Exhibit 4(a)
EXECUTION COPY
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$510,000,000
CREDIT AGREEMENT
among
CHURCH & ▇▇▇▇▇▇ CO., INC.,
as Borrower,
The Several Lenders from Time to Time Parties Hereto,
PNC BANK, NATIONAL ASSOCIATION, FLEET NATIONAL BANK, THE BANK OF
NOVA SCOTIA, and NATIONAL CITY BANK
each as a Syndication Agent,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of September 28, 2001
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▇.▇. ▇▇▇▇▇▇ Securities Inc.,
as Sole Advisor, Lead Arranger and Bookrunner
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................................................1
1.1 Defined Terms....................................................................................1
1.2 Other Definitional Provisions...................................................................24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................................................25
2.1 Term Commitments................................................................................25
2.2 Procedure for Term Loan Borrowing...............................................................25
2.3 Repayment of Term Loans.........................................................................26
2.4 Commitments.....................................................................................27
2.5 Procedure for Revolving Loan Borrowing..........................................................27
2.6 Swingline Commitment............................................................................28
2.7 Procedure for Swingline Borrowing; Refunding of Swingline Loans.................................28
2.8 Commitment Fees, etc............................................................................30
2.9 Termination or Reduction of Revolving Commitments...............................................30
2.10 Optional Prepayments............................................................................30
2.11 Mandatory Prepayments and Commitment Reductions.................................................31
2.12 Conversion and Continuation Options.............................................................33
2.13 Limitations on Eurodollar Tranches..............................................................33
2.14 Interest Rates and Payment Dates................................................................33
2.15 Computation of Interest and Fees................................................................34
2.16 Inability to Determine Interest Rate............................................................34
2.17 Pro Rata Treatment and Payments.................................................................35
2.18 Requirements of Law.............................................................................36
2.19 Taxes ..........................................................................................37
2.20 Indemnity.......................................................................................39
2.21 Change of Lending Office........................................................................39
2.22 Replacement of Lenders..........................................................................39
2.23 Increase of Tranche B Facility..................................................................40
SECTION 3. LETTERS OF CREDIT..........................................................................42
3.1 L/C Commitment..................................................................................42
3.2 Procedure for Issuance of Letter of Credit......................................................42
3.3 Fees and Other Charges..........................................................................42
3.4 L/C Participations..............................................................................43
3.5 Reimbursement Obligation of the Borrower........................................................44
3.6 Obligations Absolute............................................................................44
3.7 Letter of Credit Payments.......................................................................44
3.8 Applications....................................................................................44
3.9 Transitional Provisions.........................................................................45
3.10 Certain Reporting Requirements..................................................................45
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SECTION 4. REPRESENTATIONS AND WARRANTIES.............................................................45
4.1 Financial Condition.............................................................................45
4.2 No Change.......................................................................................47
4.3 Existence; Compliance with Law..................................................................47
4.4 Power; Authorization; Enforceable Obligations...................................................47
4.5 No Legal Bar; No Burdensome Restrictions........................................................47
4.6 Litigation......................................................................................48
4.7 No Default......................................................................................48
4.8 Ownership of Property; Liens....................................................................48
4.9 Intellectual Property...........................................................................48
4.10 Taxes ..........................................................................................48
4.11 Federal Regulations.............................................................................48
4.12 Labor Matters...................................................................................49
4.13 ERISA ..........................................................................................49
4.14 Investment Company Act; Other Regulations.......................................................50
4.15 Subsidiaries....................................................................................50
4.16 Use of Proceeds.................................................................................51
4.17 Environmental Matters...........................................................................51
4.18 Accuracy of Information, etc....................................................................51
4.19 Security Documents..............................................................................52
4.20 Solvency........................................................................................52
4.21 Regulation H....................................................................................52
4.22 Certain Documents...............................................................................52
SECTION 5. CONDITIONS PRECEDENT.......................................................................52
5.1 Conditions to Initial Extension of Credit.......................................................52
5.2 Conditions to Each Extension of Credit..........................................................54
SECTION 6. AFFIRMATIVE COVENANTS......................................................................55
6.1 Financial Statements............................................................................55
6.2 Certificates; Other Information.................................................................56
6.3 Payment of Obligations..........................................................................56
6.4 Maintenance of Existence; Compliance............................................................57
6.5 Maintenance of Property; Insurance..............................................................57
6.6 Inspection of Property; Books and Records; Discussions..........................................57
6.7 Notices.........................................................................................57
6.8 Environmental Laws..............................................................................58
6.9 Mortgages, etc..................................................................................58
6.10 Additional Collateral, etc......................................................................59
6.11 Interest Rate Protection........................................................................61
SECTION 7. NEGATIVE COVENANTS.........................................................................61
7.1 Financial Condition Covenants...................................................................61
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7.2 Indebtedness....................................................................................62
7.3 Liens ..........................................................................................64
7.4 Fundamental Changes.............................................................................65
7.5 Disposition of Property.........................................................................66
7.6 Restricted Payments.............................................................................66
7.7 Capital Expenditures............................................................................67
7.8 Investments.....................................................................................67
7.9 Transactions with Affiliates....................................................................68
7.10 Sales and Leasebacks............................................................................69
7.11 Changes in Fiscal Periods.......................................................................69
7.12 Negative Pledge Clauses.........................................................................69
7.13 Clauses Restricting Subsidiary Distributions....................................................69
7.14 Lines of Business...............................................................................69
7.15 Amendments to Transaction Documents.............................................................69
7.16 Limitation on Optional Payments and Modifications of Debt Instruments...........................69
SECTION 8. EVENTS OF DEFAULT..........................................................................70
SECTION 9. THE AGENTS.................................................................................70
9.1 Appointment.....................................................................................73
9.2 Delegation of Duties............................................................................73
9.3 Exculpatory Provisions..........................................................................73
9.4 Reliance by Administrative Agent................................................................73
9.5 Notice of Default...............................................................................74
9.6 Non-Reliance on Agents and Other Lenders........................................................74
9.7 Indemnification.................................................................................74
9.8 Agent in Its Individual Capacity................................................................75
9.9 Successor Administrative Agent..................................................................76
9.10 Syndication Agents..............................................................................76
SECTION 10. MISCELLANEOUS..............................................................................76
10.1 Amendments and Waivers..........................................................................76
10.2 Notices.........................................................................................77
10.3 No Waiver; Cumulative Remedies..................................................................78
10.4 Survival of Representations and Warranties......................................................78
10.5 Payment of Expenses and Taxes...................................................................78
10.6 Successors and Assigns; Participations and Assignments..........................................79
10.7 Adjustments; Set-off............................................................................82
10.8 Counterparts....................................................................................82
10.9 Severability....................................................................................82
10.10 Integration.....................................................................................83
10.11 GOVERNING LAW...................................................................................83
10.12 Submission To Jurisdiction; Waivers.............................................................83
10.13 Acknowledgements................................................................................83
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10.14 Releases of Guarantees and Liens................................................................84
10.15 Confidentiality.................................................................................84
10.16 WAIVERS OF JURY TRIAL...........................................................................85
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SCHEDULES:
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1.1A Commitments
1.1B Mortgaged Property
3.9 Existing Facility Letters of Credit
4.1 Existing Obligations and Liabilities
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
4.19(a) UCC Filing Jurisdictions and Intellectual Property Filings
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.2(f) Existing Hedge Agreements
7.3(f) Existing Liens
EXHIBITS:
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A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
F-2 Form of Legal Opinion of general counsel to the Borrower and its
Subsidiaries
G Form of Exemption Certificate
H Issuing Lender Agreement
I-1 Form of Optional Prepayment Option Notice
I-2 Form of Mandatory Prepayment Option Notice
J Form of New Lender Supplement
K Form of Commitment Increase Letter
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CREDIT AGREEMENT (this "Agreement"), dated as of September 28, 2001,
among CHURCH & ▇▇▇▇▇▇ CO., INC., a Delaware corporation (the "Borrower"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Lenders"), PNC BANK, NATIONAL ASSOCIATION, FLEET
NATIONAL BANK, THE BANK OF NOVA SCOTIA, and NATIONAL CITY BANK, each as a
syndication agent (in such capacity, a "Syndication Agent"; and, collectively,
the "Syndication Agents"), and THE CHASE MANHATTAN BANK, as administrative
agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on
such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean the rate of interest per annum publicly announced from
time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to be the
lowest rate of interest charged by The Chase Manhattan Bank in connection with
extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a) the
product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the CD
Reserve Percentage and (b) the CD Assessment Rate; and "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding Business Day) by The
Chase Manhattan Bank from three New York City negotiable certificate of deposit
dealers of recognized standing selected by it. Any change in the ABR due to a
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"Accounts": as defined in the Uniform Commercial Code as in effect
in the State of New York; and, with respect to the Borrower and its
Subsidiaries, all such Accounts of such Persons, whether now existing or
existing in the future, including, without limitation, (i) all
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accounts receivable of such Person (whether or not specifically listed on
schedules furnished to the Administrative Agent) including, without limitation,
all accounts created by or arising from all of such Person's software licensing
arrangements or sales of goods or rendition of services made under any of its
trade names, or through any of its divisions, (ii) all unpaid rights of such
Person (including rescission, replevin, reclamation and stopping in transit)
relating to the foregoing or arising therefrom, (iii) all rights to any goods
represented by any of the foregoing, including returned or repossessed goods,
(iv) all reserves and credit balances held by such Person with respect to any
such accounts receivable or any obligors thereon, (v) all letters of credit,
guarantees or collateral for any of the foregoing and (vi) all insurance
policies or rights relating to any of the foregoing.
"Additional Term Commitment": as defined in Section 2.23(a).
"Additional Term Loans": as defined in Section 2.23(a).
"Adjustment Date": as defined in the definition of "Pricing Grid" in
this Section 1.1.
"Administrative Agent": The Chase Manhattan Bank, together with its
affiliates, as the arranger of the Commitments and as the administrative agent
for the Lenders under this Agreement and the other Loan Documents, together with
any of its successors.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agents and the
Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": as defined in the preamble hereto.
"Applicable Margin": (a) with respect to Tranche B Term Loans which
are Eurodollar Loans, 2.50%, (b) with respect to Tranche B Term Loans which are
ABR Loans, 1.50% and (c) for each other Type of Loan for any day, the rate per
annum set forth under the
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relevant column heading in the Pricing Grid; provided, with respect to this
clause (c), until the first Adjustment Date after the Closing Date, Level II (as
set forth in the Pricing Grid) will apply, and, thereafter until the first
Adjustment Date occurring six months after the Closing Date, only Level I or
Level II (as set forth in the Pricing Grid) will apply.
"Application": an application, in such form as the applicable
Issuing Lender may specify from time to time, requesting such Issuing Lender to
open a Letter of Credit.
"Armkel Credit Agreement": the credit agreement, dated as of the
date hereof, among the Armkel Joint Venture, as the borrower, Armkel Holding
(Netherlands) B.V. and the Armkel (Canada), Corp., and The Chase Manhattan Bank,
as the administrative agent.
"Armkel Joint Venture": Armkel L.L.C., a Delaware limited liability
company, which was formed pursuant to the Armkel Joint Venture Agreement.
"Armkel Joint Venture Acquisition": any acquisition by the Armkel
Joint Venture of the Target on terms and conditions substantially in accordance
with the Transaction Documents or otherwise reasonably satisfactory to the
Administrative Agent.
"Armkel Joint Venture Agreement": the joint venture agreement, dated
as of September 28, 2001, between the Borrower and ▇▇▇▇▇, including all
exhibits, schedules, and annexes thereto.
"Arranger": ▇.▇. ▇▇▇▇▇▇ Securities Inc., in its capacity as sole
advisor, lead arranger and bookrunner.
"Arrid": the personal underarm deodorant business of the Target.
"Arrid Acquisition": the direct acquisition by the Borrower of 100%
of the assets of the United States and Canadian Arrid products division and the
Lady's Choice brand of the Target on terms and conditions substantially in
accordance with the Transaction Documents or otherwise reasonably satisfactory
to the Administrative Agent.
"Asset Sale": any Disposition of property or series of related
Dispositions of property (excluding (i) any such Disposition, or series of
related Dispositions, permitted by clause (a), (b), (c), (d) or (f) of Section
7.5 and (ii) any such Disposition, or series of related Dispositions, permitted
by clause (e) of Section 7.5 that, with respect to this clause (ii), yields
gross proceeds to any Group Member of less than $1,000,000) that yields gross
proceeds to any Group Member (valued at the initial principal amount thereof in
the case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in excess
of, when added to the aggregate amount of gross proceeds received by any Group
Member from all other Dispositions made after the Closing Date and prior to such
Disposition, $5,000,000.
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"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit E
"Assignor": as defined in Section 10.6(c).
"Available Revolving Commitment": as to any Revolving Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect over (b) such Lender's Revolving Extensions of Credit
then outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 2.8(a), the aggregate principal amount
of Swingline Loans then outstanding shall be deemed to be zero.
"Benefitted Lender": as defined in Section 10.7(a).
"Biovance": Biovance Technologies, Inc., a Delaware corporation.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower as a
date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Business": as defined in Section 4.17(b).
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close, provided, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
5
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"▇▇▇▇▇▇-▇▇▇▇▇▇▇": ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Inc., a Delaware corporation.
"Cash Equivalents": (a) marketable direct obligations issued by, 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 not more than one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing not
more than six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"CD Assessment Rate": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day that is payable by a member of the
Bank Insurance Fund maintained by the Federal Deposit Insurance Corporation (the
"FDIC") classified as well-capitalized and within supervisory subgroup "B" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. ss. 327.4 (or any successor provision) to the FDIC (or any successor) for
the FDIC's (or such successor's) insuring time deposits at offices of such
institution in the United States.
"CD Reserve Percentage": for any day as applied to any ABR Loan,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board as in effect
from time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
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"Closing Date": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied, which date is September 28, 2001.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": as to any Lender, the sum of the Tranche A Term
Commitment, the Tranche B Term Commitment and the Revolving Commitment of such
Lender. The original amount of the total Commitments is $510,000,000.
"Commitment Fee Rate": 1/2 of 1% per annum for the first six months
after the Closing Date; provided, that on and after the first Adjustment Date
occurring six months after the Closing Date, the Commitment Fee Rate will be
determined pursuant to the Pricing Grid.
"Commitment Increase Date": as defined in Section 2.23(a).
"Commitment Increase Letter": as defined in Section 2.23(c).
"Commitment Letter": the commitment letter, dated as of May 8, 2001,
among The Chase Manhattan Bank, ▇.▇. ▇▇▇▇▇▇ Securities Inc., and the Borrower.
"Commitment Period": the period from and including the Closing Date
to the Revolving Termination Date.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Conduit Lender": any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
provided, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender, and provided,
further, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.18, 2.19, 2.20 or 10.5 than the designating Lender
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender or (b) be deemed to have any Commitment.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated July 2001 and furnished to certain Lenders.
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"Consolidated Current Assets": at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving Loans
or Swingline Loans to the extent otherwise included therein.
