inc.) of the Parent Guarantor, the Borrower and Subsidiaries of the Parent
Guarantor (except for Indebtedness listed on Schedule B hereto not to exceed
$73,699,684 which may remain outstanding and Intercompany Indebtedness) shall be
repaid in full and all commitments thereunder shall be terminated.
E. Fees. On or before the Closing Date, the Parent Guarantor
shall have paid to the Lenders the fees payable on or before the Closing Date
pursuant to the Commitment Letter.
F. Agreements Performed. On or before the Closing Date, the
Parent Guarantor shall have performed in all material respects all agreements
which this Agreement provides shall be performed on or before the Closing Date
except as otherwise disclosed to and agreed to in writing by CIBC/WG.
G. Officers' Certificate. Simultaneously with the making of
the Bridge Loan by the Lenders, the Parent Guarantor and the Borrower shall have
delivered to the Lenders an Officers' Certificate from the Parent Guarantor and
the Borrower in form and substance satisfactory to CIBC/WG to the effect that
(i) the representations and warranties in Section 4 are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date, (ii) on or prior to the Closing
Date, the Parent Guarantor and the Borrower have performed and complied with in
all material respects all covenants and conditions to be performed and observed
by the Parent Guarantor and the Borrower
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on or prior to the Closing Date and (iii) all conditions to the consummation of
the MEM Acquisition in the MEM Acquisition Agreement have been satisfied
substantially on the terms set forth therein and have not been waived or amended
without the prior written consent of CIBC/WG.
H. MEM Acquisition. Immediately following the making of the
Bridge Loan by the Lenders, the MEM Acquisition and the Nomura Refinancing shall
be consummated without the waiver of any conditions precedent thereto.
I. Losses, etc. Neither the Parent Guarantor, the Borrower nor
any Subsidiary of the Parent Guarantor shall have sustained any loss or
interference with respect to its businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Required Lenders, has had or has a
material adverse effect on the business, condition (financial or other), results
of operations or prospects of the Parent Guarantor, the Borrower and
Subsidiaries of the Parent Guarantor, taken as a whole; there shall not have
been, in the sole judgment of the Required Lenders, any material adverse change,
or any development involving a prospective material adverse change, in the
business, condition (financial or other), results of operations or prospects of
the Parent Guarantor, the Borrower and Subsidiaries of the Parent Guarantor,
taken as a whole.
J. No Defaults. No event shall have occurred and be continuing
or would result from the consummation of the borrowing contemplated by the
Notice of Borrowing which would constitute an Event of Default or Potential
Event of Default. The funding of the Bridge Loan will not cause or result in any
breach or default (including any event, which, with notice or lapse of time or
both would be a breach or a default) or trigger any repurchase requirements
under any of the terms or provisions of any of the instruments governing the
existing indebtedness of the Parent Guarantor, the Borrower or any of their
subsidiaries to remain outstanding after funding of the Bridge Loan.
K. Asset Coverage; No Adverse Change of Development; Conduct
of Business. There shall have been no material adverse change from the date of
the Commitment Letter in the asset coverage levels for the repayment of the
Bridge Notes. Since the date of the Commitment Letter, nothing shall have
occurred which could reasonably be likely to have a material adverse effect on
the material rights or remedies of the Lenders, or on the ability of the Parent
Guarantor, the Borrower and the other Closing Date Guarantors to perform their
respective material obligations to the Lenders; and there shall not have been,
in the sole judgment of the Required Lenders, any material adverse change, or
any development involving (or which may reasonably be expected to involve) a
prospective material adverse change, in the business, condition (financial or
other), results of operations, operations, property, assets, liabilities or
prospects of the Parent Guarantor, the Borrower and the
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Subsidiaries of the Parent Guarantor, taken as a whole. From the date of the
Commitment Letter, the Parent Guarantor and the Borrower shall have operated its
business in the ordinary course except for the consummation of the Acquisitions.
L. Legal Proceedings. There shall not be pending or, to the
knowledge of the Parent Guarantor or the Borrower, threatened any action, suit,
proceeding, governmental investigation or arbitration against or affecting the
Parent Guarantor or any Subsidiaries of the Parent Guarantor, or any property or
asset of the Parent Guarantor or any Subsidiaries of the Parent Guarantor which
has not been disclosed by the Parent Guarantor in writing to the Lenders (and
the Lenders shall have received on the Closing Date an Officer's Certificate
dated the Closing Date attesting to the same) and there shall have occurred no
development not so disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, which, in each case, singly or in the
aggregate could reasonably be expected to materially and adversely affect the
business, operations, properties, assets, prospects or condition (financial or
otherwise) of the Parent Guarantor and Subsidiaries of the Parent Guarantor,
taken as a whole, or to impair the ability or obligation of the Parent Guarantor
or any Subsidiary of the Parent Guarantor to perform, or of the Lenders to
enforce, the Obligations under this Agreement. No injunction or other
restraining order shall have been issued and no hearing to cause an injunction
or other restraining order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to restrain, enjoin, delay, prohibit
or otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the Transactions other than as set forth on Schedule D.
Except as set forth on Schedule D, there shall not be threatened, instituted or
pending any action, proceeding or application before or by any Tribunal, or any
other Person, domestic or foreign (i) challenging the Transactions or seeking to
enjoin, restrain, delay or prohibit the consummation thereof; (ii) seeking to
prohibit or impose material limitations on the Parent Guarantor's ownership or
operation of all or any portion of the Parent Guarantor's business or assets
(including the business or assets of any Subsidiary of the Parent Guarantor and
the Acquired Business) or to compel the Parent Guarantor to dispose of or hold
separate all or any portion of the Parent Guarantor's business or assets
(including the business or assets of any Subsidiary of the Parent Guarantor) as
a result of the Acquisitions; (iii) which, in any event, might adversely affect
the Bridge Loan; or (iv) seeking to impose any materially adverse conditions
upon the Transactions.
M. Margin Rules. The making of the Bridge Loan in the manner
contemplated in this Agreement shall not violate the applicable provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve Board
or any other regulation of the Board.
N. Capital Structure. The pro forma consolidated capital
structure of the Parent Guarantor, the Borrower and Subsidiaries of the Parent
Guarantor, after
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giving effect to the Transactions, shall not differ from that contemplated by
the Commitment Letter.
O. Take-Out Banks. The Parent Guarantor shall have engaged one
or more investment banks (collectively, the "Take-Out Banks") to publicly sell
or privately place the Demand Take-Out Notes. Such engagement shall have been
definitively documented on terms and conditions and in the form and substance
reasonably satisfactory to the Required Lenders, such documentation shall be in
full force and effect and the parties thereto shall be in compliance with all
material agreements thereunder.
P. Market and Other Conditions. There shall not have occurred
(i) any general suspension of, or limitation on times or prices for, trading in
securities on the New York Stock Exchange, American Stock Exchange or Toronto
Stock Exchange or in the over-the-counter market in the United States; (ii) a
declaration of a banking moratorium or any suspension of payments in respect of
the banks in the United States, New York or Canada; or (iii) either (A) an
outbreak or escalation of hostilities between the United States or Canada and
any foreign power, or (B) an outbreak or escalation of any other insurrection or
armed conflict involving the United States, Canada or any other national or
international calamity or emergency, or (C) any material change in the financial
markets of the United States or Canada, which, in the sole judgement of the
Required Lenders, makes it impracticable or inadvisable to proceed with the
consummation of the Transactions or the Bridge Loan or any of the other
transactions contemplated hereby including, without limitation, the issuance and
sale of the Demand Take-Out Notes or that would materially affect the ability to
sell or syndicate the Bridge Loan.
Q. Strategy. The Lenders shall be satisfied with its review of
the Parent Guarantor's operating strategy, including, without limitation, any
planned asset dispositions and the tax implications of any such dispositions and
the operating income and cash flow budgets of the Parent Guarantor and
Subsidiaries of the Parent Guarantor for the first year following the Closing
Date.
R. Accounting Matters. The Lenders shall be satisfied with its
review of the accounting policies and procedures utilized by the Parent
Guarantor and Subsidiaries of the Parent Guarantor and to be utilized by the
Parent Guarantor and Subsidiaries of the Parent Guarantor after the
Acquisitions.
S. Financial Statements. The Lenders shall be satisfied that
audited, unaudited and pro forma financial statements meeting the requirements
of Regulation S-X under the Securities Act of 1933, as amended, of the Parent
Guarantor, the Borrower and each other Guarantor are available as of the Closing
Date (if required) or will be available no later than a date which would permit
the commencement of the marketing efforts for the Take-Out Securities no later
than sixty days following the Closing Date.
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T. Security Interest. The Lenders shall have a perfected first
priority (except with respect to Permitted Encumbrances) security interest in
the Pledged Stock (as defined in the Security Agreement), and the Parent
Guarantor, the Borrower and the other Closing Date Guarantors shall have
authorized, executed and delivered documents in appropriate form for filing with
the United States Patent and Trademark Office as may be reasonably necessary or
appropriate to perfect the Liens created, or purported to be created, by the
Security Agreement in the Intellectual Property (as defined in the Security
Agreement) (to the extent perfection may be made by filing with the United
States Patent and Trademark Office).
U. Lien Searches; Etc. The Parent Guarantor, the Borrower and
the other Closing Date Guarantors shall have authorized, executed and delivered
each of the following:
(1) UCC Financing Statements (Form UCC-1) in appropriate form
for filing under the UCC and any other applicable Law, rule or
regulation in each jurisdiction as may be reasonably necessary or
appropriate to perfect the Liens created, or purported to be created,
by the Security Agreement;
(2) certified copies of Requests for Information (Form
UCC-11), or equivalent reports or lien search reports, each of a recent
date listing all effective financing statements or comparable documents
that name any Obligor as debtor and that are filed in those
jurisdictions in which any of the Pledged Collateral is located and the
jurisdictions in which the Borrower's and each Closing Date Guarantor's
principal place of business is located, none of which encumber the
Collateral covered or intended to be covered by the Security Agreement
other than those encumbrances which constitute Permitted Encumbrances;
(3) to the extent a material portion of equipment or inventory
of the Borrower or any Closing Date Guarantor is maintained on a leased
premise, a copy of each lease or other agreement relating to such
possessory interest; and
(4) delivery of such other documents as may be reasonably
necessary to perfect the Liens created, or purported to be created, by
the Security Agreement.
V. Closing Date. The Closing Date shall occur no later than
December 21, 1996 unless the Acquisition Agreements, in form and substance
satisfactory to CIBC/WG, have been extended beyond such date.
W. Applicable Law. The Lenders and their special counsel shall
be reasonably satisfied that the consummation of the Transactions shall be in
compliance with all applicable statutes, laws, rules and regulations of all
applicable governmental and regulatory agencies and authorities. There shall not
have occurred after the date
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of the Commitment Letter any change in law, rule or regulation which would
prohibit or impose conditions upon the Lenders' ability to provide the Bridge
Loan or the commitment hereunder which are materially adverse to any Lenders or
would result in or require any change to the net capital of any Lenders.
The obligation of any Lender to make any extension of credit
hereunder is also subject to the payment by the Parent Guarantor and the
Borrower of such reasonable fees and expenses as the Parent Guarantor and the
Borrower shall have agreed to pay or deliver to any Creditor in connection
herewith, including the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special
New York counsel to the Lenders in connection with the negotiation, preparation,
execution and delivery of the Loan Documents and the extensions of credit
hereunder.
Each notice or request submitted by the Parent Guarantor or
the Borrower hereunder for an extension of credit hereunder shall constitute a
representation and warranty by the Parent Guarantor and the Borrower, as of the
date of such notice and as of the relevant borrowing date, that the applicable
conditions in Section 3.1 are satisfied.
3.2 Conditions to Term Loan
The obligation of the Lenders to make the Term Loan on the
Conversion Date is subject to the prior or concurrent satisfaction or waiver of
the following conditions precedent:
A. The Lenders shall have received in accordance with the
provisions of Section 2.2B an originally executed Notice of Conversion
substantially in the form of Exhibit IV-B annexed hereto, signed by the
President or a Vice President of the Borrower.
B. The Parent Guarantor, the Borrower or any other Material
Subsidiaries shall not be subject to a Bankruptcy Order or a bankruptcy or other
insolvency proceeding and an Event of Default or Potential Event of Default
shall not have occurred under Section 7.6, 7.7 or 7.9.
C. No Event of Default or Potential Event of Default (whether
matured or not) shall have occurred under Section 7.1.
D. No Event of Default or Potential Event of Default shall
have occurred under Section 7.2; provided that if an event described in this
Section 3.2D is continuing at the Conversion Date but 30 days has not passed
since the date of written notice of the commencement of such 30-day period from
the holder or holders of not less than 25% in aggregate principal amount of the
Loans then outstanding (the "Grace Period"), the Conversion Date shall be
deferred until the earlier to occur of (x) the cure of such event or (y) the
expiration of such Grace Period.
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E. On the Conversion Date, the Lenders shall have received an
Officers' Certificate from the Parent Guarantor and the Borrower dated the
Conversion Date and satisfactory in form and substance to CIBC/WG, to the effect
that the conditions in this Section 3.2 are satisfied on and as of the
Conversion Date.
F. The Borrower shall have executed and delivered to the
Lenders on the Conversion Date for delivery to the Lenders Term Notes dated the
Conversion Date substantially in the form of Exhibit II annexed hereto to
evidence the Term Loan, in the principal amount of (which principal amount shall
be the aggregate principal amount of the Bridge Loan outstanding on the
Conversion Date) the Term Loan and with other appropriate insertions.
G. The Borrower shall have paid any fees owing to the Lenders.
H. The making of the Term Loan shall not violate Regulation G,
T, U or X of the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement
and to make the Loans, the Parent Guarantor and the Borrower, jointly and
severally, represent and warrant to each Creditor that, at the time of execution
hereof and after consummation of the Transactions, the following statements are
true, correct and complete:
4.1 Organization and Good Standing; Capitalization
(a) Each of the Parent Guarantor, the Borrower and the
Subsidiaries of the Parent Guarantor is a corporation duly organized and
existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Parent Guarantor, the Borrower and the Subsidiaries
of the Parent Guarantor has the corporate power and authority to own and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted and is duly qualified as a foreign corporation and in good standing
in all jurisdictions in which it is doing business, except where failure to be
so qualified or in good standing, singly or in the aggregate, has not had and
will not have a Material Adverse Effect.
(b) All of the Subsidiaries of the Parent Guarantor as of the
Closing Date, after giving effect to the Transactions, are identified in
Schedule A annexed hereto. The Capital Stock of each of the Parent Guarantor's
Subsidiaries, including the Borrower, identified in Schedule A annexed hereto
is, and in the case of any entities that become Subsidiaries of the Parent
Guarantor in connection with the Acquisitions will be, duly authorized, validly
issued, fully paid and nonassessable
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and, except for the common stock of MEM Companies, Inc., none of such capital
stock constitutes Margin Stock. The Parent Guarantor has no direct Subsidiaries
other than the Borrower and RAI, and no direct or indirect Material Subsidiaries
other than the Borrower and the other Closing Date Guarantors.
(c) As of the date hereof, there are issued and outstanding
825,086 shares of Parent Guarantor Common Stock, 119,018 shares of Parent
Guarantor 14.0% Senior Redeemable Preferred Stock, shares of Parent Guarantor
Cumulative Exchangeable Preferred Stock having an aggregate liquidation value as
of September 30, 1996 of $12,410,719 and 100 shares of Common Stock of the
Borrower. Such shares of Parent Guarantor and Borrower Capital Stock have been
duly and validly issued and are fully paid and nonassessable. No stockholder of
the Borrower has or will have any preemptive rights to subscribe for any
additional equity securities of the Borrower.
4.2 Authorization and Power
Each of the Parent Guarantor, the Borrower and the other
Closing Date Guarantors has the corporate power and requisite authority, and has
taken all corporate action necessary, to consummate the Transactions and to
execute, deliver and perform its obligations under the Loan Documents, and each
other document and instrument to be delivered in connection with the
Transactions executed or to be executed by it and to issue the Notes and the
Exchange Notes.
4.3 No Conflicts or Consents
(a) The execution and delivery of the Loan Documents to be
executed and delivered on or before the Closing Date, and each other document to
be executed and delivered on or before the Closing Date in connection with the
Transactions, the consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and provisions hereof or
thereof, and the issuance, delivery and performance of the Notes do not and will
not (i) violate any provision of any law or any governmental rule or regulation
applicable to any of the Parent Guarantor, the Borrower and any Subsidiaries of
the Parent Guarantor, the Certificate or Articles of Incorporation, Bylaws or
any other organizational document of any of them or any order, judgment or
decree of any court or other agency of government binding on any of them, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of any of the Parent
Guarantor, the Borrower and any Subsidiaries of the Parent Guarantor which could
reasonably be expected to result in a Material Adverse Effect, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of any of the Parent Guarantor, the Borrower and any Subsidiaries of the
Parent Guarantor (other than any Liens created under the Loan Documents), or
(iv) require any approval of equity holders or any approval or consent of any
Person under any Contractual Obligation of any of the Parent Guarantor, the
Borrower and
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any Subsidiaries of the Parent Guarantor except for such approvals or consents
which will be obtained on or before the Closing Date and disclosed in writing to
the Lenders or such approvals or consents the failure to obtain which could not
reasonably be expected to singly or in the aggregate result in a Material
Adverse Effect.
(b) No consent, approval, authorization or order of any
Tribunal or other Person is required in connection with the execution and
delivery by the Parent Guarantor, the Borrower or any Subsidiaries of the Parent
Guarantor of the Loan Documents or any other document or instrument to be
delivered on or before the Closing Date in connection with the Transactions or
the consummation of the transactions contemplated hereby or thereby, other than
any such consent, approval, authorization or order which has been obtained and
remains in full force and effect or which has been waived in writing by the
Required Lenders or the failure of which to obtain would not, singly or in the
aggregate, have a Material Adverse Effect.
(c) Based on the assumption that each of the Lenders is a
"qualified institutional buyer" as defined in Regulation 144A under the
Securities Act of 1933, as amended, and a letter from CIBC/WG as to the manner
of such offering, the offering, issuance, sale and delivery of the Bridge Notes
by the Borrower to the Lenders at the closing pursuant to this Agreement are
exempt from the registration requirements of the federal Securities Act of 1933,
as now in effect.
4.4 Enforceable Obligations
Each of the Loan Documents to be executed and delivered on or
before the Closing Date and each other document or instrument to be delivered on
or before the Closing Date in connection therewith has been duly authorized;
each of the Loan Documents to be executed and delivered on or before the Closing
Date and each other document or instrument to be delivered in connection
therewith to be executed and delivered on or prior to the Closing Date has been
duly executed and delivered by the Parent Guarantor, the Borrower and each of
the Subsidiaries of the Parent Guarantor that are a party thereto; and each of
the Loan Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the Closing
Date is, and each of the Loan Documents and each other document to be delivered
in connection therewith to be executed and delivered after the Closing Date will
be, upon such execution and delivery, the legal, valid and binding obligations
of the Parent Guarantor, the Borrower and each such Subsidiary (to the extent a
party thereto), enforceable in accordance with their respective terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
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4.5 Properties; Liens
Each of the Parent Guarantor, the Borrower and the
Subsidiaries of the Parent Guarantor has, and after consummation of the
Acquisitions will have, good, sufficient and legal title to all their respective
properties and assets, and all properties held under lease by any of them, are,
and immediately after the consummation of the Acquisitions will be, held under
valid, subsisting and enforceable leases, and none of the Parent Guarantor, the
Borrower or the Subsidiaries of the Parent Guarantor and, to the knowledge of
the Parent Guarantor or the Borrower, any other party thereto, is in default
under any lease, except in each case for such defects or defaults that, singly
or in the aggregate, would not have a Material Adverse Effect. Except as
permitted by this Agreement, all such properties and assets owned or leased are
so owned or leased free and clear of Liens.
4.6 Financial Condition
(a) The audited consolidated balance sheets of the Parent
Guarantor, the Borrower and their respective Subsidiaries as at March 31, 1996
and the related consolidated statements of operations, common stockholders'
capital deficiency and cash flows of the Parent Guarantor, the Borrower and
their respective Subsidiaries for the period ended March 31, 1996 certified by
the Parent Guarantor's independent certified public accountants, copies of which
have been delivered to the Lenders, were prepared in accordance with GAAP, have
been prepared from, and are consistent with, the books and records of the Parent
Guarantor, the Borrower and their respective Subsidiaries and fairly present in
all material respects the consolidated financial position of the Parent
Guarantor, the Borrower and their respective Subsidiaries as at such date and
the consolidated results of operations and cash flows of the Parent Guarantor,
the Borrower and their respective Subsidiaries for the period then ended. On
March 31, 1996, the Parent Guarantor, the Borrower and their respective
Subsidiaries did not have any material contingent liabilities, liabilities for
Taxes or long-term leases, unusual forward or long-term commitments or
unrealized or unanticipated losses from any unfavorable commitments which are
not reflected or reserved against in the foregoing statements or in the notes
thereto. No events which have had or could reasonably be expected to have a
Material Adverse Effect have occurred since March 31, 1996.
