EXHIBIT 10.36
------------------------------------------------------------------------------
AMENDED AND RESTATED LOAN AGREEMENT
dated as of February 25, 2000
among
DEL LABORATORIES, INC.
DEL PHARMACEUTICALS, INC.
PARFUMS SCHIAPARELLI, INC.
ROYCE & ▇▇▇▇▇, INC.
565 BROAD HOLLOW REALTY CORP.
and
THE LENDERS NAMED HEREIN
$40,000,000
9.5% Senior Notes Due May 31, 2005
------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
SECTION 1. Exhibits and Section References...................................1
SECTION 2. Loans.............................................................2
SECTION 3. Effectiveness of Amendment and Restatement........................2
SECTION 4. Prepayment of Notes; Maturity.....................................2
SECTION 4.1. Required Prepayments...................................2
SECTION 4.2. Optional Prepayments...................................3
SECTION 4.3. Special Prepayment Following Restricted Asset Sale.....3
SECTION 4.4. Special Prepayment Upon Change of Control..............4
SECTION 4.5. Manner of Making Special Prepayments...................4
SECTION 4.6. Obligation to Prepay after Notice......................5
SECTION 4.7. Application of Prepayments.............................5
SECTION 4.8. Presentation or Surrender of Notes.....................5
SECTION 4.9. Note Purchase Prohibition..............................5
SECTION 5. Covenants.................................................5
SECTION 5.1. Compliance with Laws, Etc..............................5
SECTION 5.2. Reporting Requirements.................................5
SECTION 5.3 Taxes..................................................8
SECTION 5.4. Corporate Existence....................................8
SECTION 5.5. Maintenance of Properties and Insurance................8
SECTION 5.6. Books of Record and Account............................8
SECTION 5.7. Visitation.............................................8
SECTION 5.8. Performance and Compliance with Other Agreements.......8
SECTION 5.9. Continued Perfection of Liens..........................9
SECTION 5.10. Pension Funding........................................9
SECTION 5.11. Licenses; Trademarks...................................9
SECTION 5.12. New Subsidiaries......................................10
SECTION 5.13. North Carolina Mortgage...............................10
SECTION 5.14. Canadian Mortgage.....................................10
SECTION 5.15. Liens, Etc............................................10
SECTION 5.16. Debt.................................................12
-i-
TABLE OF CONTENTS
(continued)
PAGE
SECTION 5.17. Merger..................................................13
SECTION 5.18 Sale of Assets, Etc......................................13
SECTION 5.19. Investments, Etc........................................13
SECTION 5.20. Transactions With Affiliates.............................13
SECTION 5.21. Prepayment of Outstanding Debt..........................13
SECTION 5.22. Guarantees..............................................13
SECTION 5.23. Change of Business......................................13
SECTION 5.24. Fiscal Year.............................................14
SECTION 5.25. Maximum Losses; Minimum Net Income......................14
SECTION 5.26. Accounting Policies.....................................14
SECTION 5.27. Dividends, Etc..........................................14
SECTION 5.28. Change in Control.......................................14
SECTION 5.20. Hazardous Material......................................14
SECTION 5.30. Limitations on Consolidated Foreign Assets and Revenues.15
SECTION 5.31. Financial Requirements..................................15
SECTION 6. Definitions; Accounting Terms...............................16
SECTION 7. Remedies....................................................26
SECTION 7.1 Events of Default; Acceleration..........................26
SECTION 7.2. Other Remedies...........................................28
SECTION 7.3. Notice of Acceleration...................................29
SECTION 8. Communications; Payment of Notes............................29
SECTION 9. First Offer Upon Transfer of Notes..........................30
SECTION 10. Amendment and Waiver........................................30
SECTION 11. Registration, Transfer and Exchange of Notes................31
SECTION 12. Lost Notes..................................................31
SECTION 13. Expenses....................................................31
SECTION 14. Confidential Information....................................32
SECTION 15. Successors and Assigns......................................33
SECTION 16. Survival of Representations and Warranties..................33
SECTION 17. Governing Law...............................................33
-ii-
SECTION 18. Reaffirmation, Restatement and Waivers....................33
SECTION 19. Termination of Security Interests; Release of Collateral..34
SCHEDULE I
EXHIBIT A DEL LABORATORIES, INC
EXHIBIT B REPRESENTATIONS
EXHIBIT C CLOSING CONDITIONS
EXHIBIT D DOCUMENTS AND INFORMATION FURNISHED TO THE LENDERS
SCHEDULE D-1
SCHEDULE D-2
SCHEDULE D-3
SCHEDULE D-4
SCHEDULE D-5
SCHEDULE D-6
SCHEDULE D-7
SCHEDULE D-8
-iii-
AMENDED AND RESTATED
LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of February 25,
2000, (the or this "Agreement") among DEL LABORATORIES, INC., a Delaware
corporation (as further defined in Section 6, the "Company"), Del
Pharmaceuticals, Inc., a Delaware corporation ("DPI"), Parfums Schiaparelli,
Inc., a New York corporation ("Parfums"), Royce & ▇▇▇▇▇, Inc., a Delaware
corporation ("Royce"), 565 Broad Hollow Realty Corp., a New York corporation
("Broad"), and the lender named in Schedule I hereto (and with such other
lenders as may become parties hereto in accordance with the terms hereof,
collectively, the "Lenders").
WHEREAS, ▇▇▇▇▇▇▇ National Life Insurance Company and ▇▇▇▇▇▇▇
National Life Insurance Company of Michigan, as lenders (the "Original Lenders")
and the Company are parties to that certain Loan Agreement dated as of May 26,
1993, as amended by the First Amendment to Loan Agreement dated as of March 31,
1997, the Second Amendment to Loan Agreement dated as of December 30, 1998, and
the Third Amendment to Loan Agreement dated as of December 22, 1999 (as amended,
the "Original Loan Agreement"), pursuant to which the Original Lenders made
certain loans to the Company and the Company issued to the Original Lenders its
Notes (as defined in the Original Loan Agreement) (the "Original Notes");
WHEREAS, ▇▇▇▇▇▇▇ National Life Insurance Company, as the successor
in interest to ▇▇▇▇▇▇▇ National Life Insurance Company of Michigan, is the
holder of 100% of the issued and outstanding Original Notes;
WHEREAS, the Company and the Lenders now desire to amend and
restate the Original Loan Agreement to, among other things, (i) change the
amount of certain of the mandatory prepayments required to be made thereunder,
(ii) provide for the securing of the obligations represented by the Notes, (iii)
amend certain covenants and related definitions, and (iv) make certain other
changes to the Original Loan Agreement.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the parties hereto
agree as follows:
SECTION 1. EXHIBITS AND SECTION REFERENCES. This Agreement includes the
attached Schedule I and Exhibits A through D. Section numbers herein that are
preceded by a capital letter refer to sections in the Exhibit designated by that
letter.
SECTION 2. LOANS. Each Lender has made a loan to the Company in the
amount set forth opposite such Lender's name in Schedule I. On the Restatement
Effective Date, as defined below, the Company will amend and restate the
Original Notes in the form of Exhibit A to this Agreement to evidence its
promise to repay the loans with interest. Reference in this Agreement to the
"Notes" shall be a reference to the Original Notes as amended and restated in
the form of Exhibit A, or any Note or Notes delivered in substitution or
exchange therefor pursuant to the provisions of this Agreement. The Company will
issue such amended and restated Notes to the Lenders upon surrender by them of
the Original Notes for cancellation by the Company. The aggregate amount of
loans to be made pursuant to this Agreement is $40,000,000, but the loan by each
Lender is a separate and several loan. To induce each Lender to enter into this
Agreement and to amend and restate its Original Notes, the Company makes the
representations and warranties set forth in Exhibit B, Part One, and the
covenants and agreements hereinafter stated. Each Lender makes the
representation set forth in Exhibit B, Part Two.
SECTION 3. EFFECTIVENESS OF AMENDMENT AND RESTATEMENT. The terms and
provisions of this Agreement shall become effective (the "Restatement Effective
Date") on such date upon which (i) the Lenders shall have received an amendment
fee from the Company in the amount of $40,000, which amendment fee shall be
fully earned upon the execution of this Agreement, and (ii) each of the closing
conditions listed on Exhibit C hereto shall have been satisfied in form and
substance reasonably satisfactory to the Lenders.
SECTION 4. PREPAYMENT OF NOTES; MATURITY. The Company will make
required, and may make optional, prepayments of the principal of the Notes as
hereinafter provided. The principal balance of the Notes not otherwise prepaid,
together with all accrued and unpaid interest thereon and other applicable fees
and charges, shall be due in full on May 31, 2005.
SECTION 4.1. REQUIRED PREPAYMENTS. So long as any of the Notes shall be
outstanding, there shall become due and payable, and the Company will prepay,
the following aggregate principal amount of the Notes (or the unpaid balances
thereof) on the dates indicated (each, a "Mandatory Prepayment Date"):
May 31, 2001 $4,000,000
May 31, 2002 $4,000,000
May 31, 2003 $8,000,000
May 31, 2004 $8,000,000
without prepayment charge, whether or not any optional prepayment has been or is
being made pursuant to Section 4.2 (subject to the next proviso), 4.3 or 4.4;
provided that, in the event that any prepayment shall have been made pursuant to
Section 4.3 or 4.4 (a "Special Prepayment"), then with respect to all subsequent
prepayments pursuant to this Section 4.1 the aggregate principal amount of Notes
to be prepaid on each subsequent Mandatory Prepayment Date shall be an amount
equal to the product of (i) the aggregate principal amount of the Notes to be
prepaid on such Mandatory Prepayment Date (or the amount to which such number
shall have been theretofore reduced pursuant to this proviso by reason of a
prior Special Prepayment), times
2
(ii) a fraction, the numerator of which shall be the aggregate principal amount
of the Notes outstanding immediately after such Special Prepayment (before
giving effect to any prepayment pursuant to Section 4.2 or this Section 4.1
being made on the same day) and the denominator of which shall be the aggregate
principal amount of Notes outstanding immediately prior to such Special
Prepayment (before giving effect to any prepayment pursuant to Section 4.2 or
this Section 4.1 being made on the same day).
SECTION 4.2. OPTIONAL PREPAYMENTS. The Company, upon not less than 30
or more than 60 days' prior written notice of the date and amount of optional
prepayment to the holders of the Notes, may prepay at any time all or from time
to time any part (in a multiple of $100,000) of the principal of the Notes, upon
payment of a prepayment charge equal to the excess, if any, of (a) the sum of
the present values, discounted semi-annually in accordance with accepted
financial practice at a rate per annum equal to the Treasury Yield plus
seventy-five hundredths percent (.75%), of each of (i) all remaining scheduled
payments and prepayments (whether at maturity or pursuant to Section 4.1) of the
principal amount to be prepaid pursuant to this Section 4.2 (any partial
prepayment pursuant to this Section 4.2 being deemed applied in satisfaction of
such scheduled payments and prepayments in inverse chronological order of their
due dates) plus (ii) all remaining payments of interest payable on such
principal amount according to the terms of the Notes to and including maturity
or the dates of such scheduled prepayments, as the case may be (assuming each
payment referred to in clauses (i) and (ii) above is made when due), over (b)
the principal amount to be prepaid pursuant to this Section 4.2.
SECTION 4.3. SPECIAL PREPAYMENT FOLLOWING RESTRICTED ASSET SALE. In the
event that the Company proposes to enter into a transaction or series of
transactions not permitted by Section 5.17 or 5.18 (a "Restricted Asset Sale"),
the Company shall, not less than 30 nor more than 90 days prior to such
Restricted Asset Sale, give each holder of any Notes written notice thereof by
telecopy confirmed by telephone in accordance with Section 8, such notice to
describe the proposed Restricted Asset Sale and the amount of the expected
proceeds thereof and request the consent of the holder or holders of the Notes
thereto. The Company may proceed with the Restricted Asset Sale only if the
holder or holders of at least 66-2/3% of the unpaid principal amount of the
Notes then outstanding consent in writing thereto.
Not more than 190 days following the first day on which the Company or
any of its Subsidiaries receives any proceeds from an approved Restricted Asset
Sale (the "Asset Sale Closing Date"), the Company shall give each holder of any
Notes a written notice (the "Offer Notice") by telecopy confirmed by telephone
in accordance with Section 8 containing the Company's unconditional and
irrevocable offer to prepay, on a date specified therein (the "Special
Prepayment Date"), which date shall be not less than 45 nor more than 60 days
following the date on which such notice is given, a principal amount of the
Notes equal to the sum of (a) 100% of the proceeds received by the Company and
its Subsidiaries from all sales of assets which individually or in the aggregate
disposed of a Substantial Part of the assets of the Company or a Subsidiary,
less (b) the amount of such proceeds which were reinvested by the Company within
180 days following their receipt in assets substantially similar to those assets
sold, up to the entire unpaid principal amount of the Notes, at the Prepayment
Price (as defined in Section 4.5) plus interest accrued to and including the
Special Prepayment Date. If the Company shall not within 30 days of the giving
of such notice have received a written
3
acceptance (which may be by telecopy or other means of telecommunication) of
such offer by such holder, such offer shall be deemed to have been rejected by
such holder, and the Company shall have no further obligation to prepay the
Notes of such holder as a consequence of such Restricted Asset Sale.
SECTION 4.4. SPECIAL PREPAYMENT UPON CHANGE OF CONTROL. In the event of
a Change of Control, the Company shall not less than 15 days prior to such event
(or, if prior notice is not possible, immediately following the Company's
becoming aware of such Change of Control) give to each holder of any Notes
written notice thereof by telecopy confirmed by telephone in accordance with
Section 8, such notice to contain the Company's unconditional and irrevocable
offer to prepay, on a date specified therein (the "Special Prepayment Date"),
which date shall be not less than 60 nor more than 90 days following the date on
which such notice is given, all but not less than all the Notes held by such
holder, at the Prepayment Price (as defined in Section 4.5) plus interest
accrued to and including the Special Prepayment Date. If the Company shall not
within 30 days of the giving of such notice have received a written acceptance
(which may be by telecopy or other means of telecommunication) of such offer by
such holder, such offer shall be deemed to have been rejected by such holder,
and the Company shall have no further obligation to prepay the Notes of such
holder and such holder shall be deemed to have consented to the Change of
Control, as the case may be.
SECTION 4.5. MANNER OF MAKING SPECIAL PREPAYMENTS. In the case of any
acceptance of an offer to prepay Notes pursuant to Section 4.3 or Section 4.4,
the Company shall give a further written notice (a "Prepayment Notice") with
respect to such prepayment to each holder accepting the offer not more than 20
days nor less than 10 days prior to the Special Prepayment Date (as defined in
Section 4.3 or 4.4, as applicable) specifying (1) the Special Prepayment Date,
(2) the accrued interest to be paid to such holder, (3) the prepayment charge
component of the Prepayment Price (assuming, for purposes of such notice only,
that the applicable prepayment charge will be that which would be applicable if
the Notes were being prepaid on the date of such notice, it being understood,
however, that the actual prepayment charge to be paid may vary from the amount
specified in such notice), (4) the total amount of the Prepayment Price to be
paid to such holder (calculated using the same assumption set forth in the
foregoing clause (3)), and (5) the total aggregate principal amount of all Notes
(including those of such holder) to be prepaid by the Company. On the Special
Prepayment Date, the Company shall prepay the Notes held by such holder at the
Prepayment Price plus accrued interest to and including the Special Prepayment
Date.
The term "Prepayment Price" shall mean, with respect to any Notes to be
prepaid pursuant to Section 4.3 or 4.4, an amount equal to the sum of (a) either
(i) in the case of a prepayment made pursuant to Section 4.3, the amount
specified in the Offer Notice, or (ii) in the case of a prepayment made pursuant
to Section 4.4, the entire unpaid principal amount of such Notes, plus (b) a
prepayment charge equal to 50% of the prepayment charge which would be payable
under Section 4.2, if such Notes were being prepaid on the Special Prepayment
Date pursuant to Section 4.2.
For purposes of this Section 4, any prepayment pursuant to Section 4.3
shall be deemed to have preceded any prepayment pursuant to Section 4.1 or 4.2
occurring on the same day.
4
SECTION 4.6. OBLIGATION TO PREPAY AFTER NOTICE. The principal amount of
the Notes designated for prepayment in any notice of optional prepayment given
pursuant to Section 4.2 or in any Prepayment Notice given pursuant to Section
4.3 or 4.4 shall become due and payable on the date fixed for prepayment,
together with accrued interest and the amount of any prepayment charge.
SECTION 4.7. APPLICATION OF PREPAYMENTS. Each prepayment pursuant to
Section 4.1, 4.2 or 4.3 of less than the entire unpaid amount of all outstanding
Notes shall be applied (in multiples of $1,000) pro rata (as nearly as may be,
with adjustments to equalize for prior prepayments) to all outstanding Notes
according to the respective unpaid principal amounts thereof.
SECTION 4.8. PRESENTATION OR SURRENDER OF NOTES. Subject to the second
paragraph of Section 8, the Company may, as a condition to making any prepayment
of a Note, require the holder thereof to present such Note, at the place
specified in the Note for payment of the principal thereof, for notation thereon
of the amount and date of such prepayment or, if such Note is prepaid in full,
to surrender the same at such price.
SECTION 4.9. NOTE PURCHASE PROHIBITION. Except as permitted by Section
9, the Company will not, and will not permit any Subsidiary or Affiliate to,
directly or indirectly acquire any Note, by purchase or prepayment or otherwise,
except by way of payment or prepayment thereof by the Company or such Subsidiary
or Affiliate in accordance with the provisions of the Notes and of this
Agreement.
SECTION 5. COVENANTS. So long as any amount shall remain outstanding
under the Notes, the Company and each Guarantor will, unless the Required
Lenders shall otherwise consent in writing:
SECTION 5.1. COMPLIANCE WITH LAWS, ETC. Comply, and cause each
Subsidiary of the Company or any Guarantor to comply, in all material respects
with all applicable laws, rules, regulations and orders, where the failure to so
comply would be reasonably likely to result in a Material Adverse Change.
SECTION 5.2. REPORTING REQUIREMENTS. Furnish to the Lenders:
(A) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within ninety (90) days after the end of each fiscal
year of the Company, a copy of the audited consolidated and
unaudited consolidating (such consolidating statements to be
prepared by management of the Company) financial statements of
the Company and its Consolidated Subsidiaries for such year,
including balance sheets with related statements of income and
retained earnings and statements of cash flows, all in
reasonable detail and setting forth in comparative form the
figures for the previous fiscal year, together with an
unqualified opinion, prepared by independent certified public
accountants selected by the Company and reasonably
satisfactory to the Required Lenders, all such financial
statements to be prepared in accordance with GAAP.
5
(B) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within forty-five (45) days after the end of each
of the first three fiscal quarters of each fiscal year of the
Company, a copy of the consolidated and consolidating
financial statements of the Company and its Consolidated
Subsidiaries for such quarter, including balance sheets with
related statements of income and retained earnings and
statements of cash flows, all in reasonable detail and setting
forth in comparative form the figures for the comparable
quarter for the previous fiscal year, all such financial
statements to be prepared by management of the Company in
accordance with GAAP.
(C) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies
of any reports submitted to the Company or any Guarantor by
independent certified public accountants in connection with
the examination of the financial statements of the Company and
the Guarantor made by such accountants.
(D) CERTIFICATE OF NO DEFAULT. Simultaneously with the
delivery of the financial statements referred to in Section
5.2(A) and (B), a certificate of the President or the Chief
Financial Officer of the Company, (1) certifying that no
Default or Event of Default has occurred and is continuing, or
if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the
action which is proposed to be taken with respect thereto; and
(2) with computations demonstrating compliance with the
covenants contained in Section 5.31.
(E) ACCOUNTANTS' REPORT. Simultaneously with the delivery of
the annual financial statements referred to in Section 5.2(A),
a certificate of the independent certified public accountants
who audited such statements to the effect that, in making the
examination necessary for the audit of such statements, they
have obtained no knowledge of any condition or event which
constitutes a Default or Event of Default, or if such
accountants shall have obtained knowledge of any such
condition or event, specify in such certificate each such
condition or event of which they have knowledge and the nature
and status thereof.
(F) NOTICE OF LITIGATION. Promptly after the commencement
thereof, notice of all actions, suits and proceedings before
any court or governmental department, commission, board,
bureau, agency, or instrumentality, domestic or foreign,
affecting the Company, any Guarantor or any Subsidiary of the
Company or any Guarantor which, if determined adversely to the
Company, such Guarantor or any such Subsidiary would be
reasonably likely to result in a Material Adverse Change.
(G) NOTICE OF DEFAULTS AND EVENTS OF DEFAULT. As soon as
possible and in any event within five (5) days after the
occurrence of each Default or Event of Default, a written
notice setting forth the details of such Default or Event of
Default and the action which is proposed to be taken by the
Company with respect thereto.
6
(H) ERISA REPORTS. Promptly after the filing or receiving
thereof, copies of all reports, including annual reports, and
notices which the Company, any Guarantor or any Subsidiary of
the Company or any Guarantor, files with or receives from the
PBGC, the Internal Revenue Service or the U.S. Department of
Labor under ERISA; and as soon as possible after the Company,
any Guarantor or any such Subsidiary knows or has reason to
know that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or that the PBGC or the
Company, any Guarantor or any such Subsidiary has instituted
or will institute proceedings under Title IV of ERISA to
terminate any Plan, the Company or such Guarantor will deliver
to the Lenders a certificate of the President or the Chief
Financial Officer of the Company or such Guarantor setting
forth details as to such Reportable Event or Prohibited
Transaction or Plan termination and the action the Company or
such Guarantor proposes to take with respect thereto.
(I) ENVIRONMENTAL NOTICES. Promptly after the receipt thereof,
a copy of any claim, summons, charge or other notice to the
Company, any Guarantor or any Subsidiary of the Company or any
Guarantor regarding compliance (or failure to comply) with any
federal, state or local laws governing Hazardous Materials.
(J) MATERIAL ADVERSE CHANGE. Promptly, upon the occurrence
thereof, notice of a Material Adverse Change.
(K) REPORTS TO OTHER CREDITORS. Promptly after the furnishing
thereof, copies of any statement or report furnished to any
other party pursuant to the terms of any indenture, loan, or
credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this
Section 5.2.
(L) PROXY STATEMENTS, ETC. Promptly after the sending or
filing thereof, copies of all proxy statements, financial
statements and reports which the Company, any Guarantor or any
Subsidiary of the Company or any Guarantor sends to its
stockholders, and copies of all regular, periodic, and special
reports, and all registration statements which the Company or
such Guarantor or any such Subsidiary files with the SEC or
any governmental authority which may be substituted therefor,
or with any national securities exchange.
(M) NOTICE OF AFFILIATES. Promptly after any Person becomes an
Affiliate of the Company or any Guarantor (other than if such
Person becomes an Affiliate solely by virtue of a member of
management of the Company making an investment in such
Person), notice to the Lenders of such Affiliate, provided
that this clause (M) shall not require the Company or any
Guarantor to advise the Lenders of any changes in officers
other than executive officers.
(N) GENERAL INFORMATION. Such other information respecting the
condition or operations, financial or otherwise, of the
Company, any Guarantor or any Subsidiary of the Company or any
Guarantor as any Lender may from time to time reasonably
request.
7
SECTION 5.3. TAXES. Pay and discharge, and cause each Subsidiary of the
Company or any Guarantor to pay and discharge, all taxes, assessments and
governmental charges upon it or them, its or their income and its or their
properties prior to the dates on which penalties are attached thereto, unless
and only to the extent that (i) such taxes shall be contested in good faith and
by appropriate proceedings by the Company, such Guarantor or any such
Subsidiary, as the case may be; (ii) there be adequate reserves therefor in
accordance with GAAP entered on the books of the Company, such Guarantor or any
such Subsidiary; and (iii) no enforcement proceedings against the Company, such
Guarantor or any such Subsidiary have been commenced.
SECTION 5.4. CORPORATE EXISTENCE. Preserve and maintain, and cause each
Subsidiary of the Company or any Guarantor to preserve and maintain, their
corporate existence and good standing in the jurisdiction of their incorporation
and the rights, privileges and franchises of the Company, each Guarantor and
each such Subsidiary in each case where failure to so preserve or maintain would
be reasonably likely to result in a Material Adverse Change.
SECTION 5.5. MAINTENANCE OF PROPERTIES AND INSURANCE. (i) Keep, and
cause each Subsidiary of the Company and any Guarantor to keep, the respective
properties and assets (tangible or intangible) that are useful and necessary in
its business, in good working order and condition, reasonable wear and tear
excepted; and (ii) maintain, and cause any such Subsidiary to maintain,
insurance with financially sound and reputable insurance companies or
associations in such amounts and covering such risks as are usually carried by
companies engaged in similar businesses and owning properties and doing business
in the same general areas in which the Company, any Guarantor and any such
Subsidiary may operate.
SECTION 5.6. BOOKS OF RECORD AND ACCOUNT. Keep, and cause each
Subsidiary of the Company and any Guarantor to keep, adequate records and proper
books of record and account in which complete entries will be made in a manner
to enable the preparation of financial statements in accordance with GAAP,
reflecting all financial transactions of the Company, such Guarantor, and any
such Subsidiary.
SECTION 5.7. VISITATION. At any reasonable time, and from time to time,
and upon prior notice, and, provided no Default or Event of Default then exists,
not more often than once during any calendar year, permit any Lenders or
representatives thereof, to examine and make copies of (except if such copies
would result in the loss of any attorney-client or other privilege) and
abstracts from the financial and accounting books and records of, and visit the
properties of, the Company, any Guarantor or any Subsidiary of the Company or
any Guarantor to discuss the affairs, finances and accounts of the Company, any
Guarantor or any such Subsidiary with any of the respective officers of the
Company, any Guarantor or any such Subsidiary or the Company's, any Guarantor's
or such Subsidiary's independent accountants.
SECTION 5.8. PERFORMANCE AND COMPLIANCE WITH OTHER AGREEMENTS. Perform
and comply in all material respects, and cause each Subsidiary of the Company or
any Guarantor to perform and comply in all material respects, with each of the
provisions of each and every agreement the failure to perform or comply with
which would be reasonably likely to result in a Material Adverse Change.
8
SECTION 5.9. CONTINUED PERFECTION OF LIENS. Record or file, or rerecord
or refile any Loan Document or financing statement or any other filing or
recording in each and every office where and when necessary to preserve and
perfect the security interests of the Loan Documents.
SECTION 5.10. PENSION FUNDING. Comply in all material respects, and
cause each Subsidiary of the Company or any Guarantor to comply in all material
respects, with the following and cause each ERISA Affiliate of the Company, any
Guarantor or any such Subsidiary to comply with the following: (i) engage solely
in transactions which would not subject any of such entities to either a civil
penalty assessed pursuant to Section 502
(i) of ERISA or a tax imposed by Section 4975 of the Internal Revenue
Code in either case in an amount in excess of $25,000.00;
(ii) make full payment when due of all amounts which, under the
provisions of any Plan or ERISA, the Company, any Guarantor, any such Subsidiary
or any ERISA Affiliate of any of same is required to pay as contributions
thereto;
(iii) all applicable provisions of the Internal Revenue Code and the
regulations promulgated thereunder, including but not limited to Section 412
thereof, and all applicable rules, regulations and interpretations of the
Accounting Principles Board and the Financial Accounting Standards Board;
(iv) not fail to make any payments in an aggregate amount greater than
$25,000.00 to any Multiemployer Plan that the Company, any Guarantor, any such
Subsidiary or any ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining thereto; or
(v) not take any action regarding any Plan which could result in the
occurrence of a Prohibited Transaction.
SECTION 5.11. LICENSES; TRADEMARKS. (i) Maintain at all times, and
cause each Subsidiary of the Company or any Guarantor to maintain at all times,
all licenses or permits necessary to the conduct of its business or as may be
required by any governmental agency or instrumentality thereof, except for such
licenses or permits where the failure to so maintain would not be reasonably
likely to result in a Material Adverse Change, and take all steps necessary to
maintain the exclusive ownership of, and the rights to, all trademarks and
tradenames listed in Exhibit D-8 to this Agreement; provided, however, that the
Company and the Guarantors shall not be required to take such steps, including,
without limitation the renewal or continuation of trademark or tradename
registrations in the United States Trademark Office, if the Company or the
applicable Guarantor has provided the Collateral Agent and the Lenders with a
written statement giving the reasons why such steps are not necessary and why
such failure to maintain such trademark or tradename would not result in a
Material Adverse Change.
(ii) Promptly advise the Collateral Agent and the Lenders of the
acquisition or creation, after the date of this Agreement, by the Company or any
of its Subsidiaries of any additional or new trademarks or tradenames (the "New
Trademarks") and upon the request of the Collateral Agent or the Required
Lenders, take, and cause any Subsidiary to take, all steps necessary or
9
desirable to grant to the Collateral Agent, on behalf of the Secured Parties (as
such term is defined in the Intercreditor Agreement), and perfect, a security
interest in the New Trademarks, including but without limitation, the filing of
one or more Trademark Security Agreements in the United States Patent and
Trademark Office.
SECTION 5.12. NEW SUBSIDIARIES. (i) Cause any Subsidiary (other than a
Foreign Subsidiary) of the Company or any Guarantor formed after the date of
this Agreement to become a Guarantor and to become a party to this Agreement and
the Guaranty as a Guarantor.
(ii) Cause any Foreign Subsidiary which, in the reasonable
determination of the Company and its professional advisors, if it became a
Guaranteeing Foreign Subsidiary would not result in adverse tax consequences to
the Company, to become a Guarantor and to become a party to this Agreement as a
Guarantor.
(iii) Cause each Subsidiary which delivers a Guaranty pursuant to this
Section 5.12 to secure the obligations thereunder by executing a Security
Agreement and such other documentation necessary in order to grant to the
Collateral Trustee a Lien on all of its tradenames, trademarks, tradename
registrations, trademark registrations, trademark applications and trademark
licenses.
SECTION 5.13. NORTH CAROLINA MORTGAGE. (a) Not later than the thirtieth
(30th) day following the Restatement Effective Date, deliver to the Lenders a
commitment letter for the North Carolina Mortgage which shall (i) provide for
the refinance of the North Carolina Mortgage, (ii) have been accepted by the
Company, (iii) be in an amount not less than the then current principal balance
of the North Carolina Mortgage and not more than one hundred twenty (120%)
percent of the then current principal balance of the North Carolina Mortgage,
(iv) be for a term of not less than three (3) years, (v) have principal
amortization on a least a fifteen (15) year "mortgage style" amortization, (vi)
be secured solely by the property securing the North Carolina Mortgage and (vi)
be otherwise reasonably satisfactory to the Required Lenders.
(b) Not later than ninety (90) days after the date of the commitment
referred to in (a) above, close the refinance of the North Carolina Existing
Mortgage.
SECTION 5.14. CANADIAN MORTGAGE. Not later than thirty (30) days after
the date of this Agreement, close the Canadian Mortgage (i) in a principal
amount of not more than $1,722,500.00 (Canadian), (ii) with a term of five (5)
years, (iii) with principal amortization on a twenty (20) year "mortgage style"
amortization and (iv) on such other terms and conditions as are reasonably
satisfactory to the Required Lenders.
SECTION 5.15. LIENS, ETC. Not create, incur, assume or suffer to exist,
any Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(A) Liens in favor of the Collateral Agent (i) for the benefit
of itself, the Agent (as such term is defined in the Bank Credit Agreement), or
the Bank Lenders and (ii) for the benefit of the Lenders as provided for herein,
in the Security Agreement or the Trademark Security Agreement, as each is in
effect as of the Restatement Effective Date;
10
(B) Liens for taxes or assessments or other government charges
or levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(C) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established;
(D) Liens under workers' compensation, unemployment insurance,
Social Security, or similar legislation;
(E) Liens, deposits, or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(F) Liens described in Exhibit D-2, which Liens may be
renewed, extended or refinanced, without securing any additional Debt and on
terms no less favorable to the Company or applicable Guarantor than the original
terms (except for the refinancing permitted by clause (K) below, which may be on
the terms set forth therein);
(G) Judgment and other similar Liens arising in connection
with court proceedings (other than any judgment or order or combination of
judgments or orders for the payment of money, in excess of $500,000.00 in the
aggregate, which sum shall not be subject to full, complete and effective
insurance coverage (subject to deductibles), shall be rendered against the
Company, any Guarantor or any Subsidiary of the Company or any Guarantor and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect), provided the execution
or other enforcement of such Liens is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings;
(H) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
Company's or a Guarantor's occupation, use and enjoyment of the property or
assets encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto;
(I) The Canadian Bridge Loan Mortgages, provided that such
mortgages shall be satisfied when the Canadian Bridge Loan is repaid;
(J) The Canadian Mortgage;
(K) The North Carolina Mortgage which may be refinanced in
accordance with Section 5.13 of this Agreement; and
(L) Purchase money Liens on any property hereafter acquired or
the assumption
11
of any Lien on property existing at the time of such acquisition, or a Lien
incurred in connection with any conditional sale or other title retention
agreement or a Capital Lease, provided that:
(i) Any property subject to any of the foregoing is acquired
by the Company or a Guarantor in the ordinary course of its
respective business and the Lien on any such property is
created contemporaneously with such acquisition;
(ii) The obligation secured by any Lien so created, assumed,
or existing shall not exceed one hundred (100%) percent of
lesser of cost or fair market value of the property acquired
as of the time of the Company or the Guarantor acquiring the
same;
(iii) Each such Lien shall attach only to the property so
acquired and fixed improvements thereon; and
(iv) The obligation secured by such Lien is permitted by the
provisions of Section 5.16 and the related expenditure is
permitted by the provisions of Section 5.31 (B).
SECTION 5.16. DEBT. Not create, incur, assume, or suffer to exist, any
Debt, except:
(A) Debt of the Company under this Agreement or the Notes;
(B) Debt described in Exhibit D-2, which Debt may be renewed, extended
or refinanced on terms no less favorable to the Company or applicable
Guarantor than the original terms (except for the refinancing provided
for hereby and as permitted by clause (J) below, which may be on the
respective terms set forth herein or therein);
(C) Subordinated Debt;
(D) Accounts payable to trade creditors for goods or services and
current operating liabilities (other than for borrowed money), in each
case incurred and paid in the ordinary course of business;
(E) Debt of the Company or any Guarantor secured by purchase money
Liens permitted by Section 5.15(L);
(F) Debt incurred under the Bank Loan Agreement in an aggregate amount
at any time outstanding not in excess of $47,500,000;
(G) Intercompany Debt;
(H) the Canadian Bridge Loan;
(I) Debt secured by the Canadian Mortgage; and
12
(J) Debt secured by the North Carolina Mortgage which may be refinanced
in accordance with the provisions of Section 5.13 of this Agreement.
SECTION 5.17. MERGER. Not merge into, or consolidate with or into, or
have merged into it, any Person; and, for the purpose of this Section 5.17, the
acquisition or sale by the Company or any Guarantor by lease, purchase or
otherwise, of all, or substantially all, of the common stock or the assets of
any Person or of it shall be deemed a merger of such Person with the Company or
any Guarantor, provided that (i) the Company may merge with any Guarantor,
provided the Company is the surviving entity and (iii) any Guarantor may merge
with any other Guarantor.
SECTION 5.18. SALE OF ASSETS, ETC. Not sell, assign, transfer, lease or
otherwise dispose of any of its assets, (including a sale leaseback transaction)
with or without recourse, except for (i) inventory disposed of in the ordinary
course of business; (ii) the sale or other disposition of assets no longer used
or useful in the conduct of its business; (iii) Permitted Equipment Sales, (iv)
the Permitted Real Estate Sale and (v) sales of assets between the Company and a
Guarantor or between Guarantors.
SECTION 5.19. INVESTMENTS, ETC. Not make any Investment other than
Permitted Investments.
SECTION 5.20. TRANSACTIONS WITH AFFILIATES. Except for transactions
with the current Chief Executive Officer of the Company, and except as otherwise
expressly permitted by this Agreement or except in the ordinary course of
business and pursuant to the reasonable requirements of the Company's, a
Guarantor's or a Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or a Guarantor or a Subsidiary than would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate, not enter into any transaction, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service, with
any Affiliate, provided however, in no event shall the Company or any Guarantor
engage in any transaction with a Subsidiary of the Company or a Guarantor which
Subsidiary is not a Guarantor.
SECTION 5.21. PREPAYMENT OF OUTSTANDING DEBT. Not pay, in whole or in
part, any outstanding Debt of the Company or a Guarantor, which by its terms is
not then due and payable other than (i) Debt owing to the Lenders, (ii)
Intercompany Debt, (iii) Revolving Credit Loans (as defined in the Bank Credit
Agreement), and (iv) accounts payable and other trade payables.
SECTION 5.22. GUARANTEES. Not guaranty, or in any other way become
directly or contingently obligated for any Debt of any other Person (including
any agreements relating to working capital maintenance, take or pay contracts or
similar arrangements) other than (i) the endorsement of negotiable instruments
for deposit in the ordinary course of business; (ii) guarantees existing on the
date hereof and set forth in Exhibit D-2 annexed hereto; or (iii) guarantees of
any Debt permitted under Section 5.16 of this Agreement.
SECTION 5.23. CHANGE OF BUSINESS. Not materially alter the nature of
its business.
13
SECTION 5.24. FISCAL YEAR. Not Change the ending date of its fiscal
year from December 31.
SECTION 5.25. MAXIMUM LOSSES; MINIMUM NET INCOME. (i) Not incur a
consolidated net loss (calculated exclusive of extraordinary gains but inclusive
of extraordinary losses, as calculated in accordance with GAAP) greater than
$500,000.00 for the fiscal quarter ending March 31, 2000; (ii) not incur a
consolidated net loss (calculated exclusive of extraordinary gains but inclusive
of extraordinary losses, as calculated in accordance with GAAP) for the six (6)
month period ending June 30, 2000; and (iii) not incur a consolidated net loss
(calculated exclusive of extraordinary gains but inclusive of extraordinary
losses, as calculated in accordance with GAAP) for any fiscal year.
SECTION 5.26. ACCOUNTING POLICIES. Not Change any accounting policies,
except as permitted by GAAP.
SECTION 5.27. DIVIDENDS, ETC. Not declare or pay any dividends,
purchase, redeem, retire or otherwise acquire for value any of its capital stock
now or hereafter outstanding, or make any distribution of assets to its
stockholders as such, whether in cash, assets, or in obligations of the Company
or a Guarantor; or allocate or otherwise set apart any sum for the payment of
any dividend or distribution on, or for the purchase, redemption or retirement
of any shares of its capital stock; or make any other distribution by reduction
of capital or otherwise in respect of any share of its capital stock, except,
(i) any Subsidiary may pay dividends to its shareholder(s), (ii) the Company may
pay the Permitted Dividends described in clause (i) of the definition thereof,
(iii) the Company may make the Permitted Stock Repurchases described in clause
(i) of the definition thereof and (iv) provided no Default or Event of Default
has occurred and is continuing or would result therefrom, the Company may pay
Permitted Dividends described in clause (ii) of the definition thereof and the
Company may make Permitted Stock Repurchases described in clause (ii) of the
definition thereof.
SECTION 5.28. CHANGE IN CONTROL. (i) Not permit any Person or "group"
(within the meaning of Section 13(d)-3 under the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission as in effect on the date
hereof), other than the members of management of the Company and the directors
of the Company, each as in office on the date of this Agreement, to own more
than fifty (50%) percent of the outstanding voting securities of the Company.
(ii) Not permit any nominees other than nominees nominated by the existing board
of directors of the Company to hold a majority of the seats on the board of
directors of the Company.
SECTION 5.29. HAZARDOUS MATERIAL. The Company, each Guarantor and each
Subsidiary of the Company or a Guarantor shall not cause or permit any property
owned or occupied by the Company, a Guarantor or any such Subsidiary to be used
to generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance with all
applicable federal, state and local laws or regulations; nor shall the Company,
a Guarantor or any such Subsidiary cause or permit, as a result of any
intentional or unintentional act or omission on the part of the Company, such
Guarantor or any such Subsidiary or any tenant or subtenant, a release of
Hazardous Materials
14
onto any property owned or occupied by the Company, such Guarantor or any such
Subsidiary or onto any other property; nor shall the Company, the Guarantors and
each such Subsidiary fail to comply with all applicable federal, state and local
laws, ordinances, rules and regulations, whenever and by whomever triggered, nor
fail to obtain and comply with, any and all approvals, registrations or permits
required thereunder. The Company and the Guarantors shall execute any
documentation required by the Agent in connection with the representations,
warranties and covenants contained in this paragraph and Exhibit B to this
Agreement.
SECTION 5.30. LIMITATIONS ON CONSOLIDATED FOREIGN ASSETS AND REVENUES.
(i) Not have more than fifteen (15%) percent of the consolidated assets or
revenues of the Company and its Consolidated Subsidiaries be located in, or
derived from, locations other than the United States.
(ii) Not have more than ten (10%) percent of the consolidated assets or
revenues of the Company and its Consolidated Subsidiaries be held by, or
produced by, any Foreign Subsidiary.
SECTION 5.31. FINANCIAL REQUIREMENTS. So long as any amount shall
remain outstanding under the Notes: (A) Minimum Consolidated Tangible Net Worth.
The Company will maintain on the dates set forth below, Consolidated Tangible
Net Worth ("CTNW") of not less than the amounts set forth below for the periods
set forth below:
Period Minimum CTNW
------ ------------
9/30/00 The greater of (i) $34,000,000 or
(ii) $1,000,000 in excess of the
actual CTNW as of 12/31/99
12/31/00; 3/31/01;
6/30/01 and 9/30/01 The actual CTNW as of 12/31/99 plus
80% of the Company's Consolidated
Net Income for the fiscal
year ending 12/31/00.
12/31/01; 3/31/02;
6/30/02 and 9/30/02 The actual CTNW as of 12/31/00 plus
80% of the Company's Consolidated
Net Income for the fiscal
year ending 12/31/01.
12/31/02 to the Maturity Date The actual CTNW as of 12/31/01 plus
80% of the Company's Consolidated
Net Income for the fiscal year
ending 12/31/02.
(B) CONSOLIDATED CAPITAL EXPENDITURES. The Company will not make
Consolidated Capital Expenditures in excess of: (i) $10,000,000.00 in the
aggregate during the fiscal year of the Company ending December 31, 2000; and
(ii) $8,000,000.00 in the aggregate during any fiscal year thereafter.
15
(C) CONSOLIDATED FIXED CHARGE RATIO. The Company will maintain at all
times a Consolidated Fixed Charge Ratio of not less than the ratios set forth
below for the periods set forth below (to be tested quarterly):
Period Ratio
------ -----
9/30/00 to 12/30/00 0.45 to 1.00
12/31/00 to 12/30/01 0.60 to 1.00
12/31/01 to 12/30/02 1.15 to 1.00
12/31/02 to the Maturity Date 1.25 to 1.00
(D) Funded Debt to EBITDA Ratio. The Company will maintain at all times a
Funded Debt to EBITDA Ratio of not greater than the ratios set forth below for
the periods set forth below (to be tested quarterly):
Period Ratio
------ -----
9/30/00 to 12/30/00 5.15 to 1.00
12/31/00 to 12/30/01 4.65 to 1.00
12/31/01 to 12/30/02 3.00 to 1.00
12/31/02 to the Maturity Date 2.50 to 1.00
(E) Consolidated Interest Coverage Ratio. The Company will maintain at all
times a Consolidated Interest Coverage Ratio of not less than the ratios set
forth below for the periods set forth below (to be tested quarterly):
Period Ratio
------ -----
9/30/00 to 12/30/00 0.90 to 1.00
12/31/00 to 12/30/01 1.25 to 1.00
12/31/01 to 12/30/02 2.25 to 1.00
12/31/02 to the Maturity Date 2.75 to 1.00
SECTION 6. DEFINITIONS. The following defined terms have the indicated
meanings in this Agreement, unless the context otherwise requires:
"AFFILIATE" means, as to any Person (i) a Person which directly or
indirectly controls, or is controlled by, or is under common control with, such
Person; (ii) a Person which directly or indirectly beneficially owns or holds
twenty (20%) percent or more of any class of voting stock of, or twenty (20%)
percent or more of the equity interest in, such Person; or (iii) a Person twenty
(20%) percent or more of the voting stock of which, or twenty (20%) or more of
the equity interest of which, is directly or indirectly beneficially owned or
held by such Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
16
"AGREEMENT" means this Loan Agreement, as amended, supplemented or
modified from time to time.
"BANK CREDIT AGREEMENT" means that certain amended and restated loan
agreement dated as of February 25, 2000 among the Company, DPI, Parfums, Royce,
Broad, Chase Manhattan Bank as Agent and as a lender, and European American
Bank, as a lender[, as such agreement may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof].
"BANK LENDERS" means the lenders from time to time party to the Bank
Credit Agreement.
"BROAD" means 565 Broad Hollow Realty Corp., a New York corporation.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized to close in New York City.
"CANADIAN BRIDGE LOAN" means a short term loan to be incurred by the
Company in an amount not in excess of $2,650,000.00 (Canadian) for the purchase
of the real property and the improvements thereon at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
"CANADIAN BRIDGE LOAN MORTGAGES" means the mortgages or similar Liens
on the Company's real property and the improvements thereon at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
which mortgages secure the Canadian Bridge Loan.
"CANADIAN MORTGAGE" means a mortgage or similar Lien on the Company's
real property and the improvements thereon at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇.
"CAPITAL EXPENDITURES" means as to any Person, the aggregate amount of
any expenditures (including purchase money debt and purchase money liens) by
such Person for assets (including fixed assets acquired under Capital Leases)
which it is contemplated will be used or usable in fiscal years subsequent to
the year of acquisition and that are required to be capitalized in accordance
with GAAP.
"CAPITAL LEASE" means a lease which has been, or should be, in
accordance with GAAP, capitalized on the books of the lessee.
"CHANGE OF CONTROL" means the acquisition by any Person, other than a
member of the present management of the Company, and the Affiliates of such
Person of the right to vote, in the aggregate, more than 50% of the Company's
common stock or to elect more than 50% of the Board.
"CHASE LINE OF CREDIT" means the line of credit made available to the
Company by Chase, pursuant to that certain line letter dated July 6, 1999.
17
"COLLATERAL AGENT" means The Chase Manhattan Bank, or such other Person
as may succeed to the position of Collateral Agent, as provided in the
Intercreditor Agreement.
"COMPANY" means the corporation that originally executed this Agreement
as Company and any successor or transferee corporation.
"COMPETITOR" means any Person which is principally engaged in the
business of manufacturing cosmetics or pharmaceuticals and whose business
substantially competes with the business of the Company.
"CONSOLIDATED CAPITAL EXPENDITURES" means, as to any Person, the
aggregate amount of the Capital Expenditures by such Person and its Consolidated
Subsidiaries, computed and consolidated in accordance with GAAP.
"CONSOLIDATED EBITDA" means, as to any Person, for any period, the
EBITDA of such Person and its Consolidated Subsidiaries, computed and
consolidated in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE RATIO" means, as to the Company and its
Consolidated Subsidiaries, the ratio of (i) the sum of net income plus interest
expense plus income tax expense for the period measured plus depreciation
expense plus amortization of intangible assets minus Consolidated Unfunded
Capital Expenditures minus Permitted Dividends paid in cash during such period
minus Permitted Stock Repurchases to (ii) the sum of the current portion of
Consolidated Funded Debt, computed and consolidated in accordance with GAAP
(excluding Debt described in clauses (ii), (v) and (vi) of the definition of
"Consolidated Funded Debt") plus whether or not included as Current Debt under
GAAP (but without duplication), the amount of the Mandatory Reductions required
to be made within twelve (12) months of the date of determination under the Bank
Credit Agreement and the $4,000,000.00 mandatory prepayments of the Notes
required to be made by Section 4.1 within twelve (12) months of the date of
determination plus interest expense. The Consolidated Fixed Charge Coverage
Ratio shall be measured for the four (4) fiscal quarters then ended, except for
the current portion of Consolidated Funded Debt and the Mandatory Reductions,
which shall be measured for the next succeeding four (4) fiscal quarters.
"CONSOLIDATED FUNDED DEBT" means, as to any Person, at any date, any
Debt of such Person and its Consolidated Subsidiaries which is (i) indebtedness
or liability for borrowed money having an original maturity of one (1) year or
more (including the current portion thereof) or which is extendable at the
option of the obligor to a date more than one year from the date of such
extension, including, in any event, all of the outstanding Revolving Credit
Loans as defined in and incurred under the Bank Credit Agreement; (ii)
indebtedness or liability for borrowed money under lines of credit extended to
such Person or any of its Consolidated Subsidiaries; (iii) the deferred purchase
price of property (excluding trade obligations); (iv) obligations as a lessee
under Capital Leases; (v) obligations to reimburse a letter of credit issuer for
draws under letters of credit; and (v) all liabilities under any preferred stock
which, at the option of the holder or upon the occurrence or one or more certain
events, is redeemable by such holder, or which, at the option of such holder is
convertible into Debt.
18
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as to any Person, for any
period, the ratio of (i) Consolidated EBITDA minus Consolidated Unfunded Capital
Expenditures to (ii) consolidated interest expense. The Consolidated Interest
Coverage Ratio shall be measured for the four (4) fiscal quarters then ended.
"CONSOLIDATED NET INCOME" means, with respect to the Company and its
Consolidated Subsidiaries, net income for a fiscal year, computed and
consolidated in accordance with GAAP.
"CONSOLIDATED SUBORDINATED DEBT" means, as to any Person, all of the
Subordinated Debt of such Person and its Consolidated Subsidiaries, computed and
consolidated in accordance with GAAP.
"CONSOLIDATED SUBSIDIARIES" means, as to any Person, those Subsidiaries
of such Person which are consolidated with such Person in the financial
statements delivered pursuant to Section 5.2.
"CONSOLIDATED TANGIBLE NET WORTH" means, as to any Person, (excluding
the effect (positive or negative) of the "Accumulated Other Comprehensive Income
(Loss)" as reflected on the consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of any date of determination) the excess of (i)
such Person's Consolidated Total Assets, less all intangible assets properly
classified as such in accordance with GAAP, including, but without limitation,
patents, patent rights, trademarks, trade names, franchises, copyrights,
licenses, permits and goodwill, over (ii) such Person's Consolidated Total
Liabilities.
"CONSOLIDATED TOTAL ASSETS" means, as to any Person, at any date, the
aggregate net book value of the assets of such Person and its Consolidated
Subsidiaries at such date, after all appropriate adjustments in accordance with
GAAP (including without limitation, reserves for doubtful receivables,
obsolescence, depreciation and amortization and excluding the amount of any
write-up or revaluation of any asset, other than those permitted under standard
cost accounting procedures), computed and consolidated in accordance with GAAP.
"CONSOLIDATED TOTAL LIABILITIES" means, as to any Person, at any date,
all of the liabilities of such Person and its Consolidated Subsidiaries at such
date, including all items which, in accordance with GAAP would be included on
the liability side of the balance sheet (other than capital stock, treasury
stock, capital surplus and retained earnings) computed and consolidated in
accordance with GAAP.
"CONSOLIDATED TOTAL UNSUBORDINATED LIABILITIES" means, as to any
Person, the excess of (i) such Person's Consolidated Total Liabilities over (ii)
such Person's Consolidated Subordinated Debt.
"CONSOLIDATED UNFUNDED CAPITAL EXPENDITURES" means, as to any Person,
the aggregate amount of the Unfunded Capital Expenditures by such Person and its
Consolidated Subsidiaries, computed and consolidated in accordance with GAAP.
19
"DPI" means Del Pharmaceuticals, Inc., a Delaware corporation.
"DEBT" means, as to any Person, all (i) indebtedness or liability of
such Person for borrowed money; (ii) indebtedness of such Person for the
deferred purchase price of property or services (including trade obligations);
(iii) obligations of such Person as a lessee under Capital Leases; (iv) current
liabilities of such Person in respect of unfunded vested benefits under any
Plan; (v) obligations of such Person under letters of credit issued for the
account of such Person; (vi) obligations of such Person arising under acceptance
facilities; (vii) guaranties, endorsements (other than for collection or deposit
in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any other
Person, or otherwise to assure a creditor against loss; (viii) obligations
secured by any Lien on property owned by such Person whether or not the
obligations have been assumed; (ix) liabilities of such Person under any
preferred stock or other preferred equity instrument which, at the option of the
holder or upon the occurrence of one or more events, is redeemable by such
holder, or which, at the option of such holder is convertible into Debt; and (x)
all other liabilities recorded as such, or which should be recorded as such, on
such Person's financial statements in accordance with GAAP.
"DEFAULT" means any of the events specified in Section 7 of this
Agreement, whether or not any requirement for notice or lapse of time or any
other condition has been satisfied.
"DOLLARS" and the sign "$" mean lawful money of the United States of
America.
"EAB LINE OF CREDIT" means that certain line of credit made available
to the Company by EAB pursuant to that certain line letter dated June 24, 1999.
"EBITDA" means, as to any Person, for any period, the sum of (i) net
income plus (ii) interest expense plus (iii) income tax expense plus (iv)
depreciation expenses plus (v) amortization of intangible assets, all measured
and/or calculated for the four (4) fiscal quarters then ended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, the regulations promulgated thereunder and the
published interpretations thereof as in effect from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which together with any other Person would be treated, with such
Person, as a single employer under Section 4001 of ERISA.
"EVENT OF DEFAULT" means any of the events specified in Section 7 of
this Agreement, provided that any requirement for notice or lapse of time or any
other condition has been satisfied.
"FOREIGN SUBSIDIARIES" means, with respect to the Company, those
Subsidiaries of the Company which are incorporated, formed or organized outside
of the United States.
20
"FUNDED DEBT TO EBITDA RATIO" means, as to the Company and its
Consolidated Subsidiaries for any period, the ratio of (i) Consolidated Funded
Debt (as of the last day of such period) to (ii) Consolidated EBITDA for such
period. The Funded Debt to EBITDA Ratio shall be measured for a period covering
the four (4) fiscal quarters then ended.
"GAAP" means Generally Accepted Accounting Principles.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means those generally
accepted accounting principles and practices which are recognized as such by the
American Institute of Certified Public Accountants acting through the Financial
Accounting Standards Board ("FASB") or through other appropriate boards or
committees thereof and which are consistently applied for all periods so as to
properly reflect the financial condition, operations and cash flows of a Person,
except that any accounting principle or practice required to be changed by the
FASB (or other appropriate board or committee of the FASB) in order to continue
as a generally accepted accounting principle or practice may be so changed. Any
dispute or disagreement between the Company and the Required Lenders relating to
the determination of Generally Accepted Accounting Principles shall, in the
absence of manifest error, be conclusively resolved for all purposes hereof by
the written opinion with respect thereto, delivered to the Lenders, of the
independent accountants selected by the Company and reasonably satisfactory to
the Required Lenders for the purpose of auditing the periodic financial
statements of the Company.
"GUARANTEEING FOREIGN SUBSIDIARIES" means those Foreign Subsidiaries of
the Company required to become a Guarantor pursuant to Section 5.12 of this
Agreement.
"GUARANTOR" or "GUARANTORS" means DPI, Parfums, Royce, and Broad, and
any other Person required to guarantee the obligations of the Company in
accordance with Section 5.12 of this Agreement.
"GUARANTY" or "GUARANTIES" means the Joint Guaranty dated December 22,
1999 in favor of the Lender made by DPI, Parfums, Royce, and Broad, ratified and
confirmed by such parties as of the Restatement Effective Date, as such Joint
Guaranty may be amended to include or be affirmed by additional Guarantors, and
any and all other guaranties executed and delivered by one or more Guarantors
pursuant to Exhibit C or Section 5.12 of this Agreement.
"HAZARDOUS MATERIALS" includes, without limitation, any flammable
explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, or related materials defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery
Act, as amended (42 U.S.C. Sections 6901 et. seq.), and in the regulations
adopted and publications promulgated pursuant thereto, or any other federal,
state or local environmental law, ordinance, rule or regulation.
"INTERCOMPANY DEBT" means Debt owing by the Company to any Guarantor or
from any Guarantor to the Company or from any Guarantor to any other Guarantor.
21
"INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral Agency
Agreement dated of even date herewith among the Collateral Agent, the Agent, the
Lenders and the Bank Lenders, and acknowledged by the Company.
"INVESTMENT" means any stock, evidence of Debt or other security of any
Person, any loan, advance, contribution of capital, extension of credit or
commitment therefor, including without limitation the guaranty of loans made to
others (except for current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms in the ordinary course of business) and any purchase of
(i) any security of another Person or (ii) any business or undertaking of any
Person or any commitment or option to make any such purchase, or any other
investment.
"LENDER or LENDERS" shall have the meaning assigned thereto in the
introductory paragraphs hereof.
"LIEN" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranties, the
Intercreditor Agreement, the Security Agreements, the Trademark Security
Agreements, and any other document executed or delivered pursuant to this
Agreement.
"MATERIAL ADVERSE CHANGE" means, as to the Company alone, DPI alone,
any other Guarantor which has revenues or assets representing more than ten
(10%) percent of the Company's consolidated revenues or assets (a "Material
Guarantor") or the Company and its Consolidated Subsidiaries taken as a whole,
(i) a material adverse change in the financial condition, business, operations,
properties, prospects or results of operations of the Company alone, DPI alone,
a Material Guarantor alone, or the Company and its Consolidated Subsidiaries
taken as a whole (provided that the elimination of the inter-company payable
between the Company and DPI shall not, by virtue of such elimination alone, be
deemed a Material Adverse Change in either the Company or DPI) or (ii) any event
or occurrence which could have a material adverse effect on the ability of the
Company alone, DPI alone, a Material Guarantor alone, or the Company and its
Consolidated Subsidiaries taken as a whole to perform its or their obligations
under the Loan Documents.
"MULTIEMPLOYER PLAN" means a Plan described in Section 4001(a)(3) of
ERISA which covers employees of the Company or any ERISA Affiliate.
"NORTH CAROLINA EXISTING MORTGAGE" means the mortgage Lien existing on
the date of this Agreement on the Company's real property and the improvements
thereon at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
22
"NOTES" shall have the meaning assigned thereto in the introductory
paragraphs of this Agreement.
"OFFICER'S CERTIFICATE" means a certificate signed by the chief
executive officer or the chief financial officer of the Company, provided that
the Officer's Certificates delivered pursuant to Exhibit C must be signed by the
chief executive officer.
"ORIGINAL LOAN AGREEMENT" shall have the meaning assigned thereto in
the introductory paragraphs of this Agreement.
"ORIGINAL NOTES" shall have the meaning assigned thereto in the
introductory paragraphs of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PARFUMS" means Parfums Schiaparelli, Inc., a New York corporation.
"PERMITTED DIVIDENDS" means, with respect to the Company, the payment
of (i) any dividend payable in stock of the Company or (ii) subject to the
proviso at the conclusion hereof, cash dividends which, in any fiscal year of
the Company, do not exceed, in the aggregate, fifteen (15%) percent of the
Company's Consolidated Net Income for such fiscal year; provided, however, (x)
no Default or Event of Default shall have occurred and be continuing or shall
result from the payment of such cash dividend and (y) the Company shall have
provided to the Agent and the Lenders evidence that its Funded Debt to EBITDA
Ratio as of the end of the immediately preceding fiscal quarter, and after
giving effect to the paying of such cash dividend, does not, and will not,
exceed 3.50 to 1.00.
"PERMITTED EQUIPMENT SALES" means sales by the Company or its
Consolidated Subsidiaries of equipment in an aggregate principal amount not
exceeding $500,000.00 during any fiscal year.
"PERMITTED INVESTMENTS" means, (i) direct obligations of the United
States of America or any governmental agency thereof, or obligations guaranteed
by the United States of America, provided that such obligations mature within
one year from the date of acquisition thereof; (ii) time certificates of deposit
having a maturity of one year or less issued by any commercial bank organized
and existing under the laws of the United States or any state thereof and having
aggregate capital and surplus in excess of $500,000,000.00; (iii) money market
mutual funds having assets in excess of $2,500,000,000; (iv) commercial paper
rated not less than P-1 or A-1 or their equivalent by ▇▇▇▇▇'▇ Investor Services,
Inc. or Standard & Poor's Corporation, respectively; (v) tax exempt securities
rated Prime 2 or better by ▇▇▇▇▇'▇ Investor Services, Inc. or A-1 or better by
Standard & Poor's Corporation; (vi) loans or advances between the Company and a
Guarantor or between Guarantors; (vii) deposits in, and other investments made
available by any Lender; (viii) investments in, or loans or advances to, wholly
owned domestic Subsidiaries, provided that any such investment, loan or advance
made after the date of this
23
Agreement shall be made only in a domestic Subsidiary which is a Guarantor; (ix)
investments in, or loans or advances to, Foreign Subsidiaries, provided any such
single investment (valued at cost), loan or advance shall not exceed
$10,000,000.00 and all such investments (valued at cost), loans and advances
shall not exceed $12,500,000.00; and (x) loans or advances to employees of the
Company or a Guarantor which do not exceed $2,000,000.00 in the aggregate at any
time.
"PERMITTED REAL ESTATE SALE" means the sale by the Company of its real
property and the improvements thereon located at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, provided that the gross sale price shall be approximately
$1,000,000.00 (Canadian) and provided further that the net proceeds of such sale
shall be applied to partially repay the Canadian Bridge Loan.
"PERMITTED STOCK REPURCHASES" means, with respect to the Company, (i)
transactions in which (x) the Company's common stock is transferred to the
Company by a current or former employee of the Company or any of its
Subsidiaries in an amount equal to the consideration payable to such employee
upon the exercise of stock options held by such employee or (y) the Company's
common stock is transferred to the Company by an employee in an amount equal to
the withholding tax liability for such employee resulting from the exercise of
such stock option rights by such employee, provided that the amount paid by the
Company for transactions described in clause (y) (net of the related tax benefit
received by the Company for such transaction) shall not exceed $250,000.00 in
the aggregate during any fiscal year of the Company or (ii) the repurchase of
common stock of the Company from participants in the Del Laboratories, Inc.
Employee Stock Ownership Trust (the "ESOT") and from the ESOT.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity or a federal, state or
local government, or a political subdivision thereof or any agency of such
government or subdivision.
"PLAN" means any employee benefit plan established, maintained, or to
which contributions have been made by the Company or any ERISA Affiliate.
"PROHIBITED TRANSACTION" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from
time to time.
"REGULATION T" means Regulation T of the Board of Governors, as the
same may be amended and in effect from time to time.
"REGULATION U" means Regulation U of the Board of Governors, as the
same may be amended and in effect from time to time.
"REGULATION X" means Regulation X of the Board of Governors, as the
same may be amended and in effect from time to time.
"REPORTABLE EVENT" means any of the events set forth in Section 4043 of
ERISA.
24
"REQUIRED LENDERS" means Lenders holding at least 51% of the aggregate
unpaid principal amount of all Notes at the time outstanding. For the purpose of
determining whether the holders of outstanding Notes of the requisite unpaid
principal amount at any time have taken any action authorized by this Agreement,
any Notes owned by the Company or any Affiliate of the Company shall not be
deemed outstanding.
"ROYCE" means Royce & ▇▇▇▇▇, Inc., a Delaware corporation.
"SEC" means the Securities and Exchange Commission or any governmental
body succeeding to such of its authority as may from time to time be relevant to
this Agreement and the transactions contemplated hereby.
"SECURITY AGREEMENT" or "SECURITY AGREEMENTS" means, one or more, as
the context requires, of the security agreement or security agreements to be
executed and delivered pursuant to Exhibit C or Section 5.12 of this Agreement.
"SUBORDINATED DEBT" means Debt of any Person, the repayment of which
the obligee has agreed in writing, on terms which have been approved by the
Required Lenders in advance in writing, shall be subordinate and junior to the
rights of the Lenders with respect to Debt owing from such Person to the
Lenders.
"SUBSIDIARY" means, as to any Person, any corporation, partnership,
limited liability company or joint venture whether now existing or hereafter
organized or acquired (i) in the case of a corporation, of which a majority of
the securities having ordinary voting power for the election of directors (other
than securities having such power only by reason of the happening of a
contingency) are at the time owned by such Person and/or one or more
Subsidiaries of such Person or (ii) in the case of a partnership, limited
liability company or joint venture or similar entity, of which a majority of the
partnership, membership or other ownership interests are at the time owned by
such Person and/or one or more Subsidiaries of such Person.
"TRADEMARK SECURITY AGREEMENT" or "Trademark Security Agreements" means
one or more, as the context requires, of the trademark security agreements to be
executed and delivered pursuant to Exhibit C and Section 5.11 of this Agreement.
"TREASURY YIELD" means, with respect to any Note to be prepaid pursuant
to Section 4.2, 4.3 or 4.4, or which shall have been declared to be or become
immediately due and payable pursuant to Section 7.1, the yield to maturity
reported (for the latest day for which such yields shall have been so reported
as of 10:00 a.m. (New York City time) on the business day next preceding the
scheduled date of prepayment or the date of acceleration of such Note (such
scheduled date or date of acceleration being called the "Settlement Date")) by
Telerate Systems (or any successor or comparable service selected by the holders
of the Notes which are being prepaid or which have been accelerated, if such
report by Telerate Systems is unavailable) for actively traded U.S. Treasury
securities having a maturity closest to the remaining weighted average life to
final maturity (calculated in accordance with accepted financial practice) as of
such Settlement Date (A) of such Note, in the case of a prepayment in full or
acceleration of such Note, or (B) of the principal of such Note that is to be
prepaid (any partial prepayment being
25
deemed applied in satisfaction of required payments and prepayments of principal
in inverse chronological order of their due dates), in the case of a partial
prepayment pursuant to Section 4.2.
"UNFUNDED CAPITAL EXPENDITURES" means Capital Expenditures financed
other than by the incurrence of Debt.
"YEAR 2000 ISSUE" means the risk of failure of computer software,
hardware and firmware systems and equipment containing embedded computer chops
to properly receive, transmit, process, manipulate, store, retrieve, re-transmit
or in any other way utilize data and information due to the occurrence of the
year 2000 or the inclusion of dates on or after January 1, 2000. SECTION 6.1.
....Accounting Terms. Except as otherwise herein specifically provided, each
accounting term used herein shall have the meaning given to it under GAAP. For
purposes of determining compliance with the financial covenants set forth in
Sections 5.25 and 5.31, such financial covenants shall be calculated, excluding
the impact of the adoption of the Proposed Statement of Financial Accounting
Standards entitled "Business Combinations and Intangible Assets", which, if
issued as a final Statement, would require the Company to write-off the carrying
value of goodwill (which is currently approximately $6.3 million) that is
currently being accounted for in accordance with Accounting Research Bulletin
No. 43, Chapter 5, "Intangible Assets", in the first interim or annual period
ending after the issuance date of the Statement. The effect of the write-off
would be reported as a cumulative effect of a change in accounting principle in
the Company's statement of operations.
SECTION 7. REMEDIES.
SECTION 7.1. EVENTS OF DEFAULT; ACCELERATION. If any of the following
events ("Events of Default") shall occur and be continuing for any reason
whatsoever (and whether it shall be voluntary or involuntary or occur or be
effected by operation of law or otherwise):
(A) the Company defaults in the payment or prepayment when due
of any principal of, or prepayment charge on, any Note,
(B) the Company defaults for at least five business days in
the payment when due of any interest on any Note,
(C) the Company defaults in the observance of any agreement
contained in Sections 5.15, 5.16, 5.17, 5.18, 5.22, 5.25,
5.27, 5.30, and 5.31.
(D) the Company defaults in the observance of any other
agreement or covenant in this Agreement and shall not have
remedied the default within 30 days after written demand to
remedy the same has been given to the Company by the holder of
any Note,
(E) the Company, any Guarantor or any Subsidiary shall not pay
(or otherwise
26
satisfy on terms consistent with the terms of this Agreement)
any other Debt in an aggregated principal amount exceeding
$500,000 when due, or any condition shall exist permitting
other Debt of the Company, any Guarantor or any Subsidiary in
an aggregate principal amount exceeding $500,000 to become or
be declared due prior to its stated maturity, except, however,
a condition in respect of a Guarantee of the Company, any
Guarantor or any Subsidiary if the Company, such Guarantor or
such Subsidiary shall duly perform its obligations under such
Guarantee,
(F) the Company, any Guarantor or any Subsidiary shall (1) be
generally not paying its debts as they become due, (2) file,
or consent by answer or otherwise to the filing against it of,
a petition for relief or reorganization or arrangement or any
other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any
jurisdiction, (3) make any assignment for the benefit of its
creditors, (4) consent to the appointment of a custodian,
receiver, trustee or other officer with similar powers of
itself or of any substantial part of its property, (5) be
adjudicated insolvent or be liquidated, or (6) take corporate
action for the purpose of any of the foregoing,
(G) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent
by the Company, any Guarantor or any Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its
property, or if an order for relief shall be entered in any
case or proceeding for liquidation or reorganization or
otherwise, to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company, any Guarantor or any
Subsidiary, or if any petition for any such relief shall be
filed against the Company, any Guarantor or any Subsidiary and
such petition shall not be dismissed within 60 days,
(H) final judgment shall be rendered against the Company, any
Guarantor or any Subsidiary for the payment of money in excess
of $500,000, and such judgment shall not be discharged or
execution thereon stayed pending appeal, within 30 days after
entry thereof, or, in the event of such a stay, such judgment
shall not be discharged within 30 days after such stay
expires,
(I) any material representation or warranty heretofore or
hereafter made by or on behalf of the Company herein or in any
certificate or other writing delivered under or pursuant to
this Agreement or in connection with any provision hereof or
related to the transactions contemplated hereby shall prove to
have been false or incorrect or breached in any material
respect on the date as of which made, or
(J) any Guaranty shall cease, other than in accordance with
its terms, to be in full force and effect or shall be declared
by a court or governmental authority of competent jurisdiction
to be void, voidable or unenforceable against any Guarantor,
or any Guarantor or the Company asserts any of the foregoing
in
-27-
writing or before any court or governmental authority,
then (i) upon the occurrence of any Event of Default described in subsection (F)
or (G) with respect to the Company (other than such an Event of Default
described in subsection (F)(1) or described in subsection (F)(6) by virtue of
the reference in such clause (6) to such clause (1)), the unpaid principal
amount of the Notes, together with the accrued interest thereon and, to the
extent permitted by law, an amount equal to 50% of the prepayment charge that
would be payable if the Company were prepaying the Notes at the time pursuant to
Section 4.2, shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by the Company, or (ii) upon occurrence of any other
Event of Default, the holder or holders of at least 66-2/3% of the unpaid
principal amount of the Notes at the time outstanding (subject to the last
paragraph of Section 9) may, by written notice to the Company, declare all of
the Notes to be, and the same shall forthwith become due and payable, together
with accrued interest thereon which shall be deemed matured and, to the extent
permitted by law, an amount equal to 50% of the prepayment charge that would be
payable if the Company were prepaying the Notes at the time pursuant to Section
4.2, provided that, during the existence of an Event of Default described in
Subsection (A) or (B) with respect to any Note, the holder of such Note may, by
written notice to the Company, declare such Note to be, and the same shall
forthwith become, due and payable, together with accrued interest thereon which
shall be deemed matured and, to the extent permitted by law, an amount equal to
50% of the prepayment charges that would be payable if the Company were
prepaying such Note at the time pursuant to Section 4.2. If any holder of any
Note shall exercise the option specified in the proviso to the preceding
sentence, each other holder of any Note may, by written notice to the Company,
declare the principal of all Notes held by it to be, and the same shall
forthwith become, due and payable, together with accrued interest thereon which
shall be deemed matured and, to the extent permitted by law, an amount equal to
50% of the prepayment charge that would be payable if the Company were prepaying
the Notes at the time pursuant to Section 4.2. Nevertheless, if at any time
after acceleration of the maturity of any Note or Notes, the Company shall pay
all arrears of interest and all payments on account of the principal and
prepayment charge which shall have become due otherwise than by acceleration
(with interest on principal and prepayment charge and, to the extent permitted
by law, on overdue interest, at the rate specified in the Notes) and all Events
of Default (other than non-payment of principal of and accrued interest on the
Notes, an amount equal to prepayment charges as aforesaid, due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
Section 9, then the holder or holders of at least 66-2/3% of the unpaid
principal amount of the Notes at the time outstanding (subject to the last
paragraph of Section 9) by written notice to the Company, may rescind and annul
the acceleration and its consequences; but such action shall not affect any
subsequent Default or Event of Default or impair any right consequent thereon.
SECTION 7.2. OTHER REMEDIES. If any Default or Event of Default shall=
have occurred and be continuing, the holder of any Note may proceed to protect
and enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for specific
performance of any agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy is intended to be
exclusive and each remedy
28
shall be cumulative.
If the Company shall default in the payment of principal of, or
interest or prepayment charge on, any Note, or shall default in the performance
or observance of any agreement contained in this Agreement, it will pay to the
holder of any Note such amounts, to the extent lawful, as shall be sufficient to
pay the costs and expenses of collection or of otherwise enforcing any of such
holder's rights, including reasonable counsel fees.
SECTION 7.3. NOTICE OF ACCELERATION. If the maturity of any Note shall
be accelerated as provided in Section 7.1, the Company will give written notice
thereof to the holders of all outstanding Notes within one business day.
SECTION 8. COMMUNICATIONS; PAYMENT OF NOTES. All communications
provided for hereunder shall (except as otherwise provided by Section 4.3 and
4.4) be delivered, or mailed (by first-class mail, postage prepaid), addressed
(A) if to the Lender, at the Lender's address for the purpose thereof provided
in Schedule I, (B) if to any other Person who is the holder of a Note, at the
address of such Person for the purpose thereof as it appears on the register of
the Company maintained under Section 10, (C) if to the Company or any Guarantor,
c/o Del Laboratories, Inc., at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Chief Financial Officer, with a copy to Del Laboratories, Inc. at ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel. Any
address may be changed from time to time and shall be the most recent address
furnished in writing (1) if by any Lender or any other holder of a Note, to the
Company, or (2) if by the Company, to each Lender and to each holder of a Note.
Any communication shall be deemed to have been given when delivered or mailed,
as the case may be.
The Company agrees that, so long as any Lender or its nominee holds any
Note and notwithstanding any provision hereof or of the Notes to the contrary,
it will pay all sums becoming due thereon for principal, prepayment charge and
interest to such Lender in the manner provided for the Lender in Schedule I or
in such other manner as such Lender may designate to the Company in writing,
without presentation of the Notes. Each Lender agrees that if it sells or
transfers any Note held by it, (i) such sale shall be made in compliance with
all applicable Federal and state securities laws, (ii) prior to such disposition
it will make a notation thereon of all principal payments previously made, and
(iii) it will not sell or transfer a Note to any Competitor. The Company agrees
that the provisions of this paragraph shall inure to the benefit of any other
institutional holder of any such Note which shall have agreed to comply with the
requirements of this paragraph.
29
SECTION 9. FIRST OFFER UPON TRANSFER OF NOTES. In the event that any
holder of a Note (a "Proposed Transferor") should wish to transfer its Note, or
any portion thereof, to another Person in a transaction which would result in
there being more than four holders of the Notes, the Proposed Transferor shall,
before making such transfer, deliver to the Company an offer (the "Offer") to
sell to the Company the Proposed Transferor's Note, or such portion of the Note
as the Proposed Transferor wishes to transfer. The Offer shall state the
purchase price upon which the Proposed Transferor will sell the Note, or portion
thereof, to the Company and shall remain open and irrevocable for a period of 30
days from the date of its delivery (the "Offer Period"). The Company may accept
the Offer by delivering to the Proposed Transferor within the Offer Period a
written notice of acceptance together with the purchase price specified in the
Offer in immediately available funds. In the event that the Company does not
accept the offer within the Offer Period, the Proposed Transferor shall be free
to sell or transfer its Note, or the portion thereof specified in the Offer, to
any Person for a purchase price not less than nine-five percent (95%) of the
purchase price specified in the Offer for a period of 90 days following the
expiration of the Offer Period subject to the restrictions contained in Section
8 hereof. Any portion of the Note not sold or transferred by the Proposed
Transferor during the 90 day period shall, at the expiration thereof, become
subject again to the transfer restrictions specified in this Section.
Any Note, or portion thereof, acquired by the Company pursuant to this
Section shall be immediately canceled. Neither the Company nor any of its
affiliates shall ever be deemed to be a holder of any Notes and no Notes
acquired or held by the Company or its affiliates shall be considered in
calculating the ownership of the Notes.
SECTION 10. AMENDMENT AND WAIVER. Except as otherwise expressly
provided herein, any provision of this Agreement or of the Notes may be amended
or waived if the Company shall obtain the written agreement thereto of the
holder or holders of at least 66-2/3% of the unpaid principal amount of the
Notes at the time outstanding, except that, without the written agreement of the
holder or holders of all the Notes at the time outstanding, no such amendment or
waiver shall extend the maturity of any Note or reduce the principal of, or the
rate of interest or any prepayment charge payable with respect to, any Note, or
affect the time or amount of any required prepayment or interest payment or
reduce the percentage of the unpaid principal amount of the Notes required with
respect to any amendment or waiver. Each holder of the Notes at the time or
thereafter outstanding shall be bound by any such amendment or waiver, whether
or not a notation thereof shall have been placed on the Note.
No course of dealing between the Company and any Lender or the holder
of any Note, and no delay in exercising any rights hereunder or under any Note,
shall imply or otherwise operate as a waiver of any rights of any Lender or the
holder of any Note.
30
SECTION 11. REGISTRATION, TRANSFER AND EXCHANGE OF NOTES. The Company
will keep at its principal office a register in which it will provide for the
registration and registration of transfer of Notes, at its own expense
(excluding transfer taxes). If any Note is surrendered at said office or at the
place of payment named in the Note for registration of transfer or exchange
(accompanied in the case of registration of transfer by a written instrument of
transfer in form satisfactory to the Company duly executed by or on behalf of
the holder), the Company, at its expense, will deliver in exchange one or more
new Notes in any denominations (multiples of $1,000), as requested by the
holder, for the aggregate unpaid principal amount. Any Note or Notes issued in a
transfer or exchange shall carry the same rights to interest (unpaid and to
accrue) carried by the Note or Notes so transferred or exchanged so that there
will not be any loss or gain of interest on the Note or Notes surrendered. Each
holder of a Note shall promptly inform the Company of the transfer or assignment
of such Note, or any portion thereof.
SECTION 12. LOST NOTES. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction of any Note, and (in case of
loss, theft or destruction) of indemnity satisfactory to it (any Lender's or any
other institutional holder's undertaking to be satisfactory indemnity in case of
loss, theft or destruction of any Note owned by such Lender or by such other
institutional holder), and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such Note,
if mutilated, the Company will pay any unpaid principal, interest and prepayment
charge then or theretofore due and payable on such Note and will deliver in lieu
of such Note a new Note for the remaining unpaid principal amount thereof and
carrying the same rights to interest (unpaid and to accrue).
SECTION 13. EXPENSES. The Company agrees, whether or not the
transactions hereby contemplated are consummated, to pay all expenses incident
to the loans and related transactions and also in connection with any future
amendment of, or waiver under or with respect to (whether or not given), this
Agreement or any of the Notes, including in each case, without limitation, any
printing costs, and fees and expenses of Lenders' special counsel and of
Lender's local counsel, if any, for services to the Lenders in connection with
the loans and such other matters, and to reimburse each Lender for any
out-of-pocket disbursements for payment of the expenses mentioned.
The Company will also pay all taxes (including interest and penalties)
which may be payable in respect of the execution and delivery of this Agreement
or of any of the Notes (but not their transfer) or of any amendment of, or
waiver under or with respect to, this Agreement or of any of the Notes and will
save each Lender and all subsequent holders of the Notes harmless from any loss
or liability resulting from nonpayment or delay in payment of any such tax.
The obligations of the Company under this Section shall survive the
payment of the Notes.
31
SECTION 14. CONFIDENTIAL INFORMATION. The Company acknowledges that the
holder of any Note may deliver copies of any financial statements and other
documents delivered to such holder, and disclose any other information disclosed
to such holder, by or on behalf of the Company or any Subsidiary in connection
with or pursuant to this Agreement to
(i) such holder's directors, officers, employees, agent and
professional consultants (other than a Competitor),
(ii) any other holder of any Note (other than a Competitor),
(iii) any Person (other than a Competitor) to which such holder offers
to sell such Note or any part thereof,
(iv) any Person (other than a Competitor) to which such holder sells or
offers to sell a participation in all or any part of such Note,
(v) any federal or state regulatory authority having jurisdiction over
such holder,
(vi) the National Association of Insurance Commissioners or any similar
organization, or
(vii) any other Person to which such delivery or disclosure may be
necessary or appropriate
(1) in compliance with any law, rule, regulation or order
applicable to such holder,
(2) in response to any subpoena or other legal process,
(3) in connection with any litigation to which such holder is
a party, or
(4) in order to protect such holder's investment in such Note.
The Lenders agree that any information concerning the Company or any
Subsidiary that has been supplied to them by the Company and conspicuously
identified in writing by the Company as confidential, and which is not
information available to or obtainable by the public, shall be treated as
confidential by the Lenders in accordance with the procedures and standards that
the Lenders generally apply to information of a confidential nature. Any Lender
who discloses confidential information to any Person described in subsections
(iii), (iv), or (vii) shall promptly advise the Company of such disclosure.
The Company's sole remedy for any breach by a Lender of its obligation
under this Section shall be limited to obtaining injunctive relief against
further disclosures of confidential information. The Company may not raise any
Lender's breach of its obligations under this Section as a defense, counterclaim
or basis for setoff in any action brought against the Company to enforce a
holder's rights under its Note or under this Agreement.
32
SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and inure to the benefit of, and be enforceable by, the Company and each
Lender, and their respective successors and assigns, whether or not so
expressed; provided, however, that the benefits of Sections 8 (the second
paragraph thereof), 12 (as to satisfactory indemnity) and 13 shall be limited as
specifically provided therein, except that any other institutional investor
which is a holder of any of the Notes shall be entitled to the rights and
benefits thereunder as if it were a Lender.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement or made in writing by
or on behalf of the Company in connection with the transactions contemplated
hereby shall survive the execution and delivery of this Agreement and of the
Notes, regardless of any investigation at any time made by any Lender or on its
behalf. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company hereunder or in connection with the
transactions contemplated hereby shall be deemed representations and warranties
of the Company hereunder.
SECTION 17. GOVERNING LAW. The Note, this Agreement and (unless
otherwise provided) all amendments, supplements, waivers and consents relating
thereto or hereto shall be governed by the laws of the State of New York
(without regard to the conflict of law provisions thereof).
SECTION 18. REAFFIRMATION, RESTATEMENT AND WAIVERS. This Agreement
constitutes an amendment and restatement of the Original Loan Agreement and the
indebtedness evidenced by the Original Loan Agreement is continuing
indebtedness, and nothing herein shall be deemed to constitute a payment,
settlement or novation of the indebtedness evidenced by the Original Loan
Agreement except to the extent provided herein, or to release or otherwise
adversely affect any lien, mortgage or security interest securing such
indebtedness or any rights of any Lender against any guarantor, surety or other
party primarily or secondarily liable for such indebtedness.
33
SECTION 19. TERMINATION OF SECURITY INTERESTS; RELEASE OF COLLATERAL.
The security interests granted under the Security Agreement shall terminate and
all rights to the Collateral (as defined therein) shall revert to the Loan
Parties (as defined therein) upon the earlier to occur of (i) payment in full of
all Obligations (as defined therein) (except for unmatured contingent
Obligations, as defined therein) and the termination of all commitments to make
further extensions of credit to any Loan Party under the Bank Credit Agreement,
including without limitation, the issuance of any letters of credit and (ii) the
satisfaction of each of the following conditions: (x) no Event of Default shall
have occurred and be continuing prior to or after giving effect to such release
of the Collateral, (y) the Total Commitment (as defined in the Bank Credit
Agreement) shall have been permanently reduced to at least $22,500,000 and (z)
the Funded Debt to EBITDA Ratio for the immediately preceding four (4) fiscal
quarters is less than or equal to 2.00 to 1.0. Upon termination of the security
interests or release of any Collateral, the Collateral Agent will, at the
expense of the Loan Parties, execute and deliver to the Loan Parties such
documents as the Loan Parties shall reasonably request to evidence the
termination of the security interests or the release of such Collateral, as the
case may be.
In the event that the security interest of the Collateral Agent shall
be released pursuant to and in accordance with the terms and provisions of this
Section 19, the Lenders hereby agree on a good faith basis to discuss and
consider changes and modifications to the negative financial covenants or
restrictions contained herein to the extent such changes and modifications are
made to the related terms and provisions of the Bank Credit Agreement or any
replacement thereto.
34
IN WITNESS WHEREOF, the Company, each Guarantor and each Lender have
executed this Agreement as of the day and year first above written.
DEL LABORATORIES, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Executive Vice President and Chief Financial
Officer
DEL PHARMACEUTICALS, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Executive Vice President and Chief Finncial
Officer
PARFUMS SCHIAPARELLI, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Executive Vice President and Chief Financial
Officer
ROYCE & ▇▇▇▇▇, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Executive Vice President and Chief Financial
Officer
565 BROAD HOLLOW REALTY CORP.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Executive Vice President and Chief Financial
Officer
35
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE COMPANY
BY: PPM AMERICA, INC., AS ATTORNEY IN FACT,
ON BEHALF OF ▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE COMPANY
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------
▇▇▇▇▇ ▇▇▇▇▇
Managing Director
36
EXHIBIT A
DEL LABORATORIES, INC.
Amended and Restated
9.5% Senior Note Due May 31, 2005
February 25, ▇▇▇▇
▇▇. ▇-▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ B# 9
DEL LABORATORIES, INC., a Delaware corporation (the "Company"), for
value received, hereby promises to pay to the order of ▇▇▇▇▇▇▇ National Life
Insurance Company or its registered assigns, on or before May 31, 2005, the
principal sum of FORTY MILLION DOLLARS ($40,000,000) (or so much thereof as
shall not have been prepaid) and to pay interest (computed on the basis of a
360-day year of twelve 30-day months) on the unpaid principal hereof from the
date hereof at the rate of 9.5% per annum, semiannually on November 30 and May
31 in each year, until such principal sum shall have become due and payable
(whether at maturity, at a required prepayment date, or otherwise) and to pay on
demand interest at the rate of 11.5% per annum on any overdue principal and on
any prepayment charge and, to the extent permitted by applicable law, on any
overdue interest, from the due date thereof, until the obligation of the Company
with respect to the payment thereof shall be discharged. Payments of principal,
prepayment charges, and interest shall be made in lawful money of the United
States of America upon presentation hereof at the office of the Company at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as the
holder hereof shall have designated to the Company in writing.
This Note is one of the Notes of the Company, aggregating $40,000,000
in original authorized principal amount, arising out of the Amended and Restated
Loan Agreement dated as of February 25, 2000 (the "Loan Agreement"), entered
into by the Company with the lenders named therein. This Note amends and
restates the promissory notes having an original aggregate principal amount of
$40,000,000 issued under and pursuant to the Loan Agreement dated May 26, 1993,
as amended (the "Original Notes") and replaces such Original Notes in their
entirety. The indebtedness evidenced by the Original Notes is continuing
indebtedness evidenced by this Note, and nothing herein shall be deemed to
constitute a payment, settlement or novation of the indebtedness evidenced by
the Original Notes. The holder of this Note is entitled to enforce the
provisions of such Loan Agreement and to enjoy the benefits thereof.
The Company is required by such Loan Agreement to prepay this Note on
May 31, 2001, and on each May 31 thereafter to and including May 31, 2004, as
long as this Note is outstanding. The Company may, at its election, prepay this
Note, in whole or in part, and may under certain circumstances be required to
prepay this Note in whole, and the maturity hereof may be accelerated by the
holder of this Note or by holders of a percentage of the Notes outstanding
following an Event of Default, all as provided in such Loan Agreement, to which
-1-
reference is made for the terms and conditions of such provisions as to
prepayment and acceleration.
Transfer of this Note is registrable on the note register of the
Company upon presentation at the principal office of the Company, accompanied by
a written instrument of transfer in form satisfactory to the Company duly
executed by, or on behalf of, the holder hereof. This Note may also be exchanged
at such offices for one or more Notes in any denominations (multiples of
$1,000), as requested by the holder, of a like aggregate unpaid principal
amount.
The transfer of this Note is subject to certain restrictions set forth
in Sections 8 and 9 of the Loan Agreement.
Prior to due presentment for registration of transfer, the Company and
any agent of the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment of principal
and prepayment charges and interest as herein provided and for all other
purposes.
DEL LABORATORIES, INC.
----------------------------------
By:
Its:
-2-
EXHIBIT B
REPRESENTATIONS
PART ONE - REPRESENTATIONS BY THE COMPANY
SECTION B-1. GOOD STANDING OF THE COMPANY, GUARANTORS AND SUBSIDIARIES;
AUTHORIZATION. The Company, each Guarantor and each Subsidiary of the Company or
any Guarantor are each a corporation duly incorporated, validly existing and in
good standing under the laws of their respective jurisdictions of incorporation
and each has the corporate power to own its assets and to transact the business
in which it is presently engaged and is duly qualified and is in good standing
in all other jurisdictions where the failure to so qualify would be reasonably
likely to result in a Material Adverse Change. The execution, delivery and
performance of this Agreement and the Notes have been duly authorized by all
necessary proceedings on the part of the Company.
SECTION B-2. COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery
and performance of this Agreement and the Notes will not result in any breach
of, constitute a default under or result in the creation of any Lien in respect
of any property of the Company, any Guarantor or any Subsidiary pursuant to, the
charter or by-laws of the Company, any Guarantor or any Subsidiary, or any
agreement, instrument, judgment, decree, order, statute, rule or regulation
applicable to the Company, any Guarantor or any Subsidiary, other than the Liens
created pursuant to the Loan Documents. Neither the Company, any Guarantor nor
any Subsidiary is in violation of any term of its charter or by-laws, or of any
term of any agreement, instrument, judgment, decree, order, statute, rule or
regulation applicable to it, the violation of which might materially adversely
affect the business, operations, properties or financial position of the
Company, the Guarantors and Subsidiaries, taken as a whole. Neither the nature
of the Company, any Guarantor nor any Subsidiary, nor of any of their respective
businesses or properties, nor any relationship between the Company, any
Guarantor or any Subsidiary and any other Person is such as to require any
consent, approval or other action by, or any notice to, or filing with, any
Person in connection with the execution and delivery of this Agreement or
fulfillment of, or compliance with, the terms and provisions hereof or thereof,
other than such consents, approvals, actions, notices or filings which (i) have
been duly obtained or made on or prior to the Restatement Effective Date and are
set forth in an Officer's Certificate delivered to you on the Restatement
Effective Date, or (ii) are to be made pursuant to the Security Agreement after
the Restatement Effective Date.
SECTION B-3. BUSINESS, PROPERTIES, FINANCIAL AND OTHER INFORMATION
REGARDING THE COMPANY. The Company has delivered to each Lender copies of the
documents listed in Exhibit D and makes the representations that follow:
(A) Section D-1 lists all reports and proxy statements
required to be filed by the Company with the SEC since
November 14, 1999.
-1-
(B) Section D-2 sets forth a correct and complete list and
description of all Debt of the Company, any Guarantor and each
Subsidiary, any Liens securing such Debt, and any Guaranties
outstanding or existing on the date there stated.
(C) Section D-3 contains a correct and complete list of the
Company's Subsidiaries.
(D) Section D-4 lists all insurance policies carried by the
Company, the Guarantors and Subsidiaries.
SECTION B-4. SHARES OF SUBSIDIARIES. All the outstanding shares of the
Subsidiaries shown in Section D-3 as being owned by the Company or by any of its
Subsidiaries have been validly issued, are fully paid and nonassessable and are
free and clear of any Liens. No Subsidiary of the Company owns any shares of the
Company.
SECTION B-5. TAXES. The Company, each Guarantor and each Subsidiary of
the Company or any Guarantor have filed all federal, state and local tax returns
required to be filed and have paid all taxes, assessments and governmental
charges and levies thereon to be due, including interest and penalties, unless
and only to the extent that (i) such taxes are being contested in good faith and
by appropriate proceedings by the Company, such Guarantor or any such
Subsidiary, as the case may be; (ii) there are adequate reserves therefor in
accordance with GAAP entered on the books of the Company, such Guarantor or any
such Subsidiary; and (iii) no enforcement proceedings against the Company, such
Guarantor or any such Subsidiary have been commenced.
SECTION B-6. ENCUMBRANCES. The Company, each Guarantor and each
Subsidiary has good and marketable title to its real properties and good and
merchantable title to each of its other properties as are reflected in the
audited balance sheet contained in the Company's Form 10-K for the fiscal year
ended December 31, 1998 (except as sold or otherwise disposed of in the ordinary
course of business) and, except as permitted by Section 5.15, all properties of
the Company, the Guarantors and Subsidiaries are free and clear of all Liens.
SECTION B-7. MATERIAL ADVERSE CHANGES. The consolidated financial
statements of the Company and its Consolidated Subsidiaries for the fiscal year
ended December 31, 1998, and for the nine (9) month period ended September 30,
1999 copies of each of which have been furnished to the Lenders, (i) fairly
present in all material respects the financial condition of the Company and its
Consolidated Subsidiaries as at such dates and the results of operations of the
Company and its Consolidated Subsidiaries for the periods ended on such dates,
all in accordance with GAAP, subject, in the case of the interim financial
statements, to year end adjustments and the absence of footnotes, (ii) between
December 31, 1998 and the date of this Agreement there has been (x) no material
increase in the consolidated liabilities of the Company and its Consolidated
Subsidiaries, other than increases in liabilities resulting solely from
increased borrowings under the Bank Credit Agreement, the Chase Line of Credit
or the EAB Line of Credit and (y) no Material Adverse Change and (iii) except as
disclosed on such financial statements or the notes thereto, there are no
undisclosed liabilities of the Company or any of its Consolidated Subsidiaries,
contingent or otherwise required to be disclosed therein.
-2-
SECTION B-8. OFFERING OF NOTES. Neither the Company nor anyone acting
on its behalf has offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any person other than the Lenders and three
other institutional investors. Neither the Company nor anyone acting on its
behalf has taken, or will take, any action which would subject the issuance or
sale of the Notes to Section 5 of the Securities Act of 1933, as amended.
SECTION B-9. COMPLIANCE WITH FEDERAL RESERVE BOARD REGULATIONS. No part
of the proceeds of the loans made hereunder were used, and no part of the
proceeds of any loan repaid with the proceeds of the loans made hereunder were
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation T, U or X (other than the
repurchase of shares of Common Stock of the Company). The assets of the Company
and its Subsidiaries do not include any margin stock (other than shares of the
Company's common stock presently held in its treasury), and neither the Company
nor any of its Subsidiaries has any present intention of acquiring any margin
stock.
SECTION B-10. ERISA. No employee benefit plan established or maintained
by the Company or by any of its Subsidiaries or to which either the Company or
any of its Subsidiaries has made contributions, which is subject to Part 3 of
Subtitled B of Title I of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), has any material accumulated funding deficiency (as
defined in such Act), and neither the Company nor any of its Subsidiaries has
incurred any material liability to the Pension Benefit Guaranty Corporation (the
"PBGC") or any other governmental entity or agency with respect to any such
plan. The Company and each of its Subsidiaries are in compliance in all material
respects with ERISA to the extent applicable to them and have received no notice
to the contrary from the PBGC or from any other governmental agency or entity.
The consummation of the transaction provided for in this Agreement and the
compliance by the Company with the provisions hereof and the Notes issued
hereunder will not involve any prohibited transaction within the meaning of
ERISA or Section 4975 of the Internal Revenue Code of 1986.
SECTION B-11. INVESTMENT COMPANY ACT. The Company is not, and is not
directly or indirectly controlled by or acting on behalf of any person which is,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION B-12. FOREIGN ASSETS CONTROL REGULATIONS. Neither the borrowing
by the Company hereunder nor its use of the proceeds thereof will violate the
Foreign Assets Control Regulations, the Foreign Funds Control Regulations, the
Transaction Control Regulations, the Cuban Assets Control Regulations, the
Iranian Transactions Regulations, the Iranian Assets Control Regulations or the
Libyan Sanctions Regulations of the United States Treasury Department (31
C.F.R., Subtitle B, Charter V, as amended) or any regulation or ruling issued
under Executive Order Nos. 12543, 12722, 12724, 12775, 12779, 12708 or 12810.
SECTION B-13. PENDING LITIGATION. Schedule D-5 lists all actions,
suits, proceedings or investigations pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any of its Subsidiaries
before any court, arbitrator or administrative or governmental body. None of
such actions, suits, proceedings or investigations will materially adversely
affect the enforceability of this Agreement or the Notes. None of such actions,
suits, proceedings or investigations, individually or in the aggregate, could
reasonably be expected to materially adversely affect the business, operations,
properties or financial position of the Company and its Subsidiaries, taken as a
whole.
-3-
SECTION B-14. SOLVENCY. After giving effect to the execution of this
Agreement, the Bank Credit Agreement and availability of the Total Commitment
(as defined in the Bank Credit Agreement), (i) The fair value of the assets of
(x) the Company and its Consolidated Subsidiaries, on a consolidated basis and
(y) the Company and DPI, each singularly, exceeds, in each case, their debts and
liabilities (subordinated, contingent or otherwise); (ii) the present fair
saleable value of the property of (x) the Company and its Consolidated
Subsidiaries, on a consolidated basis and (y) the Company and DPI, each
singularly, is, in each case, greater than the amount required to pay the
probable liability of their debts and other liabilities (subordinated,
contingent or otherwise) as such debts and other liabilities mature; (iii) (x)
the Company and its Consolidated Subsidiaries, on a consolidated basis and (y)
the Company and each Guarantor singularly, is, in each case, able to pay their
debts and liabilities (subordinated, contingent or otherwise) as such debts and
liabilities mature; and (iv) (x) the Company and its Consolidated Subsidiaries,
on a consolidated basis and (y) the Company and each Guarantor singularly, do
not have, in each case, unreasonably small capital to conduct the businesses in
which they are engaged; and (v) the Company and DPI each has a positive net
worth.
SECTION B-15. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company complies
with all applicable Federal, state and local laws, statues, rules, regulations
and ordinances relating to public health, safety or the environment including,
without limitation, relating to releases, discharges, emissions or disposals to
air, water, land or ground water, to the withdrawal or use of ground water, to
the use, handling or disposal of polychlorinated biphenyls (PCB's), asbestos or
urea formaldehyde, to the treatment, storage, disposal or management or
hazardous substances (including, without limitation, petroleum, its derivatives,
by-products or other hydrocarbons), to exposure to toxic, hazardous or other
controlled, prohibited or regulated substances, to the transportation, storage,
disposal, management or release of gases or liquid substances, the failure to
comply with which could reasonably be expected to have a materially adverse
effect on the Company, its Subsidiaries, and their businesses and properties,
taken as a whole. Except as disclosed in Schedule D-6 hereto, the Company does
not know of any claim against, and has not received notice that it is a
potentially responsible party, and is not aware of any response action or
clean-up where it may be a potentially responsible party, under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.
Section 9601 et seq.) or any state or local laws, regulations or orders
concerning similar subject matter.
SECTION B-16. COMPLIANCE WITH APPLICABLE LAWS. The Company and each of
its Subsidiaries is in compliance, in all material respects, with all applicable
statutes, rules, regulations, ordinances, codes, orders, licenses, franchises,
permits, authorizations and concessions, as such apply to the Company and its
Subsidiaries, including, without limitation, any applicable building, zoning,
anti-pollution, occupational safety, health or other law, ordinance or
regulation in respect of any of the Company's plants, warehouses, offices,
structures, or operations. Neither the Company nor any of its Subsidiaries have
received any
-4-
notification alleging any violation of any of the foregoing which might
reasonably be expected to have a material adverse effect on the Company and its
Subsidiaries and with respect to which adequate corrective action has not been
taken. Schedule D-7 contains a list and brief description of all notices from
and related reports to governmental authorities (other than notices listed in
Schedule D-6), including, without limitation, citations received and corrective
action related thereto taken, by the Company or any of its Subsidiaries from the
Food and Drug Administration, the United States Environmental Protection Agency,
the Equal Employment Opportunity Commission, or the Occupational Safety and
Health Administration (or, in each case, any state agency performing a similar
function) with respect to potential claims which might reasonably be expected to
have a material adverse effect on the Company and its Subsidiaries.
SECTION B-17. INTELLECTUAL PROPERTY. All patents, trademarks, service
marks, trade names, copyrights, and all applications for any of the foregoing,
owned, used or licensed by the Company or any of its Subsidiaries are listed on
Schedule D-8. The Company and each Subsidiary owns or has the right to use all
patents, trademarks, service marks, trade names, copyrights, licenses, trade
secrets and other rights, free from burdensome restrictions, which are necessary
for the operation of their respective businesses as presently conducted and the
lack of which might reasonably be expected to have a material adverse effect on
the Company and its Subsidiaries. To the best knowledge of the Company, none of
the present or contemplated operations of the Company or any of its Subsidiaries
infringes any patent, trademark, service ▇▇▇▇, trade name, copyright, license or
other right owned by any other Person which infringement would reasonably be
expected to have a material and adverse effect upon the Company or any of its
Subsidiaries. To the best knowledge of the Company, no Person is presently
infringing or threatening to infringe upon any patent, trademark, service ▇▇▇▇,
trade name, copy rights or trade secret which is proprietary to or licensed by
the Company or any of its Subsidiaries.
SECTION B-18. CONSOLIDATED TANGIBLE NET WORTH. The Company's
Consolidated Tangible Net Worth at December 31, 1999 is not less than
$33,000,000.
SECTION B-19. REPRESENTATIONS AND WARRANTIES INCORPORATED FROM BANK
CREDIT AGREEMENT. As of the Restatement Effective Date, each of the
representations and warranties made in the Bank Credit Agreement by each of the
Company and the Guarantors is true and correct in all material respects, and
such representations and warranties are hereby incorporated herein by reference
with the same force and effect as though set forth in their entirety herein, as
qualified therein.
-5-
PART TWO - REPRESENTATION BY THE LENDERS
SECTION B-19. ACQUISITION OF NOTES FOR INVESTMENT. Each Lender will
acquire the Notes for its own general account and/or for one or more separate
accounts maintained by it, for investment and not with a view to any
distribution of the Notes or with any present intention of distributing or
selling any of the Notes, but subject, nevertheless, to the disposition of the
Notes being at all times within its control.
-6-
EXHIBIT C
CLOSING CONDITIONS
SECTION C-1. REPRESENTATIONS AND WARRANTIES TRUE. All representations
and warranties of the Company made in Exhibit B or otherwise under or pursuant
to this Agreement shall be true as though made on the Restatement Effective
Date, excepting representations and warranties specifically referring to an
earlier date, and provided that with respect to the representations and
warranties set forth in Sections B-13, B-15 and B-16 of Exhibit B, such
representations and warranties shall be true in all material respects as though
made on the Restatement Effective Date.
SECTION C-2. NO MERGER, ETC. The Company shall not have consolidated or
merged with, or sold, leased or otherwise disposed of its properties as an
entirety or substantially as an entirety to, any Person.
SECTION C-3. RESTATEMENT EFFECTIVE DATE. The Restatement Effective Date
shall occur on or prior to February 25, 2000.
SECTION C-4. NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing, after giving effect to this
Agreement and the Bank Credit Agreement.
SECTION C-5. INSTRUMENTS AND PROCEEDINGS TO BE SATISFACTORY. All
instruments relating to the amendment and restatement of the Original Notes and
of the Original Loan Agreement, including, but not limited to, the delivery of
the Notes and the Loan Documents, shall be satisfactory to each Lender and its
special counsel.
SECTION C-6. COMPLIANCE CERTIFICATE. The Company shall have delivered
to each Lender an Officer's Certificate, dated the Restatement Effective Date,
certifying to the effect set forth in Sections C-1, C-2 and C-4.
SECTION C-7. OPINION OF COMPANY'S COUNSEL. Each Lender shall have
received from ▇'▇▇▇▇▇▇▇▇, Graev and Karabell, LLP, and ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
counsel for the Company, opinions, dated as of the Restatement Effective Date,
in scope and substance satisfactory to each Lender, as to:
(A) the due incorporation, existence and good standing of the
Company and each Subsidiary and its power to own or hold under
lease the properties it purports so to own or hold and to
carry on the business in which it is engaged,
(B) the due authorization by all requisite corporate action
(including any required shareholder approval), and the
execution, delivery, validity, binding effect and
enforceability of this Agreement and the Notes, except to the
extent enforceability is limited by applicable bankruptcy,
insolvency or other similar laws affecting creditors' rights
generally,
-1-
(C) the due qualification and good standing of the Company and
each Subsidiary as a foreign corporation in each jurisdiction
wherein, in the opinion of such counsel, the failure to so
qualify might have a material adverse effect on the business,
operations or properties of the Company and its Subsidiaries,
taken as a whole,
(D) the due authorization of, and good and valid title of the
Company and each Subsidiary to, full payment for, and
nonassessability of, all then-outstanding shares and other
securities which the Company or any such Subsidiary purports
to own of each Subsidiary free of any Liens (of which such
counsel, after due inquiry, shall have knowledge),
(E) the execution, delivery and performance of this Agreement
and the Notes not resulting in breach of, constituting a
default under or resulting in the creation of any Lien in
respect of the property of the Company or any Subsidiary
pursuant to the charter or by-laws of the Company or any
Subsidiary, or any agreement, instrument, judgment, decree,
order, statute, rule or regulation known to such counsel which
is applicable to the Company or any Subsidiary,
(F) the absence or satisfaction of any requirements for any
consent, approval or authorization of, or registration, filing
or declaration with, any governmental authority or other
regulatory agency for the valid execution, delivery and
performance by the Company of this Agreement or the Notes,
(G) except as disclosed in the Company's letter delivered to
each Lender prior to its execution hereof, no proceedings
being, to the knowledge of such counsel after due inquiry,
pending or threatened against or affecting the Company or any
of its Subsidiaries before any court, arbitrator or
administrative or governmental body which, in the aggregate,
would adversely affect any action taken or to be taken by the
Company under this Agreement or the Notes or which, in the
aggregate, would materially adversely affect the business,
operations, properties or financial position of the Company
and its Subsidiaries, taken as a whole, and
(H) such other matters, including the use of the proceeds of
the loans in accordance with the terms of this Agreement being
in compliance with Federal Reserve Board Regulations T, U and
X, and the due perfection of all security interests granted
under the Loan Documents incident to the transactions
contemplated hereby as any Lender may reasonably request.
SECTION C-8. CONSENTS, APPROVALS, ETC. The Company shall have delivered
to the Lenders the Officer's Certificate referred to in the last sentence of
Section B-2.
SECTION C-9. NECESSARY CORPORATE ACTION. The Lenders shall have
received:
(A) certified (as of the date of this Agreement) copies of the
resolutions of the Board of Directors of the Company
authorizing the loans evidenced by the Notes
-2-
and authorizing and approving this Agreement and the other
Loan Documents and the execution, delivery and performance
thereof and certified copies of all documents evidencing other
necessary corporate action and governmental approvals, if any,
with respect to this Agreement and the other Loan Documents,
(B) certified (as of the date of this Agreement) copies of the
resolutions of the Board of Directors and the shareholders of
each of the Guarantors, authorizing and approving this
Agreement, its Guaranty and any other Loan Document applicable
to such Guarantors, and the execution, delivery and
performance thereof and certified copies of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement, its
Guaranty and the other Loan Documents,
(D) a certificate of the Secretary or an Assistant Secretary
(attested to by another officer) of the Company certifying:
(i) the names and true signatures of the officer or officers
of the Company authorized to sign this Agreement, the Notes
and the other Loan Documents to be delivered hereunder on
behalf of the Company; and (ii) a copy of the Company's
by-laws as complete and correct on the date of this Agreement,
(E) a certificate of the Secretary or an Assistant Secretary
(attested to by another officer) of each of the Guarantors
certifying (i) the names and true signatures of the officer or
officers of such Guarantor authorized to sign this Agreement,
its Guaranty and any other Loan Documents to be delivered
hereunder on behalf of such Guarantor; (ii) a copy of such
Guarantor's by-laws as complete and correct on the date of
this Agreement; and (iii) the stock ownership of such
Guarantor,
(F) a copy of the certificate of incorporation and all
amendments thereto of the Company and each Guarantor,
certified in each case by the Secretary of State (or
equivalent officer) of the state of incorporation of the
Company and each Guarantor and a certificate of existence and
good standing with respect to the Company and each Guarantor
from the Secretary of State (or equivalent officer) of the
state of incorporation of the Company and each Guarantor and
from the Secretary of State (or equivalent officer) of any
state in which the Company or each Guarantor is authorized to
do business.
SECTION C-10. INSURANCE. The Lenders shall have received evidence that
the Company and each Guarantor maintain adequate casualty and liability
insurance, with financially sound and reputable insurance companies or
associations, in such amounts and covering such risks as are usually carried by
companies engaged in similar businesses and owning properties and doing business
in the same general areas in which the Company and the Guarantors operate.
SECTION C-11. TRADEMARK DISCLOSURE. The Lenders shall have received and
satisfactorily reviewed Exhibit D-8 to this Agreement which shall disclose all
intellectual property of the Company and its Subsidiaries including domestic
trademarks, tradenames
-3-
and related product names, and including all registration numbers, serial
numbers, classifications and other information relating to any trademarks or
tradenames registered with the United States Patent and Trademark Office.
SECTION C-12. BANK LOAN AGREEMENT; INTERCREDITOR AGREEMENT. The Lenders
shall have received and satisfactorily reviewed the Bank Loan Agreement. The
parties thereto shall have entered into the Intercreditor Agreement.
SECTION C-13. CANCELLATION OF EXISTING LINES. The Lenders shall have
received letters evidencing the cancellation of the Chase Line of Credit and the
EAB Line of Credit and any other lines of credit or similar borrowing facilities
available to the Company or any Guarantor.
SECTION C-14. SECURITY AGREEMENTS. The Company and each Guarantor shall
have executed and delivered to the Lenders a Security Agreement or Security
Agreements, together with other agreements, instruments and documents
(including, without limitation, UCC financing statements) pursuant to which the
Collateral Agent shall have received, for the benefit of itself, the Agent, the
Lenders and the Bank Lenders a first priority perfected security interest in (i)
with respect to the Company and all Guarantors, all accounts and accounts
receivable of the Company and the Guarantors, and (ii) with respect to the
Company, DPI and Parfums, all trade names and trademarks, trademark
registrations, trademark applications and trademark licenses of the Company, DPI
and Parfums, and all product names related thereto (the "Collateral"). The
Company, DPI and Parfums as applicable, shall each have executed and delivered
to the Collateral Agent, a Trademark Collateral Assignment and Security
Agreement pursuant to which the Company, DPI and Parfums assign, to the
Collateral Agent for the benefit of itself, the Agent, the Lenders and the Bank
Lenders, all of their rights to each of their trademarks which have been
registered at the United States Patent and Trademark Office, such assignments to
be registered at such office.
SECTION C-15. OFFICER'S CERTIFICATE. The following statements shall be
true and the Lenders shall have received a certificate signed by the President
or the Chief Financial Officer of the Company dated the date hereof, stating
that:
(A) after giving effect to the execution and delivery of this
Agreement and the Bank Credit Agreement, the representations
and warranties contained in Exhibit B of this Agreement and in
the Loan Documents are true and correct in all material
respects on and as of such date, except for those relating to
an earlier date, which shall remain true and correct as of
such earlier date; and
(B) no Default or Event of Default has occurred and is
continuing.
SECTION C-16. GUARANTIES. The Joint Guaranty dated December 22, 1999
delivered to the Lenders by DPI, Parfums, Royce and Broad shall have been
ratified and confirmed by such parties or guaranties in replacement thereof
executed and delivered to the Lenders by such parties, such ratification or
replacement to be in form and substance satisfactory to the Lenders and their
special counsel.
-4-
SECTION C-17. MISCELLANEOUS. The following additional requirements
shall be satisfied:
(A) all schedules, documents, certificates and other
information provided to the Lenders or any Lender pursuant to
or in connection with this Agreement shall be reasonably
satisfactory to the Lenders and its counsel in all respects,
(B) all legal matters incident to this Agreement and the
transactions contemplated hereby shall be satisfactory to
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel to the Lenders, and
(C) the Lenders shall have received such other approvals,
opinions or documents as the Lenders or its counsel may
reasonably request.
SECTION C-18. FEES PAYABLE. (i) The Lenders' special counsel and local
counsel, if any, shall have received the legal fees and expenses required to be
paid or reimbursed by the Company as provided in Section 13 in connection with
their representation of the Lenders in connection with the amendment and
restatement of the Original Notes and the other transactions contemplated by the
Agreement. (ii) The Lenders shall have received the amendment fee in the amount
equal to $40,000.
-5-
SCHEDULE I TO
LOAN AGREEMENT DATED AS OF FEBRUARY 25, 2000
Manner of Payment and Communications to the Lenders:
▇. ▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE COMPANY $40,000,000
1. Please wire all payments as follows:
NORTHERN TRUST CHGO
ABA #▇▇▇-▇▇▇-▇▇▇
Credit Account #5186041000 (General ledger for all clients of
Northern Trust)
For Further Credit to: 26-91241/▇▇▇▇▇▇▇ National Life
Insurance Company
Ref: DEL LABORATORIES, INC. PVTPL, PPN 245901 B# 9, date of
payment, principal and interest breakdown.
Attn: ▇▇▇▇▇ ▇▇▇▇▇
2. Physical securities should be delivered as follows:
NORTHERN TRUST COMPANY
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
19th Floor
Acct # 2691241/▇▇▇▇▇▇▇ National Life Insurance Company
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇ (tel ▇▇▇-▇▇▇-▇▇▇▇)
3. a) One copy of documents, notes and certificates, waivers,
amendments, consents as well as periodic financial information and
covenant compliance certificates should be sent to:
▇▇▇▇▇ ▇▇▇▇,
Vice President, Private Placements,
PPM AMERICA, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
b) Interest and principal payment notices should be faxed to the
operations contact and custodian bank as follows:
▇▇▇▇▇ ▇▇▇▇▇▇▇,
Private Placements,
PPM America, Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
-▇-
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Tel ▇▇▇-▇▇▇-▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇,
Northern Trust Company,
▇▇▇ ▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Tel ▇▇▇-▇▇▇-▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
4. ▇▇▇▇▇▇▇ National Life Insurance Company is incorporated in the State
of Michigan.
Employer's ID Number: ▇▇-▇▇▇▇▇▇▇
Its address is: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