"Consolidated EBITDA": (a) for any period with respect to the
Borrower and its Subsidiaries (other than Arrid for the periods ended March 31,
2001, June 30, 2001 and September 30, 2001), Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (i) income
tax expense, (ii) interest expense, amortization or writeoff of debt discount
and debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (iii) depreciation and
amortization expense, (iv) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (v) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), (vi) any other non-cash charges, (vii) non-recurring cash
expenses not in excess of an aggregate amount of $10,500,000 related to the
creation of the Armkel Joint Venture and the Armkel Joint Venture Acquisition,
the Arrid Acquisition, the ▇▇▇▇▇▇▇ ▇▇▇ Acquisition and the USAD Acquisition,
(viii) any amounts not in excess of $500,000 paid to Finova Capital Corporation
in the second quarter of the Borrower's fiscal year 2001, (ix) any amounts
representing the write-up in the value of the Arrid inventory as of the Closing
Date based upon the appraisal thereof conducted by Deloitte & Touche LLP, (x)
minority interests to the extent received in cash and (xi) any prepayment charge
not in excess of $600,000 incurred in connection with the sale or other
disposition of the Solvay Note in the quarter of such sale or other disposition
and minus, to the extent included in the statement of such Consolidated Net
Income for such period, the sum of (i) interest income, (ii) any extraordinary,
unusual or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, gains on the sales of assets outside of the ordinary course of
business), (iii) any other non-cash income, all as determined on a consolidated
basis, (iv) minority interests to the extent paid by the Borrower in cash to
minority holders and (v) cash payments with respect to prior period non-cash
charges otherwise excluded from Consolidated Net Income. For the purposes of
calculating Consolidated EBITDA for any period of four consecutive fiscal
quarters (each, a "Reference Period") pursuant to any determination of the
Consolidated Leverage Ratio, (A) if at any time during such Reference Period the
Borrower or any Subsidiary shall have made any Material Disposition, the
Consolidated EBITDA for such Reference Period shall be reduced by an amount
equal to the Consolidated EBITDA (if positive) attributable to the property that
is the subject of such Material Disposition for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (B) if during such Reference
Period the Borrower or any Subsidiary shall
8
have made a Material Acquisition, Consolidated EBITDA for such Reference Period
shall be calculated after giving pro forma effect thereto as if such Material
Acquisition occurred on the first day of such Reference Period. As used in this
definition, "Material Acquisition" means any acquisition of property or series
of related acquisitions of property that (I) constitutes assets comprising all
or substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (II) involves the payment
of consideration by the Borrower and its Subsidiaries in excess of $5,000,000;
and "Material Disposition" means any Disposition of property or series of
related Dispositions of property that yields gross proceeds to the Borrower or
any of its Subsidiaries in excess of $5,000,000; and
(b) for each of Arrid and ▇▇▇▇▇▇▇ ▇▇▇ for each of the periods ended
March 31, 2001, June 30, 2001 and September 30, 2001, contributed profit as set
forth on the financial statement of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ for such period plus, without
duplication and to the extent reflected as a charge in the books of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ for such period, depreciation.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"Consolidated Interest Expense": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries (including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Hedge Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).
"Consolidated Leverage Ratio": as at the last day of any period, the
ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for
such period.
"Consolidated Net Income": for any period, the consolidated net
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or loss) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Total Debt": at any date, the aggregate principal
amount of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
9
"Continuing Directors": the directors of the Borrower on the Closing
Date and each other director, if, in each case, such other director's nomination
for election to the board of directors of the Borrower is recommended by at
least a majority of the then Continuing Directors.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof
(other than any sale, lease, sale and leaseback, assignment, conveyance,
transfer or other disposition of the Solvay Note). The terms "Dispose" and
"Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States.
"Environmental Laws": any and all foreign, federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"Equity Investment": the making of an equity investment in the
Armkel Joint Venture pursuant to the terms of the Armkel Joint Venture
Agreement.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Telerate screen (or otherwise on such
screen), the "Eurodollar
10
Base Rate" shall be determined by reference to such other comparable publicly
available service for displaying eurodollar rates as may be selected by the
Administrative Agent or, in the absence of such availability, by reference to
the rate at which the Administrative Agent is offered Dollar deposits at or
about 11:00 A.M., New York City time, two Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where its eurodollar
and foreign currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
--------------------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
under a particular Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"Excess Cash Flow": for any fiscal year of the Borrower, the excess,
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) decreases in Consolidated Working Capital for such fiscal year,
and (iv) the aggregate net amount of non-cash loss on the Disposition of
property by the Borrower and its Subsidiaries during such fiscal year (other
than sales of inventory in the ordinary course of business), to the extent
deducted in arriving at such Consolidated Net Income over (b) the sum, without
duplication, of (i) the amount of all non-cash credits included in arriving at
such Consolidated Net Income, (ii) the aggregate amount actually paid by the
Borrower and its Subsidiaries in cash during such fiscal year on account of
Capital Expenditures (excluding the principal amount of Indebtedness incurred in
connection with such expenditures and any such expenditures financed with the
proceeds of any Reinvestment Deferred Amount), (iii) the aggregate amount of all
prepayments of Revolving Loans and Swingline Loans during such fiscal year to
the extent accompanying permanent optional reductions of the Revolving
Commitments and all optional prepayments of the Term Loans during such fiscal
year, (iv) the aggregate amount of all regularly scheduled principal payments of
Funded Debt (including the Term Loans) of the Borrower and its Subsidiaries made
during such fiscal year (other than in respect of any revolving credit facility
to the extent there is not an equivalent permanent reduction in commitments
thereunder), (v) increases in Consolidated Working Capital for such fiscal year,
and (vi) the aggregate net amount of non-cash gain on the Disposition of
property by the Borrower and its Subsidiaries during such fiscal year (other
than sales of inventory in the ordinary course of business), to the extent
included in arriving at such Consolidated Net Income.
"Excess Cash Flow Application Date": as defined in Section 2.11(d).
11
"Excluded Foreign Subsidiary": any Foreign Subsidiary in respect of
which either (a) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would,
in the good faith judgment of the Borrower, result in adverse tax consequences
to the Borrower.
"Existing Facility": the Credit Agreement, dated as of May 23, 2001,
among the Borrower, the several lenders from time to time parties thereto, Fleet
National Bank, National City Bank, First Union National Bank and PNC Bank,
National Association, each as a syndication agent, and The Chase Manhattan Bank,
as administrative agent.
"Existing Facility Letters of Credit": as defined in Section 3.9.
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Facility": each of (a) the Tranche A Term Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Facility"), (b) the
Tranche B Term Commitments and the Tranche B Term Loans made thereunder (the
"Tranche B Term Facility"), and (c) the Revolving Commitments and the extensions
of credit made thereunder (the "Revolving Facility").
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by The Chase Manhattan Bank
from three federal funds brokers of recognized standing selected by it.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or matures not
more than one year from such date but is renewable or extendible, at the option
of such Person, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including
all current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrower, Indebtedness in respect of the
Loans, minus unrestricted cash in an amount not less than $5,000,000 and not to
exceed $20,000,000 of Church & ▇▇▇▇▇▇ Company, a Wyoming corporation and a
Wholly Owned Subsidiary of the Borrower.
12
"Funding Office": the office of the Administrative Agent specified
in Section 10.2 or such other office as may be specified from time to time by
the Administrative Agent as its funding office by written notice to the Borrower
and the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements referred to in Section 4.1(b). In the event that
any "Accounting Change" (as defined below) shall occur and such change results
in a change in the method of calculation of financial covenants, standards or
terms in this Agreement, then the Borrower and the Administrative Agent agree to
enter into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Group Members": the collective reference to the Borrower and its
Subsidiaries.
"Guarantee and Collateral Agreement": the guarantee and collateral
agreement substantially in the form of Exhibit A hereto, dated as of the date
hereof (as the same may be amended, restated, supplemented or otherwise modified
from time to time) by each Subsidiary Guarantor in favor of the Administrative
Agent for the benefit of the Lenders.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of
13
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against loss
in respect thereof; provided, however, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements dealing with interest rates or currency
exchange rates or the exchange of nominal interest obligations, either generally
or under specific contingencies.
"Increasing Lender": as defined in Section 2.23(c).
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) the liquidation value of all
preferred Capital Stock of such Person redeemable at the option of the holder
thereof, (h) all Guarantee Obligations of such Person in respect of obligations
of the kind referred to in clauses (a) through (g) above (other than any
non-recourse Guarantee Obligations incurred in relation to the pledge by the
Borrower of the Capital Stock of the Armkel Joint Venture to the lenders under
the Armkel Credit Agreement), (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
obligation, (j) for the purposes of Sections 7.2 and 8(e) only, all obligations
of such Person in respect of Hedge Agreements, (k) all obligations not otherwise
included as "indebtedness" on such Person's balance sheet in the nature of
synthetic leases and (l) to the extent not otherwise included, indebtedness or
similar obligations pursuant to any receivables or other securitization. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor.
14
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, software, databases,
patents, patent licenses, trademarks, trademark licenses, trademark
applications, service marks, service ▇▇▇▇ licenses, service ▇▇▇▇ applications,
trade names, brand names, domain names, mask works, mask work licenses,
technology, and related improvements, know-how and processes, trade secrets, all
registrations and applications related to any of the above, and all rights to
▇▇▇ at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of
each March, June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day that is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest Period,
(d) as to any Loan (other than any Revolving Loan that is an ABR Loan and any
Swingline Loan), the date of any repayment or prepayment made in respect thereof
and (e) as to any Loan, the Revolving Termination Date or such earlier date on
which the Commitments hereunder are terminated and the Loans become due and
payable pursuant to Section 8 hereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the then current Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) the Borrower may not select an Interest Period under a
particular Facility that would extend beyond the Revolving Termination
Date or beyond the date final payment is due on the Tranche A Term Loans
or the Tranche B Term Loans, as the case may be;
15
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to require
a payment or prepayment of any Eurodollar Loan during an Interest Period
for such Loan.
"Investments": as defined in Section 7.8.
"Issuers": as defined in the Guarantee and Collateral Agreement.
"Issuing Lender": The Chase Manhattan Bank and any other Lender
designated as an Issuing Lender in an Issuing Lender Agreement executed by such
Lender, the Borrower and the Administrative Agent, in its capacity as issuer of
any Letter of Credit.
"Issuing Lender Agreement": an agreement, substantially in the form
of Exhibit H, executed by a Lender, the Borrower, and the Administrative Agent
pursuant to which such Lender agrees to become an Issuing Lender hereunder.
"▇▇▇▇▇": ▇▇▇▇▇ & Company, L.P., a Delaware limited partnership, and
its Affiliates.
"▇▇▇▇▇▇▇ ▇▇▇": the ▇▇▇▇▇▇▇ ▇▇▇ products division of the Target.
"▇▇▇▇▇▇▇ ▇▇▇ Acquisition": the direct acquisition by the Borrower of
100% of the stock or assets of ▇▇▇▇▇▇▇ ▇▇▇ on terms and conditions substantially
in accordance with the Transaction Documents or otherwise reasonably
satisfactory to the Administrative Agent.
"L/C Commitment": $20,000,000.
"L/C Fee Payment Date": the last day of each March, June, September
and December and the last day of the Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
Lenders other than any Issuing Lenders.
"Lender Affiliate": (a) any Affiliate of any Lender, (b) any Person
that is administered or managed by any Lender and that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business and (c) with respect
to any Lender which is a fund that invests in commercial loans and similar
extensions of credit, any other fund that invests in commercial loans and
16
similar extensions of credit and is managed or advised by the same investment
advisor as such Lender or by an Affiliate of such Lender or investment advisor.
"Lenders": as defined in the preamble hereto; provided, that unless
the context otherwise requires, each reference herein to the Lenders shall be
deemed to include any Conduit Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents and the
Notes.
"Loan Parties": each Group Member that is a party to a Loan
Document.
"Mandatory Prepayment Date": as defined in Section 2.11(f).
"Mandatory Prepayment Option Notice": as defined in Section 2.11(f).
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Facility,
prior to any termination of the Revolving Commitments, the holders of more than
50% of the Total Revolving Commitments).
"Material Adverse Effect": a material adverse effect on (a) any of
the Transactions (other than the ▇▇▇▇▇▇▇ ▇▇▇ Acquisition), (b) the business,
property, operations, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Material Environmental Amount": an amount payable by the Borrower
and/or its Subsidiaries in excess of $20,000,000 in the aggregate for remedial
costs, compliance costs, compensatory damages, punitive damages, fines,
penalties or any combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Mortgaged Properties": the real properties listed on Schedule 1.1B,
as to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to the Mortgages.
17
"Mortgages": each of the mortgages and deeds of trust made by any
Loan Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, substantially in the form of Exhibit D (with such
changes thereto as shall be advisable under the law of the jurisdiction in which
such mortgage or deed of trust is to be recorded).
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset that is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash
proceeds received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"New Lender": as defined in Section 2.23(b).
"New Lender Supplement": as defined in Section 2.23(b).
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-U.S. Lender": as defined in Section 2.19(d).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans, the Reimbursement Obligations and all
other obligations and liabilities of the Borrower to the Administrative Agent or
to any Lender (or, in the case of Specified Hedge Agreements, any Person which
at the time of execution of the relevant Specified Hedge Agreement is a Lender
or Lender Affiliate), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any other Loan Document, the Letters
of Credit, any Specified Hedge Agreement or any other document made, delivered
or given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including all fees, charges and disbursements of
18
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise.
"Optional Prepayment Date": as defined in Section 2.10(b).
"Optional Prepayment Option Notice": as defined in Section 2.10(b).
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pricing Grid": the table set forth below.
===================================================================================================================
Applicable Margin for Eurodollar Applicable Margin for Tranche A ABR
Consolidated Leverage Tranche A Term Loans and Term Loans and ABR Revolving Credit Commitment
Ratio Eurodollar Revolving Credit Loans Loans Fee Rate
-------------------------------------------------------------------------------------------------------------------
Level I 2.250% 1.250% 0.500%
Greater than or equal to
3.25 to 1.00
-------------------------------------------------------------------------------------------------------------------
Level II
Less than 3.25 to 1.00
and greater than or equal
to 2.50 to 1.00 2.000% 1.000% 0.500%
-------------------------------------------------------------------------------------------------------------------
Level III
Less than 2.50 to 1.00
and greater than or equal
to 2.00 to 1.00 1.750% 0.750% 0.375%
-------------------------------------------------------------------------------------------------------------------
Level IV 1.500% 0.500% 0.375%
Less than 2.00 to 1.00
===================================================================================================================
For the purposes of the Pricing Grid, changes in the Applicable Margin resulting
from changes in the Consolidated Leverage Ratio shall become effective on the
date (the "Adjustment Date") that
19
is three Business Days after the date on which financial statements are
delivered to the Lenders pursuant to Section 6.1 and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified in Section 6.1, then, from the date that is three Business Days after
the date when such financial statements are due until the date that is three
Business Days after the date on which such financial statements are delivered,
the highest rate set forth in each column of the Pricing Grid shall apply. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the highest rate set forth in each column of the Pricing Grid shall
apply. Each determination of the Consolidated Leverage Ratio pursuant to the
Pricing Grid shall be made in a manner consistent with the determination thereof
pursuant to Section 7.1.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 4.1(d).
"Properties": as defined in Section 4.17(a).
"Receivables": all Accounts and accounts receivable of the Borrower
or any of its Subsidiaries (including any thereof constituting or evidenced by
chattel paper, instruments or general intangibles), and all proceeds thereof and
rights (contractual and other) and collateral related thereto.
"Receivables Subsidiary": any special purpose, bankruptcy-remote
Subsidiary that acquires, on a revolving basis, Receivables generated by the
Borrower or any of its Subsidiaries and that engages in no operations or
activities other than those related to receivables securitizations.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of any Group Member.
"Refinancing": the refinancing of outstanding Indebtedness of the
Borrower under the Existing Facility with the proceeds of the Loans.
"Refunded Swingline Loans": as defined in Section 2.7.
"Refunding Date": as defined in Section 2.7.
"Register": as defined in Section 10.6(d).
"Regulation T": Regulation T of the Board as in effect from time to
time.
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Regulation X": Regulation X of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lenders pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
20
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by any Group Member in
connection therewith that are not applied to prepay the Term Loans or reduce the
Revolving Commitments pursuant to Section 2.11(c) as a result of the delivery of
a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
the Borrower (directly or indirectly through a Subsidiary) intends and expects
to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or
Recovery Event to acquire or repair assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire or repair
assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months after such Reinvestment
Event and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire or repair assets useful in the
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
▇▇▇.▇▇. 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments then in effect and (b) thereafter, the
sum of (i) the aggregate unpaid principal amount of the Term Loans then
outstanding and (ii) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation (including, without limitation,
Regulation T, U or X) or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer, president or
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
21
"Restricted Payments": as defined in Section 7.6.
"Revolving Commitment": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Swingline Loans and
Letters of Credit in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading "Revolving Commitment" opposite such Lender's
name on Schedule 1.1A or in the Assignment and Acceptance pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original amount of the Total Revolving
Commitments is $100,000,000.
"Revolving Commitment Period": the period from and including the
Closing Date to the Revolving Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding and (c) such
Lender's Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.
"Revolving Lender": each Lender that has a Revolving Commitment or
that holds Revolving Loans.
"Revolving Loans": as defined in Section 2.4(a).
"Revolving Percentage": as to any Revolving Lender at any time, the
percentage which such Lender's Revolving Commitment then constitutes of the
Total Revolving Commitments or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender's Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then outstanding, provided,
that, in the event that the Revolving Loans are paid in full prior to the
reduction to zero of the Total Revolving Extensions of Credit, the Revolving
Percentages shall be determined in a manner designed to ensure that the other
outstanding Revolving Extensions of Credit shall be held by the Revolving
Lenders on a comparable basis.
"Revolving Termination Date": September 28, 2006.
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.
"Single Employer Plan": any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
22
"Solvay Note": $22,500,000 note, due January 5, 2011, issued by
Solvay Minerals, Inc., a Delaware corporation, and guaranteed by the Borrower
"Solvent": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Hedge Agreement": any Hedge Agreement (a) entered into by
the Borrower and any Person which at the time of execution of the relevant
Specified Hedge Agreement is a Lender or Lender Affiliate and (b) that has been
designated by the relevant Lender and the Borrower, by written notice to the
Administrative Agent, as a Specified Hedge Agreement. The designation of any
Hedge Agreement as a Specified Hedge Agreement shall not create in favor of such
Lender or Lender Affiliate any rights in connection with the management or
release of any Collateral or of the obligations of any Loan Party under the
Guarantee and Collateral Agreement.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower. Notwithstanding the foregoing,
the Armkel Joint Venture shall not be a Subsidiary for purposes of this
Agreement.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than
(i) any Excluded Foreign Subsidiary and (ii) any Receivables Subsidiary.
"Swingline Commitment": the obligation of the Swingline Lender to
make Swingline Loans pursuant to Section 2.6 in an aggregate principal amount at
any one time outstanding not to exceed $10,000,000.
23
"Swingline Lender": The Chase Manhattan Bank, in its capacity as the
lender of Swingline Loans.
"Swingline Loans": as defined in Section 2.6.
"Swingline Participation Amount": as defined in Section 2.7(c).
"Syndication Agents": as defined in the preamble hereto.
"Target": the consumer products business of ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
"Term Lenders": the collective reference to the Tranche A Term
Lenders and the Tranche B Term Lenders.
"Term Loans": the collective reference to the Tranche A Term Loans
and the Tranche B Term Loans.
"Total Revolving Commitments": at any time, the aggregate amount of
the Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Trademarks": as defined in the Guarantee and Collateral Agreement.
"Tranche A Term Commitment": as to any Lender, the obligation of
such Lender, if any, to make a Tranche A Term Loan to the Borrower in a
principal amount not to exceed the amount set forth under the heading "Tranche A
Term Commitment" opposite such Lender's name on Schedule 1.1A. The original
aggregate amount of the Tranche A Term Commitments is $125,000,000.
"Tranche A Term Lender": each Lender that has a Tranche A Term
Commitment or that holds a Tranche A Term Loan.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Percentage": as to any Tranche A Term Lender at any
time, the percentage which such Lender's Tranche A Term Commitment then
constitutes of the aggregate Tranche A Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche A Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding).
"Tranche B Mandatory Prepayment Amount": as defined in Section
2.11(f).
"Tranche B Optional Prepayment Amount": as defined in Section
2.10(b).
"Tranche B Term Commitment": as to any Lender, the obligation of
such Lender, if any, to make a Tranche B Term Loan to the Borrower in a
principal amount not to exceed the amount set forth under the heading "Tranche B
Term Commitment" opposite such Lender's
24
name on Schedule 1.1A. The original aggregate amount of the Tranche B Term
Commitments is $285,000,000.
"Tranche B Term Lender": each Lender that has a Tranche B Term
Commitment or that holds a Tranche B Term Loan.
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Percentage": as to any Tranche B Term Lender at any
time, the percentage which such Lender's Tranche B Term Commitment then
constitutes of the aggregate Tranche B Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding).
"Transaction Documents": (i) the Armkel Joint Venture Agreement,
(ii) the Master Services Agreement, dated September 28, 2001, between the
Borrower and the Armkel Joint Venture, (iii) the Asset Purchase Agreement, dated
as of May 7, 2001, between the Armkel Joint Venture and ▇▇▇▇▇▇-▇▇▇▇▇▇▇, (iv) the
Product Line Purchase Agreement, dated as of May 7, 2001, between the Armkel
Joint Venture and the Borrower and, in all cases, all schedules, exhibits and
annexes thereto.
"Transactions": the collective reference to (a) the Equity
Investment, (b) the Armkel Joint Venture Acquisition, (c) the Arrid Acquisition,
and (d) the ▇▇▇▇▇▇▇ ▇▇▇ Acquisition.
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"United States": the United States of America.
"USAD Acquisition": the acquisition by the Borrower of 100% of the
stock of USA Detergents Inc., a Delaware corporation ("USAD"), pursuant to the
tender offer by US Acquisition Corp., a Delaware corporation ("USAC"), whereby
the Borrower acquired in excess of 51% of the stock of USAD, and the subsequent
merger of USAC into USAD, with USAD being the surviving corporation.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that
is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
25
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP, (ii) the words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation", (iii) the word "incur" shall be construed to mean incur, create,
issue, assume, or become liable in respect of (and the words "incurred" and
"incurrence" shall have correlative meanings), (iv) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
Capital Stock, securities, revenues, accounts, leasehold interests and contract
rights, and (v) references to agreements or other Contractual Obligations shall,
unless otherwise specified, be deemed to refer to such agreements or Contractual
Obligations as amended, supplemented, restated or otherwise modified from time
to time.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments(a). Subject to the terms and conditions
hereof, (a) each Tranche A Term Lender severally agrees to make a term loan (a
"Tranche A Term Loan") to the Borrower on the Closing Date in an amount not to
exceed the amount of the Tranche A Term Commitment of such Lender and (b) each
Tranche B Term Lender severally agrees to make a term loan (a "Tranche B Term
Loan") to the Borrower on the Closing Date in an amount not to exceed the amount
of the Tranche B Term Commitment of such Lender. The Term Loans may from time to
time be Eurodollar Loans or ABR Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 2.2 and 2.12.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Term Lenders make the
Term Loans on the Closing Date and specifying the amount to be borrowed. The
Term Loans made on the Closing Date shall initially be ABR Loans, unless
otherwise agreed by the Administrative Agent. Upon receipt of such notice the
Administrative Agent shall promptly notify each Term Lender thereof. Not later
than 12:00 Noon, New York City time, on the Closing Date each Term Lender shall
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Term Loan or Term Loans to be made by
such Lender. The Administrative Agent shall credit the account of the Borrower
on the books of such office of the Administrative Agent with the aggregate of
the amounts made available to the Administrative Agent by the Term Lenders in
immediately available funds.
26
2.3 Repayment of Term Loans(a). (a) The Tranche A Term Loan of each
Tranche A Term Lender shall mature in 20 consecutive quarterly installments,
each of which shall be in an amount equal to such Lender's Tranche A Term
Percentage multiplied by the amount set forth below opposite such installment
(unless such amount has been reduced by one or more prepayments pursuant to
Section 2.10 or 2.11, in which case it will be appropriately adjusted):
Installment Principal Amount
----------- ----------------
September 30, 2002 $ 3,125,000
December 31, 2002 $ 3,125,000
March 31, 2003 $ 3,125,000
June 30, 2003 $ 3,125,000
September 30, 2003 $ 3,125,000
December 31, 2003 $ 3,125,000
March 31, 2004 $ 6,250,000
June 30, 2004 $ 6,250,000
September 30, 2004 $ 6,250,000
December 31, 2004 $ 6,250,000
March 31, 2005 $ 9,375,000
June 30, 2005 $ 9,375,000
September 30, 2005 $ 9,375,000
December 31, 2005 $ 9,375,000
March 31, 2006 $12,500,000
June 30, 2006 $12,500,000
September 30, 2006 $18,750,000
(b) The Tranche B Term Loan of each Tranche B Term Lender shall
mature in 24 consecutive quarterly installments, each of which shall be in an
amount equal to such Lender's Tranche B Term Percentage multiplied by the amount
set forth below opposite such installment (unless such amount has been reduced
by one or more prepayments pursuant to Section 2.10 or 2.11 or increased
pursuant to Section 2.23, in which case it will be appropriately adjusted):
Installment Principal Amount
----------- ----------------
September 30, 2002 $ 712,500
December 31, 2002 $ 712,500
March 31, 2003 $ 712,500
June 30, 2003 $ 712,500
September 30, 2003 $ 712,500
December 31, 2003 $ 712,500
March 31, 2004 $ 712,500
27
June 30, 2004 $ 712,500
September 30, 2004 $ 712,500
December 31, 2004 $ 712,500
March 31, 2005 $ 712,500
June 30, 2005 $ 712,500
September 30, 2005 $ 712,500
December 31, 2005 $ 712,500
March 31, 2006 $ 712,500
June 30, 2006 $ 712,500
September 30, 2006 $ 712,500
December 31, 2006 $ 28,500,000
March 31, 2007 $ 57,000,000
June 30, 2007 $ 57,000,000
September 30, 2007 $130,387,500
2.4 Commitments. (a) Subject to the terms and conditions hereof,
each Revolving Lender severally agrees to make revolving credit loans
("Revolving Loans") to the Borrower from time to time during the Revolving
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Revolving Percentage of the sum of (i) the
L/C Obligations then outstanding and (ii) the aggregate principal amount of the
Swingline Loans then outstanding, does not exceed the amount of such Lender's
Revolving Commitment. During the Revolving Commitment Period the Borrower may
use the Revolving Commitments by borrowing, prepaying the Revolving Loans in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.5 and 2.12. The Borrower may not borrow, and
the Revolving Lenders shall be under no obligations to make available, Revolving
Loans in an amount in excess of $15,000,000 on the Closing Date.
(b) The Borrower shall repay all outstanding Revolving Loans on the
Revolving Termination Date.
2.5 Procedure for Revolving Loan Borrowing. The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 Noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business
Day prior to the requested Borrowing Date, in the case of ABR Loans), specifying
(i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested
Borrowing Date and (iii) in the case of Eurodollar Loans, the respective amounts
of each such Type of Loan and the respective lengths of the initial Interest
Period therefor. Any Revolving Loans made on the Closing Date shall initially be
ABR Loans. Each borrowing under the
28
Revolving Commitments shall be in an amount equal to (x) in the case of ABR
Loans, $1,000,000 or a whole multiple thereof (or, if the then aggregate
Available Revolving Commitments are less than $1,000,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; provided, that the Swingline Lender may request,
on behalf of the Borrower, borrowings under the Revolving Commitments that are
ABR Loans in other amounts pursuant to Section 2.7. Upon receipt of any such
notice from the Borrower, the Administrative Agent shall promptly notify each
Revolving Lender thereof. Each Revolving Lender will make the amount of its pro
rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the Funding Office prior to 12:00 Noon, New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent crediting the account of
the Borrower on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Lenders and in like funds
as received by the Administrative Agent.
2.6 Swingline Commitment. (a) Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
available during the Revolving Commitment Period by making swing line loans
("Swingline Loans") to the Borrower; provided that (i) the aggregate principal
amount of Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans, may exceed the Swingline Commitment then in effect) and (ii)
the Borrower shall not request, and the Swingline Lender shall not make, any
Swingline Loan if, after giving effect to the making of such Swingline Loan, the
aggregate amount of the Available Revolving Commitments would be less than zero.
During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swingline Loans shall be ABR Loans only.
(b) The Borrower shall repay all outstanding Swingline Loans on the
Revolving Termination Date.
2.7 Procedure for Swingline Borrowing; Refunding of Swingline Loans.
(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swingline
Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date (which shall be a Business Day during the Revolving Commitment Period).
Each borrowing under the Swingline Commitment shall be in an amount equal to
$500,000 or a whole multiple of $100,000 in excess thereof. Not later than 3:00
P.M., New York City time, on the Borrowing Date specified in a notice in respect
of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender. The Administrative Agent shall make the proceeds of such Swingline Loan
available to the Borrower on such Borrowing Date by depositing such proceeds in
the
29
account of the Borrower with the Administrative Agent on such Borrowing Date in
immediately available funds.
(b) The Swingline Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), on one Business
Day's notice given by the Swingline Lender no later than 12:00 Noon, New York
City time, request each Revolving Lender to make, and each Revolving Lender
hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving
Lender's Revolving Percentage of the aggregate amount of the Swingline Loans
(the "Refunded Swingline Loans") outstanding on the date of such notice, to
repay the Swingline Lender. Each Revolving Lender shall make the amount of such
Revolving Loan available to the Administrative Agent at the Funding Office in
immediately available funds, not later than 10:00 A.M., New York City time, one
Business Day after the date of such notice. The proceeds of such Revolving Loans
shall be immediately made available by the Administrative Agent to the Swingline
Lender for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower's accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Revolving
Lenders are not sufficient to repay in full such Refunded Swingline Loans.
(c) If prior to the time a Revolving Loan would have otherwise been
made pursuant to Section 2.7(b), one of the events described in Section 8(f)
shall have occurred and be continuing with respect to the Borrower or if for any
other reason, as determined by the Swingline Lender in its sole discretion,
Revolving Loans may not be made as contemplated by Section 2.7(b), each
Revolving Lender shall, on the date such Revolving Loan was to have been made
pursuant to the notice referred to in Section 2.7(b) (the "Refunding Date"),
purchase for cash an undivided participating interest in the then outstanding
Swingline Loans by paying to the Swingline Lender an amount (the "Swingline
Participation Amount") equal to (i) such Revolving Lender's Revolving Percentage
times (ii) the sum of the aggregate principal amount of Swingline Loans then
outstanding that were to have been repaid with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has received
from any Revolving Lender such Lender's Swingline Participation Amount, the
Swingline Lender receives any payment on account of the Swingline Loans, the
Swingline Lender will distribute to such Lender its Swingline Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was outstanding
and funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.
(e) Each Revolving Lender's obligation to make the Loans referred to
in Section 2.7(b) and to purchase participating interests pursuant to Section
2.7(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any setoff,
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counterclaim, recoupment, defense or other right that such Revolving Lender or
the Borrower may have against the Swingline Lender, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
2.8 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the date hereof to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Revolving Termination
Date, commencing on the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates previously agreed to in writing by the Borrower
and the Administrative Agent.
2.9 Termination or Reduction of Revolving Commitments. The Borrower
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Commitments then in effect.
2.10 Optional Prepayments(a). (a) The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at least
three Business Days prior thereto in the case of Eurodollar Loans and at least
one Business Day prior thereto in the case of ABR Loans, which notice shall
specify the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on
any day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.20. Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with (except in
the case of Revolving Loans that are ABR Loans and Swingline Loans) accrued
interest to such date on the amount prepaid. The Borrower may apply prepayments
to the Revolving Loans or the Term Loans, as the Borrower determines. Partial
prepayments of Term Loans and Revolving Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof. Partial prepayments of
Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole
multiple thereof.
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(b) Notwithstanding anything to the contrary in Sections 2.10(a) and
2.17, with respect to the amount of any optional prepayment described in Section
2.10(a) that is allocated to Tranche B Term Loans (such amounts, the "Tranche B
Optional Prepayment Amount"), at any time when Tranche A Term Loans remain
outstanding, the Borrower will, in lieu of applying such amount to the
prepayment of Tranche B Term Loans as provided in paragraph (a) above, on the
date specified in Section 2.10(a) for such prepayment, give the Administrative
Agent telephonic notice (promptly confirmed in writing) requesting that the
Administrative Agent prepare and provide to each Tranche B Term Lender a notice
(each, an "Optional Prepayment Option Notice") as described below. As promptly
as practicable after receiving such notice from the Borrower, the Administrative
Agent will send to each Tranche B Term Lender an Optional Prepayment Option
Notice, which shall be in the form of Exhibit I-1, and shall include an offer by
the Borrower to prepay on the date (each an "Optional Prepayment Date") that is
10 Business Days after the date of the Optional Prepayment Option Notice, the
relevant Tranche B Term Loans of such Lender by an amount equal to the portion
of the Tranche B Optional Prepayment Amount indicated in such Lender's Optional
Prepayment Option Notice as being applicable to such Lender's Tranche B Term
Loans. On the Optional Prepayment Date, (i) the Borrower shall pay to the
relevant Tranche B Term Lenders the aggregate amount necessary to prepay that
portion of the outstanding relevant Tranche B Term Loans in respect of which
such Lenders have accepted or are deemed to have accepted prepayment pursuant to
the Optional Prepayment Notice and (ii) the Borrower shall pay to the Tranche A
Term Lenders an amount equal to the portion of the Tranche B Optional Prepayment
Amount not accepted by the relevant Lenders, and such amount shall be applied to
the prepayment of the Tranche A Term Loans.
2.11 Mandatory Prepayments and Commitment Reductions. (a) If any
Capital Stock shall be issued by any Group Member, an amount equal to 50% of the
Net Cash Proceeds thereof shall be applied on the date of such issuance toward
the prepayment of the Term Loans as set forth in Section 2.11(e).
(b) If any Indebtedness shall be incurred by any Group Member
(including Indebtedness incurred in accordance with Section 7.2(h) and Section
7.2(i)(A) (to the extent contemplated therein), but excluding any other
Indebtedness incurred in accordance with Section 7.2), an amount equal to 100%
of the Net Cash Proceeds thereof shall be applied on the date of such incurrence
toward the prepayment of the Term Loans as set forth in Section 2.11(e).
(c) If on any date any Group Member shall receive Net Cash Proceeds
from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall
be delivered in respect thereof, such Net Cash Proceeds shall be applied on such
date toward the prepayment of the Term Loans and the reduction of the Revolving
Commitments as set forth in Section 2.11(e); provided, that, notwithstanding the
foregoing, on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans and the reduction of
the Revolving Commitments as set forth in Section 2.11(e).
(d) If, for any fiscal year of the Borrower, commencing with the
fiscal year ending December 31, 2002, there shall be Excess Cash Flow, the
Borrower shall, on the relevant Excess Cash Flow Application Date, apply 50% of
such Excess Cash Flow toward the prepayment of the Term Loans as set forth in
Section 2.11(e). Each such prepayment shall be
32
made on a date (an "Excess Cash Flow Application Date") no later than five days
after the earlier of (i) the date on which the financial statements of the
Borrower referred to in Section 6.1(a), for the fiscal year with respect to
which such prepayment is made, are required to be delivered to the
Administrative Agent and the Lenders and (ii) the date such financial statements
are actually delivered to the Administrative Agent and the Lenders.
(e) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section 2.11 shall be applied,
first, to the prepayment of the Term Loans and, second, in the case of any Net
Cash Proceeds from any Asset Sale or Recovery Event or incurrence of
Indebtedness, to permanently reduce the Revolving Commitments. Any such
reduction of the Revolving Commitments shall be accompanied by prepayment of the
Revolving Loans and/or Swingline Loans to the extent, if any, that the Total
Revolving Extensions of Credit exceed the amount of the Total Revolving
Commitments as so reduced, provided that if the aggregate principal amount of
Revolving Loans and Swingline Loans then outstanding is less than the amount of
such excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Lenders on
terms and conditions satisfactory to the Administrative Agent. The application
of any prepayment pursuant to Section 2.11 shall be made, first, to ABR Loans
and, second, to Eurodollar Loans. Each prepayment of the Loans under Section
2.11 (except in the case of Revolving Loans that are ABR Loans and Swingline
Loans) shall be accompanied by accrued interest to the date of such prepayment
on the amount prepaid.
(f) Notwithstanding anything to the contrary in Sections 2.11(e) and
2.17, with respect to the amount of any mandatory prepayment described in
Section 2.11 that is allocated to Tranche B Term Loans (such amounts, the
"Tranche B Mandatory Prepayment Amount"), at any time when Tranche A Term Loans
remain outstanding, the Borrower will, in lieu of applying such amount to the
prepayment of Tranche B Term Loans as provided in paragraph (e) above, on the
date specified in Section 2.11 for such prepayment, give the Administrative
Agent telephonic notice (promptly confirmed in writing) requesting that the
Administrative Agent prepare and provide to each Tranche B Term Lender a notice
(each, a "Mandatory Prepayment Option Notice") as described below. As promptly
as practicable after receiving such notice from the Borrower, the Administrative
Agent will send to each Tranche B Term Lender a Mandatory Prepayment Option
Notice, which shall be in the form of Exhibit I-2, and shall include an offer by
the Borrower to prepay on the date (each a "Mandatory Prepayment Date") that is
10 Business Days after the date of the Mandatory Prepayment Option Notice, the
relevant Tranche B Term Loans of such Lender by an amount equal to the portion
of the Tranche B Mandatory Prepayment Amount indicated in such Lender's
Mandatory Prepayment Option Notice as being applicable to such Lender's Tranche
B Term Loans. On the Mandatory Prepayment Date, (i) the Borrower shall pay to
the relevant Tranche B Term Lenders the aggregate amount necessary to prepay
that portion of the outstanding relevant Tranche B Term Loans in respect of
which such Lenders have accepted prepayment or are deemed to have accepted
prepayment pursuant to the Mandatory Prepayment Notice, and (ii) the Borrower
shall pay to the Tranche A Term Lenders an amount equal to the portion of the
Tranche B Mandatory Prepayment Amount not accepted by the relevant Lenders, and
such amount shall be applied to the prepayment of the Tranche A Term Loans.
33
2.12 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations, and
provided, further, that if the Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted to
ABR Loans on the last day of such then expiring Interest Period. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
2.13 Limitations on Eurodollar Tranches. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall
be outstanding at any one time.
2.14 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to
the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to ABR Loans under the Revolving Facility plus 2%, and (ii) if all or
a portion of any
34
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans
under the relevant Facility plus 2% (or, in the case of any such other amounts
that do not relate to a particular Facility, the rate then applicable to ABR
Loans under the Revolving Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.15 Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.14(a).
2.16 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar
35
Loans under the relevant Facility requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans under the relevant
Facility that were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be continued as ABR Loans and (z) any
outstanding Eurodollar Loans under the relevant Facility shall be converted, on
the last day of the then-current Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, which the Administrative
Agent agrees to do upon the cessation of the events giving rise to such notice,
no further Eurodollar Loans under the relevant Facility shall be made or
continued as such, nor shall the Borrower have the right to convert Loans under
the relevant Facility to Eurodollar Loans.
2.17 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Tranche A Term Percentages, Tranche B
Term Percentages or Revolving Percentages, as the case may be, of the relevant
Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders (except as otherwise provided in Section 2.11(f)). The
amount of each principal prepayment of the Term Loans shall be applied to reduce
the then remaining installments of the Tranche A Term Loans and Tranche B Term
Loans, as the case may be, pro rata based upon the then remaining principal
amounts thereof. Amounts prepaid on account of the Term Loans may not be
reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Loans shall be made pro
rata according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may
36
assume that such Lender is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Effective Rate for the period until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error. If such Lender's share of
such borrowing is not made available to the Administrative Agent by such Lender
within three Business Days after such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans under the relevant Facility, on demand, from
the Borrower.
(f) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment due to be made by the
Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate. Nothing herein shall be
deemed to limit the rights of the Administrative Agent or any Lender against the
Borrower.
2.18 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by Section 2.19 and changes in the rate of tax on the overall net
income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of funds
by, any office of such Lender that is not otherwise included in the
determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
37
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender reasonably deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this paragraph, it
shall promptly notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction; provided that the Borrower shall not be required to
compensate a Lender pursuant to this paragraph for any amounts incurred more
than three months prior to the date that such Lender notifies the Borrower of
such Lender's intention to claim compensation therefor; and provided further
that, if the circumstances giving rise to such claim have a retroactive effect,
then such three-month period shall be extended to include the period of such
retroactive effect.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes")
38
or Other Taxes are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrower shall not be required to increase any such amounts
payable to any Lender with respect to any Non-Excluded Taxes (i) that are
attributable to such Lender's failure to deliver the documentation required by
paragraph (d) or (e) of this Section or (ii) that are United States withholding
taxes imposed on amounts payable to such Lender at the time such Lender becomes
a party to this Agreement, except to the extent that such Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
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(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(f) The agreements in this Section 2.19 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.20 Indemnity. The Borrower agrees to indemnify each Lender for,
and to hold each Lender harmless from, any loss or expense that such Lender may
sustain or incur as a consequence of (a) a default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) a default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error.
2.21 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.18 or 2.19(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of the Borrower or the rights of any Lender
pursuant to Section 2.18 or 2.19(a).
2.22 Replacement of Lenders. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.18 or 2.19(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event
40
of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Lender shall have taken
no action under Section 2.21 so as to eliminate the continued need for payment
of amounts owing pursuant to Section 2.18 or 2.19(a), (iv) the replacement
financial institution shall purchase, at par, all Loans and other amounts owing
to such replaced Lender on or prior to the date of replacement, (v) the Borrower
shall be liable to such replaced Lender under Section 2.20 if any Eurodollar
Loan owing to such replaced Lender shall be purchased other than on the last day
of the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6 (provided that the
Borrower shall be obligated to pay the registration and processing fee referred
to therein), (viii) until such time as such replacement shall be consummated,
the Borrower shall pay all additional amounts (if any) required pursuant to
Section 2.18 or 2.19(a), as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights that the Borrower, the Administrative
Agent or any other Lender shall have against the replaced Lender.
2.23 Increase of Tranche B Facility (a). (a) The Borrower shall
have the right at any time to increase the Tranche B Term Commitments by an
amount not to exceed $75,000,000 (such amount the "Additional Term Commitments",
such Loans made pursuant to the Additional Term Commitment, the "Additional Term
Loans", and the date such increase is to become effective, the "Commitment
Increase Date") (i) by requesting that one or more banks or other financial
institutions not a party to this Agreement become a Lender hereunder or (ii) by
requesting that any Lender already party to this Agreement increase the amount
of such Lender's Tranche B Term Commitment; provided, that the addition of any
bank or financial institution pursuant to clause (i) above shall be subject to
the consent of the Administrative Agent (which consent shall not be unreasonably
withheld); provided further, the Tranche B Term Commitment of any bank or other
financial institution pursuant to clause (i) above, shall be in an aggregate
principal amount at least equal to $1,000,000; provided further, the amount of
the increase of any Lender's Tranche B Term Commitment pursuant to clause (ii)
above when added to the amount of such Lender's Tranche B Term Commitment before
the increase, shall be in an aggregate principal amount at least equal to
$1,000,000.
(b) Not less than five Business Days prior to the Commitment
Increase Date, any additional bank, financial institution or other entity which
elects to become a party to this Agreement and make a Tranche B Term Commitment
pursuant to clause (a)(i) of this Section 2.23 shall execute a New Lender
Supplement (each, a "New Lender Supplement") with the Borrower and the
Administrative Agent, substantially in the form of Exhibit J, whereupon such
bank, financial institution or other entity (herein called a "New Lender") shall
become a Lender for all purposes and to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this Agreement, and
Schedule 1.1A shall be deemed to be amended to add the name and portion of the
Additional Term Commitment allocable to such New Lender as a Tranche B Term
Commitment.
(c) Any increase in the Tranche B Term Commitment of any Lender
(each such Lender, an "Increasing Lender") pursuant to clause (a)(ii) of this
Section 2.23 shall be effective only upon the execution and delivery by such
Lender to the Borrower and the Administrative Agent of a commitment increase
letter in substantially the form of Exhibit K hereto (a
41
"Commitment Increase Letter"), which Commitment Increase Letter shall be
delivered to the Administrative Agent not less than five Business Days prior to
the Commitment Increase Date and shall specify the portion of the Additional
Term Commitment allocable to such Increasing Lender as a Tranche B Term
Commitment.
(d) Any increase in the aggregate Tranche B Term Commitments
pursuant to this Section 2.23 shall not be effective unless:
(i) no Default or Event of Default shall have occurred and be
continuing on the Commitment Increase Date;
(ii) each of the representations and warranties made by the
Borrower in or pursuant to the Loan Documents shall be true and correct in
all material respects on the Commitment Increase Date with the same effect
as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date in
which case such representations and warranties shall have been true and
correct in all material respects as of such earlier date;
(iii) the Administrative Agent shall have received each of (A)
a certificate of the corporate secretary or assistant secretary of the
Borrower as to the taking of any corporate action necessary in connection
with such increase and (B) an opinion or opinions of general counsel to
the Borrower as to its corporate power and authority to borrow hereunder
after giving effect to such increase and such other matters relating
thereto as the Administrative Agent and its counsel may reasonably
request.
Each notice requesting an increase in the Tranche B Term Commitments pursuant to
this Section 2.23 shall constitute a certification to the effect set forth in
clauses (i) and (ii) of this Section 2.23(d).
(e) No Lender shall at any time be required to agree to a request of
the Borrower to increase its Tranche B Term Commitment or obligations hereunder.
(f) The Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 10:00
A.M., New York City time, one Business Day prior to the anticipated Commitment
Increase Date) requesting that the New Lenders and the Increasing Lenders make
Additional Term Loans in an amount not to exceed the Additional Term Commitment
on the Commitment Increase Date and specifying the amount to be borrowed. The
Additional Term Loans made on the Commitment Increase Date shall initially be
ABR Loans. Upon receipt of such notice the Administrative Agent shall promptly
notify each New Lender and each Increasing Lender thereof. Not later than 12:00
Noon, New York City time, on the Commitment Increase Date each New Lender and
each Increasing Lender shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal to the Additional
Term Loans to be made by such Lender. The Administrative Agent shall credit the
account of the Borrower on the books of such office of the Administrative Agent
with the aggregate of the amounts made available to the Administrative Agent by
each New Lender and each Increasing Lender in immediately available funds.
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Additional Term Loans shall be Tranche B Term Loans for all purposes (excepting
Section 2.1) of this Agreement.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
each Issuing Lender, in reliance on the agreements of the other Revolving
Lenders set forth in Section 3.4(a), agrees to issue letters of credit ("Letters
of Credit") for the account of the Borrower on any Business Day during the
Revolving Commitment Period in such form as may be approved from time to time by
such Issuing Lender; provided that such Issuing Lender shall have no obligation
to issue any Letter of Credit if, after giving effect to such issuance, (i) the
L/C Obligations would exceed the L/C Commitment or (ii) the aggregate amount of
the Available Revolving Commitments would be less than zero. Each Letter of
Credit shall (i) be denominated in Dollars, (ii) have a face amount of at least
$250,000 (unless otherwise agreed by such Issuing Lender) and (iii) expire no
later than the earlier of (x) the first anniversary of its date of issuance and
(y) the date that is five Business Days prior to the Revolving Termination Date,
provided that any Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the date referred to in clause (y) above).
(b) No Issuing Lender shall at any time be obligated to issue any
Letter of Credit if such issuance would conflict with, or cause such Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may
from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to the applicable Issuing Lender at its address for notices specified
herein an Application therefor, completed to the satisfaction of such Issuing
Lender, and such other certificates, documents and other papers and information
as such Issuing Lender may request. Upon receipt of any Application, an Issuing
Lender will process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue the Letter of Credit
requested thereby (but in no event shall such Issuing Lender be required to
issue any Letter of Credit earlier than three Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by such
Issuing Lender and the Borrower. The applicable Issuing Lender shall furnish a
copy of such Letter of Credit to the Borrower promptly following the issuance
thereof. The applicable Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).
3.3 Fees and Other Charges. (a) The Borrower will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar Loans under the Revolving Facility,
shared ratably among the Revolving Lenders and payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date. In addition, the Borrower
shall pay to each Issuing Lender for its own account a fronting fee of 0.25% per
annum on the undrawn and unexpired amount of each Letter of Credit issued by it,
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date.
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(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lenders for such normal and customary costs and expenses
as are incurred or charged by such Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit.
3.4 L/C Participations. (a) Each Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce each Issuing
Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from each Issuing Lender,
on the terms and conditions set forth below, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's Revolving
Percentage in each Issuing Lender's obligations and rights under and in respect
of each Letter of Credit and the amount of each draft paid by such Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees
with each Issuing Lender that, if a draft is paid under any Letter of Credit for
which such Issuing Lender is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the applicable Issuing Lender upon demand at such Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's Revolving
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.
(b) If any amount required to be paid by any L/C Participant to any
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the relevant Issuing Lender under any Letter of Credit is
not paid to such Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to such Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the relevant Issuing Lender, times (iii) a fraction the numerator of which is
the number of days that elapse during such period and the denominator of which
is 360. If any such amount required to be paid by any L/C Participant pursuant
to Section 3.4(a) is not made available to the relevant Issuing Lender by such
L/C Participant within three Business Days after the date such payment is due,
such Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans under the Revolving Facility. A
certificate of the relevant Issuing Lender submitted to any L/C Participant with
respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.4(a), such Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by such Issuing Lender), or any payment of interest on account thereof, such
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
such Issuing Lender shall be required to be returned by such Issuing Lender,
such L/C Participant shall return to such Issuing Lender the portion thereof
previously distributed by such Issuing Lender to it.
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3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse each Issuing Lender on the same Business Day (if the Borrower is
notified by 1:00 p.m. (New York time) and no later than the next Business Day if
the Borrower is notified after 1:00 p.m. (New York time)) on which such Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by such Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment. Each such
payment shall be made to the relevant Issuing Lender at its address for notices
referred to herein in Dollars and in immediately available funds. Interest shall
be payable on any such amounts from the date on which the relevant draft is paid
until payment in full at the rate set forth in (i) until the Business Day next
succeeding the date of the relevant notice, Section 2.14(b) and (ii) thereafter,
Section 2.14(c).
3.6 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against any Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with each Issuing
Lender that no Issuing Lender shall be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. No Issuing Lender
shall be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, except for errors or omissions found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Issuing Lender.
The Borrower agrees that any action taken or omitted by any Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or willful misconduct and in
accordance with the standards of care specified in the Uniform Commercial Code
of the State of New York, shall be binding on the Borrower and shall not result
in any liability of any Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the relevant Issuing Lender shall promptly
notify the Borrower of the date and amount thereof. The responsibility of the
relevant Issuing Lender to the Borrower in connection with any draft presented
for payment under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
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3.9 Transitional Provisions. On the Closing Date, (i) the Borrower
shall provide Schedule 3.9, which schedule shall list those certain letters of
credit issued by a Lender and outstanding as of the Closing Date (the "Existing
Facility Letters of Credit"), (ii) such Existing Facility Letters of Credit
shall be deemed to be Letters of Credit issued pursuant to and in compliance
with this Section 3, (iii) the face amount of such Existing Facility Letters of
Credit shall be included in the calculation of the available L/C Commitment and
the Revolving Extensions of Credit, (iv) the provisions of this Section 3 shall
apply thereto, and the Borrower and the Revolving Lenders hereunder hereby
expressly assume all obligations, and the Revolving Lenders shall have all
rights, with respect to such Letters of Credit which the Borrower and the
Revolving Lenders would have had if the Existing Facility Letters of Credit
originally had been issued hereunder and (v) all liabilities of the Borrower
with respect to such Existing Facility Letters of Credit shall constitute
Obligations.
3.10 Certain Reporting Requirements. Each Issuing Lender will report
in writing to the Administrative Agent (i) on the first Business Day of each
week, the aggregate stated amount of Letters of Credit issued by it and
outstanding as of the last Business Day of the preceding week and (ii) on or
prior to each Business Day on which an Issuing Lender expects to issue or amend
any Letter of Credit, the date of such issuance or amendment and the aggregate
stated amount of Letters of Credit to be issued by it and outstanding after
giving effect to such issuance or amendment (and such Issuing Lender shall
advise the Administrative Agent on such Business Day whether such issuance or
amendment occurred and whether the amount thereof changed).
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative Agent
and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at June 30,
2001 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies of
which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the consummation of
the Transactions and the Refinancing, (ii) the Loans to be made on the Closing
Date and the use of proceeds thereof and (iii) the payment of fees and expenses
in connection with the foregoing. The Pro Forma Balance Sheet has been prepared
based on the best information available to the Borrower as of the date of
delivery thereof, and presents fairly on a pro forma basis the estimated
financial position of Borrower and its consolidated Subsidiaries as at June 30,
2001, assuming that the events specified in the preceding sentence had actually
occurred at such date.
(b) The audited consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at December 31, 1998, December 31, 1999 and
December 31, 2000, and the related consolidated statements of income and of cash
flows for the fiscal years ended on such dates, in each case reported on by
Deloitte & Touche LLP, and accompanied by an unqualified report from Deloitte &
Touche LLP, present fairly the consolidated financial condition of the Borrower
and its consolidated Subsidiaries as at such date and the consolidated results
of its
46
operations and its consolidated cash flows for the respective fiscal years then
ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at March 31, 2001 and the related unaudited
consolidated statements of income and cash flows for the three-month period
ended on such date, present fairly the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as at such date and the consolidated
results of its operations and its consolidated cash flows for the three-month
period then ended (subject to normal year-end audit adjustments and the omission
of footnotes). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). Except as set forth
on Schedule 4.1, no Group Member has any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph. During the period from December 31, 2000 to and
including the date hereof there has been no Disposition by any Group Member of
any material part of their respective businesses or properties.
(c) The audited income statements of the Target, Arrid and ▇▇▇▇▇▇▇
▇▇▇ as at March 31, 1999 and the audited consolidated balance sheets of the
Target, Arrid and ▇▇▇▇▇▇▇ ▇▇▇ as at March 31, 2000 and March 31, 2001, and the
related consolidated statements of income and of cash flows for the fiscal years
ended 2000 and 2001, in each case reported on by KPMG LLP (and, in the case of
the balance sheets as at March 31, 2000 and March 31, 2001, accompanied by an
unqualified report from KPMG LLP) present fairly the consolidated financial
condition of the Target, Arrid and ▇▇▇▇▇▇▇ ▇▇▇ as at such date and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). To the Borrower's
knowledge, each of the Target, Arrid and ▇▇▇▇▇▇▇ ▇▇▇ has no material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases (excepting certain operating leases entered into in the ordinary course
of business) or unusual forward or long-term commitments, including any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, that are not reflected in the most recent financial
statements referred to in this paragraph or otherwise disclosed in the
Transaction Documents. During the period from March 31, 2001 to and including
the date hereof there has been no Disposition by any of the Target, Arrid or
▇▇▇▇▇▇▇ ▇▇▇, as the case may be, of any material part of its businesses or
properties.
(d) The detailed consolidated budget for each fiscal year through
2007 (including a projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of each fiscal year through 2007, the related
consolidated statements of projected cash flow, projected changes in financial
position and projected income and a description of the underlying assumptions
applicable thereto), and significant revisions, if any, of such budget and
projections with respect to such fiscal year of the Borrower through the 2007
fiscal year (collectively, the "Projections"), are based on reasonable
estimates, information and assumptions and, to the knowledge of the Borrower,
are not incorrect or misleading in any material respect.
47
4.2 No Change. Since March 31, 2001, there has been no development
or event that has had or would reasonably be expected to have a Material Adverse
Effect.
4.3 Existence; Compliance with Law. Each Group Member (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
4.4 Power; Authorization; Enforceable Obligations. Each Loan Party
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents and the Transaction Documents to which it is a party and, in
the case of the Borrower, to obtain extensions of credit hereunder and to grant
the security interests on the terms and conditions contained in this Agreement
and the Guarantee and Collateral Agreement. Each Loan Party has taken all
necessary organizational action to authorize the execution, delivery and
performance of the Loan Documents and the Transaction Documents to which it is a
party and, in the case of the Borrower, to authorize the extensions of credit on
the terms and conditions of this Agreement, and to authorize the granting of the
security interests on the terms and conditions contained in this Agreement and
the Guarantee and Collateral Agreement. No consent or authorization of, filing
with, notice to or other act by or in respect of, any Governmental Authority or
any other Person is required in connection with the Transactions and the
extensions of credit hereunder or with the execution, delivery, performance,
validity or enforceability of this Agreement, any of the Loan Documents or the
Transaction Documents, except (i) consents, authorizations, filings and notices
described in Schedule 4.4, which consents, authorizations, filings and notices
have been obtained or made and are in full force and effect and (ii) the filings
referred to in Section 4.19. Each Loan Document and each Transaction Document
has been duly executed and delivered on behalf of each Loan Party party thereto.
This Agreement constitutes, and each other Loan Document and each Transaction
Document upon execution will constitute, a legal, valid and binding obligation
of each Loan Party party thereto, enforceable against each such Loan Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar; No Burdensome Restrictions. The execution,
delivery and performance of this Agreement, the other Loan Documents and the
Transaction Documents, the issuance of Letters of Credit, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or any material Contractual Obligation of any Group Member and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
material Contractual Obligation (other than the Liens created by the Security
Documents). No Requirement of Law or Contractual Obligation applicable to the
Borrower or any of its Subsidiaries would reasonably be expected to have a
Material Adverse Effect.
48
4.6 Litigation. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against any Group Member or against any of
their respective properties or revenues (a) with respect to any of the Loan
Documents, any of the Transaction Documents or any of the transactions
contemplated hereby or thereby, or (b) that would reasonably be expected to have
a Material Adverse Effect.
4.7 No Default. No Group Member is in default under or with respect
to any of its Contractual Obligations in any respect that would reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.8 Ownership of Property; Liens. Each Group Member has title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, or a valid license of, all its other
property (including Intellectual Property), and none of the property held in fee
simple or to which any Borrower has good title is subject to any Lien except as
permitted by Section 7.3.
4.9 Intellectual Property. Each Group Member owns, or is licensed or
otherwise has sufficient legal rights to use, all Intellectual Property
necessary for the conduct of its business as currently conducted free of all
encumbrances. All of each Group Member's Trademarks and all other material
Intellectual Property are valid and enforceable, not abandoned and unexpired. No
material claim has been threatened in writing or has been asserted and is
pending, and no judgment regarding the same has been rendered by a court of
competent jurisdiction, by any Person challenging or questioning the use of any
material Intellectual Property or the validity or effectiveness of any material
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim. No Group Member which is a party to a material Intellectual Property
license or other material agreement concerning Intellectual Property, is or is
alleged in writing to be, in breach or default thereunder. Each Group Member
represents that the transactions contemplated by this Agreement shall not impair
the Intellectual Property rights of any Group Member. Each Group Member takes
reasonable steps to protect and maintain all Trademarks and all other material
Intellectual Property, including executing all appropriate confidentiality
agreements and filing for all appropriate patents and registrations. The use of
Intellectual Property by each Group Member does not impair or infringe on the
rights of any Person in any material respect.
4.10 Taxes. Each Group Member has filed or caused to be filed all
federal, state and other material tax returns that are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the relevant Group
Member); no tax Lien has been filed, and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of any Loans, and
no other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock"
49
within the respective meanings of each of the quoted terms under Regulation U as
now and from time to time hereafter in effect in a manner that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
4.12 Labor Matters. Except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against any Group Member pending or, to the
knowledge of the Borrower, threatened; (b) hours worked by and payment made to
employees of each Group Member have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from any Group Member on account of employee
health and welfare insurance have been paid or accrued as a liability on the
books of the relevant Group Member.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or would reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X) that limits its ability to incur Indebtedness.
4.15 Subsidiaries. Except as disclosed to the Administrative Agent
by the Borrower in writing from time to time after the Closing Date, (a)
Schedule 4.15 sets forth the name and jurisdiction of incorporation of each
Subsidiary and, as to each such Subsidiary, the percentage of each class of
Capital Stock owned by any Loan Party and (b) there are no outstanding
subscriptions, options, warrants, calls, rights or other agreements or
commitments (other than stock options granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except as created by the Loan Documents.
50
4.16 Use of Proceeds. The proceeds of the Term Loans shall be used
to finance the Transactions and the Refinancing and to pay related fees and
expenses. The proceeds of the Revolving Loans and the Swingline Loans, and the
Letters of Credit, shall be used for general corporate purposes, including
acquisitions and working capital needs of the Borrower and its Subsidiaries in
the ordinary course of business.
4.17 Environmental Matters. Except as, in the aggregate, would not
reasonably be expected to result in the payment of a Material Environmental
Amount:
(a) the facilities and properties owned, leased or operated by any
Group Member (the "Properties") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or
concentrations or under circumstances that constitute or constituted a
violation of, or would be reasonably likely to give rise to liability
under, any Environmental Law;
(b) no Group Member has received or is aware of any notice of
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental
Laws with regard to any of the Properties or the business operated by any
Group Member (the "Business"), nor does the Borrower have knowledge or
reason to believe that any such notice will be received or is being
threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties (to the knowledge of any Group Member with
respect to any third party actions) in violation of, or in a manner or to
a location that would give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties (to the
knowledge of any Group Member with respect to any third party actions) in
violation of, or in a manner that would be reasonably likely to give rise
to liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which any Group Member is or will be named as a party
with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Properties or the Business;
(e) there has been no release or, to the knowledge of any Group
Member, threat of release of Materials of Environmental Concern at or from
the Properties, or arising from or related to the operations of any Group
Member in connection with the Properties or otherwise in connection with
the Business, in violation of or in amounts or in a manner that would be
reasonably likely to give rise to liability under Environmental Laws;
(f) the Properties and all operations (to the knowledge of any Group
Member with respect to any third party operations) at the Properties are
in compliance in all material respects, and have in the last five years
been in compliance in all material
51
respects, with all applicable Environmental Laws, and there is no material
contamination at, under or about the Properties or material violation of
any Environmental Law with respect to the Properties or the Business; and
(g) no Group Member has assumed any liability of any other Person
under Environmental Laws.
4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, any Transaction Document,
the Confidential Information Memorandum or any other document, certificate or
written statement furnished by or on behalf of any Loan Party to the
Administrative Agent or the Lenders, or any of them, for use in connection with
the transactions contemplated by this Agreement, the other Loan Documents or the
Transaction Documents, contained as of the date such written statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein not misleading. The
projections, including the Projections, and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such financial information as
it relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. As of the
date hereof, the representations and warranties of the Borrower and, to the
Borrower's knowledge, the representations and warranties of the other parties
contained in each Transaction Document are true and correct in all material
respects. There is no fact known to any Loan Party that would reasonably be
expected to have a Material Adverse Effect that has not been expressly disclosed
herein, in the other Loan Documents, in the Transaction Documents, in the
Confidential Information Memorandum or in any other documents, certificates and
statements furnished to the Administrative Agent and the Lenders for use in
connection with the transactions contemplated hereby, by the other Loan
Documents and by the Transaction Documents.
4.19 Security Documents. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings specified (including
United States Patent and Trademark Office filings and United States Copyright
Office filings) on Schedule 4.19(a) in appropriate form are filed in the offices
specified on Schedule 4.19(a), the Guarantee and Collateral Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case prior and superior in right to Liens held by any other
Person (except, in the case of Collateral other than Pledged Stock, Liens
permitted by Section 7.3).
52
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Obligations
(as defined in the relevant Mortgage), in each case prior and superior in right
to the Lien of any other Person. Schedule 1.1B lists each parcel of real
property in the United States owned in fee simple by the Borrower or any of its
Subsidiaries as of the Closing Date.
4.20 Solvency. Each Loan Party is, and after giving effect to the
Transactions and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and such Loan Party is
reasonably expected to continue to be, Solvent.
4.21 Regulation H. No Mortgage encumbers improved real property that
is located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
4.22 Certain Documents. The Borrower has delivered to the
Administrative Agent a complete and correct copy of each Transaction Document,
including any amendments, supplements or modifications with respect to any of
the foregoing.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) Credit Agreement; Guarantee and Collateral Agreement. The
Administrative Agent shall have received (i) this Agreement executed and
delivered by the Administrative Agent, the Borrower and each Person listed
on Schedule 1.1, (ii) the Guarantee and Collateral Agreement, executed and
delivered by the Borrower and each Subsidiary Guarantor and (iii) an
Acknowledgement and Consent in the form attached to the Guarantee and
Collateral Agreement, executed and delivered by each Issuer (as defined
therein), if any, that is not a Loan Party.
(b) Transactions, etc. The following transactions or events shall
have been consummated or occurred, in each case on terms and conditions
reasonably satisfactory to the Lenders:
(i) Each of the Transactions shall have been consummated on
terms and conditions substantially in accordance with the
Transaction Documents or otherwise reasonably satisfactory to the
Administrative Agent and the operative documents with respect
thereto shall not have been amended, restated, supplemented or
otherwise modified in any material respect; and
53
(ii) The Administrative Agent shall have received a
certificate of the Chief Financial Officer of the Borrower
certifying: (A) that the cost of (I) the Equity Investment shall not
have exceeded $111,750,000, (II) the Arrid Acquisition shall not
have exceeded $121,000,000, (III) the ▇▇▇▇▇▇▇ ▇▇▇ Acquisition shall
not have exceeded $7,500,000, (IV) the Refinancing shall not have
exceeded $155,000,000, (V) Indebtedness incurred in respect of the
deferred purchase price in connection with the acquisition of
Biovance shall not have exceeded $12,000,000, (VI) the refinancing
of other Indebtedness shall not have exceeded $16,000,000 and (VII)
the fees and expenses to be incurred by the Borrower in connection
with the Transactions and the financing thereof shall not exceed
$12,000,000; and (B) that the Borrower and its Subsidiaries, after
giving effect to the Transactions and the financings contemplated
hereby, shall be Solvent.
(c) Termination of Existing Facility. The Administrative Agent shall
have received satisfactory evidence that the Existing Facility shall have
been terminated and all amounts thereunder shall have been paid in full.
(d) Approvals. All governmental and third party approvals (including
approvals under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976
and other consents) necessary or, in the discretion of the Administrative
Agent, advisable in connection with the Transactions, the continuing
operations of the Group Members and the transactions contemplated hereby
shall have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority that would restrain,
prevent or otherwise impose adverse conditions on the Transactions or the
financing contemplated hereby.
(e) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of the Borrower, Arrid and ▇▇▇▇▇▇▇ ▇▇▇ are located, and such search shall
reveal no liens on any of the assets of the Loan Parties except for liens
permitted by Section 7.3 or discharged on or prior to the Closing Date
pursuant to documentation satisfactory to the Administrative Agent.
(f) Environmental Audit. The Administrative Agent shall have
received a satisfactory environmental audit with respect to real
properties of the Armkel Joint Venture located in Winsted, Connecticut and
Cranberry, New Jersey by a firm reasonably satisfactory to the
Administrative Agent.
(g) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which invoices
have been presented (including the reasonable fees and expenses of legal
counsel), on or before the Closing Date. All such amounts will be paid
with proceeds of Loans made on the Closing Date and will be reflected in
the funding instructions given by the Borrower to the Administrative Agent
on or before the Closing Date.
(h) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
54
(i) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel
to the Borrower and its Subsidiaries, substantially in the form of
Exhibit E-1;
(ii) the legal opinion of general counsel of the Borrower and
its Subsidiaries, substantially in the form of Exhibit E-2; and
(iii) to the extent consented to by the relevant counsel, each
legal opinion, if any, delivered in connection with the Transactions
(excepting the Equity Investment), accompanied by a reliance letter
in favor of the Lenders.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(j) Pledged Stock; Stock Powers; Pledged Notes. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each
promissory note (if any) pledged to the Administrative Agent pursuant to
the Guarantee and Collateral Agreement endorsed (without recourse) in
blank (or accompanied by an executed transfer form in blank) by the
pledgor thereof.
(k) Filings, Registrations and Recordings. Each document (including
any Uniform Commercial Code financing statement, any Patent and Trademark
Office filing and any Copyright Office filing) required by the Security
Documents or under law or reasonably requested by the Administrative Agent
to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien on
the Collateral described therein, prior and superior in right to the Lien
of any other Person (other than with respect to Liens expressly permitted
by Section 7.3), shall be in proper form for filing, registration or
recordation.
(l) Federal Regulations. The Administrative Agent shall be satisfied
that this Agreement and the use of the proceeds of the Loans hereunder
comply in all respects with Regulation U. The Administrative Agent shall
have received for its own account, and for the account of each Lender,
from the Borrower an executed statement as to matters specified in Section
4.11 hereof, which statement conforms with the requirements of FR Form U-1
referred to in Regulation U.
(m) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.2(b) of
the Guarantee and Collateral Agreement.
5.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
55
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date, except for representations and
warranties expressly stated to relate to a specific earlier date, in which
case such representations and warranties were true and correct in all
material respects as of such earlier date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or the Administrative Agent hereunder, the Borrower shall
and shall cause each of its Subsidiaries (with respect to Sections 6.3 through
6.6, 6.8, 6.9 and 6.10) to:
6.1 Financial Statements. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, setting
forth in each case in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or exception,
or qualification arising out of the scope of the audit, by Deloitte &
Touche LLP or other independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments and the omission of footnotes).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by the Borrower's accountants or a Responsible
Officer, as the case may be, and disclosed therein).
56
6.2 Certificates; Other Information. Furnish to the Administrative
Agent and each Lender (or, in the case of clause (f), to the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), (i) a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate and (ii) a certificate of a Responsible Officer stating on
behalf of the Borrower that, to such Responsible Officer's knowledge, each
Loan Party during such period has observed or performed in all material
respects all of its covenants and other agreements, and satisfied every
condition contained in this Agreement and the other Loan Documents to
which it is a party to be observed, performed or satisfied by it, and that
such Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Section 6.1(a) or (b), (i) a Compliance Certificate
containing all information and calculations necessary for determining
compliance by each Group Member with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal
year of the Borrower, as the case may be, and (ii) to the extent not
previously disclosed to the Administrative Agent, a listing of any county
or state within the United States where any Loan Party keeps inventory or
equipment and of any Intellectual Property acquired by any Loan Party
since the date of the most recent list delivered pursuant to this clause
(ii) (or, in the case of the first such list so delivered, since the
Closing Date);
(c) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the current
annual plan for such periods and to the comparable periods of the previous
year;
(d) no later than 5 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Transaction
Documents;
(e) within five days after the same are sent, copies of all
financial statements and reports that the Borrower sends to the holders of
any class of its debt securities or public equity securities and, within
five days after the same are filed, copies of all financial statements and
reports that the Borrower may make to, or file with, the SEC; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of
57
whatever nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the relevant
Group Member.
6.4 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and
keep in full force and effect its organizational existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii) above,
to the extent that failure to do so would not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted, and (b) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.
6.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and accounts in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) upon not
less than three Business Days notice and with reasonable coordination among the
Lenders (in each case, so long as no Default or Event of Default has occurred
and is continuing), permit representatives of any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Group Members with officers and employees of the Group Members and with
their independent certified public accountants.
6.7 Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of any Group Member or (ii) litigation, investigation or
proceeding that may exist at any time between any Group Member and any
Governmental Authority, that in either case, if not cured or if adversely
determined, as the case may be, would reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member (i) in
which the amount involved is $5,000,000 or more and not covered by
insurance, (ii) in which injunctive or similar relief is sought or (iii)
which relates to any Loan Document or any Transaction Document;
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(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC
or the Borrower or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan;
(e) the following prospective events, as soon as possible and in any
event at least 15 days' prior to such event, (i) the change of its or any
Subsidiary Guarantor's jurisdiction of organization or the location of its
or any Subsidiary Guarantor's chief executive office or sole place of
business from that referred to in Section 4.3 of the Guarantee and
Collateral Agreement; or (ii) the change of its or any Subsidiary
Guarantor's exact name, identity or corporate or other organizational
structure; and
(f) any development or event that has had or would reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Group Member proposes to take with
respect thereto.
6.8 Environmental Laws. (a) Comply in all material respects with,
and ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Mortgages, etc. Furnish to the Administrative Agent a Mortgage
with respect to each Mortgaged Property, executed and delivered by a duly
authorized officer of each party thereto within 45 days after the Closing Date,
or up to 90 days after the Closing Date if agreed by the Administrative Agent,
and do the following in connection therewith:
(a) If requested by the Administrative Agent, the Administrative
Agent shall receive, and the title insurance company issuing the policy referred
to in clause (c) below (the "Title Insurance Company") shall receive, maps or
plats of an as-built survey of the sites of the Mortgaged Properties certified
to the Administrative Agent and the Title Insurance Company in a manner
satisfactory to them, dated a date satisfactory to the Administrative Agent and
the Title Insurance Company by an independent professional licensed land
surveyor satisfactory to the Administrative Agent and the Title Insurance
Company, which maps or plats and the surveys on
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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 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; (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; (vi) if the
site is described as being on a filed map, a legend relating the survey to said
map; and (vii) the flood zone designations, if any, in which the Mortgaged
Properties are located.
(b) The Administrative Agent shall receive in respect of each
Mortgaged Property a mortgagee's title insurance policy (or policies) or marked
up unconditional binder for such insurance. Each such policy shall (i) be in an
amount satisfactory to the Administrative Agent; (ii) be issued at ordinary
rates; (iii) insure that the Mortgage insured thereby creates a valid first Lien
on such Mortgaged Property free and clear of all defects and encumbrances,
except as disclosed therein; (iv) name the Administrative Agent for the benefit
of the Lenders as the insured thereunder; (v) be in the form of ALTA Loan Policy
- 1970 (Amended 10/17/70 and 10/17/84) (or equivalent policies); (vi) contain
such endorsements and affirmative coverage as the Administrative Agent may
reasonably request and (vii) be issued by title companies satisfactory to the
Administrative Agent (including any such title companies acting as co-insurers
or reinsurers, at the option of the Administrative Agent). The Administrative
Agent shall receive evidence satisfactory to it that all premiums in respect of
each such policy, all charges for mortgage recording tax, and all related
expenses, if any, have been paid.
(c) If requested by the Administrative Agent, the Administrative
Agent shall receive (i) a policy of flood insurance that (A) covers any parcel
of improved real property that is encumbered by any Mortgage and is in a
designated flood zone (B) is written in an amount not less than the outstanding
principal amount of the indebtedness secured by such Mortgage that is reasonably
allocable to such real property or the maximum limit of coverage made available
with respect to the particular type of property under the National Flood
Insurance Act of 1968, whichever is less, and (C) has a term ending not later
than the maturity of the Indebtedness secured by such Mortgage and (ii)
confirmation that the Borrower has received the notice required pursuant to
Section 208(e)(3) of Regulation H of the Board.