(b) The unaudited consolidated balance sheet of the Parent
Guarantor, the Borrower and their respective Subsidiaries as at September 30,
1996 and the related consolidated statements of operations and cash flows of the
Parent Guarantor, the Borrower and their respective Subsidiaries for the
six-month period then ended, a copy of which has been delivered to the Lenders,
were prepared in accordance with GAAP consistently applied, have been prepared
from, and are consistent with, the books and records of the Parent Guarantor,
the Borrower and their respective Subsidiaries and fairly present in all
material respects the consolidated financial position of the Parent Guarantor,
the Borrower and their
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respective Subsidiaries as of such date and the consolidated results of
operations and cash flows of the Parent Guarantor, the Borrower and their
respective Subsidiaries for the period covered thereby, subject to normal
year-end audit adjustments, consistent with past practices. On such date, the
Parent Guarantor, the Borrower and their respective Subsidiaries did not have
any material contingent liabilities, liabilities for Taxes or long-term leases,
unusual forward or long-term commitment or unrealized or unanticipated losses
from any unfavorable commitment which are not reflected or reserved against in
the foregoing statements or in the notes thereto.
(c) The audited consolidated balance sheet of MEM Company,
Inc. as at December 31, 1995 and the related consolidated statements of
operations and cash flows for the fiscal periods then ended, a copy of which has
been delivered to the Lenders, were prepared in accordance with GAAP
consistently applied, have been prepared from, and are consistent with, the
books and records of MEM Company, Inc. and fairly present in all material
respects the consolidated financial position of MEM Company, Inc. as of such
date and the consolidated results of operations and cash flows of MEM Company,
Inc. for the period covered thereby consistent with past practices. The
unaudited consolidated balance sheet of MEM Company, Inc. as at September 30,
1996 and the related consolidated statements of operations and cash flows of MEM
Company, Inc. for the nine months then ended, a copy of which has been delivered
to the Lenders, were prepared in accordance with GAAP consistently applied, have
been prepared from, and are consistent with, the books and records of MEM
Company, Inc. and fairly present in all material respects the consolidated
financial position of MEM Company, Inc. as of such date and the consolidated
results of operations and cash flows of MEM Company, Inc. for the period covered
thereby, subject to normal year-end audit adjustments, consistent with past
practices.
(d) Upon giving effect to the Transactions:
(i) The fair saleable value of the assets of the Parent
Guarantor, the Borrower and the Subsidiaries of the Parent Guarantor,
on a stand-alone basis, exceeds the amount that will be required to be
paid on or in respect of the existing debts and other liabilities
(including contingent liabilities) of such Person as they mature.
(ii) The assets of each of the Parent Guarantor, the Borrower
and Subsidiaries of the Parent Guarantor, on a stand-alone basis, do
not constitute unreasonably small capital for any such Person to carry
out its business as now conducted and as proposed to be conducted
including the capital needs of any such Person, taking into account the
particular capital requirements of the business conducted by such
Person, and projected capital requirements and capital availability
thereof.
(iii) The Parent Guarantor and the Borrower do not intend to,
and will not permit any Subsidiaries of the Parent Guarantor to, incur
debts beyond
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their ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of debt of
each of such Person). The cash flow of the Parent Guarantor, the
Borrower and the Subsidiaries of the Parent Guarantor, after taking
into account all anticipated uses of the cash of each such Person, will
at all times be sufficient to pay all amounts on or in respect of debt
of each such company when such amounts are required to be paid.
(iv) The Parent Guarantor and the Borrower do not intend, and
do not believe, that final judgments against any of the Parent
Guarantor, the Borrower or the Subsidiaries of the Parent Guarantor in
actions for money damages will be rendered at a time when, or in an
amount such that, any such Person will be unable to satisfy any such
judgments promptly in accordance with their terms (taking into account
the maximum reasonable amount of such judgments in any such actions and
the earliest reasonable time at which such judgments might be
rendered). The cash flow of the Parent Guarantor, the Borrower and the
Subsidiaries of the Parent Guarantor, on a stand-alone basis, after
taking into account all other anticipated uses of the cash of each such
Person (including the payments on or in respect of debt referred to in
paragraph (iii) of this Section 4.6(e)), will at all times be
sufficient to pay all such judgments promptly in accordance with their
terms.
4.7 Full Disclosure
The financial projections (including, without limitation, the
pro forma financial statements included therewith) heretofore furnished to any
Creditor by the Parent Guarantor and the Borrower were prepared in good faith on
the basis of information and assumptions that the Parent Guarantor and the
Borrower believed to be fair, complete and reasonable as of the date of such
information, and which assumptions are believed to be fair, complete and
reasonable as of the date hereof. All other factual information heretofore or
contemporaneously furnished in writing by or on behalf of the Parent Guarantor,
the Borrower or any Subsidiaries of the Parent Guarantor to any Creditor for
purposes of or in connection with this Agreement does not, as amended or
supplemented by any subsequent delivery by the same means, contain any untrue
statement of a material fact or omit to state any material fact necessary to
keep the statements contained herein or therein from being misleading. No fact
is known, no condition exists nor has any event occurred which has not been
disclosed herein or in any other document, certificate or statement furnished to
any Creditor for use in the transactions contemplated hereby which, singly or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
4.8 No Default
No event has occurred and is continuing which constitutes a
Potential Event of Default or an Event of Default.
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4.9 Compliance with Contracts, Etc.
None of the Parent Guarantor, the Borrower or any Subsidiaries
of the Parent Guarantor is in violation of (A) its certificate of incorporation,
by-laws or other organizational documents or (B) any applicable law, ordinance,
administrative or governmental rule or regulation, except, with respect to this
clause (B), for such violations that would not, singly or in the aggregate, have
a Material Adverse Effect, or (C) any order, decree or judgment of any Tribunal
having jurisdiction over any of them; no event of default or event that but for
the giving of notice or the lapse of time, or both, would constitute an event of
default exists under any material Contractual Obligation.
4.10 No Litigation
Except as described in Schedule D attached hereto, there is no
Litigation pending or, to the best knowledge of the Parent Guarantor, the
Borrower or any Subsidiary of the Parent Guarantor after due investigation,
threatened, by, against, or which may relate to or affect (a) any benefit plan
or any fiduciary or administrator thereof, (b) the Transactions, or (c) the
Parent Guarantor, the Borrower or any Subsidiaries of the Parent Guarantor
which, singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or that could reasonably be expected to materially and
adversely affect the ability of the Parent Guarantor, the Borrower or any
Subsidiary of the Parent Guarantor to consummate the Transactions in a timely
manner. There are no outstanding injunctions or restraining orders prohibiting
consummation of any of the Transactions or any other transactions contemplated
by the Loan Documents. Neither the Parent Guarantor, the Borrower nor any
Subsidiaries of the Parent Guarantor is in default with respect to any judgment,
order, writ, injunction or decree of any court or governmental agency, and there
are no unsatisfied judgments against any such Person or its business or
activities. Except as specifically noted on Schedule D, neither the Parent
Guarantor, the Borrower nor any Subsidiaries of the Parent Guarantor has been
advised that there is a reasonable likelihood of an adverse determination of any
Litigation which adverse determination, should it occur, would have a Material
Adverse Effect.
4.11 [Intentionally omitted]
4.12 Taxes
Except as set forth on Schedule J hereto, all material tax
returns, foreign and domestic, required to be filed by the Parent Guarantor, the
Borrower and each of the Subsidiaries of the Parent Guarantor in any
jurisdiction have been filed, and all material Taxes for which they are directly
or indirectly liable or to which any of their respective properties or assets
are subject have been paid prior to the time that such Taxes could give rise to
a Lien (other than Permitted Encumbrances) thereon. There is no material
proposed tax assessment against the Parent Guarantor,
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the Borrower or any Subsidiaries of the Parent Guarantor, and there is no basis
for such assessment, except for Contested Claims.
4.13 ERISA
A. The Parent Guarantor, the Borrower, each Subsidiary
of the Parent Guarantor and each of their respective ERISA Affiliates are in
compliance with all applicable provisions and requirements of the Internal
Revenue Code and ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan except for non-compliance or
non-performance which could not reasonably be expected to have a Material
Adverse Effect.
B. No ERISA Events have occurred or are reasonably
expected to occur which individually or in the aggregate resulted in or might
reasonably be expected to result in a liability of the Parent Guarantor, the
Borrower or any Subsidiary of the Parent Guarantor or any of their respective
ERISA Affiliates which would have a Material Adverse Effect.
C. Except as disclosed on Schedule E annexed hereto and
except to the extent required under Section 4980B of the Internal Revenue Code,
no Employee Benefit Plan (other than a Multiemployer Plan) provides health or
welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employees of the Parent Guarantor, the Borrower or any
Subsidiary of the Parent Guarantor.
D. In accordance with the most recent actuarial
valuations, the Amount of Unfunded Benefit Liabilities individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans which have a negative Amount of Unfunded Benefit Liabilities),
does not exceed $100,000.
E. The Parent Guarantor, the Borrower and each
Subsidiary of the Parent Guarantor and each of the Foreign Plans are in
compliance in all material respects with all applicable laws and regulations
with respect to the Foreign Plans and the terms of the Foreign Plans, and all
required contributions have been made to the Foreign Plans. For purposes hereof,
the term "Foreign Plans" shall mean any plan, program, policy, arrangement or
agreement maintained or contributed to by, or entered into with, the Parent
Guarantor, the Borrower or any Subsidiaries of the Parent Guarantor with respect
to employees employed outside the United States.
4.14 Compliance with Law
The Parent Guarantor, the Borrower and each of the
Subsidiaries of the Parent Guarantor are in compliance with all Laws, except
where the failure to comply, singly or in the aggregate, would not have a
Material Adverse Effect.
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4.15 Government Regulation
Neither the Parent Guarantor, the Borrower nor any
Subsidiaries of the Parent Guarantor is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Investment
Company Act of 1940 (as any of the preceding acts have been amended) or other
Law which regulates the Incurrence by the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor of Indebtedness, including, but not limited
to, Laws relating to common contract carriers or the sale of electricity, gas,
steam, water or other public utility services.
4.16 Capital Structure and Subsidiaries
After giving effect to the Transactions, the Parent Guarantor
will have no interest in any Person other than the Borrower and the surviving
corporation of the merger of RAI with and into MEM Company, Inc., and the
Borrower will have no interest in any Person other than the Subsidiaries of the
Borrower set forth on Schedule A and other Investments of the Parent Guarantor
and the Borrower as set forth on Schedule F attached hereto and the Parent
Guarantor and the Borrower will own, free and clear of all Liens, claims or
restrictions on voting or transfer (other than as permitted by this Agreement),
100% of all classes of outstanding Capital Stock of each of the entities set
forth on such Schedule A, except as specified on Schedule A. All of the issued
and outstanding shares of Capital Stock of the Parent Guarantor and the Borrower
and of each of the Subsidiaries of the Parent Guarantor is, and at and as of the
date of consummation of the Transactions will be, duly authorized, validly
issued, fully paid and nonassessable. Neither the Borrower nor any Subsidiaries
of the Parent Guarantor has granted or issued, or has agreed to grant or issue,
any options, warrants or similar rights to any Person to acquire any shares of,
or other securities convertible into, any Subsidiaries of the Parent Guarantor's
Capital Stock.
4.17 Intellectual Property
A. Schedule G annexed hereto sets forth a complete and
correct list, as of the Closing Date, of: (i) all patented or registered
Intellectual Property and pending patent applications or applications for
registration of Intellectual Property owned or filed by or on behalf of the
Parent Guarantor, the Borrower or any other Closing Date Guarantor; (ii) all
trade names and unregistered trademarks or service marks owned by or used by the
Parent Guarantor, the Borrower or any other Closing Date Guarantor; and (iii)
all licenses of Intellectual Property to which the Parent Guarantor, the
Borrower or any other Closing Date Guarantor is a party, either as licensee or
licensor. Except as set forth in the Form S-4, the Parent Guarantor, the
Borrower and the other Closing Date Guarantors own or are licensed to use all
the Intellectual Property.
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B. Except as disclosed in the Form S-4, no material
claim has been asserted by any Person with respect to the use of any such
Intellectual Property, or challenging or questioning the validity or
effectiveness of any such Intellectual Property. Except as disclosed in the Form
S-4, the use of such Intellectual Property by the Parent Guarantor, the Borrower
or any Subsidiaries of the Parent Guarantor does not infringe on the rights of
any Person, subject to such claims and infringements as do not, in the
aggregate, give rise to any liabilities on the part of the Parent Guarantor, the
Borrower or any Subsidiaries of the Parent Guarantor that are material to the
Borrower and Subsidiaries of the Parent Guarantor, taken as a whole. The
consummation of the Transactions will not in any material manner or to any
material extent impair the ownership of (or the license to use, as the case may
be) any of such Intellectual Property by the Parent Guarantor, the Borrower or
any Subsidiaries of the Parent Guarantor.
4.18 Environmental Matters
Except as set forth in the Form S-4:
(i) the operations of each of the Parent Guarantor,
the Borrower and the Subsidiaries of the Parent Guarantor (including,
without limitation, all operations and conditions at or in the
Facilities) comply in all material respects with all Environmental Laws
except for any such noncompliance which would not reasonably be
expected to have a Material Adverse Effect;
(ii) each of the Parent Guarantor, the Borrower and
the Subsidiaries of the Parent Guarantor has obtained all Permits under
Environmental Laws necessary to their respective operations, and all
such Permits are being maintained in good standing, and each of the
Parent Guarantor, the Borrower and Subsidiaries of the Parent Guarantor
is in compliance with all material terms and conditions of such Permits
except for any such failure to obtain, maintain or comply which would
not reasonably be expected to have a Material Adverse Effect;
(iii) none of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor has received (a) any notice or
claim to the effect that it is or may be liable to any Person under any
Environmental Law, including without limitation, any relating to any
Hazardous Materials except as would not reasonably be expected to have
a Material Adverse Effect or (b) any letter or request for information
under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9604) or comparable
foreign or state laws regarding any matter which could reasonably be
expected to result in a Material Adverse Effect, and, to the best of
the Parent Guarantor's and the Borrower's knowledge, none of the Parent
Guarantor, the Borrower or any Subsidiaries of the Parent Guarantor is
involved in any investigation, response or corrective action relating
to or in
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connection with any Hazardous Materials at any Facility or at any other
location except for such of the foregoing which would not reasonably be
expected to have a Material Adverse Effect;
(iv) none of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor is subject to any judicial or
administrative proceeding alleging the violation of or liability under
any Environmental Laws which if adversely determined could reasonably
be expected to have a Material Adverse Effect;
(v) none of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor or any of their respective
Facilities or operations is subject to any outstanding written order or
agreement with any governmental authority or private party relating to
(a) any actual or potential violation of or liability under
Environmental Laws or (b) any Environmental Claims except for such of
the foregoing which would not reasonably be expected to have a Material
Adverse Effect;
(vi) none of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor has any contingent liability in
connection with any Release or threatened Release of any Hazardous
Materials by any of the Parent Guarantor, the Parent Guarantor or any
Subsidiaries of the Borrower except for such of the foregoing which
would not reasonably be expected to have a Material Adverse Effect;
(vii) none of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor or, to the best of the Parent
Guarantor's or the Borrower's knowledge, any predecessor of any of the
Parent Guarantor, the Borrower or any Subsidiaries of the Parent
Guarantor has filed any notice under any Environmental Law indicating
past or present treatment, storage or disposal of hazardous waste, as
defined under 40 C.F.R. Parts 260-270 or any state equivalent;
(viii) no Hazardous Materials exist on, under or about
any Facility in a manner that would reasonably be expected to give rise
to an Environmental Claim having a Material Adverse Effect, and none of
the Parent Guarantor, the Borrower or any Subsidiaries of the Parent
Guarantor has filed any notice or report of a Release of any Hazardous
Materials that would reasonably be expected to give rise to an
Environmental Claim having a Material Adverse Effect;
(ix) none of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor or, to the best of the Parent
Guarantor's or the Borrower's knowledge, any of their respective
predecessors has disposed of any Hazardous Materials in a manner that
would reasonably be
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expected to give rise to an Environmental Claim having a Material
Adverse Effect; and
(x) no Lien in favor of any Person relating to or in
connection with any Environmental Claim has been filed or has been
attached to any Facility or other assets of the Parent Guarantor, the
Borrower or any Subsidiaries of the Parent Guarantor except for any
such Lien which would not reasonably be expected to have a Material
Adverse Effect.
Notwithstanding anything in this subsection 4.18 to the contrary, no event or
condition has occurred which may interfere with present compliance by the Parent
Guarantor, the Borrower or Subsidiaries of the Parent Guarantor with any
Environmental Law, or which may give rise to any liability under any
Environmental Law, including, without limitation, any matter disclosed in the
Form S-4 annexed hereto, which, in either case, individually or in the
aggregate, has had or would reasonably been expected to have a Material Adverse
Effect.
4.19 Survival of Representations and Warranties
Subject to Section 10.10B, all representations and warranties
in the Loan Documents shall survive delivery of the Bridge Notes and the making
of the Bridge Loan and shall continue until one year after repayment of the
Notes and the Obligations, and any investigation at any time made by or on
behalf of the Lenders shall not diminish the Lenders' right to rely thereon.
4.20 Permits
Except as disclosed on Schedule H, the Parent Guarantor, the
Borrower and the Subsidiaries of the Parent Guarantor have, and immediately
after the consummation of the Transactions will have, such certificates,
permits, licenses, franchises, consents, approvals, authorizations and
clearances that are material to the condition (financial or otherwise), business
or operations of the Parent Guarantor, the Borrower and the Subsidiaries of the
Parent Guarantor, taken as a whole ("Permits"), and are (and will be immediately
after the consummation of the Transactions) in compliance in all material
respects with all applicable Laws of all Tribunals as are necessary to own,
lease or operate their respective properties and to conduct their businesses in
the manner as presently conducted and to be conducted immediately after the
consummation of the Transactions, and all such Permits are valid and in full
force and effect and will be valid and in full force and effect immediately upon
consummation of the Transactions. The Parent Guarantor, the Borrower and the
Subsidiaries of the Parent Guarantor are, and immediately after the consummation
of the Transactions will be, in compliance in all material respects with their
respective obligations under such Permits and no event has occurred that allows,
or after notice or lapse of time would allow, revocation or termination of such
Permits, except for
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any such revocation or termination as would not, singly or in the aggregate,
have a Material Adverse Effect.
4.21 Insurance
The Parent Guarantor, the Borrower and the Subsidiaries of the
Parent Guarantor carry or are entitled to the benefits of insurance (including
self-insurance) in such amounts and covering such risks as is generally
maintained by companies of established repute engaged in the same or similar
businesses, and all such insurance is (and will be immediately after the
consummation of the Transactions) in full force and effect.
4.22 Labor Matters
No labor disturbance by the employees of the Parent Guarantor,
the Borrower and the Subsidiaries of the Parent Guarantor exists or, to the best
knowledge of the Parent Guarantor or the Borrower, is threatened, and the Parent
Guarantor and the Borrower are not aware of any existing or imminent labor
disturbance by the employees of the Parent Guarantor, the Borrower or their
respective Subsidiaries' principal suppliers, manufacturers or customers that
could, singly or in the aggregate, have a Material Adverse Effect.
4.23 Guarantees
Each Guarantor shall, on the date it executes and delivers a
Guarantee hereunder, have the full corporate power, authority and capacity to
execute and deliver such Guarantee and to perform all of its obligations to be
performed thereunder; all corporate and other acts, conditions and things
required to be done and performed or to have occurred prior to such execution
and delivery to constitute such Guarantee as a valid and legally binding
obligation of such Guarantor enforceable in accordance with its terms shall have
been done and performed and shall have occurred in due compliance with all
applicable Laws; on the date of such execution and delivery, the execution,
delivery and performance of such Guarantee by such Guarantor will not (i)
violate any provision of Law or any provision of the charter or bylaws of such
Guarantor, or (ii) result in a breach of, a default under (including, without
limitation, any event which with notice or lapse of time, or both, would
constitute a breach of or a default under), or the creation of any Lien on the
properties or assets of such Guarantor, the Borrower or any other Subsidiary of
the Parent Guarantor under any Contract to which such Guarantor or the Borrower
or any other Subsidiary of the Parent Guarantor is a party or by which the
properties or assets of such Guarantor, the Borrower or any other Subsidiary of
the Parent Guarantor may be bound or affected; on the date of such execution and
delivery, each Guarantee executed and delivered by a Guarantor shall constitute
legal, valid, binding and unconditional obligations of the Guarantor executing
and delivering it to the Lenders hereunder, enforceable in accordance with its
terms, except to the extent that
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the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and the
foregoing representations and warranties of the Parent Guarantor and the
Borrower shall be deemed for all purposes to have been made on each date when a
Guarantee is delivered hereunder with respect solely to that Guarantee and the
Guarantor so issuing such Guarantee.
4.24 Senior Secured Indenture; etc.
Each of the Borrower and the Guarantors shall, on the date it
executes and delivers the Senior Secured Indenture and the Exchange Notes and
the Demand Take-Out Notes and the indenture governing the Demand Take-Out Notes
(or the guarantees related thereto, as the case may be), have the full corporate
power, authority and capacity to do so and to perform all of its obligations to
be performed thereunder; all corporate and other acts, conditions and things
required to be done and performed or to have occurred prior to such execution
and delivery to constitute them as valid and legally binding obligations of the
Borrower enforceable against the Borrower and the Guarantors in accordance with
their respective terms except to the extent that the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law), shall have been done and performed and shall
have occurred in due compliance with all applicable Laws; on the date of such
execution and delivery by the Borrower and the Guarantors, the Senior Secured
Indenture and the Exchange Notes and the Demand Take-Out Notes (and the
guarantees) and the indenture governing the Demand Take-Out Notes shall
constitute legal, valid, binding and unconditional obligations of the Borrower
and the Guarantors, as the case may be, enforceable against the Borrower and the
Guarantors, as the case may be, in accordance with their respective terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
4.25 Broker's or Finder's Fees
Except as disclosed on Schedule I, no broker's or finder's
fees or commissions will be payable by the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor with respect to any of the Transactions and
no similar fees or commissions will be payable by the Parent Guarantor, the
Borrower or any of its Subsidiaries for any other services rendered to the
Parent Guarantor, the Borrower or any Subsidiaries of the Parent Guarantor in
connection with the transactions contemplated hereby and thereby. The Parent
Guarantor and the Borrower represent, warrant, covenant and agree that the
Parent Guarantor and the
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Borrower will, jointly and severally, indemnify the Creditors against, and hold
each of them completely harmless from and against, any and all claims, demands
or liabilities for broker's or finder's fees or similar fees or commissions
asserted to have been incurred in connection with any of the Transactions.
4.26 Debt Agreements
Schedule B is a complete and correct list, as of the date
hereof after giving effect to the Transactions, of any Indebtedness (other than
Intercompany Indebtedness) of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor, the aggregate principal or face amount of
which equals or exceeds (or may equal or exceed) $100,000 and the aggregate
principal or face amount outstanding or which may become outstanding under each
such arrangement is correctly described in Schedule B. The aggregate principal
or face amount of Indebtedness (other than Intercompany Indebtedness) of the
Parent Guarantor, the Borrower, and the Subsidiaries of the Parent Guarantor
under any agreement or other arrangement not set forth on Schedule B does not
exceed $100,000.
4.27 Security Interest
There has been created in favor of the Collateral Agent for
the benefit of the Lenders a valid and enforceable security interest in the
Pledged Collateral (to the extent that a security interest may be created under
the Uniform Commercial Code (as defined in the Security Agreement)), and upon
due filing of the financing statements on Form UCC-1 and possession by the
Collateral Agent of the Pledged Stock a duly perfected first priority (except as
may be expressly permitted under Section 6.2) security interest in the Pledged
Collateral (other than the Non-Perfected Collateral), in each case that secures
the full amount of the Loan to be made and all other amounts outstanding under
this Agreement and the other Loan Documents and such other amounts as are
provided in the Security Agreement (subject to Section 9.5). The pledgor has
good and legal title to all Collateral covered by the Security Agreement free
and clear of all Liens, except as may be expressly permitted under Section 6.2
and except as would not have a Material Adverse Effect. No filings or recordings
are required to perfect the security interests created under the Security
Agreement, except for such filings or recordings required in connection with the
Security Agreement as to which the Borrower and the Guarantors shall cooperate
in all respects so that the filing thereof may be made as required by this
Agreement.
4.28 Pari Passu Loan Obligations
The Obligations of the Borrower and the Guarantors under this
Agreement and each other Loan Document to which it is a party rank at least pari
passu in right of payment with all of such Borrower's or Guarantor's other
unsubordinated Indebtedness, other than any such Indebtedness which is preferred
by mandatory provisions of Law.
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SECTION 5 AFFIRMATIVE COVENANTS
The Parent Guarantor and the Borrower, jointly and severally,
covenant and agree that, until the Loans and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full, they shall perform or
cause to be performed all covenants in this Section 5 required to be performed
by it:
5.1 Financial Statements and Other Reports
(a) The Parent Guarantor and the Borrower will maintain,
and cause each of Subsidiaries of the Parent Guarantor to maintain, a system of
accounting established and administered in accordance with sound business
practices to permit preparation of consolidated financial statements in
conformity with GAAP. The Parent Guarantor will deliver to each Lender:
(i) as soon as available and in any event within 45
days after the end of each of the first three fiscal quarters of each
fiscal year, (1) the consolidated balance sheets of the Parent
Guarantor and its Subsidiaries and the consolidating balance sheets of
the Borrower and the other Material Subsidiaries as at the end of such
fiscal quarter, (2) the related consolidated and consolidating
statements of operations, stockholders' equity and cash flows for such
fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year (where available) and
the corresponding figures from the consolidated plan and financial
forecast for the current fiscal year delivered pursuant to Section
5.1(b)(ii), all in reasonable detail and certified by the chief
financial officer of the Parent Guarantor that they fairly present the
financial condition of the Parent Guarantor and its Subsidiaries, as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments, (3) the Parent Guarantor's
quarterly report on Form 10-Q for such quarterly period, if any, and
(4) only if the Parent Guarantor does not file quarterly reports on
Form 10-Q with the Commission, a narrative report describing the
operations of the Parent Guarantor and its Subsidiaries (in the form of
management's discussion and analysis of such operations which would
comply with the disclosure requirements of the Exchange Act and rules
and regulations promulgated thereunder with respect to management's
discussion and analysis set forth in quarterly reports on Form 10-Q)
prepared for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter;
(ii) as soon as available and in any event within 90
days after the end of each fiscal year, (1) the consolidated balance
sheets of the Parent
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Guarantor and its Subsidiaries and the consolidating balance sheets of
the Borrower and the Material Subsidiaries as at the end of such fiscal
year, (2) the related consolidated and consolidating statements of
operations, stockholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the corresponding
figures for the previous fiscal year (where available) and the
corresponding figures from the consolidated plan and financial forecast
for the current fiscal year delivered pursuant to Section 5.1(b)(ii)
for the fiscal year covered by such financial statements, all in
reasonable detail and certified by the chief financial officer of the
Parent Guarantor that they fairly present the financial condition of
the Parent Guarantor and its Subsidiaries and the Borrower and the
Material Subsidiaries, as the case may be, as at the dates and the
results of their operations and their cash flows for the periods
indicated, (3) the Parent Guarantor's annual report on Form 10-K for
such year, if any, (4) only if the Parent Guarantor does not file
annual reports on Form 10-K with the Commission, a narrative report
describing the operations of the Parent Guarantor and its Subsidiaries
(in the form of management's discussion and analysis of such operations
which would comply with the disclosure requirements of the Exchange Act
and rules and regulations promulgated thereunder with respect to
management's discussion and analysis set forth in quarterly reports on
Form 10-K) prepared for such fiscal year, and (5) a report thereon of
independent certified public accountants of recognized national
standing, which report shall express no doubts about the ability of the
Parent Guarantor and its Subsidiaries to continue as a going concern,
and shall state that such consolidated financial statements fairly
present the consolidated financial position of the Parent Guarantor and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally
accepted auditing standards;
(iii) together with each delivery of financial statements
pursuant to Sections 5.1(a)(i) and (ii) above, (a) an Officers'
Certificate of the Parent Guarantor and the Borrower stating that the
signers have reviewed the terms of this Agreement and the Notes and
have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of the Parent
Guarantor, the Borrower and the Subsidiaries of the Parent Guarantor
during the accounting period covered by such financial statements and
that such review has not disclosed the existence during or at the end
of such accounting period, and that the signers do not have knowledge
of the existence as at the date of the Officers' Certificate, of any
condition or event which constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
the Parent Guarantor and the
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Borrower have taken, are taking and propose to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable
detail compliance (as determined in accordance with GAAP) during and at
the end of such accounting periods with the restrictions contained in
Sections 6.1(a), 6.1(b)(iv), 6.1(b)(viii), 6.1(b)(ix), 6.1(c) (to the
extent of any Incurrence thereunder), 6.3, 6.4 and 6.14;
(iv) together with each delivery of consolidated financial
statements pursuant to Section 5.1(a)(ii) above, a written statement by
the independent certified public accountants giving the report thereon
(a) stating whether, in connection with their audit examination, any
condition or event that constitutes an Event of Default or Potential
Event of Default that relates to accounting matters has come to their
attention and, if any such condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their
audit examination, and (b) stating that based on their audit
examination nothing has come to their attention that causes them to
believe that the information contained in the certificates delivered
therewith is not correct;
(v) promptly upon receipt thereof (unless restricted by
applicable professional standards), copies of all reports (other than
reports of a routine or ministerial nature which are not material)
submitted to the Parent Guarantor and the Borrower by independent
certified public accountants in connection with each annual, interim or
special audit of the financial statements of the Parent Guarantor, the
Borrower and the Subsidiaries of the Parent Guarantor made by such
accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with their
annual audit;
(vi) promptly upon the sending or filing thereof, copies of
(a) all financial statements, reports, notices and proxy statements
sent or made available generally by the Parent Guarantor or the
Borrower to its security holders or by any Subsidiary of the Borrower
to its security holders other than the Borrower or another Subsidiary
of the Parent Guarantor, (b) all other reports and all registration
statements (other than on Form S-8 or a similar form) and prospectuses,
if any, filed by the Parent Guarantor, the Borrower or any Subsidiaries
of the Parent Guarantor with any securities exchange or with the
Commission or any governmental authority (other than reports of a
routine or ministerial nature which are not material), and (c) all
press releases and other statements made available generally by the
Parent Guarantor, the Borrower or any Subsidiaries of the Parent
Guarantor to the public concerning material developments in the
business of the Parent Guarantor, the Borrower or any Subsidiaries of
the Parent Guarantor;
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(vii) promptly upon any Senior Officer obtaining knowledge
(a) of any condition or event which constitutes an Event of Default or
Potential Event of Default, or becoming aware that any Lender or the
Collateral Agent has given any notice or taken any other action with
respect to a claimed Event of Default or Potential Event of Default
under this Agreement, (b) that any Person has given any notice to the
Parent Guarantor, the Borrower or any Subsidiary of the Parent
Guarantor or taken any other action with respect to a claimed default
or event or condition which might result in an Event of Default
referred to in Section 7.2, (c) of any condition or event which would
be required to be disclosed in a current report filed with the
Commission on Form 8-K whether or not the Parent Guarantor or the
Borrower are required to file such reports under the Exchange Act, or
(d) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse
Effect, an Officers' Certificate specifying the nature and period of
existence of any such condition or event, or specifying the notice
given or action taken by such holder or Person and the nature of such
claimed default, Event of Default, Potential Event of Default, event or
condition, and what action the Parent Guarantor or the Borrower have
taken, is taking and proposes to take with respect thereto;
(viii) promptly upon any Senior Officer obtaining knowledge of
(X) the institution of, or non-frivolous threat of, any action, suit,
proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting the
Parent Guarantor or the Borrower or any Subsidiaries of the Parent
Guarantor or any property of the Parent Guarantor or the Borrower or
any Subsidiaries of the Parent Guarantor (collectively, "Proceedings")
not previously disclosed in writing to the Lenders or (Y) any material
development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the Transactions;
written notice thereof together with such other information as may be
reasonably available to the Parent Guarantor or the Borrower or any
Subsidiaries of the Parent Guarantor to enable Lenders and their
counsel to evaluate such matters;
(ix) not later than the last day of each fiscal year of
the Parent Guarantor, a list outlining all material insurance coverage
maintained as of the date of such report by the Parent Guarantor, the
Borrower and Subsidiaries of
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the Parent Guarantor and all material insurance coverage planned to be
maintained by such Persons in the subsequent fiscal year;
(x) in writing, promptly upon a Senior Officer obtaining
knowledge that the Parent Guarantor, the Borrower or any Subsidiaries
of the Parent Guarantor has received notice or otherwise learned of any
claim, demand, action, event, condition, report or investigation
indicating any potential or actual liability arising in connection with
(x) the non-compliance with or violation of the requirements of any
Environmental Law or any regulatory agency having jurisdiction over the
Acquired Business which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (y) the
release or threatened release of any toxic or hazardous waste,
substance or constituent into the environment which would reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect, or (z) the existence of any Environmental Lien on any
properties or assets of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor;
(xi) promptly after the availability thereof, copies of all
material amendments to the certificate of incorporation or by-laws of
the Parent Guarantor, the Borrower or any Subsidiaries of the Parent
Guarantor;
(xii) promptly upon any Person becoming a Subsidiary of the
Parent Guarantor, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of the
Parent Guarantor and (b) all of the data required to be set forth in
Schedule A annexed hereto with respect to all Subsidiaries of the
Parent Guarantor; and
(xiii) with reasonable promptness, such other information and
data with respect to the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor or any of their respective
property, business or assets as from time to time may be reasonably
requested by any Creditor; provided that no information or data shall
be required to be delivered hereunder or under any other provision of
this Agreement if it would violate any applicable attorney-client or
accountant-client privilege or any confidentiality undertaking by which
the Parent Guarantor or any of its Subsidiaries may be bound.
(b) The Parent Guarantor will deliver to CIBC/WG:
(i) as soon as available and in any event within 40 days
after the end of each month ending after the Closing Date, the
financial statements and other financial information and explanatory
materials provided or to be provided to the Board of Directors of the
Parent Guarantor, in reasonable detail consistent with past practice
and certified by the chief financial officer of
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the Parent Guarantor that they are true and accurate in all material
respects; and
(ii) as soon as practicable but in any event no later than 40
days following the first day of each fiscal year a business plan for
the next succeeding twelve months for the Parent Guarantor and its
Subsidiaries in the form provided or to be provided to the Board of
Directors of the Parent Guarantor in reasonable detail consistent with
past practice. Together with each delivery of financial statements
pursuant to Sections 5.1(a)(i) and (ii) above, the Parent Guarantor
shall deliver a comparison of the current year to date financial
results against the budget required to be submitted pursuant to this
Section.
(c) Without limiting any of the foregoing, at any time that
the Borrower is not subject to the requirements of Section 13 or 15(d) of the
Exchange Act, the Borrower will, upon the request of any Lender and at the
Borrower's expense, provide to such Lender and any Person designated by such
Lender such financial and other information as such Lender may reasonably
determine to be necessary in order to permit compliance with the information
requirements of Rule 144A in connection with a resale or proposed resale of a
Note. The Lenders acknowledge that such requirement may be fulfilled by
providing such information as it relates to the Parent Guarantor and its
consolidated Subsidiaries.
5.2 Corporate Existence, Etc.
The Parent Guarantor and the Borrower will at all times preserve
and keep in full force and effect its corporate existence and rights and
franchises to its business and those of each of Subsidiaries of the Parent
Guarantor, except as permitted by Section 6.7 or where the failure to so
preserve or keep will not, singly or in the aggregate, have a Material Adverse
Effect.
5.3 Payment of Taxes and Claims; Tax Consolidation
A. The Parent Guarantor and the Borrower will, and will
cause each of the Subsidiaries of the Parent Guarantor to, pay all material
Taxes, assessments and other governmental charges imposed upon it or any of its
material properties or assets or in respect of any of its franchises, business,
income or property before any material penalty accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien upon any of its properties or assets prior to the time when
any material penalty or fine shall be incurred with respect thereto, provided,
however, that no such charge or claim need be paid if the validity or amount of
such charge or claim is being diligently contested in good faith and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
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B. The Parent Guarantor and the Borrower will not, nor
will the Parent Guarantor or the Borrower permit any of their respective
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor so long as the filing of such consolidated
income tax return is permitted by applicable law).
5.4 Maintenance of Properties; Insurance
The Parent Guarantor and the Borrower will maintain or cause
to be maintained in good repair, working order and condition, ordinary wear and
tear excepted, all material properties used or useful in the business of the
Parent Guarantor, the Borrower and the Subsidiaries of the Parent Guarantor and
from time to time promptly will make or cause to be made all necessary repairs,
renewals and replacements thereof; provided, however, that nothing in this
Section 5.4 shall prevent the Parent Guarantor, the Borrower or any Subsidiaries
of the Parent Guarantor from discontinuing the use, operation or maintenance of
any such properties, or disposing of any of them, if such action is in the
ordinary course of business or, in the reasonable good faith judgment of the
Parent Guarantor and the Borrower, necessary or desirable in the conduct of its
business or otherwise permitted by this Agreement. The Parent Guarantor and the
Borrower will maintain or cause to be maintained, with financially sound and
reputable insurers or with self insurance programs, in each case to the extent
consistent with prudent business practices and customary in its industries,
insurance with respect to its properties and business and the properties and
businesses of the Subsidiaries of the Parent Guarantor against loss or damage of
the kinds (including, in any event, business interruption insurance) and in the
amounts customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses and owning
similar properties in the same general respective areas in which the Parent
Guarantor, the Borrower and Subsidiaries of the Parent Guarantor operate.
5.5 Inspection
The Parent Guarantor and the Borrower shall permit any
authorized representatives designated by the Lenders to visit and inspect any of
the properties of the Parent Guarantor, the Borrower or the Subsidiaries of the
Parent Guarantor, including, without limitation, its and their financial and
accounting records, and to make copies and take extracts therefrom, and to
discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants (provided that representatives of the Parent
Guarantor, the Borrower or any Subsidiaries of the Parent Guarantor may, if it
so chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may be reasonably requested.
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5.6 Equal Security for Loans and Notes
If the Parent Guarantor, the Borrower or any Subsidiaries of
the Parent Guarantor shall create, assume or suffer to exist any Lien upon any
of their respective property or assets, whether now owned or hereafter acquired,
other than Liens permitted by the provisions of Section 6.2, the Parent
Guarantor shall, at the request of the Required Lenders, make or cause to be
made effective provision whereby the Obligations under this Agreement will be
secured by such Lien equally and ratably with any and all other Indebtedness
thereby secured as long as any such Indebtedness shall be secured; provided,
however, that this covenant shall not be construed as or deemed to be a consent
by the Lenders to any violation of the provisions of Section 6.2; and provided,
further, that the Parent Guarantor shall under no circumstances be required to
make or cause to be made effective provision whereby the Obligations under this
Agreement will be secured, directly or indirectly, by Margin Stock.
5.7 Compliance with Laws, Etc.
The Parent Guarantor and the Borrower shall and shall cause
each of the Subsidiaries of the Parent Guarantor to comply with the requirements
of all applicable Laws of any Tribunal, noncompliance with which, singly or in
the aggregate, would reasonably be expected to have a Material Adverse Effect.
5.8 Maintenance of Accurate Records, Etc.
The Parent Guarantor and the Borrower shall keep, and will
cause each of the Subsidiaries of the Parent Guarantor to keep, true books and
records and accounts in which full and correct entries will be made of all its
respective business transactions, and will reflect, and cause each of
Subsidiaries of the Parent Guarantor to reflect, in its respective financial
statements adequate accruals and appropriations to reserves.
5.9 Take-Out Financing
The Parent Guarantor and the Borrower agree that upon request
(a "Request") from the Take-Out Banks made at any time subsequent to 30 days
following the Closing Date (assuming that the Bridge Loan has not been
Refinanced by any other means) and prior to the Conversion Date, the Parent
Guarantor and the Borrower will take all reasonable actions necessary or
desirable (including, without limitation, providing for the cooperation of its
management and the participation of the chief executive and chief financial
officers of the Parent Guarantor and the Borrower in road show presentations and
investor meetings), so that the Take-Out Banks can, as soon as practicable after
such Request, publicly sell or privately place the Demand Take-Out Notes (the
"Initial Request Date"). The Parent Guarantor and the Borrower further agree
that upon notice by the Take-Out Banks (the "Take-Out Securities Notice"), at
any time and from time to time following the Initial Request
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Date but subject to the terms of the engagement letters entered into with the
Take-Out Banks, the Parent Guarantor will issue and sell Demand Take-Out Notes
upon such terms and conditions as specified in the Take-Out Securities Notice;
provided that for either a Request or Take-Out Securities Notice (i) the
effective interest rate thereon (whether floating or fixed) shall not exceed
13.00% (plus any original issue discount resulting solely from the inclusion of
common equity sold as part of a unit therewith) without the consent of the
Parent Guarantor and shall otherwise be determined by the Take-Out Banks in
light of the then prevailing market conditions; (ii) the Parent Guarantor, in
its reasonable discretion after consultation with the Take-Out Banks, shall
determine whether the Demand Take-Out Notes shall be issued through a public
offering or a private placement and, if issued in a private placement, the
Demand Take-Out Notes will be accompanied by customary registration rights;
(iii) subject to clause (i) above, the aggregate principal amount of Demand
Take-Out Notes to be issued by the Parent Guarantor shall be determined by the
Take-Out Banks in light of the then prevailing market conditions, provided that
the aggregate principal amount of Demand Take-Out Notes together with any other
securities sold therewith as contemplated by clause (v) below shall not be less
than the amount calculated to yield net proceeds sufficient to repay the Bridge
Notes in full; (iv) the Demand Take-Out Notes will contain such other terms
(including, without limitation, terms of maturity and subordination), conditions
and covenants as are customary for similar financings and as are satisfactory in
all respects to the Take- Out Banks and the Parent Guarantor; and (v) all other
arrangements with respect to the Demand Take-Out Notes shall be reasonably
satisfactory in all respects to the Take-Out Banks and the Parent Guarantor in
light of the then prevailing market conditions including, but not limited to,
the issuance and sale therewith of common equity or common equity equivalents to
the purchasers of the Demand Take-Out Notes in such amount (not to exceed 5% of
the Parent Guarantor's outstanding fully diluted common equity at the time of
issuance) as is necessary for the Parent Guarantor to receive net proceeds from
the sale of the Take-Out Securities in an amount sufficient to repay the Bridge
Loan. The foregoing shall not (x) limit the Parent Guarantor and the Borrower's
right to Refinance the Bridge Loan by any other means or (y) be deemed to impose
any obligation of the Parent Guarantor to issue Take-Out Securities the proceeds
of which are to be used to consummate a tender offer or otherwise redeem any
outstanding indebtedness of the Parent Guarantor (including, but not limited to,
the Notes and the Senior Notes) at a purchase price in excess of 116.50% of
principal amount.
5.10 ERISA Compliance
Each of the Parent Guarantor, the Borrower and the
Subsidiaries of the Parent Guarantor will (i) make prompt payment of all
contributions which it is obligated to make under all Pension Plans and which
are required to meet the minimum funding standard set forth in ERISA with
respect to each of the Pension Plans, (ii) within 30 days after the filing
thereof, furnish to the Lenders each Schedule B to the annual return/report
(Form 5500 Series), required to be filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA, with
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respect to each of the Pension Plans that is not a Multiemployer Plan for each
plan year, and (iii) notify the Lenders promptly upon becoming aware of any
fact, including but not limited to, any Reportable Event arising in connection
with any of the Pension Plans that is not a Multiemployer Plan, which could be
reasonably expected to constitute grounds for termination thereof by the PBGC or
for the appointment by the appropriate United States District Court of a trustee
to administer such Pension Plan, together with a statement as to the action, if
any, proposed to be taken with respect thereto.
5.11 Exchange of Term Notes
(a) At any time during the period commencing 60 days
prior to the Conversion Date and continuing for so long as any Term Notes remain
outstanding, if so requested in writing by CIBC/WG (the "Exchange Document
Request") and subject to Section 5.11(b) below, as promptly as practicable after
receipt of the Exchange Document Request, (i) the Borrower will execute and
deliver, cause each Guarantor to execute and deliver, and cause a bank or trust
company acting as trustee thereunder to execute and deliver, the Senior Secured
Indenture, and (ii) the Borrower will execute and deliver, for the benefit of
any holder of a note issued under the Senior Secured Indenture (the "Exchange
Notes"), the Registration Rights Agreement.
(b) The Senior Secured Indenture and Registration Rights
Agreement shall have the terms as are contemplated by the Commitment Letter. The
Parent Guarantor, the Borrower and CIBC/WG or one of its designated Affiliates
shall cooperate and negotiate in good faith as to the precise terms of the
Senior Secured Indenture and the Registration Rights Agreement, both of which
shall be in form, scope and substance as is customary for indentures and
registration right agreements relating to high-yield debt securities issued for
cash in the then prevailing market. In the event that the Parent Guarantor, the
Borrower and CIBC/WG or such Affiliate, as the case may be, have not reached
agreement as to the precise terms of the Senior Secured Indenture or the
Registration Rights Agreement within 30 days after the receipt of the Exchange
Document Request as provided in paragraph (a) above, then upon the written
request of either the Parent Guarantor or CIBC/WG, such unresolved terms shall
be determined by binding arbitration conducted in accordance with the Rules of
the Center for Public Resources Institute for Dispute Resolution by a sole
arbitrator. To the extent not governed by such rules, such arbitrator shall be
directed by CIBC/WG to set a schedule for determination of such dispute that is
reasonable under the circumstances. The arbitration will be conducted in New
York City. The arbitration will be governed by the United States Arbitration
Act, 9 U.S.C. SectionSection 1-16. Judgment upon the award rendered by the
arbitrator may be entered by any court having jurisdiction. The cost of such
arbitration shall be borne equally between the Parent Guarantor and the Lenders.
(c) The Borrower will, on the fifth Business Day
following the written request (the "Exchange Request") of the holder of any Term
Note (or
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beneficial owner of a portion thereof) execute and deliver to such holder or
beneficial owner in accordance with the Senior Secured Indenture, if such Senior
Secured Indenture has been executed and delivered, in exchange for such Term
Note an Exchange Note in the form attached to the Senior Secured Indenture
initially bearing interest at the rate of interest then in effect with respect
to the Term Notes and increasing thereafter in the manner and at the times set
forth in Section 2.3A hereof, dated the date of the issuance of such Exchange
Note, payable to the order of such holder or owner, as the case may be, in the
same principal amount as such Term Note (or portion thereof) being exchanged,
and cause each Guarantor to endorse its guarantee thereon. The Exchange Request
shall specify the principal amount of the Term Notes to be exchanged pursuant to
this Section 5.11 which shall be at least $5 million and integral multiples of
$100,000 in excess thereof. Term Notes delivered to the Parent Guarantor and the
Borrower under this Section 5.11 in exchange for Exchange Notes shall be
cancelled by the Parent Guarantor and the Borrower and the corresponding amount
of the Term Loan deemed repaid and the Exchange Notes shall be governed by and
construed in accordance with the terms of the Senior Secured Indenture. The bank
or trust company acting as trustee under the Senior Secured Indenture shall at
all times be a corporation organized and doing business under the laws of the
United States of America or the State of New York, in good standing and having
its principal offices in the Borough of Manhattan, in The City of New York,
which is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by Federal or State authority and which
has a combined capital and surplus of not less than $50 million.
5.12 Payments in U.S. Dollars
Other than with respect to PIK Interest Amounts, all payments
of any Obligations to be made hereunder or under the Notes by the Borrower or
any other obligor with respect thereto shall be made solely in U.S. Dollars or
such other currency as is then legal tender for public and private debts in the
United States of America.
5.13 Register
The Borrower will maintain a register (the "Register") on
which it will record the registered holders of the Notes and the principal
amount held by each and each repayment in respect of the principal amount of the
Loans of each such holder. Failure to make any such recordation, or any error in
such recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Loan Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Loan Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Borrower with respect to ownership of
such Loan Commitments and Loans and prior to such recordation all amounts owing
to the transferor with respect to such Loan Commitments and Loans shall remain
owing to the transferor. The registration of
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assignment or transfer of all or part of any Loan Commitments and Loans shall be
recorded by the Borrower on the Register only upon the receipt by the Borrower
of a properly executed and delivered Assignment and Assumption Agreement
pursuant to Section 10.2A and written notification to the Borrower of the
Principal Office of the registered holder of such Notes. Coincident with the
delivery of such an Assignment and Assumption Agreement to the Borrower for
acceptance and registration of assignment or transfer of all or part of a Loan,
or as soon thereafter as practicable, the assigning or transferor Lender shall
surrender the Note evidencing such Loan, and thereupon one or more new Notes of
the same type and in the same aggregate principal amount shall be issued to the
assigning or transferor Lender and/or the new Lender.
5.14 Lenders Meeting
The Parent Guarantor and the Borrower will participate in a
meeting with the Lenders once during each fiscal year to be held at a location
and a time selected by the Parent Guarantor and the Parent Guarantor and
reasonably satisfactory to the Lenders.
5.15 Local Counsel Opinions; Mortgaged Properties
Documentation; Non-Perfected Collateral.
A. The Borrower shall, by January 15, 1997, furnish to
the Lenders opinions of local counsel in the jurisdictions where the Collateral
other than the Non-Perfected Collateral is located in form and substance
reasonably satisfactory to counsel for the Lenders as to perfection of the
Lender's security interest in the items of Collateral as to which such security
interest is required to be perfected as of the Closing Date.
B. The Borrower shall, by April 30, 1997:
(a) Mortgages. Furnish to counsel for the Lenders each
Mortgage, each executed and delivered by a duly authorized officer of the party
thereto, with a counterpart or a conformed copy for each Lender.
(b) Surveys. Furnish to counsel for the Lenders and the
titled insurance company issuing the policies referred to in this Section
5.15B(b) (the "Title Insurance Company") with respect to each Mortgaged Real
Property (a) maps or plats of an as-built survey that was done previously and is
dated no earlier than January 1, 1992, recertified as of a date satisfactory to
counsel for the Lenders and the Title Insurance Company; or (b) maps or plats of
an as-built survey certified to the Lenders and the Title Insurance Company in a
manner reasonably satisfactory to counsel for the Lenders and the Title
Insurance Company, dated a date satisfactory to counsel for the Lenders and the
Title Insurance Company by an independent professional licensed land surveyor
reasonably satisfactory to counsel for the Lenders and the Title
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Insurance Company, which maps or plats and the surveys on which they are based
shall be made in accordance with the Minimum Standard Detail Requirements for
Land Title Surveys jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in 1992, and,
without limiting the generality of the foregoing, there shall be or is, as of a
recent date, surveyed and shown on such maps, plats or surveys the following:
(i) the locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (ii) the lines of
streets abutting the sites and width thereof; (iii) all access and other
easements appurtenant to the sites or necessary or desirable to use the sites;
(iv) all roadways, paths, driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site, whether recorded,
apparent from a physical inspection of the sites or otherwise known to the
surveyor; (v) any encroachments on any adjoining property by the building
structures and improvements on the sites; and (vi) if the site is described as
being on a filed map, a legend relating the survey to said map.
(c) Title Insurance Policy or Opinion. Furnish to counsel for
the Lenders in respect of each Mortgaged Real Property, (i) a mortgagee's title
policy (or policies) or marked up unconditional binder for such insurance dated
the date of delivery thereat but no later than April 30, 1997 and each such
policy shall (A) be in amount reasonably satisfactory to counsel for the
Lenders, (B) be issued at ordinary rates; (C) insure that the Mortgage insured,
thereby creates a valid first Lien on such parcel free and clear of all defects
and encumbrances, except such as may be approved by CIBC/WG; (D) name the
Lenders as the insured thereunder; (E) be in the then current form of ALTA Loan
Policy approved by the state in which the parcel is located or the comparable
form outside the United States, as the case may be; (F) contain such
endorsements and affirmative coverage as counsel for Lenders may reasonably
request; and (G) be issued by title companies reasonably satisfactory to counsel
for the Lenders (including any such title companies acting as co-insurers or
reinsurers, at the option of CIBC/WG), and evidence reasonably satisfactory to
counsel for the Lenders that all premiums in respect of each such policy, and
all charges for mortgage recording tax, if any, have been paid, or (ii) a title
opinion in form and substance reasonably satisfactory to counsel for the
Lenders.
(d) Copies of Documents. Furnish to the Lenders a copy of all
recorded documents referred to or listed as exceptions to title in the title
policy or policies or title opinion or opinion referred to in this Section
5.15(b) and a copy, certified by such parties as counsel for the Lenders may
deem appropriate, of all other documents affecting the property covered by each
Mortgage.
(e) Landlord Agreements. To the extent a material portion of
equipment or inventory of the Borrower or any Guarantor is maintained on a
leased premise in the United States or Canada, use its reasonable best efforts
to furnish to the Lenders executed agreements from the respective landlords of
such property confirming that such landlords have subordinated their landlord
liens in such personal
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property to the security interests held by the Collateral Agent pursuant to the
Security Agreement and that such landlords will provide the Collateral Agent
with reasonable access to such facilities to exercise the Collateral Agent's
remedies pursuant to such Security Agreement.
(f) Perfection of Non-Perfected Collateral. Furnish to the
Lenders any and all instruments and documents and take such other action
reasonably requested by CIBC/WG or the Collateral Agent as may be necessary or
desirable in order to perfect in favor of the Lenders a valid first priority
security interest (to the extent possible) in the Non-Perfected Collateral
(other than interests in fixtures and real property), subject to no other Liens
except as may be expressly permitted under Section 6.2.
SECTION 6 NEGATIVE COVENANTS
The Parent Guarantor and the Borrower covenant and agree that
until the satisfaction in full of the Loans and the Notes and all other
Obligations due under this Agreement it will fully and timely perform all
covenants in this Section 6.
6.1 Coverage Ratios; Indebtedness
(a) The Parent Guarantor and the Borrower will not and will
not permit any of their respective Subsidiaries to, directly or indirectly:
(i) Maintenance of Interest Coverage Ratio. Permit the
ratio of Available Cash Flow to Consolidated Cash Interest and Dividend
Expense of the Parent Guarantor and its Subsidiaries on a consolidated
basis for each period of four consecutive fiscal quarters ending with
the fiscal quarter set forth below to be less than the ratio set forth
opposite such period below as "Interest Coverage":
Quarter Ended Interest Coverage
March 31, 1997 0.8
June 30, 1997 0.9
September 30, 1997 1.0
December 31, 1997 1.1
March 31, 1998 1.2
June 30, 1998 1.3
September 30, 1998 1.4
December 31, 1998 1.5
March 31, 1999 and
quarters ended thereafter 1.6
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(ii) Maintenance of Cash Flow Leverage Ratio. Permit the Cash
Flow Leverage Ratio for each period of four consecutive fiscal quarters
ending with the fiscal quarter set forth below to be greater than the
ratio set forth opposite such period below as "Cash Flow Leverage":
Quarter Ended Cash Flow Leverage
March 31, 1997 9.50
June 30, 1997 9.00
September 30, 1997 8.50
December 31, 1997 7.75
March 31, 1998 7.50
June 30, 1998 7.25
September 30, 1998 7.00
December 31, 1998 6.75
March 31, 1999 6.50
June 30, 1999 6.25
September 30, 1999 6.00
December 31, 1999 5.75
March 31, 2000 and
quarters ended thereafter 5.50
(b) The Parent Guarantor and the Borrower shall not and will
not permit any of their respective Subsidiaries to, directly or indirectly,
Incur, or remain or become directly or indirectly liable with respect to, any
Indebtedness, except for the following ("Permitted Indebtedness"):
(i) the Parent Guarantor, the Borrower and the other
Guarantors may Incur and remain liable with respect to the Obligations;
(ii) the Parent Guarantor, the Borrower and the other
Guarantors may Incur and remain liable with respect to the Bridge
Notes, Term Notes, Take-Out Securities and Exchange Notes;
(iii) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may Incur and remain liable with respect to
Contingent Obligations permitted by Section 6.5 and, upon any matured
obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iv) commercial documentary letters of credit may be issued
for the account of the Parent Guarantor, the Borrower or any Subsidiary
of the Parent Guarantor in the ordinary course of business in an
aggregate amount not to exceed $5 million at any one time outstanding;
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(v) the Borrower and Subsidiaries of the Parent Guarantor
may Incur and remain liable with respect to Indebtedness in respect of
Capital Leases; provided that the aggregate amount of Indebtedness
incurred under this Section 6.1(v) and Section 6.1(ix) shall not exceed
$2.5 million at any time outstanding;
(vi) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may Incur and remain liable with respect to
Intercompany Indebtedness permitted by clauses (d) or (e) of the
definition of "Permitted Investments";
(vii) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may remain liable with respect to the Senior Notes
and the other Indebtedness which is existing on the Closing Date and is
described on Schedule B attached hereto;
(viii) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may Incur and remain liable with respect to
Permitted Refinancing Indebtedness;
(ix) the Borrower and Subsidiaries of the Parent Guarantor
may become and remain liable with respect to Indebtedness incurred to
finance (a) the purchase price of equipment, fixtures and any other
similar property or the remodeling or other improvement costs of any
facility of the Parent Guarantor or any Subsidiaries of the Parent
Guarantor or (b) the purchase price of any Real Property Assets;
provided that the aggregate principal amount of all such Indebtedness,
together with all Indebtedness incurred under Section 6.1(v) above
shall not exceed $2.5 million at any time outstanding; and
(x) Subsidiaries of the Parent Guarantor acquired after the
Closing Date may remain liable with respect to Indebtedness existing
immediately prior to the time any such entity became a Subsidiary of
Parent Guarantor in an aggregate amount for all such Subsidiaries not
to exceed $2.5 million at any time outstanding; provided that such
Indebtedness is not incurred in contemplation of such acquisition.
In addition to the foregoing, at any time after the Conversion
Date, if no Default with respect to payment of principal of, or interest on, the
Notes or Event of Default shall have occurred and be continuing at the time of
or as a consequence of the incurrence of any such Indebtedness, the Parent
Guarantor, the Borrower or any other Guarantor may incur Indebtedness if the
Cash Flow Leverage Ratio for the Parent Guarantor's, the Borrower's and their
respective Subsidiaries most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the time at
which such additional Indebtedness is incurred would have been not greater than
6.00 to 1.00, determined on a pro forma basis to
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give effect to the incurrence of such additional Indebtedness and (if
applicable) the application of the net proceeds therefrom (including, without
limitation, to refinance other Indebtedness and/or consummate the Parent
Guarantor's or the Borrower's or any of the Parent Guarantor's Subsidiaries'
acquisition of any Person or operating assets) and (if applicable) the
availability of Available Cash Flow derived from the assets, if any, acquired in
the transaction giving rise to such additional Indebtedness, as if such
additional Indebtedness had been incurred and any such application (including,
without limitation, any refinancing and/or acquisition) had occurred and any
such Available Cash Flow was available at the beginning of such four-quarter
period. In addition, a Subsidiary of the Parent Guarantor that is not a
Guarantor may incur Indebtedness of a type described in clause (x) above
(without regard to the $2.5 million limitation set forth therein) if and to the
extent such Indebtedness could have been incurred by the Parent Guarantor, the
Borrower or any other Guarantor pursuant to this paragraph.
6.2 Liens
(a) The Parent Guarantor and the Borrower shall not, nor
shall the Parent Guarantor cause or permit any Subsidiaries of the Parent
Guarantor to, directly or indirectly, create, incur, assume or permit to exist
any Lien on or with respect to any property or asset (including any document or
instrument in respect of goods or accounts receivable) of the Parent Guarantor,
the Borrower or of any Subsidiaries of the Parent Guarantor, whether now owned
or hereafter acquired, or assign or otherwise convey any right to receive any
income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any effective financing statement or other similar notice of
any Lien with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or notice
statute, except:
(i) Permitted Encumbrances;
(ii) Liens on (a) Real Property Assets or (b) equipment,
fixtures and other similar property of Parent Guarantor, the Borrower
and any Subsidiaries of the Parent Guarantor, in each case securing
Indebtedness described in Sections 6.1(b)(v) and 6.1(b)(ix); provided
that such Liens shall extend only to the equipment, fixtures, and other
similar property so financed (and improvements or attachments thereto)
and the proceeds thereof;
(iii) Liens securing Indebtedness permitted under Section
6.1(x), which Liens are existing prior to the time the entity which
incurred such Indebtedness became a Subsidiary of the Parent Guarantor;
provided that such Liens were not incurred in connection with, or in
contemplation of, the acquisition of such Subsidiary of the Parent
Guarantor and such Liens extend or cover only the property and assets
of such entity which were covered by such Liens and which were owned by
such entity, in each case at the time
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such entity became a Subsidiary of the Parent Guarantor (and
improvements or attachments thereto); and
(iv) the replacement, extension or renewal of any Lien
permitted by this Section 6.2 upon or in the same property subject to
such Lien and as security for the same obligations or any refinancings
thereof to the extent such refinancings are permitted under Section
6.1; provided that such Lien does not extend to or cover any property
other than the property covered by such Lien immediately prior to such
replacement, extension or renewal of such Lien (and improvements or
attachments thereto) and the principal of the obligations secured
thereby is not increased.
(b) The foregoing restriction shall not apply to the common
stock of the surviving corporation in the merger of RAI with and into MEM
Company, Inc. if and to the extent such stock constitutes Margin Stock and the
value (determined by any reasonable means, as agreed between the Parent
Guarantor and CIBC/WG) thereof exceeds 25% of the aggregate value (determined by
any reasonable means, as agreed between the Parent Guarantor and CIBC/WG) of the
assets subject to this Section 6.2.
6.3 Restricted Payments
(a) The Parent Guarantor and the Borrower shall not, nor
shall the Parent Guarantor cause or permit any Subsidiaries of the Parent
Guarantor to, directly or indirectly (a) declare or pay any dividend, or make
any distribution, on any Capital Stock of the Parent Guarantor or the Borrower
(other than dividends or distributions payable solely in Qualified Capital Stock
of the Parent Guarantor or, on or after the Conversion Date, payable solely in
cash on shares of preferred stock of the Parent Guarantor outstanding at the
Closing Date), (b) purchase, redeem or otherwise acquire or retire for value any
of the Parent Guarantor's or the Borrower's Capital Stock, or any warrants,
rights or options to acquire shares of any class of such Capital Stock or (c)
make any principal or interest payment on, purchase, defease, redeem, prepay, or
otherwise acquire or retire for value, other than any scheduled final maturity,
scheduled repayment or scheduled sinking fund payment, any Subordinated
Indebtedness of the Parent Guarantor (any such dividend, distribution, purchase,
redemption, acquisition, retirement, defeasance or prepayment set forth in
clauses (a), (b) and (c) above a "Restricted Payment").
(b) Notwithstanding the foregoing, (A) if no Default or Event
of Default shall have occurred and be continuing or shall be caused as a
consequence thereof, the provisions set forth in the immediately preceding
paragraph will not prevent (1) the acquisition of any shares of Capital Stock of
the Parent Guarantor or the repurchase, redemption or other repayment of any
Subordinated Indebtedness of the Parent Guarantor in exchange for or solely out
of the proceeds of the substantially concurrent sale or exchange (other than to
a Subsidiary of the Parent Guarantor) of
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shares of Qualified Capital Stock of the Parent Guarantor or a capital
contribution to the Parent Guarantor, (2) the repurchase, redemption or other
repayment of any Subordinated Indebtedness of the Parent Guarantor in exchange
for or solely out of the proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Parent Guarantor) of Subordinated Indebtedness of
the Parent Guarantor with a Weighted Average Life to Maturity equal to or
greater than the then remaining Weighted Average Life to Maturity of the
Subordinated Indebtedness repurchased, redeemed or repaid, (3) Restricted
Payments by the Parent Guarantor in an amount in any one fiscal year not to
exceed 50% of Excess Cash Flow which unused portion of any such annual amount,
if any, may not be aggregated with Restricted Payments proposed to be made with
respect to this subclause (3) in any subsequent fiscal year, (4) Restricted
Payments to and by the Parent Guarantor in an amount sufficient to permit it to
pay cash dividends on its 14.0% Senior Redeemable Preferred Stock, Series B and
Series C, if and to the extent the failure to pay cash dividends would result in
an increase in the applicable dividend rate, (5) the purchase, redemption or
other acquisition of Capital Stock (or options to acquire same) held by former
employees of the Parent Guarantor or any Subsidiary of the Parent Guarantor up
to a maximum of $500,000 in the aggregate amount during any consecutive twelve
month period after the Closing Date, (6) the payment of management and advisory
fees to ▇▇▇▇ ▇▇▇▇ Equity Partners, L.P. and its Affiliates and successors and
assigns in an amount not to exceed $675,000 per year, (7) Restricted Payments
made to the Parent Guarantor to enable it to complete the P&G Acquisition, (8)
the payment of any Restricted Payment within 60 days of the declaration thereof
if such payment was permitted when declared, (9) Restricted Payments made by any
Subsidiary of the Parent Guarantor to the Parent Guarantor, the Borrower or any
other Guarantor, (10) Restricted Payments made by any Subsidiary of the Parent
Guarantor that is not a Guarantor to any other Subsidiary of the Parent
Guarantor that is not a Guarantor, and (11) working capital loans from the
Parent Guarantor, the Borrower or any other Guarantor to any foreign Subsidiary
of the Parent Guarantor that is not a Guarantor in an aggregate amount not to
exceed $5 million at any one time outstanding; and (B) the provisions set forth
in the immediately preceding paragraph will not apply to the payment of
distributions, dividends or interest payments on Intercompany Indebtedness owed
to the Parent Guarantor in an amount sufficient to permit the Parent Guarantor
to pay interest on the Senior Notes in full when due and to make any tax payment
when due if, at the time of such dividend, interest payment or distribution, no
payment is overdue under this Agreement or the Notes and no Event of Default
shall have occurred and be then continuing.
6.4 Investments; Joint Ventures
The Parent Guarantor and the Borrower shall not, nor shall the
Parent Guarantor cause or permit any Subsidiaries of the Parent Guarantor to,
directly or indirectly, make or own any Investment (other than Permitted
Investments) in any Person, including any Joint Venture, except:
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(i) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may continue to own the Investments owned by them
as of the Closing Date (after giving effect to the Acquisitions) in any
Subsidiaries of the Parent Guarantor and described on Schedule A
annexed hereto;
(ii) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may continue to own the Investments owned by them
and described on Schedule F annexed hereto;
(iii) the Parent Guarantor, the Borrower or any Subsidiaries
of the Parent Guarantor may make Related Business Investments;
(iv) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may accept promissory notes received in
consideration of, or the deferral of a portion of the sales price
accepted with respect to, any Asset Sale permitted under Section 6.15;
(v) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may make and own Investments received in
connection with the bankruptcy of suppliers and customers or received
pursuant to a plan of reorganization of any supplier or customer, in
each case in settlement of delinquent obligations or disputes with such
suppliers or customers; and
(vi) after the Conversion Date, the Parent Guarantor, the
Borrower and Subsidiaries of the Parent Guarantor may make and own
other Investments in an aggregate amount not to exceed $2.5 million at
any time outstanding.
6.5 Contingent Obligations
The Parent Guarantor and the Borrower shall not, nor shall the
Parent Guarantor cause or permit any Subsidiaries of the Parent Guarantor to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) the Guarantors may become and remain liable with
respect to Contingent Obligations under the Guarantees;
(ii) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may become and remain liable with respect to
Contingent Obligations in respect of customary indemnification and
purchase price adjustment obligations incurred in connection with Asset
Sales or other sales of assets; provided that the maximum assumable
liability in respect of all such obligations shall at no time exceed
the gross proceeds actually received by the Parent Guarantor, the
Borrower and Subsidiaries of the Parent Guarantor in connection with
such Asset Sales and other sales;
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(iii) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor, as applicable, may remain liable with respect to
existing Contingent Obligations described in Schedule B annexed hereto;
(iv) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may become and remain liable with respect to
Contingent Obligations under guarantees made under the Senior Notes;
and
(v) the Parent Guarantor, the Borrower and Subsidiaries of
the Parent Guarantor may become and remain liable with respect to
guarantees of Indebtedness or Contingent Obligations of a wholly-owned
Subsidiary of the Parent Guarantor and a Subsidiary of the Parent
Guarantor may become and remain liable with respect to guarantees of
Indebtedness or Contingent Obligations of the Parent Guarantor or a
wholly-owned Subsidiary of the Parent Guarantor.
6.6 Restriction on Fundamental Changes
Subject to Section 5.2 and other than a sale in accordance
with Section 2.5A.(ii)(a) and Section 6.14, the Parent Guarantor and the
Borrower shall not, nor shall the Parent Guarantor cause or permit any Material
Subsidiaries of the Parent Guarantor to, directly or indirectly, enter into any
transaction, or series of related transactions, of merger, amalgamation,
consolidation or combination, or consolidate, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
sublease, transfer or otherwise dispose of, in one transaction or in a series of
transactions, all or substantially all of its business, property or assets,
whether now owned or hereafter acquired, except:
(i) in connection with the Acquisitions; and
(ii) any Subsidiary of the Parent Guarantor may be merged,
amalgamated, consolidated or combined with or into the Parent Guarantor
or any wholly-owned Subsidiary of the Parent Guarantor or be
liquidated, wound up or dissolved, or all or substantially all of its
business, property or assets may be conveyed, sold, leased, transferred
or otherwise disposed of, in one transaction or in a series of
transactions, to the Parent Guarantor, the Borrower or to any
wholly-owned Subsidiary of the Parent Guarantor; provided, however,
that, (A) no Potential Event of Default or Event of Default shall have
occurred and be continuing or would result therefrom, (B) in the case
of such a merger, amalgamation, consolidation or combination of the
Parent Guarantor or the Borrower, on the one hand, and a Subsidiary of
the Parent Guarantor that is not a Guarantor, on the other hand, the
Parent Guarantor or the Borrower shall be the continuing or surviving
corporation, and (C) where one or more of the predecessor entities is
the Parent Guarantor, the Borrower or another Guarantor, the surviving
entity (i) if it is the Parent
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Guarantor, the Borrower or another Guarantor (I) continues to be bound
as such under this Agreement or the Guarantee of such Guarantor, as the
case may be, and (II) executes and delivers to the Lenders immediately
upon consummation of such transaction a written confirmation or
acknowledgment to such effect, in form and substance satisfactory to
CIBC/WG, together with evidence of appropriate corporate power,
authority and action and a written legal opinion (which may be of its
General Counsel) in form and substance satisfactory to CIBC/WG to the
effect that this Agreement and such Guarantee continue to be a legal,
valid and binding obligation of such entity, enforceable against such
entity in accordance with its terms (subject to customary exceptions in
respect of bankruptcy, insolvency and other equitable remedies) and
with respect to such other matters as CIBC/WG may reasonably request,
and (ii) if it is not the Parent Guarantor, the Borrower or another
Guarantor, executes and delivers to the Lenders immediately upon the
consummation of such transaction an assumption agreement, in form and
substance satisfactory to CIBC/WG, whereby such surviving entity
assumes the due and punctual performance of all obligations and
liabilities of such predecessor Guarantor under its Guarantee, together
with evidence of appropriate corporate power, authority and action and
a written legal opinion (which may be of its General Counsel) in form
and substance satisfactory to CIBC/WG to the effect that such Guarantee
is the legal, valid and binding obligation of such surviving entity,
enforceable against such surviving entity in accordance with its terms
(subject to customary exceptions in respect of bankruptcy, insolvency
and other equitable remedies) and with respect to such other matters as
CIBC/WG may reasonably request.
6.7 Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries
The Parent Guarantor shall not, nor shall it cause or permit
any Subsidiaries of the Parent Guarantor to, directly or indirectly, create or
otherwise cause or permit or suffer to exist or become effective any encumbrance
or restriction on the ability of any Subsidiary of the Parent Guarantor to (a)
pay dividends or make any other distributions on its Capital Stock or any other
interest or participation in, or measured by, such Subsidiary's profits; (b)
make loans or advances or pay any Indebtedness or other obligation owed to the
Parent Guarantor or to any Subsidiary of the Parent Guarantor; or (c) transfer
any of its property or assets to the Parent Guarantor or to any Subsidiary of
the Parent Guarantor (any such restriction or encumbrance, other than those
excepted in clauses (i) through (iv) below, a "Payment Restriction"), except for
such encumbrances or restrictions existing under or by reason of: (1) any
restrictions contained in (i) the Loan Documents, the Senior Secured Indenture
and any instrument governing the Take-Out Securities or Exchange Notes to the
extent Incurred in accordance with this Agreement; (ii) the indenture with
respect to the 13 3/4% Senior Notes of the Parent Guarantor due 2001 and 2002
(the "Senior Notes") as in effect on the Closing Date; (iii) the Indebtedness
pertaining
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to a Subsidiary of the Parent Guarantor that is not a Subsidiary of the Parent
Guarantor on the Closing Date in existence at the time such Subsidiary becomes a
Subsidiary of the Parent Guarantor; provided, however, that any such
Indebtedness was not incurred as a result of, in connection with or in
anticipation of the transaction pursuant to which such entity becomes a
Subsidiary of the Parent Guarantor and it does not apply to any Person, or the
properties of assets of any Person, other than the Subsidiary acquired and such
Indebtedness is otherwise permitted to be incurred pursuant to Section 6.1; (iv)
secured Indebtedness otherwise permitted to be incurred pursuant to Sections 6.1
and 6.2 that limits the right of the debtor to dispose of the assets securing
such Indebtedness; (2) customary non-assignment provisions of any lease
governing a leasehold interest of any Subsidiary of the Parent Guarantor; (3)
customary net worth provisions contained in leases and other agreements entered
into by a Subsidiary in the ordinary course of business; (4) customary
restrictions with respect to a Subsidiary pursuant to an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary; (5) applicable law; and (6) any
instrument that Refinances any Indebtedness effecting any such encumbrance or
restriction pursuant to clause (1) above; provided, however, that the provisions
relating to any such encumbrance or restriction in any such instrument are
substantially similar to those contained in the agreements referred to in clause
(1).
6.8 Transactions with Shareholders and Affiliates
The Parent Guarantor and the Borrower shall not, nor shall the
Parent Guarantor cause or permit any Subsidiaries of the Parent Guarantor to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate of the Parent
Guarantor or the Borrower (each of the foregoing, an "Affiliate Transaction");
provided, however, that the foregoing restriction shall not apply to: (i) any
transaction exclusively between the Parent Guarantor and the Borrower and any of
its wholly-owned Subsidiaries or exclusively between any of the Parent
Guarantor's wholly-owned Subsidiaries to the extent any are in compliance with
all of the terms of this Agreement, (ii) reasonable and customary fees paid to
members of the Board of Directors of the Parent Guarantor and the Borrower,
(iii) reasonable and customary fees and compensation paid to, and indemnity
provided on behalf of, officers, directors or employees of the Parent Guarantor
and the Borrower or any Subsidiaries of the Parent Guarantor, as determined by
the Board of Directors of the Parent Guarantor or any such Subsidiary or the
senior management thereof in good faith, including, without limitation,
issuances of stock, payment of bonuses and other transactions pursuant to
employment or compensation agreements, stock option agreements, indemnification
agreements and other arrangements in effect on the Closing Date or substantially
similar thereto; provided that no cash bonuses will be paid to officers,
directors or employees of the Parent Guarantor, the Borrower or Subsidiaries of
the Parent Guarantor other than pursuant to the bonus plans or arrangements in
effect on the Closing Date (including, without limitation, upon
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reaching performance targets determined by the Board of Directors of the Parent
Guarantor from time to time), (iv) Affiliate Transactions of aggregate value
less than $1 million which are on terms that are no less favorable to the Parent
Guarantor, the Borrower or the relevant Subsidiary than those that would have
been obtained in a comparable transaction by the Parent Guarantor, the Borrower
or such Subsidiary with an unrelated person, as determined by the Board of
Directors of the Parent Guarantor, and which are conducted in good faith, (v)
Affiliate Transactions in which the Parent Guarantor delivers to the Lenders an
opinion as to the fairness to the Parent Guarantor, the Borrower or such
Subsidiary from a financial point of view issued by an investment banking firm
of national standing, and (vi) the payment of management and advisory fees to
▇▇▇▇ ▇▇▇▇ Equity Partners, L.P. and its Affiliates and successors and assigns in
an amount not to exceed $675,000 per year.
6.9 Subsidiary Stock
Except for any sale of 100% of the Capital Stock or other
equity securities of any of the Subsidiaries of the Parent Guarantor in
compliance with the provisions of Section 6.4, the Parent Guarantor will not and
will not permit any Subsidiaries of the Parent Guarantor to directly or
indirectly sell, assign, pledge or otherwise encumber or dispose of any shares
of Capital Stock or other equity securities of any Subsidiaries of the Parent
Guarantor, except (i) to qualify directors if required by applicable law, (ii)
in the case of the Parent Guarantor's Subsidiaries, to the Parent Guarantor or
to a wholly-owned Subsidiary of the Parent Guarantor or (iii) Asset Sales made
in compliance with this Agreement.
6.10 Business Activities
The Parent Guarantor and the Borrower shall not, nor shall the
Borrower cause or permit any Subsidiaries of the Parent Guarantor to, directly
or indirectly, materially alter the nature of the consolidated business of the
Parent Guarantor, the Borrower and Subsidiaries of the Parent Guarantor from
that in existence immediately after giving effect to the Transactions or similar
or related businesses.
6.11 [Intentionally omitted]
6.12 [Intentionally omitted]
6.13 Refinancing of the Loans in Part
The Borrower shall not, nor shall the Parent Guarantor cause
or permit any Subsidiaries of the Parent Guarantor to, Incur any Indebtedness to
Refinance the Loans in part other than the Demand Take-Out Notes or the Exchange
Notes, unless the terms, conditions, covenants, events of default and other
provisions in respect of the instruments evidencing the Indebtedness Incurred to
Refinance the Loans in part
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shall have been approved in writing by the Required Lenders prior to the
Incurrence of any such Indebtedness; and provided that no Refinancing in part
shall result in the amount of the Loans outstanding being less than $75 million
and no Refinancing in part shall occur at a time when the amount of the Loans
outstanding is less than $75 million.
6.14 Asset Sales
The Parent Guarantor and the Borrower shall not, nor shall the
Parent Guarantor cause or permit any Subsidiaries of the Parent Guarantor to,
directly or indirectly, consummate any Asset Sale unless (1) the Parent
Guarantor and the Borrower or such Subsidiary, as the case may be, receives
consideration therefor at the time thereof at least equal to the fair market
value at the time of such Asset Sale of the property, assets or stock that is
the subject of such Asset Sale, (2) at least 80% of the consideration received
therefor by the Parent Guarantor or such Subsidiary is in the form of cash or
Cash Equivalents (provided that liabilities assumed in connection therewith
shall be treated as cash solely for the purpose of determining satisfaction of
the requirement set forth in this clause (2)) and (3) all of the Net Cash
Proceeds in respect thereof are applied by the Parent Guarantor and the Borrower
or a Subsidiary of the Parent Guarantor in accordance with Section 2.5A(ii)(a).
6.15 Transfer of Assets to Subsidiaries
The Parent Guarantor and the Borrower shall not, nor shall the
Parent Guarantor cause or permit any Subsidiaries of the Parent Guarantor to,
directly or indirectly, transfer (other than in the ordinary course of business
and other than pursuant to a Permitted Investment) any assets or property to any
Subsidiary of the Parent Guarantor that is not a Guarantor unless such
Subsidiary pays fair market value therefor to the Parent Guarantor or to a
wholly-owned Subsidiary of the Parent Guarantor and except as provided in
Sections 6.3, 6.4, 6.6 and 6.8. For purposes of this Section 6.15, the fair
market value paid by such Subsidiary shall not consist in whole or in part of
any securities or debt instruments of such Subsidiary or of any Affiliate of
such Subsidiary. Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Agreement shall prohibit or restrict the ability of
the Parent Guarantor, the Borrower or any Subsidiary of the Parent Guarantor to
create, hold and transfer cash into, newly-formed foreign Subsidiaries for the
purpose of acquiring the foreign inventories and equipment being acquired in the
P&G Acquisition or from transferring foreign inventory and equipment acquired in
the P&G Acquisition to such foreign subsidiaries.
6.16 Additional Guarantees
The Parent Guarantor and the Borrower will not permit any
Material Subsidiaries of the Parent Guarantor to be created unless such
Subsidiary executes a
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Guarantee of the Obligations of the Borrower under this Agreement. Thereafter,
such Subsidiary shall be a Guarantor for all purposes of this Agreement.
6.17 Security Interests
A. The Parent Guarantor and the Borrower shall, and shall
cause each of their respective Subsidiaries that are Guarantors to, duly and
punctually perform any and all acts and, at their expense, will promptly execute
or cause to be executed any and all further instruments and documents and take
such action as CIBC/▇▇ ▇▇▇▇ necessary or desirable in obtaining the full
benefits of this Agreement, the Security Documents and of each other Loan
Document and of the rights and powers herein and therein granted as may, in the
reasonable judgment of CIBC/WG, be necessary or desirable in order to grant and
maintain in favor of the Lenders a valid and perfected first priority security
interest in the Collateral, subject to no other Liens except as may be expressly
permitted under Section 6.2.
B. If the Collateral Agent or the Required Lenders
determine that they are required by Law to have appraisals prepared in respect
of Mortgaged Real Property, the Parent Guarantor and its Subsidiaries shall
provide to the Collateral Agent appraisals which satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of Financial
Institutions Reform Recovery and Enforcement Act of 1989, as amended, and which
shall be in form and substance reasonably satisfactory to the Collateral Agent
and the Required Lenders.
6.18 Impairment of Security Interest
Except as contemplated by this Agreement with respect to the
Non-Perfected Collateral, the Parent Guarantor and the Borrower will not take or
omit to take any action which action or omission would have the result of
adversely affecting or impairing the security interest in favor of the Lenders
with respect to the Collateral, and neither the Parent Guarantor nor the
Borrower shall grant to any Person, or suffer any Person (in each case other
than to the creditors or to the Borrower or the Subsidiaries to the extent
permitted hereby) to have any interest whatsoever in the Collateral except as
expressly permitted under Section 6.2. The Parent Guarantor and the Borrower
will not enter into any agreement or instrument that by its terms requires the
proceeds received from any sale of Collateral to be applied to repay, redeem,
defease or otherwise acquire or retire any Indebtedness of any Person, other
than pursuant to this Agreement, the Bridge Notes and the Senior Notes.
6.19 [Intentionally Omitted]
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6.20 Restriction on Tax Consolidation
Neither the Parent Guarantor nor the Borrower will, nor will
any of them permit any of their respective Subsidiaries to, file or consent to
the filing of any consolidated income tax return with any Person other than the
Borrower and the Subsidiaries.
6.21 Sale and Lease-Backs
Neither the Parent Guarantor nor the Borrower will, nor will
any of them permit any of their respective Subsidiaries to, directly or
indirectly, become or thereafter remain liable as lessee or as guarantor or
other surety with respect to the lessee's obligations under any lease, whether
an operating lease or a capital lease, of any Property, whether now owned or
hereafter acquired, (i) which such Person has sold or transferred or is to sell
or transfer to any other Person or (ii) which sale and such lease are part of
the same transaction or a series of related transactions or such sale and such
lease occur within one year of each other or are with the same other Person,
unless, immediately after giving effect to the incurrence of liability with
respect to sale-leaseback transaction, any such entity could incur $1.00 of
Indebtedness under Section 6.1(a) and the last paragraph of Section 6.1(b).
6.22 Limitation on Other Restrictions on
Amendment of Loan Documents
Neither the Parent Guarantor nor the Borrower will, nor will
any of them permit any of their respective Subsidiaries to, directly or
indirectly, enter into, suffer to exist or become or remain subject to any
agreement or instrument, except for the Loan Documents, that would prohibit or
restrict (including by way of a covenant, representation or warranty or event of
default), or require the consent of any Person to, any amendment to, or waiver
or consent to departure from the terms of, any of the Loan Documents.
6.23 Modifications of Certain Documents; Etc.
Neither the Parent Guarantor nor the Borrower will, nor will
any of them permit any of their respective Subsidiaries to, directly or
indirectly, (a) consent to any amendment, modification, supplement or waiver of
any of the provisions of (i) the Senior Notes (except for any supplemental
indenture that may be required by the indenture relating to the Senior Notes in
order to add guarantors thereto), any Subordinated Indebtedness or the P&G
Acquisition Agreement or (ii) any other document where (in the case of this
clause (ii) only) the effect of such amendment, modification, supplement or
waiver is reasonably likely to be materially adverse to the Lenders, and (in the
case of each of clauses (i) and (ii)) without the prior written approval of the
Required Lenders; and (b) amend, modify or change in any manner which is
reasonably likely to be materially adverse to the Lenders its certificate of
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incorporation (including, without limitation, by the filing of any certificate
of designation) or its by-laws (or any other organizational document), or any
agreement entered into with respect to its Capital Stock, nor will the Borrower
or any other Subsidiary of the Parent Guarantor enter into any new agreement
with respect to its Capital Stock in any manner which is reasonably likely to be
materially adverse to the Lenders.
6.24 Pledge of Additional Collateral
Promptly, and in any event within 30 days, after the
acquisition of any property or assets of the type that would have constituted
Pledged Collateral at the Closing Date excluding the shares of common stock of
the surviving corporation of the merger of RAI with and into MEM Company, Inc.
(the "Additional Collateral"), the Borrower and each Guarantor will, and each of
them will cause each of their respective Material Subsidiaries to, take all
action necessary or desirable, including the execution and delivery of all such
agreements, assignments, documents and instruments (including amendments to the
Loan Documents) and the filing of appropriate financing statements under the
provisions of the UCC or applicable governmental requirements in each of the
offices where such filing is necessary or appropriate, to grant the Collateral
Agent for the benefit of the Lenders a duly perfected first priority Lien on
such property or assets pursuant to and to the extent required by the Security
Agreement and this Agreement as of the Closing Date (if such acquisition occurs
prior to April 30, 1997) or as of April 30, 1997 (if such acquisition occurs
thereafter); provided, however, that none of the Capital Stock of any Subsidiary
organized outside of the United States of America or Canada need be pledged. In
the event that, after the Closing Date, the Borrower or any Guarantor acquires
or holds a fee interest in any Real Property Asset, the Borrower or such
Guarantor, as the case may be, will, and will cause each such Subsidiary to, (i)
take such actions and execute such documents as the Collateral Agent shall
reasonably require to create a new mortgage on such Real Property Asset of the
Lenders, the documents and instruments reasonably requested by the Collateral
Agent by April 30, 1997 (if such Real Property Asset is acquired or held before
such date) or within 30 days of such acquisition (if it occurs after such date).
The costs of all actions taken by the parties in connection with any action to
be taken under this Section 6.24, including reasonable costs of counsel for the
Collateral Agent, shall be for the account of the Borrower or the Guarantors,
which shall pay all sums due on demand.
6.25 Restrictions on Capital Expenditures
The Parent Guarantor and the Borrower will not and will not
permit any of their respective Subsidiaries to make or commit to make any
expenditure ("Capital Expenditures") for fixed capital assets (including,
without limitation, expenditures for maintenance and repairs which should be
capitalized in accordance with GAAP and including Capitalized Lease Obligations
but excluding insurance proceeds received in connection with a Casualty Event to
effect the repair,
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construction or rebuilding of the Asset which is the subject of the Casualty
Event) except for expenditures in the ordinary course of business not exceeding,
in the aggregate for the Parent Guarantor, the Borrower and all Subsidiaries of
the Parent Guarantor during the fiscal years set forth below, the following:
Period Amount
Closing until March 31, 1997 $5,000,000
Fiscal year ending March 31, 1998 $7,500,000
Fiscal years ending March 31, 1999
and thereafter $5,000,000
SECTION 7 EVENTS OF DEFAULT
If any of the following conditions or events ("Events of
Default") shall occur and be continuing:
7.1 Failure To Make Payments When Due
Failure to pay any installment of principal of the Loans when
due, whether at stated maturity, by acceleration, by notice of prepayment or
otherwise (whether or not such payment is prohibited by Section 8); or failure
to pay any interest on the Loans or any other amount due under this Agreement
which failure shall have continued for five days; or
7.2 Default in Other Agreements
Failure of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor to pay at final maturity any principal on
one or more issues of Indebtedness or Contingent Obligations of the Borrower or
of any Subsidiaries of the Parent Guarantor (other than Indebtedness referred to
in Section 7.1) or breach or default by the Parent Guarantor, the Borrower or
any Subsidiaries of the Parent Guarantor with respect to any other term of any
one or more issues of Indebtedness or Contingent Obligations of the Parent
Guarantor, the Borrower or of any Subsidiaries of the Parent Guarantor or any
agreement or instrument evidencing or securing such Indebtedness or Contingent
Obligations and such default or breach results in the acceleration of that
Indebtedness or Contingent Obligation prior to its stated maturity and, in
either case, the principal amount of such Indebtedness or Contingent Obligation
and all other such Indebtedness or Contingent Obligations of the Parent
Guarantor, the Borrower and Subsidiaries of the Parent Guarantor in respect of
which there is a failure to pay principal or interest or which has been so
accelerated equals $3 million or more; or
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7.3 Breach of Certain Covenants
Failure of the Parent Guarantor or the Borrower to perform or
comply with any covenant, term or condition contained in Section 2.5A(ii)(e),
2.5A(iv) or 5.2; or
7.4 Breach of Warranty
Any representation, warranty or certification made by the
Parent Guarantor, the Borrower or any other Guarantor in any Loan Document or in
any statement or certificate at any time given by the Parent Guarantor or the
Borrower in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false or incorrect in any material respect on the date as of
which made or deemed made; or
7.5 Other Defaults Under Agreement or Loan Documents
The Parent Guarantor or the Borrower shall default in the
performance of or compliance with any covenant, term or condition contained in
this Agreement or the other Loan Documents (other than those covered by Sections
7.1, 7.3, 7.4, 7.10 or 7.11) and such default shall not have been remedied or
waived in accordance with this Agreement within 30 days after the date of
written notice from the holder or holders of not less than 25% in aggregate
principal amount of the Loans then outstanding of such default; or
7.6 Involuntary Bankruptcy; Appointment
of Custodian, Etc.
A court of competent jurisdiction enters a Bankruptcy Order
under any Bankruptcy Law that:
(A) is for relief against the Parent Guarantor, the Borrower
or any other Material Subsidiary in an involuntary case or proceeding,
or
(B) appoints a Custodian of the Parent Guarantor, the
Borrower or any other Material Subsidiary for all or substantially all
of its properties, or
(C) orders the liquidation of the Parent Guarantor, the
Borrower or any other Material Subsidiary, and in each case the order
or decree remains unstayed and in effect for 60 days; or
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7.7 Voluntary Bankruptcy; Appointment
of Custodian, Etc.
The Parent Guarantor, the Borrower or any other Material
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of a Bankruptcy Order for relief
against it in an involuntary case or proceeding, or
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors or files a proposal or scheme of arrangement involving the
rescheduling or composition of its indebtedness, or
(E) consents to the filing of a petition in bankruptcy
against it, or
(F) shall generally not pay its debts when such debts become
due or shall admit in writing its inability to pay its debts generally;
or
7.8 Judgments and Attachments
Any money judgment, writ or warrant of attachment, or similar
process involving in any individual case or in the aggregate at any time an
amount in excess of $3 million (to the extent not covered by third-party
insurance as to which the insurance company has acknowledged coverage) shall be
entered or filed against the Parent Guarantor, the Borrower or any Subsidiaries
of the Parent Guarantor or any of their respective properties or assets and
shall remain undischarged, unvacated, unbonded or unstayed for a period of 60
days or in any event later than five days prior to the date of any proposed sale
thereunder; or
7.9 Dissolution
Any order, judgment or decree shall be entered against the
Parent Guarantor, the Borrower or any other Material Subsidiary decreeing the
dissolution or split-up of the Parent Guarantor, the Borrower or any Material
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
7.10 Guarantee
(i) Any Guarantee or any material provision thereof shall
cease to be in full force or effect (other than in accordance with its express
terms), or (ii) any
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Guarantor or any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under its Guarantee, or (iii) any
Guarantor shall default in the due performance or observance in any material
respect of any term, covenant or agreement on its part to be performed or
observed, after giving effect to any applicable grace periods, pursuant to its
Guarantee Agreement; or
7.11 Collateral Document Default
A. The Security Agreement (together with any other security
document delivered or to be delivered thereunder) after delivery thereof shall
for any reason fail to create or cease to maintain a valid and duly perfected
first priority security interest (to the extent that a security interest can be
created under the Uniform Commercial Code (as defined in the Security
Agreement)) except for Liens permitted by Section 6.2 in the Collateral (other
than the Non-Perfected Collateral subject to compliance with Section 5.15) until
such Collateral is released in accordance with the terms of this Agreement and
the Security Documents; or
B. The Collateral shall become subject to a pledge not
permitted under the Security Documents on the Collateral or any Person takes any
action to foreclose on such Collateral or takes any action inconsistent with the
security interest held by the Lenders that could have a material adverse effect
on the validity or requisite priority of such pledge; or
C. The enforceability of the Lender's security interest in
any Collateral shall be contested by the Parent Guarantor, the Borrower or any
Subsidiary of the Parent Guarantor; or
7.12 ERISA Matters
An ERISA Event shall occur or exist and, as a result of such
ERISA Event, together with all other such ERISA Events or conditions (which have
not been cured), the Parent Guarantor, the Borrower or any ERISA Affiliate shall
have incurred a liability to an Employee Benefit Plan, a Multiemployer Plan, the
PBGC or the Internal Revenue Service (or any combination of the foregoing) that
(individually or in the aggregate) has had a Material Adverse Effect; or
7.13 Environmental Matters
There shall have been asserted against the Parent Guarantor,
the Borrower or any Subsidiary of the Parent Guarantor, claims or liabilities,
whether accrued, absolute or contingent, based on or arising from the
generation, storage, transport, handling or disposal of Hazardous Materials by
the Parent Guarantor, the Borrower or any Subsidiary of the Parent Guarantor or
any Affiliate, or any predecessor in interest of the Parent Guarantor, the
Borrower or any Subsidiary of the Parent Guarantor or any Affiliate, or relating
to any site or facility owned, operated
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or leased by the Parent Guarantor, the Borrower or any Subsidiary of the Parent
Guarantor or any Affiliate, which claims or liabilities, singly or in the
aggregate, have had a Material Adverse Effect; or
7.14 Non-Monetary Judgment
Any non-monetary judgment, order or decree is entered against
the Parent Guarantor, the Borrower or any Subsidiary of the Parent Guarantor
which has had a Material Adverse Effect, and there shall be any period of 60
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
7.15 Injunction
The Parent Guarantor, the Borrower or any Subsidiary of the
Parent Guarantor is enjoined, restrained or in any way prevented by the order of
any Tribunal from conducting all or any material part of its business and such
order continues for more than 60 days; or
7.16 Damage, Strike, Casualty; Etc.
Any material damage to, or loss, theft or destruction of, any
Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than 60 consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility of the Parent
Guarantor, the Borrower or any Subsidiary of the Parent Guarantor if any such
event or circumstance, singly or in the aggregate, has had a Material Adverse
Effect; or
7.17 Licenses and Permits
The loss, suspension, forfeiture or revocation of, or failure
to renew, any license or permit now held or hereafter acquired by the Parent
Guarantor, the Borrower or any Subsidiary of the Parent Guarantor, if such loss,
suspension, revocation or failure to renew, singly or in the aggregate, has had
a Material Adverse Effect; or
7.18 Subordination Provisions
The subordination provisions relating to any Subordinated
Indebtedness (the "Subordination Provisions") shall fail in any material respect
to be enforceable by the Lenders (which have not effectively waived the benefits
thereof) in accordance with the terms thereof, or any Obligation (other than to
the extent the Parent Guarantor's Guaranty is pari passu with the Senior Notes)
shall fail to constitute Senior Debt (as defined in the Subordinated
Indebtedness); or the Parent Guarantor,
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the Borrower or any Subsidiary of the Parent Guarantor shall, directly or
indirectly, disavow or contest in any manner any of the Subordination
Provisions; or
7.19 Debt Tender Offer
The failure of the Parent Guarantor to commence a tender offer
(subject to customary conditions including the receipt of financing) for the
Parent Guarantor's 13 3/4% Senior Notes due 2001 and 2002 within 15 Business
Days after the Closing Date; provided that no Potential Event of Default or
Event of Default shall result hereunder if the Parent Guarantor does not so
commence a tender offer based upon its reasonable and good faith belief that the
price to be paid in a tender offer that successfully acquires a majority of the
Senior Notes (together with the consent requested by the Parent Guarantor to
modify the related indenture) will exceed 116.50% of the aggregate principal
amount (plus accrued interest).
THEN (i) upon the occurrence of any Event of Default described
in the foregoing Sections 7.6 or 7.7, all of the unpaid principal amount of and
accrued interest on the Loans and all other outstanding Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by the Parent Guarantor, and the commitments of the Lenders hereunder
shall thereupon terminate, and (ii) upon the occurrence of any other Event of
Default, the Lenders shall, upon written notice of the Required Lenders, by
written notice to the Parent Guarantor, declare all of the unpaid principal
amount of and accrued interest on the Loans and all other outstanding
Obligations to be, and the same shall forthwith become, due and payable, and the
obligations of the Lenders hereunder shall thereupon terminate; provided,
however, that if any declaration of acceleration under this Agreement occurs
solely because an Event of Default set forth in Section 7.2 has occurred and is
continuing, such declaration of acceleration shall be automatically annulled if
the holders of the Indebtedness which is the subject of such Event of Default
have rescinded their declaration of acceleration in respect of such Indebtedness
within thirty days of such acceleration of such Indebtedness and the Lenders
have received written notice thereof within such time and if no other Event of
Default has occurred during such thirty-day period which has not been cured or
waived in accordance with this Agreement. Nevertheless, if at any time after
acceleration of the maturity of the Loans, the Borrower shall pay all arrears of
interest and all payments on account of the principal thereof which shall have
become due otherwise than by acceleration (with interest on principal and, to
the extent permitted by law, on overdue interest, at the rates specified in this
Agreement or the Notes) and all Events of Default and Potential Events of
Default (other than non-payment of principal of and accrued interest on the
Loans and the Notes due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to Section 10.6, then the Lenders shall, upon
written notice of the Required Lenders, by written notice to the Parent
Guarantor rescind and annul the acceleration and its consequences; but such
action shall not
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affect any subsequent Event of Default or Potential Event of Default or impair
any right consequent thereon.
SECTION 8 PROVISIONS RELATING TO THE COLLATERAL AGENT
AND CIBC/WG
8.1 Appointment
Each Lender hereby irrevocably designates and appoints CIBC/WG
as Collateral Agent of such Lender to act as specified herein and in the other
Loan Documents, and each Lender hereby irrevocably authorizes CIBC/WG as the
Collateral Agent to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Collateral Agent by the terms of
this Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. The Collateral Agent agrees to act as such
upon the express conditions contained in this Section 8. Notwithstanding any
provision to the contrary elsewhere in this Agreement or in any other Loan
Document, the Collateral Agent shall not have any duties or responsibilities,
except those expressly set forth herein or in the other Loan Documents, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Collateral Agent. The provisions of
this Section 8 are solely for the benefit of the Collateral Agent and the
Lenders, and neither the Parent Guarantor, the Borrower nor any Subsidiaries of
the Parent Guarantor shall have any rights as a third party beneficiary of any
of the provisions hereof. In performing its functions and duties under this
Agreement, the Collateral Agent shall act solely as agent of the Lenders and the
Collateral Agent does not assume and shall not be deemed to have assumed any
obligation or relationship of agent or trust with or for the Parent Guarantor,
the Borrower or any Subsidiaries of the Parent Guarantor.
8.2 Delegation of Duties
The Collateral Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Collateral Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care except to the extent otherwise required by Section 8.3.
8.3 Exculpatory Provisions
Neither the Collateral Agent, CIBC/WG nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable
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for any action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Agreement or the other Loan Documents (except for its
or such Person's own gross negligence or willful misconduct) or (ii) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor or any of their respective officers
contained in this Agreement, any other Loan Documents, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Collateral Agent or CIBC/WG under or in connection with, this Agreement
or any other Loan Document or for any failure of the Parent Guarantor, the
Borrower or any Subsidiaries of the Parent Guarantor or any of their respective
officers to perform its obligations hereunder or thereunder. Neither Collateral
Agent nor CIBC/WG shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or the other Loan Documents, or to inspect
the properties, books or records of the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor. Neither Collateral Agent nor CIBC/WG shall
be responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the
Collateral Agent or CIBC/WG, as the case may be, to the Lenders or by or on
behalf of the Parent Guarantor, the Borrower or any Subsidiaries of the Parent
Guarantor to the Collateral Agent or CIBC/WG, as the case may be, or any Lender
or be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained
herein or therein or as to the use of the proceeds of the Loans or of the
existence or possible existence of any Default or Event of Default.
8.4 Reliance by Collateral Agent
The Collateral Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, facsimile, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including,
without limitation, counsel to the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor), independent accountants and other experts
selected by the Collateral Agent. The Collateral Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. As
between the Collateral Agent and the Lenders, the Collateral Agent shall in all
cases be fully
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protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders.
8.5 Notice of Default
The Collateral Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Collateral Agent has actually received notice from a Lender or the Parent
Guarantor or the Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default." In
the event that the Collateral Agent receives such a notice, the Collateral Agent
shall give prompt notice thereof to the Lenders. The Collateral Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided, that, as between the
Collateral Agent and the Lenders unless and until the Collateral Agent shall
have received such directions, the Collateral Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
8.6 Non-Reliance on Collateral Agent
and Other Lenders
Each Lender expressly acknowledges that neither the Collateral
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by the Collateral Agent hereinafter taken, including any
review of the affairs of the Parent Guarantor, the Borrower or any Subsidiaries
of the Parent Guarantor, shall be deemed to constitute any representation or
warranty by the Collateral Agent to any Lender. Each Lender represents to the
Collateral Agent that it has, independently and without reliance upon the
Collateral Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other condition, prospects and creditworthiness of the Parent Guarantor, the
Borrower or Subsidiaries of the Parent Guarantor and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the Collateral
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other condition, prospects
and creditworthiness of the Parent Guarantor, the Borrower or Subsidiaries of
the Parent Guarantor. The Collateral Agent shall not have any duty or
responsibility to provide any Lender with any credit or other
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information concerning the business, operations, assets, property, financial and
other condition, prospects or creditworthiness of the Parent Guarantor, the
Borrower or any Subsidiaries of the Parent Guarantor which may come into the
possession of the Collateral Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
8.7 Indemnification
The Lenders agree to indemnify each of the Collateral Agent in
its capacity as such and CIBC/WG ratably according to their respective
"percentages" as used in determining the Required Lenders at such time, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, incurred by or
asserted against the Collateral Agent in its capacity as such or CIBC/WG in any
way relating to or arising out of this Agreement or any other Loan Document, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby of any action taken or omitted to be taken by the Collateral
Agent or CIBC/WG under or in connection with any of the foregoing, but only to
the extent that any of the foregoing is not paid by the Parent Guarantor, the
Borrower or any Subsidiaries of the Parent Guarantor; provided, that no Lender
shall be liable to the Collateral Agent or CIBC/WG for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
gross negligence or willful misconduct of the Collateral Agent or CIBC/WG, as
the case may be. If any indemnity furnished to the Collateral Agent or CIBC/WG
for any purpose shall, in the opinion of the Collateral Agent or CIBC/WG, as the
case may be, be insufficient or become impaired, the Collateral Agent or CIBC/WG
may call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished. The agreements
in this Section 8.7 shall survive the payment of all Obligations.
8.8 Collateral Agent or CIBC/WG in Its
Individual Capacity
The Collateral Agent and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Parent Guarantor, the Borrower or Subsidiaries of the Parent Guarantor as though
the Collateral Agent were not the Collateral Agent hereunder. With respect to
the Loans made by it and all Obligations owing to it, the Collateral Agent shall
have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not the Collateral Agent and the terms
"Lender" and "Lenders" shall include the Collateral Agent in its individual
capacity.
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8.9 Resignation of the Collateral Agent;
Successor Collateral Agent
The Collateral Agent may resign as the Collateral Agent upon
20 days' notice to the Lenders, the Parent Guarantor and the Borrower. Upon the
resignation of the Collateral Agent, the Required Lenders shall appoint from
among the Lenders a successor Collateral Agent which is a bank or a trust
company for the Lenders subject to prior approval by the Borrower (such approval
not to be unreasonably withheld or delayed), whereupon such successor agent
shall succeed to the rights, powers and duties of the Collateral Agent, and the
term "Collateral Agent" shall include such successor agent effective upon its
appointment, and the resigning Collateral Agent's rights, powers and duties as
the Collateral Agent shall be terminated, without any other or further act or
deed on the part of such former Collateral Agent or any of the parties to this
Agreement. After the resignation of the Collateral Agent hereunder, the
provisions of this Section 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Collateral Agent under this Agreement.
SECTION 9 GUARANTEE
9.1 Unconditional Guarantee
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (such guarantee to be referred to herein as the "Guarantee") to each
of the Lenders and to the Collateral Agent and their respective successors and
assigns, that: (i) the principal of and interest on the Loans will be promptly
paid in full when due, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise and interest on the overdue principal, if
any, and interest on any interest, to the extent lawful, of the Loans and all
other obligations of the Borrower to the Lenders or the Collateral Agent
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (ii) in case of any extension
of time of payment or renewal of any of the Loans or of any such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set forth
in Section 9.5. Each Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Loans or this Agreement, the absence of any action to
enforce the same, any waiver or consent by any of the Lenders with respect to
any provisions hereof or thereof, the recovery of any judgment against the
Borrower, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Borrower,
any right to require a proceeding first against the
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Borrower, protest, notice and all demands whatsoever and covenants that this
Guarantee will not be discharged except by complete performance of the
obligations contained in the Loans, this Agreement and in this Guarantee. If any
Lender or the Collateral Agent is required by any court or otherwise to return
to the Borrower, any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Borrower or any Guarantor, any amount
paid by the Borrower or any Guarantor to the Collateral Agent or such Lender,
this Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Guarantor further agrees that, as between each
Guarantor, on the one hand, and the Lenders and the Collateral Agent, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Section 7 for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Section 7, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Guarantee.
9.2 Ranking of Guarantee
The obligations of each Guarantor to the Lenders and to the
Collateral Agent pursuant to the Guarantee of such Guarantor and this Agreement
are expressly senior in right of payment to the Senior Notes and pari passu with
all other Indebtedness of such Guarantor (except that the Guarantee of the
Parent Guarantor is pari passu with its obligations under the Senior Notes).
9.3 Severability
In case any provision of this Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
9.4 Release of a Guarantor
Upon the sale or disposition (whether by merger, stock
purchase, asset sale or otherwise) of a Guarantor (or all or substantially all
its assets) to an entity which is not a Subsidiary of the Parent Guarantor and
which sale or disposition is otherwise in compliance with the terms of this
Agreement, such Guarantor shall be deemed released from all obligations under
this Section 9 without any further action required on the part of the Collateral
Agent or any Lender; provided, however, that any such termination shall occur
only to the extent that all obligations of such Guarantor under all of its
guarantees of, and under all of its pledges of assets or other security
interests which secure, such Indebtedness of the Borrower shall also terminate
upon such release, sale or transfer.
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The Collateral Agent shall deliver an appropriate instrument
evidencing such release upon receipt of a request by the Parent Guarantor
accompanied by an Officers' Certificate certifying as to the compliance with
this Section 9.4. Any Guarantor not so released remains liable for the full
amount of principal of and interest on the Loans as provided in this Section 9.
9.5 Limitation of Guarantor's Liability
Each Guarantor and by its acceptance hereof each of the
Lenders hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the Lenders
and such Guarantor hereby irrevocably agree that the obligations of such
Guarantor under the Guarantee shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to Section 9.7, result in the
obligations of such Guarantor under the Guarantee not constituting such
fraudulent transfer or conveyance.
9.6 Guarantors May Consolidate, etc.,
on Certain Terms
(a) Nothing contained in this Agreement or in the Loans shall
prevent any consolidation or merger of a Guarantor with or into the Borrower or
another Guarantor or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety, to the Parent
Guarantor or another Guarantor. Upon any such consolidation, merger, sale or
conveyance, the Guarantee given by such Guarantor shall no longer have any force
or effect.
(b) Except as set forth in Section 6.7, nothing contained in
this Agreement or in the Loans shall prevent any consolidation or merger of a
Guarantor with or into a corporation or corporations other than the Borrower or
another Guarantor (whether or not affiliated with the Guarantor); provided,
however, that, subject to Sections 9.4 and 9.6(a), (i) immediately after such
transaction, and giving effect thereto, no Potential Event of Default or Event
of Default shall have occurred as a result of such transaction and be
continuing, and (ii) upon any such consolidation, merger, sale or conveyance,
the Guarantee of such Guarantor set forth in this Section 9, and the due and
punctual performance and observance of all of the covenants and conditions of
this Agreement to be performed by such Guarantor, shall be expressly assumed (in
the event that the Guarantor is not the surviving corporation in the merger), by
supplemental indenture satisfactory in form to the Collateral Agent, executed
and delivered to the Collateral Agent, by the corporation formed by such
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consolidation, or into which the Guarantor shall have merged, or by the
corporation that shall have acquired such property. In the case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture executed and delivered to the
Collateral Agent and satisfactory in form to the Collateral Agent of the due and
punctual performance of all of the covenants and conditions of this Agreement to
be performed by the Guarantor, such successor corporation shall succeed to and
be substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor.
9.7 Contribution
In order to provide for just and equitable contribution among
the Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Parent
Guarantor's obligations with respect to the Obligations. "Adjusted Net Assets"
of such Guarantor at any date shall mean the lesser of (x) the amount by which
the fair value of the property of such Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date (other than liabilities of such Guarantor under Subordinated
Indebtedness)), but excluding liabilities under the Guarantee, of such Guarantor
at such date and (y) the amount by which the present fair salable value of the
assets of such Guarantor at such date exceeds the amount that will be required
to pay the probable liabilities of such Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date and after giving effect to any collection from any Subsidiary of such
Guarantor in respect of the obligations of such Subsidiary under the Guarantee),
excluding debt in respect of the Guarantee of such Guarantor, as they become
absolute and matured.
9.8 Waiver of Subrogation
Until the Loans are indefeasibly paid in full, each Guarantor
hereby irrevocably waives any claim or other rights which it may now or
hereafter acquire against the Borrower that arise from the existence, payment,
performance or enforcement of such Guarantor's obligations under its Guarantee
and this Agreement, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Lender against the Borrower, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the Borrower,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to any Guarantor in violation of the preceding
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sentence and the Loans shall not have been paid in full, such amount shall be
deemed to have been paid to such Guarantor for the benefit of, and held in trust
for the benefit of, the Lenders, and shall forthwith be paid to the Collateral
Agent for the benefit of such Lenders to be credited and applied upon the Loans,
whether matured or unmatured, in accordance with the terms of this Agreement.
Each Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by this Agreement and that the
waiver set forth in this Section 10.8 is knowingly made in contemplation of such
benefits.
9.9 Evidence of Guarantee
To evidence their guarantees to the Lenders set forth in this
Section 9, each of the Guarantors hereby agrees to execute the notation of
Guarantee in substantially the form included in Exhibit VII. Each such notation
of Guarantee shall be signed on behalf of each Guarantor by two Officers, or an
Officer and an Assistant Secretary or one Officer shall sign and one Officer or
an Assistant Secretary (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to such notation of
Guarantee.
9.10 Waiver of Stay, Extension or Usury Laws
Each Guarantor covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law that would prohibit or forgive such Guarantor from
performing its Guarantee as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Agreement; and (to the extent that it may lawfully do so) each Guarantor
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Collateral Agent, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 10 MISCELLANEOUS
10.1 Representation of the Lenders
Each Lender hereby represents that (i) it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933,
as amended, or an institutional "accredited investor" as defined in
subparagraphs (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act of
1933, as amended, (ii) it will purchase the Notes hereunder for its own account
or for one or more accounts as to each of which it exercises sole investment
discretion, (iii) it does not beneficially own 10% or more of the Parent
Guarantor Common Stock (as beneficial ownership is determined in accordance with
Rule 13d-3 under the Exchange Act), (iv) it has had opportunities to
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ask questions of, and receive answers from, officers and other representatives
of the Parent Guarantor and its Subsidiaries with respect to the business and
financial condition of the Parent Guarantor and its Subsidiaries, to obtain such
additional information concerning the Parent Guarantor and its Subsidiaries as
such Lender has deemed relevant in connection with its investment decision and
such information as such Lender has deemed necessary to verify such information,
(v) it has no intention to transfer the Notes; provided that the disposition of
its property shall at all times be and remain within its control, subject,
however, to compliance with federal and state securities laws, (vi) it
acknowledges that the Notes have not been registered under the Securities Act or
any other applicable securities laws, and unless so registered, may not be
offered, sold or otherwise transferred except in compliance with the
registration requirements of the Securities Act and any other applicable
securities laws, pursuant to an exemption therefrom or in a transaction not
subject thereto, and (vii) it acknowledges that each certificate representing
the Note will contain a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE REGISTRATION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF OR THE ISSUE DATE OF THE BRIDGE
NOTE WHICH WAS CONVERTED INTO THIS NOTE, AS THE CASE MAY BE, AND THE
LAST DATE ON WHICH THE BORROWER OR AN AFFILIATE OF THE BORROWER WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A)
TO THE BORROWER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE
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MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF SUBPARAGRAPHS
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE HAVING AN AGGREGATE
PRINCIPAL AMOUNT OF NOT LESS THAN $250,000, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT; AND SUBJECT TO THE BORROWER'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION REASONABLY SATISFACTORY TO IT, AND IN THE CASE OF ANY OF
THE FOREGOING CLAUSES (A)-(F), A CERTIFICATE OF TRANSFER IN FORM
REASONABLY SATISFACTORY TO THE BORROWER IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE BORROWER AND, IN THE CASE OF CLAUSE (E), A
TRANSFEREE LETTER OF REPRESENTATION IN THE FORM ATTACHED TO THIS NOTE
IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE BORROWER. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
10.2 Participations in and Assignments
of Loans and Notes
A. Subject to Section 10.1, each Lender shall have the
right at any time to sell, assign, transfer or negotiate all or any portion of
its Notes or its Loan Commitment to one or more commercial lenders or other
financial institutions that are "qualified institutional buyers" or
institutional "accredited investors"; provided that such Person does not
beneficially own (as determined in accordance with Rule 13d-3 under the Exchange
Act) 10% or more of the Parent Guarantor Common Stock and such Person agrees to
be bound by the covenants set forth in this Section 10.2. In the case of any
sale, transfer or negotiation of all or part of the Notes or any Loan Commitment
authorized under this Section 10.2A, the assignee, transferee or recipient shall
become a party to this Agreement as a Lender by execution of an Assignment and
Assumption Agreement; provided that (i) at such time Section 2.1A or 2.2A, as
the case may be, shall be deemed modified to reflect the Loan Commitment of such
new Lender and of the existing Lenders and (ii) upon surrender of the Notes, new
Notes will be issued, at the Borrower's expense, to such new Lender and to the
assigning Lender, such new Notes to be in conformity with the requirements of
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Section 2.1D or 2.2E as the case may be (with appropriate modifications) to the
extent needed to reflect the revised Loan Commitment; and provided, further,
that such transfer or assignment will not be effective until recorded by the
Borrower on the Register pursuant to Section 5.13. To the extent of any
assignment pursuant to this Section 10.2A, the assigning Lender shall be
relieved of its obligations hereunder with respect to its assigned Loan
Commitment, and the assignee, transferee or recipient shall have, to the extent
of such sale, assignment, transfer or negotiation, the same rights, benefits and
obligations as it would if it were a Lender with respect to such Notes or Loan
Commitment, including, without limitation, the right to approve or disapprove
actions which, in accordance with the terms hereof, require the approval of a
Lender. At the time of each assignment pursuant to this Section 10.2A to a
Person which is not already a Lender hereunder and which is not a United States
Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue
Code) for Federal income tax purposes, such Person shall provide to the Parent
Guarantor and the Agent the appropriate Internal Revenue Service Forms described
in Section 10.2E.
B. Each Lender may grant participations in all or any part of
its Notes or its Loan Commitment to one or more commercial lenders or other
financial institutions that are "qualified institutional buyers" as defined in
Rule 144A under the Securities Act of 1933, as amended, or institutional
"accredited investors" as defined in subparagraphs (a)(1), (2), (3) or (7) of
Rule 501 under the Securities Act of 1933, as amended.
C. The Borrower shall, at its own cost and expense, provide
such certificates, acknowledgments and further assurances in respect of this
Agreement and the Loans as any Lender may reasonably require in connection with
any participation, transfer or assignment pursuant to this Section 10.2.
D. Nothing in this Agreement shall prevent or prohibit any
Lender from pledging its Loan and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank.
E. Each Lender that is an assignee or transferee of an
interest under this Agreement pursuant to Section 10.2A (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer) and that is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) agrees to deliver to the
Borrower, on the date of such assignment or transfer to such Lender, (i) two
accurate and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying to such Lender's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Note, or (ii) if the Lender is not
a "bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code
and cannot deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (i) above, two accurate and complete original signed copies
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of Internal Revenue Service Form W-8 (or successor form) certifying to such
Lender's entitlement to a complete exemption from United States withholding tax
with respect to payments of interest to be made under this Agreement and under
any Note. In addition, each Lender agrees that, when a lapse in time or change
in circumstances renders the previous certification obsolete or inaccurate in
any material respect, it will deliver to the Borrower two new accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001,
or Form W-8, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Borrower of its inability to deliver any such Form or Certificate. Subject to
Section 10.2A and the immediately succeeding sentence, the Parent Guarantor
shall be entitled, to the extent it is required to do so by law, to deduct or
withhold income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder or made on any other Loan Document for the account of
any Lender which is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) for U.S. Federal income tax
purposes to the extent that such Lender has not provided to the Borrower U.S.
Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding.
10.3 Expenses
Whether or not the transactions contemplated hereby shall be
consummated, the Borrower agrees to promptly pay (i) all the actual and
reasonable out-of-pocket costs and expenses of preparation of the Loan Documents
and all the costs of furnishing all opinions by counsel for the Borrower
(including without limitation any opinions requested by the Lender as to any
legal matters arising hereunder), and of the Borrower's performance of and
compliance with all agreements and conditions contained herein on its part to be
performed or complied with; (ii) the fees, expenses and disbursements of one
firm of outside counsel to the Lenders in connection with the negotiation,
preparation, execution and administration of the Loan Documents and the Loans
hereunder, and any amendments, modifications and waivers hereto or thereto and
consents to departures from the terms hereof and thereof; and (iii) after the
occurrence and during the continuance of an Event of Default, all costs and
expenses (including attorneys fees, including allocated costs of internal
counsel (unless represented by outside counsel), and costs of settlement)
incurred by the Lenders or the Collateral Agent in enforcing any Obligations of
or in collecting any payments due from the Borrower hereunder or under the Notes
by reason of such Event of Default or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or of any insolvency or bankruptcy proceedings.
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10.4 Indemnity
In addition to the payment of expenses pursuant to Section
10.3, whether or not the transactions contemplated hereby shall be consummated,
the Borrower agrees to indemnify, pay and hold each of the Lenders, any holder
of any of the Notes, CIBC/WG and the Collateral Agent, and each of their
officers, directors, employees, agents, and affiliates (collectively called the
"Indemnitees"), harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of one firm of counsel
(plus appropriate local counsel) for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated as a party thereto), which
may be suffered by, imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect of,
relating to or arising out of this Agreement, the other Loan Documents, the
Lenders' agreements to make the Loans or the use or intended use of any of the
proceeds of the Loans hereunder, the issuance of the Exchange Notes or the
Take-Out Securities or the Transactions (the "indemnified liabilities");
provided, however, that the Borrower shall have no obligation to an Indemnitee
hereunder with respect to indemnified liabilities (i) to the extent such is
finally judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure of such
Indemnitee to perform its obligations under any Loan Document or (C) such
Indemnitee's violation of law or (ii) in connection with the obligations of any
Indemnitee under any Loan Document or for any transfer fees. Without limiting
the generality of the foregoing, the Borrower will (x) indemnify the Collateral
Agent for any payments that the Collateral Agent is required to make under any
indemnity issued to any Lender referred to in Section 4.01(c) of the Security
Agreement, or to any bank referred to in Section 4.02 of the Security Agreement
to which remittances in respect of Accounts, as defined therein, are to be made
and (y) indemnify each Creditor and each other Indemnitee from, and hold each
Creditor harmless against, any Losses described in the preceding sentence (but
excluding, as provided in the preceding sentence, any Loss to the extent
resulting from the gross negligence or bad faith of such Indemnitee) arising
under any Environmental Law as a result of (A) the past, present or future
operations of the Parent Guarantor, the Borrower or any Subsidiary of the Parent
Guarantor (or any predecessor in interest), (B) the past, present or future
condition of any site or facility owned, operated or leased at any time by the
Parent Guarantor, the Borrower or any Subsidiary of the Parent Guarantor (or any
predecessor in interest), or (C) any Release or threatened Release of any
Hazardous Materials at or from any such site or facility, including any such
Release or threatened Release that shall occur during any period when any
Creditor shall be in possession of any such site or facility following the
exercise by such Creditor of any of its rights and remedies hereunder or under
any of the Security Documents. To the extent that the undertaking to indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any
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law or public policy, the Borrower shall contribute the maximum portion which it
is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the Indemnitees or any
of them.
10.5 Setoff
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default, each Lender and
each subsequent holder of any Note is hereby authorized by the Borrower at any
time or from time to time, without notice to the Borrower, or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured but not including trust accounts or any other accounts held
for the benefit of another Person) and any other Indebtedness at any time held
or owing by such Person or that subsequent holder to or for the credit or the
account of the Borrower against and on account of the obligations and
liabilities of the Borrower to such Person or that subsequent holder under this
Agreement and the Notes, including, but not limited to, all claims of any nature
or description arising out of or connected with this Agreement or the Notes,
irrespective of whether or not (a) such Person or that subsequent holder shall
have made any demand hereunder or (b) such Person or that subsequent holder
shall have declared the principal of or the interest on its portion of the Loans
and its Notes and other amounts due hereunder to be due and payable as permitted
by Section 7 and although said obligations and liabilities, or any of them, may
be contingent or unmatured.
10.6 Amendments and Waivers
No amendment, modification, termination or waiver of any term
or provision of this Agreement, of the Notes, any Guarantee or, prior to the
execution and delivery thereof, of the form of the Registration Rights Agreement
or the form of the Senior Secured Indenture or consent to any departure by the
Borrower or any Guarantor therefrom, shall in any event be effective without the
prior written concurrence of the Borrower or such Guarantor, as the case may be,
and the Required Lenders, and, upon the request of any Lender, the receipt of a
written opinion of counsel of the Parent Guarantor (which may be its General
Counsel) addressed to the Lenders to the effect that such amendment,
modification, termination, waiver or consent does not violate or conflict with
any of the terms and provisions of any Contractual Obligation of the Borrower or
such Guarantor, as the case may be; provided, however, that, without the prior
written consent of each Lender affected, an amendment, modification, termination
or waiver of this Agreement, any Notes, any Guarantee, and, prior to the
execution and delivery thereof, of the form of Registration Rights Agreement and
the form of Senior Secured Indenture or consent to departure from a term or
provision hereof or thereof may not: (i) reduce the principal amount of Notes
whose holders must consent to any such amendment,
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modification, termination, waiver or consent; (ii) reduce the rate of or extend
the time for payment of principal or interest on any Note; (iii) reduce the
principal amount of any Note; (iv) make any Note payable in money other than
that stated in the Note; (v) make any change in Section 2.5A(iv) or in the
definition of Change of Control, in the last paragraph of Section 7 or in
Section 10.4, 10.5 or this Section 10.6; or (vi) reduce the rate or extend the
time of payment of fees or other compensation payable to the Lenders hereunder;
and provided, further, that without the consent of the Collateral Agent, no such
amendment, modification, termination or waiver may amend, modify, terminate or
waive any provision of Section 8 as the same applies to the Collateral Agent or
any other provision of this Agreement as it relates to the rights or obligations
of the Collateral Agent. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on the Parent Guarantor in any case shall entitle the Parent
Guarantor to any further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this Section 10.6 shall be binding upon each holder of the Notes at the
time outstanding, each further holder of the Notes, and, if signed by the
Borrower or a Guarantor, on the Borrower and such Guarantor.
10.7 Independence of Covenants
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitation of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
10.8 Entirety
The Loan Documents embody the entire agreement of the parties
and supersede all prior agreements and understandings, if any, relating to the
subject matter hereof and thereof.
10.9 Notices
Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by mail and shall be
deemed to have been given when delivered in person, upon receipt of telecopy or
telex against receipt of answer back or two Business Days after depositing it in
the mail, registered or certified, with postage prepaid and properly addressed.
For the purposes hereof, the addresses of the parties hereto (until notice of a
change thereof is delivered as provided in this Section 10.9) shall be set forth
under each party's name on the signature pages hereto and any additional
Guarantors shall (until notice of a change thereof is delivered as
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provided in this Section 10.9) have the address set forth under the Borrower's
name on the signature page hereto.
10.10 Survival of Warranties and Certain Agreements
A. All agreements, representations and warranties made herein
shall survive the execution and delivery of this Agreement, the making of the
Loans hereunder and the execution and delivery of the Notes and, notwithstanding
the making of the Loans, the execution and delivery of the Notes or any
investigation made by or on behalf of any party, shall continue in full force
and effect. The closing of the transactions herein contemplated shall not
prejudice any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or other
remedies.
B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of the Parent Guarantor set forth in
Sections 10.3, 10.4 and 10.22 shall survive the payment of the Loans and the
Notes and the termination of this Agreement.
10.11 Failure or Indulgence Not Waiver;
Remedies Cumulative
No failure or delay on the part of the Collateral Agent or any
Lender or any holder of any Note in the exercise of any power, right or
privilege hereunder, under a Guarantee, under the Notes or under the Security
Documents shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under this Agreement, under a Guarantee or the Notes are
cumulative to and not exclusive of any rights or remedies otherwise available.
10.12 Severability
In case any provision in or obligation under this Agreement,
under a Guarantee or the Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
10.13 Headings
Sections and Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
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10.14 Applicable Law
THIS AGREEMENT, EACH GUARANTEE AND THE NOTES SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
10.15 Successors and Assigns; Subsequent
Holders of Notes
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of the Lenders. The terms and
provisions of this Agreement and each Guarantee shall inure to the benefit of
any permitted assignee or transferee of the Notes pursuant to Section 10.2A, and
in the event of such transfer or assignment, the rights and privileges herein
conferred upon the Lenders shall automatically extend to and be vested in such
permitted transferee or assignee, all subject to the terms and conditions
hereof. Except as provided in Section 10.6, in determining whether the holders
of a sufficient aggregate principal amount of the Loans shall have consented to
any action under this Agreement, any amount of the Loans owned or held by the
Borrower, any Guarantor or any of their respective Affiliates shall be
disregarded. The Borrower's rights or any interest therein hereunder may not be
assigned without the prior express written consent of each of the Lenders.
10.16 Counterparts; Effectiveness
This Agreement and any amendments, waivers, consents or
supplements 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 an original, but all such counterparts together shall
constitute but one and the same instrument. This Agreement shall become
effective upon the execution of a counterpart hereof by each of the parties
hereto, and delivery thereof to the Collateral Agent or, in the case of the
Lenders, written telex or facsimile notice or telephonic notification (confirmed
in writing) of such execution and delivery.
10.17 Consent to Jurisdiction; Venue;
Waiver of Jury Trial
A. Any legal action or proceeding with respect to this
Agreement, any Note or any Guarantee may be brought in the courts of the State
of New York or of the United States for the Southern District of New York, and,
by execution and delivery of this Agreement, each of the parties to this
Agreement hereby irrevocably accepts for itself and in respect of its respective
property, generally and
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unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
to this Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or claim, in any
legal action or proceeding with respect to this Agreement, the Notes or the
Guarantees brought in any of the aforesaid courts, that any such court lacks
jurisdiction over such party. Each of the parties to this Agreement irrevocably
consents to the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such party, at its respective address for notices pursuant to Section 10.9, such
service to become effective 30 days after such mailing. To the extent permitted
by law, each of the parties to this Agreement hereby irrevocably waives any
objection to such service of process and further irrevocably waives and agrees
not to plead or claim in any action or proceeding commenced hereunder or under
any Note or any Guarantee that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to this
Agreement to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against any party in any other
jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement, the Notes or the Guarantees brought in the courts referred
to in clause A above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
C. Each of the parties to this Agreement hereby irrevocably
waives all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement, the Notes or the Guarantees or the
transactions contemplated hereby or thereby.
10.18 Sharing of Benefits
Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Loan Documents, or otherwise)
which is applicable to the payment of the principal of, or interest on, the
Loans of a sum which with respect to the related sum or sums received by other
Lenders is in a greater proportion than the total of such Obligation then owed
and due to such Lender bears to the total of such Obligation then owed and due
to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the Borrower
to such Lenders in such amount as shall result in a proportional participation
by all of the Lenders in such amount; provided that if all or any portion of
such excess amount is thereafter recovered from such
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Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
10.19 Taxes and Other Taxes
A. Except as provided in this Section 10.19, any and all
payments by the Borrower hereunder or under any of the other Loan Documents
shall be made free and clear of and without deduction or withholding for any and
all present or future Taxes, excluding (i) in the case of each Lender and the
Collateral Agent, Taxes imposed on its net income and franchise taxes imposed on
it by the jurisdiction under the laws of which such Person is organized or any
political subdivision thereof, (ii) in the case of each such Lender, any Taxes
that are in effect and that would apply to a payment to such Person, as
applicable, as of the Closing Date, and (iii) if any Person acquires any
interest in this Agreement (a "Transferee"), any Taxes to the extent that they
are in effect and would apply to a payment to such Transferee as of the date of
the acquisition of such interest, as the case may be (all such nonexcluded Taxes
being hereinafter referred to as "Covered Taxes"). If the Borrower shall be
required by Law or the administration thereof to deduct or withhold any Covered
Taxes from or in respect of any sum payable hereunder or under any other Loan
Document, (a) unless such requirement results from the failure of the payee to
perform its obligations under Section 10.2E, the sum payable shall be increased
as may be necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional amounts paid
under this paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made; (b) the
Borrower shall make such deductions or withholdings; and (c) the Borrower
forthwith shall pay the full amount deducted or withheld to the relevant
taxation or other authority in accordance with applicable Law.
B. The Borrower agrees to pay forthwith any present or future
stamp documentary taxes or any other excise or property taxes, charges or
similar levies (all such taxes, charges and levies being herein referred to as
"Other Taxes") imposed by any jurisdiction (or any political subdivision or
taxing authority thereof or therein) which arise from any payment made by the
Borrower hereunder or under any of the other Loan Documents or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any of the other Loan Documents.
C. The Borrower agrees to indemnify the Agent and each of the
Lenders for the full amount of Covered Taxes or Other Taxes not deducted or
withheld and paid by the Borrower in accordance with Section 10.19(A) and (B) to
the relevant taxation or other authority and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
any such Covered Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days from the date
such Lender makes written demand therefor. A certificate as to the amount of
such Covered Taxes or
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Other Taxes and evidence of payment thereof submitted to the Borrower shall be
prima facie evidence, absent manifest error, of the amount due from the Borrower
to such Lender.
D. The Parent Guarantor shall furnish to each of the Lenders
the original or a certified copy of a receipt evidencing any payment of Taxes or
Other Taxes made by the Parent Guarantor as soon as such receipt becomes
available.
E. The provisions of this Section 10.19 shall survive the
termination of the Agreement and repayment of all Obligations.
10.20 Waiver of Stay, Extension or Usury Laws
The Borrower and the Guarantors covenant (to the extent that
they may lawfully do so) that they will not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Borrower or the Guarantors from paying all or any portion of the principal of or
interest on the Loans as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Agreement; and (to the extent that they may lawfully do so) the Borrower
and the Guarantors hereby expressly waive all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Lenders, but will suffer and permit the execution of
every such power as though no such law had been enacted.
10.21 Requirements of Law
(a) In the event that any change in law occurring after the
date that any lender becomes a Lender party to this Agreement with respect to
such Lender shall, in the opinion of such Lender, require that any Bridge Loan
Commitment of such Lender be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
such Lender or any corporation controlling such Lender, and such change in law
shall have the effect of reducing the rate of return on such Lender's or such
corporation's capital, as the case may be, as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation, as the case may be, could have achieved but for such change in law
(taking into account such Lender's or such corporation's policies, as the case
may be, with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time following notice by such Lender to the
Borrower of such change in law as provided in paragraph (b) of this Section
10.21, within 15 days after demand by such Lender, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such corporation, as the case may be, for such reduction.
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(b) The Borrower shall not be required to make any payments to
any Lender for any additional amounts pursuant to this Section 10.21 unless such
Lender has given written notice to the Borrower, of its intent to request such
payments prior to or within 60 days after the date on which such Lender became
entitled to claim such amounts. If any Lender requests compensation from the
Parent Guarantor under this Section 10.21, the Borrower may, by notice to such
Lender, suspend the obligation of such Lender thereafter to make or continue
Loans, until the requirement of law giving rise to such request ceases to be in
effect; provided that such suspension shall not affect the right of such Lender
to receive the compensation so requested.
10.22 Confidentiality
Each Lender shall hold all non-public information obtained
pursuant to the requirements of or in connection with this Agreement which has
been identified as confidential by the Borrower in accordance with such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by the Borrower that in any event a Lender may make disclosures reasonably
required by any bona fide assignee, transferee or participant in connection with
the contemplated assignment or transfer by such Lender of any Loans or any
participation therein or as required or requested by any governmental agency or
representative thereof or pursuant to legal process; provided that unless
specifically prohibited by applicable law or court order, each Lender shall
notify the Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information; and
provided, further, that in no event shall any Lender be obligated or required to
return any materials furnished by the Parent Guarantor, the Borrower or any
Subsidiaries of the Parent Guarantor. Each Lender acknowledges that it may from
time to time receive information that would be considered material, non-public
information within the meaning of the federal securities laws and that its use
of such information, if received, will be restricted by such laws as in effect
from time to time. In connection with any sales, assignments or transfers
referred to in Section 10.2A, a Lender shall obtain agreements from the
purchasers, assignees or transferees, as the case may be, reasonably
satisfactory to the Borrower, that such parties will comply with this Section
10.22.
10.23 Role of Special Counsel
The role of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to the
Lenders, has been limited to functioning on the Loan Documents and such firm has
not performed a due diligence investigation with respect to the Parent
Guarantor, the Borrower, any Subsidiaries of the Parent Guarantor, the Acquired
Business or their respective affairs.
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10.24 Joint and Several Liability
Except as otherwise expressly provided herein, the Parent
Guarantor, the Borrower or any Subsidiary of the Parent Guarantor shall be
jointly and severally liable for the performance of all Obligations and
covenants under this Agreement and the Notes.
10.25 Collateral Agent Third Party Beneficiary
Notwithstanding any provision herein to the contrary, the
Collateral Agent is an express third party beneficiary hereof of all provisions
herein relating to the Collateral Agent.
[Signature Pages Follow]
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WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written above.
BORROWER:
COSMAR CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇.▇. Kaung
--------------------------
Name: ▇▇▇▇▇▇ ▇.▇. Kaung
Title: Vice President
Notice Address:
c/o Renaissance Cosmetics, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PARENT GUARANTOR:
RENAISSANCE COSMETICS, INC.
By: /s/ ▇▇▇▇▇▇ ▇.▇. Kaung
--------------------------
Name: ▇▇▇▇▇▇ ▇.▇. Kaung
Title: Group Vice President
Notice Address:
c/o Renaissance Cosmetics, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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SUBSIDIARY GUARANTORS:
▇▇▇▇ PERFUMES CORP.
By: /s/ ▇▇▇▇▇▇ ▇.▇. Kaung
----------------------------------
Name: ▇▇▇▇▇▇ ▇.▇. Kaung
Title: Group Vice President
Notice Address:
c/o Renaissance Cosmetics, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GREAT AMERICAN COSMETICS, INC.
By: /s/ ▇▇▇▇▇▇ ▇.▇. Kaung
----------------------------------
Name: ▇▇▇▇▇▇ ▇.▇. Kaung
Title: Group Vice President
Notice Address:
c/o Renaissance Cosmetics, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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HOUBIGANT (1995) LIMITED/
HOUBIGANT (1995) LIMITEE
By: /s/ ▇▇▇▇▇▇ ▇.▇. Kaung
---------------------------------
Name: ▇▇▇▇▇▇ ▇.▇. Kaung
Title: Group Vice President
Notice Address:
c/o Renaissance Cosmetics, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
MEM COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇.▇. Kaung
---------------------------------
Name: ▇▇▇▇▇▇ ▇.▇. Kaung
Title: Group Vice President
Notice Address:
c/o Renaissance Cosmetics, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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LENDERS:
Commitment: 19,500,000 CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ Illegible
--------------------------
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $1,000,000 BT Holdings (New York) Inc.
---------------------------
[NAME OF ENTITY]
By: /s/ Manual ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: VP
Notice Address:
Telephone:
Telecopy:
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122
[Signature Page of Cosmar Corporation Credit Agreement]
STONEHILL INVESTMENT CORP* AND
Commitment: $4,000,000.00 STONEHILL ADVISERS LLC, AS AGENTS
---------------------------------
[NAME OF ENTITY]
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP and Member
Notice Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
* For and on behalf of the following managed accounts:
Percentage: Amount:
Stonehill Partners, L.P. 50% $ 2,000,000.00
GRS Partners III 15% $ 600,000.00
Aurora Limited Partnership 10% $ 400,000.00
Stonehill Offshore Partners Ltd. 25% $ 1,000,000.00
==== ==============
TOTAL 100% $ 4,000,000.00
=====
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[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $3,500,000 MASSMUTUAL HIGH YIELD
PARTNERS LLC
By: HYP MANAGEMENT, INC.
Its Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
Massachusetts Mutual Life
Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, II
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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124
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $5,000,000 ▇▇▇▇▇▇▇▇, LLC
----------------------------
[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Member
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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125
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $ BEA ASSOCIATES (*AS AGENT*)
------------------------------
[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name:
Title:
Notice Address:
Telephone:
Telecopy:
* For And on Behalf of the Following Accounts*
$ Amount
---------
BEA High Yield Portfolio 250,000
General Retirement System of the City of Detroit 500,000
Northwestern University 250,000
Omaha Public School Employee Retirement System 250,000
RJR Nabisco Domestic High Yield 250,000
Vail 250,000
The Common Fund 500,000
Texaco Inc. 250,000
SEI Institutional Managed Trust 500,000
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[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $1,800,000.00 MAINSTAY UP SERIES FUND, INC.
on behalf of its HIGH YIELD
CORPORATE BOND FUND PORTFOLIO
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Director
Notice Address:
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $16,700,000.00 THE MAINSTAY FUNDS, on behalf
of its HIGH YIELD CORPORATE
BOND FUND SERIES
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Director
Notice Address:
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $500,000 ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ MASTER
RETIREMENT TRUST
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
Its: Investment Advisor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Director
Notice Address:
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial
Corporation
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $6,000,000 United States Fidelity and Guarantee Co.
----------------------------------------
[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇ ▇. [Illegible]
------------------------------------
Name: ▇▇▇▇▇ ▇. [Illegible]
Title: Vice President
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
137
130
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $10,000,000 THE EQUITABLE LIFE ASSURANCE
SOCIETY OF US - NUTMEG
[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Investment Officer
Notice Address:
c/o Alliance Capital
▇▇▇▇ ▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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131
[Signature Page of Cosmar Corporation Credit Agreement]
THE EQUITABLE LIFE ASSURANCE
Commitment: $5,000,000 SOCIETY OF US - LIFE NON PAR
[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Investment Officer
Notice Address:
c/o Alliance Capital
▇▇▇▇ ▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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132
[Signature Page of Cosmar Corporation Credit Agreement]
▇▇▇▇▇▇▇▇▇ & Co. L.P.
By ▇▇▇▇▇▇▇▇▇ Partner L.P.
Commitment: $1,000,000 By ▇▇▇▇▇▇▇▇▇ Partners Inc.
--------------------------------------
[NAME OF ENTITY]
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
Telephone:
Telecopy:
140
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[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $2,000,000 The Provident Bank
------------------------------------
[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: VP
Notice Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇#▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
141
134
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $11,000,000 Sun America Inc.
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[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇ ▇. Buckle
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Name:
Title: Authorized Agent
Notice Address:
▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Buckle
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
142
135
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $5,000,000 Anchor National Life Ins. Co.
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[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇ ▇. Buckle
-----------------------
Name:
Title: Authorized Agent
Notice Address:
▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ Buckle
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
143
136
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $5,000,000 Sun America Life Ins. Co.
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[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇ ▇. Buckle
------------------
Name:
Title: Authorized Agent
Notice Address:
▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Buckle
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
144
137
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $4,000,000 Delta Asset Management Corporation
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[NAME OF ENTITY]
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
145
138
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $102,596.30 TCW/Crescent Mezzanine Investment Partners, L.P.
[NAME OF ENTITY]
By: /s/ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Title: President
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇
TCW
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
146
139
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $1,142,832.35 TCW/Crescent Mezzanine Trust
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[NAME OF ENTITY]
By: /s/ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Title: President
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇
TCW
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
147
140
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $3,754,571.35 TCW/Crescent Mezzanine Partners, L.P.
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[NAME OF ENTITY]
By: /s/ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Title: President
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇
TCW
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
148
141
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $4,500,000.00 TCW shared Opportunity Fund II, L.P.
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[NAME OF ENTITY]
By: TCW Asset Management Group, its
investment advisor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Group Managing Director
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇
TCW
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
149
142
[Signature Page of Cosmar Corporation Credit Agreement]
Commitment: $500,000.00 ▇▇▇▇▇ University Third Century Fund
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[NAME OF ENTITY]
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Investment Counsel
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇
TCW
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