EXHIBIT 10.32
AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT AGREEMENT ("Amendment") made this 25th day of February,
2000 among DEL LABORATORIES, INC., a Delaware corporation, having its principal
place of business at ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Borrower"),
DEL PHARMACEUTICALS, INC., a Delaware corporation, having its principal place of
business at ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("DPI"), PARFUMS
SCHIAPARELLI, INC., a New York corporation, having its principal place of
business at ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Parfums"), ROYCE & ▇▇▇▇▇,
INC., a Delaware corporation, having its principal place of business at ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Royce"), ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇ ▇▇▇
▇▇▇▇ corporation, having its principal place of business at ▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("565"), (DPI, Parfums, Royce and 565, individually a
"Guarantor" and collectively, the "Guarantors") and THE CHASE MANHATTAN BANK, as
agent for the Lenders (as defined herein), a New York banking corporation,
having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(the "Agent"), THE CHASE MANHATTAN BANK, a New York banking corporation, having
an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
("Chase" or a "Lender") and EUROPEAN AMERICAN BANK, a New York banking
corporation, having an office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ("EAB" or a "Lender") hereby agree as follows:
W I T N E S S E T H :
WHEREAS, the Borrower, the Guarantors and Chase had entered into a Loan
Agreement dated as of the 30th day of December, 1998 as amended by certain
amendments thereto dated June 10, 1999 and November 12, 1999 (hereinafter the
"Agreement"); and
WHEREAS, the Borrower, the Guarantors and Chase desire to amend the
Agreement to among other things, (i) add EAB as a lender, (ii) provide for Chase
to act as the Agent (as defined in the Agreement), (iii) increase the amounts
available under the Agreement, (iv) provide the Lenders with certain Collateral
(as defined in the Agreement) and (v) other changes as the parties may agree.
NOW, THEREFORE, in consideration of Ten ($10.00) Dollars and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Guarantors, the Agent and the Lenders do hereby
agree to amend and restate the Agreement to read in its entirety as follows:
AMENDED AND RESTATED LOAN AGREEMENT
Dated as of February 25, 2000
DEL LABORATORIES, INC., a Delaware corporation, having its principal
place of business at ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Borrower"),
DEL PHARMACEUTICALS, INC., a Delaware corporation, having its principal place of
business at ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("DPI"), PARFUMS
SCHIAPARELLI, INC., a New York corporation, having its principal place of
business at ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Parfums"), ROYCE & ▇▇▇▇▇,
INC., a Delaware corporation, having its principal place of business at ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Royce"), ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇ ▇▇▇
▇▇▇▇ corporation, having its principal place of business at ▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("565"), (DPI, Parfums, Royce and 565, individually a
"Guarantor" and collectively, the "Guarantors") and THE CHASE MANHATTAN BANK, as
agent for the Lenders (as defined herein), a New York banking corporation,
having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(the "Agent"), THE CHASE MANHATTAN BANK, a New York banking corporation, having
an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
("Chase" or a "Lender") and EUROPEAN AMERICAN BANK, a New York banking
corporation, having an office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ("EAB" or a "Lender") hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADJUSTED LIBOR RATE" means, with respect to any Eurodollar Loan for
any Interest Period, an interest rate per annum (rounded, if not already a whole
multiple of 1/16th of one (.01%) percent to the nearest 1/16th of one (.01%)
percent) equal to the product of (a) the LIBOR Rate and (b) Statutory Reserves.
"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%)
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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.
"AGENT" means The Chase Manhattan Bank, or such other Lender as may
succeed to the position of Agent, as provided in this Agreement.
"AGGREGATE OUTSTANDINGS" means, at any time the sum of (i) outstanding
Revolving Credit Loans plus (ii) Outstanding L/C Exposure.
"AGREEMENT" means this Loan Agreement, as amended, supplemented or
modified from time to time.
"ALTERNATE BASE RATE" means, for any day, the higher of (a) the Prime
Rate (computed on the basis of the actual number of days elapsed over a year of
360 days) in effect on such day or (b) the Federal Funds Effective Rate in
effect on such day plus one-half of one (1/2%) percent (computed on the basis of
the actual number of days elapsed over a year of 360 days). For purposes of this
Agreement any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively. If for any reason the Agent shall have reasonably determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason, including,
without limitation, the inability or failure of the Agent to obtain sufficient
bids or publications in accordance with the terms thereof, the Alternate Base
Rate shall be determined without regard to clause (b) of the first sentence of
this definition, as appropriate, until the circumstances giving rise to such
inability no longer exist.
"ALTERNATE BASE RATE LOAN" means a Loan bearing interest at the
Alternate Base Rate in accordance with the provisions of Article II hereof.
"APPLICABLE MARGIN" means the amount of basis points to be added to the
Alternate Base Rate or the Adjusted LIBOR Rate as provided in Section 2.04 of
this Agreement and as determined pursuant to Section 2.05 of this Agreement.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the agreement by which a
Lender assigns all or part of its Commitment and its
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interests in the Loans to another Lender, as provided in Section 8.08 of this
Agreement.
"B/As" means bankers acceptances created by the Issuing Bank pursuant
to Section 2A.03 hereof, and subject to the conditions of this Agreement, by the
acceptance, for the account of the Borrower, of drafts drawn upon it by the
Borrower having not more than 180 days' sight to run, exclusive of days of
grace, which grow out of transactions involving the importation, exportation or
the domestic shipment of goods. All such drafts shall be subject to the
provisions of the Federal Reserve Act, as amended, and the rules and regulations
thereunder. In addition, all such drafts shall be eligible for purchase by,
discount with and pledge to, the Federal Reserve Bank of New York and each
request for the creation of a B/A shall be accompanied by any certification
required by the Issuing Bank as to the necessary elements supporting such
eligibility.
"BA RATE" means the rate per annum established by the Issuing Bank from
time to time as its acceptance rate for B/As.
"BOARD OF GOVERNORS" means the Board of Governors of the Federal
Reserve System of the United States of America.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized to close in New York City, provided that, if the relevant day
relates to a Eurodollar Loan, a Eurodollar Interest Period, or notice with
respect to a Eurodollar Loan, the term "Business Day" shall mean a day on which
dealings in dollar deposits are also carried on in the London interbank market
and banks are open for business in London.
"CANADIAN BRIDGE LOAN" means a short term loan to be incurred by the
Borrower 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 Borrower'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 Borrower'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
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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.
"CHASE LINE OF CREDIT" means the line of credit made available to the
Borrower by Chase, pursuant to that certain line letter dated July 6, 1999.
"CLOSING DATE" means the date on which the conditions precedent to the
making of the initial Loans, the issuance of the initial Letter of Credit and
the creation of the initial B/A, all as set forth in Section 3.01 of this
Agreement, are satisfied.
"COLLATERAL" means all property which is subject or is to be subject to
the Liens granted by the Security Agreements and/or the Trademark Security
Agreements.
"COLLATERAL AGENT" means Chase, in its capacity as Collateral Agent
under the Security Agreements, the Trademark Security Agreements and the
Intercreditor Agreement, or any successor thereto.
"COMMITMENT" means, with respect to each Lender, the obligation of such
Lender (i) to make Revolving Credit Loans to the Borrower pursuant to the terms
and subject to the conditions of this Agreement and (ii) in the case of the L/C
Issuer, to issue Letters of Credit for the account of the Borrower or in the
case of the other Lenders, to take risk participations in the Letters of Credit
issued by the Issuing Bank, each pursuant to the terms and subject to the
conditions of this Agreement, in the aggregate Dollar amount and Pro Rata Share
set forth in Schedule 1.01 annexed hereto, as modified by any reductions in the
Total Commitment or by any assignments of all or any part of such Lender's
Commitment.
"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.
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"CONSOLIDATED FIXED CHARGE RATIO" means, as to the Borrower 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 and the
$4,000,000.00 repayments of the Senior Notes required to be made 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; (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 (vi) all liabilities under any preferred
stock which, at the option of the holder or upon the occurrence of one or more
certain events, is redeemable by such holder, or which, at the option of such
holder is convertible into Debt.
"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 Borrower and its
Consolidated Subsidiaries, net income for a fiscal year, computed and
consolidated in accordance with GAAP.
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"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 5.01(b).
"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 Borrower 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.
"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
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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 6.01 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 Borrower 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 expense 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.
"EURODOLLAR LOAN" means a Loan bearing interest at a rate based on the
Adjusted LIBOR Rate in accordance with the provisions of Article II hereof.
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"EVENT OF DEFAULT" means any of the events specified in Section 6.01 of
this Agreement, provided that any requirement for notice or lapse of time or any
other condition has been satisfied.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three (3) federal funds brokers
of recognized standing selected by it.
"FEE LETTER" means the letter dated February 25, 2000 from the Agent to
the Borrower pursuant to which the Borrower agrees to pay certain administrative
and other fees to the Agent.
"FIELD EXAMINATION" means an examination of (i) the Collateral subject
to the Lien of the Security Agreements and/or the Trademark Security Agreements,
including the books and records relating thereto and (ii) the accounts
receivable, inventory, payables and other aspects of the Borrower's and the
Guarantors' financial and operating condition, to be conducted by the Agent or
its authorized representatives.
"FOREIGN SUBSIDIARIES" means, with respect to the Borrower, those
Subsidiaries of the Borrower which are incorporated, formed or organized outside
of the United States.
"FUNDED DEBT TO EBITDA RATIO" means, as to the Borrower 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
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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
Borrower and the Agent 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 Agent, of the independent accountants selected by the Borrower
and reasonably satisfactory to the Agent for the purpose of auditing the
periodic financial statements of the Borrower.
"GUARANTEEING FOREIGN SUBSIDIARIES" means those Foreign Subsidiaries of
the Borrower required to become a Guarantor pursuant to Section 5.01(l) of this
Agreement.
"GUARANTOR" OR GUARANTORS" means those Persons identified as Guarantors
in the preamble to this Agreement, and any other Person required to guarantee
the obligations of the Borrower in accordance with Section 5.01(l) of this
Agreement.
"GUARANTY" OR "GUARANTIES" means the guaranty or guaranties executed
and delivered by one or more Guarantors pursuant to Section 3.01(h) or Section
5.01 (l) 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 Borrower to any Guarantor
or from any Guarantor to the Borrower or from any Guarantor to any other
Guarantor.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral Agency
Agreement of even date herewith among the Collateral Agent, the Agent, the
Lenders and the Senior Note Holders, and acknowledged by the Borrower.
"INTEREST DETERMINATION DATE" means the date on which an Alternate Base
Rate Loan is converted to a Eurodollar Loan and, in the case of a Eurodollar
Loan, the last day of the applicable Interest Period.
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"INTEREST PAYMENT DATE" means (i) as to each Eurodollar Loan, the last
Business Day of each calendar quarter during the applicable Interest Period and
the last day of each Interest Period and (ii) as to each Alternate Base Rate
Loan, the last Business Day of each calendar quarter.
"INTEREST PERIOD" means the period commencing on the date of any
Eurodollar Loan and ending on the numerically corresponding day in the calendar
month that is one, two, three, six or twelve months thereafter (subject to
availability), as the Borrower may elect (or, if there is no numerically
corresponding day, on the last Business Day of such month); provided, however,
(i) no Interest Period shall end later than the Maturity Date, (ii) if any
Interest Period would end on a day which shall not be a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day,
(iii) interest shall accrue from and including the first day of such Interest
Period to but excluding the date of payment of such interest pursuant to Section
2.04, (iv) no Interest Period for all or any part of a requested Loan which is
required to be paid as a result of the Mandatory Reduction in the Total
Commitment pursuant to Section 2.08(b) of this Agreement may be selected unless
the outstanding Loans accruing interest at a rate based on the Alternate Base
Rate and Eurodollar Loans for which the relevant Interest Periods end on or
prior to the date of such Mandatory Reduction are in an aggregate amount which
will be sufficient to make such payment, and (v) no Interest Period of
particular duration may be selected by the Borrower if the Agent determines, in
its sole discretion, that Eurodollar Loans with such maturities are not
generally available.
"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.
"ISSUING BANK" means Chase, or such other Lender that may succeed Chase
as the issuer of Letters of Credit or B/As pursuant to this Agreement.
"L/C DOCUMENTS" means all documents required to be executed and
delivered by the Borrower in connection with the issuance of
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Letters of Credit in accordance with the usual and customary practices of the
Issuing Bank.
"L/C SUBLIMIT" means $1,000,000.00.
"LENDER" OR "LENDERS" means one or more of the lenders that are, or
become, lenders under, and parties to, this Agreement.
"LETTERS OF CREDIT" means trade letters of credit issued by the Issuing
Bank for the account of the Borrower in a maximum amount equal to the L/C
Sublimit and issued pursuant to the terms and conditions of this Agreement.
"LIBOR RATE" means the rate (rounded upwards, if not already a whole
multiple of 1/16th of one (1%) percent, to the next higher of 1/16th of one (1%)
percent) at which dollar deposits approximately equal in principal amount to the
requested Eurodollar Loan and for a maturity equal to the requested Interest
Period are offered in immediately available funds to the London office of the
Agent by leading banks in the London interbank market for Eurodollars at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period.
"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" OR LOANS" means the Revolving Credit Loans or any or all of the
same as the context may require and includes Alternate Base Rate Loans and
Eurodollar Loans, as the context may require.
"LOAN DOCUMENTS" means this Agreement, the Note, the Guaranties, the
Security Agreements, the Trademark Security Agreements, the L/C Documents and
any other document executed or delivered pursuant to this Agreement.
"MANDATORY REDUCTION" means the permanent reduction in the Total
Commitment required pursuant to Section 2.08(b) of this Agreement in an amount
equal to the greater of (i) $4,000,000.00 less any reductions (not reinstated)
in the Total Commitment made since the date of the prior Mandatory Reduction or
(ii) the principal amount of the Senior Notes paid on May 31, 2001 and May 31,
2002.
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"MATERIAL ADVERSE CHANGE" means, as to the Borrower alone, DPI alone,
any other Guarantor which has revenues or assets representing more than ten
(10%) percent of the Borrower's consolidated revenues or assets (a "Material
Guarantor")or the Borrower 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 Borrower alone, DPI alone,
a Material Guarantor alone or the Borrower and its Consolidated Subsidiaries
taken as a whole (provided that the elimination of the inter-company payable
between the Borrower and DPI shall not, by virtue of such elimination alone, be
deemed a Material Adverse Change in either the Borrower or DPI) or (ii) any
event or occurrence which could have a material adverse effect on the ability of
the Borrower alone, DPI alone, a Material Guarantor alone or the Borrower and
its Consolidated Subsidiaries taken as a whole to perform its or their
obligations under the Loan Documents.
"MATURITY DATE" means the third anniversary of the Closing Date.
"MULTIEMPLOYER PLAN" means a Plan described in Section 4001(a)(3) of
ERISA which covers employees of the Borrower or any ERISA Affiliate.
"NORTH CAROLINA MORTGAGE" means the mortgage Lien existing on the date
of this Agreement on the Borrower's real property and the improvements thereon
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"NOTE" or "NOTES" means the Revolving Credit Notes or any or all of the
same as the context may require.
"OUTSTANDING L/C EXPOSURE" means, at any time, the aggregate of (i) the
amount available to be drawn on all outstanding Letters of Credit, (ii) the
aggregate amount of all unmatured B/As, other drafts accepted and deferred
payment obligations incurred by the Issuing Bank under any Letters of Credit and
(iii) the amount of any payments made by the Issuing Bank under any Letters of
Credit that has not been reimbursed by the Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED DIVIDENDS" means, with respect to the Borrower, the payment
of (i) any dividend payable in stock of the Borrower or (ii) subject to the
proviso at the conclusion hereof, cash dividends which, in any fiscal year of
the Borrower, do not exceed, in the aggregate, fifteen (15%) percent of the
Borrower's consolidated net income for such fiscal year; provided, however,
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(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 Borrower 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 Borrower 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 Borrower 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 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 Borrower 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 Borrower 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 Borrower, (i)
transactions in which (x) the Borrower's common stock is transferred to the
Borrower by a current or former employee of the Borrower or any of its
Subsidiaries in an amount equal to the
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consideration payable to such employee upon the exercise of stock options held
by such employee or (y) the Borrower's common stock is transferred to the
Borrower 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 Borrower for transactions
described in clause (y) (net of the related tax benefit received by the Borrower
for such transaction) shall not exceed $250,000.00 in the aggregate during any
fiscal year of the Borrower or (ii) the repurchase of common stock of the
Borrower 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 Borrower or any ERISA Affiliate.
"PRIME RATE" means the rate per annum announced by the Agent from time
to time as its prime rate in effect at its principal office on a 360-day basis;
each change in the Prime Rate shall be effective on the date such change is
announced to become effective.
"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.