(d) The Administrative Agent shall receive a copy of all recorded
documents referred to, or listed as exceptions to title in, the title policy or
policies referred to in paragraph (c) above and a copy of all other material
documents affecting the Mortgaged Properties.
6.10 Additional Collateral, etc. (a) With respect to any property
acquired after the Closing Date by any Loan Party (other than (x) any property
described in paragraph (b), (c) or (d) below, (y) any property subject to a Lien
expressly permitted by Section 7.3(g) and (z) property acquired by any Excluded
Foreign Subsidiary) as to which the Administrative Agent, for the benefit of the
Lenders, does not have a perfected Lien, promptly (i)
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execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or such other documents as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a security interest in such property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in such
property, including the filing of Uniform Commercial Code financing statements
(or other documents, such as Patent and Trademark Office filings and Copyright
Office filings) in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent.
(b) With respect to any fee interest in any real property having a
fair market value (together with improvements thereof) of at least $2,000,000
acquired after the Closing Date by any Loan Party (other than (x) any such real
property subject to a Lien expressly permitted by Section 7.3(g) and (z) real
property acquired by any Excluded Foreign Subsidiary), promptly (i) execute and
deliver a first priority Mortgage, in favor of the Administrative Agent, for the
benefit of the Lenders, covering such real property, (ii) if requested by the
Administrative Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real property in an amount at least equal to the
purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor's certificate and (y) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such Mortgage, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if reasonably
requested by the Administrative Agent, deliver to the Administrative Agent a
legal opinion relating to such new Mortgage, which opinion shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary and any Receivables Subsidiary) created or acquired after the
Closing Date by any Loan Party (which, for the purposes of this paragraph (c),
shall include any existing Subsidiary that ceases to be an Excluded Foreign
Subsidiary), promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by any Loan Party, (ii)
deliver to the Administrative Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the relevant Loan Party, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement, (B)
to take such actions necessary or advisable to grant to the Administrative Agent
for the benefit of the Lenders a perfected security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary (subject to existing Liens permitted by this Agreement), including
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as may
be requested by the Administrative Agent and (C) to deliver to the
Administrative Agent a certificate of such Subsidiary, substantially in the form
of Exhibit C, with appropriate insertions and attachments, and (iv) if
reasonably requested by the Administrative Agent, deliver to the Administrative
Agent a legal opinion relating to the matters described above, which opinion
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
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(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by any Loan Party (other than by any Loan Party
that is an Excluded Foreign Subsidiary), promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest (other than Liens arising by operation of law) in the Capital
Stock of such new Subsidiary that is owned by any such Loan Party (provided that
in no event shall more than 65% of the total outstanding voting Capital Stock of
any such new Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of the relevant Loan Party, and take such other action as may be
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the Administrative Agent's security interest therein, and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent a legal opinion
relating to the matters described above, which opinion shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
6.11 Interest Rate Protection. In the case of the Borrower, within
90 days after the Closing Date, enter into, and thereafter maintain, Hedge
Agreements to the extent necessary to provide that at least 33 1/3% of the
aggregate principal amount of the Term Loans is subject to either a fixed
interest rate or interest rate protection for a period of not less than one
year, which Hedge Agreements shall have terms and conditions reasonably
satisfactory to the Administrative Agent.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other amount
is owing to any Lender or the Administrative Agent hereunder, the Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
12/31/01 4.00 to 1.00
3/31/02 4.00 to 1.00
6/30/02 3.75 to 1.00
9/30/02 3.75 to 1.00
12/31/02 3.50 to 1.00
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3/31/03 3.50 to 1.00
6/30/03 3.25 to 1.00
9/30/03 3.25 to 1.00
12/31/03 3.00 to 1.00
3/31/04 2.50 to 1.00
each fiscal quarter thereafter 2.50 to 1.00.
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for the four consecutive fiscal quarters subsequent to
the Closing Date ending with any fiscal quarter set forth below to be less than
the ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
-------------- --------------
12/31/01 4.00 to 1.00
3/31/02 4.00 to 1.00
6/30/02 4.00 to 1.00
9/30/02 4.00 to 1.00
12/31/02 4.25 to 1.00
3/31/03 4.25 to 1.00
6/30/03 4.25 to 1.00
9/30/03 4.25 to 1.00
12/31/03 4.75 to 1.00
3/31/04 5.00 to 1.00
each fiscal quarter thereafter 5.00 to 1.00
; provided, that for the purposes of determining the ratio described above for
the fiscal quarters of the Borrower ending December 31, 2001, March 31, 2002 and
June 30, 2002, Consolidated Interest Expense for the relevant period shall be
deemed to equal Consolidated Interest Expense for such fiscal quarter (and, in
the case of the latter two such determinations, each previous fiscal quarter
commencing after the Closing Date) multiplied by 4, 2 and 4/3, respectively.
7.2 Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Guarantee Obligations incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of any
Wholly Owned Subsidiary Guarantor;
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(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or extensions
thereof (without increasing, or shortening the weighted average life to
maturity of, the principal amount thereof);
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $10,000,000 at any one time outstanding;
(f) Hedge Agreements in respect of Indebtedness otherwise permitted
hereby that bears interest at a floating rate, so long as such agreements
are not entered into for speculative purposes (including those Hedge
Agreements in existence on the date hereof and listed on Schedule 7.2(f));
(g) Indebtedness existing on the Closing Date or incurred thereafter
in respect of the deferred purchase price in connection with the
acquisition of Biovance not to exceed $12,000,000;
(h) Indebtedness of the Borrower and any of its Subsidiaries in
respect of any receivables securitization to the extent reasonably
approved by the Administrative Agent in an aggregate principal amount not
to exceed $75,000,000, so long as the Net Cash Proceeds of any such
receivables securitization shall be applied as set forth in Section
2.11(b);
(i) (A) Indebtedness of the Borrower in respect of unsecured notes,
so long as (I) such Indebtedness has no scheduled principal payments prior
to ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) no covenant or default contained in the unsecured
notes is more restrictive than those contained in this Agreement, as
reasonably determined by the Administrative Agent and (III) if
subordinated, the unsecured notes contain subordination terms that are no
less favorable in any material respect to the Lenders than those
applicable to offerings of "high-yield" subordinated debt by similar
issuers of similar debt at the same time as reasonably agreed to by the
Administrative Agent; provided, that the Net Cash Proceeds of such
unsecured notes shall be applied as set forth in Section 2.11(b) (except
that if after giving effect to such Indebtedness the Borrower is in pro
forma compliance with Section 7.1 hereof, the Net Cash Proceeds of such
unsecured notes may be used to finance acquisitions permitted pursuant to
this Agreement); and (B) Guarantee Obligations of any Loan Party in
respect of such Indebtedness, provided that if the unsecured notes are
subordinated, such Guarantee Obligations are subordinated to the same
extent as the obligations of the Borrower in respect of the unsecured
notes;
(j) any Indebtedness of any Person prior to such Person becoming a
Subsidiary pursuant to an acquisition permitted by the terms of this
Agreement; provided, that (i) such Indebtedness is not created in
contemplation of or in connection with such acquisition and (ii) such
Indebtedness does not exceed the aggregate amount of $10,000,000;
(k) additional Indebtedness incurred in relation to the pledge by
the Borrower of the Capital Stock of the Armkel Joint Venture to the
lenders under the Armkel Credit
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Agreement; provided, any guarantee associated with such pledge is
non-recourse to the Borrower;
(l) additional Indebtedness of any Foreign Subsidiary in an
aggregate principal amount (for all the Foreign Subsidiaries) not to
exceed $20,000,000 at any one time outstanding; and
(m) additional Indebtedness of the Borrower or any of its Domestic
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $10,000,000 at any one time outstanding.
7.3 Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except:
(a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
that are not overdue for a period of more than 30 days or that are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Section 7.2(d), provided that no such
Lien is spread to cover any additional property after the Closing Date and
that the principal amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower or any Subsidiary
incurred pursuant to Section 7.2(e) to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property other
than the property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
65
(h) Liens created pursuant to any Security Document;
(i) any interest or title of a lessor under any lease entered into
by the Borrower or any Subsidiary in the ordinary course of its business
and covering only the assets so leased;
(j) Liens incurred pursuant to receivables securitizations and
related assignments and sales of any income or revenues (including
Receivables), including Liens on the assets of any Receivables Subsidiary
created pursuant to any receivables securitization and Liens incurred by
the Borrower and its other Subsidiaries on Receivables to secure
obligations owing by them in respect of any such receivables
securitization to the extent reasonably approved by the Administrative
Agent;
(k) Liens securing Indebtedness permitted by Section 7.2(j);
(l) Liens on the Capital Stock of the Armkel Joint Venture in favor
of the lenders party to the Armkel Credit Agreement to secure the
obligations thereunder; provided, that such Liens shall be created
pursuant to agreements reasonably satisfactory to the Administrative Agent
and also shall permit the pledge of such Capital Stock to secure the
Obligations; and
(m) Liens not otherwise permitted by this Section so long as neither
(i) the aggregate outstanding principal amount of the obligations secured
thereby nor (ii) the aggregate fair market value (determined as of the
date such Lien is incurred) of the assets subject thereto exceeds (as to
the Borrower and all Subsidiaries) $10,000,000 at any one time.
7.4 Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any Wholly Owned
Subsidiary Guarantor (provided that the Wholly Owned Subsidiary Guarantor
shall be the continuing or surviving corporation);
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (i) to the Borrower or any Wholly Owned Subsidiary Guarantor (upon
voluntary liquidation or otherwise) or (ii) pursuant to a Disposition
permitted by Section 7.5; and
(c) any Investment expressly permitted by Section 7.8 may be
structured as a merger, consolidation or amalgamation so long as (i) in
the event the Borrower is a party to such merger, consolidation or
amalgamation, the Borrower is the surviving or continuing entity and (ii)
in the event a Wholly Owned Subsidiary Guarantor is a party to such
merger, consolidation or amalgamation, but the Borrower is not a party,
such Wholly Owned Subsidiary Guarantor is the surviving or continuing
entity.
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7.5 Disposition of Property. Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b) (other than Section
7.4(b)(ii));
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(e) the Disposition, for any fiscal year of the Borrower, of other
property having a fair market value not to exceed $15,000,000 in the
aggregate; and
(f) Dispositions in connection with any receivables or other
securitization contemplated by Section 7.2(h), so long as the Net Cash
Proceeds of any such receivables securitization shall be applied as set
forth in Section 2.11(b).
7.6 Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person paying such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of any Group Member, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of any Group Member
(collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the Borrower or
any Subsidiary Guarantor;
(b) so long as no Default or Event of Default shall have occurred
and be continuing, the Borrower may pay dividends to or purchase common
stock or common stock options from present or former officers or employees
of any Group Member upon the death, disability or termination of
employment of such officer or employee, provided, that the aggregate
amount of payments under this clause (b) after the date hereof (net of any
proceeds received by the Borrower after the date hereof in connection with
resales of any common stock or common stock options so purchased) shall
not exceed $5,000,000; and
(c) so long as no Default or Event of Default shall have occurred
and be continuing, the Borrower may make Restricted Payments and may
redeem or repurchase its common stock or common stock options from any
Person in an amount not to exceed the sum in any fiscal quarter ending
during the term of this Agreement of (i) $5,000,000 provided, that any
such amount referred to in this clause (i) may be carried over for
expenditure in another fiscal quarter in the same fiscal year but, if not
so expended in the fiscal year for which it is permitted may not be
carried over for expenditure in succeeding
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fiscal years, plus (ii) 10% of Consolidated Net Income for the period
beginning on the first day of the fiscal quarter commencing on or
immediately following the Closing Date, and ending on the last day of the
most recent fiscal quarter for which financial statements shall have been
delivered pursuant to Section 6.1 (taken as a single accounting period)
minus any amount expended under this clause (ii) during any prior fiscal
quarter ending during the term of this Agreement.
7.7 Capital Expenditures. Make or commit to make any Capital
Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding $45,000,000 in
fiscal 2001 and $35,000,000 in any fiscal year thereafter during the term of
this Agreement; provided, that (i) any such amount referred to above, if not so
expended in the fiscal year for which it is permitted, may be carried over for
expenditure only in the next succeeding fiscal year and (ii) Capital
Expenditures made pursuant to this clause (a) during any fiscal year shall be
deemed made, first, in respect of amounts permitted for such fiscal year as
provided above and, second, in respect of amounts carried over from the prior
fiscal year pursuant to subclause (i) above and (b) Capital Expenditures made
with the proceeds of any Reinvestment Deferred Amount.
7.8 Investments. Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of any Group Member in the
ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for all Group Members not to
exceed $3,000,000 at any one time outstanding;
(e) the Transactions;
(f) the investment in Biovance whereby the Borrower shall acquire at
least 51% of the outstanding common stock of Biovance for an aggregate
amount not in excess of $8,000,000 plus the sum of the gross profit of
Biovance for each of the first two fiscal years of Biovance ending after
such investment in Biovance by the Borrower;
(g) Investments in assets (constituting a business unit) useful in
the business of the Borrower and its Subsidiaries made by the Borrower or
any of its Subsidiaries with the proceeds of any Reinvestment Deferred
Amount;
(h) seller notes, including seller mortgages, in an aggregate amount
not to exceed $2,000,000 for any fiscal year of the Borrower in connection
with any sale contemplated by Section 7.5(e);
68
(i) intercompany Investments by any Group Member in the Borrower or
any Person that, prior to such investment, is a Wholly Owned Subsidiary
Guarantor;
(j) intercompany Investments not otherwise allowed hereunder by any
Group Member in any Foreign Subsidiary provided that the aggregate total
amount of such Investments does not exceed $5,000,000;
(k) other non-hostile acquisitions of the equity securities of, or
assets constituting a business unit of, any Person in an aggregate amount
not to exceed the sum of (i) $60,000,000 in any fiscal year (provided,
that any such amount referred to above, if not so expended in the fiscal
year for which it is permitted, may not be carried over for expenditure in
the succeeding fiscal years), (ii) proceeds of Indebtedness permitted by
Section 7.2(i) to be used to finance acquisitions and (iii) the market
value of any Capital Stock of the Borrower or any of its Subsidiaries
issued in connection with any such acquisition, provided that (A)
immediately prior to and after giving effect to any such acquisition, no
Default or Event of Default shall have occurred or be continuing, (B) such
acquisition is consummated in accordance with applicable law, and (C) the
Borrower shall be in pro forma compliance with the covenants set forth in
Section 7.1 after giving effect to such acquisition (assuming that such
acquisition had been completed and any related Indebtedness had been
incurred on the first day of the most recently completed period of four
fiscal quarters for which financial statements shall have been furnished
pursuant to Section 6.1);
(l) Investments comprised of capital contributions, loans or
deferred purchase price (whether in the form of cash, a note or other
assets) to any Receivables Subsidiary;
(m) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower in an aggregate amount (valued at
cost) not to exceed $10,000,000 during the term of this Agreement in
Quimica Geral do Nordeste, S.A., a corporation organized under the laws of
the Federated Republic of Brazil; and
(n) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost) not to exceed $20,000,000 during the
term of this Agreement.
7.9 Transactions with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrower or any Subsidiary Guarantor) unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary
course of business of the relevant Group Member, and (c) upon fair and
reasonable terms no less favorable to the relevant Group Member than it would
obtain in a comparable arm's length transaction with a Person that is not an
Affiliate; provided, that the Borrower (i) may receive from the Armkel Joint
Venture management and other fees and (ii) may provide services to the Armkel
Joint Venture, in each case, in accordance with the Transaction Documents.
69
7.10 Sales and Leasebacks. Enter into any arrangement with any
Person providing for the leasing by any Group Member of real or personal
property with a fair market value in excess of $3,000,000 in the aggregate that
has been or is to be sold or transferred by such Group Member to such Person or
to any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of such Group Member.
7.11 Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's method
of determining fiscal quarters.
7.12 Negative Pledge Clauses. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of any Group
Member to create, incur, assume or suffer to exist any Lien upon any of its
property or revenues, whether now owned or hereafter acquired, other than (a)
this Agreement and the other Loan Documents, (b) the Letter of Credit
Reimbursement Agreement, dated as of May 1, 1991, between the Borrower and The
Bank of Nova Scotia (provided that any limitation contained therein shall not be
effective to the extent such limitation is made more restrictive after the date
hereof), and (c) any agreements governing any purchase money Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby).
7.13 Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents and (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary.
7.14 Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement (after giving effect
to the Transactions) or that are reasonably related thereto or to the business
currently conducted by the Target.
7.15 Amendments to Transaction Documents. (a) Amend, supplement or
otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of
the indemnities and licenses furnished to the Borrower or any of its
Subsidiaries pursuant to the Transaction Documents such that after giving effect
thereto such indemnities or licenses shall be materially less favorable to the
interests of the Loan Parties or the Lenders with respect thereto, (b) otherwise
amend, supplement or otherwise modify the terms and conditions of the
Transaction Documents or any such other documents except for any such amendment,
supplement or modification that would not reasonably be expected to have a
Material Adverse Effect or (c) amend, supplement or otherwise modify any
material term of any Transaction Document without
70
the prior written consent of the Administrative Agent (which will not be
unreasonably withheld or delayed).
7.16 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) Make any optional payment or prepayment on, or set apart assets
to create a sinking or other analogous fund to effect the redemption, purchase
or defeasance of, any Indebtedness or Guarantee Obligation (other than the
Loans) except for refinancings of Indebtedness permitted by subsection 7.2 or
(b) amend, modify or change, or consent or agree to any amendment, modification
or change to, any of the material terms of any Indebtedness or Guarantee
Obligations (other than any such amendment, modification or change which would
extend the maturity or reduce the amount of any payment of principal thereof or
which would reduce the rate or extend the date for payment of interest thereon).
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, any fees payable hereunder or any other amount payable
hereunder or under any other Loan Document, within five days after any
such interest or other amount becomes due in accordance with the terms
hereof or thereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or
performance of Section 6.4(a) (with respect to the Borrower only), Section
6.7(a) or Section 7 of this Agreement or Section 5.5 or 5.7(b) of the
Guarantee and Collateral Agreement or (ii) an "Event of Default" under and
as defined in any Mortgage shall have occurred and be continuing; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days after
notice to the Borrower from the Administrative Agent or the Required
Lenders; or
(e) any Group Member shall (i) default in making any payment of any
principal of any Indebtedness (including any Guarantee Obligation, but
excluding the Loans) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or (ii)
default in making any payment of any interest on any such Indebtedness
beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (iii) default in
the observance
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or performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to
cause, or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or (in the case of any such Indebtedness constituting
a Guarantee Obligation) to become payable; provided, that a default, event
or condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default unless, at such time,
one or more defaults, events or conditions of the type described in
clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and
be continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $10,000,000; or
(f) (i) any Group Member shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any Group Member shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against any
Group Member any case, proceeding or other action of a nature referred to
in clause (i) above that (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Group Member any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets that
results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) any Group Member shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) any Group Member shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become
due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of any
Group Member or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, or
(v) any Group Member or any Commonly Controlled Entity shall, or in the
reasonable opinion of the
72
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan; and in each case in clauses (i) through (v) above, such event or
condition, together with all other such events or conditions, if any,
would, in the reasonable judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against any
Group Member involving in the aggregate a liability (not paid or fully
covered by insurance as to which the relevant insurance company has not
denied coverage) of $5,000,000 or more, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal
within 30 days from the entry thereof; or
(i) any of the Security Documents covering a material amount of
property shall cease, for any reason other than as permitted hereunder or
under the relevant Security Document, to be in full force and effect, or
any Loan Party or any Affiliate of any Loan Party shall so assert, or any
material Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created
thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party shall so assert or any Loan Party shall disaffirm
or deny its obligations thereunder; or
(k) (i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), excluding stockholders who, as of the Closing Date, own,
directly or indirectly, more than 10% of the outstanding common stock of
the Borrower, shall become, or obtain rights (whether by means of
warrants, options or otherwise) to become, the "beneficial owner" (as
defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 20% of the outstanding common stock of the
Borrower or (ii) the board of directors of the Borrower shall cease to
consist of a majority of Continuing Directors;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower, the
Commitments shall automatically and immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall automatically and immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents
73
(including all amounts of L/C Obligations, if the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, 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 Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorney's
in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from 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 any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document
74
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agents under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. The Agents shall not 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 any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, 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 counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative 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 (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully 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 (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender 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 Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative 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.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any 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, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
75
without reliance upon any 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 the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such termination and repayment), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from such Agent's
gross negligence or willful misconduct. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
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9.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
9.10 Syndication Agents . No Syndication Agent shall have any duties
or responsibilities hereunder in its capacity as such.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date or
reduce the amount due of any amortization payment in respect of any Term Loan,
reduce the stated rate of any interest or fee payable hereunder (except (x) in
connection with the waiver of applicability of any post-default increase in
interest rates (which waiver shall be effective with the consent of the Majority
Facility Lenders of each adversely affected Facility) and (y) that any amendment
or modification of defined terms used in the financial covenants in this
Agreement shall not constitute a reduction in the rate of interest or fees for
purposes of this clause (i)) or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any
77
Lender's Revolving Commitment, in each case without the written consent of each
Lender directly affected thereby; (ii) eliminate or reduce the voting rights of
any Lender under this Section 10.1 without the written consent of such Lender;
(iii) reduce or increase any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement or the other Loan Documents, or
release all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their obligations under the
Guarantee and Collateral Agreement, in each case without the written consent of
all Lenders; (iv) amend, modify or waive any condition precedent to any
extension of credit under the Revolving Facility set forth in Section 5.2
(including in connection with any waiver of an existing Default or Event of
Default) without the written consent of the Majority Facility Lenders with
respect to the Revolving Facility; (v) amend, modify or waive any provision of
Section 2.17(a), (b) or (c) without the written consent of each Lender adversely
affected thereby or amend, modify or waive any other provision of Section 2.17
without the written consent of the Majority Facility Lenders in respect of each
Facility adversely affected thereby; (vi) reduce the percentage of Net Cash
Proceeds or Excess Cash Flow required to be applied to prepay Loans under this
Agreement, amend the definition of Net Cash Proceeds, Excess Cash Flow or Asset
Sale in a manner which would be reasonably likely to materially lower the
amounts applied to prepay Loans under this Agreement or waive any prepayment
required under Section 2.11 without the written consent of the Majority Facility
Lenders in respect of each Facility; (vii) reduce the percentage specified in
the definition of Majority Facility Lenders with respect to any Facility without
the written consent of all Lenders under such Facility; (viii) amend, modify or
waive any provision of Section 9 without the written consent of the
Administrative Agent; (ix) amend, modify or waive any provision of Section 2.6
or 2.7 without the written consent of the Swingline Lender; (x) amend, modify or
waive any provision of Section 3 without the written consent of each Issuing
Lender or (xi) waive any condition precedent to the initial extension of credit
set forth in Section 5.1 without the written consent of each Lender. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
Notwithstanding the foregoing, this Agreement may be amended (or
amended and restated) with the written consent of the Required Lenders, the
Administrative Agent and the Borrower (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
to share ratably in the benefits of this Agreement and the other Loan Documents
with the Term Loans and Revolving Extensions of Credit and the accrued interest
and fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders and Majority
Facility Lenders.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or five Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy
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notice, when received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
Church & ▇▇▇▇▇▇ Co., Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
The Chase Manhattan Bank
695 Route 64W
Administrative Agent: ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
or reimburse the Administrative Agent and the Arranger for all their reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and the Arranger, with
statements with respect to the foregoing to be submitted to the Borrower prior
to the Closing Date (in the case of amounts to be paid on the Closing Date) and
from time to time thereafter on a quarterly basis or such other periodic basis
as the Administrative Agent shall deem appropriate, (b) to pay or reimburse each
Lender and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of one
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counsel to the Lenders as a group and of one counsel to the Administrative Agent
(including, in each case, the allocated fees and expenses of in-house counsel),
(c) to pay, indemnify, and hold each Lender and the Administrative Agent and the
Arranger harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, stamp, excise and other taxes, if any, that may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender and
the Administrative Agent and the Arranger and their respective officers,
directors, employees, affiliates, agents and controlling persons when acting in
such capacity (each, an "Indemnitee") harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the other Loan Documents and any such other documents,
including any of the foregoing relating to the use of proceeds of the Loans or
the violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of any Group Member or any of the Properties and
the reasonable fees and expenses of legal counsel in connection with claims,
actions or proceedings by any Indemnitee against or otherwise related to any
Loan Party under any Loan Document (all the foregoing in this clause (d),
collectively, the "Indemnified Liabilities"), provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities result from the gross
negligence or willful misconduct of such Indemnitee. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee. All amounts due under this Section
10.5 shall be payable not later than 10 days after written demand therefor.
Statements of amounts payable by the Borrower pursuant to this Section 10.5
shall be submitted to ▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telephone No. ▇▇▇-▇▇▇-▇▇▇▇) (Telecopy No.
973-439-5011), at the address of the Borrower set forth in Section 10.2, or to
such other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender other than any Conduit Lender may, without the
consent of the Borrower, in accordance with applicable law, at any time sell to
one or more banks, financial institutions or other entities (each, a
"Participant") participating interests in any Loan owing to such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the
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other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Loans or
any fees payable hereunder, or postpone the date of the final maturity of the
Loans, in each case to the extent subject to such participation. The Borrower
agrees that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.18, 2.19 and 2.20
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; provided that, in the case of Section
2.19, such Participant shall have complied with the requirements of said Section
and provided, further, that no Participant shall be entitled to receive any
greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender other than any Conduit Lender (an "Assignor") may, in
accordance with applicable law, at any time and from time to time assign to any
Lender or any Lender Affiliate or, with the consent of the Borrower and the
Administrative Agent (which, in each case, shall not be unreasonably withheld or
delayed), to an additional bank, financial institution or other entity (an
"Assignee") all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance, executed
by such Assignee, such Assignor and any other Person whose consent is required
pursuant to this paragraph, and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that, unless otherwise agreed
by the Borrower and the Administrative Agent, no such assignment to an Assignee
(other than any Lender or any Lender Affiliate) shall be in an aggregate
principal amount of less than $5,000,000 (or, in the case of the Tranche B Term
Facility, $1,000,000), in each case except in the case of an assignment of all
of a Lender's interests under this Agreement. For purposes of the proviso
contained in the preceding sentence, the amount described therein shall be
aggregated in respect of each Lender and its Lender Affiliates, if any. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
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all of an Assignor's rights and obligations under this Agreement, such Assignor
shall cease to be a party hereto). Notwithstanding any provision of this Section
10.6, the consent of the Borrower shall not be required for any assignment that
occurs when an Event of Default shall have occurred and be continuing.
Notwithstanding the foregoing, any Conduit Lender may assign at any time to its
designating Lender hereunder without the consent of the Borrower or the
Administrative Agent any or all of the Loans it may have funded hereunder and
pursuant to its designation agreement and without regard to the limitations set
forth in the first sentence of this Section 10.6(c).
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each other Loan Party, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Loans and any Notes evidencing the Loans recorded therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance, and thereupon one or more new Notes shall be issued
to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor, an Assignee and any other Person whose consent is required by Section
10.6(c), together with payment to the Administrative Agent of a registration and
processing fee of $4,000, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) record the information contained therein
in the Register on the effective date determined pursuant thereto.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including any pledge or assignment by a
Lender to any Federal Reserve Bank in accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (f) above.
(h) The Borrower, each Lender and the Administrative Agent hereby
confirms that it will not institute against a Conduit Lender or join any other
Person in instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its
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inability to institute such a proceeding against such Conduit Lender during such
period of forbearance.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "Benefitted
Lender") shall, at any time after the Loans and other amounts payable hereunder
shall immediately become due and payable pursuant to Section 8, receive any
payment of all or part of the Obligations owing to it, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 8(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of the Obligations owing to
each such other Lender, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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10.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive personal jurisdiction of the courts of the State
of New York, the courts of the United States for the Southern District of New
York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to the Borrower, as
the case may be at its address set forth in Section 10.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and
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(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
10.14 Releases of Guarantees and Liens. (a) Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender) to take any action requested
by the Borrower having the effect of releasing any Collateral or Guarantee
Obligations (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to in
accordance with Section 10.1 or (ii) under the circumstances described in
paragraph (b) below.
(b) At such time as the Loans, the Reimbursement Obligations and the
other obligations under the Loan Documents (other than obligations under or in
respect of Hedge Agreements) shall have been paid in full, the Commitments have
been terminated and no Letters of Credit shall be outstanding, the Collateral
shall be released from the Liens created by the Security Documents, and the
Security Documents and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Loan Party under
the Security Documents shall terminate, all without delivery of any instrument
or performance of any act by any Person.
10.15 Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party pursuant to this Agreement that is designated in writing by such
Loan Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any Lender Affiliate, (b) subject
to an agreement to comply with the provisions of this Section, to any actual or
prospective Transferee or any direct or indirect counterparty to any Hedge
Agreement (or any professional advisor to such counterparty), (c) to its
officers, employees, directors, agents, attorneys, accountants and other
professional advisors or those of any of its affiliates, (d) upon the request or
demand of any Governmental Authority, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender, or (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document. This Section 10.15 shall not apply
with respect to any information which (i) is or becomes generally known to the
public, (ii) was already known to the Lenders or the Administrative Agent or was
otherwise in their possession prior to its disclosure in connection with this
Agreement, (iii) was disclosed to the Lenders or the Administrative Agent prior
or subsequent to the date hereof from a third party not known to the Lenders or
the Administrative Agent to be bound by a confidentiality agreement with the
Borrower or (iv) was internally developed by any of the Lenders or the
Administrative Agent without reference to any otherwise confidential
information.
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10.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
CHURCH & ▇▇▇▇▇▇ CO., INC., as the Borrower
By:
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By:
--------------------------------------
Name:
Title: