EXHIBIT 10(ai)
INTEREST RATE SWAP AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of the 15 of November,
2000, by and between Playtex Product, Inc. ("Fixed Rate Payer"), and ▇▇▇▇▇ FARGO
BANK, NATIONAL ASSOCIATION ("Floating Rate Payer").
WHEREAS, both Fixed Rate Payer and Floating Rate Payer seek to reduce
actual or expected exposure to changes in interest rates or to lower costs of
actual or expected borrowings.
WHEREAS, the Fixed Rate Payer is willing to make the payments based on a
fixed rate of interest as provided herein; and
WHEREAS, the Floating Rate Payer is willing to make the payments based on
a floating rate of interest as provided herein;
NOW THEREFORE, in consideration of their mutual covenants, Fixed Rate
Payer and Floating Rate Payer agree as follows:
1. Definitions. The capitalized terms, "Effective Date", "Fixed Rate",
"Floating Rate", "Floating Rate Maturity", "Loan Facility", "Net Swap Settlement
Payment Dates", "Reset Dates", "Swap Amount", "Termination Date" and "Trade
Date" shall each be as specified in the Swap Confirmation. All other capitalized
terms shall have the meanings set forth below or otherwise as set forth in this
Agreement:
(a) "Business Day" means a day (other than Saturday, Sunday or
holiday) on which Floating Rate Payer is open and conducting its customary
banking transactions in the State of California.
(b) "Business Day Convention" means, for purposes of determining
each Calculation Period, that convention specified in the Swap Confirmation for
adjusting any relevant date if it would otherwise fall on a day that is not a
Business Day, so that:
(i) if "following" is specified, that date will be the first
following day that is a Business Day;
(ii) if "modified following" is specified, that date will be
the first following day that is a Business Day unless that day falls in
the next calendar month, in which case that date will be the first
preceding day that is a Business Day; and
(iii) if "preceding" is specified, that date will be the first
preceding day that is a Business Day.
(c) "Calculation Period" means, subject to the Business Day
Convention, each consecutive period designated in the Swap Confirmation, the
first of which will commence on, and include, the Effective Date and extend to,
but exclude, the first Reset Date. Each subsequent Calculation Period will
commence on, and include, the Reset Date and extend to, but
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exclude the next Reset Date. The final Calculation Period will end on, but
exclude, the Completion Date.
(d) "Swap Confirmation" means a document, substantially in the form
of Exhibit A hereto, with the information required in each blank space
completed.
(e) "Completion Date" shall mean the Termination Date unless an
Early Termination Date has occurred, in which case the Completion Date shall be
the Early Termination Date.
(f) "Day Count Convention" means that the calculation of each Net
Swap Settlement will be based on the actual number of days in the Calculation
Period divided by a 360-day year.
(g) "Early Termination Date" means the date, if any, prior to the
Termination Date upon which this Agreement is terminated pursuant to Paragraph
3(a) below.
(h) "LIBOR" means, with respect to each Calculation Period, the rate
for deposits in U.S. Dollars for a period equal to the Floating Rate Maturity,
as such rate appears on Telerate Page 3750 as of 11:00 AM, London Time, on the
day that is two Business Days prior to the Reset Date (or the Effective Date in
the case of the initial Period). If such rate does not appear on Telerate Page
3750, the rate for that Reset Date will be the arithmetic mean of the rates
quoted by major Banks in London, selected by Floating Rate Payer, for a period
equal to the Floating Rate Maturity, as of 11:00 AM, London Time, on the day
that is two Business Days prior to the Reset Date.
(i) "Telerate Page 3750" means the display designated as "Page 3750"
on the Dow ▇▇▇▇▇ Telerate Service (or such other page as may replace Page 3750
on that service or such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
British Bankers' Association Interest Settlement Rates for U.S. Dollar
Deposits).
2. Determination; Net Swap Settlement Payments.
(a) On the first Business Day following the end of each Calculation
Period, Floating Rate Payer will send Fixed Rate Payer a written notice
("Settlement Notice") specifying:
(i) the amount of interest which would have accrued on the
Swap Amount during the Calculation Period at a rate per annum equal to the
Floating Rate ("Floating Rate Payment").
(ii) the amount of interest which would have accrued on the
Swap Amount during the Calculation Period at a rate per annum equal to the
Fixed Rate ("Fixed Rate Payment"); and
(iii) the difference, if any, between the Floating Rate
Payment and the Fixed Rate Payment ("Net Swap Settlement Payment").
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(b) All calculations under Paragraph 2(a) above will be made on the
basis of the Day Count Convention.
(c) On each Net Swap Settlement Payment Date:
(i) if the Fixed Rate Payment exceeds the Floating Rate
Payment, Fixed Rate Payer shall pay Floating Rate Payer the amount of the Net
Swap Settlement Payment by, at Floating Rate Payer's option, Floating Rate
Payer's debiting Fixed Rate Payer's demand deposit account with Floating Rate
Payer, or by wiring funds to Floating Rate Payer; or
(ii) if the Floating Rate Payment exceeds the Fixed Rate
Payment, Floating Rate Payer shall pay Fixed Rate Payer the amount of the Net
Swap Settlement Payment by, at Floating Rate Payer's option, crediting Fixed
Rate Payer's demand deposit account with Floating Rate Payer, or by wiring funds
to a designated Fixed Rate Payer account.
3. Early Termination.
(a) This Agreement shall expire on the Termination Date and neither
party may terminate this Agreement prior thereto; provided, however that in the
event that:
(i) either Floating Rate Payer or Fixed Rate Payer fail to
make any payment when due hereunder or otherwise fail to perform any of
their obligations hereunder, unless such default is cured within five
Business Days of the defaulting party's receipt of written notice thereof,
the non-defaulting party may, so long as such default in then continuing,
upon five Business Days written notice terminate this Agreement;
(ii) Fixed Rate Payer fails to make any payment when due under
the Loan Facility (after giving effect to any applicable notice
requirement or grace period) or any other event of default occurs under
the Loan Facility which has resulted in the indebtedness thereunder being,
or being capable of being declared, accelerated, Floating Rate Payer may,
so long as such default is then continuing and upon five Business Days
written notice, take one or more of the following actions: (aa) offset the
remaining payments owed by Floating Rate Payer from time to time hereunder
to Fixed Rate Payer against the amount owed to Floating Rate Payer under
the Loan Facility, (bb) place the remaining payments owed by Floating Rate
Payer from time to time hereunder in a cash collateral account with
Floating Rate Payer over which Fixed Rate Payer will have no control (and
Fixed Rate Payer hereby grants Floating Rate Payer a security interest in
any such account to secure repayment of all amounts owing by Fixed Rate
Payer under the Loan Facility), or (cc) terminate this Agreement; or
(iii) Fixed Rate Payer repays its obligations, and Floating
Rate Payer has no further commitment to lend, under the Loan Facility,
Floating Rate Payer by written notice to Fixed Rate Payer may terminate
this Agreement. Any termination of this Agreement under this Paragraph
3(a) shall be effective on the Early Termination Date which shall be
designated in the notice of termination.
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(b) In the event of an early termination of this Agreement pursuant
to Paragraph 3(a)(i) or (ii) above, the defaulting party shall promptly pay the
non-defaulting party, on demand, an amount equal to the Termination Amount. In
the event of an early termination under Paragraph 3(a)(iii) above, if the
Termination Amount is a positive number, then Fixed Rate Payer shall promptly
pay the Floating Rate Payer such amount; if the Termination Amount is a negative
number, then the Floating Rate Payer shall promptly pay the Fixed Rate Payer the
absolute value of such amount. Each party hereto acknowledges the Termination
Amount to be a reasonable estimate of the value, costs and loss of compensation
incurred by the other party as a result of the early termination of this
Agreement.
(c) "Termination Amount" means the amount in U.S. Dollars equal to
the arithmetic mean of the respective one-time all-in fees (including
documentation costs) communicated to the non-defaulting party (or to Floating
Rate Payer in the case of termination pursuant to Paragraph 3(a)(iii) above) on
the earliest practicable Business Day following the Early Termination Date by
each of three leading commercial banks or investment banking firms in San
Francisco, Los Angeles or New York selected in good faith by the non-defaulting
party (or by Floating Rate Payer in the case of termination pursuant to
Paragraph 3(a)(iii) above) as the fee that it would charge to assume, as of the
Early Termination Date, all of the rights and obligations of the defaulting
party (or in the case of termination pursuant to Paragraph 3(a)(iii) above, the
rights and obligations of Fixed Rate Payer under this Agreement). However, if
one or more such entities fail so to communicate such a fee, the Termination
Amount shall be determined on the basis of those fees so communicated by the
other entities.
4. Limitations of Liability. In no event shall either party hereto be
liable to the other for loss of profit or indirect, special, consequential,
punitive or exemplary damages, arising out of any default under this Agreement.
5. Notices. All notices and other communications required or permitted to
be given hereunder shall be in writing and shall be deemed served when
personally delivered or, if mailed, upon the first to occur of receipt or the
expiration of seventy-two hours after deposit in the United States Postal
Service, certified mail, or if sent by overnight courier service, upon the first
to occur of receipt or 3:00 p.m. (local time at place of delivery) the next
Business Day, addressed to Floating Rate Payer or Fixed Rate Payer at their
respective addresses set forth in the Swap Confirmation.
6. Successors; Assigns. This Agreement shall be binding on and inure to
the benefit of the successors and assigns of the parties; provided, however,
that Fixed Rate Payer shall not, without the prior written consent of Floating
Rate Payer, assign (whether by operation of law or otherwise) its rights and
obligations under this Agreement or any interest herein and any such attempted
assignment shall be void and without force or effect.
7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
any choice of law doctrine.
8. No Third Party Beneficiary. This Agreement and the payments to be made
by the parties hereunder are solely for the benefit of the parties hereto for
the purposes stated herein and
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no other person or entity shall have any rights hereunder or be a beneficiary of
either party's obligations under this Agreement.
9. Counterparts. This Agreement and the Swap Confirmation may be executed
in any number of counterparts and by each party hereto on separate counterparts,
each of which when executed and delivered shall constitute an original, but all
the counterparts shall together constitute but one and the same instrument.
10. Amendments; Waivers. Any amendment or waiver of any right under any
provision of this Agreement shall be in writing and, in the case of an
amendment, signed by both parties hereto, or in the case of a waiver, signed by
the party waiving such right. No failure or delay by either party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
11. Trade Date; Interest Agreement Not Credit Commitment. This Agreement
shall be effective at, and as of, 12:01 a.m., California time, on the Trade
Date. Nothing in this Agreement shall be construed to (i) mean that Floating
Rate Payer is committed to make a loan or extend any other credit to Fixed Rate
Payer, or (ii) amend or modify any contract, instrument or document executed in
connection with the Loan Facility.
12. Costs, Expenses and Attorneys' Fees. In the event of any dispute or
litigation between the parties hereto, the prevailing party shall be entitled to
recover from the other party, immediately upon demand, all costs and expenses,
including reasonable attorneys' fees, incurred by the prevailing party in
connection with the enforcement of its rights and/or the collection of any
amounts which become due to it under this Agreement, and the prosecution or
defense of any action in any way related to this Agreement, including any of the
foregoing incurred in connection with any bankruptcy proceeding relating to such
other party.
13. Entire Agreement. This Agreement and the Swap Confirmation constitute
the entire agreement and understanding of the parties with respect to its
subject matter and supersedes all oral communications and prior writings with
respect thereto.
14. Security. To be secured by that credit agreement dated 7/21/1997 in
the amount of $170,000,000 and that specific Term Loan Agreement dated 7/21/1997
in the amount of $150,000,000.
15. No Reliance. In connection with the negotiation of and entering into
this Agreement, (i) Fixed Rate Payer acknowledges that the Floating Rate Payer
is not acting as a fiduciary or a financial or investment advisor for it; (ii)
Fixed Rate Payer is not relying upon any advice, counsel or representations
(whether written or oral) of the Floating Rate Payer hereto other than the
representations expressly set forth in this Agreement, and in any Confirmation;
(iii) the Floating Rate Payer has not given Fixed Rate Payer any advice or
counsel as to the expected or projected success, return, performance, result,
consequence or benefit (either legal, regulatory, tax, financial, accounting, or
otherwise) of this Agreement; (iv) Fixed Rate Payer has consulted with its own
legal, regulatory, tax, business, investment, financial and accounting advisors
to the extent is has deemed necessary and has made its own investment, hedging,
and trading decisions (including decisions regarding suitability of any
Transaction pursuant to this Agreement) based upon its own judgment and upon any
advice from such advisors as it has
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deemed necessary and not upon any view expressed by the other party hereto; (v)
Fixed Rate Payer has determined that the rates, prices, or amounts and other
terms of each Transaction in the indicative quotations (if any) provided by
Floating Rate Payer hereto reflect those in the relevant market for similar
Transactions, and all trading decisions have been the result of arms length
negotiations between the parties; (vi) Fixed Rate Payer is entering into this
Agreement with a full understanding of all of the terms, conditions and risks
thereof (economic and otherwise), and Fixed Rate Payer is capable of assuming
and willing to assume (financially and otherwise) those risks; and (vii) Fixed
Rate Payer is a sophisticated investor.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
Floating Rate Payer: Fixed Rate Payer:
▇▇▇▇▇ FARGO BANK, Playtex Product, Inc.
NATIONAL ASSOCIATION
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------- --------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President Its: Executive Vice President & CFO
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November 15, 2000
Playtex Product, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
VIA FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇,
The purpose of this letter agreement is to confirm the terms and
conditions of the Swap Transaction entered into between ▇▇▇▇▇ Fargo Bank, N.A.
("Floating Rate Payer") and Playtex Product, Inc. ("Fixed Rate Payer"). This
Swap Transaction is effective at, and as of 12:01 a.m., California time, on the
Trade Date specified below.
This confirmation supplements, forms part of, and is subject to ▇▇▇▇▇
Fargo's customary form of Interest Rate Swap Agreement, a copy of which will
follow via overnight mail. In the absence of any other such agreement, this
communication itself constitutes a binding agreement setting forth the essential
terms of the Swap Transaction.
The terms of the Swap Transaction to which this Swap Confirmation relates
are as follows:
Trade Date: November 15, 2000
Effective Date: November 30, 2000
Termination Date: August 30, 2001*
*▇▇▇▇▇ Fargo Bank, N.A. has the option to and may extend the provisions of this
Swap Transaction two business days prior to August 30, 2001. In the event ▇▇▇▇▇
Fargo Bank exercises its option to extend the provisions of this Swap
Transaction, The termination date shall be deemed to be May 30, 2002.
Swap Amount: $150,000,000 constant balance
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Fixed Amounts:
Fixed Rate Payer: Playtex Product, Inc.
Fixed Rate: 6.3475%
Day Count Convention: Actual/360
Business Day Convention: modified following
Calculation Period: From the last day of each
February, May, August, and November
beginning with November 30, 2000, up
to the Last day of the following
three month period, continuing until
the Termination Date, subject to
adjustment in accordance with the
designated Business Day Convention.
Floating Amounts:
Floating Rate Payer: ▇▇▇▇▇ Fargo Bank
Floating Rate: LIBOR
Floating Rate Maturity: 3 Month
Reset Date: last day of each February, May,
August, and November, subject to
adjustment in accordance with the
designated Business Day Convention.
The first reset date is February
28, 2001.
Day Count Convention: Actual/360
Business Day Convention: modified following
Calculation Period: From the last day of each
February, May, August, and November,
beginning with November 30, 2000, up
to the Last day of the following
three month period, continuing until
the Termination Date, subject to
adjustment in accordance with the
designated Business Day Convention.
Net Swap Settlement Payment
Dates: The last day of each February, May,
August, and November, beginning with
February 28, 2001, continuing up to
and including the Termination Date,
subject to adjustment in accordance
with the designated Business Day
convention.
Loan Facility: That certain term loan dated
7/21/1997 in the amount of
$150,000,000 extended by ▇▇▇▇▇
Fargo to the Fixed Rate Payer.
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Account Details:
Payments to Fixed Rate Payer: Credit DDA# 4091-216036
Payments to Floating Rate Payer: Debit DDA# 4091-216036
Addresses for Notices:
Fixed Rate Payer: Playtex Product, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Floating Rate Payer: ▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇: ▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing this facsimile and sending it as a return acknowledgment to
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ attention (FAX: (▇▇▇) ▇▇▇-▇▇▇▇). Swap agreement documents will
follow via overnight delivery. If you have any questions, please call me at
(▇▇▇) ▇▇▇-▇▇▇▇.
Sincerely,
CONFIRMED BY: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE: Executive Vice President & CFO
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