"PRO RATA SHARE" means, with respect to each Lender, its pro rata share
of the initial Total Commitment, as set forth in Schedule 1.01 annexed hereto as
the same may be modified by any assignment of all or any part of such Lender's
Commitment.
"REGULATION D" means Regulation D of the Board of Governors, as the
same may be amended and in effect 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.
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"REPORTABLE EVENT" means any of the events set forth in Section 4043 of
ERISA.
"REQUIRED LENDERS" means (i) at any time there are Loans outstanding,
those Lenders having, in the aggregate, sixty six and two thirds (66-2/3%)
percent of such Loans and (ii) at any time when there are no Loans outstanding
those Lenders having, in the aggregate, sixty six and two thirds (66-2/3%)
percent of the Total Commitment, provided, however, as long as EAB is a Lender,
it shall be one of the "Required Lenders".
"REVOLVING CREDIT LOANS" shall have the meaning assigned to such term
in Section 2.01 of this Agreement.
"REVOLVING CREDIT NOTE" OR "REVOLVING CREDIT NOTES" means one or more,
as the context requires, of the promissory notes of the Borrower payable to the
order of each of the Lenders, in substantially the form of Exhibit A annexed
hereto, evidencing the aggregate indebtedness of the Borrower to each such
Lender resulting from Revolving Credit Loans made by such Lender to the Borrower
pursuant to this Agreement.
"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 Section 3.01(p) or Section 5.01(l) of this
Agreement.
"SENIOR NOTE AGREEMENT" means that certain Amended and Restated Loan
Agreement dated as of the date hereof between the Borrower and the Senior Note
Holders pursuant to which the Senior Note Holders have lent $40,000,000.00 to
the Borrower, as such agreement may be further amended, modified or extended
from time to time.
"SENIOR NOTE HOLDERS" means ▇▇▇▇▇▇▇ National Life Insurance Company,
and its successors and assigns, which is, or are, a party or parties to, and a
lender or lenders under, the Senior Note Agreement.
"SENIOR NOTES" means those promissory notes, executed and delivered by
the Borrower and evidencing the loans made to the Borrower, in the original and
current principal amount of $40,000,000.00, pursuant to the Senior Note
Agreement.
"STATUTORY RESERVES" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including, without
limitation, any marginal, special, emergency, or supplemental reserves)
expressed
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as a decimal established by the Board of Governors or any other
banking authority to which the Agent is subject with respect to the Adjusted
LIBOR Rate for Eurocurrency Liabilities (as defined in Regulation D). Such
reserve percentages shall include, without limitation, those imposed under such
Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to the Agent under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"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
Agent and the Required Lenders in advance in writing, shall be subordinate and
junior to the rights of the Agent and the Lenders with respect to Debt owing
from such Person to the Agent and 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 Section 3.01(q), Section 5.01(k)(ii) and
Section 5.01(l)(iii) of this Agreement.
"TOTAL COMMITMENT" means the aggregate of the Commitments of each of
the Lenders, which, on the date of this Agreement, is $47,500,000.00.
"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 chips
to properly receive, transmit, process, manipulate, store, retrieve, re-transmit
or in any other way
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utilize data and information due to the occurrence of the year 2000 or the
inclusion of dates on or after January 1, 2000.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to and including".
SECTION 1.03. 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 5.02(k) and 5.03, such financial covenants shall be
calculated, excluding the impact of the adoption of 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.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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ARTICLE II
AMOUNT AND TERMS OF THE LOANS
SECTION 2.01. THE REVOLVING CREDIT LOANS. (a) The Lenders agree,
severally, but not jointly, on the date of this Agreement, on the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Borrower and the Guarantors set forth in this Agreement, to
lend to the Borrower prior to the Maturity Date such amounts as the Borrower may
request from time to time (individually, a "Revolving Credit Loan" or
collectively, the "Revolving Credit Loans"), which amounts may be borrowed,
repaid and reborrowed, provided that (i) the aggregate amount of such Revolving
Credit Loans outstanding at any one time shall not exceed the Total Commitment,
or such lesser amount of the Total Commitment as may be reduced pursuant to
Section 2.08 (a) hereof, or as shall be reduced by Mandatory Reductions pursuant
to Section 2.08(b) hereof, (ii) Aggregate Outstandings shall not at any one time
exceed the Total Commitment as in effect at such time and (iii) each Lender's
Pro Rata Share of Aggregate Outstandings shall not exceed such Lender's
Commitment. On the date of this Agreement, all letters of credit set forth on
Schedule 2.01 annexed hereto and which are outstanding under the Chase Line of
Credit or the EAB Line of Credit shall be deemed to be Outstanding L/C Exposure
under this Agreement.
(b) Each Revolving Credit Loan shall be an Alternate Base Rate Loan or
a Eurodollar Loan (or a combination thereof) as the Borrower may request subject
to and in accordance with Section 2.02. Any Lender may at its option make any
Eurodollar Loan by causing a foreign branch or affiliate to make such Loan,
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of the applicable
Revolving Credit Note. Subject to the other provisions of this Agreement,
Revolving Credit Loans of more than one type may be outstanding at the same
time, provided not more than seven (7) Eurodollar Loans may be outstanding at
the same time.
SECTION 2.02. REVOLVING CREDIT LOANS; NOTICE, CONTINUATION AND
CONVERSION.
(a) Each Revolving Credit Loan shall be (i) in the case of each
Alternate Base Rate Loan in the minimum principal amount of $500,000.00 and (ii)
in the case of each Eurodollar Loan in the minimum principal amount of
$2,000,000.00 and in increased integral multiples of $100,000.00 (except that,
if any such Alternate Base Rate Loan so requested shall exhaust the remaining
available Total Commitment, such Alternate Base Rate Loan may be in an amount
equal to the amount of the remaining available Total Commitment).
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(b) The Borrower shall give the Agent irrevocable written, telex,
telephonic (immediately confirmed in writing) or facsimile notice (i) at least
three (3) Business Days prior to each Revolving Credit Loan comprised in whole
or in part of one or more Eurodollar Loans (subject to availability, including,
without limitation, the conditions set forth in (c) below) or (ii) prior to
11:00 a.m. on the day of each Revolving Credit Loan consisting solely of an
Alternate Base Rate Loan. Such notice shall specify the date of such borrowing,
the amount thereof and whether such Loan is to be (or what portion or portions
thereof are to be) an Alternate Base Rate Loan or a Eurodollar Loan and, if such
Loan or any portion thereof is to consist of one or more Eurodollar Loans, the
principal amounts thereof and Interest Period or Interest Periods with respect
thereto. If no election as to the Interest Period is specified in such notice
with respect to any Eurodollar Loan, the Borrower shall be deemed to have
selected an Interest Period of one month's duration and if a Eurodollar Loan is
requested when such Loans are not available, the Borrower shall be deemed to
have requested an Alternate Base Rate Loan.
(c) The Borrower shall have the right, on such notice to the Agent as
is required pursuant to (b) above, (i) to continue any Eurodollar Loan or a
portion thereof into a subsequent Interest Period (subject to availability) or
(ii) to convert an Alternate Base Rate Loan into a Eurodollar Loan (subject to
availability) subject to the following:
(1) if an Event of Default shall have occurred and be
continuing at the time of any proposed conversion or continuation only Alternate
Base Rate Loans shall be available;
(2) in the case of a continuation or conversion of fewer than
all Loans, the aggregate principal amount of each Eurodollar Loan continued or
into which a Loan is converted shall be in the minimum principal amount of
$2,000,000.00 and in increased integral multiples of $100,000.00;
(3) each continuation or conversion of a Eurodollar Loan shall
be effected by the new Loan replacing the Loan (or portion thereof) being
continued or converted;
(4) if the new Loan made as a result of a continuation or
conversion shall be a Eurodollar Loan, the first Interest Period with respect
thereto shall commence on the date of continuation or conversion;
(5) each request for a Eurodollar Loan which shall fail to
state an applicable Interest Period shall be deemed to be a request for an
Interest Period of one month and each request for a Eurodollar Loan made when
such Loans are not available shall be deemed to be a request for an Alternate
Base Rate Loan; and
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(6) in the event that the Borrower shall not give notice to
continue a Eurodollar Loan as provided above, such Loan shall automatically be
converted into an Alternate Base Rate Loan at the expiration of the then current
Interest Period.
(d) Upon receipt of such notice, the Agent shall promptly notify each
Lender of the contents thereof and of the amount, type and other relevant
information regarding the Loan requested. Thereupon, each Lender shall, not
later than 2:00 p.m. (New York time), transfer immediately available funds equal
to such Lender's Pro Rata Share of the requested Loan to the Agent, which,
provided the conditions of Sections 3.01 and 3.02 of this Agreement have been
met, and provided the Lenders have made such transfers, shall thereupon transfer
immediately available funds equal to the requested Loan to the Borrower's
account with the Agent. If a notice of borrowing is received by the Agent after
11:00 a.m. on a Business Day, such notice shall be deemed to have been given on
the next succeeding Business Day. Any Lender's failure to make any requested
Loan shall not relieve any other Lender of its obligation to make such Loan, but
such other Lender shall not be liable for such failure of the first Lender.
(e) Unless the Agent shall have received notice from a Lender prior to
2:00 p.m. (New York time) on the requested date, that such Lender will not make
available to the Agent the Loan requested to be made on such date, the Agent may
assume that such Lender has made such Loan available to the Agent on such date
in accordance with Section 2.02(d) hereof and the Agent in its sole discretion
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount on behalf of such Lender. If and to the extent such
Lender shall not have so made available to the Agent the Loan requested to be
made on such date and the Agent shall have so made available to the Borrower a
corresponding amount on behalf of such Lender, such Lender shall, on demand, pay
to the Agent such corresponding amount together with interest thereon, at the
Federal Funds Effective Rate, for each day from the date such amount shall have
been so made available by the Agent to the Borrower until the date such amount
shall have been repaid to the Agent. If such Lender does not pay such
corresponding amount promptly upon the Agent's demand therefor, the Agent shall
promptly notify the Borrower and the Borrower shall, with reservation of rights
against such Lender, not later than one (1) Business Day following such notice,
repay such corresponding amount to the Agent together with accrued interest
thereon at the applicable rate or rates provided (i) in Section 2.04 hereof or
(ii) if the Borrower fails to repay such corresponding amount within three (3)
Business Days after such notice, in Section 2.18 hereof.
SECTION 2.03. REVOLVING CREDIT NOTES. Revolving Credit Loans shall be
evidenced by the Revolving Credit Notes of the Borrower.
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Each Lender's Revolving Credit Note shall be dated the date hereof and be in the
principal amount of such Lender's Pro Rata Share of the Total Commitment, and
shall mature on the Maturity Date, at which time the entire outstanding
principal balance and all interest thereon shall be due and payable and the
Commitment shall be terminated. The Revolving Credit Notes shall be entitled to
the benefits and subject to the provisions of this Agreement.
At the time of the making of each Revolving Credit Loan and at the time
of each payment of principal thereon, the holder of each Revolving Credit Note
is hereby authorized by the Borrower to make a notation on the schedule annexed
to the Revolving Credit Note of the date and amount, and the type and Interest
Period of the Revolving Credit Loan or payment, as the case may be. Failure to
make a notation with respect to any Revolving Credit Loan shall not limit or
otherwise affect the obligation of the Borrower hereunder or under the Revolving
Credit Notes with respect to such Revolving Credit Loan, and any payment of
principal on the Revolving Credit Notes by the Borrower shall not be affected by
the failure to make a notation thereof on said schedule.
SECTION 2.04. PAYMENT OF INTEREST ON THE REVOLVING CREDIT NOTES.
(a) In the case of an Alternate Base Rate Loan, interest shall be
payable at a rate per annum (computed on the basis of the actual number of days
elapsed over a year of 360 days) equal to the Alternate Base Rate plus the
Applicable Margin. Such interest shall be payable on each Interest Payment Date,
commencing with the first Interest Payment Date after the date of such Alternate
Base Rate Loan, on each Interest Determination Date and on the Maturity Date.
Any change in the rate of interest on the Revolving Credit Note due to a change
in the Alternate Base Rate shall take effect as of the date of such change in
the Alternate Base Rate.
(b) In the case of a Eurodollar Loan, interest shall be payable at a
rate per annum (computed on the basis of the actual number of days elapsed over
a year of 360 days) equal to the Adjusted LIBOR Rate plus the Applicable Margin.
Such interest shall be payable on each Interest Payment Date, commencing with
the first Interest Payment Date after the date of such Eurodollar Loan, on each
Interest Determination Date and on the Maturity Date. In the event Eurodollar
Loans are available, the Agent shall determine the rate of interest applicable
to each requested Eurodollar Loan for each Interest Period at 11:00 a.m., New
York City time, or as soon as practicable thereafter, two (2) Business Days
prior to the commencement of such Interest Period and shall notify the Lenders
and the Borrower of the rate of interest so determined. Such determination shall
be conclusive absent manifest error.
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(c) All interest on the Revolving Credit Notes shall be paid to the
Agent for the pro rata distribution to the Lenders.
SECTION 2.05. APPLICABLE MARGIN. The Applicable Margin for Revolving
Credit Loans shall be determined on the basis of the Borrower's Funded Debt to
EBITDA Ratio, as calculated based on the Borrower's consolidated financial
statements for its most recent fiscal year or quarter. The Agent shall determine
the Applicable Margin within five (5) Business Days after it has received the
financial statements of the Borrower as required by Section 5.01(b)(i) or (ii),
as applicable. The Agent shall promptly notify the Borrower and the Lenders of
such determination, which shall be conclusive, in the absence of manifest error.
The Applicable Margin shall be determined as follows:
(i) The initial Applicable Margin shall be 75 basis points for
Alternate Base Rate Loans and 375 basis points for Eurodollar Loans and shall be
applicable until five (5) Business Days after delivery of the Borrower's
consolidated financial statements for its fiscal year ending December 31, 1999
pursuant to Section 5.01(b) hereof.
Beginning five (5) Business Days after delivery of the Borrower's
consolidated financial statements for the fiscal year ending December 31, 1999,
and for each fiscal year or quarter thereafter:
(ii) If the Borrower's Funded Debt to EBITDA Ratio as of the end of
such fiscal year or quarter is equal to or less than 3.00 to 1.00, the
Applicable Margin shall be -0- basis points for Alternate Base Rate Loans and
275 basis points for Eurodollar Loans.
(iii) If the Borrower's Funded Debt to EBITDA Ratio as of the end of
such fiscal year or quarter is greater than 3.00 to 1.00 but less than 4.00 to
1.00, the Applicable Margin shall be 50 basis points for Alternate Base Rate
Loans and 325 basis points for Eurodollar Loans.
(iv) If the Borrower's Funded Debt to EBITDA Ratio as of the end of
such fiscal year or quarter is equal to or greater than 4.00 to 1.00, the
Applicable Margin shall be 75 basis points for Alternate Base Rate Loans and 375
basis points for Eurodollar Loans.
The Applicable Margin for any Eurodollar Loan shall change during the
term of such Eurodollar Loan as a result of this Section 2.05.
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In the event that the Borrower fails to deliver any financial
statements and the related certificate on the due date therefor set forth in
Section 5.01(b)(i) or (ii) hereof, unless an Event of Default is declared as a
result of such failure, the Applicable Margin shall be 75 basis points for
Alternate Base Rate Loans and 375 basis points for Eurodollar Loans until the
Borrower delivers all required financial statements and certificates at which
time the Applicable Margin shall be redetermined as provided for in this Section
2.05.
Upon the occurrence and during the continuance of a Default or an Event
of Default the Applicable Margin may, as a result of changes in the Borrower's
Funded Debt to EBITDA Ratio, increase but will not decrease. The Borrower and
the Guarantors acknowledge and agree that (i) the provisions of this Section
2.05 and the Funded Debt to EBITDA Ratios used for pricing purposes shall not
be, or result in, a waiver of any Default or Event of Default which may occur by
virtue of the Borrower breaching the requirements of Section 5.03(d) of this
Agreement and (ii) if such a Default or Event of Default should occur, the Agent
and the Lenders reserve all rights under Section 2.18(b) of this Agreement.
SECTION 2.06 USE OF PROCEEDS. The proceeds of the Revolving Credit
Loans shall be used by the Borrower (i) to refinance (subject to the last
sentence of Section 2.01(a) of this Agreement) existing Debt owing to Chase and
EAB, (ii) for working capital needs of the Borrower and its Consolidated
Subsidiaries, including the issuance of Letters of Credit in accordance with the
terms and subject to the provisions of this Agreement or (iii) to finance
Capital Expenditures of the Borrower and its Consolidated Subsidiaries. No part
of the proceeds of any Loan may be used for any purpose that directly or
indirectly violates or is inconsistent with, the provisions or Regulations T, U
or X.
SECTION 2.07. COMMITMENT FEE; OTHER FEES. (a) The Borrower agrees to
pay to the Agent, for the pro rata distribution to the Lenders, from the date of
this Agreement and for so long as the Total Commitment remains in effect, on the
last Business Day of each calendar quarter, a commitment fee computed at the
rate of one quarter of one (1/4%) percent per annum (computed on the basis of
the actual number of days elapsed over 360 days) on the average daily unused
amount of the Total Commitment, such commitment fee being payable for the
calendar quarter, or part thereof, preceding the payment date.
(b) The Borrower agrees to pay to the Agent the fees set forth in the
Fee Letter, at the times and in the amounts set forth in the Fee Letter.
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SECTION 2.08. REDUCTIONS OF TOTAL COMMITMENT.
(a) Upon at least three (3) Business Days' written notice to the Agent,
the Borrower may irrevocably elect to have the Total Commitment terminated in
whole or reduced in part provided, however, that any such partial reduction
shall be in a minimum amount of $1,000,000.00, or whole multiples thereof. The
Total Commitment, once terminated or reduced, shall not be reinstated without
the express written approval of the Agent and the Lenders. Any reduction of the
Total Commitment shall be applied pro rata to the respective Commitments of the
Lenders. On the date any reduction in the Total Commitment becomes effective,
the Borrower shall, without notice or demand from the Agent or the Lenders,
prepay Revolving Credit Loans, subject to the provisions of Section 2.10 of this
Agreement, such that, following such prepayment, the Aggregate Outstandings
shall not exceed the Total Commitment, as reduced.
(b) On each of May 31, 2001 and May 31, 2002, the Total Commitment
shall permanently reduce by the Mandatory Reduction required on each such date.
On the date of each Mandatory Reduction, the Borrower shall, without notice or
demand from the Agent or the Lenders, prepay Revolving Credit Loans, subject to
the provisions of Section 2.10 of this Agreement, such that, following such
prepayment, Aggregate Outstandings shall not exceed the Total Commitment, as
reduced by the Mandatory Reduction. Each Mandatory Reduction shall reduce each
Lender's Commitment pro-rata.
SECTION 2.09. PREPAYMENT. (a) The Borrower shall have the right at any
time and from time to time to prepay any Alternate Base Rate Loan, in whole or
in part, without premium or penalty on the same day on which telephonic notice
is given to the Agent (immediately confirmed in writing) of such prepayment
provided, however, that each such prepayment shall be on a Business Day and
shall be in a minimum principal amount of $250,000.00.
(b) The Borrower shall have the right at any time and from time to
time, subject to the provisions of this Agreement, to prepay any Eurodollar
Loan, in whole or in part, on three (3) Business Days' prior irrevocable written
notice to the Agent, provided, however, that (i) each such prepayment shall be
on a Business Day and shall be in a minimum principal amount of $500,000.00 and
in increased integral multiples of $100,000.00 and (ii) each such prepayment
shall be subject to the provisions of Section 2.10 of this Agreement.
(c) The notice of prepayment under this Section 2.09 shall set forth
the prepayment date and the principal amount of the Loan being prepaid and shall
be irrevocable and shall commit the Borrower to prepay such Loan by the amount
and on the date stated therein. All prepayments shall be accompanied by accrued
interest
-25-
on the principal amount being prepaid to the date of prepayment. Each prepayment
under this Section 2.09 shall be applied first towards unpaid interest on the
amount being prepaid and then towards the principal in whole or partial
prepayment of Loans by the Borrower. In the absence of such specification,
amounts being prepaid shall be applied first to any Alternate Base Rate Loan
then outstanding and then to Eurodollar Loans in the order of the expiration of
their respective Interest Periods. All prepayments shall be applied pro rata
among the Lenders.
SECTION 2.10. REIMBURSEMENT BY BORROWER. The Borrower shall reimburse
the Agent, on behalf of a Lender, upon the Agent's demand, for any loss, cost or
expense incurred or to be incurred by such Lender (in such Lender's sole
determination) as a result of any prepayment or conversion (whether voluntarily
or by acceleration) of any Eurodollar Loan other than on the last day of the
Interest Period for such Loan, or if the Borrower fails to borrow the Eurodollar
Loan (or is not able to borrow because of a Default or an Event of Default or
for any other reason hereunder) after having given the irrevocable notice of
borrowing required by this Agreement. Such reimbursement shall include, but not
be limited to, any loss, cost or expense incurred by such Lender in obtaining,
liquidating or redeploying any funds used or to be used in making or maintaining
the Eurodollar Loan.
SECTION 2.11. STATUTORY RESERVES. It is understood that the cost to the
Lenders of making or maintaining Eurodollar Loans may fluctuate as a result of
the applicability of, or change in, Statutory Reserves. The Borrower agrees to
pay to the Agent, on behalf of the Lenders from time to time, as provided in
Section 2.12 below, such amounts as shall be necessary to compensate each Lender
for the portion of the cost of making or maintaining any Eurodollar Loans made
by it resulting from any such Statutory Reserves, or change therein, it being
understood that the rates of interest applicable to Eurodollar Loans hereunder
have been determined on the basis of Statutory Reserves in effect at the time of
determination of the Adjusted LIBOR Rate, and that such rate does not reflect
costs imposed on such Lender in connection with any change to such Statutory
Reserves. It is agreed that, for purposes of this paragraph, the Eurodollar
Loans made hereunder shall be deemed to constitute Eurocurrency Liabilities as
defined in Regulation D and to be subject to the reserve requirements of
Regulation D without benefit or credit of proration, exemptions or offsets which
might otherwise be available to a Lender from time to time under Regulation D.
SECTION 2.12. INCREASED COSTS. If, after the date of this Agreement,
the adoption of, or any change in, any applicable law, regulation, rule or
directive, or any interpretation thereof by any authority charged with the
administration or interpretation thereof:
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(i) subjects the Agent, the Issuing Bank or any Lender to any
tax with respect to its Commitment, the Loans, the Notes, the Letters of Credit,
Outstanding L/C Exposure or on any amount paid or to be paid under or pursuant
to this Agreement, its Commitment, the Loans, the Notes, the Letters of Credit
or Outstanding L/C Exposure (other than any tax measured by or based upon the
overall net income of the Agent, the Issuing Bank or such Lender);
(ii) changes the basis of taxation of payments to the Agent,
the Issuing Bank or a Lender of any amounts payable hereunder (other than any
tax measured by or based upon the overall net income of the Agent, the Issuing
Bank or such Lender);
(iii) imposes, modifies or deems applicable any reserve,
capital adequacy or deposit requirements against any assets held by, deposits
with or for the account of, loans made by, or letters of credit issued by, the
Issuing Bank or a Lender; or
(iv) imposes on the Agent, the Issuing Bank or a Lender any
other condition affecting its Commitment, the Loans, the Notes, the Letters of
Credit, Outstanding L/C Exposure or this Agreement; and the result of any of the
foregoing is to increase the cost to the Agent, the Issuing Bank or such Lender
of maintaining this Agreement or its Commitment or making the Loans, or issuing
the Letter of Credit or creating B/As or to reduce the amount of any payment
(whether of principal, interest or otherwise) receivable by the Agent, the
Issuing Bank or such Lender or to require the Agent, the Issuing Bank or such
Lender to make any payment on or calculated by reference to the gross amount of
any sum received by it, in each case by an amount which the Agent, the Issuing
Bank or such Lender in its reasonable judgment deems material, then and in any
such case:
(a) the Issuing Bank or the Lender shall promptly advise the Agent and
the Borrower of such event, together with the date thereof, the amount of such
increased cost or reduction or payment and the way in which such amount has been
calculated; and
(b) the Borrower shall pay to the Agent, on behalf of itself, the
Issuing Bank or such Lender, as applicable, within ten (10) days after the
advice referred to in subsection (a) hereinabove, such an amount or amounts as
will compensate the Agent, the Issuing Bank or such Lender, as applicable, for
such additional cost, reduction or payment for so long as the same shall remain
in effect.
The determination of the Agent, the Issuing Bank or a Lender
as to additional amounts payable pursuant to this Section 2.12 shall be
conclusive evidence of such amounts absent manifest error.
-27-
SECTION 2.13. CAPITAL ADEQUACY. If the Agent, the Issuing Bank or any
Lender shall have determined that the applicability of any law, rule, regulation
or guideline, or the adoption after the date hereof of any other law, rule,
regulation or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Agent, the
Issuing Bank or such Lender (or any lending office of such Lender) or the
Agent's, the Issuing Bank's or such Lender's holding company with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the Agent's, the Issuing Bank's or such
Lender's capital or on the capital of the Agent's, the Issuing Bank's or such
Lender's holding company, if any, as a consequence of its obligations hereunder
to a level below that which the Agent, the Issuing Bank or such Lender or the
Agent's, the Issuing Bank's or such Lender's holding company could have achieved
but for such adoption, change or compliance (taking into consideration the
Agent's, the Issuing Bank's or such Lender's policies and the policies of the
Agent's, the Issuing Bank's or such Lender's holding company with respect to
capital adequacy) by an amount reasonably deemed by the Agent, the Issuing Bank
or such Lender to be material, then and in any such case:
(a) the Agent, the Issuing Bank or such Lender shall promptly advise
the Borrower of such event, together with the date thereof, the amount of such
reduction and the way in which such amount has been calculated; and
(b) the Borrower shall pay to the Agent, on behalf of the Agent, the
Issuing Bank or such Lender, as applicable, within ten (10) days after the
advice referred to in subsection (a) hereinabove, such an amount or amounts as
will compensate the Agent, the Issuing Bank or such Lender or the Agent's, the
Issuing Bank's or such Lender's holding company for such reduction for so long
as the same shall remain in effect.
The determination of the Agent, the Issuing Bank or a Lender as to
additional amounts payable pursuant to this Section 2.13 shall be conclusive
evidence of such amounts absent manifest error.
SECTION 2.14. CHANGE IN LEGALITY. (a) Notwithstanding anything to the
contrary contained elsewhere in this Agreement, if any change after the date
hereof in law, rule, regulation, guideline or order, or in the interpretation
thereof by any governmental authority charged with the administration thereof,
shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or
to give effect to its obligations as
-28-
contemplated hereby with respect to a Eurodollar Loan, then, by written notice
to the Agent and the Borrower, such Lender may:
(i) declare that it will not thereafter make Eurodollar Loans
hereunder, whereupon the Borrower shall be prohibited from requesting such
Eurodollar Loans from such Lender unless such declaration is subsequently
withdrawn; and
(ii) require that, subject to the provisions of Section 2.10,
all outstanding Eurodollar Loans made by such Lender be converted to an
Alternate Base Rate Loan, whereupon all of such Eurodollar Loans shall be
automatically converted to an Alternate Base Rate Loan as of the effective date
of such notice as provided in paragraph (b) below.
(b) For purposes of this Section 2.14, a notice to
the Borrower by a Lender pursuant to paragraph (a) above shall be effective, for
the purposes of paragraph (a) above, if lawful, and if any Eurodollar Loans
shall then be outstanding, on the last day of the then current Interest Period;
otherwise, such notice shall be effective on the date of receipt by the
Borrower.
SECTION 2.15. INDEMNITY. The Borrower will indemnify each of the
Lenders against any loss or expense which any Lender may sustain or incur as a
consequence of any default in payment or prepayment of the principal amount of
any Eurodollar Loan or any part thereof or interest accrued thereon, as and when
due and payable (at the due date thereof, by notice of prepayment or otherwise),
or the occurrence of any Event of Default, including but not limited to any loss
or expense sustained or incurred in liquidating or re-employing deposits from
third parties acquired to affect or maintain such Eurodollar Loan or any part
thereof. When claiming under this Section 2.15, a Lender shall provide to the
Borrower a statement, signed by an officer of such Lender, explaining the amount
of any such loss or expense (including the calculation of such amount), which
statement shall, in the absence of manifest error, be conclusive with respect to
the parties hereto.
SECTION 2.16. CHANGE IN LIBOR; AVAILABILITY OF RATES. In the event, and
on each occasion, that, on the day the interest rate for any Eurodollar Loan is
to be determined, the Agent shall have reasonably determined (which
determination, absent manifest error, shall be conclusive and binding upon the
Borrower) that dollar deposits in the amount of the principal amount of the
requested Eurodollar Loan are not generally available in the London interbank
market, or that the rate at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to the Lenders of making or
maintaining the principal amount of such Eurodollar Loan during such Interest
Period, such Eurodollar Loan shall be unavailable. The Agent shall, as soon as
practicable
-29-
thereafter, given written, telex or telephonic notice of such determination of
unavailability to the Borrower. Any request by the Borrower for an unavailable
Eurodollar Loan shall be deemed to have been a request for an Alternate Base
Rate Loan. After such notice shall have been given and until the Agent shall
have notified the Borrower that the circumstances giving rise to such notice no
longer exist, each subsequent request for an unavailable Eurodollar Loan shall
be deemed to be a request for an Alternate Base Rate Loan.
SECTION 2.17. AUTHORIZATION TO DEBIT BORROWER'S ACCOUNT. The Agent is
hereby authorized to debit the Borrower's account maintained with the Agent for
(i) all scheduled payments of principal and/or interest under the Notes, (ii)
all required reimbursements and other payments due in connection with Letters of
Credit, (iii) the Agent's fees and (iv) the commitment fee and all other amounts
due hereunder; all such debits to be made on the days such payments are due in
accordance with the terms hereof.
SECTION 2.18. LATE CHARGES, DEFAULT INTEREST. (a) If the Borrower shall
default in the payment of any principal installment of or interest on any Loan
or any other amount becoming due hereunder, the Borrower shall pay interest, to
the extent permitted by law, on such defaulted amount up to the date of actual
payment (after as well as before judgment) at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal to (i)
the amount of principal, interest, fees and/or other amounts due (the "Past Due
Amount") TIMES (ii) two (2%) percent in excess of the interest rate otherwise in
effect with respect to the type of Loan in connection with which the required
payments have not been made, or, if no such interest rate is in effect, two (2%)
percent in excess of the Alternate Base Rate plus the Applicable Margin for
Alternate Base Rate Loans, TIMES (ii) the number of days the Past Due Amount is
delinquent.
(b) Upon the occurrence and during the continuation of an Event of
Default, the Borrower shall, at the demand of the Agent and the Required
Lenders, pay interest on all amounts owing under the Notes and this Agreement
(after as well as before judgment) at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 360 days) equal to two (2%)
percent in excess of the interest rate otherwise in effect hereunder.
SECTION 2.19. PAYMENTS. All payments by the Borrower hereunder or under
the Notes shall be made in Dollars in immediately available funds at the office
of the Agent by 12:00 noon, New York City time on the date on which such payment
shall be due. Interest on the Notes shall accrue from and including the date of
each Loan to but excluding the date on which such Loan is paid in full or
refinanced with a Loan of a different type.
-30-
SECTION 2.20. INTEREST ADJUSTMENTS. (a) If the provisions of this
Agreement or the Notes would at any time otherwise require payment by the
Borrower to the Lenders of any amount of interest in excess of the maximum
amount then permitted by applicable law the interest payments shall be reduced
to the extent necessary so that the Lenders shall not receive interest in excess
of such maximum amount. To the extent that, pursuant to the foregoing sentence,
the Lenders shall receive interest payments hereunder or under the Notes in an
amount less than the amount otherwise provided, such deficit (hereinafter called
the "Interest Deficit") will cumulate and will be carried forward (without
interest) until the termination of this Agreement. Interest otherwise payable to
the Lenders hereunder and under the Notes for any subsequent period shall be
increased by such maximum amount of the Interest Deficit that may be so added
without causing the Lenders to receive interest in excess of the maximum amount
then permitted by applicable law.
(b) The amount of the Interest Deficit on the Maturity Date shall be
cancelled and not paid.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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ARTICLE IIA
THE LETTERS OF CREDIT
SECTION 2A.01. LETTERS OF CREDIT. (a) On the terms and conditions set
forth herein, (i) the Issuing Bank agrees, from time to time on any Business Day
during the period from the date of this Agreement to the day which is thirty
(30) days prior to the Maturity Date to issue Letters of Credit for the account
of the Borrower or DPI and (ii) the Lenders severally agree to participate in
Letters of Credit issued for the account of the Borrower or DPI. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving, and,
accordingly, the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit which have expired or which have been drawn
upon and reimbursed, provided that in no event shall the Outstanding L/C
Exposure exceed the L/C Sublimit.
(b) The Issuing Bank has no obligation to issue any Letter of
Credit if:
(i) any order, judgment or decree of any governmental
authority or arbitrator purports by its terms to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit or any requirement of law applicable to
the Issuing Bank or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over the Issuing Bank
prohibits, or requests that the Issuing Bank refrain from, the issuance of
commercial letters of credit generally or such Letter of Credit in particular or
imposes upon such Issuing Bank with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which such Issuing Bank is not
otherwise compensated hereunder) not in effect on the date of this Agreement, or
imposes upon the Issuing Bank any unreimbursed loss, cost or expense which was
not applicable on the date of this Agreement and which the Issuing Bank in good
▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) the Issuing Bank has received written notice
from any Lender, the Agent or the Borrower, on or prior to the Business Day
prior to the requested date of issuance of such Letter of Credit, that one or
more of the applicable conditions contained in Article III is not then
satisfied;
(iii) the expiry date of any requested Letter of
Credit is (x) more than one (1) year from its date of issuance or (y) later than
thirty (30) Business Days prior to the Maturity Date;
(iv) Aggregate Outstandings, after giving effect to
the requested Letter of Credit shall exceed the Total Commitment;
-32-
(v) the L/C Documents are not in form and substance
satisfactory to the Issuing Bank; or
(vi) any requested Letter of Credit is not in form
and substance acceptable to the Issuing Bank, or the issuance of a Letter of
Credit violates any applicable policies of the Issuing Bank.
SECTION 2A.02. ISSUANCE OF LETTERS OF CREDIT. Each Letter of Credit
shall be issued upon the request of the Borrower (which request shall be
irrevocable), received by the Issuing Bank in accordance with arrangements
between the Issuing Bank and the Borrower to provide the Issuing Bank
electronically with the information necessary to issue, amend or renew Letters
of Credit. The arrangements between the Borrower and the Issuing Bank are set
forth in the L/C Documents (other than the Letters of Credit) between the
Issuing Bank and the Borrower. To the extent any term in any such L/C Documents
(other than a Letter of Credit) conflicts with or is inconsistent with the terms
of this Agreement, the term most favorable to the Issuing Bank shall apply, and
an Issuing Bank may exercise its rights under either such L/C Document or this
Agreement, but subject in any event to the provisions herein with respect to
sharing and notification. If any such inconsistency exists, the Agent and the
Lenders shall not be deemed to have waived any rights hereunder, nor shall the
Issuing Bank be deemed to have waived any rights under such L/C Document, by
reason of such inconsistency.
SECTION 2A.03. PARTICIPATIONS OF LENDERS. (a) Immediately upon the
issuance of each Letter of Credit, each Lender shall be deemed to, and hereby
irrevocably unconditionally agrees to, purchase from the Issuing Bank a
participation in such Letter of Credit, each drawing thereunder in any amount
and each draft accepted or deferred payment obligation incurred in any amount
under such Letter of Credit equal in each case to the product of (i) the Pro
Rata Share of each Lender, times (ii) the maximum amount available to be drawn
under such Letter of Credit and the amount of such drawing, accepted draft or
deferred payment obligation, respectively. Each issuance of a Letter of Credit
shall be deemed to utilize the Commitment of each Lender by an amount equal to
the amount of such participation.
(b) The Issuing Bank will promptly notify the Borrower of any drawing
under a Letter of Credit. The Borrower shall reimburse the Issuing Bank on each
date that any amount is paid by the Issuing Bank under any Letter of Credit
(each such date, an "Honor Date") at such time(s) as are agreed upon by the
Borrower and the Issuing Bank, in an amount equal to the amount so paid by the
Issuing Bank. The Borrower may request, and the Issuing Bank, in its sole
discretion may issue, a B/A in satisfaction of the Borrower's obligation to
reimburse the Issuing Bank for draws under a Letter
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of Credit. In such event, the Lenders shall each be deemed to have purchased a
participation in such B/A in the same pro rata percentage as each Lender's
participation in the related Letter of Credit. The Borrower agrees to pay to the
Issuing Bank, on the date of maturity of each B/A, an amount equal to the face
amount of such B/A plus an amount sufficient to reimburse the Issuing Bank in
full for all principal, interest, fees and charges payable to the Issuing Bank
on account of such B/A, pursuant to any applicable agreement or otherwise. If
the Borrower fails to reimburse the Issuing Bank for the full amount of any
drawing under any Letter of Credit at such agreed upon time on the Honor Date,
or fails to pay a B/A on its maturity date, the Issuing Bank will promptly
notify the Agent and the Agent will promptly notify each Lender thereof.
(c) Upon receipt of any notice from the Agent of any failure by the
Borrower to reimburse or pay the Issuing Bank, each Lender shall make available
to the Agent for the account of the Issuing Bank its pro rata share of the
amount of such reimbursement or payment. If, after receipt of such notice, any
Lender fails to transfer its pro rata share of the amount of such reimbursement
or payment to the Agent, interest shall accrue on such Lender's obligation to
make such reimbursement or payment from the Honor Date or the maturity date, as
applicable, to the date such Lender makes such payment, at a rate per annum
equal to the Federal Funds Effective Rate in effect from time to time during
such period. Any failure of the Agent to give notice to the Lenders on an Honor
Date or a maturity date, as applicable, or in sufficient time to enable any
Lender to effect such payment on such date shall not relieve such Lender from
its obligations under this subsection (c).
(d) Each Lender's payment to the Issuing Bank pursuant to Section
2A.03(c) shall be deemed payment in respect of and in satisfaction of its
participation in such Letter of Credit or B/A.
(e) Each Lender's obligation to make payment in respect of its
participation in Letters of Credit or B/As, shall be absolute and unconditional
and without recourse to the Issuing Bank and shall not be affected by any
circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right which such Bank may have against the Issuing Bank, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or any Event of Default; or (iii) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing.
SECTION 2A.04. REPAYMENT OF PARTICIPATIONS. (a) Upon receipt by the
Issuing Bank of (i) reimbursement from the Borrower for any payment made by the
Issuing Bank under a Letter of Credit or a B/A with respect to which any Lender
has paid for its participation in such Letter of Credit or B/A or (ii) payment
of interest thereon, the Issuing Bank will pay such amounts to the Agent in the
same
-34-
funds as those received by the Issuing Bank. The Agent shall promptly distribute
to each Lender its pro rata share thereof.
(b) If the Agent or any Issuing Bank is required at any time to return to
the Borrower, or to a trustee, receiver, liquidator, custodian, or any official
in any insolvency proceeding, any portion of the payments made by the Borrower
to the Agent or to the Issuing Bank pursuant to Section 2A.04(a) in
reimbursement of a payment made under a Letter of Credit or a B/A or interest
thereon or fees relating thereto or as a result of a setoff, each Lender shall,
on demand of the Agent or the Issuing Bank, as the case may be, forthwith return
to the Agent or the Issuing Bank, as the case may be, the amount of its pro rata
share of any amounts so returned by the Agent or the Issuing Bank plus interest
thereon from the date such demand is made to the date such amounts are returned
by such Lender to the Agent or the Issuing Bank, at a rate per annum equal to
the Federal Funds Effective Rate in effect from time to time.
(c) If any event described in subsection (b) above occurs, the
obligation of the Borrower in respect of the payment or setoff required to be
returned shall be revived and continued in full force and effect as if such
payment had not been make or such setoff had not been effected.
SECTION 2A.05. ROLE OF THE ISSUING BANK. (a) The Issuing Bank shall
not have any responsibility to obtain any document in connection with paying
any draw under a Letter of Credit (other than any required sight or time draft,
certificate and other documents expressly required by the Letter of Credit) or
to ascertain or inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such document.
(b) Neither the Issuing Bank nor any of its correspondents or assignees
shall be liable to any Lender for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders (including the
Required Lenders, as applicable); (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any L/C Document.
(c) The Borrower hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Borrower's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. Neither the
Agent, nor any of its officers, directors or employees, nor any of the
respective correspondents, participants or assignees of the Issuing Bank, shall
be liable or responsible for any of the matters
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described in clauses (i) through (vii) of Section 2A.06; provided, however, that
the Borrower may have a claim against the Issuing Bank, and the Issuing Bank may
be liable to the Borrower, to the extent of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the Issuing Bank's willful misconduct or gross negligence
or the Issuing Bank's willful failure to pay under any Letter of Credit after
the presentation to it by the beneficiary of a required sight or time draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reasons.
SECTION 2A.06. OBLIGATIONS ABSOLUTE. The obligations of the Borrower
under this Agreement and any L/C Documents to reimburse the Issuing Bank for a
drawing under a Letter of Credit shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement and the
L/C Documents under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement
or any L/C Document;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the Borrower in respect
of any Letter of Credit or any other amendment or waiver of or any consent to
departure from all or any of the L/C Documents;
(iii) the existence of any claim, setoff, defense or other
right that the Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the Issuing Bank or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby
or by the L/C Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any Letter of Credit;
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(v) any payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of any Letter of Credit; or any payment made by the Issuing Bank
under any Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of any Letter of Credit, including any arising in connection
with any insolvency proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of the Borrower in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
SECTION 2A.07. UNIFORM CUSTOMS AND PRACTICES. The Uniform Customs and
Practices for Documentary Credits as published by the International Chamber of
Commerce most recently at the time of issuance of any Letter of Credit shall
(unless otherwise expressly provided in the Letters of Credit) apply to the
Letters of Credit.
SECTION 2A.08. FEES AND COMMISSIONS. (a) In the case of trade Letters
of Credit payable on sight, the Borrower shall pay to the Agent a payment
commission equal to the greater of (i) $75.00 or (ii) one quarter of one (1/4%)
percent of the amount drawn, payable on the date of presentment of thE required
documents under the Letter of Credit.
(b) In the case of trade Letters of Credit payable at a stated time,
the Borrower shall pay to the Agent a per annum commission on the average amount
of B/As and other deferred payment obligations as outstanding from the date of
presentment of required documents under the Letter of Credit to the date of
payment, equal to the greater of (i) $150.00 or (ii) three (3%) percent.
(c) In the case of all Letters of Credit, the Borrower shall pay to the
Issuing Bank its usual and customary letter of credit fees as established from
time to time, including without limitation, fees, commissions and charges for
issuance, payment, processing amendment and expiration.
(d) In the case of the fees and commissions set forth in (a) and (b)
above, same shall be paid to the Agent for the pro rata distribution to the
Lenders.
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO THE MAKING OF THE INITIAL
REVOLVING CREDIT LOAN, THE ISSUANCE OF THE INITIAL LETTER OF CREDIT AND THE
CREATION OF THE INITIAL B/A. The obligation of the Lenders to make the initial
Revolving Credit Loans contemplated by this Agreement and the obligation of the
Issuing Bank to issue the initial Letter of Credit or create the initial B/A
contemplated by this Agreement is subject to the following conditions precedent,
the satisfaction of which shall be, and each of which shall be in form and
substance, satisfactory to the Agent, the Lenders and their counsel:
(a) The Agent shall have received the Revolving Credit Notes duly
executed and payable to the order of each of the Lenders.
(b) The Agent shall have received certified (as of the date of this
Agreement) copies of the resolutions of the Board of Directors of the Borrower
authorizing the Loans 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.
(c) The Agent shall have received certified (as of the date of this
Agreement) copies of the resolutions of the Board of Directors and, if required
under applicable law, 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) The Agent shall have received a certificate of the Secretary or an
Assistant Secretary (attested to by another officer) of the Borrower certifying:
(i) the names and true signatures of the officer or officers of the Borrower
authorized to sign this Agreement, the Notes and the other Loan Documents to be
delivered hereunder on behalf of the Borrower; and (ii) a copy of the Borrower's
by-laws as complete and correct on the date of this Agreement.
(e) The Agent shall have received 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
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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) The Agent shall have received copies of the certificate of
incorporation and all amendments thereto of the Borrower and each Guarantor,
certified in each case by the Secretary of State (or equivalent officer) of the
state of incorporation of the Borrower and each Guarantor and a certificate of
existence and good standing with respect to the Borrower and each Guarantor from
the Secretary of State (or equivalent officer) of the state of incorporation of
the Borrower and each Guarantor and from the Secretary of State (or equivalent
officer) of any state in which the Borrower or each Guarantor is authorized to
do business.
(g) The Agent shall have received an opinion, addressed to the Agent
and each of the Lenders, of ▇'▇▇▇▇▇▇▇▇, Graev and Karabell, LLP, counsel for the
Borrower and the Guarantors as to certain matters referred to in Article IV
hereof and as to such other matters as the Agent or its counsel may reasonably
request.
(h) The Agent shall have received from each Guarantor, an executed
Guaranty.
(i) The Agent shall have received evidence that the Borrower 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 Borrower and the Guarantors operate.
(j) The Agent shall have received and satisfactorily reviewed all
credit agreements and other similar agreements described in Section 4.01(t) of
this Agreement.
(k) The Agent shall have received and satisfactorily reviewed Schedule
4.01(k) to this Agreement which shall disclose all intellectual property of the
Borrower and its Subsidiaries including domestic trademarks, tradenames 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.
(l) The Agent and the Lenders shall have received and satisfactorily
reviewed the Senior Note Agreement Amendment.
(m) The Agent shall have received letters evidencing the cancellation
of the Chase Line of Credit and the EAB Line of Credit
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and any other lines of credit or similar borrowing facilities available to the
Borrower or any Guarantor.
(n) The Agent shall have received and satisfactorily reviewed the
management letter issued in connection with the audit of the Borrower's
consolidated financial statements for the year ended December 31, 1998.
(o) Intentionally Omitted.
(p) The Borrower and each Guarantor shall each have executed and
delivered to the Collateral Agent 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
Senior Note Holders a first priority perfected security interest in (i) with
respect to the Borrower and all Guarantors, all accounts and accounts receivable
of the Borrower and the Guarantors, and (ii) with respect to the Borrower, DPI
and Parfums, all trade names and trademarks, trademark registrations, trademark
applications and trademark licenses of the Borrower, DPI and Parfums and all
product names related thereto (the "Collateral").
(q) The Borrower, 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 Borrower, DPI and
Parfums assign, to the Collateral Agent for the benefit of itself, the Agent,
the Lenders and the Senior Note Holders, 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.
(r) The Collateral Agent, the Agent, the Lenders and the Senior Note
Holders shall have entered into the Intercreditor Agreement.
(s) The Borrower will have engaged the Agent to conduct a Field
Examination, to commence not later than March 6, 2000.
(t) The following statements shall be true and the Agent shall have
received a certificate signed by the President or the Chief Financial Officer of
the Borrower dated the date hereof, stating that:
(i) After giving effect to the execution and delivery of this
Agreement and the Senior Note Agreement, the representations and warranties
contained in Article IV 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
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(ii) No Default or Event of Default has occurred and is
continuing, or would result from the making of the initial Revolving Credit
Loans.
(u) Receipt by the Agent of (i) the facility fees payable to the
Lenders, (ii) its administrative fee together with all other fees payable
pursuant to the Fee Letter.
(v) All schedules, documents, certificates and other information
provided to the Agent or any Lender pursuant to or in connection with this
Agreement shall be reasonably satisfactory to the Agent and its counsel in all
respects.
(w) All legal matters incident to this Agreement and the transactions
contemplated hereby shall be satisfactory to Cullen and ▇▇▇▇▇▇, counsel to the
Agent.
(x) Receipt by the Agent of such other approvals, opinions or documents
as the Agent or its counsel may reasonably request.
(y) Payment by the Borrower of the reasonable fees and expenses of
counsel to the Agent.
SECTION 3.02. CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT LOANS. The
obligations of the Lenders to make each subsequent Revolving Credit Loan shall
be subject to the further condition precedent that on the date of such Revolving
Credit Loan:
(a) The following statements shall be true and each request for a
Revolving Credit Loan shall be deemed a certification by the Borrowers and the
Guarantors that such statements are true, and the Agent shall have received, if
requested by the Agent, a certificate signed by the President or the Chief
Financial Officer of the Borrower dated the date of such Revolving Credit Loan,
stating that:
(i) The representations and warranties contained in Article IV
of this Agreement and in the Loan Documents are true and correct in all material
respects on and as of such date as though made on and as of such date except for
those that relate to an earlier date which shall remain true and correct as of
such earlier date; and
(ii) No Default or Event of Default has occurred and is
continuing, or would result from such Revolving Credit Loan.
(b) The Agent shall have received such other approvals, opinions or
documents as the Agent may reasonably request.
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SECTION 3.03. CONDITIONS PRECEDENT TO ALL LETTERS OF CREDIT AND ALL
B/As. The obligation of the Issuing Bank to issue each Letter of Credit
(including the initial Letter of Credit) and to create each B/A (including the
initial B/A) shall be subject to the further condition precedent that on the
date of each request for a Letter of Credit or B/A:
(a) The following statements shall be true and each request for a
Letter of Credit or B/A shall be deemed a certification by the Borrowers and the
Guarantors that such statements are true, and the Agent shall have received, if
requested by the Agent, a certificate signed by the President or the Chief
Financial Officer of the Borrower dated the date of such request for a Letter of
Credit or B/A, stating that:
(i) The representations and warranties contained in Article IV
of this Agreement and in the Loan Documents are true and correct in all material
respects on and as of such date as though made on and as of such date except for
those that relate to an earlier date which shall remain true and correct as of
such earlier date; and
(ii) No Default or Event of Default has occurred and is
continuing, or would result from the issuance of such Letter of Credit or the
creation of such B/A.
(b) The Agent shall have received such other approvals, opinions or
documents as the Agent may reasonably request.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES. On the date hereof and,
on each date that the Borrower requests a Revolving Credit Loan or a Letter of
Credit, the Borrower and the Guarantors each represent and warrant as follows:
(a) SUBSIDIARIES. On the date hereof, the only Subsidiaries of the
Borrower or the Guarantors are those set forth on Schedule 4.01(a) annexed
hereto, which Schedule accurately sets forth with respect to each such
Subsidiary, its name and address, any other addresses at which it conducts
business, its state of incorporation and each other jurisdiction in which it is
qualified to do business, other than jurisdictions where the failure to so
qualify would not be reasonably likely to result in a Material Adverse Change in
such Subsidiary, the identity and share holdings of its stockholders and whether
such Subsidiary is inactive and has no assets. Except as set forth on Schedule
4.01(a), all of the issued and outstanding shares of each Subsidiary which are
owned by the Borrower or any Guarantor are owned by the Borrower or such
Guarantor free and clear of any mortgage, pledge, lien or encumbrance, other
than Liens permitted by Section 5.02(a) of this Agreement. Except as set forth
on Schedule 4.01(a) and except for options granted under the 1984 Stock Option
Plan or the 1994 Stock Plan, there are no outstanding warrants, options,
contracts or commitments of any kind entitling any Person to purchase or
otherwise acquire any shares of common or capital stock or other equity interest
of the Borrower, any Guarantor or any Subsidiary of the Borrower or any
Guarantor, nor are there outstanding any securities which are convertible into
or exchangeable for any shares of the common or capital stock of the Borrower,
any Guarantor or any Subsidiary of the Borrower or any Guarantor.
(b) ORGANIZATION; GOOD STANDING. The Borrower, each Guarantor and each
Subsidiary of the Borrower 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.
(c) LOAN DOCUMENTS; NO CONSENTS OR VIOLATIONS. The execution, delivery
and performance by the Borrower and each Guarantor of the Loan Documents to
which they are a party are within the Borrower's and such Guarantor's corporate
power and have been duly authorized by all necessary corporate action and do not
and will not (i) require any consent or approval of the stockholders of the
Borrower
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or such Guarantor (other than those previously obtained and appropriate evidence
of which has been delivered to the Agent); (ii) do not contravene the Borrower's
or such Guarantor's certificate of incorporation, charter or by-laws; (iii)
violate any provision of or any law, rule, regulation, contractual restriction,
order, writ, judgment, injunction, or decree, determination or award binding on
or affecting the Borrower or such Guarantor; (iv) result in a breach of or
constitute a default under any indenture or loan or credit agreement, or any
other material agreement, lease or instrument to which the Borrower or such
Guarantor is a party or by which it or its properties may be bound or affected;
and (v) result in, or require, the creation or imposition of any Lien upon or
with respect to any of the properties now owned or hereafter acquired by the
Borrower or such Guarantor, other than the Liens created pursuant to the Loan
Documents.
(d) AUTHORIZATION. No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Borrower or any
Guarantor of any Loan Document to which it is a party, except authorizations,
approvals, actions, notices or filings which have been obtained, taken or made,
as the case may be.
(e) VALIDITY AND ENFORCEABILITY. The Loan Documents, when delivered
hereunder, will have been duly executed and delivered on behalf of the Borrower
and each Guarantor, as the case may be, and will be legal, valid and binding
obligations of the Borrower and each Guarantor, as the case may be, enforceable
against the Borrower or such Guarantor in accordance with their respective
terms.
(f) FINANCIAL STATEMENTS. The consolidated financial statements of the
Borrower 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 Agent and the Lenders, (i) fairly
present in all material respects the financial condition of the Borrower and its
Consolidated Subsidiaries as at such dates and the results of operations of the
Borrower 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 Borrower and its Consolidated
Subsidiaries, other than increases in liabilities resulting solely from
increased borrowings under this 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 Borrower or any of its Consolidated
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Subsidiaries, contingent or otherwise required to be disclosed therein.
(g) LITIGATION. There is no pending or to the Borrower's or any
Guarantor's knowledge, threatened action, proceeding or investigation affecting
the Borrower, such Guarantor or any Subsidiary of the Borrower or any Guarantor,
before any court, governmental agency or arbitrator, which would either in one
case or in the aggregate, be reasonably likely to result in a Material Adverse
Change.
(h) TAXES. The Borrower, each Guarantor and each Subsidiary of the
Borrower 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 Borrower, 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 Borrower, such Guarantor or any
such Subsidiary; and (iii) no enforcement proceedings against the Borrower, such
Guarantor or any such Subsidiary have been commenced.
(i) LICENSES, ETC. The Borrower, each Guarantor and each Subsidiary of
the Borrower or any Guarantor possess, or has the right to use, all material
licenses, permits, franchises, patents, copyrights, trademarks and trade names,
including, without limitation, those set forth on Schedule 4.01(v), or rights
thereto, to conduct their respective businesses substantially as now conducted
and as presently proposed to be conducted, and neither the Borrower, such
Guarantor nor any such Subsidiary are in violation of any similar rights of
others.
(j) NO ADVERSE AGREEMENTS. Neither the Borrower, nor any Guarantor nor
any Subsidiary of the Borrower or any Guarantor is a party to any indenture,
loan or credit agreement or any other agreement, lease or instrument or subject
to any charter or corporate restriction, the default or breach of which would be
reasonably likely to result in a Material Adverse Change. All material
agreements to which the Borrower, any Guarantor, or any Subsidiary of the
Borrower or any Guarantor is a party are in full force and effect and neither
the Borrower, such Guarantor nor any such Subsidiary are in default of any such
agreement.
(k) MARGIN STOCK. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation T, U or X), and no proceeds of any Loan will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock or in any other way which
will cause the Borrower to violate the provisions of Regulations T, U or X.
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(l) COMPLIANCE WITH LAWS. The Borrower, each Guarantor and each
Subsidiary of the Borrower or any Guarantor are in all material respects in
compliance with all federal and state laws and regulations in all jurisdictions
where the failure to comply with such laws or regulations would be reasonably
likely to result in a Material Adverse Change.
(m) ERISA. The Borrower, each Guarantor, each Subsidiary of the
Borrower or any Guarantor and each ERISA Affiliate are in compliance in all
material respects with all applicable provisions of ERISA. Neither a Reportable
Event nor a Prohibited Transaction has occurred and is continuing with respect
to any Plan; no notice of intent to terminate a Plan has been filed nor has any
Plan been terminated; no circumstances exist which constitute grounds under
Section 4042 of ERISA entitling the PBGC to institute proceedings to terminate,
or appoint a trustee to administrate, a Plan, nor has the PBGC instituted any
such proceedings; neither the Borrower, any Guarantor, any Subsidiary of the
Borrower or any Guarantor, nor any ERISA Affiliate has completely or partially
withdrawn under Sections 4201 or 4204 of ERISA from a Multiemployer Plan; the
Borrower, each Guarantor, each Subsidiary of the Borrower or any Guarantor and
each ERISA Affiliate have met their minimum funding requirements under ERISA
with respect to all of their Plans and the present fair market value of all Plan
assets exceeds the present value of all vested benefits under each Plan, as
determined on the most recent valuation date of the Plan in accordance with the
provisions of ERISA for calculating the potential liability of the Borrower,
such Guarantor, any such Subsidiary or any ERISA Affiliate to PBGC or the Plan
under Title IV of ERISA; and neither the Borrower, such Guarantor, any such
Subsidiary nor any ERISA Affiliate has incurred any liability to the PBGC under
ERISA.
(n) HAZARDOUS MATERIALS. The Borrower, each Guarantor and each
Subsidiary of the Borrower or any Guarantor are in compliance in all material
respects with all federal, state or local laws, ordinances, rules, regulations
or policies governing Hazardous Materials and neither the Borrower, any
Guarantor nor any such Subsidiary has used Hazardous Materials on, from, or
affecting any property now owned or occupied or hereafter owned or occupied by
the Borrower, such Guarantor or any such Subsidiary in any manner which violates
federal, state or local laws, ordinances, rules, regulations or policies
governing the use, storage, treatment, transportation, manufacture, refinement,
handling, production or disposal of Hazardous Materials, and, to the Borrower's,
such Guarantor's and such Subsidiaries' knowledge, no prior owner of any such
property or any tenant, subtenant, prior tenant or prior subtenant have used
Hazardous Materials on, from or affecting such property in any manner which
violates federal, state or local laws, ordinances, rules, regulations, or
policies governing the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of Hazardous Materials.
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(o) USE OF PROCEEDS. The proceeds of the Revolving Credit Loans shall
be used exclusively for the purposes set forth in Sections 2.06 hereof.
(p) TITLE TO ASSETS; NO LIENS. The Borrower and each Guarantor have
good and marketable title to all of their properties and assets, subject only to
the Liens permitted by Section 5.02(a) of this Agreement.
(q) CASUALTIES, ETC. Neither the business nor the properties of the
Borrower, any Guarantor nor any Subsidiary of the Borrower or any Guarantor are
affected by any fire, explosion, accident, strike, hail, earthquake, embargo,
act of God or of the public enemy, or other casualty (whether or not covered by
insurance), which would be reasonably likely to result, in any one case or in
the aggregate, in a Material Adverse Change.
(r) SOLVENCY. After giving effect to the execution of this Agreement,
the availability of the Total Commitment and the Senior Note Agreement
Amendment, (i) the fair value of the assets of (x) the Borrower and its
Consolidated Subsidiaries, on a consolidated basis and (y) the Borrower 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 Borrower and its Consolidated Subsidiaries, on a
consolidated basis and (y) the Borrower 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 Borrower and its Consolidated
Subsidiaries, on a consolidated basis and (y) the Borrower 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 Borrower and its Consolidated Subsidiaries, on a consolidated
basis and (y) the Borrower 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 Borrower and DPI each has a positive net worth.
(s) FINANCIAL ADVANTAGE. Each Guarantor acknowledges it has derived or
expects to derive a financial or other advantage from the Loans obtained by the
Borrower from the Lenders.
(t) CREDIT AGREEMENTS, ETC. Schedule 4.01(t) is a complete and correct
list of all credit agreements, indentures, purchase agreements, guaranties,
Capital Leases, and other agreements and arrangements presently in effect
providing for or relating to extensions of credit (including agreements and
arrangements for the issuance of letters of credit or for acceptance financing)
in the
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principal amount of $50,000.00 or more and in respect of which the Borrower or
any Guarantor is in any manner directly or contingently obligated, and the
maximum principal or face amounts of the credit in question, outstanding or to
be outstanding, are correctly stated, and all Liens of any nature given or
agreed to be given as security therefor are correctly described or indicated in
such Schedule.
(u) YEAR 2000 ISSUE. The Year 2000 date change has not resulted in
disruption of the Borrower's and its Subsidiaries' computer hardware, software,
databases, systems and other equipment containing embedded microchips (including
systems and equipment supplied by others or with which the Borrower's or its
Subsidiaries' systems interface), or to the Borrower's or its Subsidiaries'
operations or business systems, or to the best of the Borrower's and its
Subsidiaries' knowledge, to the operations or business systems of the Borrower's
major vendors, customers, suppliers and counterparties. The Borrower has no
reason to believe that liabilities and expenditures related to the Year 2000
date change (including, without limitation, costs caused by reprogramming
errors, the failure of others' systems or equipment, and the potential
liability, if any, of the Borrower or its Subsidiaries for Year 2000 related
costs incurred or disruption experienced by others) will result in a Default, or
an Event of Default or a Material Adverse Change.
(v) TRADEMARKS. Schedule 4.01(v) is a complete and correct list of all
trademarks, tradenames, trademark applications, trademark licenses and related
product names owned by the Borrower and its Subsidiaries, including, with
respect to those which have been registered with the United States Patent and
Trademark Office, all requisition numbers, serial numbers, dates of
registration, classifications and other relevant information.
(w) CONSOLIDATED TANGIBLE NET WORTH. The Borrower's Consolidated
Tangible Net Worth at December 31, 1999 is not less than $33,000,000.00.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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ARTICLE V
COVENANTS OF THE BORROWER AND THE GUARANTOR
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any amount shall remain
outstanding under the Revolving Credit Notes, or there is any Outstanding L/C
Exposure, or so long as the Commitments shall remain in effect, the Borrower and
each Guarantor will, unless the Agent and the Required Lenders shall otherwise
consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each Subsidiary of the
Borrower 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.
(b) REPORTING REQUIREMENTS. Furnish to the Agent and the Lenders: (i)
ANNUAL FINANCIAL STATEMENTS. As soon as available and in any event within ninety
(90) days after the end of each fiscal year of the Borrower, a copy of the
audited consolidated and unaudited consolidating (such consolidating statements
to be prepared by management of the Borrower) financial statements of the
Borrower 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 Borrower
and reasonably satisfactory to the Agent, all such financial statements to be
prepared in accordance with GAAP.
(ii) 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 Borrower, a copy of the consolidated
and consolidating financial statements of the Borrower 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 Borrower in accordance with GAAP.
(iii) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of any
reports submitted to the Borrower or any Guarantor by independent certified
public accountants in connection with the examination of the financial
statements of the Borrower and the Guarantor made by such accountants.
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(iv) CERTIFICATE OF NO DEFAULT. Simultaneously with the
delivery of the financial statements referred to in Section 5.01(b)(i) and (ii),
a certificate of the President or the Chief Financial Officer of the Borrower,
(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 5.03.
(v) ACCOUNTANTS' REPORT. Simultaneously with the delivery of
the annual financial statements referred to in Section 5.01(b)(i), 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.
(vi) 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 Borrower, any Guarantor or any Subsidiary of
the Borrower or any Guarantor which, if determined adversely to the Borrower,
such Guarantor or any such Subsidiary would be reasonably likely to result in a
Material Adverse Change.
(vii) 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
Borrower with respect thereto.
(viii) ERISA REPORTS. Promptly after the filing or receiving
thereof, copies of all reports, including annual reports, and notices which the
Borrower, any Guarantor or any Subsidiary of the Borrower 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 Borrower, 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 Borrower, any Guarantor or any such Subsidiary has instituted or
will institute proceedings under Title IV of ERISA to terminate any Plan, the
Borrower or such Guarantor will deliver to the Agent and the Lenders a
certificate of the President or the Chief Financial Officer of the Borrower or
such Guarantor setting forth details as to such Reportable Event or
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Prohibited Transaction or Plan termination and the action the Borrower or such
Guarantor proposes to take with respect thereto;
(ix) ENVIRONMENTAL NOTICES. Promptly after the receipt
thereof, a copy of any claim, summons, charge or other notice to the Borrower,
any Guarantor or any Subsidiary of the Borrower or any Guarantor regarding
compliance (or failure to comply) with any federal, state or local laws
governing Hazardous Materials.
(x) MATERIAL ADVERSE CHANGE. Promptly, upon the occurrence
thereof, notice of a Material Adverse Change.
(xi) 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 Agent and the Lenders pursuant to any
other clause of this Section 5.01(b).
(xii) PROXY STATEMENTS, ETC. Promptly after the sending or
filing thereof, copies of all proxy statements, financial statements and reports
which the Borrower, any Guarantor or any Subsidiary of the Borrower or any
Guarantor sends to its stockholders, and copies of all regular, periodic, and
special reports, and all registration statements which the Borrower or such
Guarantor or any such Subsidiary files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor, or
with any national securities exchange.
(xiii) NOTICE OF AFFILIATES. Promptly after any Person becomes
an Affiliate of the Borrower or any Guarantor (other than if such Person becomes
an Affiliate solely by virtue of a member of management of the Borrower making
an investment in such Person), notice to the Agent and the Lenders of such
Affiliate, provided that this clause (xiii) shall not require the Borrower or
any Guarantor to advise the Agent and the Lenders of any changes in officers
other than executive officers.
(xiv) GENERAL INFORMATION. Such other information respecting
the condition or operations, financial or otherwise, of the Borrower, any
Guarantor or any Subsidiary of the Borrower or any Guarantor as the Agent or any
Lender may from time to time reasonably request.
(c) TAXES. Pay and discharge, and cause each Subsidiary of the Borrower
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 Borrower, such Guarantor or any such Subsidiary,
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as the case may be; (ii) there be adequate reserves therefor in accordance with
GAAP entered on the books of the Borrower, such Guarantor or any such
Subsidiary; and (iii) no enforcement proceedings against the Borrower, such
Guarantor or any such Subsidiary have been commenced.
(d) CORPORATE EXISTENCE. Preserve and maintain, and cause each
Subsidiary of the Borrower 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 Borrower, 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.
(e) MAINTENANCE OF PROPERTIES AND INSURANCE. (i) Keep, and cause each
Subsidiary of the Borrower 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 Borrower, any Guarantor and any such
Subsidiary may operate.
(f) BOOKS OF RECORD AND ACCOUNT. Keep, and cause each Subsidiary of the
Borrower 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 Borrower, such Guarantor, and any such Subsidiary.
(g) VISITATION; FIELD EXAMINATION. (i) 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
the Agent or any agents 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 Borrower, the Guarantor or any
Subsidiary of the Borrower or the Guarantor to discuss the affairs, finances and
accounts of the Borrower, the Guarantor or any such Subsidiary with any of the
respective officers of the Borrower, the Guarantor or any such Subsidiary or the
Borrower's, the Guarantor's or such Subsidiary's independent accountants.
(ii) Not later than March 6, 2000, permit the Agent to begin
to conduct a Field Examination, and cooperate with the Agent to complete the
Field Examination within thirty (30) days, the
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reasonable cost of which, along with all other reasonable collateral monitoring
expenses will be paid by the Borrower.
(h) PERFORMANCE AND COMPLIANCE WITH OTHER AGREEMENTS. Perform and
comply in all material respects, and cause each Subsidiary of the Borrower 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.
(i) 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.
(j) PENSION FUNDING. Comply in all material respects, and cause each
Subsidiary of the Borrower or any Guarantor to comply in all material respects,
with the following and cause each ERISA Affiliate of the Borrower, 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 Borrower, 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 Borrower, 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.
(k) LICENSES; TRADEMARKS. (i) Maintain at all times, and cause each
Subsidiary of the Borrower 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
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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 Schedule 4.01(v) to this
Agreement, provided however that the Borrower 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 Borrower or the applicable Guarantor has provided the
Collateral Agent, the Agent, the Lenders and the Senior Note Holders 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, the Agent and the
Lenders of the acquisition or creation, after the date of this Agreement, by the
Borrower 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 Agent, take, and cause any Subsidiary to take, all steps necessary or
desirable to grant to the Collateral Agent, on behalf of itself, the Agent, the
Lenders and the Senior Note Holders, and perfect, a security interest in the New
Trademarks, including but without limitation, the filing of one or more
Trademark Collateral Assignment and Security Agreements in the United States
Patent and Trademark Office.
(l) NEW SUBSIDIARIES. (i) Cause any Subsidiary (other than a Foreign
Subsidiary) of the Borrower or any Guarantor formed after the date of this
Agreement to become a Guarantor and to become a party to this Agreement as a
Guarantor.
(ii) Cause any Foreign Subsidiary which, in the reasonable
determination of the Borrower and its professional advisors, if it became a
Guaranteeing Foreign Subsidiary would not result in adverse tax consequences to
the Borrower, 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 5.01(l) to secure the obligations thereunder by executing a
Security Agreement and such other documentation necessary in order to grant to
the Agent a Lien on all of its tradenames, trademarks, tradename registrations,
trademark registrations, trademark applications and trademark licenses.
(m) NORTH CAROLINA MORTGAGE. (a) Not later than the thirtieth (30th)
day following the Closing Date, deliver to the Agent and the Lenders a
commitment letter from the lender for the North Carolina Mortgage which shall
(i) provide for the refinance of the North Carolina Mortgage, (ii) have been
accepted by the Borrower, (iii)
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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 Agent and the 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
Mortgage.
(n) 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 Agent and the Required Lenders.
SECTION 5.02. NEGATIVE COVENANTS. So long as any amount shall remain
outstanding under the Revolving Credit Note, or there is any Outstanding L/C
Exposure, or so long as the Commitment shall remain in effect, neither the
Borrower nor any Guarantor will, without the written consent of the Agent and
the Required Lenders:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, any Lien,
upon or with respect to any of its properties, now owned or hereafter acquired,
except:
(i) Liens in favor of the Collateral Agent, for the benefit of
itself, the Agent, the Lenders and the Senior Note Holders;
(ii) 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;
(iii) 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;
(iv) Liens under workers' compensation, unemployment
insurance, Social Security, or similar legislation;
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(v) 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;
(vi) Liens described in Schedule 5.02(a), which Liens may be
renewed, extended or refinanced, without securing any additional Debt and on
terms no less favorable to the Borrower or applicable Guarantor than the
original terms (except for the refinancing permitted by clause (xi) below, which
may be on the terms set forth therein);
(vii) Judgment and other similar Liens arising in connection
with court proceedings (other than those described in Section 6.01(f)), 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;
(viii) Easements, rights-of-way, restrictions, and other
similar encumbrances which, in the aggregate, do not materially interfere with
the Borrower'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;
(ix) The Canadian Bridge Loan Mortgages, provided that such
mortgages shall be satisfied when the Canadian Bridge Loan is repaid;
(x) The Canadian Mortgage;
(xi) The North Carolina Mortgage which may be refinanced in
accordance with Section 5.01(m) of this Agreement; and
(xii) Purchase money Liens on any property hereafter acquired
or the assumption 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:
(1) Any property subject to any of the foregoing is
acquired by the Borrower or a Guarantor in the ordinary course of its respective
business and the Lien on any such property is created contemporaneously with
such acquisition;
(2) 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
Borrower or the Guarantor acquiring the same;
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(3) Each such Lien shall attach only to the property
so acquired and fixed improvements thereon; and
(4) The obligation secured by such Lien is permitted
by the provisions of Section 5.02(b) and the related expenditure is permitted by
the provisions of Section 5.03(b).
(b) DEBT. Create, incur, assume, or suffer to exist, any Debt, except:
(i) Debt of the Borrower under this Agreement or the Notes;
(ii) Debt described in Schedule 5.02(b),which Debt may be
renewed, extended or refinanced on terms no less favorable to the Borrower or
applicable Guarantor than the original terms (except for the refinancing
provided for in the Senior Note Agreement and as permitted by clause (x) below,
which each may be on the terms set forth therein);
(iii) Subordinated Debt;
(iv) 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;
(v) Debt of the Borrower or any Guarantor secured by purchase
money Liens permitted by Section 5.02(a)(xii);
(vi) Debt evidenced by the Senior Notes;
(vii) Intercompany Debt;
(viii) the Canadian Bridge Loan;
(ix) Debt secured by the Canadian Mortgage; and
(x) Debt secured by the North Carolina Mortgage which may be
refinanced in accordance with the provisions of Section 5.01(m) of this
Agreement.
(c) MERGER. Merge into, or consolidate with or into, or have merged
into it, any Person; and, for the purpose of this subsection (c), the
acquisition or sale by the Borrower 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 Borrower or
any Guarantor, provided that (i) the Borrower may merge with any Guarantor,
provided the Borrower is the surviving entity and (iii) any Guarantor may merge
with any other Guarantor.
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(d) SALE OF ASSETS, ETC. Sell, assign, transfer, lease or otherwise
dispose of any of its assets, (including a saleleaseback 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 Borrower and a
Guarantor or between Guarantors.
(e) INVESTMENTS, ETC. Make any Investment other than Permitted
Investments.
(f) TRANSACTIONS WITH AFFILIATES. Except for transactions with the
current Chief Executive Officer of the Borrower, 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 Borrower's, a
Guarantor's or a Subsidiary's business and upon fair and reasonable terms no
less favorable to the Borrower or a Guarantor or a Subsidiary than would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate, 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 Borrower or any Guarantor
engage in any transaction with a Subsidiary of the Borrower or a Guarantor which
Subsidiary is not a Guarantor.
(g) PREPAYMENT OF OUTSTANDING DEBT. Pay, in whole or in part, any
outstanding Debt of the Borrower or a Guarantor, which by its terms is not then
due and payable other than (i) Debt owing to the Lenders, (ii) Intercompany Debt
and (iii) accounts payable and other trade payables.
(h) GUARANTEES. 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 Schedule 5.02(i) annexed hereto; or (iii)
guarantees of any Debt permitted under Section 5.02(b) of this Agreement.
(i) CHANGE OF BUSINESS. Materially alter the nature of its business.
(j) FISCAL YEAR. Change the ending date of its fiscal year from
December 31.
(k) MAXIMUM LOSSES; MINIMUM NET INCOME. (i) Incur a consolidated net
loss (calculated exclusive of extraordinary gains but inclusive of extraordinary
losses as calculated in accordance
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with GAAP) greater than $500,000.00 for the fiscal quarter ending March 31,
2000; (ii) 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; (iii) 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.
(l) ACCOUNTING POLICIES. Change any accounting policies, except as
permitted by GAAP.
(m) DIVIDENDS, ETC. 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 Borrower 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 Borrower may pay
the Permitted Dividends described in clause (i) of the definition thereof, (iii)
the Borrower 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 Borrower may pay
Permitted Dividends described in clause (ii) of the definition thereof and the
Borrower may make Permitted Stock Repurchases described in clause (ii) of the
definition thereof.
(n) CHANGE IN CONTROL. (a) 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 Borrower and the directors
of the Borrower, each as in office on the date of this Agreement, to own more
than fifty (50%) percent of the outstanding voting securities of the Borrower.
(b) Permit any nominees other than nominees nominated by the existing board of
directors of the Borrower to hold a majority of the seats on the board of
directors of the Borrower.
(o) HAZARDOUS MATERIAL. The Borrower, each Guarantor and each
Subsidiary of the Borrower or a Guarantor shall not cause or permit any property
owned or occupied by the Borrower, 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 Borrower,
a Guarantor or any such Subsidiary cause or permit, as a result of any
intentional or unintentional act or omission on
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the part of the Borrower, such Guarantor or any such Subsidiary or any tenant or
subtenant, a release of Hazardous Materials onto any property owned or occupied
by the Borrower, such Guarantor or any such Subsidiary or onto any other
property; nor shall the Borrower, 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 Borrower and the Guarantors shall execute any documentation
required by the Agent in connection with the representations, warranties and
covenants contained in this paragraph and Section 4.01 of this Agreement.
(p) LIMITATIONS ON CONSOLIDATED FOREIGN ASSETS AND REVENUES. (i) Have
more than fifteen (15%) percent of the consolidated assets or revenues of the
Borrower and its Consolidated Subsidiaries be located in, or derived from,
locations other than the United States.
(ii) Have more than ten (10%) percent of the consolidated
assets or revenues of the Borrower and its Consolidated Subsidiaries be held by,
or produced by, any Foreign Subsidiary.
SECTION 5.03. FINANCIAL REQUIREMENTS. So long as any amount shall
remain outstanding under the Revolving Credit Note, or there is any Outstanding
L/C Exposure, or so long as the Commitment shall remain in effect:
(a) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Borrower 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) $34,000,000.00 or
(ii) $1,000,000.00 in excess of the
actual CTNW as of 12/31/99
12/31/00; 3/31/01; The actual CTNW as of 12/31/99 PLUS 80%
6/30/01 and 9/30/01 of the Borrower's Consolidated Net
Income for the fiscal year ending
12/31/00.
12/31/01; 3/31/02; The actual CTNW as of 12/31/00 PLUS 80%
6/30/02 and 9/30/02 of the Borrower's Consolidated Net
Income for the fiscal year ending
12/31/01.
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PERIOD MINIMUM CTNW
------ ------------
12/31/02 to the The actual CTNW as of 12/31/01 PLUS 80%
Maturity Date of the Borrower's Consolidated Net
Income for the fiscal year ending
12/31/02.
(b) CONSOLIDATED CAPITAL EXPENDITURES. The Borrower will not make
Consolidated Capital Expenditures in excess of: (i) $10,000,000.00 in the
aggregate during the fiscal year of the Borrower ending December 31, 2000; and
(ii) $8,000,000.00 in the aggregate during any fiscal year thereafter.
(c) CONSOLIDATED FIXED CHARGE RATIO. The Borrower 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 Borrower 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 Borrower 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
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay (i) any installment of
principal of any Revolving Credit Note when due, (ii) any amounts due in
connection with any Letter of Credit or B/A when due or (iii) any interest, fees
or other amounts owed in connection with this Agreement within five (5) days of
when such payment is due; or
(b) Any representation or warranty made by the Borrower or a
Guarantor herein or in the Loan Documents or which is contained in any
certificate, document, opinion, or financial or other statement furnished at any
time under or in connection with any Loan Document shall prove to have been
incorrect in any material respect when made; or
(c) The Borrower or a Guarantor shall (i) fail to perform or
observe any term, covenant or agreement contained in Sections 5.01(a), (c), (e),
(f), (h), (j), or (k)(i) of this Agreement for twenty (20) days after such
performance or observation is required, or (ii) fail to perform or observe any
other term, covenant, or agreement contained in this Agreement in any other Loan
Document (other than the Notes) on its part to be performed or observed; or
(d) The Borrower, a Guarantor, or any Subsidiary of the
Borrower or a Guarantor shall fail to pay any Debt or Debts, or principal
installments thereon, which Debt or Debts are in the aggregate principal amount
of $500,000.00 or more (excluding Debt evidenced by the Notes) of the Borrower,
a Guarantor or any such Subsidiary (as the case may be), or any interest or
premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other default under any agreement or instrument
relating to any such Debt, or any other event shall occur and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof;
or
(e) The Borrower, any Guarantor or any Subsidiary of the
Borrower or any Guarantor shall generally not pay its Debts as such Debts become
due, or shall admit in writing its inability to pay its Debts generally, or
shall make a general assignment for the
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benefit of creditors; or any proceeding shall be instituted by or against the
Borrower, any Guarantor or any such Subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its Debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial part
of its property and if instituted against the Borrower, any Guarantor or any
such Subsidiary shall remain undismissed for a period of 60 days; or the
Borrower, any Guarantor or any such Subsidiary shall take any action to
authorize any of the actions set forth above in this subsection (e); or
(f) 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 Borrower, any
Guarantor or any Subsidiary of the Borrower 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; or
(g) Any Guarantor shall fail to perform or observe any term or
provision of its Guaranty or any representation or warranty made by such
Guarantor (or any of its officers) in connection with such Guarantor's Guaranty
shall prove to have been incorrect in any material respect when made; or
(h) Any of the following events occur or exist with respect to
the Borrower, any Guarantor, any Subsidiary of the Borrower or any Guarantor, or
any ERISA Affiliate: (i) any Prohibited Transaction involving any Plan; (ii) any
Reportable Event with respect to any Plan; (iii) the filing under Section 4041
of ERISA of a notice of intent to terminate any Plan or the termination of any
Plan; (iv) any event or circumstance that might constitute grounds entitling the
PBGC to institute proceedings under Section 4042 of ERISA for the termination
of, or for the appointment of a trustee to administer, any Plan, or the
institution of the PBGC of any such proceedings; (v) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization insolvency, or termination of any Multiemployer Plan; and in each
case above, such event or condition, together with all other events or
conditions, if any, could in the opinion of the Agent subject the Borrower, any
Guarantor, any such Subsidiary or any ERISA Affiliate to any tax, penalty, or
other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any
combination thereof) which in the aggregate exceeds or may exceed $250,000.00;
or
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(i) This Agreement or any other Loan Document, at any time
after its execution and delivery and for any reason, ceases to be in full force
and effect or shall be declared to be null and void, or the validity or
enforceability of any document or instrument delivered pursuant to this
Agreement shall be contested by the Borrower, any Guarantor or any party to such
document or instrument or the Borrower, any Guarantor or any party to such
document or instrument shall deny that it has any or further liability or
obligation under any such document or instrument; or
(j) An event of default specified in any Loan Document other
than this Agreement shall have occurred and be continuing.
SECTION 6.02. REMEDIES ON DEFAULT. Upon the occurrence and continuance
of an Event of Default the Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower, take any or all of the following actions, (i)
terminate the Commitments, (ii) demand cash collateral in the full amount of the
Outstanding L/C Exposure, (iii) declare the Notes, all interest thereon and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Commitments shall be terminated, the cash collateral shall be due,
the Revolving Credit Notes, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower and (iv) proceed to enforce its rights whether by suit in equity or by
action at law, whether for specific performance of any covenant or agreement
contained in this Agreement or any Loan Document, or in aid of the exercise of
any power granted in either this Agreement or any Loan Document or proceed to
obtain judgment or any other relief whatsoever appropriate to the enforcement of
its rights, or proceed to enforce any other legal or equitable right which the
Agent may have by reason of the occurrence of any Event of Default hereunder or
under any Loan Document, provided, however, upon the occurrence of an Event of
Default referred to in Section 6.01(e), the Commitments shall be immediately
terminated, the cash collateral shall be immediately due, the Revolving Credit
Notes, all interest thereon and all other amounts payable under this Agreement
shall be immediately due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower. Any amounts collected pursuant to action taken under this Section 6.02
shall be applied to the payment of, first, any costs incurred by the Agent in
taking such action, including, but without limitation, reasonable attorneys fees
and expenses, second, to cash collateral for the Outstanding L/C Exposure,
third, to payment of the accrued but unpaid interest on the Revolving Credit
Notes, and fourth, to payment of the unpaid principal of the Revolving Credit
Notes.
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SECTION 6.03. REMEDIES CUMULATIVE. No remedy conferred upon or reserved
to the Agent or the Lenders hereunder or in any Loan Document is intended to be
exclusive of any other available remedy, but each and every such remedy shall be
cumulative and in addition to every other remedy given under this Agreement or
any Loan Document or now or hereafter existing at law or in equity. No delay or
omission to exercise any right or power accruing upon any Event of Default shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle the Agent or any Lender to exercise any
remedy reserved to it in this Article VI, it shall not be necessary to give any
notice, other than such notice as may be herein expressly required in this
Agreement or in any Loan Document.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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ARTICLE VII
THE AGENT; RELATIONS AMONG LENDERS AND BORROWER
SECTION 7.01. APPOINTMENT, POWERS AND IMMUNITIES OF AGENT. Each Lender
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under any other Loan Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Loan
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Loan Document, and shall not by reason of
this Agreement be a trustee or fiduciary for any Lender. The Agent shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties made by the Borrower or the Guarantors, or any officer or official of
the Borrower or Guarantors, or any of them, or any other Person contained in
this Agreement or any other Loan Document, or in any certificate or other
document or instrument referred to or provided for in, or received by any of
them under, this Agreement or any other Loan Document, or for the value,
legality, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or any other document or instrument
referred to or provided for herein or therein, except as explicitly provided
herein, or for the failure by the Borrower, the Guarantors, or any of them to
perform any of their or its respective obligations hereunder or thereunder. The
Agent may employ agents and attorneys-in-fact and shall not be responsible,
except as to money or securities received by it or its authorized agents, for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. Except as otherwise explicitly provided herein, neither
the Agent nor any of its directors, officers, employees or agents shall be
liable or responsible to any Lender for any action taken or omitted to be taken
by it or them hereunder or under any other Loan Document or in connection
herewith or therewith, except for its or their own gross negligence or wilful
misconduct. The Borrower shall pay any fee agreed to by the Borrower and the
Agent with respect to the Agent's services hereunder.
SECTION 7.02. RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent with reasonable care. The Agent may deem and
treat each Lender as the holder of the Loans
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made by it for all purposes hereof unless and until a notice of the permitted
transfer thereof satisfactory to the Agent and signed by such Lender shall have
been furnished to the Agent but the Agent shall not be required to deal with any
Person who has acquired a participation in any Loan from a Lender. As to any
matters not expressly provided for by this Agreement or any other Loan Document,
the Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by the Required
Lenders, and such instructions of the Required Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders and any
other holder of all or any portion of any Loan.
SECTION 7.03. DEFAULTS. The Agent shall not be deemed to have knowledge
of the occurrence of a Default or Event of Default (other than the non-payment
of principal of or interest on the Loans or the non-payment of fees due
hereunder) unless the Agent has actual knowledge of such Default or Event of
Default or has received notice from a Lender or a Borrower specifying such
Default or Event of Default and stating that such notice is a "Notice of
Default." In the event that the Agent receives such a notice of, or otherwise
has actual knowledge of the occurrence of, a Default or Event of Default, the
Agent shall give prompt notice thereof to the Lenders (and shall give each
Lender prompt notice of each such non-payment). The Agent shall (subject to
Section 7.08 and Section 8.01 hereof) take such action with respect to such
Default or Event of Default which is continuing as shall be directed by the
Required Lenders; provided that, unless and until the Agent shall have received
such directions, the Agent may take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders; and provided further that the
Agent shall not be required to take any such action which it determines to be
contrary to law.
SECTION 7.04. RIGHTS OF AGENT AS A LENDER. With respect to the Loans
made by it, any Person which is the Agent in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not acting as the Agent, and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include any
Person which is the Agent in its capacity as a Lender. The Agent or any Lender
and their respective Affiliates may (without having to account therefor to any
other Lender except as otherwise expressly provided in this Agreement) accept
deposits from, lend money to (on a secured or unsecured basis but subject to the
provisions of Section 5.02(a) and (b) of this Agreement), and generally engage
in any kind of banking, trust or other business with, the Borrower, the
Guarantors or any of them (and any of their Affiliates);
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PROVIDED that no payment or lien priority (other than purchase money liens on
equipment being financed by such Lender) shall be given to the Agent or to any
Lender for any other transaction without the express written approval of all of
the other Lenders. In the case of Chase, it may do so as if it were not acting
as the Agent, and the Agent may accept fees and other consideration from the
Borrower, the Guarantors or any of them for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
Although the Agent or a Lender or any of their respective Affiliates may in the
course of such relationships and relationships with other Persons acquire
information about the Borrower, the Guarantors, their Affiliates and such other
Persons, neither the Agent nor such Lender shall have any duty to the other
Lenders or the Agent to disclose such information to the other Lenders or the
Agent except as otherwise provided herein with respect to the occurrence of an
Event of Default.
SECTION 7.05. INDEMNIFICATION OF AGENT. The Lenders agree to indemnify
the Agent and its directors, officers, employees, agents and Affiliates (the
"Indemnitees") (to the extent not reimbursed under Section 8.05 hereof or under
the applicable provisions of any other Loan Document, but without limiting the
obligations of the Borrower and Guarantors under Section 8.05 hereof or such
provisions), ratably in accordance with their Pro Rata Shares of the Total
Commitment (without giving effect to any participation in all or any portion of
the Total Commitment sold by them to any other Person), for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Indemnitees in any way relating
to or arising out of this Agreement, any other Loan Document or any other
documents contemplated by or referred to herein or the transactions contemplated
hereby or thereby (including, without limitation, the costs and expenses which
the Borrower and Guarantors are obligated to pay under Section 8.05 hereof or
under the applicable provisions of any other Loan Document but excluding, unless
a Default or Event of Default has occurred, normal administrative costs and
expenses incidental to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Lender shall be liable for any of the foregoing
to the extent they arise from the gross negligence or wilful misconduct of an
Indemnitee.
SECTION 7.06. DOCUMENTS. It is the responsibility of the Borrower to
forward to each Lender, on or before the due dates set forth herein, a copy of
each report, notice (other than notices of borrowings and payments) or other
document required by this
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Agreement or any other Loan Document to be delivered to the Agent. The Agent is
not responsible for forwarding such information to the Lenders.
SECTION 7.07. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower, the Guarantors and
their Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or any other Loan Document. The Agent shall not be required
to keep itself informed as to the performance or observance by the Borrower or
Guarantors of this Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Borrower, the Guarantors or any Subsidiary of the Borrower or any
Guarantor. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to any other Lender to provide
any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrower, the Guarantors or any
Subsidiary (or any of their Affiliates) which may come into the possession of
the Agent or of its Affiliates. The Agent shall not be required to file this
Agreement, any other Loan Document or any document or instrument referred to
herein or therein, or record or give notice of this Agreement, any other Loan
Document or any document or instrument referred to herein or therein, to any
Person.
SECTION 7.08. FAILURE OF AGENT TO ACT. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Lenders under Section 7.05 hereof in respect of any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
SECTION 7.09. RESIGNATION OF AGENT. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor Agent, which shall be a Lender which has an office in New York, New
York and, provided no Default or Event of Default has occurred and is
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continuing, which shall be reasonably acceptable to the Borrower, such
acceptance not to be unreasonably withheld or delayed. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a Lender which has an office in New York, New
York and, provided no Default or Event of Default has occurred and is
continuing, which shall be reasonably acceptable to the Borrower, such
acceptance not to be unreasonably withheld or delayed. The Required Lenders or
the retiring Agent, as the case may be, shall upon the appointment of a
Successor Agent promptly so notify the Borrower, the Guarantors and the other
Lenders. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation as Agent, the provisions of
this Article 7 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.
SECTION 7.10. AMENDMENTS CONCERNING AGENCY FUNCTION. The Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Loan Document which affects its rights or duties
hereunder or thereunder unless it shall have given its prior written consent
thereto.
SECTION 7.11. LIABILITY OF AGENT. The Agent shall not have any
liabilities or responsibilities to the Borrower, the Guarantors or any of them
on account of the failure of any Lender to perform its obligations hereunder or
to any Lender on account of the failure of the Borrower, the Guarantors or any
of them to perform their or its obligations hereunder or under any other Loan
Document. Nothing herein shall be read to relieve any obligation that the Agent
may have to the Borrower as a Lender hereunder.
SECTION 7.12. TRANSFER OF AGENCY FUNCTION. Without the consent of the
Borrower, the Guarantors or any Lender, the Agent may at any time or from time
to time transfer its functions as Agent hereunder to any of its offices located
in the New York metropolitan area, provided that the Agent shall promptly notify
the Borrower, the Guarantors and the Lenders thereof.
SECTION 7.13. WITHHOLDING TAXES. Each Lender represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Lender's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect
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of the foregoing, if any Lender is not created or organized under the laws of
the United States of America or any state thereof, in the event that the payment
of interest by the Borrower is treated for U.S. income tax purposes as derived
in whole or in part from sources from within the United States, such Lender will
furnish to the Agent Form 4224 or Form 1001 of the Internal Revenue Service, or
such other forms, certifications, statements or documents, duly executed and
completed by such Lender as evidence of such Lender's exemption from the
withholding of United States tax with respect thereto. The Agent shall not be
obligated to make any payments hereunder to such Lender in respect of any Loan
until such Lender shall have furnished to the Agent the requested form,
certification, statement or document.
SECTION 7.14. SEVERAL OBLIGATIONS AND RIGHTS OF LENDERS. The failure of
any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender.
SECTION 7.15. PRO RATA TREATMENT OF LOANS, ETC. Except to the extent
otherwise provided, each prepayment and payment of principal of, or interest on,
Loans of a particular type and a particular Interest Period, if any, and each
payment of fees or other amounts due hereunder shall be made to the Agent for
the account of the Lenders holding Loans of such type and Interest Period, if
any, pro rata (unless expressly provided otherwise in this Agreement) in
accordance with the respective unpaid principal amounts for such Loans of such
Interest Period held by such Lenders.
SECTION 7.16. SHARING OF PAYMENTS AMONG LENDERS. If a Lender shall
obtain payment of any principal of or interest on any Loan any fee due
hereunder, made by it through the exercise of any right of setoff, banker's
lien, counterclaim, or any other means, it shall share such payment with the
other Lenders and the amount of such payment shall be applied to reduce the
Loans of all the Lenders pro rata in accordance with the unpaid principal on the
Loans held by each of them, and make such other adjustments from time to time as
shall be equitable to the end that all the Lenders shall share the benefit of
such payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans held by each of them. To such end the
Lenders shall make appropriate adjustments among themselves if such payment is
rescinded or must otherwise be restored. The Borrower agrees that any Lender so
purchasing a participation (or direct interest) in the Loans made by the other
Lenders may exercise all rights of set off, banker's lien, counterclaim or
similar rights with respect to such participation (or direct interest). Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and
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retain the benefits of exercising, any such right with respect to any other
indebtedness of the Borrower. Notwithstanding the foregoing or any other
provision of this Agreement, no right or remedy of any Lender relating to any
assets of the Borrower (including real property, improvements or fixtures) not
covered by this Agreement or the other Loan Documents shall in any way be
affected by this Agreement or otherwise with respect to any other indebtedness
of the Borrower to any of the Lenders.
SECTION 7.17. NONRECEIPT OF FUNDS BY AGENT; PAYMENTS TO LENDERS. (a)
Unless the Agent shall have received notice from the Borrower prior to the date
on which any payment is due to the Lenders hereunder that the Borrower will not
make such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent in its sole discretion
may, but shall not be obligated to, in reliance upon such assumption, cause to
be distributed to each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent that the Borrower shall not have so
made such payment in full to the Agent, such Lender agrees to repay to the Agent
on demand such amount and if for any reason the Agent does not receive such
amount from such Lender on the day of such demand, if such demand is made before
2:00 p.m. on such day, or on the next Business Day if demand is made after 2:00
p.m. on such day, such Lender shall repay to the Agent forthwith on demand such
amount distributed to such Lender together with interest thereon, for each day
from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Agent, at the customary rate set by the Agent
for the correction of errors among lenders for three (3) Business Days and
thereafter at the interest rate applicable to the obligation that was not repaid
by the Borrower, or if no such rate was in effect, at the Alternate Base Rate.
(b) If the Agent shall fail to pay any amounts owing by the Agent to a
Lender as promptly as may be required by this Agreement, the Agent shall pay to
such Lender, on its demand, interest on such delinquent amount at the customary
rate set by the Agent for the correction of errors among lenders for three (3)
Business Days and thereafter at the Alternate Base Rate.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. Except as otherwise expressly provided
in this Agreement, any provision of this Agreement may be amended or modified
only by an instrument in writing signed by the Borrower, the Guarantors, the
Agent and the Required Lenders, and any provision of this Agreement may be
waived by the Borrower (if such provision requires performance by the Agent or
the Lenders) or by the Agent acting with the consent of the Required Lenders (if
such provision requires performance by the Borrower or any Guarantor); PROVIDED
that no amendment, modification or waiver shall, unless by an instrument signed
by all of the Lenders or by the Agent acting with the consent of all of the
Lenders result in: (1) a reduction in the principal amount of the Revolving
Credit Loans or Outstanding L/C Exposure or extension of the Maturity Date; (2)
a reduction in the rate of interest on reduction of any Loan or any fee or any
extension of any due date thereof; (3) an increase in the amount of the Total
Commitment; (4) a change in the duration or the amount of any Lender's
Commitment; (5) a modification of the definition of "Required Lenders" or any
provision of this Section 8.01; (6) the assignment or transfer by the Borrower
of any of its rights and obligations under the Loan Documents; or (7) releases
of any Guarantors or any Collateral, except as provided in Section 8.02 of this
Agreement.
SECTION 8.02. RELEASE OF COLLATERAL. The security interest of the Agent
and the Lenders in the Collateral shall be released if (i) the Total Commitment
shall have been reduced to an amount not greater than $22,500,000 and (ii) the
Borrower shall have provided evidence satisfactory to the Collateral Agent, the
Agent the Lenders and the Senior Note Holders that its Funded Debt to EBITDA
Ratio for the immediately preceding four (4) fiscal quarters is less than 2.00
to 1.0 and (iii) there shall be no Default or Event of Default continuing prior
to or after giving effect to such release of the Collateral. Prior to releasing
any Collateral, the Collateral Agent and the Agent shall have the right, but not
the obligation, to request a written acknowledgment, in form and substance
satisfactory to the Collateral Agent and the Agent, from each Lender and each
Senior Note Holder that the conditions of this Section 8.02 have been satisfied.
SECTION 8.03. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and mailed, telegraphed, sent by facsimile or delivered, if to the Borrower or a
Guarantor, at the address of the Borrower or Guarantor, as the case may be, set
forth at the beginning of this Agreement and if to the Agent or any
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of the Lenders, at the addresses of the Agent and the Lenders set forth at the
beginning of this Agreement to the attention of Del Laboratories, Inc. Account
Officer, or, as to each party, at such other address as shall be designated by
such party in a written notice complying as to delivery with the terms of this
Section 8.02 to the other parties. All such notices and communications shall be
effective two (2) days after mailing or when telegraphed or delivered, except
that notices to the Agent or Lender shall not be effective until actually
received by the Agent or such Lender.
SECTION 8.04. NO WAIVER, REMEDIES. No failure on the part of the Agent
or any Lender to exercise, and no delay in exercising, any right, power or
remedy under any Loan Document, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The
remedies provided in the Loan Documents are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.05. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on
demand all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery and administration of this Agreement, the
Revolving Credit Notes and any other Loan Documents, including, without
limitation, the reasonable fees and expenses of counsel for the Agent with
respect thereto and with respect to advising the Agent as to its rights and
responsibilities under this Agreement, and all costs and expenses, if any
(including reasonable counsel fees and expenses), of the Agent and the Lenders
in connection with the enforcement of this Agreement, the Revolving Credit Notes
and any other Loan Documents. The Borrower and each Guarantor, jointly and
severally, shall at all times protect, indemnify, defend and save harmless the
Agent and the Lenders from and against any and all claims, actions, suits and
other legal proceedings, and liabilities, obligations, losses, damages,
penalties, judgments, costs, expenses or disbursements which the Agent or any of
the Lenders may, at any time, sustain or incur by reason of or in consequence of
or arising out of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby except as herein provided.
The Borrower and each Guarantor acknowledge that it is the intention of the
parties hereto that this Agreement shall be construed and applied to protect and
indemnify the Agent and the Lenders against any and all risks involved in the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, all of which risks are hereby assumed by the
Borrower and the Guarantors, including, without limitation, any and all risks of
the acts or omissions, whether rightful or wrongful, of any present or future DE
JURE or DE FACTO government or governmental authority, provided that neither the
Borrower nor any
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Guarantor shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's or any Lender's gross negligence or
willful misconduct. The provisions of this Section 8.05 shall survive the
payment of the Notes and the termination of this Agreement.
SECTION 8.06. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender, or any Affiliate of such Lender to or for the credit or the account of
the Borrower or any Guarantor against any and all of the obligations of the
Borrower or the Guarantors now or hereafter existing under this Agreement and
the Revolving Credit Notes, irrespective of whether or not the Agent shall have
made any demand under this Agreement or the Revolving Credit Notes and although
such obligations may be unmatured. The rights of the Agent and the Lenders under
this Section are in addition to all other rights and remedies (including,
without limitation, other rights of set-off) which they may have.
SECTION 8.07. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower, the Guarantors, the Agent and
the Lenders and thereafter it shall be binding upon and inure to the benefit of
the Borrower, the Guarantors, the Agent and the Lenders and their respective
permitted successors and assigns.
SECTION 8.08. SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of all Lenders.
(b) Any Lender may at any time grant to one or more lenders or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans or its obligations in connection with Letters of Credit.
In the event of any such grant by a Lender of a participating interest to a
Participant, whether or not upon notice to the Borrowers and the Agent, such
Lender shall remain responsible for the performance of its obligations
hereunder, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement pursuant to which any Lender may
grant such a
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participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement. The Borrower agrees that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits of Section 8.06 of this Agreement and this subparagraph
(b) with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) (i) Any Lender may at any time assign to one or more lenders or
other institutions (each an "Assignee") all, or a proportionate part (equivalent
to an initial Commitment of not less than $5,000,000.00) of all, of its rights
and obligations under this Agreement, the Notes and its obligations in
connection with Letters of Credit, and such Assignee shall assume such rights
and obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit B hereto executed by such Assignee and such
transferor Lender, with the subscribed consent of the Agent, which shall not be
unreasonably withheld. Upon execution and delivery of such instrument and
payment by such Assignee to such transferor Lender of an amount equal to the
purchase price agreed between such transferor Lender and such Assignee, such
Assignee shall be a Lender party to this Agreement and shall have all the rights
and obligations of a Lender with a Commitment as set forth in such instrument of
assumption, and the transferor Lender shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required.
(ii) Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
Assignee. In connection with any such assignment, the transferor Lender shall
pay to the Agent an administrative fee for processing such assignment in the
amount of $3,000.00 and the reasonable fees of the Agent's counsel. If an
Assignee is not incorporated under the laws of the United States of America or a
state thereof, it shall deliver to the Borrower and the Agent certification as
to exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 7.13 hereof.
(d) Notwithstanding anything to the contrary in this Section 8.08, if
either Chase or EAB agrees to make any assignment hereunder, such assignor shall
notify the other and, at the other's
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option, the prospective assignee shall purchase its interest on a pro rata basis
from each of Chase and EAB.
(e) Any Lender may at any time assign all or any portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank. No such assignment
shall release the transferor Lender from its obligations hereunder.
SECTION 8.09. FURTHER ASSURANCES. The Borrower and each Guarantor agree
at any time and from time to time at its expense, upon request of the Agent or
its counsel, to promptly execute, deliver, or obtain or cause to be executed,
delivered or obtained any and all further instruments and documents and to take
or cause to be taken all such other action the Agent may deem desirable in
obtaining the full benefits of, this Agreement or any other Loan Document.
SECTION 8.10. SECTION HEADINGS, SEVERABILITY, ENTIRE AGREEMENT. Section
and subsection headings have been inserted herein for convenience only and shall
not be construed as part of this Agreement. Every provision of this Agreement
and each Loan Document is intended to be severable; if any term or provision of
this Agreement, any Loan Document, or any other document delivered in connection
herewith shall be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions hereof or
thereof shall not in any way be affected or impaired thereby. All exhibits and
schedules to this Agreement shall be annexed hereto and shall be deemed to be
part of this Agreement. This Agreement and the exhibits and schedules attached
hereto embody the entire Agreement and understanding among the Borrower, the
Guarantors, the Agent and the Lenders and supersede all prior agreements and
understandings relating to the subject matter hereof.
SECTION 8.11. CONFIDENTIALITY. The Agent, the Lenders and each of their
assignees and participants agree to use commercially reasonable efforts
(reasonably equivalent to the efforts the Agent, a Lender or such assignee or
participant applies to maintaining the confidentiality of its own confidential
information) to maintain as confidential all confidential information provided
to them by the Borrower or any of its Subsidiaries, except that the Agent, a
Lender and any assignee or participant may disclose such information (a) to
Persons employed or engaged by the Agent, a Lender or such assignee or
participant in evaluating, approving, structuring or administering this
Agreement, the Loans or its Commitment; (b) to any bona fide assignee or
participant or potential assignee or participant that has agreed to comply with
the covenant contained in this Section 8.11 (and any such bona fide assignee or
participant or potential assignee or participant may disclose such information
to Persons employed or engaged by them as
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described in CLAUSE (A) above); (c) as required or requested by any governmental
authority or reasonably believed by the Agent, a Lender or such assignee or
participant to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, in the opinion of the Agent's, a
Lender's or such assignee's or participant's counsel, required by law; (e) in
connection with the exercise of any right or remedy under the Loan Documents or
in connection with any litigation to which the Agent, a Lender or such assignee
or participant is a party arising in connection with any Loan Document; or (f)
which ceases to be confidential through no fault of the Agent, a Lender or such
assignee or participant.
SECTION 8.12. GOVERNING LAW. This Agreement, the Revolving Credit Notes
and all other Loan Documents shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to principles of
conflict of laws.
SECTION 8.13. WAIVER OF JURY TRIAL. THE BORROWER, EACH GUARANTOR, THE
AGENT AND THE LENDERS WAIVE ALL RIGHTS TO TRIAL BY JURY ON ANY CAUSE OF ACTION
DIRECTLY OR INDIRECTLY INVOLVING THE TERMS, COVENANTS OR CONDITIONS OF THIS
AGREEMENT OR ANY LOAN DOCUMENT.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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SECTION 8.14. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
DEL LABORATORIES, INC.
BY /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
DEL PHARMACEUTICALS, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
PARFUMS SCHIAPARELLI, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
ROYCE & ▇▇▇▇▇, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
565 BROAD HOLLOW REALTY CORP.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
THE CHASE MANHATTAN BANK, as Agent
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
THE CHASE MANHATTAN BANK
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
EUROPEAN AMERICAN BANK
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
SCHEDULE 1.01
COMMITMENTS OF EACH LENDER
AMOUNT PRO RATA SHARE
------ --------------
The Chase Manhattan Bank $35,000,000.00 73.6842%
European American Bank $12,500,000.00 26.3158%
SCHEDULE 2.01
Outstanding Letters of Credit
SCHEDULE 4.01(a)
SUBSIDIARIES
STATE OF INCORPORATION IDENTITY AND
AND EACH STATE IN WHICH PERCENTAGE OF
SUBSIDIARY'S NAME IT IS QUALIFIED TO DO OWNERSHIP OF
AND ADDRESS BUSINESS EACH SHAREHOLDER
----------- -------- ----------------
SCHEDULE 4.01 (t)
CREDIT AGREEMENTS
NATURE OF AMOUNT OF LIENS SECURING
CREDITOR AGREEMENT CREDIT CREDIT
-------- --------- ------ ------
SCHEDULE 4.01(v)
TRADEMARKS
SCHEDULE 5.02(a)
LIENS
-----
CREDITOR AMOUNT PROPERTY SUBJECT TO LIEN
-------- ------ ------------------------
SCHEDULE 5.02(b)
DEBT
CREDITOR AMOUNT
-------- ------
See Schedules 4.01(t) and 5.01(a)
SCHEDULE 5.02(i)
GUARANTIES
Description of All Guaranties: None, other than pursuant to the Loan
Documents.
EXHIBIT A
REVOLVING CREDIT NOTE
$_____________ Garden City, New York
-------- --, ----
FOR VALUE RECEIVED, on the Maturity Date, DEL LABORATORIES, INC., a
Delaware corporation, having its principal place of business at ▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), promises to pay to the order of the
_______________ __________________________ (the "Lender") at the office of The
Chase Manhattan Bank, as agent for the Lender (the "Agent") located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the principal sum of the
lesser of: (a) ___________________ ($_____________) DOLLARS; or (b) the
aggregate unpaid principal amount of all Revolving Credit Loans made by the
Lender to Borrower pursuant to the Agreement (as defined below).
Borrower shall pay interest on the unpaid principal balance of this
Note from time to time outstanding, at said office, at the rates of interest, at
the times and for the periods set forth in the Agreement.
All payments including prepayments on this Note shall be made in lawful
money of the United States of America in immediately available funds. Except as
otherwise provided in the Agreement, if a payment becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day, and interest shall be payable thereon at the rate
herein specified during such extension.
Borrower hereby authorizes the Lender to enter from time to time the
amount of each Loan to Borrower and the amount of each payment on a Loan on the
schedule annexed hereto and made a part hereof. Failure of the Lender to record
such information on such schedule shall not in any way effect the obligation of
Borrower to pay any amount due under this Note.
This Note is the Revolving Credit Note referred to in that certain Loan
Agreement among Borrower, certain Guarantors, the Lender, certain other
lender(s) and the Agent, dated of even date herewith, as such Agreement may be
amended from time to time (the "Agreement"), and is subject to prepayment and
its maturity is subject to acceleration upon the terms contained in said
Agreement. All capitalized terms used in this Note and not defined herein shall
have the meanings given them in the Agreement.
If any action or proceeding be commenced to collect this Note or
enforce any of its provisions, Borrower further agrees to pay all reasonable
costs and expenses of such action or proceeding and attorneys' fees and expenses
and further expressly waives any and every right to interpose any counterclaim
in any such action or
proceeding. Borrower hereby submits to the jurisdiction of the Supreme Court of
the State of New York and agrees with the Lender that personal jurisdiction over
Borrower shall rest with the Supreme Court of the State of New York for purposes
of any action on or related to this Note, the liabilities hereunder, or the
enforcement of either or all of the same. Borrower hereby waives personal
service by manual delivery and agrees that service of process may be made by
pre-paid certified mail directed to the Borrower at the Borrower's address set
forth above or at such other address as may be designated in writing by the
Borrower to the Lender in accordance with Section 7.02 of the Agreement, and
that upon mailing of such process such service be effective with the same effect
as though personally served. BORROWER HEREBY EXPRESSLY WAIVES ANY AND EVERY
RIGHT TO A TRIAL BY JURY IN ANY ACTION ON OR RELATED TO THIS NOTE, THE
LIABILITIES HEREUNDER OR THE ENFORCEMENT OF EITHER OR ALL OF THE SAME.
Subject to the provisions of the Agreement, the Lender may transfer
this Note to the permitted transferee or transferees, who shall thereupon become
vested with all the powers and rights above given to the Lender in respect
thereto, and the Lender shall thereafter be forever relieved and fully
discharged from any liability or responsibility in the matter. The failure of
any holder of this Note to insist upon strict performance of each and/or all of
the terms and conditions hereof shall not be construed or deemed to be a waiver
of any such term or condition.
Borrower and all endorsers and guarantors hereof waive presentment and
demand for payment, notice of non-payment, protest, and notice of protest.
This Note shall be construed in accordance with and governed by the
laws of the State of New York.
DEL LABORATORIES, INC.
By:
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial
Officer
SCHEDULE OF REVOLVING CREDIT LOANS
----------------------------------
AMOUNT OF
PRINCIPAL UNPAID NAME OF
AMOUNT OF PAID OR PRINCIPAL PERSON MAKING
DATE LOAN PREPAID BALANCE NOTATION
---- ---- ------- ------- --------
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EXHIBIT B
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") dated
as of __________________ among ___________________ (the "Assignor"),
________________ (the "Assignee") and THE CHASE MANHATTAN BANK, as Agent (the
"Agent").
WITNESSETH
WHEREAS, this Assignment and Assumption Agreement (the
"Assignment") relates to the Loan Agreement dated ___________, 2000 among the
Lenders, the Borrower, the Guarantors (as such terms are defined in the
Agreement referred to herein) and the Assignor as Agent (as amended from time to
time, the "Agreement"); and
WHEREAS, as provided under the Agreement, the Assignor has
heretofore made Loans to the Borrower; and
WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Agreement in respect of all or a portion
of its Commitment and the Loans and the Assignee proposes to accept assignment
of such rights and assume the corresponding obligations from the Assignor on
such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Agreement.
SECTION 2. ASSIGNMENT. The Assignor hereby sells and assigns
to the Assignee, without recourse, and the Assignee hereby purchases and assumes
from the Assignor, a ____% interest in and to all of the Assignor's rights and
obligations as a Lender under the Agreement as of the Effective Date (as defined
below) including, without limitation, such percentage interest in (i) the
Assignor's Commitment, (ii) the Revolving Credit Loans owing to Assignor
outstanding on the Effective Date, (iii) the Revolving Credit Note held by the
Assignor under the Agreement, together with the rights to interest accruing from
the Effective Date and (iv) the Outstanding L/C Exposure.
SECTION 3. ASSIGNOR REPRESENTATIONS. The Assignor (i)
represents and warrants that as of the date hereof, (x) its Commitment,
unreduced by any assignments thereof which have not yet become effective, is
$_____________, and (y) the outstanding balance of its Revolving Credit Loans,
unreduced by any assignments thereof which have not yet become effective, is
$___________; (ii) its pro rata share of Outstanding L/C Exposure is $_________;
(iii)
it makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Agreement or any other Loan Document or any other instrument
or document furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement, any other
Loan Document or any other instrument or document furnished pursuant thereto,
other than that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim created by it; (iv) it makes no representation or warranty and assumes no
responsibility with respect to the solvency or financial condition of the
Borrower or the Guarantors, or the performance or observance by the Borrower or
the Guarantors of any of their obligations under the Agreement, any other Loan
Document or any other instrument or document furnished pursuant thereto; and (v)
confirms that its Revolving Credit Note shall be exchanged as of the Effective
Date for two Revolving Credit Notes, each dated the Effective Date, to be
delivered to the Assignor and the Assignee, in an aggregate principal amount of
$____________ and $__________, respectively.
SECTION 4. ASSIGNEE REPRESENTATIONS. The Assignee (i)
represents and warrants that it is legally authorized to enter into this
Assignment and Assumption Agreement; (ii) confirms that it has received copies
of the Agreement and the other Loan Documents, together with copies of such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption
Agreement; (iii) attaches the forms prescribed by the Internal Revenue Service
of the United States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Agreement and the Notes or such
other documents as are necessary to indicate that all such payments are subject
to such rates at a rate reduced by an applicable tax treaty; (iv) agrees that it
will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Agreement and the other Loan Documents; and (v)
agrees that it will perform in accordance with their terms all the obligations
which by the terms of the Agreement are required to be performed by it as a
Lender.
SECTION 5. PAYMENTS. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in federal funds an amount equal to the outstanding principal of
the Revolving Credit Loans. Each of the Assignor and the Assignee hereby agrees
that if either of them receives any amount under the Agreement or any other Loan
Document which is for the account of the other, it shall receive the same for
the account of such other party to the extent of such other party's interest
herein and shall promptly pay the same to the Agent on behalf of such other
party.
SECTION 6. EFFECTIVENESS. Subject to the remaining provisions
of this Section 6, the effective date for this Assignment and Assumption
Agreement shall be ___________, 2000 (the "Effective Date"). Following the
execution of this Assignment and Assumption Agreement, it will be delivered by
the Assignor to the Agent for acknowledgment and recording by the Agent. The
Assignor agrees to pay to the Agent, on or prior to the Effective Date, the
$3,000.00 assignment fee required by Section 8.08 of the Agreement. This
Assignment and Assumption Agreement shall become effective, as of the Effective
Date, upon (i) its execution by the Agent.
SECTION 7. EFFECT OF ASSIGNMENT. On and after the Effective
Date, (i) the Assignee shall be a party to the Agreement and the other Loan
Documents to which each Lender is a party and, to the extent provided in this
Assignment and Assumption Agreement, shall have the rights and obligations of a
Lender and (ii) the Assignor shall, to the extent provided in this Assignment
and Assumption Agreement, relinquish its rights and be released from its
obligations under the Agreement and the other Loan Documents to which it is a
party.
SECTION 8. PAYMENTS. From and after the Effective Date, the
Agent shall make all payments in respect of the interest assigned hereby
(including payments of principal, interest and other amounts) to the Assignee.
SECTION 9. GOVERNING LAW. This Assignment and Assumption
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
SECTION 10. COUNTERPARTS. This Assignment and Assumption
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By:_____________________
Name:
Title:
[ASSIGNEE]
By:_____________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Agent
By:____________________
Name:
Title: